TCR_Public/020429.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, April 29, 2002, Vol. 6, No. 83


360NETWORKS: Enters Into Purchase Pact with Time Warner Telecom
ALTERRA HEALTHCARE: Sets Shareholders' Meeting for May 30, 2002
AMES DEPARTMENT: Court OKs 5th Amendment to DIP Credit Agreement
APPLIEDTHEORY: Obtains Approval to Use Emergency Cash Collateral
BAUSCH & LOMB: Posts Improved Operating Results in First Quarter

BETHLEHEM STEEL: Court Approves $9 Million in Professional Fees
BREAKAWAY SOLUTIONS: Secures Court Nod to Retain Altman Group
CLASSIC COMMS: Wants Lease-Decision Period to Run Until July 10
COMDISCO INC: Resolves Disputed Cure Amount with AT&T
COMDISCO: Files Joint Plan & Disclosure Statement in Illinois

COMDISCO INC: Closes Sale of Two Leasing Assets to GE Entity
CONSECO INC: Will Webcast First Quarter Results on May 1
CONSULIER ENG'G: Receives Nasdaq Stock Market Delisting Notice
CORRECTIONS CORP: Amends Indenture Governing $100M 12% Sr. Notes
COUNTRY STYLE FOODS: Emerges from CCAA Protection in Canada

COVANTA ENERGY: Court Okays Cleary Gottlieb as Co-Counsel
COYNE INT'L: Dannible & McKee Raises 'Going Concern' Doubts
CUSTOM COACH: Files for Chapter 11 Reorganization in S.D. Ohio
CUSTOM COACH CORPORATION: Voluntary Chapter 11 Case Summary
CYBEX INTERNATIONAL: Will Hold Conference Call Tomorrow

DIAMOND ENTERTAINMENT: CEO James Lu Serving One-Year Sentence
DOW CORNING: Reports $8.5 Million First Quarter Loss
ENRON CORP: Seeks Court Approval of Woodlark Sale Agreement
ENRON CORP: Sempra Closes Metals Concentrates Assets Acquisition
EXIDE TECH: Wants to Honor $3M Pre-Petition Employee Obligations

EXODUS COMMS: Files Liquidating Chapter 11 Plan
FEDERAL-MOGUL: Judgment Claimants Seek Stay Relief to Appeal
FLEMING: Fitch Affirms Low-B's After Acquisition Announcement
FORMICA CORPORATION: Wants More Time to Make Lease Decisions
FRIEDE GOLDMAN: Hydralift Takes Over Amclyde Business for $36MM

GLOBAL WEB: Mantyla McReynolds Issues 'Going Concern' Opinion
HAYES LEMMERZ: Taps Arthur Andersen as Compensation Consultant
ICH CORP: Committee Gets OK to Retain Vinson & Elkins as Counsel
INTEGRATED HEALTH: Intends to Restructure Lyric & Settle Claims
INT'L FIBERCOM: Engages Alvarez & Marsal for Financial Advice

K2 INC: Q1 Net Income Up by 22% Despite Drop in Net Sales
KFX INC: Needs to Raise New Funds to Satisfy Current Obligations
KAISER ALUMINUM: Gets OK to Tap Shaw Norton as Louisiana Counsel
KMART CORP: Signs-Up Jay Alix Pros to Fill Financial Posts
LTV: Beech Street Names Nat'l Provider Network for Ex-Employees

LOUISIANA-PACIFIC: Q1 Net Loss Drops to $3MM on $597MM in Sales
MEMC ELECTRONIC: Annual Shareholders' Meeting Set for June 5
METATEC INT'L: March 31 Balance Sheet Upside-Down by About $9MM
NATIONAL STEEL: Wants Deadline to Remove Actions Moved to Dec. 2
NETWORK ENGINES: Falls Below Nasdaq Listing Requirements

NEXTERA ENT.: Working Capital Deficit Down to $2MM at March 31
NORTEL NETWORKS: Will Be Paying Dividends on Preferred Shares
OMEGA HEALTHCARE: S&P Affirms Single-B Credit Rating
P-COM INC: Says Debt Restructuring Initiatives Right on Track
PSINET INC: Intends to Sell Europe Unit for $9.5 Million or More

PACIFIC GAS: Seeks Okay Pay $5.5 Million Land-Related Expenses
PERSONNEL GROUP: Shareholders' Meeting Set for May 23, 2002
PRESSTEK INC: First Quarter Revenues Drop 19% to $21 Million
SAFETY-KLEEN: Seeks Approval to Examine MIMS on Frontier Issues
SENSE TECHNOLOGIES: Begins Trading on OTCBB under 'SNSG' Symbol

SEPRACOR INC: Will Hold Annual Shareholders' Meeting on May 22
STELCO INC: Reduces First Quarter 2002 Net Loss by Almost Half
STRATUS SERVICES: Completes Internal Restructuring Plan
SYBRA INC: Independent Directors OK RTM's Recapitalization Plan
TECSTAR: Hires Scotland Group as Restructuring Consultants

USG CORP: Unit Will Open New Joint Compound Plant in Arizona
USG: Improved Gypsum Wallboard Results Yield Higher Net Earnings
VIASYSTEMS: Falls Short of NYSE Continued Listing Requirements
WA TELCOM: Court OKs Verso's Deferred Payment for NACT Deal
WARNACO GROUP: Unsecured Panel Employs Jaspan as Special Counsel

WARPRADIO: Taps Tune-Up Inc. to Assist in Reorganization
WILLIAMS COMMS: Will Cooperate with Oklahoma Regulators' Probe
ZILOG INC: Expects to Complete Capital Reorganization Next Month

* BOND PRICING: For the week of April 29 - May 3, 2002


360NETWORKS: Enters Into Purchase Pact with Time Warner Telecom
360networks inc., and its debtor-affiliates seek the Court's
authority to enter into a Purchase Agreement with Time Warner
Telecom of California.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, relates that the Debtors and Time Warner executed a
settlement agreement that resolved certain disputed issues with
respect to the construction, marketing and maintenance of a
fiber optic telecommunications system running from Portland,
Oregon, to Sacramento, California.  Ms. Chapman reminds Judge
Gropper that this Court previously approved the Settlement

Ms. Chapman explains that under the Settlement Agreement, the
Debtors and Time Warner Telecom of California, a subsidiary of
Time Warner Telecom Holdings, have negotiated a Fiber Optic
Purchase Agreement for the purchase of conduit and unactivated
fiber.  Under the Agreement, the Debtors would purchase:

    (i) 2 two-inch high-density polyethelene conduits;

   (ii) 72 fibers located in a 144-count cable installed in one
        side of the Timer Warner Telecom of California conduits;

  (iii) associated rights and improvements, including the rights
        to use manholes, handholes and vaults associated with the
        Debtor's conduits and the right to use equipment and
        Space in collocation facilities associated with the 360
        Fiber for $4,350,000.

"The Debtors would pay the Purchase Price of the 360 System by
utilizing the $4,350,000 credit available under the Settlement
Agreement," Ms. Chapman states.

The Debtors will be responsible for obtaining permits, approvals
or authorizations necessary for the ownership, operation,
maintenance and repair of the 360 Conduit and the 360 Fiber.
"The agreements, permits and approvals that grant these
Underlying Rights may be issued by or entered into with private,
governmental or quasi-governmental entities," Ms. Chapman adds.
The Purchase Agreement provides that:

    (i) Time Warner, California agrees to grant the Debtors a
        subeasement or sublicense in any rights of way,
        easements, or licenses granting Underlying Rights that
        were issued to it by a private party;

   (ii) Time Warner, California is obligated to partially assign
        any agreement granting Underlying Rights to the extent
        such assignment is permitted, issued by any governmental
        or other non-private party.  The Debtors will procure any
        other agreements necessary to obtain Underlying Rights.

According to Ms. Chapman, the transaction would provide the
Debtors and their estates a substantial benefit.  The Debtors
are parties to sell to a third-party one conduit in California.
However, the Debtors' network contains a gap of approximately
125 miles between Ontario, California and Mira Mesa, California,
which the Debtors must fill to perform under the Sales
Agreement. "The Debtors intend to fill this gap by purchasing
the 360 System," Ms. Chapman adds.  The Debtors have no viable,
cost effective alternative to fill this gap other than the
purchase of the 360 System under the Purchase Agreement.  Thus,
it is critical that the Debtors obtain authorization to enter
into the Purchase Agreement.  Moreover, the proceeds from the
Sales Agreement exceed the total cost of the Purchase Agreement.
Consequently, not only is the transaction by the Purchase
Agreement a cash-flow positive transaction but after a transfer
of a single conduit under the Sales Agreement, the Debtors will
retain fiber in Southern California as well as amplification and
regeneration space essentially at no cost. (360 Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ALTERRA HEALTHCARE: Sets Shareholders' Meeting for May 30, 2002
The Annual Meeting of Stockholders of Alterra Healthcare
Corporation will be held at the Radisson Hotel Milwaukee West,
2303 N. Mayfair Road, Wauwatosa, Wisconsin on Thursday, May 30,
2002, at 8:00 a.m., Milwaukee time, for the purpose of
considering and voting upon the following matters:

           (1) To approve an amendment to the Restated
Certificate of Incorporation that (a) reduces the size of the
Board of Directors from nine to seven members, (b) reduces the
number of directors elected by the holders of the Series A 9.75%
Cumulative Convertible Pay-In-Kind Preferred Stock from four to
three and (c) reduces the number of directors elected by the
holders of the Company's common stock from five to four;

           (2) (a) If Proposal No. 1 shall be approved by the
stockholders, to elect a board of seven directors, each to serve
until the next annual meeting of the Company, four of whom are
to be elected by the holders of the Company's common stock and
three of whom are to be elected by the holders of the Company's
Series A 9.75% Cumulative Convertible Pay-In-Kind Preferred
Stock; or

               (b) If Proposal No. 1 shall not be approved by the
stockholders, to elect a board of nine directors, each to serve
until the next annual meeting of the Company, five of whom are
to be elected by the holders of the Company's common stock and
four of whom are to be elected by the holders of the Company's
Series A 9.75% Cumulative Convertible Pay-In-Kind Preferred
Stock; and

           (3) To transact such other business as may properly
come before the Meeting.

The Board of Directors has fixed the close of business on April
26, 2002, as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Meeting.

Alterra operates home-like assisted-living residences for the
frail elderly and Alzheimer's sufferers who don't require
skilled nursing care. The company operates about 450 facilities
in nearly 30 states. It offers personal care, health care, and
support services to its residents. After falling victim to
increased competition and its own ambitious expansion, Alterra
received a cash infusion that left entities associated with
Amway's DeVos family controlling more than 30% of the company.
Alterra is still trying to sell some residences in order to pay
off debt.

As of September 30, 2001, Alterra reported a working capital
deficit of about $1.09 billion and a total shareholders' equity
deficit of about $239.7 million.

AMES DEPARTMENT: Court OKs 5th Amendment to DIP Credit Agreement
In light of Ames Department Stores, Inc.'s and its debtor-
affiliates' store closings and reduced operations since the
commencement of its bankruptcy cases, and to simplify some of
the covenant requirements, the Debtors sought and obtained Court
approval of a Fifth Amendment to the DIP Credit Agreement.

Frank A. Oswald, Esq., at Togut Segal & Segal LLP in New York,
New York, explains that the Fifth Amendment will enable the
Debtors to remain in compliance with the covenants in light of
their store closings and concomitant reduced operations.
Avoiding a default by the Debtors through the Fifth Amendment
will save Ames' estates significant sums, which would be charged
against the Debtors under the Credit Agreement, including an
increase by 2% of the interest rate charged to the Debtors.  The
Fifth Amendment will not increase the amount of total borrowing
authorized by the Court in the DIP Order.

Existing Financial Covenants to the Credit Agreement is deleted
in its entirety and replaced with the new Financial Covenants.
The three significant changes are:

A. Minimum EBITDAR Covenant: This covenant is deleted in its

B. Fixed Charge Coverage Covenant: The Fixed Charge Coverage
    Covenant will remain unchanged, but its levels are modified
    to 85% of current projections; and,

C. Minimum Trade Payables to Inventory Covenant: This covenant
    is deleted in its entirety since the Debtors' financial
    condition will continue to be separately tested by the
    Minimum Inventory Covenant and the Minimum Accounts Payable
    Covenant which remain unchanged.

Ames will pay an Amendment Fee to GE Capital and the Lenders:

A. for the account of each Revolving Lender that approved the
    Fifth Amendment, in an amount equal to 0.25% (i.e., 25 basis
    points) of the aggregate of such approving Lenders' Revolving
    Loan Commitments; and,

B. for the account of each Term Lender that has approved the
    Fifth Amendment, in an amount equal to .58333% (i.e., 58-1/3
    basis points) of the aggregate of such approving Term
    Lenders' outstanding principal amount of the Term Loan.

The Amendment Fee payable is $2,000,000 based on approval of the
Fifth Amendment by all the Revolving Lenders and Term Lenders.
Mr. Oswald informs the Court that this is the first amendment
fee required by the DIP Lenders, even though the DIP Lenders
have already approved four prior amendments.  This is reasonable
in light of the modifications being agreed to by the Lenders DIP
in the Fifth Amendment.

                    The New Financial Covenants

A. Minimum Revolver Borrowing Availability. Ames agrees:

    a. during the period from December 15 through March 15,
       inclusive, of each year, to maintain a Revolver Borrowing
       Availability of at least $75,000,000 and

    b. during the period from March 16 through December 14,
       inclusive, of each year, to maintain a Revolver Borrowing
       Availability of at least $25,000,000;

    provided, however, that, if Revolver Borrowing Availability
    on any day during the period from January 31, 2002 through
    March 15, 2002, inclusive, must exceed $125,000,000 at all
    times on that day and after taking into effect any Advances
    requested by the Borrower to be made on that day, then, only
    on that day, the Borrower must maintain a Revolver Borrowing
    Availability of at least $50,000,000.

B. Minimum Fixed Charge Coverage Ratio.  Ames must maintain, on
    a consolidated basis for the 12-month period then ended, a
    Fixed Charge Coverage Ratio of no less than:

    0.44 for the Fiscal Month ending on October 6, 2001;
    0.37 for the Fiscal Month ending on November 3, 2001;
    0.37 for the Fiscal Month ending on December 1, 2001;
    0.33 for the Fiscal Month ending on January 5, 2002;
    0.37 for the Fiscal Month ending on February 2, 2002;
    0.41 for the Fiscal Month ending on March 2, 2002;
    0.45 for the Fiscal Month ending on April 6, 2002;
    0.41 for the Fiscal Month ending on May 4, 2002;
    0.41 for the Fiscal Month ending on June 1, 2002;
    0.41 for the Fiscal Month ending on July 6, 2002;
    0.45 for the Fiscal Month ending on August 3, 2002;
    0.57 for the Fiscal Month ending on August 31, 2002;
    0.66 for the Fiscal Month ending on October 5, 2002;
    0.79 for the Fiscal Month ending on November 2, 2002;
    0.85 for the Fiscal Month ending on November 30, 2002;
    1.00 for the Fiscal Month ending on January 4, 2003;
    1.00 for the Fiscal Month ending on February 1, 2003
    and each Fiscal Month thereafter.

C. Minimum Inventory.  At the end of each Fiscal Month, Ames
    total Inventory (at book value, valued at the lower of FIFO
    cost or market), must be no less than:

    $578,660,000 for the Fiscal Month ending October 6, 2001;
    $677,677,000 for the Fiscal Month ending November 3, 2001;
    $682,028,000 for the Fiscal Month ending December 1, 2001;
    $463,040,000 for the Fiscal Month ending January 5, 2002;
    $549,352,000 for the Fiscal Month ending February 2, 2002;
    $595,951,000 for the Fiscal Month ending March 2, 2002;
    $619,174,000 for the Fiscal Month ending April 6, 2002;
    $631,605,000 for the Fiscal Month ending May 4, 2002;
    $632,498,000 for the Fiscal Month ending June 1, 2002;
    $585,602,000 for the Fiscal Month ending July 6, 2002;
    $584,560,000 for the Fiscal Month ending August 3, 2002;
    $628,553,000 for the Fiscal Month ending August 31, 2002;
    $702,991,000 for the Fiscal Month ending October 5, 2002;
    $739,316,000 for the Fiscal Month ending November 2, 2002;
    $720,335,000 for the Fiscal Month ending November 30, 2002;
    $496,947,000 for the Fiscal Month ending January 4, 2003;
    $585,156,000 for the Fiscal Month ending February 1, 2003;
    $595,951,000 for the Fiscal Month ending March 1, 2003;
    $619,174,000 for the Fiscal Month ending April 5, 2003;
    $631,605,000 for the Fiscal Month ending May 3, 2003;
    $632,498,000 for the Fiscal Month ending May 31, 2003;
    $585,602,000 for the Fiscal Month ending July 5, 2003;
    $584,560,000 for the Fiscal Month ending August 2, 2003;
    $628,553,000 for the Fiscal Month ending August 30, 2003;

    provided, that, the minimum Inventory amounts assume that
    Ames is operating 403 stores; provided, further, that,
    upon the commencement of any store closing, the minimum
    Inventory amount for the Fiscal Month during which such store
    closing must have commenced and for each Fiscal Month
    thereafter must be decreased by $1,500,000 for each such
    store closing.

D. Minimum Trade Payables. Ames must maintain total trade
    payables of not less than:

    $66,000,000 for the Fiscal Month ending October 6, 2001;
    $60,000,000 for the Fiscal Month ending November 3, 2001;
    $75,000,000 for the Fiscal Month ending December 1, 2001;
    $40,000,000 for the Fiscal Month ending January 5, 2002;.
    $64,000,000 for the Fiscal Month ending February 2, 2002;
    $75,000,000 for the Fiscal Month ending March 2, 2002;
    $75,000,000 for the Fiscal Month ending April 6, 2002;
    $75,000,000 for the Fiscal Month ending May 4, 2002;
    $75,000,000 for the Fiscal Month ending June 1, 2002;
    $75,000,000 for the Fiscal Month ending July 6, 2002;
    $75,000,000 for the Fiscal Month ending August 3, 2002;
    $150,000,000 for the Fiscal Month ending August 31, 2002;
    $150,000,000 for the Fiscal Month ending October 5, 2002;
    $150,000,000 for the Fiscal Month ending November 2, 2002;
    $150,000,000 for the Fiscal Month ending November 30, 2002;
    $75,000,000 for the Fiscal Month ending January 4, 2003,
    and each Fiscal Month thereafter;

    provided, that, the minimum trade payables amounts assume
    that the Borrower is operating 403 stores; provided, further,
    that, upon the commencement of any store closing, the minimum
    trade payables amount for the Fiscal Month during which such
    store closing must have commenced and for each Fiscal Month
    thereafter must be decreased by the percentage equal to the
    product of:

    a. 0.25% times

    b. the total number (without duplication) of those store

Amendment No. 5 to the DIP Credit Agreement, dated as of
April 4, 2002, identifies the current members of DIP Lending

      * General Electric Capital Corporation
      * Foothill Capital Corp.
      * Foothill Income Trust II, L.P.
      * GMAC Business Credit, LLC
      * Heller Financial, Inc.
      * Fleet Retail Finance, Inc.
      * Standard Federal Bank National Association
      * Textron Financial Corporation
      * RZB Finance LLC
      * Congress Financial Corporation
      * National City Commercial Finance
      * Oxford Strategic Income Fund
      * Eaton Vance Institution Senior Loan Fund
      * Eaton Vance Senior Income Trust
      * Grayson & Co.
      * Senior Debt Portfolio and
      * The CIT Group/Business Credit, Inc.

Mr. Oswald relates that pursuant to the DIP Order, the First
Amendment to the Credit Agreement was approved. Since that time,
the Debtors and the Lenders entered into the Second Amendment on
September 27, 2001, the Third Amendment on October 26, 2001, and
the Fourth Amendment on February 1, 2002. Each amendment was
non-material in nature and did not require the payment of any
fees to the Lenders. Accordingly, Court approval was not sought.
However, copies of the amendments were provided to counsel for
the Committee and the United States Trustee, neither of which
had an objection to the same. (AMES Bankruptcy News, Issue No.
16; Bankruptcy Creditors' Service, Inc., 609/392-0900)

APPLIEDTHEORY: Obtains Approval to Use Emergency Cash Collateral
AppliedTheory Corporation obtained an emergency order from the
U.S. Bankruptcy Court for the Southern District of New York to
continue using its lenders' cash collateral to fund on-going
operations.  Those lenders are Halifax Fund, L.P., Palladin
Partners I, L.P., Palladin Overseas Fund Ltd., DeAm Convertible
Arbitrage Fund, Ltd., Lancer Securities (Cayman) Ltd., Elliot
Associates, L.P., and Elliot International, L.P.

The Debtors relate that their sole source of working capital is
the cash generated from operations. The Debtors point out that
the collection of revenues will continued to fund:

      -- the ordinary, necessary and reasonable operating
         expenses of the business, including, but not limited to,
         payroll, insurance, taxes, payments to utilities and
         other actual out-of-pocket disbursements which must be
         made in the day-to-day operations of the Debtors, and

      -- certain costs arising in connection with these chapter
         11 cases, such as the costs of publication of notices,
         U.S. Trustee's fees, and professional fees and expenses
         incurred by the Debtors.

As set forth in a Cash Flow Statement presented to the
Bankruptcy Court, the Debtors estimate cash receipts to be
approximately $4,475,000 in the near-term.  The Court also
stipulates that the Debtors must provide the Institutional
Investors with adequate protection to protect them from
diminution of the collateral's value in the form of a
replacement lien.

Prior to the filing of their chapter 11 petitions, the Debtors
entered into agreements for the sale of their internet access
business to Fastnet Acquisition Corp., and the sale of their web
hosting and professional services business to ClearBlue
Technologies Management, Inc.  The Debtor assures that
Replacement Lien will also encompasses all of the proceeds
generated by the Fastnet Sale and the ClearBlue Sale.

BAUSCH & LOMB: Posts Improved Operating Results in First Quarter
Bausch & Lomb (NYSE:BOL) announced the results of its operations
for the first quarter ended March 30, 2002.

                Reported Revenues and Net Income

Net sales during the period were $414.2 million, up 3% from the
$402.6 million reported in the first quarter of 2001. In
constant dollars (excluding the impact of changes in foreign
currency exchange rates), revenues increased 5% from the prior
year. For the first quarter the Company reported net earnings of
$8.8 million, compared to a net loss of $1.0 million in the
prior-year period.

           Impact of Change in Accounting for Goodwill

These results include an $0.08 per share earnings benefit from
the Company's first-quarter 2002 adoption of Statement of
Financial Accounting Standards (SFAS) No. 142 - Goodwill and
Other Intangible Assets, under which it will no longer amortize
goodwill recorded on its balance sheet. The Company had
previously estimated the earnings benefit of this adoption to be
approximately $0.35 per share for all of 2002. That amount has
now been determined to be $0.33 per share. Had the adoption been
made as of the beginning of 2001, prior-year first-quarter pro
forma earnings per share would have increased by $0.09, to $0.07
per share.

In the current quarter, the Company recorded restructuring
charges and asset write-offs totaling $23.5 million before
taxes, or $15.4 million after taxes, associated with a
restructuring program announced in January and designed to
reduce ongoing operating costs. First-quarter 2001 results
included charges of $16.9 million before taxes, or $11.0 million
after taxes, associated with restructuring initiatives to
implement a new organizational structure, as well as the write-
off of an investment in a business-to-business e-commerce

Both quarters included gains from the sale of equity interests
in Charles River Laboratories, Inc. which the Company retained
when it divested that entity in 1999. Such gains amounted to
$27.6 million before taxes, or $18.1 million after taxes, in
2002 and $5.4 million before taxes, or $3.5 million after taxes,
in 2001. The Company no longer holds an equity position in
Charles River.

As previously announced, Moody's Investor Services downgraded
the Company's debt securities during the first quarter of 2002,
triggering the early termination of a partnership transaction
that is classified as minority interest on the Company's balance
sheet. In the 2002 first quarter, the Company recorded a charge
to minority interest expense of $7.0 million after taxes,
representing a previously announced early liquidation premium
associated with the termination, which is expected to occur in
the second quarter of this year.

           First-Quarter Revenues by Geographic Location

On a geographic segment basis, first-quarter revenues in the
Americas region increased 5% over the prior year, and were up 6%
in constant dollars. Revenues were flat in Europe on a reported
basis and up 3% in constant dollars. In the Asia region,
revenues increased 2% on a reported basis, and grew 7% in
constant dollars, reflecting primarily movements in the Japanese
yen. U.S. revenues increased 4% over the prior year, and
constituted 44% of total Company sales. Outside the U.S.,
revenues increased 2%, but increased 6% in constant dollars.

           First-Quarter Revenues by Product Category

Contact lens revenues increased 8% from the same period in 2001,
and were up 11% in constant dollars. Double-digit increases in
sales of the Company's newer-technology planned replacement and
disposable products, including PureVision and SofLens66 Toric,
outpaced relatively flat performance for the Company's lines of
older-technology offerings.

Lens care revenues increased 3% from the prior year, and were up
5% in constant dollars, with sales increases in the Americas and
Asia more than offsetting modest declines in Europe. In the U.S.
market, the Company experienced slight revenue increases from
the prior year, following a period of retail inventory
reductions that had impacted sales performance throughout 2001,
and benefiting from the recent launch of ReNu MultiPlus No Rub

Pharmaceutical revenues increased 10% over the prior year, and
grew 13% in constant dollars. Gains were driven by the Americas
region, which benefited from higher sales of proprietary and
multi-source products as well as the launch of Ocuvite
PreserVision, the ocular vitamin supplement used by the National
Eye Institute in its landmark Age-Related Eye Disease Study.
Revenues in Europe were essentially flat with the prior year,
reflecting the impact of currency as well as uncertainty
surrounding pending generic pharmaceutical price legislation in
Cataract surgery product revenues declined 7% from the prior
year, and were down 6% in constant dollars, with lower sales
reported in all regions. This reflects the residual impact of
market share lost throughout 2001 as the Company addressed
product supply issues in this category. With these issues
largely resolved, the Company is focusing on regaining customer
confidence and rebuilding its share position.

Refractive surgery product revenues declined 9% in actual
dollars and 8% in constant dollars from the prior year. As
anticipated by the Company, softness in the U.S. economy has led
to a slowing in the number of consumers electing to have LASIK
surgery than in the year-ago quarter. Outside the U.S., the
Company noted continued increases in sales of procedure cards
and equipment used in its Zyoptix system for customized
refractive surgery.

"This quarter's results represent a good first step on our road
to improved financial performance," commented Ronald L.
Zarrella, Bausch & Lomb's chairman and chief executive officer.
"We were particularly pleased with our comparable-basis
operating earnings performance, which improved nearly 40% had
goodwill been treated similarly in both years. But we still have
work to do to achieve our three-year targets of upper-single
digit revenue growth and mid-teen operating margins. With our
continuing aggressive efforts to manage costs, the adoption of a
more disciplined approach to the business, and strategic
investments in growth opportunities, these goals should be

                 Company Provides Updated 2002 Outlook

Commenting on the Company's expectations for the remainder of
2002, Zarrella said, "Our business performance in the first
quarter was generally in line with our internal expectations,
and we expect the positive trends to continue, with sequential
earnings per share improvement in each of the next three
quarters. As a result, we remain comfortable with our original
guidance for the year (adjusting for the final impact of
adopting SFAS 142) of full-year EPS in the mid-$1.60s range,
with revenue growth in the mid-to-upper single digits."

       Company Updates Status of Envision TD Technology Program

With respect to the development program for the Envision TD drug
delivery implant, the Company indicated that it is still
targeting approval of a first indication around the end of 2003
with product commercialization in 2004. Six-month data from the
first diabetic macular edema clinical study will be analyzed
during the second quarter, after which the Company anticipates
providing information concerning those results.

                     Quarterly Dividend Reduced

In a separate news release, the Company announced a reduction in
its quarterly dividend from $0.26 to $0.13 per share in order to
better align its dividend payout with its own financial
objectives and the payout rates of its industry peers.

Bausch & Lomb Incorporated is the preeminent global technology-
based healthcare Company for the eye, dedicated to helping
consumers see, look and feel better through innovative
technology. Its core businesses include soft and rigid gas
permeable contact lenses, lens care products, ophthalmic
surgical and pharmaceutical products. The Company is advantaged
with some of the most respected brands in the world starting
with its name, Bausch & Lomb, and including SofLens, PureVision,
Boston, ReNu, Storz and Technolas.

Founded in 1853 in Rochester, N.Y., where it continues to have
its headquarters, the Company had revenues of approximately $1.7
billion in 2001, and employs approximately 12,000 people in more
than 50 countries.

Bausch & Lomb products are available in more than 100 countries
around the world. Additional information about the Company can
be found on Bausch & Lomb's Worldwide Web site at

                          *    *    *

As reported in the March 14, 2002 edition of Troubled Company
Reporter, Moody's Investor Service downgraded the senior credit
ratings of Bausch and Lomb from Baa3 to Ba1. The company's
short-term rating was also revised to Not-Prime from Prime-3.

                          Ratings Actions:

      Bausch & Lomb, Inc.'s puttable/callable notes, medium term
           notes from Baa3 to Ba1

      Short-term rating to Not-Prime from Prime-3.

BETHLEHEM STEEL: Court Approves $9 Million in Professional Fees
Eight professionals sought and obtained Judge Lifland's
authorization for the allowance and payment of compensation
incurred in connection with the Bethlehem Steel Corporation's,
and its debtor-affiliates' bankruptcy cases:

Professional                    Retention Service
------------                    -----------------
Weil, Gotshal & Manges, LLP     Debtors' bankruptcy counsel

Skadden, Arps, Slate, Meagher   Debtors' special counsel
& Flom, LLP

Dewey Ballantine, LLP           Debtors' special counsel

Greenhill and Co., LLC          Debtors' financial advisor

PricewaterhouseCoopers, LLP     Debtors' accountant & tax

Kramer, Levin, Naftalis         Committee's counsel
& Frankel, LLP

McDonald Investment, Inc.       Committee's investment banker &
                                 restructuring advisor

KPMG LLP - US and Canada        Committee's accountant

The compensation requested covers the period from October 15,
2001 to January 31, 2002. For this period, each professional
rendered services:

                               Number of   Number of
Professional                  personnel   hours        Amount
------------                  ---------   ---------    ------
Weil, Gotshal & Manges, LLP       32        3,859    $1,555,372

Skadden, Arps, Slate,
Meagher & Flom, LLP               35        9,898       971,432

Dewey Ballantine                  74       17,047     4,143,634

Greenhill and Co.                  4        1,186       612,500

PwC LLP                           20        2,351       152,800

Kramer, Levin,
Naftalis & Frankel                35        1,788       535,954

McDonald Investment               11        1,267       450,000

KPMG LLP - US and Canada          19        2,276       899,158

Pursuant to the Fee Procedures Order, a 20% holdback is in place
with those fees payable when final applications for compensation
are allowed. Accordingly, as applicable, Judge Lifland approves
these compensation amounts:

                           Amount       Holdback
Professional             Requested     Amount      Amount
------------             ---------     -------    -------------
Weil, Gotshal &          $1,244,298   $311,074       $1,244,298
Manges, LLP

Skadden, Arps, Slate,       777,146    194,286          777,146
Meagher & Flom, LLP

Dewey Ballantine,         1,401,518    280,304        1,121,215

Greenhill and Co.           612,500       none          612,500

PwC, LLP                    152,800       none          152,800

Kramer, Levin,              428,763    107,191          428,763
Naftalis & Frankel

McDonald Investment         450,000       none          450,000

KPMG LLP - US & Canada      836,067    167,153          668,853

In the course of service, these professionals incurred out-of-
pocket expenses. Judge Lifland allows the reimbursement of these

                                              Amount       Amount
Professional                                Requested
------------                                ---------     ------
Weil, Gotshal & Manges, LLP                  $94,079     $94,079

Skadden, Arps, Slate, Meagher & Flom, LLP     61,157      61,157

Dewey Ballantine                             105,180     105,180

Greenhill and Co.                            111,825     111,825

PwC, LLP                                      11,672      11,672

Kramer, Levin, Naftalis & Frankel             42,271      42,271

McDonald Investment                           24,579      24,579

KPMG LLP - US and Canada                      98,129      98,129

The Debtors are directed to wire transfer to each professional
the amounts of fees and expenses allowed. (Bethlehem Bankruptcy
News, Issue No. 14; Bankruptcy Creditors' Service, Inc.,

BREAKAWAY SOLUTIONS: Secures Court Nod to Retain Altman Group
The U.S. Bankruptcy Court for the District of Delaware approves
the application of The Altman Group, Inc. as notice and claims
Agent to the Court and as solicitation and balloting agent and
claims administrator to Breakaway Solutions, Inc.

