TCR_Public/020430.mbx           T R O U B L E D   C O M P A N Y   R E P O R T E R

              Tuesday, April 30, 2002, Vol. 6, No. 84

                           Headlines

360NETWORKS INC: Court Approves Settlement Agreement with Qwest
AAR CORP: Fitch Hatchets Unsecured Debt Rating Down Two Notches
AFC ENTERPRISES: S&P Rates $275MM Senior Secured Bank Loan at BB
AMERICAN TISSUE: Sells Tissue Paper Assets to Cascades for $35MM
AMERIQUEST: Ceases All Operations Due to Lack of Working Capital

AMES DEPT: Argues Guaranty Capital & Orix Adequately Protected
ANTEON CORPORATION: S&P Raises Corporate Credit Rating to BB-
ASSET SECURITIZATION CORP: S&P Cuts Class B-2 Certs. Rating to D
ATLAS AIR: Parent Names Ernst & Young as New Independent Auditor
BANK OF HAWAII: Reduced Risk Profile Spurs Fitch's B/C Rating

BANK OF HAWAII: Appoints 3 New Directors to Board of Directors
BETHLEHEM STEEL: Acquires Ownership Rights of Columbus Companies
COMDISCO INC: Judge Barliant Caps HP Break-Up Fee at $5 Million
COVANTA ENERGY: Court Okays Jenner & Block as Special Counsel
CROWN CORK: DebtTraders Says Bankruptcy "A Less Likely Scenario"

ENRON CORP: Seeks Court's Nod to Escrow Iberdrola Sales Proceeds
ENRON: Azurix's Consent Payment Deadline Extended Until Today
EXODUS: Liquidation Plan Vests Broad Power on Plan Administrator
FIVE NINE SOLUTIONS: Case Summary & Largest Unsecured Creditors
FLAG TELECOM: Pushing for Injunction Against Utility Companies

FORMICA: Committee Wants to Hire Dewey Ballantine as Counsel
FRUIT OF THE LOOM: Pushing for May 31 Bar Date for Admin. Claims
HAYES LEMMERZ: Committee Taps Chanin Capital for Fin'l Advice
ICH CORPORATION: Signs-Up BSI for Claims and Noticing Services
ICH CORP: Accepts Proposed Recapitalization of Sybra Subsidiary

IT GROUP: Hearing on Removal Period Extension Set for May 10
INTEGRATED HEALTH: Wants to Assume Three New Mexico Leases
INT'L FIBERCOM: Wants to Extend Lease-Decision Period to June 11
KAISER ALUMINUM: Gets Open-Ended Lease Decision Period Extension
KING PRODUCTS: Receiver Completes Asset Sale to Urmet Unit

KMART CORP: Obtains Approval to Engage DrKW as Financial Advisor
LASON INC: Court Sets Plan Confirmation Hearing for Today
LERNOUT & HAUSPIE: Wants Solicitation Period Extended to June 17
LYONDELL CHEMICAL: Fitch Assigns BB- to Senior Credit Facilities
MARSON HOLDING: Case Summary & 8 Largest Unsecured Creditors

MCLEODUSA: Automatic Stay Terminated Effective April 16, 2002
MOTIENT CORP: Virginia Court Confirms Joint Reorganization Plan
NATIONAL STEEL: Wants More Time to Make Lease-Related Decisions
NUCENTRIX BROADBAND: Violates Nasdaq Listing Requirements
PACIFIC GAS: Wins Nod to Spend Up to $183MM on San Jose Project

PINNACLE HOLDINGS: Will File Prepack. Chapter 11 Plan Next Month
PLANETRX.COM INC: Agrees to Merge with Paragon Homefunding
PROVELL INC: Eyeing Chapter 11 Filing to Reorganize Operations
PSINET INC: Court Okays Asset Purchase Pact Terms with Cogent
PSINET INC: Enters Into Pact to Sell Europe Unit for $9.5MM

RELIANCE: May 16 Hearing Set on Compensation Protocol Dispute
REPUBLIC TECH.: USWA Says Proposed Deal Stalls Asset Liquidation
RHINO ENTERPRISES: Weaver Steps Down from Board of Directors
SAFETY-KLEEN: Taps BBM/MSG to Help Prosecute Claims Against PwC
STARWOOD HOTELS: Negotiating to Refinance Senior Credit Facility

TELEGLOBE INC: S&P Junks Ratings After Parent Cuts-Off Funding
TITAN CORP: S&P Rates $450 Mill. Senior Credit Facilities at BB-
TRINITY INDUSTRIES: Q1 2002 Net Loss Narrows to $8.6 Million
USG CORP: Asks Court to Approve Bar Dates & Claims Procedures
USDATA CORP: Has Working Capital Deficit of $1.4MM at March 31