The Altman Group is expected to:

      a) prepare and serve required notices in this chapter 11

      b) within 5 business days after the mailing of a particular
         notice, file with the Clerk's Office a declaration of
         service that includes a copy of the notice involved, an
         alphabetical list of persons to whom the notice was
         serves and the date and manner of service;

      c) maintain copies of all proofs of claim and proofs of
         interest filed;

      d) maintain an official claims register by docketing all
         proofs of claim and proofs of interest on  claims

      e) implement necessary security measures to ensure the
         completeness and integrity of the claims register;

      f) transmit to the Clerk's Office a copy of the claims
         register on a monthly basis, unless requested by the
         Clerk's Office on a more or less frequent basis;

      g) 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 free of charge upon
         request of a party in interest on the Limited Service
         List or the Clerk's Office and at the expense of any
         other party in interest upon the request of such party,
         and comply with all requests under the Local Rules for
         mailing labels duplicated from the mailing list;

      h) provide access to the public for examination of copies
         of the proofs of claim or interest without charge during
         regular business hours;

      i) record all transfers of claim and provide notice of such
         transfers as required;

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

      k) promptly comply with such further conditions and
         requirements as the Clerk's Office or the Court may at
         any time prescribe; and

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

The Debtors agree to compensate Altman Group with its
corresponding services and customary hourly rates of

      Claims docketing             $100 to $150 per hour
      Voting and tabulation        $100 per hour
      Consulting charges
         - Claims docketing        $100 to $200 per hour
         - Programming/Technical   $125 to $175 per hour
      Reconciliation of Claims     $100 to $200 per hour

Professional's Hourly Rates:

      Senior Managing Director     $250 per hour
      Managing Director            $225 per hour
      Senior Bankruptcy Consultant $200 per hour
      Bankruptcy Consultant        $175 per hour
      Senior Account Executive     $150 per hour
      Account Executive            $125 per hour
      Telephone Service Rep.       $100 per hour

Breakaway Solutions, Inc., which provides collaborative business
solutions to its clients, filed for Chapter 11 petition on
September 05, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. Gary M. Schildhorn, Esq. and Leon R. Barson, Esq.
at Adelman Lavine Gold and Levin and Neil B. Glassman, Esq. and
Steven M. Yoder, Esq. at The Bayard Firm represent the Debtor in
its restructuring efforts. When the company filed for protection
from its creditors, it listed $45,319,579 in assets and
$25,877,720 in debt.

CLASSIC COMMS: Wants Lease-Decision Period to Run Until July 10
Classic Communications Inc. and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for more time
to make lease-related decisions.  The Debtors want to extend the
time within which they must elect to assume, assume and assign,
or reject all of their unexpired leases, until July 10, 2002.

The Debtors say that their unexpired leases are an integral part
of their business operations and are vital to their
reorganization effort.  The Debtors anticipate that any plan of
reorganization they propose may partly be based upon the
assumption and possible assignment of certain unexpired leases.

Although the Court has previously extended the original
deadline, the Debtors believe that additional time is needed to
permit their ongoing analysis of the value of the unexpired
leases to their estate.  Until the Debtors have had an
opportunity to fully complete their evaluation, any decision
regarding the unexpired leases would be premature and may
adversely affect their ability to successfully reorganize.

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

COMDISCO INC: Resolves Disputed Cure Amount with AT&T
In a Court-approved stipulation, Comdisco, Inc., its debtor-
affiliates and AT&T agree that:

    (i) the Debtors will pay to AT&T's assignee, Contrarian,
        $5,526,870 -- the Settlement Amount -- for cure amounts
        owing on the AT&T executory contracts to be assumed and

   (ii) effective upon the Debtors' payment of the Settlement
        Amount, AT&T's cure objection is dismissed without
        prejudice, and AT&T and Contrarian, and their respective
        successors and assigns, will waive all claims against the
        Debtors and the Debtors will waive all claims against
        AT&T and Contrarian except:

        (a) AT&T does not waive its right to file any
            administrative claims against the Debtors for post-
            petition amounts that may be due; and

        (b) AT&T does not waive any claims with regard to any
            contract not relevant to the cure objection.

  (iii) there will be no award of costs or attorneys' fees
        expended. (Comdisco Bankruptcy News, Issue No. 24;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)

COMDISCO: Files Joint Plan & Disclosure Statement in Illinois
Comdisco, Inc. (OTCBB:CDSO) has filed a proposed Joint Plan of
Reorganization and Disclosure Statement with the United States
Bankruptcy Court for the Northern District of Illinois. All of
Comdisco's domestic U.S. subsidiaries that filed for Chapter 11
relief are included in the Plan with Comdisco along with 15 of
its direct and indirect subsidiaries substantively consolidated
into one estate and Prism Communications Services, Inc. along
with 34 of its direct and indirect subsidiaries substantively
consolidated into another estate.

The Plan contemplates a Reorganized Comdisco that will have
three primary operating subsidiaries--Comdisco U.S. Leasing
Company, Comdisco Europe Holding Company, and Comdisco Ventures
Company. As more fully described in the Plan, Reorganized
Comdisco will continue to operate in an orderly sale or run off
of all its existing asset portfolios, which is expected to take
up to three years to complete.

The Plan proposes that Comdisco's general unsecured creditors
will receive their pro-rata share of an initial cash
distribution, which will be funded by current cash on hand from
asset sales and cashflow from operations, less amounts necessary
to establish a cash reserve to pay secured, administrative,
priority and other payments, including the establishment of
an operating reserve to fund the Reorganized Comdisco's
continuing operations.

In addition, general unsecured claim holders will receive their
pro-rata share of two separate note issuances: New Senior Notes
in the face amount of $400 million with an interest rate of
three month average LIBOR plus 3% and New Payment-in-Kind (PIK)
Notes in the face amount of $500 million with an interest rate
of 11%. General unsecured claimholders will also receive their
pro rata share of 100% of the new common stock of the
Reorganized Comdisco.

If the Plan is approved, Comdisco presently estimates that it
will make an initial cash distribution of approximately $2
billion, and that the ultimate recovery to unsecured creditors
will be approximately 87% of their claims, subject to the
provisions, assumptions and limitations of the Plan.

The Plan provides that existing equity interests will be
cancelled. However, if the Plan is accepted by Comdisco's
creditors as well as its stockholders and holders of
subordinated claims, the Plan proposes that stockholders and
holders of subordinated claims receive warrants or other
contingent payments in increasing amounts based upon creditor
recoveries achieving specified thresholds.

The Plan currently provides for contingent consideration to
stockholders and holders of subordinated claims beginning at 2%
of the net available cash distributions after creditors achieve
an 85% net present value recovery as of the effective date of
the Plan, scaling up in increasing increments to 32% of the net
available cash distributions after creditors receive a 100% net
present value recovery on their claims, exclusive of accrued
post-petition interest. Comdisco is unable to accurately predict
at this time the ultimate value, if any, that would be realized
by current equity holders and holders of subordinated claims
relative to the distribution under the Plan as proposed and
discussions regarding any such distributions continue among
Comdisco, and the separate Creditors' and Equity Committees
appointed in these cases.

The Plan further proposes that certain subrogation rights
Comdisco may have against certain managers who participated in a
Shared Investment Plan will be placed in a trust for the benefit
of stakeholders. Under the SIP program, 106 senior managers in
1998 took out full recourse, personal loans to purchase six
million shares of the company's common stock and the company
provided a guarantee in the event of default. The loans have an
outstanding principal balance of approximately $104 million. To
the extent that the company makes a payment under its guaranty
on behalf of a SIP participant, the company is subrogated to the
rights of the lender to collect such amounts from the
participant, subject to any defenses or claims that the SIP
participant may assert. In the Plan, the company proposes
various discounts ranging from 20% to 80% with respect to
repayment on account of subrogation claims at graduated levels
based upon an employee's prepetition, post-petition and/or post-
emergence service to the company and other consideration. The
subrogation rights of SIP participants who do not fulfill their
repayment obligations will be placed in the SIP Subrogation
Trust for the benefit of stakeholders.

In regard to the Prism subsidiaries, Comdisco currently has
intercompany secured claims against Prism that exceed the value
of the assets of Prism. If the general unsecured creditors of
Prism vote to accept the Plan, Comdisco will reduce its claims
against the Prism entities to no more than one-third of the
total distribution to Prism creditors, thereby allowing for a
meaningful distribution to creditors. Prism estimates that the
proposed plan will generate a distribution of 13% to general
unsecured Prism claim holders (other than Comdisco), if the
general unsecured creditors vote to accept the Plan. The assets
of the Prism entities will continue to be liquidated.

The Plan and the Disclosure Statement will be filed with the
Securities and Exchange Commission in connection with a form 8-K
filing and will be mailed to all creditors and stockholders
entitled to vote on the Plan after the Bankruptcy Court approves
the Disclosure Statement and authorizes the company to commence
solicitation of votes. A hearing on the Disclosure Statement is
scheduled for May 31, 2002 and a Confirmation Hearing on the
Plan is scheduled for July 30, 2002.

Norm Blake, Chairman and Chief Executive Officer, said: "We have
reached this key milestone towards the conclusion of the Chapter
11 process for our company because of the tremendous hard work
and focus of the Comdisco employees and management team. In just
over nine months, we have sold assets related to Availability
Solutions and our Electronics, Laboratory and Scientific,
Healthcare and Australia/ New Zealand leasing portfolios. I am
very proud of what the team has accomplished, often under
challenging circumstances, to maximize the value of the estate
for its stakeholders. We look forward to concluding Comdisco's
Chapter 11 process within the next several months."

In connection with the orderly sale or run off of the remaining
assets of the company, the company also announced that it will
be filing a motion to approve a comprehensive compensation
program that includes a stay bonus plan designed to retain
essential support and professional staff and a performance-based
management incentive plan designed to retain key employees at
each of the business units and at the corporate headquarters.
The Company will schedule this motion for hearing on May 31,
2002, the next scheduled bankruptcy court omnibus hearing date.

           New Executive Management Structure Announced

Separately, Comdisco also announced a new executive management
structure. Ronald C. Mishler, 41, who had been serving as chief
financial officer, has been appointed president and chief
operating officer of Comdisco, Inc, reporting to Norman P.
Blake, chairman and chief executive officer. In his new
position, Mishler will be responsible for all of Comdisco's
operating units, and he will retain responsibility for the
company's finance and accounting areas. Mishler joined Comdisco
in July 2001.

New appointments reporting to Mishler include: Francis J.
Cirone, 43, who joined Comdisco in 1984 and has served in
various management positions in Leasing and Finance, has been
named chief executive officer of Comdisco U.S. Leasing; Robert
E.T. Lackey, 54, who has served as senior vice president and
chief legal officer since he joined Comdisco in June 2001, has
been named chief executive officer of Comdisco Ventures; Robert
E. Koe, 57, was named chief executive officer of Comdisco Europe
on March 25, 2002; and John R. McNally, 41, who joined Comdisco
in 1988 and has served in various management positions in
Finance and Leasing, has been named president of the company's
Corporate Asset Management group.

Other new appointments reporting to Norman P. Blake, chief
executive officer, include: Nazneen Razi, 49, who has served as
senior vice president, Human Resources since October 2000, has
been promoted to executive vice president and chief
administrative officer; Gregory D. Sabatello, 41, who has served
as senior vice president and chief information officer since
June 1994, has been promoted to executive vice president and
CIO; and Robert E.T. Lackey, who has been promoted to executive
vice president and will continue in his role as chief legal
officer. All of the executive changes are supported by
Comdisco's Official Committee of Unsecured Creditors.

The company also announced that as part of its restructuring
efforts, it will reduce its U.S. workforce over the next 30 to
60 days by approximately 180 positions, or approximately 20% of
its total workforce. About 80% of the reductions will be at the
company's Rosemont, IL corporate headquarters.

Comdisco's operations located outside of the United States were
not included in the Chapter 11 reorganization cases. All of
Comdisco's businesses, including those that filed for Chapter
11, are conducting normal operations. The company continues to
target emergence from Chapter 11 in late summer of 2002.

Comdisco -- provides technology
services to help its customers maximize technology functionality
and predictability, while freeing them from the complexity of
managing their technology. The Rosemont (IL) company offers
information technology and telecommunications equipment leasing
to a broad range of customers. Through its Ventures division,
Comdisco provides equipment leasing and other financing and
services to venture capital backed companies.

COMDISCO INC: Closes Sale of Two Leasing Assets to GE Entity
GE Capital Commercial Equipment Financing announced the closing
of its acquisition of Comdisco's Electronics and Laboratory &
Scientific leasing businesses.

The initial agreement was signed on January 14, the deal was
granted approval by the U.S. Bankruptcy Court for the Northern
District of Illinois on January 24, and officially closed

The electronics assets will be integrated into CEF's newly
established "Global Electronics Solutions (GES)" business, which
will focus specifically on the financing needs of the
electronics industry. Global Electronics Solutions will offer
enhanced asset management capabilities and a broader array of
financial products and services to customers. With the addition
of the Comdisco assets, GES's portfolio exceeds $1.2 billion in
served assets.

"We are very excited about bringing Comdisco's strong asset
management and electronic equipment financing expertise into our
new Global Electronics Solutions business," said Karl Bongarten,
Vice President, GE Capital Commercial Equipment Financing. "By
harnessing our collective asset management capabilities and
increased financing products and services, we can meet our
customers needs with one robust company."

The Laboratory & Scientific assets will be integrated into CEF's
existing Life Science and Technology Finance (LSTF) business,
which provides financial assistance to Life Science companies
throughout the U.S. and Canada with a portfolio exceeding $300
million in served assets representing over 200 customers. This
acquisition will provide LSTF with expanded financing products
and equipment management services for the Life Science industry,
including companies focused on Biotechnology, Drug Discovery and
Medical Device Development.

In addition to these two deals closed today, on April 18th the
U.S. Bankruptcy Courts approved GE Capital Healthcare Financial
Services' agreement to buy Comdisco's healthcare assets. The
deal is expected to close in late May.

GE Capital Commercial Equipment Financing (CEF), a GE Capital
Company, helps thousands of customers, from small businesses to
Fortune 100 companies, finance the purchase of fixed assets.
With $66.4 billion of served assets worldwide, our portfolio
includes trucks and trailers, corporate aircraft, manufacturing
facilities and construction and office equipment. GE Capital,
with assets of US$425 billion, is a global, diversified
financial services company grouped into six key operating
segments comprised of 25 businesses. A wholly-owned subsidiary
of General Electric Company, GE Capital, based in Stamford,
Connecticut, provides a variety of consumer services, such as
credit cards and life and auto insurance; mid-market financing;
specialized financing; specialty insurance; equipment
management, and specialized services, to businesses and
individuals in 45 countries around the world. GE is a
diversified services, technology and manufacturing company with
operations worldwide.

CONSECO INC: Will Webcast First Quarter Results on May 1
Conseco, Inc. (NYSE: CNC) will report results for the first
quarter of 2002 before the market opens on Wednesday, May 1st.
The company will host its regular quarterly investor conference
call later that morning.

The call will begin at 11:00 a.m. Eastern Time on May 1st.  The
webcast can be accessed through the Investor Relations section
of the Web site.  The specific Web address is:

Listeners should go to the Web site at least 15 minutes before
the event to register, download and install any necessary audio
software.  The webcast will be archived for two weeks.

CONSULIER ENG'G: Receives Nasdaq Stock Market Delisting Notice
Consulier Engineering, Inc. (Nasdaq:CSLR) received a letter,
dated April 18, 2002, pursuant to Marketplace Rule 4815(b),
indicating that the company's stock will be delisted from the
Nasdaq Stock Market at the opening of business on April 26, 2002
unless the company requests a hearing. The company has formally
requested a hearing and fully expects to file a Form 10-KSB
before the open of business on April 26, 2002.

CORRECTIONS CORP: Amends Indenture Governing $100M 12% Sr. Notes
Corrections Corporation of America (NYSE: CXW) announced the
pricing of $250.0 million aggregate principal amount of its
9-7/8% Senior Notes due 2009.

CCA intends to use the proceeds of the offering of the 2009
Senior Notes to refinance a portion of its existing senior
secured bank credit facility, to purchase all or a portion of
its existing $100.0 million 12% Senior Notes due 2006 pursuant
to an outstanding offer to purchase such notes, and to pay
related fees and expenses.  In connection with CCA's previously
announced offer to purchase its existing 12% Senior Notes, CCA
also announced that it has received sufficient consents and has
amended the indenture governing the notes to delete
substantially all of the restrictive covenants and events of
default contained therein upon consummation of the offer to

Copies of the offering memorandum relating to the offering of
the 2009 Senior Notes may be obtained from Lehman Brothers Inc.,
the sole book-running manager for the offering, at 745 Seventh
Avenue, 3rd Floor, High Yield Capital Markets, New York, New
York 10019.

The 2009 Senior Notes have not been 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.

CCA is the nation's largest owner and operator of privatized
correctional and detention facilities and one of the largest
prison operators in the United States, behind only the federal
government and four states.  CCA currently owns 39 correctional,
detention and juvenile facilities, three of which are leased to
other operators, and two additional facilities which are not yet
in operation.  CCA also has a leasehold interest in a juvenile
facility.  CCA currently operates 63 facilities, including 36
company owned facilities, with a total design capacity of
approximately 61,000 beds in 21 states, the District of Columbia
and Puerto Rico.  CCA specializes in owning, operating and
managing prisons and other correctional facilities and
providing inmate residential and prisoner transportation
services for governmental agencies. In addition to providing the
fundamental residential services relating to inmates, CCA's
facilities offer a variety of rehabilitation and educational
programs, including basic education, life skills and employment
training and substance abuse treatment.  These services are
intended to reduce recidivism and to prepare inmates for their
successful re-entry into society upon their release.  CCA also
provides health care (including medical, dental and psychiatric
services), food services and work and recreational programs.

                            *   *   *

As reported in Friday's edition of Troubled Company Reporter,
CCA's ratings remain on Standard & Poor's CreditWatch with
positive implications, where they were placed March 4, 2002,
after CCA said it would refinance substantially all of its
existing indebtedness. The transaction would relieve the company
of onerous near-term debt maturities.

Upon the closing of the debt refinancing, Standard & Poor's
expects to raise CCA's corporate credit rating one notch to 'B+'
from its current 'B'. The company's existing senior unsecured
debt rating, as well as its senior secured debt rating, will be

The rating on the company's proposed bank facilities would be
the same as the expected corporate credit rating ('B+'). The
secured bank facility comprises a $125 million term A loan due
2006, a $495 million term B loan due 2008, and $75 million
revolving credit facility due 2006.

The credit facilities derive strength from their secured
position. However, according to Standard & Poor's simulated
default scenario, which incorporates the possibility of severely
distressed cash flows that would trigger a default on payment,
it is not clear whether the distressed enterprise value would be
sufficient to cover the entire loan balance when fully drawn.

The 'B-' ratings on the proposed senior unsecured notes are two
notches below the expected corporate credit rating, reflecting
its secondary position relative to the firm's relatively high
level of secured bank debt.

The ratings on CCA reflect the company's high debt leverage,
somewhat mitigated by CCA's leading position in the correctional
facility management business.

COUNTRY STYLE FOODS: Emerges from CCAA Protection in Canada
Country Style Food Services Inc. and its associated companies
announced that it has emerged from protection under the
Companies' Creditors Arrangement Act after successfully
implementing its Plan of Compromise and Arrangement.

"This day marks the rebirth of Country Style," said Patrick
Gibbons, President and CEO. "As a testament to the dedication
and unfailing loyalty of our employees, franchisees, suppliers
and customers, we have succeeded in revitalizing the Country
Style brand."

Country Style filed for CCAA protection on December 13, 2001 in
order to provide for an orderly restructuring of its debts and
liabilities. On February 18, 2002, 93% of Country Style's proven
unsecured creditors and its sole secured creditor approved the
Plan. The Ontario Superior Court of Justice sanctioned the Plan
on March 7, 2002.

"Over the past several months, we were able to positively
restructure our business and secure the foundation for growth
and prosperity. We are over 150 locations strong and have
implemented several exciting new marketing initiatives that will
continue to strengthen the Country Style brand and position us
for growth. Our franchisees and head-office staff are working
together with renewed vigor to ensure the long-term health of
our business," Mr. Gibbons concluded.

Country Style Food Services Inc. is the third largest coffee and
donut franchiser in the Canadian quick service restaurant
industry. There are over 150 franchised and corporate locations
across Canada operating under the "Country Style" brand name.
Country Style also operates in the retail "fresh bake" industry
through over 60 franchised locations operating under the "Buns
Master" brand name. For more information, visit

COVANTA ENERGY: Court Okays Cleary Gottlieb as Co-Counsel
Judge Blackshear approves Covanta Energy Corporation and its
debtor-affiliates' request to employ Cleary, Gottlieb, Steen &
Hamilton as co-counsel in the Chapter 11 proceedings and to
represent them in their reorganization was granted.

Specifically, Cleary, Gottlieb will:

     (a) provide advice to the Debtors with respect to their
         powers and duties as debtors and debtors in possession
         in the continued operation of their businesses and the
         management of their properties:

     (b) take necessary or appropriate action to protect and
         preserve the Debtors' estates, including prosecuting
         actions commenced against the Debtors, conducting
         negotiations concerning litigation in which the Debtors
         are involved, and file and prosecute objections to
         claims filed against the Debtors' estates, except where
         such litigation is handled by Jenner or other retained

      (c) prepare, on behalf of the Debtors, applications,
          motions, answers, orders, reports, memoranda of law
          and papers in connection with the administration of
          the Debtors' estates;

      (d) represent the Debtors in negotiations with all
          other creditors and Debtors' equity holders, including
          governmental agencies and municipal authorities;

      (e) represent the Debtors in negotiations regarding
          possible dispositions of some or all of their assets;

      (f) negotiate, on behalf of the Debtors, one or more plans
          of reorganization and all related documents; and

      (g) perform other necessary or appropriate legal services
          in connection with these chapter 11 cases.

Cleary, Gottlieb will bill for its professionals' services at
its customary hourly rates:

      Position                         Rate
      --------                         ----
      Partners                       $525-695
      Special Counsel                $505-695
      Associates                     $225-455
      Managing Attorneys             $440-455
      Law Clerks/Summer Associates   $155-220
      Paralegals/Clerks              $155-220

Also, Cleary, Gottlieb will bill the Debtors for any ordinary
out-of pocket expenses associated with their services to the
Debtors. (Covanta Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

COYNE INT'L: Dannible & McKee Raises 'Going Concern' Doubts
Dannible & McKee, LLP, independent auditing firm of Syracuse,
New York, audited the consolidated balance sheet of Coyne
International Enterprises Corp., and subsidiaries, as of October
31, 2001 and the related consolidated statement of operations,
changes in shareholders' equity and comprehensive income, and
cash flows for the year then ended.  The audit also included the
Company's financial statement schedule.  In their Independent
Auditor's Report of January 25, 2002 directed to the Board of
Directors of Coyne International Enterprises Corp., the auditors
stated: ". . . the Company has experienced recurring losses, has
a shareholder deficit and is required to maintain financial
covenants under its senior credit facility. These conditions
raise substantial doubt about its ability to continue as a going

Coyne International Enterprises Corp. was founded and
incorporated in New York in 1929 and has been owned and operated
by the Coyne family since its inception.  The Company rents and
distributes uniform and career apparel, protective clothing, and
other non-garment items, including towels, floormats, dust
control, and reusable absorbent products.  The Company services
a wide variety of industries throughout the eastern United
States from 42 service locations and one manufacturing facility.
The Company's products and services are distributed by route
delivery trucks, which run out of 18 laundry plants and 24
terminals.  CTS manufactures shop towels, dust mops, floormats
and several other products used in the textile rental industry
at its Blue Ridge manufacturing facility.

The Company is highly leveraged with total indebtedness of
$99,833,395 and a shareholder deficit of $11,785,101. In
addition, the Company has incurred net losses for the last three
years, is required to maintain certain financial covenants as
part of its existing credit facility, and is dependent on
operations for a major portion of its liquidity and working
capital needs. These facts create an uncertainty about the
Company's ability to continue as a going concern.

The Company's primary source of liquidity has been cash flows
from operations and borrowing under the Facility, which was
amended in fiscal 2001. The amendments reduced the maximum
credit available to the Company under an acquisition and capital
expenditure facility and amended certain financial covenants so
that the Company would be in compliance. The maximum credit
available under the Company's revolving credit facility, subject
to collateral availability, is $30,000,000. At October
31, 2001, the Company had approximately $2,500,000 available
under the Revolver. Management is pursuing alternative senior
credit facilities from other lenders, with the goal of providing
additional liquidity. Over the next twelve months, the Company
will continue to focus on improving utilization of new inventory
and merchandise in service as well as controlling overall costs
and capital expenditures to improve liquidity and to meet its
financial covenants. The Company does not anticipate the need to
increase levels of inventory or capital expenditures in 2002.
Based on the Company's operating budget, the Company expects
that it will be able to meet its obligations as they become due
and maintain compliance with current financing agreements, but
there can be no assurances.

Total revenue increased $0.7 million, (0.5%), from 2000 to 2001.
Core rental revenue increased by $1.2 million and direct sale
revenue declined by $0.4 million due to customer accounts lost
or contracted as a result of general economic conditions.
Ancillary revenues, such as delivery, fuel and environmental
charges, increased by $1.9 million, primarily as pass-throughs
of higher than expected energy costs.  Cost of rental operations
were $105.9 million for fiscal 2001, which represents a 3.3%
increase as compared to $102.5 million for 2000.  This increase
is largely due to increased natural gas prices, as well as
merchandise costs of new account installations.

Selling and administrative expenses were $25.8 million for 2001,
representing an increase of $2.0 million versus 2000. During
2000, the company recognized the benefit of certain non-
reoccurring adjustments relating to life insurance death
benefits and reversals of accruals for deferred compensation
arrangements totaling approximately $770,000.

Depreciation and amortization was $6.1 million for 2001,
representing a decrease of approximately $0.4 million or 5.4%
over 2000.  The reduction is due to the reduction in capital
expenditures over the past two years.

Net losses for each of the years ending October 31, 2001, 2000
and 1999, respectively, were $2,555,647, $182,051 and $951,265.

CUSTOM COACH: Files for Chapter 11 Reorganization in S.D. Ohio
Bankrupt Custom Coach Corp. announced that RedLine Investments
LLC, a private Cleveland investment partnership, is buying the
bus maker for an undisclosed sum, reported The Daily Deal.  The
Columbus, Ohio-based luxury motor coach maker filed for chapter
11 bankruptcy protection on April 18 with the U.S. Bankruptcy
Court for the Southern District of Ohio.

Custom Coach Leasing Corp., a part of Custom Coach that leases
luxury coaches and motor homes for sporting events and other
occasions, also filed for bankruptcy.  According to the Deal,
the entities listed liabilities between $1 million and $10
million, with 553 creditors.

The company's buses have an average sticker price of $700,000
and have been built for many celebrities, including football
sportscaster John Madden, actor Clint Eastwood, boxer Muhammad
Ali, as well as Wendy's International Inc. founder Dave Thomas.
(ABI World, April 24, 2002)

CUSTOM COACH CORPORATION: Voluntary Chapter 11 Case Summary
Lead Debtor: Custom Coach Corporation
              aka Nunn Acquisition Corp
              1400 Dublin Road
              Columbus, Ohio 43215

Bankruptcy Case No.: 02-54963

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      JCN Properties LLC                         02-54967
      Custom Coach Leasing Corporation           02-54969

Type of Business: The Debtor modifies buses for celebrities.
                   The company's modifications often are
                   elaborate and designed to fit a customer's
                   taste. Buses have sound systems, galley, bar
                   and bathroom. For business customers, they
                   also feature conference space, telephone, fax
                   and modem. The cost averages $700,000 per

Chapter 11 Petition Date: April 18, 2002

Court: Southern District of Ohio (Columbus)

Judge: Donald E. Calhoun, Jr.

Debtors' Counsel: Susan L. Rhiel, Esq.
                   392 E. Town Street
                   Columbus, Ohio 43215

CYBEX INTERNATIONAL: Will Hold Conference Call Tomorrow
Cybex International, Inc. (AMEX:CYB), a leading exercise
equipment manufacturer, will discuss its first quarter financial
results in a conference call tomorrow, April 30, 2002 at 10:00

Those who wish to participate in the conference call may
telephone 888/335-6674 approximately 15 minutes before the 10:00
A.M. EST starting time. A digital replay of the call will be
available by telephone for 24 hours following completion of the
live call, at 877/519-4471 toll free in the United States or
973/341-3080 for international callers, PIN #3253097.

Cybex International, Inc. is a leading manufacturer of premium
exercise equipment for consumer and commercial use. Cybex and
the Cybex Institute, a training and research facility, are
dedicated to improving exercise performance based on an
understanding of the diverse goals and needs of individuals of
varying physical capabilities. Cybex designs and engineers
each of its products and programs to reflect the natural
movement of the human body, allowing for variation in training
and assisting each unique user -- from the professional athlete
to the rehabilitation patient -- to improve their daily human
performance. For more information on Cybex and its product line,
please visit the Company's Web site at

As of December 31, 2001, Cybex's liquidity is strained with
total current assets of 29.7 million and total current
liabilities of 33.4 million.

DIAMOND ENTERTAINMENT: CEO James Lu Serving One-Year Sentence
As disclosed in its Form 10-K for the fiscal year ended March
31, 2001, filed with Securities and Exchange Commission on June
29, 2001, Mr. James Lu entered a plea and cooperation agreement
with the Office of the United States Attorney for the Eastern
District of New York. The agreement involved Mr. Lu pleading
guilty to one count of Conspiracy to Launder Money and one count
of violation of the Travel Act. According to Diamond
Entertainment Corporation the conduct for which Mr. Lu pled
guilty had no relationship to the Company's business or his
activities as an officer of the Company.  Mr. Lu was sentenced
on March 8, 2002, by Judge John Gleeson, for a term of one year
and one day imprisonment commencing April 19, 2002.  On April
18, 2002, Mr. Lu received his corrected written sentencing
document from his attorney.  During the time of Mr. Lu's
incarceration, he will not be able to attend to the management
of the business and he will be on a Leave of Absence.

The company distributes budget videos and DVDs, including
collections starring Abbott and Costello, Ozzie and Harriet, and
Martin and Lewis. Its has some 750 video titles -- most in the
public domain -- include motion pictures, television episodes,
sports, software tutorials, cartoons, and educational programs.
Diamond Entertainment also sells childrens' toys through Jewel
Products International. Its CineChrome division sells greeting
cards. The company sells through mass merchandisers, consignment
arrangements with a mail order catalog and retail chain, and
through its Web site.

Diamond Entertainment, as of September 30, 2001, reported that
its total current liabilities exceeded its total current assets
by about $1.6 million.

DOW CORNING: Reports $8.5 Million First Quarter Loss
Dow Corning Corp. reported consolidated net income of $22.9
million for the first quarter of 2002, eight percent higher than
the $21.1 million reported in Q1 of 2001, after excluding 2002
restructuring charges.  First quarter 2002 sales were $582.5
million, a ten percent decline from sales of $646.9 million in
last year's first quarter.

Including restructuring charges, Dow Corning reported a
consolidated net loss of $8.5 million for the first quarter of

"We are encouraged by our growth in profits after adjusting for
restructuring, despite continuing soft sales," said Dow
Corning's vice president for planning and finance and chief
financial officer Gifford E. Brown.  "The restructuring expenses
were associated with previously announced staff reductions to
adjust to lower operating rates caused by the global slowdown in
industrial activity. Our restructuring implementation is on
schedule and we have already begun to realize the benefits of
lower operating costs."