U.S. INDUSTRIES: Hubbell Acquires LCA Group Assets for $250MM
VELOCITY EXPRESS: Closes Fin'l Workout via Reverse Stock Split
WARNACO GROUP: Has Until July 31 to Decide on Milford Leases
WASTE CONNECTIONS: S&P Rates New $150MM Convertible Notes at B+
WESTERN RESOURCES: S&P Concerned About Frail Fin'l Measurements

WISE ALLOYS: S&P Assigns Low-B's to Credit Rating & Other Issues
WORKFLOW MANAGEMENT: Seeks Waiver of Default Under Credit Pact

                           *********

360NETWORKS INC: Court Approves Settlement Agreement with Qwest
---------------------------------------------------------------
"The Official Committee of Unsecured Creditors [of 360networks
inc., and its debtor-affiliates] does not oppose the general
settlement with Qwest but believes that the proposed allocations
of the proceeds and liability of the Administrative Cap may
unfairly prejudice the U.S. Debtors' estates," Norman N.
Kinel, Esq., at Sidley Austin Brown & Wood, in New York
explains.

Mr. Kinel tells the Court that:

    -- First, the Debtors have not adequately demonstrated the
       basis for the proposed allocation of the Settlement
       Agreement proceeds.  The proposed Settlement Agreement
       provides that the Canadian Debtors will receive
       approximately $15,000,000 while the U.S. Debtors will get
       $11,000,000 of the proceeds.  "While the Debtors have
       provided the Committee with certain confidential
       information of the allocation on a route by route basis,
       such information does not sufficiently justify why the
       Canadian Debtors' estates are entitled to a larger
       percentage of the proceeds," Mr. Kinel asserts.

    -- Second, the Settlement Agreement attempts to unfairly
       burden the estates of the U.S. Debtors with 100% of the
       financial liability of the Administrative Cap.  While the
       Canadian Debtors enjoy the larger share of the proceeds of
       the transaction, they will not be required to shoulder a
       proportionate amount of the responsibility should the
       Debtors default on their obligations to Qwest.  "The
       Committee believes that the allocation of liability
       regarding the Administrative Cap should be shared between
       the U.S. Debtors and Canadian Debtors in a manner
       consistent with the means by which they enjoy the
       proceeds," Mr. Kinel relates.

The Committee asks the Court to approve the Agreement only on
the condition that the proceeds are held in escrow until an
appropriate allocation between the U.S. Debtors and the Canadian
Debtors is determined, and a proper allocation of the
Administrative Cap is reached.

                          Wagner Objects

According to Eric J. Snyder, Esq., at Pryor & Mandelup, in
Westbury, New York, Wagner Equipment Company also disputes the
proposed settlement agreement between the Debtors and Qwest
Communication Corporation.

Mr. Snyder explains that Wagner is a supplier of electric
generators and related equipment to the Debtors.  Prior and
subsequent to the Petition Date of these cases, Wagner filed
mechanic's liens in the counties which include eight locations
that are the subject of the Indefeasible Rights of Use
Agreements.  These are affected by the proposed Qwest
settlement.

"The Qwest settlement states that the proposed sale is free and
clear of any liens, claims and encumbrances including
Materialman's claims," Mr. Snyder notes.  However, Mr. Snyder
asserts that Wagner is a materialman.  In order for the Debtors
to sell the fiber that is the subject of the Qwest Settlement
free and clear of Wagner's lien, the Debtors must satisfy the
requirements under Section 363(f) of the Bankruptcy Code.
Furthermore, the Debtors should be required to escrow the
proceeds of the sale, up to the amount of Wagner's liens, along
with interest, costs and attorney's fees, as allowed under
applicable state law, the Bankruptcy Code and the applicable
contract.

Thus, Wagner Equipment Company asks the Court to deny the
Debtors' proposed Qwest Settlement with Qwest Communications.

                          *    *    *

Judge Gropper approves the Settlement Agreement with Qwest
Communications.  The Court further rules that:

   -- the Debtors' assumption and rejection of the contracts
      proposed to be assumed and rejected under the Settlement
      Agreement is authorized by this Court;

   -- of the $26,017,000 in proceeds from the Agreement,
      $10,508,500 will be provisionally allocated to the U.S.
      Debtors and another $10,508,500 to the Canadian Debtors,
      subject fully to the reservations. $5,000,000 will be
      placed in a segregated account pending agreement among the
      Debtors and their affiliates, the Pre-petition Lenders and
      the Official Committee of Unsecured Creditors regarding the
      allocation of such proceeds; provided, however, that each
      of the parties have the right at any time to make
      application to this Court upon notice to the other parties
      regarding a further disposition of the proceeds.