Dow Corning -- develops,
manufactures and markets diverse silicon-based products and
services, and currently offers more than 7,000 products to
customers around the world.  Dow Corning is a global leader in
silicon-based materials with shares equally owned by The Dow
Chemical Company and Corning Incorporated.  More than half of
Dow Corning's sales are outside the United States.

As reported in the February 5, 2002, edition of the Troubled
Company Reporter, the United States Court of Appeals for the
Sixth Circuit published two opinions.  One opinion says that Dow
Corning's Plan of Reorganization may give claimants outside the
United States inferior treatment.  The second opinion remanded
Dow Corning's chapter 11 cases back to District Court Judge Hood
with instructions to make additional findings of fact that
"unusual circumstances" exist that warrant granting non-
consensual releases to Dow Chemical Company, Corning,
Incorporated, and various insurance companies, under Dow Corning
Corp.'s Amended Joint Plan of Reorganization.  Dow Corning filed
for bankruptcy in 1995.  It's Plan, paying commercial claims in
full with interest and establishing a $3.2 billion silicone
claim settlement facility, was confirmed years ago.  Dow Corning
has stopped predicting when appeals from the confirmation order
will end and when the Effective Date will occur.

ENRON CORP: Seeks Court Approval of Woodlark Sale Agreement
Enron Corporation, and its debtor-affiliates ask Judge Gonzalez
to approve the following terms and conditions of the Woodlark

Woodlark Sale: Woodlark assigns and transfers to Iberdrola, and
                Iberdrola assumes and acquires from Woodlark, all
                of Woodlark's right, title and interest to the
                Early Works and related rights.

Consideration: Although Iberdrola bid on the Transaction as a
                whole, for the Early Works and related rights,
                Iberdrola agrees to pay Woodlark:

                (a) $210,000,000;

                (b) any amounts of the Contract Price and the
                    Staging Services Amount which have become due
                    prior to the Completion Date that have been
                    paid by Woodlark (or an affiliate on its
                    behalf); and

                (c) any amounts paid by Woodlark (or its
                    affiliates on its behalf) during the period
                    from the Contract Date until the Completion
                    Date to preserve the Early Works; provided,
                    that such amounts (other than VAT) do not
                    exceed $1,000,000 in the aggregate (unless
                    Iberdrola consents to such excess, such
                    consent not to be unreasonably withheld).

                In addition, Iberdrola agrees to pay
                Approximately $38,500,000 to the extent such
                amounts are due on the Completion Date, as well
                as any amounts due under the Staging Services

Termination:   In the event that the order approving the
                Transaction provides GE Company and GE
                International with a reasonable basis for
                concluding that any payments they received from
                Woodlark under the Power Island Contract are
                subject to avoidance by this Court under the
                Bankruptcy Code or applicable state law, GE
                Company and GE International have the right to
                terminate the Power Island Contract within 5
                calendar days following entry of such order.
(Enron Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ENRON CORP: Sempra Closes Metals Concentrates Assets Acquisition
Sempra Energy Trading, the wholesale commodity trading
subsidiary of Sempra Energy (NYSE: SRE), has completed the
previously announced acquisition of the metals concentrates
business of New York-based Enron Metals & Commodity

Enron Metals & Commodity Corp. is a top global trader of copper,
lead and zinc concentrates.  Sempra Energy Trading purchased the
metals concentrates business for a cash price of $43.5 million,
after approval by the U.S. Bankruptcy Court April 24, 2002.  The
purchase price is subject to a post-closing adjustment after
determination of net assets, as of the closing date.

In a separate transaction, Sempra Energy Trading has also
acquired the U.S. warehousing business of Henry Bath Inc. for
$12 million.  On April 2, 2002, Sempra Energy Trading acquired
the European and Asian assets of Henry Bath Limited and its
subsidiaries for a cash price of $24 million from Enron and
Dipanker Ghosh of PricewaterhouseCoopers, one of the joint
administrators of Enron Europe.

Henry Bath Limited and its subsidiaries hold a leading position
in the metals warehousing industry, storing approximately 18
percent of all non-ferrous metals held in the London-Metals-
Exchange-approved warehouses.

Previously, on February 4, 2002, Sempra Energy Trading completed
the acquisition of London-based Enron Metals Limited, the
leading metals trader on the London Metals Exchange, for $145
million, and renamed the company Sempra Metals Limited.

All of these transactions are expected to be accretive to Sempra
Energy's earnings in 2002.

The metals concentrates business will operate under the new
name, Sempra Metals Concentrates, and be based in New York.
Philip Bacon, previously president and chief executive officer
of Enron Metals & Commodity Corp., will continue to manage the
day-to-day operations of Sempra Metals Concentrates. Thomas
McKeever, chairman of Sempra Metals Limited, will head Sempra
Metals Concentrates.

Henry Bath Limited and its subsidiaries will retain their
current name. McKeever will head the group of companies, while
Michael Hutchinson, president and chief executive officer of
Sempra Metals Limited, will serve on the board of directors.

Based in Stamford, Conn., Sempra Energy Trading -- a subsidiary
of Sempra Energy Global Enterprises, the umbrella for Sempra
Energy's growth businesses -- is a leading participant in
marketing and trading physical and financial commodity products,
including natural gas, power, petroleum products and base
metals.  Sempra Energy Trading combines trading and risk-
management experience with physical commodity expertise to
provide innovative solutions for its customers worldwide.

Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500
energy services holding company with 2001 revenues of $8
billion.  The Sempra Energy companies' nearly 12,000 employees
serve more than 9 million customers in the United States,
Europe, Canada, Mexico, South America and Asia.

EXIDE TECH: Wants to Honor $3M Pre-Petition Employee Obligations
Currently, Exide Technologies, and its debtor-affiliates employ
approximately 6,500 employees in hourly, salaried, supervisory,
commissioned, consultant, management and administrative
positions to perform the functions necessary to effectively and
efficiently operate their businesses.

The Debtors seek to minimize the personal hardship that the
Employees will suffer if pre-petition employee-related
obligations are not paid when due or as expected, and to
maintain morale during this critical time. They, by this Motion,
seek authority, in their discretion, to pay and honor certain
pre-petition claims. These pre-petition claims, among other
items, include wages, salaries, and other compensation, federal
and state withholding taxes, payroll taxes, other amounts
withheld (e.g., garnishments, employee share of insurance
premiums, and 401(k) contributions), paid time off, vacation
time, medical benefits, insurance benefits, contributions to
employee benefit plans, retirement benefits, severance programs,
bonus plans, educational benefits, assistance and counseling
programs, and all other employee benefits that the Debtors
historically paid in the ordinary course of business.  The
Debtors also seek authority, in their discretion, to pay the
Reimbursable Expenses.

                        Employee Compensation

According to James E. O'Neill, Esq., at Pachulski Stang Ziehl
Young & Jones P.C. in Wilmington, Delaware, in the ordinary
course of their businesses, the Debtors make direct deposits and
pay Employees via payroll checks on a weekly and semi-monthly
basis. Salaried employees are generally paid semi-monthly on the
15th and last day of each month, and hourly employees (i.e.,
production employees in factories, distribution centers, and
branches) are paid on a weekly basis. The aggregate gross
amounts are approximately $3,150,000 for the weekly payroll and
$4,500,000 for the semi-monthly payroll.

Because most of the Debtors' Employees are paid in arrears and,
pursuant to various payroll schedules, as of the Petition Date,
Mr. O'Neill believes that some of the Employees have not been
paid all of their pre-petition wages. The Debtors believe that
as of the Petition Date, approximately $3,150,000 in accrued
pre-petition wages, salaries, commissions, and other
compensation, excluding vacation pay, severance pay, deferred
compensation and incentive bonus plan earned prior to the
Petition Date was unpaid. Similarly, not all payroll-related
taxes (such as employer's FICA payments, Social Security
payments, Medicare, unemployment, federal, state and local
withholding taxes) have been paid with respect to the Unpaid
Compensation. Additionally, the Debtors routinely withhold
amounts from Employee salaries and wages and, in turn, pay such
amounts to third parties on a periodic basis. The Withheld
Amounts that remain unpaid as of the Petition Date may include,
but are not limited to, garnishments, employee share of
insurance premiums, 401(k) contributions, credit union savings,
and flexible spending accounts to pay medical and child care

Unpaid Compensation, Taxes and Withheld Amounts may have been
due and owing on the Petition Date because:

A. some discrepancies may exist between amounts paid and amounts
    Employees or others believe should have been paid, which,
    upon resolution, may reveal that amounts are owed to such

B. some payroll checks issued to Employees prior to the Petition
    Date may not have been presented for payment or cleared the
    banking system and, accordingly, have not been honored and
    paid as of the Petition Date; and

C. variations in the Debtors' various payroll schedules.

As of the Petition Date, the Debtors owe approximately
$3,150,000 in Unpaid Compensation, approximately $2,250,000 in
Taxes, and approximately $725,000 in Withheld Amounts. The
Debtors recognize the Bankruptcy Code's treatment of unsecured
claims of employees for Unpaid Compensation earned within ninety
days before the date of filing. The Debtor is unaware of any
Employee being owed more than $4,650 for Unpaid Compensation and
the Debtors, if this Motion is granted, will not pay any
Employee more than $4,650 for such Unpaid Compensation. The
Debtors seek authority, in their discretion, to pay any Unpaid
Compensation, subject to the limitation set forth above, Taxes,
and Withheld Amounts that accrued, but remained unpaid as of the
Petition Date and all costs incident thereto.

Other employee compensation obligations include:

A. Paid Time Off and Vacation Time: The Debtors have various
    policies whereby certain Employees are permitted to take paid
    time off for sick leave, personal days, holidays, jury duty
    and bereavement leave. Salaried and most hourly Employees are
    not entitled to compensation for accrued, but unused PTO.
    However, two plants have guaranteed PTO for its hourly
    employees. As of the Petition Date, the Debtors believe that
    salaried and regular fulltime branch hourly Employees have a
    relatively small amount of accrued, but unused Vacation Time
    because vacation days are not fully accrued until the
    Employee's anniversary date. It would be extremely difficult
    for the Debtors to obtain the actual amount of outstanding
    and accrued Vacation Time because they do not have a
    centralized Employee Database and this information can only
    be obtained with great hardship locally at the numerous
    distribution centers, branches, smelters and offices.

B. Union Employees: The Debtors have many Employees who work on
    an hourly basis and whose employment is governed by
    collective bargaining agreements. As a result of the CBAs
    entered into by the Debtors, the requirements set forth for
    Union Employees in connection with their hours worked,
    overtime, Vacation Time and other PTO vary slightly depending
    on the particular CBA. The outstanding wages owed to Union
    Employees as of the Petition Date, which is included in the
    Unpaid Compensation described above, is approximately

C. ADP: In order to administer certain of their payroll and
    benefit programs, the Debtors employ ADP to act as an
    intermediary and paying agent. ADP provides the Debtors'
    benefit providers with information regarding the covered
    Employees and the amount of coverage to which each Employee
    is entitled. Without the aid of ADP, it is likely that the
    Debtors' would experience disruption in their payroll
    Services and that some Employees would experience
    difficulties securing their benefit coverage, causing a
    serious disruption in the Debtors' operations. The Debtors
    pay ADP approximately $30,000 per month for their services.
    As of the Petition Date, the Debtors owe approximately
    $75,000 to ADP.
                         Employee Benefits

The Debtors have established various plans and policies to
provide their Employees with the Health Benefits, the Employee
Insurance Benefits and the Other Employee Benefits, in addition
to the costs associated thereto, including, but not limited to,
the Employee Deductions. The Employee Benefits are as follows:

A. Health Benefits: An important element of the Employee
    Benefits is the medical, dental, vision and prescription drug
    insurance, which the Debtors provide for all their current
    and certain former employees primarily through a variety of
    self-insured and premium-based insurance plans. The estimated
    annual Health Benefits cost to the Debtors is approximately
    $42,000,000. As with the Unpaid Compensation, Employees and
    their families rely on the Debtors to provide continuing
    health care. Any failure to pay these amounts would be
    injurious to employee welfare, morale and expectations. The
    Debtors pay approximately $3,960,000 per month for medical
    claims and administrative costs. As of the Petition Date, the
    Debtors estimate that the Pipeline Medical Claims aggregate
    approximately $8,800,000.

    Additionally, the Debtors purchase stop loss coverage for the
    self-insured Health Plans to cap their exposure for
    individuals at $250,000 per year. As of the Petition Date,
    the premiums owed for the Stop Loss Insurance is
    approximately $65,000. The Debtors are also responsible for
    overhead costs to administer the Self-Insured Health Plans.
    The amounts owed for overhead costs as of the Petition Date
    are approximately $350,000.

    The Debtors also purchase Health Benefits for some employees
    covered by United Steelworkers and International Brotherhood
    of the Teamsters negotiated contracts. The Union Health Plans
    are held by the unions and the Debtors are required to pay a
    premium. The average monthly cost of these health benefits is
    approximately $125,000. As of the Petition Date, the Debtors
    estimate that the premiums owed for the Union Health Plans
    total $41,500.

B. Employee Insurance Benefits: The Debtors provide Employees
    with premium-based group terra life insurance and accidental
    death and dismemberment insurance. Salaried Employees receive
    coverage equal to one times current base salary while Hourly
    Employees receive a fixed level of coverage based on the
    employee group. The Debtor pays approximately $45,000 per
    month for the Life Insurance coverage and $3,500 per month
    for all Employees. As of the Petition Date, the Debtors'
    believe that approximately $50,000 is owed for premiums for
    the Life Insurance and ADD.

    The Debtors provide Employees with business travel accident
    insurance with a death benefit ranging from $1,000,000 to
    $150,000 per person. The Debtors pay approximately $12,000
    annually for the Business Travel Insurance for all Employees.
    As of the Petition Date, the Debtors believe that
    approximately $500 is owed for premiums for the Business
    Travel Insurance.

    The Debtors also provide Employees with short- and long-term
    disability benefits, which are paid by a third-party
    administrator and subsequently funded by the Debtors.
    Benefits for salaried Employees vary depending on years of
    service, with a maximum benefit of four weeks at full salary
    and 22 weeks at 80% of salary. As of the Petition Date, the
    Debtors believe that $22,000 is owed for overhead to
    administer the Short-Tenn Disability Benefits and there are
    approximately $35,000 of outstanding claims.

    Employees are eligible for Long-Term Disability Benefits
    after 26 weeks of short term disability and receive
    approximately 60% income replacement. Approximately 95% of
    the premium for all salaried and union-free hourly Employees
    is funded by the Employees through payroll deduction. The
    Debtors portion of the premium is approximately $3,500 per
    month. The Debtors believe that the amounts owed for the
    Long-Term Disability Benefits is approximately $12,250.

    The Debtors maintain premium-based fiduciary liability
    insurance for their fiduciaries, including the Debtors'
    executives, which covers claims alleging breach of duties
    specified by the 1974 Employee Income Retirement Security Act
    and is a rider to the Debtors' directors and officers
    insurance policy. The approximate annual premium for the
    Fiduciary Liability Insurance is approximately $40,250. The
    annual premium for the Fiduciary Liability Insurance combined
    with the D&O Insurance is approximately $1,200,000. As of the
    Petition Date, the Debtors do not owe any premiums for the
    Fiduciary Liability Insurance or the D&O Insurance.

C. Other Employee Benefits: The Debtors also offer Employees the
    opportunity to use flexible spending accounts to rise pre-tax
    dollars toward the payment of medical or dependent care
    expenses. As of the Petition Date, the Debtors estimate that
    the contributions to the FSA total approximately $56,000, the
    claims total approximately $36,500 and the outstanding
    amounts are approximately $19,500. The Debtors also pay a
    monthly administrative fee of approximately $1,500, covering
    308 plan participants. As of the Petition Date, the Debtors
    owe approximately $3,750 for administrative fees relating to
    the SA.

    The Debtors offer Employees the ability to purchase long term
    care insurance, supplemental life insurance for employees and
    dependents, and property/casualty insurance. The approximate
    monthly premium for long-term care insurance for the three
    participants is $100. The approximate monthly premium for the
    supplemental life insurance is $36,000, covering 1,520
    participants. The approximate monthly premium for the
    voluntary property/casualty insurance is $12,000, covering
    approximately 100 participants.

D. Employee Benefits Withheld From Employee Earnings and Related
    Reductions and Payments:  The Debtors deduct from Employees'
    earnings payroll taxes; employee contributions for health
    benefits and health care and dependent care spending
    accounts; employee contributions to employee life insurance,
    long term care insurance, long term disability insurance,
    voluntary property and casualty insurance and personal
    accident insurance; employee contributions to 401(k) plans
    and 401(k) loan repayments; legally ordered deductions, such
    as child support; voluntary contributions to United Way; and
    employee parking and public transportation costs. Prior to
    the Petition Date, Employee Deductions not remitted totaled
    approximately $950,000. Due to the commencement of the
    Chapter 11 Cases, these funds were deducted from employee
    earnings, but may not have been forwarded to appropriate
    third-party recipients.

    The Debtors believe that performing their obligations under
    the above-described Employee Benefits is essential to
    maintaining employee morale. Any disruption in the benefits
    under such programs will call into question the Debtors'
    commitment to their Employees.

                       Retirement Benefits

The Debtors seek to honor retirement benefits as follows:

A. Pension Plans: The Debtors sponsor nine defined benefit
    pension plans, covering virtually all of the Debtors active
    Employees and contribute to two multi-employer plans. The
    Debtors pay approximately $50,000 per month to the Teamsters
    Pension Trust and $12,200 per month to the Steelworkers
    Pension Trust. As of the Petition Date, the Debtors owe
    approximately $25,000 to the Teamsters Pension Trust. No
    payments are due to the Steelworkers Pension Trust as a
    result of a surplus, which currently totals approximately
    $109,000. The Debtors estimate that the minimum funding
    requirement for the Defined Benefit Plans for fiscal year
    2003 will be approximately $5,800,000. The Debtors are
    required to make a minimum funding contribution on April 15,
    2002 in the amount of $177,000.

B. Other Retirement Benefits: The Debtors offer their current
    Employees the opportunity to participate in a 401(k) savings
    plan. It is estimated that the matching contribution for
    hourly participants for the plan year ending December 31,
    2001 will be $350,000. The Debtors estimate that guaranteed
    minimum match for the plan year beginning January 1, 2002
    will be approximately $25,000 per month. Salaried
    participants defer approximately $450,000 per month. Hourly
    participants defer approximately $400,000 per month. As of
    the Petition Date, the Debtors owe approximately $87,500 for
    calendar year 2002 hourly Employee match accrual. However,
    this amount will not be funded until calendar year 2003.

    The Debtors also provide medical, dental and prescription
    benefits to certain of its retired salaried Employees. The
    Debtors pay approximately $950,000 in annual claims for
    former salaried Employees covered by these plans.
    Approximately $928,000 of this annualized cost is to provide
    retiree medical benefits for former salaried Employees of
    GNB. The remaining $22,000 is designated to provide retiree
    medical benefits to former Exide executives. The amounts owed
    for the Retired Salaried Health Benefits, as of the Petition
    Date, are included in the Pipeline Medical Claims discussed

    The Debtors also provide medical and prescription benefits to
    certain of its retired hourly Employees. The Debtors pay
    approximately $1,400,000 in annual claims for these former
    hourly Employees.

                      Employee Bonus Programs

In the ordinary course of their businesses, Ms. Jones relates
that the Debtors implement various types of incentive bonus
programs for different constituencies of employees to retain and
motivate its employees. Although these Bonus Plans are not
mandatory obligations of the Debtors, the Debtors seek the
authority by this Motion to continue the Bonus Plans at their
sole discretion in order to retain valuable Employees and
preserve employee morale as the Debtors seek to consummate a
successful reorganization.

Ms. Jones relates that the Debtors maintain the Exide
Technologies Corporate Bonus Plan that provides for annual bonus
payments to Employees at designated salary grades and
responsibility levels, including high-level managers, directors,
vice-presidents, presidents and other professionals. The plan is
based on performance achievements of the individuals, as well as
the Debtors. Each eligible Employee has an annual target bonus
amount that is expressed as a percentage of base salary.
Depending on a combination of individual and Debtors'
performance, each eligible Employee can receive an actual bonus
anywhere from 0% to 150% of his or her Target Award.

Approximately 119 of the Debtors' Employees are currently
eligible for the Exide Technologies Corporate Bonus Plan but the
Debtors expect to pay no bonus for the fiscal year ending March
31, 2002. As of April 1, 2002, Ms. Jones informs the Court that
the Debtors modified the Exide Technologies Corporate Bonus Plan
from an annual plan to quarterly goals, under which, Employees
receive a bonus if they meet specific goals relating to their
positions, including figures based on earnings before interest,
taxes, depreciation and amortization (EBITDA) (and restructuring
costs), working capital adjustment, sales and margin, and costs,
inventory and achieving certain initiatives. The Debtors expect
to pay, and have budgeted, approximately $4,400,000 annually and
$1,100,000 quarterly for the Exide Technologies Corporate Bonus
Plan. These amounts are based upon each eligible Employee
meeting their Target Award and therefore, could decrease if
Employees fall short of their Target Award or increase if they
exceed their Target Award.

    Educational Benefits, Assistance and Counseling Programs

Along with the numerous Employee Benefit Plans, various
insurance programs profit sharing plans, and bonus incentive
programs, the Debtors also offer their Employees educational
benefits, including an employee scholarship program and a
tuition reimbursement program, employee assistant programs
(EAP), and counseling programs. These various programs are
offered on a case by case basis to the Debtors' Employees at no
cost to the Employee. As of the Petition Date, the Debtors owe
approximately $55,000 for the Employee Programs.

                      Reimbursable Expenses

Prior to the Petition Date and in the ordinary course of their
businesses, the Debtors reimbursed Employees for certain
expenses incurred in the scope of their employment. As of the
Petition Date, the Debtors owe approximately $950,000 to
Employees consisting of pre-petition business expenses relating
to, among other things, related travel expenses; meals;
relocation expenses; car rentals; leased car expenses; cellular
phones; calling cards; mileage reimbursement; seminars; parking;
and miscellaneous business expenses. (Exide Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

EXODUS COMMS: Files Liquidating Chapter 11 Plan
Determining that a Chapter 11 liquidation plan would provide the
maximum recovery for their creditors, Exodus Communications,
Inc., and its debtor-affiliates present the Court with a
disclosure statement on a liquidating Chapter 11 Plan.

The Debtors' general counsel, Adam W. Wegner, tells the Court
the Debtors have opted for a Chapter 11 liquidation as opposed
to a Chapter 7 liquidation. They believe that their estates have
value that would not be fully realized in a Chapter 7
Liquidation. This is primarily due to the difficulties that a
Chapter 7 Trustee would encounter in resolving disputed,
contingent and unliquidated claims, the additional
administrative expenses that would be incurred, plus the delay
in distributions that would occur, if the Debtors' Chapter 11
cases were converted to Chapter 7. The implementation of the
Chapter 11 Plan dependents on the Plan Administrator, who will
be appointed by Plan Committee prior to the Confirmation Date,
after consultation with and as agreed to by the Debtors.

Subject to the Court's approval, the Plan includes:

A. Substantive Consolidation: On the Confirmation Date, (i) all
    inter-company Claims by, between and among the Debtors will
    be eliminated, (ii) all assets and liabilities of the
    Affiliate Debtors will be emerged or treated as if they were
    merged with the assets and liabilities of EXDS Inc. (The
    Debtors had announced through SEC form 8-K that effective
    February 11, 2002, the name Exodus Communications, Inc. has
    been changed to EXDS, Inc.), (iii) any obligation of a Debtor
    and all guarantees thereof by one or more of the other
    Debtors will be deemed to be one obligation of EXDS, (iv) the
    Subsidiary Interests will be cancelled, and (v) each claim
    filed or to be filed against any Debtor will be deemed filed
    only against EXDS and will be deemed a single Claim against
    and a single obligation of EXDS. On the Confirmation Date,
    all Claims based upon guarantees of collection, payment or
    performance made by the Debtors as to the obligations of
    another Debtor will be released with further force and

B. Merger of Subsidiaries into EXDS: On the Effective Date, the
    members of the board of directors of each of the Affiliate
    Debtors will be deemed to have resigned, each of the
    Affiliate Debtors will be deemed merged with and into EXDS
    and the Chapter 11 Cases of the Affiliate Debtors shall be

C. Continued Corporate Existence: EXDS will continue to exist as
    Reorganized EXDS after the effective date.

D. Amended Certificate of Incorporation and By-laws: The
    certificate of incorporation and by-laws of EXDS will be
    amended as necessary to satisfy the provisions of the Plan
    and the Bankruptcy Code. This will be amended to, among other
    things: (a) authorize issuance to the Plan Administrator of
    1 share of new common stock, $0.01 par value per share, (b)
    provide, pursuant to section 1123(a)(6) of the Bankruptcy
    Code, for a provision prohibiting the issuance of non-voting
    equity securities, and (c) limit the activities of
    Reorganized EXDS to matters related to the implementation of
    the Plan and to matters reasonably incidental thereto.

E. Directors and Officers, Effectuating Documents, Further
    Transactions: From and after the Effective Date, the Plan
    Administrator will serve as the sole shareholder, officer and
    director of Reorganized EXDS. The Plan Administrator will be
    authorized to execute, deliver, file or record such
    documents, instruments, releases and other agreements and to
    take such actions as may be necessary or appropriate to
    effectuate and further evidence the terms and conditions of
    the Plan.

F. No Revesting of Assets: The property of the Debtors' Estates
    cannot be revested or reinvested in the Debtors on or
    following the Confirmation Date or the Effective Date but
    will remain property of the Estate and continue to be subject
    to the jurisdiction of the District Court following
    confirmation of the Plan until distributed to holders of
    Allowed Claims. From and after the Effective Date, all such
    property will be distributed.

G. Preservation of Rights of Action, Settlement of Litigation
    Claims: Except as otherwise provided in the Plan, the
    Confirmation Order, or in any document, instrument, release
    or other agreement entered into in connection with the Plan,
    the Debtors and their Estates will retain the Litigation
    Claims. Reorganized EXDS, may, subject to the ultimate
    supervisory authority of the Plan Committee enforce, sue,
    settle or compromise or decline to do so any or all of the
    Litigation Claims.  The Debtors may settle any or all of the
    Litigation Claims with the approval of the District Court
    pursuant to Fed. R. Bankr. P. 9019.

H. ADR: The Debtors, Reorganized EXDS and/or the Plan
    Administrator have requested or may request that the District
    Court establish the ADR for the liquidation and payment of
    Tort Claims. Any ADR so established will continue after the
    Confirmation Date and the Effective Date. The Debtors
    anticipate that, pursuant to any ADR that may be established,
    each Tort Claim will be subjected to a process designed to
    produce a settlement with respect to such Tort Claim. If
    unsuccessful, the holder of the Tort Claim would then be
    entitled to obtain relief from the District Court to pursue
    the Tort Claim in an appropriate forum, which may include the
    District Court, if so requested by Reorganized EXDS.

I. Cancellation of Securities, Instruments and Agreements
    Evidencing Claims and Interests: Except as otherwise provided
    in the Plan and in any contract, instrument or other
    agreement or document created in connection with the Plan, on
    the Effective Date and concurrently with the applicable
    distributions made, the promissory notes, share certificates
    (including treasury stock), other instruments evidencing any
    Claims or Interests, and all options, warrants, calls,
    rights, puts, awards, commitments or any other agreements of
    any character to acquire such Interests will be cancelled and
    of no further force and effect.

J. Sources of Cash for Plan Distributions. All cash necessary
    for the Reorganized EXDS and the Plan Administrator to make
    payments pursuant to the Plan must be obtained from the
    Debtors' cash balances and the liquidation of the Debtors'
    and the Estates' remaining non-cash assets, if any. Cash
    payments to be made pursuant to the Plan will be made by the
    Reorganized EXDS or any successor or, if the Disbursing Agent
    is an entity other than the Reorganized EXDS, the Disbursing

K. Special Provisions Regarding Insured Claims: Distributions
    under the Plan to each holder of an Allowed Insured Claim
    will be in accordance with the treatment provided under the
    Plan for the Class in which such allowed insured claim is
    classified, provided, however, that the maximum amount of any
    distribution under the Plan on account of an allowed insured
    claim is limited to an amount equal to the applicable
    deductible under the relevant insurance policy minus any
    reimbursement obligations of the Debtors to the insurance
    carrier for sums expended by the insurance carrier on account
    of such claim.

L. Exemption from Transfer Taxes. Pursuant to Section 1146 of
    the Bankruptcy Code, the issuance, transfer or exchange of
    notes or equity securities under the Plan; the creation of
    any mortgage deed of trust, lien, pledge or other security
    interest; the making or assignment of any contract, lease, or
    sublease or the making or delivery of any deed or other
    instrument of transfer under the Plan including, without
    limitation, any merger agreements; agreements of
    consolidation, restructuring, disposition, liquidation or
    dissolution; deeds; bills of sale and transfers of tangible
    property, will not be subject to any stamp tax, recording
    tax, personal property tax, real estate transfer tax, sale or
    use tax or other similar tax. Unless the District Court
    orders, otherwise, all sales, transfers and assignment of
    owned and leased property, approved by the District Court on
    or prior to the Effective Date, is deemed, in furtherance of,
    or in connection with the Plan. (Exodus Bankruptcy News,
    Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-

FEDERAL-MOGUL: Judgment Claimants Seek Stay Relief to Appeal
Calvin R. Lane and Alicia Lane ask the Court for entry of an
order modifying the automatic stay in order for them to pursue
the appeals filed by Federal-Mogul Corporation, and its debtor-
affiliates and to ultimately recover against the Letter of
Credit posted by the Debtors in the State Court Action. The
Lanes are plaintiffs in an asbestos-related personal injury
lawsuit filed against, among others, Flexitallic, Inc. a
predecessor of Gasket Holdings, Inc., a subsidiary of the
Debtors, which was filed in the Superior Court of the State of
California for the County of Los Angeles on February 15, 2000.

Daniel K. Hogan, Esq., in Wilmington, Delaware, informs the
Court that the State Court Action arises out of:

A. the failure of the Debtors to give adequate warning of the
    hazardous conditions to which the Lanes were exposed;

B. the negligent, careless and reckless mining, manufacturing,
    processing, import, conversion, sale, distribution,
    installation and application of a dangerous product;

C. the negligence, carelessness and failure to install
    appropriate fireproofing material that would not cause
    mesothelioma and otherwise harm people who were exposed to it
    such as Mr. Calvin R. Lane;

D. the breach of the implied warning by the Debtors by releasing
    harmful asbestos fiber into the atmosphere as Mr. Lane
    carried out his duties; and,

E. the false representation to consumers, users and persons
    exposed to the asbestos products that the asbestos products
    were safe products and would not cause harm to persons
    exposed to them in the manner in which Mr. Lane was exposed
    and that it was safe to work around the asbestos products on
    a regular and prolonged basis. As a result of the Debtors'
    negligence and carelessness, Mr. Lane suffers from
    mesothelioma, and other asbestos-caused diseases, all of
    which have caused and will continue to cause him pain and
    suffering and all of the Lanes' damages.

Mr. Hogan relates that on June 29, 2001, after trial, a jury
returned a verdict in favor of the Lanes in the amount of
$4,213,171. Following entry of the judgment, the Debtors filed a
Notice of Appeal to Superior Court of the State of California
and an Irrevocable Standby Letter of Credit for stay of
execution of the judgment, which amounted to $6,080,997.

Mr. Hogan argues that the State Court Action should be permitted
to proceed because:

A. the questions presented in the appeal are best addressed by
    the California Superior Court;

B. pursuit of the Appeal will not affect the Debtors'
    reorganization efforts; and,

C. recovery of the award in the State Court Action is available
    from the Letter of Credit posted by the Debtors.

Mr. Hogan asserts that to the extent the Debtors are responsible
for defense in the appeal of the State Court Action, lifting the
Stay will not harm the Debtors. The Debtors are already
represented in the State Court Action by local counsel in
California and the State Court Action will require no
significant time commitment from the bankruptcy counsel or any
employees who might be centrally involved in the Debtors'
reorganization efforts. Besides, if the verdict is affirmed on
appeal, the Lanes will only seek recovery first from available
Letter of Credit posted with the State Court on which the
Debtors have no interest. Since the Letter of Credit is not a
property of the Debtors' estate, it cannot be necessary for an
effective reorganization or be property in which the Debtors
have equity.