   -- the provisions of the use of collateral and providing
      adequate protections will apply to the proceeds.  This is
      provided, however, that the Qwest Reallocation Amount is
      not subject to the limitations on the amount of borrowings
      of the cash collateral order and any Qwest Reallocation
      Amount will not be counted in determining whether such
      limitation has been reached for any other purpose under the
      cash collateral order;

   -- the Debtors must use reasonable best efforts to obtain an
      order from the Canadian Court authorizing that of the
      $26,017,000 in proceeds from the Agreement, $10,508,500
      will be provisionally allocated to the U.S. Debtors and
      $9,508,500 will be allocated to the Canadian Debtors.  A
      separate $6,000,000 will be placed in a segregated account
      pending agreement among the parties regarding the
      allocation of such proceeds;

   -- the conveyance of the Qwest Conduit is free and clear
      of any liens, interests and encumbrances, including any
      liens, interests and encumbrances of the Debtors' Lenders
      or Materialman, and that Qwest Communications is a good
      faith purchaser of the Qwest Conduit and is entitled to all
      protections. (360 Bankruptcy News, Issue No. 22; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)


AAR CORP: Fitch Hatchets Unsecured Debt Rating Down Two Notches
---------------------------------------------------------------
Fitch Ratings has downgraded the unsecured debt of AAR Corp. to
'BB+' from 'BBB'. The rating change affects all of AAR's
outstanding senior unsecured notes, as well as its unsecured
bank credit facilities. As part of this rating action, the
company has been removed from Rating Watch Negative, and the
revised Rating Outlook for AAR is Stable.

The downgrade reflects the significant negative impact of recent
turmoil in the U.S. airline industry on AAR's operating cash
flow generation capacity. Although some signs of modest
strengthening in demand for after-market aviation services are
expected to appear as scheduled capacity in the airline industry
returns to more normal levels, AAR's revenue and EBITDA growth
rates are unlikely to rebound quickly. Particularly in light of
the company's need to move away from older-generation aircraft
components in its inventory management and
maintenance/repair/overhaul (MRO) businesses, Fitch believes
that operating cash flows will remain under pressure for the
next 18 months to two years. Despite a concentration on cost-
cutting and the need to improve inventory turnover ratios, Fitch
believes that the combination of weaker demand for aviation-
related services and lower operating margins will present
continuing challenges for AAR as it seeks to regain the levels
of profitability and cash flow generation seen in the late
1990s.

Recent operating results for the company point out the degree to
which the company's core inventory management and MRO businesses
have been affected by the post-September 11 reduction in airline
capacity. For the quarter ending February 28, AAR's revenues
fell by 28% to $143 million from $200 million in the prior-year
period. Likewise, operating margins have been squeezed as
airline customers have trimmed outsourcing budgets and retired
older-generation aircraft. Performance in the MRO and leasing
segments of AAR's business continued to weaken sequentially in
the February quarter-from a poor November quarter that reflected
the immediate effects of the post-September 11 demand shock. As
airline capacity is added back through the summer months, AAR's
cash flow can be expected to improve in relation to the most
recent periods. However, a return to early 2001 revenue and cash
flow levels is not likely to occur until at least fiscal year
2004 (AAR's fiscal year ends on May 31).

Signs of strength are apparent in AAR's military logistics
business, where improved demand reflects heightened U.S.
military aviation activity worldwide. The military business may
ultimately account for 20% of AAR's total revenue. Similar
growth opportunities exist in new-generation aircraft platforms
(e.g., regional jets and high-growth narrowbody aircraft such as
the Airbus A320 and Boeing 737NG families). Parts management and
overhaul work related to these aircraft types can be expected to
drive much of AAR's revenue and EBITDA growth over the next 2-3
years.

In spite of this product and service transition, AAR's financial
outlook continues to be influenced in large part by the speed of
recovery in commercial airline traffic and the desire on the
part of major airline customers to outsource more of their
component management and overhaul functions. With airline
industry unit revenue recovering only slowly through the
remainder of 2002 and into next year, Fitch sees little evidence
that a rapid rebound in airline capacity will drive
significantly stronger demand for AAR's services.

With regard to liquidity and capital structure, AAR retains a
significant degree of financial flexibility in spite of recent
events. The company's successful $34 million equity offering in
February allowed AAR to reduce borrowings under its bank credit
facilities. As of February 28, AAR's cash balance stood at $34.5
million (vs. $13.8 million on May 31, 2001), and long-term debt
totaled $189.7 million. The next major debt maturity occurs in
October 2003, when $50 million in unsecured notes are due. The
company's primary bank facility matures in April 2004.

AAR Corp. (NYSE: AIR) is a provider of aviation-related services
and manufactured products to major commercial airlines, the
military and original equipment manufacturers. Based in Wood
Dale, IL, AAR operates in four principal segments-inventory and
logistics services, maintenance/repair/overhaul, aircraft and
engine leasing, and aviation-related manufacturing.