Mr. Hogan claims that the Lanes have prevailed at trial and are
seeking an affirmation of that verdict in the pending Appeal
filed by the Debtors. Maintenance of the stay prolongs
litigation and prevents the Lanes from bringing this matter to a
close. There is no reason why the Debtors should delay this
process any further, nor is there benefit to such delay, since
the Appeal is based on a fixed record and requires only legal
arguments. By maintaining the automatic stay, the hardship of
the Lanes greatly outweighs the hardships of the Debtors.
(Federal-Mogul Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

FLEMING: Fitch Affirms Low-B's After Acquisition Announcement
Fitch Ratings affirms Fleming Companies, Inc.'s 'BB+' rated
secured bank credit facilities, 'BB' rated senior unsecured
notes and 'B+' rated senior subordinated notes. The affirmations
follow the company's announcement of its acquisition of two
convenience store distribution companies for total cash
consideration of approximately $430 million (including assumed
debt), to be financed with a combination of debt and equity. The
Rating Outlook remains Negative, reflecting the uncertainty as
to the achievement of Kmart's sales levels, the ultimate nature
of Fleming's agreement with Kmart, as Fleming's contract with
Kmart has not yet been confirmed in the bankruptcy process and
the inherent integration risks associated with the acquisitions.
Also of concern is the possibility for additional Kmart store
closures, beyond those already announced.

The two acquisitions will significantly enhance Fleming's
distribution business and solidify its position as the largest
food wholesaler in the U.S. The larger acquisition, Core-Mark
International, Inc. distributes products to over 30,000
convenience stores throughout the Western U.S. and generated
about $3.4 billion in revenues and $54 million in EBITDA
(excluding LIFO) in 2001. Head Distributing, the second
acquisition, also distributes to the convenience store industry,
with its key territory being the Southeast. Head generated about
$350 million in 2001 revenues. Fleming's business with
convenience stores, which represented about 11.7% of 2001
revenues, will more than double as a result of these

The affirmations reflect the significant equity component of the
funding of these transactions. While the pace of improvement in
bondholder protection measures in 2002 will slow slightly from
previously anticipated levels, leverage (total debt plus eight
times rents to EBITDAR) and coverage (EBITDAR to interest and
rents) at year-end 2002 are still expected to strengthen from
the 4.4x and 2.4x respectively, at year-end 2001. Of ongoing
concern is the company's appetite for acquisitions, which has
resulted in incremental borrowings. However, Fitch Ratings
favorably views the equity component of the financing of these
transactions and to the extent Fleming continue to pursue
opportunistic acquisitions, we expect that they will be continue
to be financed in a way that would not compromise the company's
ability to meet its financial targets.

FORMICA CORPORATION: Wants More Time to Make Lease Decisions
Formica Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to give
them more time to decide whether to assume, assume and assign,
or reject their unexpired nonresidential real property leases.
The Debtors ask for an open-ended extension through the date a
chapter 11 plan is confirmed in their cases.

The Debtors assert that the Unexpired Leases are valuable and
are integral to the continued operation of their businesses.
These unexpired leases contain the Debtors' sales offices and
corporate offices and warehouse facilities, which are a crucial
part of their continued operations.

The Debtors tell the Court that they cannot successfully operate
their marketing and manufacturing operations without the
continued use of the property underlying the Unexpired Leases.
The Debtors add that the 60-day period specified in the
Bankruptcy Code is not enough for them to arrive a reasoned
determination as to all of their Unexpired Leases.

Formica, together with its debtor and non-debtor-affiliates is a
preeminent worldwide manufacturer and marketer of decorative
surfacing materials. The company filed for chapter 11 protection
on March 5, 2002. Alan B. Miller, Esq. and Stephen Karotkin,
Esq. at Weil, Gotshal & Manges LLP represent the Debtors in
their restructuring efforts. As of September 30, 2001, the
Company reported a consolidated assets of $858.8 million and
liabilities of $816.5 million.

DebtTraders reports that Formica Corp.'s 10.875% bonds due 2009
(FORMICA1) are trading between 17 and 21. See
more real-time bond pricing.

FRIEDE GOLDMAN: Hydralift Takes Over Amclyde Business for $36MM
Friede Goldman Halter, Inc. (OTCBB:FGHLQ) announced the closing
of the previously announced sale of the company's AmClyde
Division located in St. Paul, Minnesota, for approximately $36
million to Hydralift ASA, a Norwegian company.

"This is an important step," said Jack Stone, President and
Chief Executive Officer of Friede Goldman Halter. "The
completion of this transaction provides a major portion of the
liquidity necessary to accomplish the financial restructuring.
The Company continues to move toward Court approval of its Plan
of Reorganization. The officers and employees of the AmClyde
division did an exemplary job of working with their customers
during the bankruptcy and are joining another market leader."

Friede Goldman Halter is a leader in the design and manufacture
of equipment for the maritime and offshore energy industries.
Its core operating units are Friede Goldman Offshore
(construction, upgrade and repair of drilling units, mobile
production units and offshore construction equipment) and Halter
Marine, Inc. (a significant domestic and international designer
and builder of small and medium sized vessels for the
government, commercial, and energy markets). As previously
announced, Friede & Goldman Ltd. (naval architecture and marine
engineering) is expected to be sold in early May, subject to a
bankruptcy court approved auction process.

GLOBAL WEB: Mantyla McReynolds Issues 'Going Concern' Opinion
Independent auditor Mantyla McReynolds of Salt Lake City, Utah,
in the Auditors Report for Global Web, Inc., dated April 15,
2002, states: "the Company has recurring losses from operations,
negative cash flow from operations and a working capital
deficiency which raise substantial doubt about its ability to
continue as a going concern."

Global Web, Inc., a Utah corporation, based in Draper, Utah,
provides, develops and markets business  services primarily to
Internet users including commercial businesses.   In addition,
it provides financial services to assist its customers.

Global Web, Inc. was organized on September 6, 1985, under the
laws of the State of Utah as BP 150,  Inc., having the purpose
of investing in a business opportunity.  BP 150 sold 150,000
shares of common stock in a public offering in January 1986. In
1987 it invested these funds in a restaurant franchise area and
changed its name to American Restaurant Management, Inc. In 1989
the restaurant venture failed and the Company remained inactive
from 1989 until March 1998.

In March 1999 it acquired all of the issued and outstanding
shares of Global Web, Inc., a Nevada  corporation, in exchange
for a controlling interest. Since that time it has operated and
marketed products and services to its clients and customers.

During 2001 the Company encountered cash flow difficulties which
in part were created by the events of September 11, 2001.  The
Company is working with creditors to make different payment
arrangements with longer payout periods. In addition, it has
been sued by suppliers and others because it has  failed to make
timely payments. Management believes that the Company will, over
time, be able to resolve these problems. Global Web has
indicated that it does not intend to raise funds to pay
creditors and admits that no assurance can be given that it will
be successful in resolving the cash flow problems.

Operation of the Company is to provide, when a customer
subscribes to its service, access to a web site hosted by Global
Web and to provide the use of the Company's software called
"Quicksitemaker".  Previously the software was called "Web
Builder." A subscriber uses Quicksitemaker, a point and click
based program, to construct or build the web site.  On the
Internet a subscriber gains access to and use of Quicksitemaker
by providing a unique, personal access code.  Quicksitemaker is
not downloaded or sold separately as a software program.
Access is available only by subscription.  Through
Quicksitemaker subscribers build web pages with ease by making
choices from the series of options  provided in the software.
Knowledge of web page programming code is not needed. By
designating  choices from the menu the web page is built.
Options are selected by pointing and  clicking.  Options include
such things as background colors, type faces for text, page
location, and graphics. Changes and updates are made through
Quicksitemaker at any time.  Quicksitemaker also has shopping
cart and catalogue features in it.  Quicksitemaker is used by
both novices and professionals. Presently the Company services
approximately 2,000 subscribers for web sites and other
products. Global Web is not dependent upon a few major

For the period ended December 31, 2001, Global Web had revenues
of $12,335,753 compared to $6,859,522 for the year ended
December 31, 2000, and a net loss of $5,727 compared to a net
loss of  $1,250,489 for an increase of $1,244,762. Revenues
increased by $5,476,231 because of several factors. First, the
Company conducted more than double the seminars in 2001 that it
did in 2000.  This added significantly to its customer base and
also provided for greater opportunities for post-seminar sales.
Second, it had an entire year of selling its own merchant
account leases.  Third, it increased its package prices and
bundled additional services in them to make them more attractive
to its customers. Fourth, its lead generation system yielded
significantly higher sales through its telemarketing activities.
And fifth, the amount of revenue that was deferred from 2000 and
recognized during 2001 was significantly greater than the
revenue needing to be deferred to 2002. As an offset to the
increase, in the third and fourth quarters, because of
difficulties with its previous  merchant account provider the
Company was unable to consummate a number of leases.  As a
result its lease revenues were significantly down in the fourth

Expenses increased commensurate with revenues, however a decline
was noticed in profit margins from the seminar sales as Global
Web moved into the third quarter.  By the fourth quarter it was
not able to cover seminar costs from the seminar sales.
Expenses increased by $4,056,258 from $8,124,618 to $12,180,876.
A review of the lease portfolio showed that provision for
uncollectible accounts was probably insufficient to cover losses
so the allowance was increased significantly.  Total bad debt
expense for 2001 was $1,431,991 compared to only $613,646 in

Total assets as of December 31, 2001, were $1,257,057 compared
to $2,028,051 as of December 31,  2000, for a decrease of
$770,994.  This was primarily the result of selling a number of
the merchant lease receivable contracts and a drop in prepaid
expenses since the Company was not incurring seminar expenses at
December 31, 2001.  Another significant drop in assets resulted
from the Company's  experience with collections on its lease
receivables.  Previously, it had been recording a 25% allowance
for bad debt on these leases, but as the Company began to
develop more history it appeared that that level was
insufficient.  At year end, the allowance was increased  to 49%.

Liabilities decreased by $1,099,992 from $3,023,975 as of
December 31, 2000 to 1,923,983 primarily  because of the
decrease in deferred revenues.  Accounts payable during the
period increased by  $413,003 from $650,447 to $1,063,450
because decreased cash flow from the seminars.  In November
Global Web entered into an agreement with a debt management
company to work with its major creditors in an attempt to
restructure Company debt. It is not known if this venture will
be successful. The Company turned its line of credit into a term
loan moving it from current liabilities to long term and also
incurred new leases which increased long term debt from $70,135
to $281,261.  Total liabilities decreased $888,887 from
$3,094,110 to $2,205,243.

As of December 31, 2001, the Company's current ratio was 0.19
compared to .23 as of December 31, 2000.

Global Web is dependent upon future sales, maintaining its
present level of subscribers, and  monthly lease payments at
anticipated levels to fund operations.  Its primary objective is
to increase the number of subscribers to its products and
services.  The Company indicates that it continues to evaluate
its marketing plan and may seek other methods of selling its

However, the Company has accumulated losses for the years ended
December 31, 2001 and 2000 totaling $1.2 million, has had
significant negative cash flow from operations, and has a
working capital  deficiency.  The Company's ability to achieve a
level of profitable operations and/or additional  financing
impacts its ability to continue as it is presently organized.
These factors raise  substantial doubt about its ability to
continue as a going concern.

HAYES LEMMERZ: Taps Arthur Andersen as Compensation Consultant
Hayes Lemmerz International, Inc., and its debtor-affiliates ask
the Court to authorize the retention of Arthur Andersen as
Employee Compensation Consultant for the Debtors, nunc pro tunc
to the Petition Date.  Author Anderson would serve to assist the
Debtors in the design and implementation of a revised
compensation strategy to retain key employees and executives
during the Debtors' Chapter 11 cases. All would be performed in
accordance with the terms of the engagement letter between the
Debtors and Arthur Andersen, dated November 13, 2001.

Kenneth A. Hiltz, Esq., the Debtors' Chief Finance Officer,
relates that prior to the Petition Date, the Debtors entered
into the Engagement Agreement with Arthur Andersen.  The Debtors
desire to continue to utilize the services of Arthur Andersen in
these Chapter 11 cases. Arthur Andersen is well-qualified to act
as Employee Compensation Consultant to the Debtors in these
cases in light of its considerable expertise in assisting
companies both inside and outside of bankruptcy.

According to Mr. Hiltz, on December 12, 2001, the Debtors filed
a Motion Pursuant to Sections 105(a) and 327 of the Bankruptcy
Code for Authorization to Employ Professionals Utilized in the
Ordinary Course of Business.  They sought to retain, among
others, Arthur Andersen under 11 U.S.C. Sections 105(a) and 327
without the necessity of a separate, formal retention
application approved by this Court. However, the United States
Trustee objected to the proposed retention of Arthur Andersen
pursuant to the Ordinary Course Professionals Motion and
requested the Debtors to file a formal retention application
with respect to Arthur Andersen. Accordingly, the Debtors have
filed the instant Application seeking authority to retain and
employ Arthur Andersen and no longer seek to retain Arthur
Andersen pursuant to the OCP Motion.

If this Application is approved, the professional services that
Arthur Andersen will continue to provide to the Debtors are:

A. assist in the design of a retention bonus program for
    executives and key employees;

B. compare the proposed retention program to competitive

C. prepare a report summarizing findings regarding the proposed
    retention program;

D. assist in determining whether existing incentive plans should
    be retained, and if so what changes are appropriate, i.e.,
    performance measures, goal setting process, appropriate
    threshold, target, and maximum levels, opportunity amounts,

E. determine whether any new or special incentive arrangements
    are necessary for certain key executives;

F. assist in the formulation of a communications strategy
    regarding any new or revised compensation programs;

G. provide compensation consulting services as requested, and

H. providing expert testimony as required.

The Debtors believe that Arthur Andersen is well qualified and
able to provide the foregoing services to the Debtors in a cost-
effective, efficient, and timely manner. Such professional
services are necessary in the ongoing operation and management
of the Debtors' businesses and assets, as well as to the
Debtors' restructuring efforts under Chapter 11 of the
Bankruptcy Code.

Nick W. Bubnovich, a partner of the firm of Arthur Andersen LLP,
assures the Court that the officers and employees of Arthur
Andersen do not have any connection with the Debtors, their
creditors, or any other party in interest, or their respective
attorneys or accountants.  They are "disinterested persons"
under Section 101(14) of the Bankruptcy Code.  They do not hold
or represent an interest adverse to the Debtor's estates, except
that the firm has in the past been retained by, and presently
and likely in the future will perform work for, certain pre-
petition secured creditors of the Debtors.  These cases are,
however, unrelated to the Debtors' Chapter 11 cases. These
representations include:

A. Secured Creditors: CIBC, Credit Suisse First Boston, Dresdner
    Bank AG, Merrill Lynch, ABN Amro Bank, Alliance Capital,
    AMEX, Arab Banking Corporation, ARES, Banca Nazionale del
    Lavoro Spa, Bank of America, Bank of Montreal, Bank of New
    York, Bank of Nova Scotia, Bank of Tokyo-Mitsubishi, Bank
    One, Bank Polska Kasa Opieki, Bear Stearns Asset Management,
    Black Diamond CLO 2000-1 Ltd., BNP Paribas, BW Capital,
    Caravelle, Citibank, Citadel Investments, Comerica Bank,
    Conseco, Credit Agricole Indosuez, Credit Industrial Et
    Commercial, Credit Lyonnais, Dai-Ichi Kangyo Bank Ltd.,
    Deutsche Bank AG, Deutsche Genossenschaftsbank, Erste Bank,
    First Union National Bank, Fleet National Bank, Fuji Bank
    Ltd., Goldman Sachs, Hypo-Und Vereinsbank/Bank Austria
    Creditanstalt, IDM, IKB, ING Capital, JH Whitney, KBC Bank,
    Mellon Bank N.A., Michigan National Bank, Natexis Banque,
    National City Bank, Octagon, Pilgrim, Societe Generale,
    Firstar Bank, Sterling, Sun America, Provident Bank, Wachovia
    Bank, and Webster Bank;

B. Major Bondholders: ABN Amro Securities LLC, A.G. Edwards &
    Sons Inc., American Enterprise Investment Services Inc.,
    American Express Trust Company, Banc of America Securities
    LLC, Bank of New York, Bankers Trust Company, Bankers Trust
    Company/Aragon Investment Ltd., Bankers Trust
    Company/Barclays Global Investors, Bear Stearns Securities
    Corp., Boston Safe Deposit and Trust Company, Brown Brothers
    Harriman & Co., Charles Schwab & Co., Chase Bank of Texas
    N.A., Chase Manhattan Bank, CIBC World Markets Corp.,
    Citibank N.A., City National Bank, Commerzbank Capital
    Markets Corporation, Credit Suisse First Boston Corporation,
    Dain Rauscher Incorporated, Deutsche Bank A.G., Deutsche Bank
    Alex. Brown Inc., Donaldson, Lufkin & Jenrette Securities
    Corporation, Edward D. Jones & Co., Fifth Third Bank, First
    Union National Bank, Goldman, Sachs & Co., Investors Bank &
    Trust, J.P. Morgan Securities Inc., Legg Mason Wood Walker
    Inc., Lehman Brothers Inc., Mercantile-Safe Deposit & Trust
    Company, Manufacturers and Traders Trust Company, Mizuho
    Trust & Banking Co. (USA), Merrill Lynch Pierce Fenner &
    Smith, Morgan Stanley & Co. Incorporated, Northern Trust
    Company, PNC Bank, National Association, Prudential
    Securities Incorporated, Salomon Smith Barney Inc./Salomon
    Brothers, Sanford C. Bernstein & Co., SEI Trust Company,
    State Street Bank and Trust Company, Sumitomo Trust & Banking
    Co. (U.S.A.), Suntrust Bank, Swiss American Securities Inc.,
    UBS Warburg LLC, UMB Bank National Association, U.S. Bank
    N.A., Wachovia Bank N.A., and Wells Fargo Bank Minnesota

C. Trade Creditors: Alcan Aluminum Corp., Alcoa, Inc., Alumax,
    ASAMA Coldwater Manufacturing, Auburn Foundry Inc., Borden
    Chemical, Comalco Aluminum Ltd., DTR Industries, Dubal
    America Inc., Grede Foundries, Honda of America Mfg. Inc.,
    Hydro Aluminum Louisville Inc., LTV Steel Company, McKechnie
    Vehicle Components USA Inc., National Steel Corporation,
    Pechiney Sales Corporation, PPG Industries Inc., Rouge Steel,
    Wheland Foundry, Oglebay Norton Ind. Sands Inc., Makino, E &
    R Industrial, CDP North America Inc., DuPont S.A. De C.V.,
    Basf Corporation, G&S Metal, Moeller Manufacturing Co., City
    of Gainesville, Proper Mold & Engineering Inc., Delphi
    Automotive Systems, Lemforder, and Gosiger Inc.

Mr. Bubnovich informs the Court that Arthur Andersen receives
fees for services based upon its customary hourly rates and
receives reimbursement for reasonable and necessary out-of-
pocket expenses.  These expenses include travel, report
preparation, delivery services, and other necessary costs
incurred providing services to the Debtors. The hourly rates for
Arthur Andersen range from:

      Partners and Principals          $425 - $550 per hour
      Managers & Directors             $300 - $425 per hour
      Associates                       $200 - $300 per hour
      Analysts                         $125 - $200 per hour

These rates are subject to change periodically, but will remain
in line with market rates for comparable services. In addition,
Arthur Andersen receives fees for expert witness testimony,
which fees may range from $25,000 to $75,000, depending on the
number of depositions and hearings, and the amount of
preparation required.

Mr. Bubnovich submits that Arthur Andersen began serving as
employee compensation consultant to the Debtors on November 13,
2001, at which time Arthur Andersen received a retainer of
$50,000 from the Debtors for professional services to be
rendered and expenses to be charged by Arthur Andersen in
connection with its services. During the period from November
13, 2001 through the Petition Date, the total amount of Arthur
Andersen's fees and expenses for employee compensation
consulting services rendered on behalf of the Debtors was
approximately $8,000, which amount remained unpaid as of the
Petition Date. As of the date hereof, Arthur Andersen has not
applied the Initial Retainer against such unpaid pre-petition
fees and expenses. The Debtors request authority to allow Arthur
Andersen to apply the Initial Retainer against its unpaid pre-
petition fees and expenses, in the approximate amount of $8,000,
and to hold the remaining $42,000 of the Initial Retainer for
application against post-petition fees and expenses that are
allowed by this Court.

For the period from the Petition Date through February 28, 2002,
Mr. Bubnovich estimates that its fees and expenses are
approximately $73,600. Moreover, Arthur Andersen estimates that
its fees and expenses for the remainder of its involvement in
the Debtors cases, which will end soon after approval of an
employee retention plan in these case, will not exceed
approximately $75,000, depending on numerous factors, including
primarily, the extent to which the Debtors' proposed critical
employee retention program is contested.

The Debtors believe that the fees of Arthur Andersen are fair
and reasonable in light of industry practice, market rates both
in and out of Chapter 11 proceedings, Arthur Andersen's
experience in reorganizations, and the scope of work to be
performed pursuant to its retention.

                       U.S. Trustee Objects

Frank J. Perch III, Esq., in Wilmington, Delaware, informs the
Court that the UST objects to the relief sought on the following

A. The UST objects to the nunc pro tunc retention of Andersen as
    of the Petition Date, December 5, 2001. The only stated
    reason for the delay in filing the Application is that
    Debtors originally sought to retain Andersen as an Ordinary
    Course Professional (OCP) and the UST objected. However,
    those facts account for only a small portion of the delay
    involved. Debtors filed the OCP Motion on December 12, 2001.
    The OCP Motion was scheduled for hearing on January 15, 2002.
    Prior to the hearing the UST contacted Debtors' counsel and
    Indicated that the UST would be inclined to object to the OCP
    Motion unless certain changes were made to the proposed order
    including the removal of accounting firms from the OCP list.
    Debtors consented to this modification and, accordingly, came
    to the January 15, 2002 hearing with a revised proposed form
    of order that so provided. The Order approving the OCP motion
    was not signed until January 22, 2002 to permit the Lenders
    to review and comment thereupon - but their comments did not
    seek the reinstatement of Andersen as an OCP.

B. Therefore, Debtors knew no later than January 15, 2002 that
    they would need to file a retention application to utilize
    Andersen. Nevertheless, the Application was not filed until
    April 12, 2002, a total of 87 days later. There were no
    emergent matters in the case of sufficiently long and
    continuous intensity to account for a delay of three months
    in moving for Andersen's retention.

C. The UST objects to the indemnification provisions of the
    engagement letter as being contrary to appropriate principles
    of bankruptcy professionalism and as unreasonably foregoing
    any ability to obtain redress against Andersen in the event
    its negligence causes harm to creditors or the estate.

D. The UST objects to any provision of the engagement letter
    that purports to cap or limit Andersen's liability to the
    fees received. (Hayes Lemmerz Bankruptcy News, Issue No. 10;
    Bankruptcy Creditors' Service, Inc., 609/392-0900)

ICH CORP: Committee Gets OK to Retain Vinson & Elkins as Counsel
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases involving ICH Corporation, sought and obtained
authority from the U.S. Bankruptcy Court for the Southern
District of New York to employ Vinson & Elkins L.L.P. as general
counsel, nunc pro tunc to February 13, 2002.

The Committee believes that Vinson & Elkins is well-qualified to
represent it in these cases with the firm's extensive experience
and knowledge in bankruptcy and commercial law areas.  Vinson &
Elkins is expected to:

      a. give the Committee advice on its powers and duties
         under the Code, including aiding the Committee in its:

         1. consultations with the Debtors concerning the
            administration of the case;

         2. investigation of the acts, conduct, assets,
            liabilities, and financial conditions of the Debtors,
            the operation of the Debtors' businesses and the
            desirability of the continuance of such businesses;

         3. participation in formulating a plan;

      b. advise the Committee on legal issues that become
         relevant in these cases;

      c. prepare and submitting on behalf of the Committee all
         legal papers that may need to be prepared and submitted
         in these cases, including all applications, motions,
         complaints, answers, responses, orders, reports, plans,
         disclosure statements, and other legal papers to be
         prepared and submitted in this case;

      d. negotiate with the Debtors, the Debtors' secured
         creditors and other parties in interest concerning all
         aspects of the Debtors' Chapter 11 cases;

      e. appear on behalf of the Committee at all hearings
         scheduled before the Court; and

      f. represent the Committee and performing all other
         legal services for the Committee as may be necessary in
         connection with these cases.

The Standard hourly rates that the Committee agrees to
compensate V&E are:

           partners               $310 to $665 per hour
           counsel                $245 to $575 per hour
           associates             $190 to $440 per hour
           paraprofessionals      $85 to $165 per hour

The attorneys who will work on this matter and their standard
rates are:

           Daniel C. Stewart, Partner          $545 per hour
           Steven M. Abramowitz, Partner       $475 per hour
           Jonathan Krueger, Associate         $250 per hour
           Michaela C. Crocker, Associate      $200 per hour

ICH Corporation operates Arby's restaurants, located primarily
in Michigan, Texas, Pennsylvania, New Jersey, Florida and
Connecticut.  The Company filed for chapter 11 protection on
February 5, 2002.  Peter D. Wolfson, Esq. at Sonnenschein Nath &
Rosenthal represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed debts and assets of over $50 million.

INTEGRATED HEALTH: Intends to Restructure Lyric & Settle Claims
Prior to the date Integrated Health Services, Inc. commenced
bankruptcy proceedings, TFN Healthcare Investors, LLC and IHS
each owned 50% of the limited liability company membership
interests of Lyric Health Care LLC.

Lyric, through its wholly owned subsidiaries and its indirect,
wholly owned subsidiaries, lease (a) 32 skilled nursing
facilities and specialty hospitals from Monarch Properties, LP
and Monarch Properties at Jacksonville, LLC, and (b) 9 skilled
nursing facilities from Omega Healthcare Investors, Inc.

IHS Management provides management services to the Lyric
Facilities pursuant to certain Management Agreements and
provides franchising rights to the Lyric Facilities pursuant to
certain Franchise Agreements. PharMerica provides pharmacy
services to the Lyric Facilities pursuant to a certain Agreement
for Pharmaceutical Services among IHS, certain subsidiaries of
IHS and PharMarcia.

Because the Lyric Facilities have operated with negative cash
flow and the Agreements by their terms required IHS to be paid
these fees only after other major facility expenses, such as
rent and debt service, IHS has been owed its management fees and
franchise fees. IHS has accrued a claim against Lyric and the
Lyric Subsidiaries for unpaid management fees and other advances
(including unpaid franchise fees) for the period from December
1999 through December 31, 2001 in the total amount of
approximately $31 million.

PharMerica has accrued a claim for accrued and unpaid fees for
pre-January 1, 2002 pharmacy services provided to the
Lyric Facilities in the total amount of approximately $6.3

IHS has concluded that in order to protect the value of its
membership interest in Lyric, it is in IHS's best interests to
facilitate the settlement of the claims with PharMerica by
transferring to PharMerica 20% of IHS's 50% ownership interest
in Lyric. In addition, Lyric has agreed to execute and deliver a
five year services agreement with PharMerica on terms and
conditions substantially similar to those currently in effect
between IHS and PharMerica.

Following the proposed Lyric Restructure,

(a) TFN will retain its 50% membership interest in Lyric,

(b) IHS will relinquish 10% percent and retain a 40% membership
     interest in Lyric through a limited liability company
     subsidiary-designee of IHS (the IHS Sub), and

(c) PharMerica will receive a 10% percent membership interest in

The amended and restated Lyric LLC Agreement will also expand
the authority of Nicholson, the Managing Director of Lyric, with
respect to his management and operation of Lyric.

IHS believes that, with the consummation of the proposed Lyric
Restructure, Lyric will be provided the opportunity to operate
suecessfu11y and meet its ongoing obligations to its creditors,
including the payment of its interim management fees to IHS
Management, and create enterprise value for the benefit of
Lyric's members, including IHS. Based upon the current and
projected financial condition of Lyric, IHS concluded that any
realizable value for its membership interest in Lyric and any
recovery on its direct claims against Lyric were remote at best,
absent the Lyric Restructure.

Furthermore, the continuation of any management and franchising
services, absent the Lyric Restructure or outright termination
and abandonment of the IHS relationship with Lyric, would be
simply and enormously wasteful of IHS's resources.

Therefore, on or about December 12, 2001, IHS Management issued
its notice to Lyric of IHS's intention to terminate the
Management Agreements, effective December 31, 2001. Pending
resolution of the resulting disputes among IHS, Lyric and other
parties, however, IHS Management agreed to continue to provide
management services to the Lyric Facilities on an interim and
priority payment as is.

During the Transition Period (i.e., from January 1, 2002 to the
Termination Date, as defined in the Interim Management
Agreements), Lyric will pay IHS Management (a) $500,000 per
month with respect to its interim management of the
Lyric/Monarch Facilities, and (b) $110,000 per month (prorated
for any partial month), payable on the last day of each month
during the Transition Period, with respect to its interim
management of the Lyric/Omega Facilities. From January 1, 2002
to April 18, 2002, IHS Management has received from Lyric the
payment of such management fees. For the period between the
Target Termination Date and Final Termination Date (an
additional two month period), Lyric will pay IHS Management 5%
of the gross revenues per month with respect to any of the
Lyric/Monarch Facilities or the Lyric/Omega Facilities that
continue to be managed by IHS Management.

                        The Settlement

The proposed Lyric Restructure will be conditioned upon, among
other things,

(a) the release of all accrued and unpaid management fees and
     franchise fees and other outstanding liabilities due from
     Lyric and Lyric Subsidiaries to IHS Management and IHS
     Franchising as of the Termination Date under the Management
     Agreements and the Franchise Agreements,

(b) the release of all accrued and unpaid fees and other amounts
     allocated to Lyric and due to PharMerica as of the
     Termination Date under the PharMerica Agreement and

(c) the termination of the Management Agreements and Franchise
     Agreements, effective as of the Termination Date, pursuant
     to the Termination Agreement,

(d) the execution of the Amended Operating Agreement and
     Nicholson's Amended Employment Agreement,

(e) the execution by IHS Management and certain of the Lyric
     Subsidiaries of the Interim Management Agreements, effective
     as of the Termination Date, with respect to the Lyric
     Facilities and

(f) the execution and delivery of other agreements and documents
     as contemplated by the Term Sheet.

Following the Termination Date, none of IHS, TFN, PharMerica nor
IHS Sub (nor any other IHS entity or affiliate), shall pay any
cost or expense associated with or bear any economic risk with
respect to any of the Lyric Facilities, and each of IHS, TFN,
PharMerica and IHS Sub shall be indemnified and held harmless by

The Debtors have determined that the proposed transfer of
membership interest and settlement of various claims is in the
best interest of the Debtors, their estates, their creditors,
and other parties in interest because these fully and finally
resolve, on fair and reasonable terms, certain of the claims
filed by Lyric and the Lyric Subsidiaries against the Debtors
with respect to the Lyric Facilities, the litigation of which
undoubtedly would be costly, time-consuming and ultimately,
unproductive. Moreover, the proposed settlement enables the
Debtors and their Affiliates to reduce their exposure to the
further accrual of management fees while allowing IHS Management
subsequent to January 1, 2002, to retain interim management of
the Lyric Facilities with a priority of payment.

The Committee has indicated that it does not object to the
proposed transfer of membership interest and settlement of
claims embodied in the Term Sheet.

Accordingly, in this motion, the Debtors seek an order of the
Court, pursuant to sections 105(a) and 363 of the Bankruptcy
Code and Rules 6004, 9014 and 9019(a) of the Bankruptcy Rules,

      (a) approving the transfer by IHS to PharMerica, Inc. of
20% of IHS' 50% ownership interest in Lyric,

      (b) approving the settlement of the Affiliates' claims
against Lyric and the Lyric Subsidiaries for accrued and unpaid
management fees and other outstanding advances, franchise fees
and obligations.

      (c) approving the execution and delivery of a certain
Second Amended and Restated Operating Agreement for Lyric, a
certain Amended and Restated Employment Agreement with Timothy
F. Nicholson, the Managing Director of Lyric, a certain
Termination of Management and Franchise Agreements among Lyric,
the Lyric Subsidiaries, IHS Management and IHS Franchising,
certain Management Agreements among the Lyric Subsidiaries and
IHS Management (collectively, the Interim Management
Agreements), and other documentation implementing such
resolutions and transactions incident thereto, and

       (d) authorizing the performance of any and all obligations
as set forth in the Term Sheet (collectively, the Lyric
Restructure). (Integrated Health Bankruptcy News, Issue No. 34;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

INT'L FIBERCOM: Engages Alvarez & Marsal for Financial Advice
The U.S. Bankruptcy Court for the District of Arizona gives
International Fibercom, Inc. and its debtor-affiliates,
permission to retain Alvarez & Marsal, Inc. as their
restructuring advisor. Along with the retention, the Court also
approves the Debtors to continue the services of Mr. Mark A.
Roberts as Chief Restructuring Officer, and Mr. Eric Bradford as
Interim Assistant Controller.

In a separate application, the Debtors also seek to hire
PricewaterhouseCoopers LLP.  Alvarez & Marsal and
PricewaterhouseCoopers will coordinate their activities to
ensure that their services will not overlap.

The services that Messrs. Roberts and Bradford and Alvarez &
Marsal will provide may include:

      i) assisting the Debtors in defining their financial and
         operational difficulties, gathering and analyzing data,
         interviewing appropriate management and evaluating the
         Debtors' existing financial forecasts and budgets
         in light of these difficulties;

     ii) assisting the Debtors in identifying and implementing
         immediate cost-cutting strategies to stabilize their
         cash flow and operations;

    iii) advising the Debtors on crisis management strategies,
         daily operations as debtors-in-possession and the
         workout process, and assisting the IFCI Entities in the
         implementation of these functions;

     iv) assisting the Debtors in identifying and implementing
         immediate financial operational changes to improve the
         timeliness and accuracy of financial reporting, and
         improving internal controls over the assets of the

      v) advising the Debtors in the budgeting and projection
         process necessary to stabilize and "right size" the
         Debtors, and generally supervising the budgeting and
         projection process;

     vi) assisting Debtors' management in negotiations with
         ending institutions and creditors; and

    vii) any other Chief Restructuring Officer, Interim Assistant
         Controller, and crisis management tasks required by the

In his capacity as Chief Restructuring Officer, Mr. Roberts will
bill $330 per hour.  Mr. Bradford, as Interim Assistant
Controller, will bill $195 per hour. Alvarez & Marsal holds a
$50,000 retainer for post-petition services to be rendered to
the Debtors.  Alvarez & Marsal's customary hourly rates are:

      Managing Directors & Directors      $300 - $500
      Associates                          $195 - $300
      Analysts                            $100 - $195

International Fibercom, Inc. resells used, refurbished
communications equipment, including fiber-optic cables. The
Company filed for chapter 11 protection on February 13, 2002.
Robert J. Miller, Esq. at Bryan Cave, LLP represents the Debtors
in their restructuring efforts.

K2 INC: Q1 Net Income Up by 22% Despite Drop in Net Sales
K2 Inc. (NYSE:KTO) announced a 22 percent increase in first
quarter net income, as compared with the same period of the
prior year, reflecting the impact of its expense reduction
activities as previously announced and record sales and earnings
of its fishing tackle and water sports businesses.

Net sales for the first quarter totaled $148.7 million, compared
with $173.2 million in the comparable 2001 period. Net income
was $3.8 million as compared with $3.2 million a year ago.

"We are pleased with the 22 percent increase in net income,
especially in light of the $24 million decrease in net sales for
the period. The decline in sales was due almost entirely to
lower sales of inline skates and scooters resulting from an
industry-wide reduction," said Richard M. Rodstein, K2's
President and Chief Executive Officer. "Skate sales were
consistent with our expectations, reflecting the last quarter of
a year long industry decline that first occurred in the second
quarter of 2001. We are encouraged by the performance of inline
skates at retail since many of our retailers are reporting
increased sales for the category and continued strong
performance by K2 in particular. The combination of stabilized
sales levels and the successful restructuring of our inline
skate operations enabled one of our historically strongest
performers to return to profitability in the first quarter,
despite the decline in sales."

Rodstein added, "Results for the period benefited from record
sales and earnings in both our Shakespeare fishing tackle group
in the key domestic market and in our Stearns outdoor sporting
goods products business. Sales of our domestic Shakespeare
fishing tackle business benefited from a gain in market share,
led by higher sales of our Pflueger brand of fishing reels and
sales of Shakespeare kits and combos, especially of our Warner
Brothers licensed kits and accessories. We are also benefiting
from an increase in sales at Stearns, mainly from children's
flotation devices, new outdoor water products and other military

Rodstein continued, "In a seasonally slow quarter, the company
reported a modest decline in shipments of skis and snowboard
products, as compared to the prior year, reflecting unfavorable
snow conditions. Cost reduction initiatives, however, resulted
in improved operating results for the quarter. Revenues of K2
bikes also increased approximately 14 percent over the prior
year's period."

The company said industrial sales fell during the quarter
because of the continued slowdown and consolidation in the
paperweaving industry, offset somewhat by increased sales of
composite light poles sold to utilities and by higher sales of
monofilaments for international markets and other industrial

The successful implementation of the expense reduction program
resulted in an $8.1 million decrease in total expenses for the
quarter. Gross profit as a percentage of sales was comparable
with the prior year's quarter at 29.2 percent. Reduced costs
associated with the China manufacturing facility were offset by
increased sales of reduced margin inline skates. Interest
expense declined $.7 million due to both reduced borrowing
levels and lower interest rates. In accordance with SFAS No.
142, effective on January 1, 2002, goodwill is no longer
required to be amortized. Amortization of goodwill was $410,000,
or $0.02 per diluted share, in the prior year.

The company has also successfully continued to generate strong
cash flow and reduced debt by $5.6 million from year-end.

                          Business Outlook

The following statements are based on management plans for the
year and reflect assumptions as to numerous factors beyond K2's
control. These statements are forward-looking, and actual
results may differ materially. Certain of the material
uncertainties are more specifically referenced

In looking ahead, Mr. Rodstein said, "Despite the continuing
difficult economic environment and concerns over the weather, we
are encouraged by several trends throughout the company. The
domestic fishing tackle business continues to be a very positive
story based on the strength of the brand and strong product
offerings. The favorable trend of customer orders however could
be mitigated by unfavorable weather conditions such as the
drought in key parts of the country. Order trends at Stearns
water products, reflecting the leadership position of our
flotation products and the success of new product introductions,
continue to be positive.

"Based on retail sales of inline skates during 2002, it appears
that sales levels in the industry have stabilized and retail
inventory levels are declining. If such trends continue and we
successfully sustain our expense reduction initiatives, then our
skate business will be positioned for improved year over year
results beginning in the second quarter. We believe that
preseason orders in the winter sports industry have declined
overall from the prior year, reflecting poor snow conditions in
North America and Europe and weak economic conditions in the
Japanese market. While we have had a positive response to our
new ski, snowboard and snowboard binding collection, retailers
have displayed caution in ordering for the upcoming season and
our preseason orders have declined from prior year levels. We
believe however, that an improved mix of higher margin products
sold, the cost advantages from manufacturing winter sports
products in China and the reduction in overhead expenses should
result in a continuation in the positive trend in earnings of
the winter sports businesses. Within our industrial group, sales
appear steady at current levels. Finally, the company should
continue to benefit from expense reduction initiatives
implemented in 2001. While we are confronted with uncertainty,
we continue to be confident in our cost and expense reduction
efforts and in the momentum we display in several of our
sporting goods categories, which should provide the company with
the opportunities to report strong earnings growth in 2002."

K2 Inc. is a leading designer, manufacturer and marketer of
brand-name sporting goods, recreational and industrial products.
The company's sporting goods and recreational products include
well-known names such as K2 and Olin alpine skis; K2, Ride and
Morrow snowboards, boots and bindings; K2 inline skates; Stearns
sports equipment; Shakespeare fishing tackle; K2 bikes; and Dana
Design backpacks. K2's other recreational products include
Planet Earth apparel, Adio skateboard shoes and Hilton corporate
casuals. K2's industrial products include Shakespeare extruded
monofilaments, marine antennas and composite light poles.

                               *   *   *

As reported in the March 4, 2002 edition of Troubled Company
Reporter, K2 had not been in compliance with covenants in its
bank credit facility and two long-term notes since the third
quarter of 2001.  However, K2 reached an understanding with the
lenders and note holders on the principal terms of amendments
intended to enable K2 to operate in compliance with the
applicable provisions. Completion of the amendments is subject
to approval of definitive documentation. Short-term waivers have
been received to allow time for documentation.

KFX INC: Needs to Raise New Funds to Satisfy Current Obligations
Under date of April 12, 2002, PricewaterhouseCoopers LLP of
Denver, Colorado, directed their Auditors Report on KFx, Inc.'s
financial condition as of December 31, 2001, to the Company's
Board of Directors.  In that Report the auditing firm stated
that KFx has suffered recurring losses and negative cash flows
from operations and has an accumulated deficit of $86,268,380 at
December 31, 2001.  The firm went on to state: "These factors,
among others, raise substantial doubt about the Company's
ability to continue as a going concern."

KFx Inc., a Delaware corporation formed in 1988, is engaged in
developing and delivering various technology and service
solutions to the electric power generation industry to
facilitate the industry's (a) compliance with various air
quality emission standards on a domestic and worldwide basis and
(b) need to lower the cost of producing electricity,
particularly domestically as the United States power industry
undergoes deregulation and is transformed into a highly
competitive business. Currently, the Company sells and installs
technology solutions that enhance the output of
coal, gas and oil-fired electric utility boilers while
simultaneously reducing the related environmental impacts and
facilitating compliance with various environmental standards,
most importantly the Clean Air Act, as amended. The Company
currently considers its business to be in two operating
segments, Pegasus Technologies, Inc. and K-Fuel(R) Technology,
both of which serve the same industry and provide similar
benefits, but which have distinctly different technology bases.
Prior to the acquisition of Pegasus in 1998, the Company
operated only in the K-Fuel segment.

Pegasus develops, markets, licenses and installs software that
optimizes the combustion performance of coal, gas and oil-fired
electric utility boilers. Pegasus currently has a suite of
optimization products that include its NeuSIGHT(R) flagship
product, Power Perfecter(TM), Software CEM(R) and Environmental
Portfolio Manager(TM).

NeuSIGHT has been installed at 24 boiler units in the United
States, Canada and Poland.  NeuSIGHT is currently under
installation or scheduled to be installed at 43 boiler units
including two additional boiler units in Poland and at one
boiler unit in China.  The NeuSIGHT installations underway or
scheduled are expected to be completed within approximately the
next 12-24 months. NeuSIGHT utilizes an artificial
intelligence/neural network software platform licensed from a
wholly-owned subsidiary of Computer Associates, Inc. to
interface with the process control system in electric utility
boiler units. The license agreement provides Pegasus perpetual,
irrevocable, worldwide, exclusive rights for process monitoring
and control applications in the electric utilities industry.
NeuSIGHT collects real time operating data and builds a model of
optimal boiler combustion performance, taking into account
various safety, environmental and other constraints. NeuSIGHT
can be set to optimize the reduction of various emissions, such
as nitrogen oxide ("NO\\x\\"), a boiler's heat rate (a measure
of boiler operating efficiency considering fuel consumed in
comparison to electricity generated), and/or other boiler
performance measures.  NeuSIGHT provides the most benefit when
operated in a closed loop mode, whereby automatic adjustments
are made to various controllable factors, such as oxygen input.

Pegasus is continuously pursuing the development of improvements
to NeuSIGHT as well as complementary new products and services.

The consolidated operating loss in 2001 of $9,620,186, which
includes $4,172,650 of non-cash charges, was $621,781, or 6.9%,
greater than the 2000 operating loss.  Pegasus' portion of the
operating loss in 2001 was $3,489,709, which was an improvement
of $641,585, or 15.5%, compared to the corresponding $4,131,294
operating loss in 2000.  The improvement in the Pegasus
operating loss was due mainly to a significant increase in
customer orders and efficiencies gained in installations during
2001.  The gross margin for Pegasus' installations increased to
34% from 6% in the prior year.  The combined K-Fuel segment and
corporate cost portion of the operating loss for 2001 was
$6,130,477 compared to $4,867,111, an increase of $1,263,366, or
26.0%.  The increased loss can be attributed to the increase in
marketing, general and administrative expenses of $1,860,129, or
83.3%, from the prior year.  The increase is primarily due to
increased professional fees for legal and consulting services,
relating to various financing arrangements that took place
during 2001, in addition to $762,144 relating to the final
payment for KFx's Chairman's note to the State of Wyoming in
return for a 12% royalty interest held by the state.

Consolidated operating revenues increased $878,287, or 41.3%,
from 2000 to 2001.  Pegasus' revenues for 2001 are $3,003,057,
an increase of $1,108,063, or 58.4% due to increased executed
orders during 2001 mainly from the Cinergy Fleetwide Agreement
along with recognition of the revenue from the installation
completed in Poland and the Gateway license fee.  The increase
in consolidated revenues was offset by the decline in K-Fuel
contract revenues in 2001 because there were no contract
projects during 2001.  The K-Fuel contract revenues are derived
from contracts negotiated with a third party who funds
individual research projects.  Each contract with this third
party is negotiated separately as research projects arise.
These contracts occur intermittently and there may not be a new
project each year.  The absence of such a contract in 2001
resulted in a decrease of $229,776 compared to 2000.

Consolidated operating costs and expenses in 2001 exceeded 2000
by $1,500,068, or 13.5%.  Pegasus' operating costs for 2001 are
$6,492,766, an increase of $466,478, or 7.7%, compared to 2000.
The increase can be attributed to a) an increase in amortization
expense of $198,110 mainly due to the amortization of
intangibles purchased from Pavilion, b) an increase in research
and development costs of $40,176, and c) an increase in
headcount primarily to support the increase in contracts entered
into during 2001.  At December 31, 2001, Pegasus had 32 full
time employees compared to 23 full time employees at December
31, 2000.  The increases in costs were offset by a reduction in
professional fees primarily due to the reduction in legal fees
incurred during the Pavilion lawsuit and the realization of
reduced sales and marketing expenses due to headcount reductions
in those areas in 2000.  The operating costs for the K-Fuel
segment and corporate cost portion for 2001 are $6,130,477, an
increase of $1,033,590, or 20.3%, compared to 2000.  The
increase is primarily due to the increase in professional fees
for legal and consulting services, relating to various financing
arrangements that took place during 2001, in addition to
$762,144 relating to the final payment for the Chairman's note
to the State of Wyoming.  These increases were offset by a
decrease in depreciation and amortization expense of $265,984
primarily due to the full amortization of most Series "A" and
"B" patents by the end of 2000 and the decrease of $560,555 in
the costs at the K-Fuel demonstration plant due to the
suspension of certain contract activities during 2001.

Non-operating items added $5,556,890 to the Company's net loss
in 2001, an increase of $2,265,123, or 68,8%, compared to
$3,291,767 in 2000.  The increase is primarily due to an
increase in interest expense of $2,822,061, or 106.3%, offset by
a reduction in the impairment loss recognized in 2000 of
$629,000. Interest expense increased due mainly to the accretion
for the maturity premium of $1,063,520 relating to the Company's
convertible debentures and the sales of Pegasus preferred stock
and the amortization of the debt discount of $2,998,352 relating
to the Cinergy convertible debt, the Company's convertible
debentures and the Evergreen Resources, Inc. preferred stock

As a result of the above factors, the consolidated net loss of
$15,177,076 ($.58 per share) for 2001 was $2,886,904 ($.09 per
share), or 23.5%, greater than the net loss in 2000.  Included
in the year to date net losses were non-cash charges
approximating $8,391,179 and $5,814,864, respectively. Non-cash
charges for the current year included depreciation and
amortization, accretion of maturity premium, amortization of
debt discount and the cost of common stock and warrants issued
for services. Non-cash charges for the prior year included
depreciation and amortization, impairment losses, accretion of
maturity premium, amortization of debt discount and the cost of
common stock and warrants issued for services.

KFx will seek to meet its cash requirements over the next fiscal
year with respect to day-to-day operations and debt service
requirements through (a) cash on hand, which as of April 12,
2002 approximated $934,000; (b) an additional discretionary
investment by Kennecott of $500,000 during the year; (c)
potential additional investments in Pegasus and/or KFx from
interested participants in the power generation industry; (d)
potential debt and/or equity offerings of the Company; (e)
potential fees from licensing new K-Fuel facilities; (f)
potential partners in connection with opportunities to expand
the Company's product and service offerings to the power
industry; and (g) unsecured short term borrowings for the
Company and/or Pegasus from one or more of its directors and/or
other parties.  Efforts by the Company to raise additional
funding may be hampered by the put option and additional
financing restrictions as a result of the financing transactions
that occurred subsequent to year-end.

There are no assurances that any of these potential funding
sources will materialize, the Company currently does not have
the means to satisfy certain indebtedness, including, but not
limited to the Debentures due July 2002, and the Company does
not currently have any commitments with respect to any such
funding sources. If the overall outcome of the various
uncertainties affecting the Company is not favorable, the
Company may be forced to seek debt and/or equity financing on
terms and conditions that may be unfavorable to the Company, if
available at all. If the Company requires additional financing
and cannot obtain it when needed, the Company may default on
payments when due. Should the Company not be successful in
achieving one or more financing alternatives, the Company may
not be able to continue as a going concern.

KAISER ALUMINUM: Gets OK to Tap Shaw Norton as Louisiana Counsel
Kaiser Aluminum Corporation sought and obtained the Court
authority to retain Shaw Norton, L.L.P. as special counsel with
respect to specific litigation matters pending in the State of

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

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

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

Shaw Norton will:

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

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

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

     Professional            Position       Rate
   ---------------------    ----------    --------
    Danny G. Shaw             Partner       $210
    William N. Norton         Partner       $210
    Gerardo R. Barrios        Partner       $175
    Mark W. Mercante         Associate      $155
    Mark W. Frilot           Associate      $135
    C. Patrick Abercrombie   Paralegal      $ 70
    Jennifer O'Brien         Paralegal      $ 70
(Kaiser Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

KMART CORP: Signs-Up Jay Alix Pros to Fill Financial Posts
Kmart Corporation, and its debtor-affiliates ask the Court to
retain Albert A. Koch as their Chief Financial Officer and Ted
Stenger to serve as Kmart's Treasurer.

According to Mark A. McDermott, Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, Messrs. Koch and Stenger
are both associated with JA&A Services LLC, which is an
affiliate of Jay Alix & Associates.

The Debtors seek to employ and retain JA&A Services retroactive
to March 4, 2002 on the terms and conditions of their Engagement

Mr. McDermott explains that the Debtors' ability to manage their
business and financial operations, and preserve value for their
estates is dependent upon, among other things, the employment
and dedication of both a Chief Financial Officer and Treasure
who each possess strong restructuring experience, as well as
other knowledge and skills.

Mr. McDermott asserts that Mr. Koch is highly qualified to
assume the position of Chief Financial Officer because he has
extensive senior management experience in numerous industries.
Mr. McDermott relates that Mr. Koch has served as interim Chief
Financial Officer of Oxford Health Plans after a financial and
accounting systems failure.  He lead the effort to stabilize the
company's financial functions, create credible reporting, and to
help position Oxford obtain $750,000,000 of new financing that
provided the financial strength to assure success of the ensuing
operational turnaround.  Mr. Koch also led the restructuring of
Ryder System, Inc. that resulted in a 40% or $2,000,000,000
increase in Ryder's market value, Mr. McDermott adds.

Prior to serving Oxford and Ryder, Mr. McDermott informs the
Court that Mr. Koch was a partner with Ernst & Young for 14
years, including seven years as the managing partner of the
firm's Detroit office.  Mr. Koch is a Certified Public
Accountant and a member of the American Institute of Certified
Public Accountants and the Michigan Association of Certified
Public Accountants.

Mr. McDermott also indicates that Mr. Stenger is equally
qualified for the position of Treasurer because of his
"expertise in developing solutions in complex corporate
restructurings and reorganizations.  He has served as advisor to
senior management and boards of directors to guide them through
workout negotiations and in the development of comprehensive
turnaround strategies, including organizational change, capacity
rationalization and divestitures."  Among the companies for
which Mr. Stenger provided service are: Allied Holdings, Fruit
of the Loom, Finova Group, Rice Inc., and Maidenform Worldwide.

Like Mr. Koch, Mr. Stenger was also employed in the Corporate
Finance Group of Ernst & Young before he joined JA&A Services.
Mr. Stenger is both a Certified Insolvency and Restructuring
Accountant and a Certified Public Accountant.

Pursuant to the terms of the JAS Engagement Letter, Messrs. Koch
and Stenger will:

    (a) manage the Debtors' financial and treasury functions;

    (b) provide leadership to the financial function including,
        without limitation, assisting the Debtors in:

        -- strengthening the core competencies in the finance
           organization, particularly cash management, planning,
           general accounting and financial reporting,

        -- the formulation and negotiation of a plan of
           reorganization, and

        -- supervising, participating in and reviewing a pre-
           petition claims analysis;

    (c) assist the Debtors' Chief Restructuring Officer, in
        overseeing the 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) supervise the preparation of reports required by the
        Bankruptcy Court and those that are customarily issued by
        the Debtors' Chief Financial Officer as well as providing
        assistance in such areas as testimony before the
        Bankruptcy Court on matters that are within JA&A's areas
        of expertise; and

    (f) assist with such other matters that fall within JA&A's

According to Mr. McDermott, Messrs. Koch Stenger will be
appointed by the Debtors' Board of Directors and will report to
James Adamson, Chairman of the Board of Directors and Chief
Executive Officer.  Messrs. Koch Stenger will "lead a team of
three other JAS professionals, including Maggie L. Anderson,
Laurence E. Leonard, and Thomas A. Morrow, who will assist in
fulfilling the engagement tasks," Mr. McDermott says.  No
additional JAS employees may be added to the engagement without
first consulting with Mr. Adamson to obtain his approval that
such additional employees are required and do not duplicate the
activities of other employees or professionals.

Initially, Mr. McDermott notes, Mr. Koch will be billed at $640
per hour and Mr. Stenger will be billed at $620 per hour.  The
other staff is be billed at these rates:

         Maggie L. Anderson          $420
         Laurence E. Leonard         $400
         Thomas A. Morrow            $450

Should additional JAS employees be added to the engagement upon
the approval of Mr. Adamson, the fees charged are based on these
hourly rates:

         principals                  $520 - 640
         senior associates            400 - 500
         associates                   285 - 385
         accountants & consultants    210 - 280
         analysts                     125 - 185

Mr. McDermott adds that the Debtors will reimburse JAS for all
reasonable out-of-pocket expenses incurred in connection with
the engagement such as travel, lodging, postage, telephone and
fascimile charges.

Furthermore, Mr. McDermott continues, the Debtors will also pay
JAS an annual performance fee calculated as:

    (a) a base amount equal to the Debtors' actual earning before
        interest, taxes, depreciation and amortization for each
        year multiplied by 0.75%;

    (b) the base amount is to be adjusted for the EBITDA
        performance levels of the Threshold Amount, the Target
        Amount and the Stretch Amount -- as defined in the
        Debtors' Corporate Annual Performance Plan.  The Annual
        Performance Fee is equal to the Base Amount
        multiplied by 50% for achieving the Threshold Amount
        EBITDA performance, and increasing ratably to 150% for
        achieving or exceeding the Stretch Amount; and

    (c) the Annual Performance Fee will be pro-rated for the
        number of the months in the fiscal year that JA&A serves
        the Debtors.

Moreover, Mr. McDermott says, the Debtors will pay a retainer of
$500,000 to JAS to be applied against fees and expenses specific
to the engagement.  "JAS will submit monthly invoices to the
Debtors for services rendered and expenses incurred, and JAS
will offset such invoices against the retainer," Mr. McDermott

Mr. McDermott relates that JAS' engagement may be terminated at
any time by the Debtors or JAS with or without cause.
Notwithstanding such termination, Mr. McDermott says, JAS will
be entitled to any fees and expenses due under the provisions of
the Engagement Letter, including performance fees.  "If at any
time prior to the earlier of (i) the second anniversary of the
Engagement Letter, or (ii) confirmation of a plan of
reorganization where a new Chief Executive Officer is employed,
and there is material change in the responsibilities or duties
of Mr. Koch or Mr. Stenger without the consent of JAS, then the
engagement will terminate and a fee of $2,000,000 will be due
from the Debtors to JAS," Mr. McDermott says.

As officers of the Debtors, Mr. McDermott asserts that Mr. Koch
and Mr. Stenger are entitled to the benefit of the indemnities
provided by the Debtors to their officers and directors.  This
is true, whether under the Debtors' by-laws, certificates of
incorporation, by contract or otherwise -- including the
Directors' and Officers' Insurance Policy.  "In the event that
other JAS employees become officers of the Debtors, such
individuals will be entitled to the same benefit," Mr. McDermott

Ted Stenger, a principal of JA&A Services, assures the Court
that neither he, nor the firm, nor any principals and employees
have any connection with the Debtors, their creditors, the
United States Trustee, or any other party with an actual or
potential interest in these Chapter 11 cases.  "But despite
efforts described to identify and disclose the connections that
JAS and its affiliates have with parties in interest in these
cases, JAS is unable to state with certainty that every client
relationship has been disclosed," Mr. Stenger admits.  If JAS
discovers additional information that requires disclosure, Mr.
Stenger promises that JAS will file a supplemental disclosure
with the Court.  "JAS submits that it holds no adverse interest
as to the matters for which it has been employed by the
Debtors," Mr. Stenger asserts. (Kmart Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LTV: Beech Street Names Nat'l Provider Network for Ex-Employees
Americana Financial Services, Inc., the outreach and service
center for The Retired Steel Worker Benefits Plan and Trust,
announced that Beech Street Corporation will serve as the
national provider network for Steel Worker Benefits Plus plan
participants, less than 65 years old. Steel Worker Benefits Plus
is the Voluntary Employee Beneficiary Association (VEBA) health
benefits plan arranged by and for LTV retirees and former
employees with the assistance of Americana Financial.

Beech Street Corporation, with corporate offices in Lake Forest,
CA, is one of the largest independently owned Preferred Provider
Organizations, with over 345,000 providers, 3,300 hospitals and
50,000 ancillary providers. The company has provided over 51
years of reliable service to more than 700 clients and 16
million members across the country.

Due to LTV's recent bankruptcy, the majority of its retirees and
laid off employees are left with limited health plan options
including the loss of Life and dental coverage. Americana will
administer an affordable health benefits program for both pre-
and post- age 65 individuals and their families. These programs
will be available to all eligible participants regardless of
health status.

Americana will service plan participants through its state-of-
the-art Customer Care Center, which is staffed with experienced
benefit professionals. In addition, plan members can access
their benefits and a health information resource center online
at To service the former
employees of LTV a dedicated, toll free number has been
established at: 800-717-7895.

According to Samuel H. Fleet, President and CEO of
Americana/NEBCO, Beech Street has an extensive provider network,
giving former LTV employees nationwide access to quality health
care. "The health services delivery should be seamless for
patients," says Fleet. "In many cases, patients will continue to
see their current providers and use the same local hospitals and
facilities, since many of their providers belong to the Beech
Street network," he said.

DebtTraders reports that LTV Corporation's 11.750% bonds due
2009 (LTV2) are quoted between the prices 0.5 and 1.5. See more
real-time bond pricing.

LOUISIANA-PACIFIC: Q1 Net Loss Drops to $3MM on $597MM in Sales
Louisiana-Pacific Corporation (NYSE:LPX) reported a first
quarter net loss of $3 million on sales of $597 million.

In the first quarter of 2001, the net loss was $89 million, on
sales of $559 million. Excluding the amortization of goodwill,
first quarter 2001 net loss was $83 million.

"While our earnings are not yet at an acceptable level, we have
made substantial progress in lowering our costs and improving
our operations," said Mark A. Suwyn, Chairman and CEO. "Our OSB
operations were profitable with improving prices and production
costs were 10% below the same period last year. Our profitable
siding business grew strongly this quarter as good weather
permitted house construction to proceed across most of the
nation. Unfortunately, we still have several businesses
(including plywood and industrial panels) that continue to lag
due to commodity pricing and our higher cost positions."

"As we look forward, we see continued strong homebuilding and
robust retail sales for the rest of this year. We are encouraged
by the continued market share growth of OSB in structural panels
and the focus of industry participants to buy rather than build
new capacity. As a result, OSB demand/supply is coming into much
better balance. Going forward, our intention is to manage very
conservatively while we continue our efforts to lower costs and
maximize our earnings by focusing our resources on our most
profitable businesses," said Suwyn.

LP is a premier supplier of building materials, delivering
innovative, high-quality commodity and specialty products to its
rapidly growing retail, wholesale, homebuilding and industrial
customers. Visit LP's Web site at http://www.lpcorp.comfor
additional information on the company.

                           *   *   *

As reported on December 28, 2001, in the Troubled Company
Reporter, Standard & Poor's lowered its low-B ratings on
Louisiana-Pacific Corp., by one notch and removed them from
CreditWatch where they were placed with negative implications
October 17, 2001. S&P says that the current outlook is negative.

S&P, as cited in the report, says that the downgrade reflects
expectations that oversupply and seasonal softness in Louisiana-
Pacific's primary markets are likely to keep cash flow
protection measures very weak for the next year or so. During
the next several months, debt levels could rise somewhat in
order to fund seasonal operating needs. On the positive side,
the company has initiated considerable operating cost
reductions, lowered capital expenditures substantially, and
eliminated all dividend payments. In addition, Louisiana-Pacific
and others have taken significant production downtime to manage
inventories (although this does raise unit costs). The company
has also completed a debt refinancing that should provide the
necessary flexibility during this cyclical trough and pushed all
major debt maturities beyond 2003.

MEMC ELECTRONIC: Annual Shareholders' Meeting Set for June 5
MEMC Electronic Materials, Inc. will hold its 2002 Annual
Shareholders' Meeting at the MEMC Learning Center, 1613 E. Terra
Lane, O'Fallon, Missouri 63366, on Wednesday, June 5, 2002 at
10:00 a.m., local time, for the following purposes:

      1. To elect directors;

      2. To consider and act upon a proposal to approve MEMC's
2001 Equity Incentive Plan; and

      3. To transact such other business as may properly come
before the meeting and all adjournments thereof. The Board of
Directors has fixed April 26, 2002 as the record date for the
determination of the shareholders entitled to notice of, and to
vote at, the annual meeting and all adjournments thereof.

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 or through joint ventures in
every major semiconductor manufacturing region throughout the
world, including Europe, Japan, Malaysia, South Korea, Taiwan
and the United States. MEMC's liabilities eclipsed $1.5 billion
of reported assets on the Company's June 30, 2001 balance sheet,
following continued quarter-by-quarter operating attributed to
excess capacity, declining prices and interest expense.

METATEC INT'L: March 31 Balance Sheet Upside-Down by About $9MM
Metatec International, Inc., (Nasdaq:META) announced improved
results for the first quarter ended March 31 compared to the
prior year's first quarter as the company begins to see positive
results from its comprehensive cost-reduction and refocusing

Operating earnings for the quarter ended March 31, 2002, were
$80,000 compared to a loss of $1 million for the first quarter
2001. The year-earlier period included $110,000 in restructuring

First-quarter revenues in 2002 were $15.2 million as compared to
$21 million in 2001. The sales decrease is primarily due to
closing the company's Silicon Valley plant and planned
restructuring that reduced manufacturing capacity and eliminated
certain low-margin customers.

Net income for the first quarter of 2002 was $207,000, compared
to a net loss of $1.9 million for the first quarter of 2001. Net
income for first quarter 2002 included an $875,000 income tax
benefit related to changes enacted in tax legislation signed by
President Bush in March 2002.

Also, at March 31, 2002, Metatec recorded a total shareholders
equity deficit of close to $9 million.

Christopher A. Munro, president and chief executive officer,
said that first quarter results are on target with the business
plan and indicate Metatec has made good progress in scaling the
company to match current market conditions while aggressively
pursuing opportunities for growth.