AFC ENTERPRISES: S&P Rates $275MM Senior Secured Bank Loan at BB
----------------------------------------------------------------
A 'BB' rating was assigned on April 26, 2002, to AFC Enterprises
Inc.'s proposed $275 million senior secured bank loan, comprised
of a five-year $75 million revolving credit facility, a five-
year $75 million term loan A, and a seven-year $125 million term
loan B. Proceeds from the debt issuance will be used to replace
the company's $198.3 million credit facility and repay $126.9
million of outstanding 10.25% senior subordinated notes due in
2007. The other ratings on AFC were also affirmed at that time.
The bank loan rating is the same as the corporate credit rating
because, considering the stability of the business, it is
anticipated that the company would retain value as a business
enterprise in the event of a bankruptcy. Standard & Poor's
analyzed the company's value under a distressed scenario in
which its cash flow was severely discounted. Based on this
simulated default scenario, collateral value would provide
meaningful recovery of principal despite potentially significant
loss exposure. Outlook is stable.

The ratings on AFC reflect its participation in the highly
competitive quick-service segment of the restaurant industry and
the risks associated with operating multiple concepts. These
factors are partially offset by the company's relatively well-
established concepts, steadily improving operating performance,
skills in managing franchise operations, and experienced
management team.

Atlanta, Georgia-based AFC operates and franchises 3,857 units
in the U.S. and 33 foreign countries under the brands Church's
Chicken, Popeyes Chicken & Biscuits, Cinnabon, Seattle's Best
Coffee, and Torrefazione Italian. The company has generated
solid sales and operating profit growth over the past five
years. Its system sales grew at an average annual rate of 13%
from 1997 to 2001, and its operating margin expanded to 22% from
16% during the same period. The company's good operating
performance is attributable to its successful brand re-imaging
program, new unit openings, and positive same-store sales growth
in its core concepts. In addition, Church's and Popeyes'
combined share of the quick-service chicken market increased
about five percentage points from 1995 to 2001.

Although still heavily dependent on the mature fried chicken
sector, AFC should continue to grow moderately due to its
diversification strategy, expansion into new markets and
distribution channels, and improving operating efficiencies.
Cash flow protection is good for the rating, with EBITDA
coverage of interest expense of 4.6 times and funds from
operations to total debt of 28% at the end of 2001. Leverage is
moderate, with total debt to EBITDA of 2.3x.

                        Outlook

AFC's well-established chicken concepts and experienced
management team provide support for the rating, and its non-
chicken concepts are not expected to detract from future cash
flows. The outlook reflects Standard & Poor's expectation that
AFC will maintain a moderate financial profile while it uses
operating cash flow to remodel restaurants and that it could add
leverage to finance possible acquisitions as part of its growth
strategy.


AMERICAN TISSUE: Sells Tissue Paper Assets to Cascades for $35MM
----------------------------------------------------------------
Cascades Inc. (TSE - CAS) acquired 33 converting lines and
concluded agreements to purchase a tissue paper mill and a paper
machine through its affiliate, Cascades Tissue Group Inc.  These
assets were previously owned and operated by American Tissue
Inc., a tissue and fine paper manufacturer presently in the
reorganization proceedings under the U.S. Bankruptcy Code.

The tissue mill located in Mechanicville, New York, and the
tissue paper machine, located in a pulp and paper mill belonging
to Boise Cascade Corporation in St. Helens, Oregon, have a total
combined annual capacity of 110,000 tons. These assets will be
acquired from American Tissue Inc. for $35 million US. The
acquisition of these units is subject to the approval of the
American bankruptcy court. Cascades expects to complete this
transaction within 60 days.

The tissue converting operations are mainly located in
Waterford, New York, and in Calexico, California. They have a
total production capacity of eight million cases and were
acquired from several financial institutions for a global amount
of approximately $20 million US.

Cascades Inc. is a leader in the manufacturing of packaging
products, tissue paper and specialized fine papers.
Internationally, Cascades employs nearly 14,000 people and
operates close to 150 modern and versatile operating units
located in Canada, the United States, Mexico, France, England,
Germany and Sweden. Cascades recycles more than two million tons
of paper and board annually, supplying the majority of its fibre
requirements. Leading edge de-inking technology, sustained
research and development, and 38 years of experience in
recycling are all distinctive strengths that enable Cascades to
manufacture innovative value-added products. Cascades' common
shares are traded on the Toronto Stock Exchange under the ticker
symbol CAS.

DebtTraders says that American Tissue Inc.'s 12.50% bonds due
2006 (AMET06USR1), are trading around 25 cents-on-the-dollar.
For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMET06USR1


AMERIQUEST: Ceases All Operations Due to Lack of Working Capital
----------------------------------------------------------------
AmeriQuest Technologies, Inc. (OTCBB:AMQT) has laid off all of
its remaining employees and would cease all business operations,
effective immediately, due to a lack of working capital.