"Overall, I'm very pleased with the progress Metatec is making
toward its goal of returning to sustainable profitability," he
said. "We will continue to examine all areas of the business to
improve operations and eliminate inefficiencies. With continued
stability and recovery in the national economy, we intend to
accelerate our transformation into a supply chain solutions
company offering more end-to-end services for current and new
                 Other Developments at Metatec

Munro announced that Deanna D. Stewart recently joined Metatec
as vice president of Strategic Customer Development. He said the
newly created position will play a key role in strengthening the
company's sales and market development activities in supply
chain services and its core optical disc manufacturing business.
Stewart joins Metatec after 22 years in various senior sales,
marketing and business management roles with AT&T Corporation.

Munro also announced that Metatec expects its shares to begin
trading on the Over The Counter Bulletin Board starting
tomorrow, April 26, as previously announced by the company on
March 22. The stock ticker symbol will continue to be "META."

Metatec will hold its annual shareholders meeting on May 16 at 1
p.m. ET at the company's corporate headquarters in Dublin, Ohio.
Munro said that shareholders are encouraged to attend, tour the
facility and hear more about the company's progress.

Metatec International enables companies in the computer
hardware, software, telecommunications and media/publishing
markets to streamline the process of delivering products and
information to market by providing technology driven supply
chain solutions that increase efficiencies and reduce costs.
Technologies include CD-ROM and DVD manufacturing services, a
full range of supply chain management services and secure
Internet-based software distribution services. Extensive real-
time customer-accessible online reporting and tracking systems
support all services. Metatec maintains operations in Ohio and
The Netherlands.

More information about Metatec is available by visiting the
company's Web site at http://www.metatec.comand

NATIONAL STEEL: Wants Deadline to Remove Actions Moved to Dec. 2
National Steel Corporation, and its debtor-affiliates seek the
Court's authority to extend the time period within which they
can remove prepetition lawsuits and other actions to the
Northern District of Illinois for further litigation.  The
Debtors ask that the deadline be extended to the earlier of
December 2, 2002, or 30 days after the entry of an order
terminating the automatic stay with respect to any particular
action they might want to remove.

Mark A. Berkoff, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, states that the present deadline is on June
4, 2002.  Mr. Berkoff explains that the Debtors are parties to
numerous judicial and administrative proceedings currently
pending in various courts throughout the United States.
"Because of the number of actions involved and the wide variety
of claims, the Debtors need additional time to determine which
actions should be removed or transferred to this district," Mr.
Berkoff adds.

Mr. Berkoff further relates that the extension sought will
afford the Debtors a sufficient opportunity to make fully
informed decisions concerning the possible removal of the
actions, protecting the Debtors' valuable right to economically
adjudicate lawsuits.  Moreover, Mr. Berkoff assures Judge
Squires that the Debtors' adversaries will not be prejudiced by
such an extension because such adversaries may not prosecute the
actions absent relief from automatic stay. (National Steel
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

NETWORK ENGINES: Falls Below Nasdaq Listing Requirements
Network Engines, Inc. (Nasdaq: NENG), a leading provider of
server appliance platforms and integration services, reported
results for its quarter ended March 31, 2002, which included
both sequential and year-over-year quarterly revenue growth and
improved operating results.

For the quarter ended March 31, 2002, the Company reported net
revenues of $3.0 million, an increase of 43 percent from net
revenues of $2.1 million reported in the previous quarter ended
December 31, 2001, and an increase of 20 percent from $2.5
million reported in the quarter ended March 31, 2001. Excluding
the impact of adjustments for the amortization of stock-based
compensation, amortization of goodwill, inventory reserves and
restructuring, and other adjustments as itemized for the
applicable periods in the attached Pro Forma Condensed
Consolidated Statements of Operations, the Company's pro forma
net loss was $2.8 million, an improvement of 20 percent over a
pro forma net loss of $3.5 million, reported in the previous
quarter ended December 31, 2001, and an improvement of 75
percent from a pro forma net loss of $11.2 million, reported in
the quarter ended March 31, 2001. The Company's cash balance as
of March 31, 2002 was $62.6 million.

"We are pleased with our improved operating results this past
quarter and are encouraged by the progress we have made in our
transition to a supplier of value-added products and services to
software providers," said John Curtis, president and CEO of
Network Engines. "Our operating results this past quarter were
in line with our expectations and we expect continuing
improvements in revenue, gross margins and bottom line results
in the coming quarters."

As expected, there was a high concentration of Original
Equipment Manufacturer (OEM) revenues from one customer during
the second quarter, accounting for 76 percent of the second
quarter net revenues. This OEM customer is expected to announce
the general availability of their product in the current
quarter. Gross margins for the second quarter of fiscal 2002
improved to approximately 11 percent as a result of increased

"We anticipate gross margins improving toward our goal of 25
percent to 30 percent of net revenues during the coming quarters
as revenue volumes continue to increase and as we achieve a
higher concentration of sales to our Appliance Alliance software
partners," said Doug Bryant, Chief Financial Officer of Network
Engines. "Our fiscal model continues to show improvement. Not
only did we achieve revenue growth during the quarter, but we
accomplished this while controlling costs and maintaining a
strong cash position."

The Company has recently added three new Appliance Alliance
members from fast growing market segments, including Sonexis
Inc., a developer of audio conferencing and web conferencing
solutions; Spirian Technologies, a developer of automated
desktop management solutions; and BlueCat Networks, a provider
of dedicated network appliances designed to manage complex
networks. The Company also introduced the ApplianceEngine 3000
hardware platform designed for high performance application
requirements. The Company expects to expand its product line
during the next few quarters to broaden its appeal to
Independent Software Vendors (ISVs).

Curtis said, "We believe our business strategy is sound, and
that our Company will continue to gain momentum as ISVs seek
rapid deployments of their applications on plug-and-go
appliances. Our recent achievements have been encouraging, and
provide a foundation for us to become more assertive in our
marketing and sales efforts. Although our transition to this new
market has been difficult at times, we believe we are now better
positioned to meet the needs of our growing list of software
partners and will continue to evolve into a stronger company
with the potential for greater growth."

Based on current forecasts the Company anticipates net revenues
in the third quarter will be approximately $4 million, with
comparable sequential growth in the fourth quarter of this
fiscal year. This guidance is predicated on the current OEM
customer successfully launching their product, the ability to
sign more ISV partners, and the success of ISV partners in
selling their applications as an appliance. Net revenues in the
third and fourth quarters will continue to have a heavy
concentration of OEM sales.

The Company expects third quarter gross margins will be between
15 percent and 20 percent of net revenues with continued
improvement in the fourth quarter. Over time, as volume
increases and as Appliance Alliance partners represent a larger
portion of net revenues, the Company expects to achieve gross
margins of 25 percent to 30 percent of net revenues.

The Company continues to adjust and closely monitor operating
expenses and to conserve cash. The Company currently expects
quarterly cash operating expenses to be approximately $2.5 to
$3.0 million per quarter for the remainder of the fiscal year.
The Company's cash position at the end of the third quarter
should be approximately $59 million, excluding the impact of any
stock repurchases.

Based on current long-term revenue forecasts and continued
operating expense controls, the Company expects to be profitable
in fiscal 2003. The Company does not expect its cash balance to
go below $50 million, excluding the impact of any stock
repurchases, prior to becoming cash flow positive.

                          Related Issues

As part of the Company's previously announced stock buyback
program, the Company has repurchased approximately 620,000
shares of its common stock this past quarter at a cost of about
$640,000. Since the inception of the buyback program in August
2001, the Company has repurchased over 2,280,000 shares at a
cost of approximately $2,005,000.

The Company received notice from Nasdaq indicating that, if the
Company does not maintain a closing bid price of at least $1.00
for a minimum of 10 consecutive trading days on or before July
3, 2002, the Company's stock may be delisted from The Nasdaq
National Market. The Company is considering various options to
maintain its listing, including transferring to The Nasdaq
SmallCap Market.

Network Engines (Nasdaq: NENG) combines creative hardware
platforms, software integration and other services to provide
server appliance platforms that enable strategic partners to
deliver plug-and-go appliance solutions to enterprise customers.
The Company was founded in 1997 and is based in Canton,
Massachusetts. For more information, visit the Company's Web
site at http://www.networkengines.comor phone at 781-332-1000.

NEXTERA ENT.: Working Capital Deficit Down to $2MM at March 31
Nextera Enterprises, Inc. (NASDAQ: NXRA), which consists of
Lexecon, one of the world's preeminent economics consulting
firms, reported results for the first quarter ended March 31,

Revenues for the first quarter, which included Sibson revenues
through its sale disposition date of January 29, were $20.8
million including reimbursements received for out-of-pocket
expenses. Excluding Sibson's revenue of $1.9 million, first
quarter 2002 revenues were $18.9 million.

Nextera recorded earnings per share of $0.03, versus a loss of
$0.35 in the fourth quarter 2001. Net income for the quarter was
$1.7 million, up sequentially from a net loss of $11.9 million
in the fourth quarter 2001, which included $9.8 million for
goodwill and special charges. Net income, excluding the net loss
from Sibson in the month of January of $0.4 million or $0.01 per
share, was $2.1 million. Nextera did not record a federal income
tax provision in the first quarter as a result of the Company's
$53.0 million deferred tax asset, which consists primarily of
net operating losses carry-forwards, that is fully reserved on
the balance sheet.

Operating income in the first quarter, including corporate
costs, but excluding the Sibson loss in the month of January of
$0.4 million, was $3.6 million with an operating margin of
19.0%. Operating income on a comparable basis for Lexecon
including corporate costs by quarter in 2001 was $3.3 million,
$3.9 million, $3.0 million and $1.8 million, respectively, with
a full year operating margin of 16.0%.

Also, Nextera's March 31, 2002 balance sheet shows that the
company has a working capital deficit of about $2 million, down
from about $5 million at December 31, 2001.

David Schneider, President and Chief Executive Officer, said,
"Our strong first quarter results, achieved despite the
continued challenging business environment, substantiate our
belief that Lexecon, our highly profitable economics consulting
unit, has solid long-term prospects as a stand-alone entity. We
are committed to generating consistent returns for shareholders,
and believe that the Company's increased profitability and
successful debt reduction are signs of significant progress. In
the second quarter, we expect to achieve net revenues between
$19.0 million and $19.5 million with operating income between
$3.4 million and $3.9 million."

Lexecon's annualized revenue per professional in the first
quarter was $488,000, up from $441,000 per professional in the
fourth quarter of 2001. Utilization in the first quarter was
75%, up from 71% in the fourth quarter 2001.

Recent client engagements for Lexecon include:

      - A study of the effects of Fannie Mae on mortgage

      - An analysis of Western U.S. power markets and electricity
        pricing for several large power producers, including
        Dynegy and Reliant;

      - A regulatory analysis of restructurings and corporate
        transactions for PG&E as the Company attempts to emerge
        from bankruptcy;

      - Assisted Superior Propane Corporation in its acquisition
        of ICG before the Canadian Competition Tribunal; and

      - Providing expert testimony for Prudential Securities that
        successfully opposed class certification.

On April 1, Nextera announced that it signed a new credit
agreement with Fleet National Bank and Bank of America to extend
its senior credit facility through January 2004. The Company
currently has approximately $29.8 million outstanding under its
senior credit facility, down from $38.4 million at the end of
the 2001.

In connection with the new credit agreement, Fleet National Bank
and Bank of America have consented to Nextera's request to
exchange a portion of the Series A Cumulative Convertible
Preferred Stock into debt to avoid potential dilution. The
Company expects to exchange between $18.0 and $21.0 million,
out of a total of $23.3 million, of the Preferred Stock to debt
in the second quarter.

Michael Muldowney, Chief Financial Officer, said, "Our efforts
to restructure operations and strengthen our balance sheet have
begun to take hold. The extension of our senior credit facility,
coupled with our return to positive earnings per share, affirms
our approach and underscores our commitment to creating lasting
value for our shareholders."

Nextera Enterprises Inc. currently consists of Lexecon, one of
the world's preeminent economics consulting firms. Lexecon
provides its law firm and corporate clients with analysis of
complex economic issues in connection with legal and regulatory
proceedings, strategic-planning decisions, and other business
activities. The firm has offices in Boston, Cambridge and
Chicago. More information can be found at

NORTEL NETWORKS: Will Be Paying Dividends on Preferred Shares
The board of directors of Nortel Networks Limited declared a
dividend on the outstanding Nortel Networks Cumulative
Redeemable Class A Preferred Shares Series 5 (TSE:NTL.PR.F), the
amount of which will be calculated by multiplying (a) the
average prime rate of Royal Bank of Canada and Toronto-Dominion
Bank during May 2002 by (b) the applicable percentage for the
dividend payable for April 2002, as adjusted up or down by a
maximum of 4 percentage points based on the weighted average
trading price of such shares during May 2002, in each case as
determined in accordance with the terms and conditions attaching
to such shares. The dividend will be payable on June 12, 2002 to
shareholders of record at the close of business on May 31, 2002.

With respect to the Non-cumulative Redeemable Class A Preferred
Shares Series 7 (TSE:NTL.PR.G), of Nortel Networks Limited, the
board of directors declared a dividend in the amount of
Cdn$0.30625 per share. The dividend is payable on June 3, 2002
to shareholders of record at the close of business on May 13,

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

                              *   *   *

As previously reported, Moody's Investors Service has lowered
the ratings on senior long term debt issued or guaranteed by
Nortel Networks Limited, the rating on the company's preferred
stock and the company's rating for commercial paper. Moody's has
also assigned a Ba3 senior implied rating to the company.

Rating Action                                To          From

Nortel Networks Limited:

      * Commercial paper                    Not Prime     Prime 3
      * Senior debt                            Ba3         Baa3
      * Preferred stock                         B3          Ba2

Nortel Networks Capital Corporation (Guaranteed by Nortel
Networks Limited):

      * Senior debt                            Ba3         Baa3
      * Senior shelf                         (P)Ba3      (P)Baa3

Nortel Networks Corporation (Guaranteed by Nortel Networks

      * Senior debt                            Ba3         Baa3

Nortel Networks Inc. (Guaranteed by Nortel Networks Limited)

      * Commercial paper                    Not Prime     Prime 3

"The downgrades reflect the continued decline in spending by
telecom carriers which is expected to be deeper and more
protracted than previously anticipated," Moody's declares. "The
timing of the rating change is not focused on anticipated
results  for the first quarter but rather our expectation that
Nortel's operating performance will remain under pressure
for an extended period and that it will prove difficult for the
company to return to profitability this year," Moody's adds.

DebtTraders reports that Nortel Networks Ltd.'s 6.125% bonds due
2006 (NT06CAN1) are quoted between 73.5 and 74.5. See
real-time bond pricing.

OMEGA HEALTHCARE: S&P Affirms Single-B Credit Rating
Standard & Poor's affirmed its single-'B' issuer credit rating
on Omega Healthcare Investors Inc.  At the same time, ratings on
the company's $197.5 million senior unsecured notes and $107.5
million preferred stock are also affirmed.  The ratings outlook
is revised to stable from negative.

The outlook revision reflects this Maryland-based healthcare
REIT's improved financial flexibility following its recent
equity offering.

Omega recently announced the completion of its $50 million
rights offering and private placement with Explorer Holdings
L.P., its largest shareholder. The rights offering and private
placement, which raised $18.7 million and $31.3 million,
respectively, significantly enhances Omega's ability to meet its
near-term maturing debt obligations and satisfies conditions for
the modification and extension (to Dec. 31, 2003) of its $160
million bank credit facility. Omega has two secured bank
revolvers, the $160 million facility and a $65 million secured
facility due 2005 for a total of $225 million, of which
approximately $17 million was available at fiscal year-end.
Management indicated during its most recent earnings call that
it intends to use a combination of $75 million cash-on-hand
(stemming from the above offerings and proceeds from mortgage
refinancings and asset sales), operating cash flow (averaging $5
million per month), and availability under its bank lines to
repay the $97.5 million 6.95% senior notes that mature in June
2002. The company also plans to continue to defer dividend
payments on its common stock and preferred stock ($19.9 million
accumulated and unpaid preferred dividends as of December 31,
2001) at least until the June debt maturity is fully met.

                       Outlook: Stable

Management has stated its plan to further reduce debt (from
operating cash flow) beyond the June 2002 maturity, which should
help to preserve and eventually improve upon current debt
coverage measures (1.3 times debt service coverage for fiscal
2001). The company's operations, which had been under intense
pressure over the past few years due to well-documented
bankruptcy filings by its nursing home operators, appear to be
showing signs of improvement. Operator coverage has advanced to
about 1.55x, before management fees, and 1.14x, after management
fees, for the quarter ended Sept. 30, 2001, up from 1.46x and
1.08x, respectively, during the prior quarter. Standard & Poor's
intends to meet with management in the near term to gain an
update on Omega's business and to assess its plans/ability to
meet unpaid and future preferred dividend payments.

P-COM INC: Says Debt Restructuring Initiatives Right on Track
P-Com, Inc. (Nasdaq:PCOM), a worldwide provider of wireless
telecom products and services, reported that net sales increased
to $8.3 million for the quarter ended March 31, 2002, compared
to $7.4 million for the fourth quarter of 2001 and $59.2 million
compared to a year ago.

The net sales increase between the fourth quarter of 2001 and
the first quarter of 2002 was the result of stronger sales
resulting from the introduction of new products and growing
sales to emerging markets, such as the Asia-Pacific Region.

Net loss for the quarter before the cumulative effect of
accounting change for the implementation of Financial Accounting
Standard 142, was $9.7 million, compared to a net loss of $10.2
million, for the same period in 2001, and a net loss of $17.9
million in the fourth quarter of 2001. FAS 142, which the
Company adopted on January 1, 2002, requires companies to assess
goodwill recorded from previous acquisitions, and as necessary,
record a one-time valuation charge that does not affect cash or
the Company's operations.

Including the non-cash impact of $5.5 million recorded in the
quarter for the effect of implementing FAS 142, P-Com recorded a
net loss for the first quarter 2002 of $15.2 million. The net
loss for the first quarter ended March 31, 2001 included a
receivable valuation charge of $11.6 million, inventory related
charges of $10 million relating to the bankruptcy of a major
customer Winstar, and a gain on sale of subsidiary of $9.8

Operating expenses for the quarter were $10.6 million, compared
to $11.7 million (excluding goodwill amortization) in the fourth
quarter of 2001, and $14.6 million (excluding goodwill
amortization and the receivable valuation charge) for the same
period in 2001.

P-Com's March 31, 2002 balance sheet shows that its total
current liabilities exceeded its total current assets by almost
$17 million.

"P-Com's first quarter results are encouraging and build on the
steady progress we've been making to improve sales, reduce
expenses and debt, and penetrate emerging markets to diversify
our customer base," said P-Com Chairman George Roberts. "We
believe the restructuring program we announced in January 2002
is clearly working."

P-Com, Inc. develops, manufactures, and markets complete lines
of point-to-multipoint, point-to-point, spread spectrum wireless
access systems to the worldwide telecommunications market, and
through its wholly owned subsidiary, P-Com Network Services,
provides related installation support, engineering, program
management and maintenance support services to the
telecommunications industry in the United States. P-Com
broadband wireless access systems are designed to satisfy the
high-speed, integrated network requirements of Internet access
associated with Business to Business and E-Commerce business
processes. Cellular and personal communications service (PCS)
providers utilize P-Com point-to-point systems to provide
backhaul between base stations and mobile switching centers.
Government, utility, and business entities use P-Com systems in
public and private network applications. For more information
visit http://www.p-com.comor call (408) 866-3666.

PSINET INC: Intends to Sell Europe Unit for $9.5 Million or More
With the assistance of its professional advisers, PSINet, Inc.,
and its debtor-affiliates have marketed their European
businesses for sale throughout the term of their bankruptcy
cases, both as a stand alone business and as a component of the
Debtors' worldwide business. The Debtors have also marketed the
individual assets of PSINet Europe for sale.

The Debtors were in advanced negotiations with a potential buyer
for PSINet Europe. However, the potential buyer has been unable
to provide satisfactory evidence of its ability to finance and
consummate the proposed transaction in light of the proposed
structure thereof. The Debtors have accordingly been unable to
enter into a definitive agreement for such a sale.

In the meantime, the Debtors have continued to operate their
European businesses. These businesses cannot continue to
operate, however, without a cash infusion. After consultation
with the Committee, the Debtors determined that if they are
unable to sell their European subsidiaries quickly, they will
recommend that the local directors will likely cause the PSINet
Europe Entities to file local insolvency proceedings.

The Debtors propose to hold an auction in a final effort to
realize value for their bankruptcy estates from the PSINet
Europe Entities. Specifically, the Debtors propose to hold an
open auction for the Shares, or assets of the PSINet Europe
Entities in the event the Debtors receive a bid therefor, on
Monday, April 22, 2002.

Therefore, the Debtors filed a motion seeking authority that
would allow them to proceed with the sale of their European

Specifically, the Debtors move this Court, pursuant to Sections
105, 363 and 1146 of the Bankruptcy Code and Rules 2002 and 6004
of the Bankruptcy Rules, for approval of a sale (the Stock Sale)
of all of the shares of PSINet Europe, B.V. (PSINet Europe), a
wholly-owned, non- Debtor Netherlands subsidiary of PSINet
(Seller), to a purchaser to be determined at auction for a
minimum of US $9.5 million, on the terms and conditions of a
model share purchase agreement, which Seller and Purchaser may
consent to modify. The Debtors also seek simultaneous approval
for the sale of certain equipment vital to the operation of the
PSINet Europe Entities' various businesses from the Debtors to
the PSINet Europe Entities (the Equipment Sale).

The nature and structure of the relief requested is similar to
that requested in various other motions the Debtors have
previously filed with the Court, seeking authority to sell the
shares of various non-debtor foreign subsidiaries.

Again, there are two parts of the motion seeking respectively
two orders by the Court.

Granting Part I of the motion and a separate emergency motion,
the Court has issued a Sale Procedures Order, approving sales
procedures (bidding procedures, an offer deadline and a sale
approval hearing, among other things) in connection with the
Debtors' efforts to solicit the highest and best offer for the

In Part II of the motion, the Debtors seek entry of a Sale
Approval Order, to be entered at a later sale hearing after the
conclusion of the auction process contemplated by the Sale
Procedures Order, approving the Stock Sale and the Equipment
Sale free and clear of all liens, claims, encumbrances and

                    Share Purchase Agreement

The Share Purchase Agreement provides for the sale of the Shares
to the Purchaser, free and clear of all liens, claims,
encumbrances, interests and transfer taxes in exchange for a
minimum purchase price of US$9,500,000 and the Intercompany

In the Debtors' business judgment, the terms of the Share
Purchase Agreement are fair and reasonable to Seller and any
potential purchaser in view of all applicable legal and economic

The Sales Procedures Order provides, among other things, that
while an offer for the Shares may include a version of the Share
Purchase Agreement marked to indicate proposed changes thereto,
the Seller will not consummate a version of the Share Purchase
Agreement whose terms are on the whole less favorable to the
Seller than the terms of the original Share Purchase Agreement.

Certain equipment obtained by PSINet under disguised financing
agreements may be located in Europe and used in connection with
the operation of the PSINet Europe business. Debtor intends to
convey any such equipment to the PSINet Europe Entities in
connection with the Sale. All counterparties to such equipment
leases will receive this notice, and if a sale agreement is in
fact entered into, will receive notice of such agreement.
Debtors propose that the sale of the Equipment be free and clear
of any liens, claims, or encumbrances, such liens attaching to
the proceeds of the Stock Sale without prejudice to the rights
of any party to object to the validity, power or extent of such

Seller makes it clear that it does not purport to convey,
through the Share Purchase Agreement or any other document, any
software license that any buyer may need in order to operate the

The Debtors indicate that they may, in their discretion,
consider any offer for the Shares or the assets of the PSINet
Europe Entities as a Qualified Offer, for the purposes of the

                Sale Approval Order Requested

At the Sale Hearing, the Debtors will request the Court to enter
the Sale Approval Order.

If only one Qualified Offer is received, the Debtors will
request entry of a Sale Approval Order authorizing the Sale of
the Shares to the party that submitted the Qualified Offer, on
the terms of the Share Purchase Agreement, as modified to
reflect the Qualified Offer.

The Debtors will conduct the Auction if more than one Qualified
Offer is submitted. In that event, at the Sale Hearing, the
Debtors will request entry of a Sale Approval Order

(i)   confirming the results of the Auction,

(ii)  approving the Sale of the Shares to the bidder who has
       made the Winning Bid, on the terms of the Share Purchase
       Agreement as modified to reflect the Winning Bid, and

(iii) granting related relief.

The proposed Sale Approval Order also authorizes the Debtors to
execute the Transitional Services Agreement, and to consummate
the transactions contemplated therein.

The Sale Approval Order provides that the Equipment and the
Stock will be conveyed free and clear of all liens, claims,
encumbrances, or other interests. Such relief is without
prejudice to any parties that may hold such interests in the
Shares or the Equipment, however, in that the Sale Approval
Order provides that such interests will attach to the proceeds
of the Stock Sale, without prejudice to any party in interest to
challenge the validity or extent of such interest.

Because the Debtors need to close the Stock Sale and the
Equipment Sale as soon as possible after all closing conditions
have been met or waived, the Sale Approval Order provides for
the elimination of the 10-day automatic stay imposed by Rule
6004(g) of the Bankruptcy Rules after entry of an order pursuant
to Section 363 of the Bankruptcy Code.

The Debtors also request that the Purchaser be granted limited
relief from the automatic stay to the extent necessary to allow
the Purchaser to give any notice provided for under the Share
Purchase Agreement or the Transitional Services Agreement, and
to take any actions permitted by such agreements, in accordance
with the terms and conditions thereof.

                Sale Procedures Order (Issued)

The Sale Procedures Order issued by the Court provides for the

* Sale Hearing

If the Debtors enter into a definitive share purchase agreement,
subject to the final approval of the Court, Debtors shall file
and serve on parties in interest on or before April 24, 2002 the
Share Purchase Agreement, the proposed Sale Approval Order, and
an appropriate notice thereof.

Such notice shall include notice of the Sale Hearing, which
shall be held the first available date on or after April 29,
2002, at which time the Court will consider the relief requested
in Part II of the Motion with respect to the Sale.

Objections to the entry of the Sale Approval Order, if any, must
be filed with the Bankruptcy Court and served upon the following
so as to be actually received no later than 12:00 p.m.
prevailing Eastern time on April 27, 2002 (the Objection

(i)   counsel to the Debtors, Wilmer, Cutler & Pickering,
       Attention: Craig Goldblatt, Esq.;

(ii)  counsel to the Official Committee of Unsecured Creditors,
       Wachtell, Lipton, Rosen & Katz, Attention: Scott Charles,
       Esq.; and

(iii) Office of the United States Trustee, Attention: Paul
       Schwartzberg, Esq.

* Bidding Procedures

A.  Any proposal to purchase the Shares (an Initial Offer) must
     provide for aggregate consideration or value to the Debtors'
     estates of at least US$9,500,000.00 (the Minimum Offer).

B.  An Initial Offer shall also:

     (i)   be in writing in the form of the Share Purchase
           Agreement, marked to show any and all changes thereto;

     (ii)  be accompanied by appropriate evidence that offeror
           has the financial resources and capabilities (x)
           necessary to pay the offered consideration at the
           closing of the Sale, and, if Debtors deem it
           appropriate in light of the structure of the
           transaction (y) to enable offeror to operate the
           PSINet Europe Entities as a going concern
           for an indefinite period after the closing of the
           Sale, among other things;

     (iii) provide terms as good as or better than the terms
           contained in the Share Purchase Agreement, as
           determined by Seller in consultation with its advisors
           and the Committee; and

     (iv)  be accompanied by a good faith deposit of US$500,000
           in cash or certified or cashier's check payable to
           Seller, which shall be credited toward the purchase

C.  Each Initial Offer and Overbid must be irrevocable and
     remain open until the closing of the purchase of the Shares.

D.  Initial Offers shall be delivered to the Debtors, with a
     copy to the Committee, so as to be received by them no later
     than 10:00 a.m. prevailing Eastern time on April 22, 2002
     (the Offer Deadline), as follows:

     (i)  to the Debtors, Attention: General Counsel with a copy
          each to:

          Wilmer, Cutler & Pickering, Attention: Craig Goldblatt,
          Esq. and to

          Nixon Peabody LLP, Attention: Richard F. Langan, Jr.,

     (ii) to the Committee, to: Wachtell, Lipton, Rosen & Katz,
          Attention: Scott Charles, Esq.

E.  If the Debtors receive only one Initial Offer that the
     Debtors determine satisfies the requirements hereof (a
     Qualified Offer), the Debtors will report same to the Court
     and will proceed with the Sale pursuant to the terms of the
     Share Purchase Agreement as modified.

F.  If more than one Qualified Offer is submitted, an auction
     will be held on April 22, 2002 at 12:00 p.m. prevailing
     Eastern time at the offices of Wilmer, Cutler & Pickering,
     2445 M Street, Washington, D.C. 20037.

     At the Auction, bidding shall begin with the highest
     Qualified Offer timely submitted (the Initial Bid). All
     subsequent overbids shall include additional consideration
     of at least US$250,000 over the previous Bid. The Auction
     shall not conclude until each participating bidder has had
     the opportunity to submit any additional Overbid with full
     knowledge of the existing highest Bid.

G.  The most favorable Bid submitted at the Auction, as
     determined by Seller, shall be submitted to the Court for
     approval at the Sale Hearing. The Debtors may determine, in
     their business judgment, which Bid is the highest or
     otherwise best offer and reject at any time before entry of
     an order approving a Bid, any Bid that, in the Debtors' sole
     discretion, is

     (i)   inadequate or insufficient,

     (ii)  not in conformity with the requirements of the
           Bankruptcy Code or the Bidding Procedures or

     (iii) contrary to the best interests of the Debtors, their
           estates and their creditors. (PSINet Bankruptcy News,
           Issue No. 18; Bankruptcy Creditors' Service, Inc.,

PACIFIC GAS: Seeks Okay Pay $5.5 Million Land-Related Expenses
In anticipation of work necessary to transfer PG&E's extensive
Land and Land Rights to the New Entities under the proposed
Plan, Pacific Gas and Electric Company intends to present Judge
Montali with a motion for authority for PG&E to incur and pay
certain Land-Related Expenses on May 9, 2002, at 1:30 p.m.

By this Motion, PG&E requests authority to pay certain
contractors who will assist with the preparation required for
the transfer of PG&E's existing Land and Land Rights to the New
Entities ETrans, GTrans and Electric Generation LLC (Gen) for
the New Entities to conduct their operations in full compliance
with relevant laws, rules and regulations. Much of the Land Work
to be performed, however, is also for general business purposes,
including the maintenance and reconciliation of PG&E's real
estate rights and records.

PG&E holds a large portfolio of real estate assets, including
approximately 250,000 acres of land, more than six million
square feet of support service space (service centers, offices
and warehouses) and hundreds of real property leases, along with
thousands of related real property rights, including: rights-of-
way and easements, prescriptive rights, possessory interests,
unrecorded rights and other land-related agreements, and
associated maps and drawings.

PG&E tells the Court Land rights analysis and reconciliation
work is constant for a company with such substantial real estate
holdings as PG&E. In fact, such work has been ongoing both pre-
petition and post-petition. The transfer of the Land and Land
Rights in connection with the Plan now requires an accelerated
pace for this work.

As PG&E has historically utilized real estate specialists to
assist its internal real estate staff, most of the contractors,
as listed below in the description of "Land Work To Be
Performed," have worked for PG&E and are familiar with PG&E's
unique Land and Land Rights' issues. PG&E believes that these
contractors are well qualified to perform the services necessary
to assist with the Land Work. PG&E also utilizes real estate
brokers and appraisers, as previously approved by the Court
pursuant to Bankruptcy Code Section 327(a). PG&E does not
contemplate that any of the brokers or appraisers will be
utilized for the work described in this Motion.

PG&E believes that the contractors included in the motion do not
rise to the level of "professionals" under the Bankruptcy Code,
due both to the nature of the services to be provided and to the
contractors' limited role in connection with PG&E's
reorganization proceeding. PG&E employs various attorneys in
connection with real estate matters, as previously approved by
the Court pursuant to Bankruptcy Code Section 327(e).

                      Budget for Land Work

PG&E requests approval to pay the Contractors for the Land Work
approximately $5.5 million, beginning April 2002 and continuing
to the Effective Date as defined in the Plan, or such earlier
date on which the transfers contemplated to the New Entities
have been completed. PG&E also looks to Corestaff Services,
Inc., a staffing agency, to assist its internal staff with
project planning and coordination, data gathering and analysis,
and database development and management in connection with the
Land Work. Payments would be made by PG&E to the Contractors on
a monthly basis as work is completed, based on monthly billings
by the Contractors.

                   Land Work To Be Performed

The following is a description of the two categories of Land
Work to be performed and each contractor currently under
contract with PG&E to perform the applicable Land Work. All of
the Contractors will perform the work at the direction of and
under the supervision of PG&E.

A.  Land and Land Rights Analysis and Reconciliation

     -- the review, analysis and reconciliation of all Land
Rights, including field verification of information, assignment
of the Land and Land Rights to the New Entities, and analyzing
new and modified rights to be acquired.

     Contractors performing this work are as follows:

     *  EDB Data Resources
     *  Phillip Longo
     *  Charles McClue
     *  Paragon Partners, Ltd.
     *  Kenneth Sorensen
     *  Willbanks Resources Corporation

B. Land Surveying

    -- land surveys, preparation of the deeds and maps related to
       the possible subdivision, lot line adjustments, and/or
       transfer of fee properties to the New Entities, performing
       the work necessary to ensure compliance with local rules
       and regulations, and preparation of easement reservations
       and new easement grants.

    The contractor performing this work is:

    *  Towill, Inc.

                      Need for Approval

PG&E requests that the Court approve the expenditures described
in accordance with the Budget, for the following reasons.

First, the Land Work is essential to the implementation of the
Plan proposed by PG&E and its corporate Parent. As PG&E
estimates that it will take up to 12 months to complete the Land
Work, PG&E believes the Land Work must be accelerated well in
advance of confirmation of the Plan in order to assure a timely

Second, PG&E tells the Court that, in developing its strategy
for handling the Land Work, PG&E has adopted a moderate approach
in terms of balancing risks and costs. Specifically, PG&E
contemplates undertaking a complete review of title and land
rights only for those properties and entitlements that may
become assets of the New Entities. PG&E does not intend to
obtain title insurance in connection with any of the transfers
to the New Entities. Thus, the goal is to handle the
transactions in a manner that will effectively transfer the Land
and Land Rights to the New Entities, thereby minimizing the
potential for disputes and uncertainties arising post-
separation, but without the certainty and costs associated with
title insurance.

Moreover, the Land Work will also provide value to PG&E whether
or not the Plan is implemented, PG&E represents, as the
accelerated review and audit of its real property portfolio will
enable PG&E to manage its Land and Land Rights more efficiently
through enhanced understanding and improved organization of its

Finally, to the extent that subsequent events demonstrate that
the transfers to the New Entities will not be necessary, the
associated Land Work can be terminated immediately, given that
PG&E's standard contractual provisions in place with the various
contractors do not guarantee future work or any minimum amount
of revenue, and PG&E maintains the right to terminate the
contracts at any time without cause, in which case PG&E is
liable only for work performed to the date of termination plus
costs reasonably incurred by the contractor in terminating any
work in progress, PG&E tells the Court.

Sound business justifications exist for approval of the Budget,
PG&E says, because:

1.  the Land Work is necessary and cannot be delayed without
     causing a delay in the implementation of the Plan;

2.  the volume of Land and Land Rights that PG&E proposes to
     transfer to the New Entities will require resources far in
     excess of PG&E's own internal resources;

3.  the Land Work will provide value to PG&E whether or not the
     Plan is implemented by allowing the continued efficient
     organization and management of its extensive real property

4.  PG&E is solvent and has sufficient cash to pay the Budget
     without causing any detriment to its creditors. (PG&E's
     February 2002 Monthly Operating Report reflects that PG&E
     held more than $4.8 billion in cash reserves as of February
     28, 2002.)

Any opposition to the motion has to be served upon appropriate
parties at least 5 days prior to the scheduled hearing date
(currently scheduled for May 9, 2002). (Pacific Gas Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc.,

PERSONNEL GROUP: Shareholders' Meeting Set for May 23, 2002
The 2002 Annual Meeting of Shareholders of Personnel Group of
America, Inc., a Delaware corporation, will be held at 9:30
a.m., local time, on May 23, 2002, at the Hyatt SouthPark Hotel,
5501 Carnegie Boulevard, Charlotte, North Carolina 28209, for
the following purposes:

          (1)    To elect one member to the Company's Board of
Directors to serve until the Annual Meeting of Shareholders in
2005 or until his successor is duly elected and qualified;

          (2)    To approve an amendment to the Company's
Certificate of Incorporation changing the Company's name from
"Personnel Group of America, Inc.," to "Venturi Partners, Inc.";

          (3)    To ratify the selection of
PricewaterhouseCoopers LLP as the Company's independent public
accountants for 2002; and

          (4)    To transact such other business as may properly
come before the Annual Meeting and any adjournments or
postponements thereof.

The Board of Directors has fixed the close of business on April
10, 2002, as the record date for determining those shareholders
entitled to notice of, and to vote at, the Annual Meeting and
any adjournments or postponements thereof.

Personnel Group of America, Inc. is a nationwide provider of
information technology consulting and custom-software
development services; high-end clerical, accounting and other
specialty professional staffing services; and technology systems
for human capital management. The Company operates through a
network of proprietary brand names in strategic markets
throughout the United States.

Personnel Group, as of July 1, 2001, reported a working capital
deficit of about $59 million.

PRESSTEK INC: First Quarter Revenues Drop 19% to $21 Million
Presstek, Inc. (Nasdaq: PRST), a leading provider of direct
digital imaging technology, announced financial results for the
first quarter ended March 30, 2002.

Presstek's revenues for the first quarter ended March 30, 2002
decreased 19.4% to $20.8 million from $25.8 million in the same
period a year ago. Net income for the first quarter of 2002 was
$183,000, compared to $973,000 for the first quarter of 2001.

Revenues for the quarter consisted of product sales of $19.4
million and $1.5 million of royalties and fees from licensees,
compared with product sales of $23.7 million and $2.1 million of
royalties and fees from licensees in the corresponding quarter
last year. Plate media revenues for first quarter 2002 were a
record $13.7 million, up 9.6% from $12.5 million in the first
quarter of 2001. Equipment revenues for the first quarter were
$5.7 million, compared to $11.2 million in the same period a
year ago. Lasertel did not record any external revenues during
the first quarter.

The company's equipment revenue shortfall was experienced across
all products, including imaging kits, press and CTP products.
Sales continued to be weak in the first quarter based, in part,
on the slowdown in capital spending worldwide, Heidelberg's
realignment of its production and inventory levels, and the lack
of any significant sales from Xerox. This has been offset
somewhat by sales to Ryobi and KBA.

Commenting on the first quarter, President and Chief Executive
Officer Edward J. Marino said, "Our core consumables business
has taken an encouraging turn, with stronger demand than in the
fourth quarter. We have not yet, however, seen clear signs that
our capital equipment business has experienced a recovery."

Gross margins for the current quarter were 39%, down from 40% in
the corresponding quarter last year, but up from 38% in the
fourth quarter of 2001. Gross margins have continued at these
levels primarily as a result of a favorable product mix.

The results for the quarter include a $530,000 benefit from the
workforce reductions completed in January. The company expects
to see a benefit of $650,000 from the reductions in subsequent

The company's Lasertel operations continued to incur operating
losses for the quarter. Lasertel's operating loss before inter-
company interest charges was $1.6 million, down substantially
from $2.8 million in the corresponding quarter in the prior
year. Marino said, "We are continuing to focus on operating
performance and targeted opportunities at Lasertel."

During the quarter, the company generated $6.8 million in cash
from operations and working capital. As a result, cash and cash
equivalents at the end of the quarter were $7.8 million, up from
$2.5 million at the end of fiscal 2001. The company has also
repaid its revolving line of credit during the quarter.
Regarding the balance sheet, Marino said, "We continue to have a
strong balance sheet, but need to work on our current high level
of inventories. Reducing inventories continues to be a special
focus within the organization."

Marino added, "Moosa E. Moosa, Presstek's new chief financial
officer, and I have only been on the job for a few weeks, and we
are critically reviewing all aspects of our business for
optimization. Trends in the industry favor Presstek's
fundamentals of digital workflows, direct laser imaging,
chemistry- free processes, and more color. We also have key
alliances that support our marketing, product and technology
efforts. We are confident that all of these factors can be
translated into increased market share and improved financial
performance. We are, however, in the early stages of the review
process and until we get our arms around the entire Presstek
outlook, we prefer to limit our guidance regarding second
quarter prospects. We plan to keep the shareholders and the
financial community fully advised as we progress." Marino
continued, "Looking ahead, prospects for the future are bright,
but clearly we have work to do now."

Presstek, Inc. is a leading developer of digital laser imaging
and chemistry-free plate technologies for the printing and
graphic arts industries. Marketed to world-leading press
manufacturers and directly to end users, Presstek's patented
DIr, CTP and plate products eliminate photographic darkrooms,
film and toxic processing chemicals, reduce the printing
turnaround time and lower the production costs. The company's
Lasertel subsidiary supplies it with the valuable resources
necessary for its next generation laser imaging devices.

                           *   *   *

As reported in the March 22, 2002 edition of Troubled Company
Reporter, Presstek, Inc. received waivers from its lenders for
the fourth quarter bank covenant violations caused by the write-
off of the $2.1 million of prepayments made to Adast for raw
materials and work-in-progress.

On March 12, 2002 the company announced that its manufacturing
partner Adast had filed for bankruptcy protection. As previously
stated, this bankruptcy is not expected to impact any other
portion of Presstek's business.

SAFETY-KLEEN: Seeks Approval to Examine MIMS on Frontier Issues
Safety-Kleen Corp. and its subsidiary and affiliated Debtors ask
Judge Walsh to authorize the oral examinations of corporate
representatives of MIMS International, Ltd., and production of
documents from MIMS, in connection with:

       (1) the retention of MIMS and Frontier Insurance Company,

       (2) MIMS' efforts to identify an insurance company to
           provide financial assurance bonds on behalf of

       (3) the brokerage services MIMS rendered concerning the
           surety bonds issued by Frontier,

       (4) the issuance and administration of the Frontier
           surety bonds and MIMS' knowledge regarding the
           Frontier surety bonds,

       (5) the relationship and dealings between MIMS and
           Frontier with respect to the Frontier surety bonds,

       (6) the relationship and dealings between MIMS and
           Safety-Kleen concerning the Frontier surety bonds,

       (7) Frontier and its financial condition,

       (8) the eligibility requirements of insurance companies
           to be able to provide financial assurance bonds and

       (ix) Circular 570.

SK explains that, under the Resource Conservation and Recovery
Act, the Toxic Substances Control Act, and analogous state
statutes, owners and operators of certain waste management
facilities must provide financial assurance to ensure
performance of their closure, post-closure and corrective action
obligations. Applicable regulations allow owners and operators
to provide financial assurance through a surety bond from an
approved surety. Under federal regulations and in virtually all
states, to qualify as an approved surety for the purposes of
providing this type of financial assurance, a surety company
must be listed on Circular 570, which is maintained and
distributed publicly by the United States Department of the

Safety-Kleen procured surety bonds issued by Frontier as
financial assurance at numerous locations. Of the total amount
of financial assurance required of Safety-Kleen under the
environmental statutes, which approximated $500 million as of
May 31, 2000, slightly more than 50 percent of such requirements
were satisfied through the Frontier Surety Bonds.

On November 3, 1997, Frontier agreed to provide $200 million in
landfill closure and post closure bonds to Laidlaw Environmental
Services, Inc. and LESI agreed to post the necessary collateral,
which consisted of a $28.5 million letter of credit that Toronto
Dominion Bank issued to Frontier on November 6, 1997.  On June
6, 2000, the U.S. Treasury issued a notification that Frontier
no longer qualified as an acceptable surety on federal bonds and
had been removed from Circular 570 as of May 31, 2000.
Accordingly, as of May 31, 2000, Safety-Kleen no longer had
compliant financial assurance for many of its facilities.
Under applicable regulations, Safety-Kleen was required to
obtain compliant financial assurance within sixty days, and in
some states, more quickly. The Frontier Surety Bonds at Safety-
Kleen's facilities remain in place (except where replaced with
compliant coverage) and effective.

Immediately following the June 6, 2000 announcement that
Frontier no longer qualified as an approved surety, Safety-Kleen
notified the Environmental Protection Agency that Safety-Kleen
would have difficulty in attempting to obtain compliant
financial assurance for its facilities previously covered by the
Frontier Surety Bonds. Safety-Kleen and the EPA also contacted
states in which the non-compliant facilities were located and
apprised such states of these facts. Safety-Kleen and the EPA,
acting on behalf of many, but not all affected states, then
engaged in negotiations resulting in the entry of a Consent
Agreement and Final Order, which Judge Walsh approved on
October 17, 2000. The main component of the CAFO was a
compliance schedule (since modified) for Safety-Kleen to obtain
compliant financial assurance for the facilities covered by the
Frontier Surety Bonds. The CAFO also imposed a penalty on
Safety-Kleen Services, Inc., and some states have imposed
additional financial assurance penalties.

On August 7, 2001, Safety-Kleen entered into arrangements to
enable it to replace the Frontier Surety Bonds at approximately
114 facilities. Many states have approved the replacement
insurance policies, which Indian Harbor Insurance Company has
issued, and in those states Safety-Kleen now has financial
assurance coverage that complies with applicable law.

On or about November 5, 2001, and again on December 31, 2001 and
March 31, 2002, Safety-Kleen entered into arrangements to enable
it to replace the Frontier Surety Bonds at additional
facilities, pursuant to Bankruptcy Court approval obtained on
November 5, 2001.

As of April 1, 2002, Safety-Kleen was in a position to replace
the Frontier Surety Bonds for financial assurance at all but
approximately eight inactive facilities where Frontier coverage
does not comply with applicable law.  Safety-Kleen understands
that, on August 27, 2001, Frontier entered a rehabilitation
proceeding that the New York Superintendent of Insurance will
administer pursuant to New York law. Safety-Kleen further
understands that in such a proceeding, the Superintendent takes
possession of the property of Frontier and conducts its
business. Safety-Kleen has been informed that these
rehabilitation proceedings are unlikely to affect the validity
of the remaining Frontier Surety Bonds at its facilities.

MIMS provided brokerage services to LESI, and subsequently SKC,
in connection with the Frontier Surety Bonds and the Financial
Assurance Transaction.  As part of Safety-Kleen's examination of
its potential claims against Frontier, Safety-Kleen has
attempted to speak with and obtain documents from MIMS in
connection with the Frontier Surety Bonds and the Financial
Assurance Transaction. Notwithstanding that MIMS provided
brokerage services to SKC and its predecessor, MIMS has refused
Safety-Kleen's requests for information.  The Debtors believe
that obtaining information and documents from MIMS will benefit
the Debtors' estates by allowing to Debtors to evaluate and
determine the appropriate manner to proceed to recover a
potentially valuable estate asset. (Safety-Kleen Bankruptcy
News, Issue No. 34; Bankruptcy Creditors' Service, Inc.,

SENSE TECHNOLOGIES: Begins Trading on OTCBB under 'SNSG' Symbol
Sense Technologies Inc. (OTC Bulletin Board: SNSGC) received
written notification Wednesday evening, April 24, 2002, from the
Nasdaq Listing Qualifications Panel announcing the panel's
decision to terminate the exception granted to the Company until
April 30, 2002 and delist the Company's stock from the Nasdaq
SmallCap Market effective with the open of business Thursday,
April 25, 2002.

The Company's stock commenced trading on the Over-the- Counter
Bulletin Board (OTCBB) Thursday, April 25, 2002, under the
trading symbol "SNSGC." Beginning with the open of business on
April 26, 2002, the Company's trading symbol will revert back to
the normal trading symbol of "SNSG."

The Company does not expect that this action taken by Nasdaq
will effect its business or operations.  The Company intends to
pursue the options available to it to become listed again on the
Nasdaq SmallCap Market, which may include requesting
reconsideration by the Nasdaq Listing Qualifications Panel,
appealing the decision of the panel or reapplying for listing on
the Nasdaq SmallCap Market in the future.

SEPRACOR INC: Will Hold Annual Shareholders' Meeting on May 22
The 2002 Annual Meeting of Stockholders of Sepracor Inc. will be
held at the offices of Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts 02109, on Wednesday, May 22, 2002 at 9:00
a.m., local time, to consider and act upon the following

      1. To elect two Class II Directors for the ensuing three

      2. To approve an amendment to the Company's 2000 Stock
         Incentive Plan increasing from 2,500,000 to 4,000,000
         the number of shares of common stock reserved for
         issuance under the 2000 Stock Incentive Plan; and

      3. To transact such other business as may properly come
         before the meeting or any adjournment thereof.

Stockholders of record at the close of business on April 10,
2002 are entitled to notice of, and to vote at, the meeting.

Sepracor develops and commercializes new, patented forms of
existing pharmaceuticals by purging them of nonessential -- or
even deleterious -- molecules. Compared to their traditional-
compound counterparts, Sepracor's products (called improved
chemical entities, or ICEs) can reduce side effects, provide new
uses, and improve safety, performance, and dosage. Sepracor
focuses its ICE efforts on gastroenterology, neurology,
psychiatry, respiratory care, and urology. The firm is also
developing its own new drugs to treat infectious diseases and
central nervous system disorders.

As of September 30, 2001, Sepracor reported an upside down
balance sheet, showing a total shareholders' deficit of about
$226.8 million.

STELCO INC: Reduces First Quarter 2002 Net Loss by Almost Half
Stelco Inc. reported a net loss of $32 million in first quarter
2002 compared with a loss of $60 million in first quarter 2001.

Net sales in first quarter 2002 were $638 million compared with
$637 million in the same quarter in 2001. Average revenue per
ton in the quarter at $542 remained unchanged compared with
first quarter 2001. The first quarter loss was mainly due to
depressed spot market pricing brought about by continued high
levels of unfairly priced imported steel. Steel shipments in
the quarter at 1,176,000 tons were virtually unchanged from
first quarter 2001.

Costs decreased by $36 per ton to $543 in first quarter 2002
from $579 in first quarter 2001. This decrease primarily
reflects the cost reduction initiatives throughout the
Corporation and a reduction in the average price of natural gas.
The production of semi-finished steel in the quarter was 18%
higher than that of first quarter 2001 and the volume of
downstream rolling and finishing operations was also increased.

First quarter EBITDA of negative $1 million improved by $42
million over first quarter 2001 primarily as a result of lower
cost per ton.

Jim Alfano, President and Chief Executive Officer, stated that,
"Our financial results continued to be adversely affected by
historically low average revenue per ton. However, our first
quarter financial results improved significantly over last year
as a result of increased operating levels and lower production
costs. We expect our financial results to continue to improve in
the second quarter as announced price increases take effect and
steel demand improves as the North American economy strengthens.
The Canadian Government must prevent unfair imports, under the
safeguard investigation it initiated, to allow the Canadian
steel industry to recover from the injury imports are causing."

               Financial and Operational Summary

Net loss was $32 million in first quarter 2002 compared with a
loss of $60 million in first quarter 2001.

For first quarter 2002, net sales were $638 million, shipments
were 1,176,000 tons, and average revenue per ton was $542
compared with first quarter 2001 net sales of $637 million,
shipments of 1,174,000 tons, and average revenue per ton of
$542. Spot market prices continued to be depressed primarily as
a result of high levels of unfairly priced imports.

Production of semi-finished steel in first quarter 2002 of
1,343,000 tons was 18% higher than first quarter 2001 and 4%
higher than fourth quarter 2001. The Corporation restricted
production in first quarter 2001 in order to reduce inventories.

Cost per ton improved $36 to $543 in the quarter from $579 in
the same quarter of 2001. The decrease in cost was primarily due
to the ongoing focus on cost reduction, increased production of
semi-finished steel, improved downstream operations, and reduced
average natural gas prices.

First quarter 2002 EBITDA of negative $1 million improved by $42
million over first quarter 2001, primarily as a result of lower
cost per ton.

At March 31, 2002, the Corporation's net cash position (cash and
cash equivalents net of bank indebtedness) was negative $2
million compared with negative $35 million at the end of 2001.

On January 21, 2002, the Corporation issued $90 million of 9.50%
Convertible Subordinated Debentures due February 1, 2007. The
debentures are convertible at the option of the holder into
Series A Convertible Common Shares of the Corporation at any
time prior to the maturity date at a conversion price of $4.50
per share. The debentures are redeemable by the Corporation,
under certain circumstances, on and after February 1, 2005. The
net proceeds of the sale of debentures of $87 million were used
for general corporate purposes, including the repayment of short
term debt. The per common share loss includes $0.02 for the
ongoing direct charge to retained earnings for the costs
relating to these debentures.

In February 2002, Stelco Inc. announced it had entered into a
10-year agreement with EDS Canada (EDS), effective April 1,
2002, whereby EDS will provide information technology support
and development services at most of Stelco's locations in
Canada. Under the agreement, EDS will also implement new
enterprise resource planning systems for Stelco's order flow,
maintenance, procurement, human resources, and finance

Stelco was honoured with the Canada Climate Change Voluntary
Challenge Registry's Leadership Award for displaying
extraordinary commitment, action, and leadership towards the
voluntary reduction of Greenhouse Gas Emissions.

                      Segmented Information

Integrated Steelmaking segment

The Integrated Steelmaking segment of the Corporation comprises
those business units that include and are primarily associated
with the Hilton Works and Lake Erie Steel Company integrated
steel plants and their raw materials properties. The primary
markets served by this segment are automotive, transportation,
construction, manufacturing, pipe and tubular manufacturers,
steel service centres, and steel fabricators. The segment
provides a significant quantity of steel required by Stelco's
Manufactured Products segment.

Net sales for the Integrated Steelmaking segment in the first
quarter were $476 million compared with $468 million in first
quarter 2001. Selling prices continued to be depressed during
the quarter due to lower spot market prices, caused by unfairly
priced imported steel, and lower activity in prime manufacturing

Costs improved significantly in the quarter compared with first
quarter 2001 primarily due to the decline in average natural gas
prices, increased production of semi-finished steel, improved
downstream operations, and the ongoing effects of cost reduction

An operating loss of $38 million was recorded for this segment
in first quarter 2002 compared with an operating loss of $75
million in the same quarter of 2001 with most of the improvement
being due to lower costs.

On March 12, 2002, Hilton Works and Local 1005 of the United
Steelworkers of America agreed to begin early negotiations.
Discussions began on March 25, 2002 and have a targeted
completion date of April 29, 2002. The current collective
agreement expires on July 31, 2002.

Mini-mill segment

The Mini-mill segment of the Corporation includes Stelco-
McMaster Lte and AltaSteel Ltd. located in Contrecoeur, Quebec,
and Edmonton, Alberta, respectively. These wholly owned
subsidiaries comprise electric arc steelmaking, billet casting,
and bar rolling facilities, and have combined steelmaking
capacity of approximately 1,000,000 tons. This segment also
includes the respective mini-mills' 50%-owned metal recyclers,
Fers et Mtaux Lte and GenAlta Recycling Inc. The primary
markets served by this segment are automotive, construction, oil
and gas, mining, manufacturing, and steel service centres.

Net sales for the Mini-mill segment in the first quarter were
$60 million compared with $61 million in first quarter 2001.
Average revenue per ton increased to $444 per ton in first
quarter 2002 from $389 per ton in the same quarter of 2001. The
increase in revenue per ton was due to an increase in shipments
of high-value-added products and selling price increases on

The steelmaking facility and bar mill at Stelco-McMaster Lte
established new monthly production records in the quarter. At
AltaSteel Ltd., progress continued to be made with the new bar
mill, and the new grinding rod heat-treat facility commenced
operation in March 2002.

Mini-mill segment operating income increased to $8 million in
first quarter 2002 from $4 million in the same quarter of 2001
primarily as a result of improvement in sales mix from high-
value-added product.

Manufactured Products segment

The Manufactured Products segment of the Corporation includes
business units, both wholly and partially owned, involved in
further steel processing. Products manufactured by units in this
segment include a wide variety of wire and wire products, small-
and large-diameter pipe and tubular products, and grinding

Manufactured Products net sales decreased to $102 million in
first quarter 2002 from $108 million in first quarter 2001. This
decrease was mainly due to the absence in first quarter 2002 of
large-diameter pipe sales. Increased sales of wire products at
Stelwire Ltd. partially offset the reduced pipe sales.

An operating loss of $3 million was recorded by this segment
during first quarter 2002, compared with an operating loss of $5
million for first quarter 2001.

In January 2002, CAW Local 523 at Welland Pipe Ltd. ratified a
new labour contract, which is in effect until October 31, 2003.

                 Liquidity and Capital Resources

At March 31, 2002, the Corporation's cash and cash equivalent
balance stood at $37 million versus $41 million at year-end 2001
and $27 million one year previous. Available lines of credit at
March 31, 2002, were $314 million, unchanged from December 31,
2001. At the end of first quarter 2002, $39 million of these
lines were drawn down compared with $76 million at the beginning
of the quarter. The Corporation's long-term debt/equity as a
percent of total capital was 37/63 at March 31, 2002 compared
with 39/61 at year-end 2001 and 38/62 at March 31, 2001.
Convertible debentures issued in first quarter 2002 have been
included in shareholders' equity as required by Canadian
generally accepted accounting principles.

                       Operating activities

Operating losses after adjustment for items not affecting cash
resulted in cash outflows of $9 million in first quarter 2002
compared with $50 million in first quarter 2001. In first
quarter 2002, operating elements of working capital used $18
million, principally on increased receivables and lower accounts
payable and accrued balances, partially offset by reduced
inventories. In first quarter 2001, operating elements of
working capital provided $54 million, principally on a
substantial reduction in inventories, partially offset by
increased receivables and lower accounts payable and accrued

                      Investing activities

Expenditures for capital assets were $11 million in the first
quarter of 2002, compared with $7 million in first quarter 2001.

                      Financing activities

Bank indebtedness decreased by $37 million in first quarter 2002
primarily due to the net proceeds of $87 million from the issue
of convertible debentures in January 2002.


On March 5, 2002, U.S. President George W. Bush announced his
import remedy decision following the U.S. International Trade
Commission's investigation under Section 201 of the Trade Act of
1974. The U.S. imposed tariffs of up to 30 percent on a wide
range of steel imports. Canada and Mexico, due to their NAFTA
status, were excluded from the tariffs. However, there is
concern that unfairly traded steel, otherwise destined for the
U.S. market, could be diverted to Canada, due to these U.S.
tariffs and the recent enactment of similar measures by Mexico.
Consequently, at the request of Canadian steel producers, the
Government of Canada initiated, on March 22, 2002, a safeguard
investigation into the increased level of Canadian steel
imports. Furthermore, the government also announced its
intention to invoke a provision whereby any surge in imported
steel during the investigation period could result in the
immediate imposition of a tariff surcharge.

On April 2, 2002, the U.S. Department of Commerce announced that
imports into the U.S. of Stelco's wire rod products were found
to have been priced at a level that would not result in the
imposition of anti-dumping duties going forward. Verification by
the Department is under way to confirm that preliminary finding.


North American automotive and housing markets are at levels
higher than anticipated in the first half of the year. Steel
demand will improve as the North American economy strengthens
during the year. Selling price increases announced during first
and second quarter 2002 on several products will provide
additional revenue and support improved earnings in the second
quarter. However, the Canadian government must prevent unfair
imports, under the safeguard investigation it initiated, to
allow the Canadian steel industry to recover from the injury
imports are causing.

Stelco Inc. and its affiliates are a group of market-driven,
technologically advanced businesses that are committed to
maintaining leadership roles as suppliers of high-quality steel
products. These businesses are dedicated to meeting the
requirements of their customers as well as collectively
providing an appropriate return for Stelco shareholders. Stelco
has a presence in six Canadian provinces and three states of the
United States. Consolidated net sales in 2001 were $2.6 billion.
For further information please refer to the company's Web site:

                          *   *   *

As reported in the Troubled Company Reporter's January 15, 2002
edition, Standard & Poor's assigned its single-'B' subordinated
debt rating to Stelco Inc.'s CDN$90 million convertible
subordinated debt issue due February 1, 2007. At the same time,
Standard & Poor's assigned its preliminary double-'B'-minus
senior unsecured debt rating and preliminary single-'B'
subordinated debt rating to the company's CDN$300 million shelf.

In addition, the ratings outstanding on the company, including
the double-'B'-minus corporate credit rating, were affirmed. The
outlook is negative.

The ratings on Stelco reflect a weakened financial profile due
to the effect of the ongoing economic downturn and the
prevailing difficult steel industry conditions on its financial
results, offset by the company's fair business position.

STRATUS SERVICES: Completes Internal Restructuring Plan
Stratus Services Group, Inc. (OTC Bulletin Board: SERV), the
SMARTSolutions(TM) company, announced the completion of an
internal restructuring plan and a gain in new customer

The Company is reporting better than average placement
requirement activity by its customers, signaling a positive
change in customer activity compared to the last twelve months.
Significant increases are in the manufacturing and distribution

Stratus' placement requirements in the last month have increased
by 50% from the same time period last year and in the last two
months have increased by more than 100% from the same period
last year.  Joseph J. Raymond, Chairman and CEO, stated, "This
type of order activity in the manufacturing and distribution
sectors provides a strong indication of economic rebound.  We
are seeing this activity on both coasts, which suggests that
this is not just a regional change.  This activity is not only
coming from our base business, but our recent acquisitions,
which support the soundness of our acquisition and integration

Stratus is a national provider of business productivity
consulting and staffing services through a network of thirty
offices in eight states, employing over 6,000 employees in
fifteen states.  Through its SMARTSolutions(TM) technology,
Stratus provides a structured program to monitor and reduce the
cost of a customer's labor resources.  Through its Stratus
Technology Services, LLC joint venture, the Company provides a
broad range of information technology staffing and project

At September 30, 2001, Stratus Services' total current
liabilities exceeded its total current assets by about $1.5

SYBRA INC: Independent Directors OK RTM's Recapitalization Plan
RTM Restaurant Group has executed a letter of intent with Sybra,
Inc. that will bring Arby's two largest franchisees together.

The recapitalization plan, which has been approved by the
independent members of the Board of Directors of Sybra, is
expected to bring Sybra out of Chapter 11.

As announced in March, the plan calls for RTM Restaurant Group,
the nation's largest privately held restaurant company and the
largest franchisee of Arby's Restaurants, to join with Sybra's
senior management team to acquire all of the capital stock of
Sybra, Inc., a subsidiary of ICH Corporation.

Russ Umphenour, president and CEO of RTM, expects the proposal
to be incorporated into Sybra's plan of reorganization and
submitted for final approval by July 15.

"We are pleased that our negotiations with Sybra and the
independent directors have passed this important milestone and
are moving toward the next phase of Sybra's reorganization
plan," commented Umphenour. "The management teams of both of our
companies are eager to implement a plan that will address issues
with Sybra's creditors and position the company for future

RTM Restaurant Group developed the plan after collaborating with
Sybra's largest unsecured creditors and independent directors.
The RTM proposal includes the participation of Sybra's senior
management as well as the key operators of each of its regions.

Sybra, the second largest franchisee of Arby's, filed for
Chapter 11 protection in February. Sybra currently operates 239
Arby's Restaurants located primarily in Michigan, Texas,
Pennsylvania, New Jersey, Connecticut and Florida. As part of
Sybra's restructuring plan, an affiliate of RTM and Sybra's
management have agreed to form a joint venture, which has
offered to contribute to Sybra $5 million for all of the
outstanding stock of Sybra, Inc.

RTM Restaurant Group operates 774 Arby's restaurants in 21
states and 42 markets. It is ranked by the Restaurant Finance
Monitor as the largest restaurant franchisee in the United
States. Annual sales of RTM Arby's operations are $750 million.
The company employs approximately 25,000 people and is privately
held by management.