In commenting on these matters, Jon Jensen, President and Chief
Executive Officer, noted that the Company had lost money every
year since 1994 and had received a going concern qualification
on its audited financial statements in each of the past two
fiscal years.

He further stated that the Company had previously indicated that
the ability to avoid liquidation or bankruptcy depended, among
other things, on its being able to convert approximately
$4,137,000 of trade debt into equity since it did not have the
cash to pay this debt. While the Company had proposed such an
exchange, it could not reach agreement with enough major
creditors for this to happen.

AmeriQuest is an information technology and business process
consulting company providing consultation, solutions and
services to financial, education, healthcare, manufacturing and
government clients. The company specializes in Technology
Audits, automated IT help desk solutions, asset management and
customer relationship management applications. Web site:
http://www.ameriquest.com


AMES DEPT: Argues Guaranty Capital & Orix Adequately Protected
--------------------------------------------------------------
According to Frank A. Oswald, Esq., at Togut Segal & Segal in
New York, New York, Guaranty Capital and Orix previously moved
to compel the Debtors' post-petition payments under purported
equipment leases. Ames Department Stores, Inc., and its debtor-
affiliates responded asserting that under Section 1-201(37) of
the Uniform Commercial Code, the leases were in actuality
secured financing agreements, that entitled Guaranty Capital and
Orix to, at most, adequate protection payments. To the extent
those same arguments are relevant here, the Debtors incorporate
their prior response, dated November 29, 2001, in full.

Mr. Oswald relates that the core issue before the Court is
whether the leases are in actuality secured financing
arrangements under the Uniform Commercial Code, and whether the
Lessors are entitled to adequate protection or lease payments.
The Debtors agree that if the facts support that the leases are
financing agreements, then the Lessors are entitled to adequate
protection, or to relief from the automatic stay to allow them
to exercise their rights as secured creditors. The Debtors also
contend that the value of the equipment is far less than the
value of the Lessors' claims, rendering the Lessors under-
secured creditors under Section 506(a) of the Bankruptcy Code.
Conversely, if the Court concludes the leases are true leases,
the Lessors will be entitled to the contract payments unless and
until the leases are rejected.

Mr. Oswald tells the Court that the Debtors have been and remain
willing to make interim payments to the Lessors pending
resolution of the re-characterization issue, reserving the right
to make adjustments after the Court rules. That is, if the
Debtors are found to owe more than they have paid because the
leases are true leases, the Lessors will have an administrative
claim for those amounts. If the Debtors have overpaid, such as
where the adequate protection payments to which the Lessors are
entitled are less than the interim payments, the Lessors will
refund the overpayment to the Debtors. All that the Court need
do at this point is schedule a date for an evidentiary hearing
with sufficient time for the parties to conduct discovery.

Mr. Oswald acknowledges that the Debtors have not made any post-
petition payments, but are willing, as the Lessors request, to
pay an amount into escrow pending a final determination of the
substantive issues. However, the Debtors submit that requiring
them to deposit the full amount of post-petition lease payments
is unnecessary and unwarranted. Some of the equipment was
located in stores where GOB sales have concluded, and may be
available for the Lessors to recover. In addition, the amount in
question, approximately $1,772,780 in the aggregate through
March 2002 according to the Lessors, plus taxes and late fees,
would be an enormous cash drain. Particularly for equipment that
is no longer needed in the restructuring, Mr. Oswald argues that
the Debtors should not be compelled to pay this money now.
Lessors may assert an administrative claim, which if allowed can
be paid at confirmation, as required by Section 1129(a)(9) of
the Bankruptcy Code.

Mr. Oswald submits that the Debtors previously offered an amount
to the Lessors for interim payments, which was the basis for the
settlement that Lessors refer to in the Motion. However, the
Debtors ultimately did not sign a settlement stipulation. The
Debtors are now prepared to move forward and make interim
payments because the Lessors have agreed to an escrow provision
that fully protects the parties against any risk of under- or
overpayment.  The parties are protected against risk because the
escrowed money will only be paid to the Lessors if and to the
extent the Court so rules. The Debtors are willing to place the
amount previously agreed upon with the Lessors into escrow until
final resolution of the issues. (AMES Bankruptcy News, Issue No.
16; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ANTEON CORPORATION: S&P Raises Corporate Credit Rating to BB-
-------------------------------------------------------------
Standard & Poor's BB- ratings on Anteon, a provider of
information technology and engineering services primarily to the
U.S. federal government, reflect the expectation that
government-related business will remain substantial, as federal
agency outsourcing continues to grow and new defense and
security initiatives are implemented. Operating margins could
improve from current 7% levels over time with additional scale
and operating synergies.  S&P says the Outlook is stable.