TECSTAR: Hires Scotland Group as Restructuring Consultants
The U.S. Bankruptcy Court for the District of Delaware approves
the request of Tecstar, Inc. and its debtor-affiliate to retain
and employ The Scotland Group, Inc. as their restructuring

Pursuant to the terms of an Engagement Letter, The Scotland
Group will:

      a) assist the Debtors in restructuring operation including
         reducing costs and expenses and improving operating

      b) assist the Debtors in communications with vendors,
         creditors and customers;

      c) assist in the sale process and related due diligence;

      d) assist the Debtors in negotiations with vendors,
         creditors and customers;

      e) assist the Debtors in preparing any plan of
         reorganization, including the underlying operating and
         financial assumptions;

      f) work with creditors' committee and its advisors, as
         necessary, to evaluate the Debtors' plan of
         reorganization an operations;

      g) work with the Debtors' management throughout the chapter
         11 process to address issues related to chapter 11
         procedures, and

      h) provide other financial and operational analysis as
         requested by the Debtors.

The Debtors will pay The Scotland Group its customary hourly and
weekly rates for similar services and reimburse necessary and
actual expenses incurred.  Scotland's customary rates are:

      David Aucterlonie                    $400 per hour
      Russell Burbank                      $20,000 per week
      Other professionals                  $150 to $400 per hour
      Word processing support services     $75 per hour

Tecstar, Inc. manufactures high-efficiency solar cells that are
primarily used in the construction of spacecraft and satellite.
The Company filed for chapter 11 protection on February 07,
2002. Tobey M. Daluz, Esq. at Reed Smith LLP and Jeffrey M.
Reisner at Irell & Manella LLP represent the Debtors in their
restructuring efforts. When the company filed for protection
from its creditors, it listed assets of over $10 million and
debts of over $50 million.

USG CORP: Unit Will Open New Joint Compound Plant in Arizona
To better serve its customers in the Southwest, United States
Gypsum Company, a subsidiary of USG Corporation (NYSE: USG),
will open a new plant in Glendale, Arizona, to manufacture joint
compounds and texture products and act as a distribution center
for the company's comprehensive line of interior finishing
products and other products.  This state-of-the-art facility is
expected to begin manufacturing operations in December 2002 and
will initially employ about 30 people.

The plant will complement the company's existing sales office in
Phoenix and serve customers throughout the Southwest.  It will
enable U.S. Gypsum to provide enhanced service to customers,
meet increasing product demand throughout the region and
increase the company's sales.

The 96,000-square-foot facility will manufacture a variety of
joint compound and texture products under the SHEETROCK(R) brand
name.  Joint compound is used with joint tape to create smooth
walls and ceilings in new construction and remodeling projects.
U.S. Gypsum Company is North America's leading producer of both
joint compounds and gypsum wallboard.

"We selected the Phoenix area as the site for this new plant
because of its proximity to a large and rapidly expanding
customer base," said James S. Metcalf, senior vice president,
USG Corporation and president, Building Systems.  "The facility
will provide enhanced access to U.S. Gypsum's top-quality
products throughout the Southwest, benefit the local economy by
creating new jobs and help U.S. Gypsum strengthen its leadership
position in the building industry.  We are excited about
expanding our longtime relationship with the community, which
was established when we opened our Phoenix sales office many
years ago."

The fully automated joint compound and texture products plant
will be housed in an industrial building in Glendale, a suburb
of Phoenix.  Other products, including joint tape, primers,
corner bead, DUROCK(R) Brand Cement Board and a variety of
ceiling panels, will be stocked and distributed from this
facility.  The company is making an investment in improving the
existing building and the eight-acre property on which it is

USG Corporation is a Fortune 500 company with subsidiaries that
are market leaders in their key product groups: gypsum
wallboard, joint compound and related gypsum products; cement
board; gypsum fiber panels; ceiling panels and grid; and
building products distribution.  USG Corporation and its
principal subsidiaries filed for Chapter 11 reorganization on
June 25, 2001, in the U.S. Bankruptcy Court for the District of
Delaware. For more information about USG Corporation, visit the
USG Web site at

USG: Improved Gypsum Wallboard Results Yield Higher Net Earnings
USG Corporation (NYSE: USG), a leading building products
company, reported first quarter net sales of $829 million and
net earnings of $26 million, increases of $3 million and $15
million, respectively, from the year-before.

"We are pleased with both the improvement in our financial
performance and how we strengthened our operations during the
first quarter," said USG Corporation Chairman, President and
CEO, William C. Foote.  "Our businesses implemented new customer
satisfaction initiatives, reduced their operating costs and made
investments enabling them to grow."

Market conditions for several of USG's businesses improved
during the quarter.  The housing market, in particular, was
strong, resulting in increased operating rates in the gypsum
wallboard industry and higher selling prices.

Commenting on these market trends, Foote said, "The strength of
the new housing market and the recovery in residential
remodeling activity that we have seen this year is encouraging.
Growth in these two markets is important as they represent
nearly two-thirds of all demand for gypsum wallboard, our
largest product line.  Commercial construction, which is the
major market for our ceiling business and also important to our
distribution business, remains weak but we believe the worst is
behind us in that market."

"For those reasons, our view of market conditions has become
more favorable. However, there is a real risk that the positive
market trends may not continue.  For example, unfavorable
changes in interest rates, consumer confidence or employment
levels could cause conditions to weaken.  In this uncertain
environment, we will remain focused on the basics, which are
improving customer service and operating efficiency, and
selectively investing for profitable growth."

                      North American Gypsum

USG's North American gypsum business recorded net sales of $525
million and operating profit of $58 million, increases of 9
percent and 287 percent, respectively, from the first quarter of
2001.  A significant drop in the cost of producing Sheetrock(R)
brand gypsum wallboard was the largest factor behind the
improved profitability.  The business also sold more gypsum
wallboard, at higher average realized prices, than in the first
quarter of 2001, and had record first quarter shipments of
Sheetrock brand joint compounds and Durock(R) brand cement

United States Gypsum Company realized first quarter 2002 net
sales of $483 million and operating profit of $46 million.  Net
sales and operating profit were each $41 million more than that
achieved during the first quarter of 2001.  Most of the
improvement in U.S. Gypsum's operating profit came from lower
production costs for its gypsum wallboard.  Manufacturing costs
for gypsum wallboard declined by more than 10 percent due to
lower energy and raw material costs, and improved operating
efficiencies.  The company's wallboard capacity has continued to
become more efficient due to a successful capacity modernization

Also contributing to the company's improved profitability was an
increase in gypsum wallboard pricing.  U.S. Gypsum's nationwide
average realized price of wallboard was $95.84 per thousand
square feet during the first quarter, 4 percent higher than a
year ago.  The average price improved to about $99 in March,
reflecting a price increase implemented by the company on March

U.S. Gypsum shipments totaled 2.6 billion square feet, 13
percent above first quarter 2001 shipments and the second
highest quarterly volume in the company's history.  U.S.
Gypsum's wallboard plants operated at 95 percent of capacity in
the first quarter compared with an estimated 86 percent for the
industry as a whole.  Operating rates in the first quarter of
last year were 83 percent for U.S. Gypsum and 78 percent for the
industry.  Operating rates have improved due to increased demand
for wallboard.  Industry shipments of gypsum wallboard so far
this year are running about 10 percent higher than in the same
period last year.

The gypsum division of Canada-based CGC Inc., reported first
quarter 2002 net sales of $50 million and operating profit of $6
million.  Sales and operating profit were unchanged compared to
the first quarter of 2001. Gains from lower production costs and
increased shipments of gypsum wallboard in Canada were offset by
lower selling prices.  While market demand for wallboard has
been improving and CGC has gained market share, market prices
have been soft until recently.  CGC implemented a 10 percent
price increase for Eastern Canada in April and announced a 12
percent increase for Western Canada to take effect in July.

                          Worldwide Ceilings

USG's worldwide ceilings business reported first quarter net
sales of $148 million and operating profit of $5 million,
declines of 14 percent and 44 percent, respectively, from the
first quarter of 2001.  Both domestic and international business
units experienced lower sales.  The decline in profitability was
largely attributable to the international operations, where the
business swung from a break-even level to a modest loss.  Most
of the decline was in Europe where the market for commercial
ceiling products has weakened.

USG's domestic ceilings business, USG Interiors, reported an
operating profit of $7 million compared with $8 million in the
first quarter of 2001. This business is experiencing lower sales
and shipments in 2002 as the primary market for its products,
commercial construction, has been contracting. During the
quarter, the negative impact of lower volumes was partially
offset by cost reductions.  The company was more efficient
following the closure of a high cost ceiling tile production
line in the fourth quarter.  Production costs also benefited
from lower energy and raw materials costs.

Operating profit of $1 million for the ceilings division of CGC
Inc. was the same as last year's first quarter while USG
International reported a loss of $3 million compared with
breakeven performance in last year's first quarter.

                    Building Products Distribution

L&W Supply, USG's building products distribution business,
reported first quarter 2002 net sales of $275 million and
operating profit of $7 million, decreases of 4 percent and 53
percent, respectively, vs. the first quarter of 2001.  These
declines primarily reflect lower selling prices for gypsum
wallboard, but lower sales of complementary products, such as
drywall metal, were also a factor.  Sales and margins have been
under pressure since commercial construction, which is a major
market for L&W, has weakened.

L&W continued pursuing a strategy of reducing costs and boosting
returns by closing underperforming facilities and redeploying
assets to locations with better growth and return prospects.
In line with this strategy, L&W closed three facilities and
opened one new facility during the quarter.  It now operates 178
locations in the U.S. that distribute a variety of gypsum and
ceilings products, as well as related building materials.

                   Other Consolidated Information

First quarter 2002 selling and administrative expenses increased
$14 million, or 21 percent, year-over-year, principally due to
expenses in 2002 related to a key employee retention program and
prior-year reversals of accruals for incentive programs.
Selling and administrative expenses as a percent of net sales
were 9.9 percent, up from 8.2 percent in the comparable 2001

Interest expense of $1 million was incurred in the first quarter
of 2002, compared with $14 million in the first quarter of 2001.
Under AICPA Statement of Position 90-7 (SOP 90-7), "Financial
Reporting by Entities in Reorganization Under the Bankruptcy
Code," virtually all of USG's outstanding debt is classified as
liabilities subject to compromise, and interest expense on this
debt is not accrued and recorded.  For the first quarter of
2002, contractual interest expense not accrued and recorded on
pre-petition debt totaled $18 million.

USG incurred Chapter 11 reorganization expenses of $2 million in
the first quarter of 2002.  This consisted of $4 million in
legal and financial advisory fees, partially offset by $2
million in interest income.  Under SOP 90-7, interest income on
USG's bankruptcy-related cash is offset against Chapter 11
reorganization expenses.

As of March 31, 2002, USG had cash and cash equivalents totaling
$523 million on a consolidated basis and $319 million of unused
borrowing capacity under a debtor-in-possession (DIP) financing
facility.  As of that date, there were no borrowings under the
DIP facility, however, $11 million of standby letters of credit
were outstanding.  The total borrowing capacity on the facility
varies depending on certain asset levels and equaled $330
million as of March 31, 2002.

                     Chapter 11 Reorganization

On June 25, 2001, USG Corporation and 10 of its subsidiaries
filed voluntary petitions for reorganization under Chapter 11 of
the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware.  This action was
taken to resolve asbestos-related claims in a fair and equitable
manner, to protect the long-term value of USG's businesses and
to maintain their leadership positions in their markets.  The
Chapter 11 cases have been consolidated for purposes of joint
administration as In re: USG Corporation et al. (case no. 01-

The USG case, along with four other asbestos-related cases, has
been assigned to Judge Alfred M. Wolin, a senior federal judge
in Newark, New Jersey.  Judge Wolin will preside over asbestos
personal injury matters in all five cases.  Judge Randall J.
Newsome, a U.S. Bankruptcy Court judge in Delaware, will preside
over all other bankruptcy matters in the USG case.

Recent developments in USG's case include bankruptcy-court
approval in February of procedures for USG and its subsidiaries
to follow when making small acquisitions.  In early April, the
Corporation submitted a motion requesting establishment of a bar
date for all claims except asbestos personal injury claims.  A
hearing on the motion is scheduled for April 30. "While the
major issues in the bankruptcy have yet to be addressed and
resolved, these are important steps that will allow us to keep
our businesses growing and our Chapter 11 reorganization moving
ahead," stated Foote.

USG Corporation is a Fortune 500 company with subsidiaries that
are market leaders in their key product groups: gypsum
wallboard, joint compound, cement board and related gypsum
products; ceiling tile and grid; and building products
distribution. For more information about USG Corporation, visit
the USG home page at

USG Corporation's 8.50% bonds due 2005 (USG1), DebtTraders
reports, are quoted at a price of 79. See
real-time bond pricing.

VIASYSTEMS: Falls Short of NYSE Continued Listing Requirements
On April 16, 2002, Viasystems Group, Inc. advised by the New
York Stock Exchange that due to noncompliance with the minimum
share price and total market capitalization continued listing
standards of the Exchange, the Exchange would suspend trading of
the Company's common stock prior to the opening of business on
Thursday, April 18, 2002 and initiate procedures to delist the
common stock.

As of April 22, 2002, the OTC Bulletin Board ("OTCBB") began
quoting and trading the Company's common stock under the symbol
"VSGI." The OTCBB is a regulated quotation service that displays
real time quotes, last sale prices and volume information in
over-the-counter equity securities. An
over-the-counter equity security generally is any equity
security that is not listed or traded on the NASDAQ stock market
or a national securities exchange. Over-the-counter equity
securities are traded on the OTCBB by a community of registered
market makers that enter quotes through a computer network.

Investors should be aware that trading in the Company's common
stock through market makers and quotation on the OTCBB entails
risk. For example, market makers may not be able to execute
trades as quickly as when the stock was traded on the Exchange.
Investors are urged to contact their broker for further
information about executing trades on the OTCBB.

The company is a leading contract manufacturer of printed
circuit boards (PCBs), backpanel assemblies used to connect
PCBs, wire harnesses, custom enclosures, and cable assemblies.
Viasystems also makes multilayer PCBs for connecting
semiconductors and integrated circuits. Customers include
telecommunications and networking (62% of sales), computer,
automotive, and consumer electronics manufacturers. Lucent
accounts for about 20% of sales. Viasystems continues to use
acquisitions -- including units from Lucent and Marconi -- to
expand its operations in China and Europe. Director Thomas
Hicks, along with investment firm Hicks, Muse, Tate & Furst,
owns 50.4% of the company.

As September 30, 2001, Viasystems' total liabilities exceeded
its total assets by about $171.1 million.

WA TELCOM: Court OKs Verso's Deferred Payment for NACT Deal
Verso Technologies, Inc. (Nasdaq NMS: VRSO), an integrated
switching solutions company that is adapting the cost savings of
IP networks to the unique requirements of voice, announced that
the Bankruptcy Court having jurisdiction over WA Telcom's
pending Chapter 11 reorganization proceedings has approved
Verso's agreement with WA Telcom to restructure the
approximately $5.5 million payment that was due WA Telcom on
March 31, 2002.

The restructured payments will be made as follows: Verso will
pay WA Telcom $4.25 million, of which $1.5 million was paid on
April 1, 2002, $500,000 will be paid on each of July 1, 2002,
October 1, 2002 and January 1, 2003 and $1.25 million (plus
interest from April 1, 2002) will be paid on April 1, 2003. As
part of this agreement, Verso will release WA Telcom from any
and all claims that Verso may have had against WA Telcom.

The revised payment obligation will be evidenced by a promissory
note that is convertible, at WA Telcom's option, during a
certain period surrounding each payment date to the extent of
the payment then due, into shares of Verso common stock, at a
fixed rate of $1.36 per share. If the promissory note is
converted, Verso will seek to register the shares of its common
stock underlying the promissory note for resale under the
Securities Act of 1933.

Verso Technologies provides integrated switching solutions for
communications service providers who want to develop IP-based
services with PSTN scalability and quality of service. Verso's
unique, end-to-end native SS7 over IP capability enables
customers to leverage their existing PSTN investments by
ensuring carrier-to-carrier interoperability and rich billing
features. Verso's complete VoIP migration solutions include
state-of-the-art hardware and software, OSS integration, the
industry's most widely used applications and technical training
and support. For more information about Verso Technologies,
contact the company at http://www.verso.comor by calling (678)

WARNACO GROUP: Unsecured Panel Employs Jaspan as Special Counsel
Pursuant to the Stipulation and Order between the Official
Committee of Unsecured Creditors and the Bank of Nova Scotia and
Citibank, N.A. as Debt Coordinator for the Pre-petition Lenders,
Judge Bohanon approves the retention and employment of Jaspan
Schlesinger Hoffman, LLP as special counsel of the Official
Committee of Unsecured Creditors in the bankruptcy cases of
Warnaco Group, Inc., and its debtor-affiliates, nunc pro tunc to
October 9, 2001.

                          * * * *

As previously reported in the October 23, 2001 issue of the
Troubled Company Reporter, the Committee will look to Jaspan to:

   (a) assist and advise the Committee in connection with the
       Committee's investigation of the security interests, liens
       and claims of the Debtors' Pre-Petition Secured Lenders,
       including Rule 2004 examinations;

   (b) commence, if necessary, and prosecute adversary
       proceedings against the Pre-Petition Secured Lenders and
       other necessary parties, which shall include all aspects
       of discovery;

   (c) to attend meetings and negotiate with the representatives
       of the Debtors and/or any party which is the subject of
       investigation by the Committee or against which the
       Committee may commence an adversary proceeding;

   (d) to take all necessary action to protect and preserve the
       interests of the Committee, including:

          (i) the prosecution of actions on their behalf, and

         (ii) negotiations concerning all litigation in which the
              Debtors are involved;

   (e) to prepare on behalf of the Committee all necessary
       adversary complaints and related motions, applications,
       answers, orders, reports and other papers in support of
       positions taken by the Committee in any adversary

   (f) to appear, as appropriate, before this Court, the
       Appellate Courts, State Courts and the United States
       Trustee and to protect the interests of the Committee
       before said Courts and the United States Trustee; and

   (g) to perform all other necessary legal services in these
       Cases as is appropriate given the purpose and scope of
       Jaspan's retention, with those services primarily related
       to present or former clients of Otterbourg.

Jaspan will continue the investigation commenced by Otterbourg,
inter alia, which will include:

     (i) scheduling and conducting Rule 2004 examinations,

    (ii) requesting and reviewing additional documents in the
         possession of various of the Pre-Petition Secured

   (iii) completing a thorough and comprehensive review of the
         pre-petition transactions, and

    (iv) prosecuting various claims and defenses, if requested.

With the Court's approval, Jaspan will calculate its fees for
professional services based on:

(A) Jaspan's customary hourly billing rates, which in the normal
     course of business are subject to revision.  Jaspan's
     current range of customary hourly rates is:

                      Partners: $315 to $395
                       Counsel: $235 to $375
                    Associates:  $95 to $225
              Legal Assistants:  $75 to $105

     Jaspan will also charge the Committee for all other
     disbursements incurred, such as: costs for telephone
     charges, photocopying (at a reduced rate of 10 cents per
     page), travel, business meals (but not overtime meals),
     computerize research, messengers, couriers, postage, witness
     fees and other fees related to trials and hearings.

(B) If a proceeding is filed to assert any Claims against the
     Pre-Petition Secured Lenders, Steven R. Schlesinger, a
     member of the firm of Jaspan Schlesinger Hoffman, LLP, says
     they intend to apply to the Court for compensation and
     reimbursement of actual and necessary expenses incurred in
     such proceeding, to be awarded strictly on a contingency fee
     basis.  Mr. Schlesinger explains that a contingency fee
     arrangement is required since the Final Financing Order
     provides that proceeds of Pre-Petition and Post-Petition
     collateral (representing virtually all of the Debtors'
     assets) may not be used to assert Claims against the Pre-
     Petition Secured Lenders.  Subject to the Court's approval,
     Mr. Schlesinger notes, Jaspan will charge a contingency fee
     calculated as:

     (1) the fees shall be contingent upon results as measured by
         the distribution to the Unsecured Creditors pursuant to
         a Plan of Reorganization, or as a result of a
         liquidation pursuant to Chapter 7 of the Bankruptcy

     (2) either in cash or in kind arising from the settlement
         with Secured Creditors, the setting aside of lien claims
         of the Secured Creditors, the return to the Estate of
         preferences or any other tangible benefit inuring to the
         Unsecured Creditors,

     (3) such fees shall be equal to 10% of the first
         $10,000,000, 7% of the next $10,000,000 and 1 1/2% of
         amounts in excess of $20,000,000.

C) In the event there is a benefit to the Estate as a result of
     Jaspan's efforts (but distribution to the Unsecured
     Creditors is limited relative to the benefit obtained by the
     Debtors' Estate), then, Mr. Schlesinger says, they will
     reserve their right to apply for fees bases upon the time
     expended by Jaspan and the benefit obtained by the Estate
     from those efforts.

And with the Court's approval of Jaspan's employment, Jaspan
intends to apply to the Court for allowance of compensation and
reimbursement of expenses in accordance with the applicable
provisions of the Bankruptcy Code, the applicable Federal Rules
of Bankruptcy Procedure and rules and Orders of this Court.
(Warnaco Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

WARPRADIO: Taps Tune-Up Inc. to Assist in Reorganization
WarpRadio (OTC: WRPR) signs agreement with Tune-Up Inc. of
Denver to assist the company through its reorganization.  Tune-
Up Inc. has over 20 years experience helping established as well
as development stage companies with a proven track record for
successful emergence from chapter 11 including public companies.
The Company has retained Bill Shenkin, president of Tune-Up, as
acting CFO.  With 11.4 million shares out and with an
approximate float of 1.8 million and its nominal debt, it is not
the company's intention to restructure the shares at this time.

The principal reason for seeking chapter 11 relief was to
protect the value and brand name of the WarpRadio network, which
is currently the third largest in the US, only behind Clear
Channel and Virgin Radio.  "Each week, more people discover the
tremendous entertainment value of Internet radio," said
MeasureCast -- spokesman Sven
Haarhoff; "Despite having to negotiate rough waters, many Web
radio stations are streaming more hours of music, news and talk
than ever before.  In fact, the total time spent listening to
stations measured by MeasureCast has increased 99 percent this
year, and more than 560 percent since January 2001. WarpRadio
remains a leading network of AM and FM stations broadcasting
over the Internet.  In 2001, WARP topped the MeasureCast Top 10
Internet Radio Networks chart."

The company creates a partnership synergy with the stations
allowing both to share in the vast potential revenue
opportunities.  The increased number of advertisements, which
can be in the form of banner ads, pop-ups, pop-unders audio
gateways and digitally inserted impressions, can deliver
significant revenue through the use of this new medium.  With
less than one third of the existing 12,000 radio stations in the
US currently streaming, the potential for WarpRadio is enormous.
As more and more stations seek to expand their audiences with
increasing revenues an industry leader such as WarpRadio should
benefit through dramatic growth.

WarpRadio has also signed an agreement with Microsoft (Nasdaq:
MSFT) to participate in the Windows Media Advertising Program
with revenues beginning to be realized by the company currently
through this program.  With over 300 Microsoft sales
representatives, WarpRadio should be able to benefit from their
ability to charge higher advertising rates as well as gaining
penetration to the larger advertisers more effectively.  "With
actual revenues of $568,000 in 2001 and new, significantly lower
bandwidth costs, coupled with the fact that the number of
Americans who watched or listened to streaming media live is now
in excess of 80 million per year (according to Hiwire inc.) our
prospects for a banner year are quite promising," says Denise
Sutton, CEO of WarpRadio.

For more information visit the company's Web site at
http://www.warpradio.comor contact Fair Market Value at 303-

WILLIAMS COMMS: Will Cooperate with Oklahoma Regulators' Probe
Williams Communications Group, Inc. (OTC Bulletin Board: WCGRQ)
is the subject of an order initiating investigation issued by
the Oklahoma Department of Securities.  Williams Communications
has been informed that the investigation is related to its spin-
off from Williams Companies and to the recent filing of a
negotiated Chapter 11 bankruptcy.

Williams Communications has informed the Oklahoma Department of
Securities that it will cooperate fully with the investigation.

Based in Tulsa, Oklahoma, Williams Communications Group, Inc.,
through its operating subsidiary Williams Communications, LLC,
is a leading broadband network services provider focused on the
needs of bandwidth-centric customers. Williams Communications
operates the largest, most efficient, next-generation network in
North America.  Connecting 125 U.S. cities and reaching five
continents, Williams Communications provides customers with
unparalleled local-to-global connectivity.  By leveraging its
infrastructure, best-in-breed technology, connectivity and
network and broadband media expertise, Williams Communications
supports the bandwidth demands of leading communications
companies around the globe.  For more information, visit

DebtTraders reports that Williams Communications Group Inc.'s
10.875% bond due 2009 (WCG2) are quoted at 12.5. See
real-time bond pricing.

ZILOG INC: Expects to Complete Capital Reorganization Next Month
ZiLOG, Inc. reported operating income, excluding special
charges, of $2.3 million for the first fiscal quarter ended
March 31, 2002 which compares to operating losses, excluding
special charges, of $16.6 million and $2.2 million for its first
and fourth quarters of 2001, respectively. The Company reported
$4.4 million of EBITDA on net sales of $36.0 million in the
first quarter of 2002 compared to EBITDA of negative $7.1
million on net sales of $44.3 million for the same period in
2001. In the fourth quarter of 2001 the Company reported EBITDA
of $6.6 million on net sales of $41.4 million.

"We achieved the highest level of operating income, excluding
special charges, since Q3 1999 when our revenue was over $65
million," said Jim Thorburn, ZiLOG's Chief Executive Officer.
"This accomplishment is another critical milestone on ZiLOG's
road to full financial health. Our operating performance is
ahead of plan, our balance sheet restructuring is nearly
complete, and our new product pipeline is taking shape around
our re-focused strategy of delivering significant value to our

The Company's book-to-bill ratio was 1.04 for the quarter
reflecting a sequential bookings growth of 2 percent. During
2000 and 2001 the Company de-emphasized certain of its products,
the result of which has been a decline in the levels of new
orders on these products. Excluding these de-emphasized
products, the Company's book-to-bill ratio was 1.15 and
sequential bookings growth was 21 percent.

ZiLOG Inc.'s March 31, 2002, balance sheet is upside-down,
recording a total shareholders' equity deficit of about $287

Since announcing its plan of reorganization in November 2002,
the Company's senior executives have met with many of its major
OEM and distribution customers. "Our customers have been
extremely positive about our plans and are excited about our
product and market roadmaps," said Thorburn.

The Company has aggressively managed its costs, with gross
margin increasing to 44 percent of sales during the first
quarter of 2002, up from 35 percent in the fourth quarter of
2001 and 14 percent in the first quarter of last year. Cash and
cash equivalents on March 31, 2002 were $17.5 million, as
compared to $30.7 million at December 31, 2001. This reduction
in cash reflects planned expenditures on restructuring

"We have made significant progress to right-size our operating
costs," said Thorburn. "Upon conversion of our Senior Notes to
equity next month, our restructuring will be substantially
complete and ZiLOG will emerge with a strong balance sheet," he

The Company's net loss in the first quarter of 2002 was $11.9
million as compared to the fourth quarter of 2001 of $62.0
million and $24.1 million in first quarter of 2001. Included in
the first quarter 2002 net loss are special charges totaling
$5.6 million related to the closure of its 8 inch wafer
manufacturing facility, discontinuation of future Cartezian
product development efforts and closure of the Austin, Texas
design center. Additionally, the first quarter 2002 net loss
includes reorganization costs of $3.8 million for professional
and financial advisory services related to the Company's planned
capital reorganization. The Company anticipates completion of
the capital reorganization next month, and as such, all
remaining significant payments associated with the Company's
restructuring and capital reorganization, approximating $5
million, are expected to be made in the second quarter.

ZiLOG's First Quarter Highlights

      --  In January, ZiLOG completed its planned closure of its
Mod III 8 inch wafer manufacturing facility in Nampa, Idaho and
transitioned its related products to alternate manufacturing

      --  In February, the Company completed the move of its
headquarters from Campbell to San Jose, California.

      --  In January, the Company discontinued future development
the Cartezian product and subsequently closed its Austin, Texas
design center. ZiLOG has rationalized its engineering efforts
and aligned its engineering talent to its core micro-logic

      --  On February 26th, ZiLOG received approval from the
holders of its $280 million 9-1/2 percent Senior Secured Notes
and of its preferred stock that voted to proceed with the
Company's prepackaged plan of reorganization. The court granted
the Company's motion on March 1, 2002 to pay its unsecured
creditors, including its employees and trade creditors, in full
in the ordinary course of business. The Senior Noteholders will
receive stock in the reorganized Company and an interest in its
Mod III subsidiary in exchange for their notes, and all pre-
existing senior secured notes and equity securities of the
Company will be cancelled.

      --  The Company announced that Acting CEO Jim Thorburn was
elected to ZiLOG's Board of Directors as Chairman and appointed
Chief Executive Officer. In addition, Executive Vice President
Mike Burger was named President and was also elected to the
Board of Directors.

New Products

      --  The recently introduced eZ80 Webserver product enables
easy, cost-effective, direct connections to networks and the
Internet. The product leverages standard Internet protocols to
enable direct connections over Local Area Networks (LAN), Wide
Area Networks (WAN), like the Internet, and Personal Area
Networks (PAN). The eZ80 is code-compatible with ZiLOG's well-
known Z80 and Z180, and offers Internet connectivity, high-speed
performance and superior memory support in a cost-effective 8-
bit device.

      --  The complete third-party tool set for the eZ80 family
was released in March. It includes an integrated development
environment with C/C++ compiler from IAR Systems Jonkoping AB
and an integrated system analyzer from First Silicon Solutions.

      --  The eZ80 spring workshop series was announced as the
Second set of workshop training sessions for the new eZ80
Webserver. The workshops will be held in 11 cities across North

      --  The Company has developed fully functioning silicon for
the next part in the eZ80 family (L92), which is a low power
version of the eZ80 Webserver augmented with an expanded
peripheral set.

      --  ZiLOG has completed the design on the next family of
flash-based eZ80 products.

      --  The Company continues rapid development of a new family
of Z8 Microcontrollers expected to launch in the second half of
2002. This family of embedded flash 8-bit microcontrollers will
feature a new high performance core, an updated peripheral set
and a complete tool suite.

      --  ZiLOG released a new internally developed version of
its European database for its Universal Infrared Remote Control
product. These semiconductor devices provide customers with a
code database to make universal remote controls for models of
consumer electronic equipment produced in Europe.

      --  The Company has recorded its first design win for its
new UltraSlim(TM) IrDA transceiver family addressing the PDA and
cell phone markets. These products, introduced in December 2001,
are designed to add "always-on," power-efficient infrared
connectivity to the most compact portable electronics systems.

ZiLOG, designs, manufactures and markets semiconductor micro-
logic devices for the communications and embedded control
markets. Headquartered in San Jose, California, ZiLOG maintains
design centers in San Jose; Ft. Worth, Texas; Nampa, Idaho;
Seattle, Wash.; and Bangalore, India, advanced manufacturing in
Nampa and test operations in Manila, Philippines. To know more
about the company, visit its Web site at

* BOND PRICING: For the week of April 29 - May 3, 2002
Following are indicated prices for selected issues:

Amresco 9 7/8 '05              23 - 25(f)
AES 9 1/2 '09                  77 - 79
AMR 9 '12                      96 - 97
Asia Pulp & Paper 11 3/4 '05   25 - 26(f)
Bethlehem Steel 10 3/8 '03     11 - 12(f)
Enron 9 5/8 '03                11 - 12(f)
Global Crossing 9 1/8 '04       2 - 3(f)
Level III 9 1/8 '04            46 - 48
Kmart 9 3/8 '06                50 - 52(f)
NWA 8.70 '07                   90 - 92
Owens Corning 7 1/2 '05        40 - 41(f)
Revlon 8 5/8 '08               44 - 46
Trump AC 11 1/4 '07            75 - 77
USG 9 1/4 '01                  80 - 82(f)
Westpoint Stevens 7 3/4 '05    55 - 57
Xerox 7.15 '04                 94 - 95


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

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

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

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

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


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

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

Copyright 2002.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
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                      *** End of Transmission ***