Anteon has bolstered its capital structure by using the
proceeds from its initial public offering and free cash flow to
reduce debt levels, from the 5 times debt-to-EBITDA area to
about 3x. In addition, prospects are good for moderate but
predictable earnings and cash flow from a diversified program
portfolio and healthy order pipeline exceeding $3 billion.
Anteon had fiscal 2001 revenues of $715 million.

The company's bank facility is rated one notch higher than the
corporate credit rating. The facility is secured by
substantially all of the company's assets. Anteon's cash flows
were severely discounted and capitalized by a multiple of EBITDA
reflective of its peer group. Under this downside case,
collateral value should be sufficient to fully cover the bank
facility if a payment default were to occur.

                              Outlook

A fairly stable cash flow base limits Anteon's downside credit
risk. Management is expected to structure and pace acquisitions
to support current credit quality.


ASSET SECURITIZATION CORP: S&P Cuts Class B-2 Certs. Rating to D
----------------------------------------------------------------
Standard & Poor's raised its ratings on the class A-2, A-3, and
A-4 certificates of Asset Securitization Corp.'s commercial
mortgage pass-through certificates series 1995-D1. At the same
time, ratings are lowered on the class B-1 and B-2 certificates.
In addition, the rating on class A-1 is affirmed.

The rating actions reflect a mortgage pool that has experienced
large increases in credit support due to extensive seasoning, as
well as the defeasance of eight loans totaling $43.3 million (or
28% of the mortgage pool). Four of the defeased loans totaling
$23.9 million (or 15%) will pay off within the next two months.
However, these positives are balanced by the fact that one REO
property and two limited service hotels in foreclosure will
likely incur losses upon liquidation.

As of April 2002, the loan pool consisted of 49 mortgage loans
with an outstanding pool balance of $155.7 million, down from 61
loans totaling $211 million at issuance. The current weighted
average debt service coverage ratio (DSCR) for the pool is 2.02
times versus 1.66x at issuance (excluding defeasance). In
addition to the high concentration of defeased loans, the pool
has geographic concentrations in Massachusetts (12%), Georgia
(9%), and California (7%), and property type concentrations in
hotels (26%), multifamily (15%), and retail (14%).

There are presently five loans totaling $16.1 million (or 10.3%)
in special servicing. Of the five loans, one is REO, two are
more than 90-days delinquent and in the process of foreclosure,
and two have defaulted at maturity. The special servicer, CRIIMI
MAE Services L.P. (CRIIMI MAE), indicated that the two loans
that defaulted at maturity will most likely successfully payoff.
Of those two loans, one remains current with its loan payments
and has requested a six-month extension in order to complete its
refinance. The other loan recently matured and expects to close
next month on its refinance. The servicer, Midland Loan Services
Inc. (Midland), presently has four loans totaling $5.4 million
(or 3.5%) on its watchlist due to operating performance concerns
with DSCRs below 1.0x. However, these loans remain current, as
does the remainder of the pool, except for those loans
previously discussed that are in special servicing.

Based on discussions with Midland and CRIIMI MAE, Standard &
Poor's stressed various loans in the mortgage pool as part of
its analysis. The expected losses and resultant credit levels
adequately support the rating actions.

                        Ratings Raised

                   Asset Securitization Corp.
       Commercial mortgage pass-thru certs series 1995-D1

                Class     Rating
                         To     From    Credit Support (%)
                A-2     AAA    AA+     29.7
                A-3     AA     A+      22.3
                A-4     BBB+   BBB     18.2

                        Ratings Lowered

                   Asset Securitization Corp.
      Commercial mortgage pass-thru certs series 1995-D1

                Class    Rating
                        To     From    Credit Support (%)
                B-1     B+     BB      6.7
                B-2     D      CCC     0.6

                        Rating Affirmed

                   Asset Securitization Corp.
      Commercial mortgage pass-thru certs series 1995-D1

                Class    Rating    Credit Support (%)
                A-1      AAA       37.9


ATLAS AIR: Parent Names Ernst & Young as New Independent Auditor
----------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. (NYSE: CGO) announced the
selection of its new independent auditor, Ernst & Young.  In
previous years, the company's audits were conducted by Arthur
Andersen.

"Arthur Andersen served as our independent auditors for seven
years, and we valued their services. However, in light of the
difficulties that they currently face, we believe it is in the
best interest of our company and our shareholders for Atlas to
make a change," said Douglas A. Carty, Chief Financial Officer
of Atlas Air Worldwide Holdings. "We conducted a thorough search
and we have selected Ernst & Young as our new independent
auditor. Their outstanding reputation speaks for itself, and we
look forward to working with them. As we make this change, we
would like to thank Arthur Andersen for their professional
services and contributions to Atlas Air."

In order to accommodate the change in auditors, and to provide
for an orderly transition, the Company's release of its first
quarter earnings financial results will be slightly delayed from
its normal schedule; the Company currently anticipates an early
May earnings release date.

Atlas Air Worldwide Holdings, Inc. is the parent company of
Atlas Air, Inc., and of Polar Air Cargo. Atlas Air offers its
customers a complete line of freighter services, specializing in
ACMI contracts, with its fleet of B747 aircraft. These contracts
include the provision by Atlas Air of the Aircraft, Crew,
Maintenance and Insurance for some of the world's leading
international carriers. Polar Air Cargo's fleet of Boeing 747
freighter aircraft specialize in time-definite, cost-effective
airport-to-airport scheduled airfreight service. Polar and Atlas
Air are operated as separate subsidiaries of the parent company.

                          *   *   *

As reported in the November 16, 2001 edition of Troubled Company
Reporter, Michael B. Kanner, CFA, an analyst at DebtTraders,
said that "everything that ha[d] transpired since the date of
our last update [led] us to believe that Atlas' business
continues to deteriorate."

Atlas Air, Inc.'s total operating revenue declined by 28% from
the prior year to $150.7 million. "If the economy continues to
remain weak for the next several quarters, as we believe it
will, we expect the cash burn at Atlas to continue. By this time
next year, the cash and investments total could be significantly
lower than current levels, significantly impacting the cushion
afforded bondholders," Mr. Kanner said.

                          *   *   *

Atlas Air Inc.'s 10.75% bonds due 2005 (CGO05USR1), DebtTraders
reports, are quoted at a price of 87. For real-time bond pricing
see http://www.debttraders.com/price.cfm?dt_sec_ticker=CGO05USR1


BANK OF HAWAII: Reduced Risk Profile Spurs Fitch's B/C Rating
-------------------------------------------------------------
Fitch Ratings has upgraded the Individual rating of Bank of
Hawaii Corporation, formerly Pacific Century Financial
Corporation, to 'B/C' from 'C' and revised its Rating Outlook to
Positive from Stable. The upgrade of the Individual rating and
the change in its Rating Outlook largely reflects the progress
the company has made in reducing the risk profile of the company
and the prospects for improved operating performance.

Fitch's ratings also take into account the company having a
solid Hawaiian banking franchise, which provides them with a
stable core funding base and a healthy liquidity position.
Further, the ratings incorporate BOH's strong capital and
reserve positions, which temper concerns regarding the number of
problem or potential problem credits that remain in the
portfolio.

Over the course of the past 12 to 18 months, new management,
which has been installed over that time frame, successfully
divested of a significant portion of BOH's diverse franchise
that stretched from the US mainland to the Pacific Rim. The
combined effect of these divestitures allows management to
better focus BOH's resources and reduces management distractions
from relatively small but numerous business lines. Additionally,
management has significantly reduced the level of problem and
potential problem exposures in the company's loan portfolio.
Going forward, having been focused on clean up for much of 2001,
management is now concentrating on improving the company's
operating efficiency, as well as working toward better
leveraging the company's Hawaiian banking franchise and growing
the business.

While BOH has done a good job of reducing the risk profile of
the company and reigning in its franchise, the company must
prove that it can thrive as a Hawaiian focused organization.
Future rating improvements will largely depend on BOH's ability
to grow its business without accepting undue risk.

                         Ratings Upgraded

                    Bank of Hawaii Corporation

               -- Individual to 'B/C' from 'C'.

                         Bank of Hawaii

               -- Individual to 'B/C' from 'C'.

                         Ratings Affirmed:

                    Bank of Hawaii Corporation

                --  Senior long-term 'BBB'.
                --  Senior short-term 'F2'.
                --  Support '5'.

                         Bank of Hawaii

                --  Uninsured deposits long-term 'BBB+'.
                --  Uninsured deposits short-term 'F2'.
                --  Senior long-term 'BBB'.
                --  Senior short-term 'F2'.
                --  Support '5'.


BANK OF HAWAII: Appoints 3 New Directors to Board of Directors
--------------------------------------------------------------
Michael E. O'Neill, Chairman, CEO and President of Bank of
Hawaii Corporation and Bank of Hawaii, announced the appointment
of David W. Thomas, Vice Chairman, Retail Banking; Allan R.
Landon, Vice Chairman, Treasurer and Chief Financial Officer;
and William C. Nelson, Vice Chairman, Corporate Risk, to the
bank's Board of Directors. The three new members will also serve
on the bank's Charitable Foundation Board. The appointments are
effective immediately.

In addition to O'Neill, two other Bank of Hawaii executives
currently serve on the bank board: Alton Kuioka, Vice Chairman,
Commercial Banking, and Donna Tanoue, Vice Chair, Financial
Services.

O'Neill said, "The three appointments are in recognition of the
key positions these executives hold within our organization. We
will now have full representation of our three key business
units -- retail banking, commercial banking and financial
services, as well as our finance and risk management areas.
Dave, Al and Bill's contributions to the company have already
been very significant, and I look forward to working with them
in their expanded capacities."

Dave Thomas joined the bank in July 2001. As head of the Retail
Banking Group, he is responsible for developing and implementing
strategic initiatives and managing the results for the bank's
diverse lines of retail business. These include the branch and
ATM distribution systems, small business banking, deposit
products, consumer lending, mortgage banking and corporate
marketing functions. It also includes retail operations in
American Samoa.

Prior to joining Bank of Hawaii, Thomas was Executive Vice
President of Retail Lending at Summit Bank in Princeton, New
Jersey. He also spent 24 years at Bank One Corporation where he
held a number of executive positions.

Thomas holds a master's degree in business administration from
Butler University in Indiana and a bachelor of science degree in
finance from Indiana University. He serves as director of the
Consumer Bankers Association and the Aloha United Way.

Allan Landon joined the bank in April 2000 as Executive Vice
President and Director of Risk Management. In February 2001 he
was named Chief Financial Officer and appointed Vice Chair. His
responsibilities include overseeing treasury, investments,
financial reporting, accounting, investor relations, performance
management division, corporate sourcing and policy guidance.

Prior to BOH, he served as Chief Financial Officer of First
American Corporation in Nashville, Tenn. Prior to that he was
with Ernst & Young, LLP for 28 years.

He received his bachelor of science degree in accounting from
Iowa State University and is a Certified Public Accountant.
Landon serves on the Hawaii Council for the Humanities.

William Nelson, who joined the bank in January 2001, is
responsible for overseeing the management of corporate-wide
risk, excluding interest rate and liquidity risk.

Prior to joining the bank, he spent 24 years with Bank of
America, most recently serving as Managing Director in charge of
the credit products group handling the U.S. healthcare industry.
Before that, he was an Executive Vice President based in Hong
Kong where he was the Senior Credit Officer for the Asia-Pacific
region.

He received his master's degree in business administration from
UCLA and a bachelor of arts degree from the University of Puget
Sound. He served four years in the U.S. Air Force as an officer
through the rank of Captain in intelligence-related duties in
the U.S. and Southeast Asia. He is a member of the Advisory
Board of the Hawaii Institute for Public Affairs and the Board
of the Aloha Council-Boy Scouts of America.

Bank of Hawaii Corporation (formerly Pacific Century Financial
Corporation) is a regional financial services company serving
businesses, consumers and governments in Hawaii, the West
Pacific and American Samoa. Bank of Hawaii was founded in 1897
and is the leading locally headquartered commercial bank in the
state of Hawaii.


BETHLEHEM STEEL: Acquires Ownership Rights of Columbus Companies
----------------------------------------------------------------
By order of a federal bankruptcy court judge, Bethlehem Steel
Corporation (NYSE:BS) has the exclusive right to acquire full
ownership of Columbus Coatings Company and the companion
Columbus Processing Company, both located near Columbus, Ohio.

Chief Judge William T. Bodoh of the U.S. Bankruptcy Court,
Northern District of Ohio, Eastern Division, approved the
settlement of a lawsuit brought by Bethlehem against LTV and
agreed to grant Bethlehem the exclusive right to acquire the
interest of LTV Steel in the 50/50 joint venture of Columbus
Coatings that is currently owned by subsidiaries of both LTV
Steel and Bethlehem.

The closing of the transaction is subject to, among other
things, receipt by Bethlehem of authority from the bankruptcy
court having jurisdiction over its bankruptcy case, receipt by
the parties of any necessary regulatory approvals and execution
of definitive documentation. At the closing, Bethlehem will pay
$2.5 million, forgive certain liabilities owed by LTV Steel and
assume LTV Steel's portion of the outstanding venture
modernization loan.

"Columbus Coatings Company is a strategic part of Bethlehem's
Burns Harbor, Ind., Division and critical to its long-term
success and future," said Robert S. Miller, Jr., Bethlehem's
chairman and chief executive officer. "Bethlehem's acquisition
of all of the business allows us to control its destiny."

The agreement will settle all other matters between LTV Steel
and Bethlehem Steel related to Columbus Coatings and Columbus
Processing.

Columbus Coatings began operation in fall 2000 to produce up to
500,000 tons per year of galvannealed and galvanized sheet
primarily for the automotive industry. Columbus Processing
Company takes Columbus Coatings' material for slitting,
inspection and warehousing. Bethlehem has been continuing to
supply material to Columbus Coatings from its Burns Harbor
Division following the exit in December 2001 by LTV Steel from
the integrated steel business.

DebtTraders says that Bethlehem Steel Corporation's 10.375%
bonds due 2003 (BS03USR1) are quoted at a price of about 10. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for
real-time bond pricing.


COMDISCO INC: Judge Barliant Caps HP Break-Up Fee at $5 Million
---------------------------------------------------------------
Before considering the merits of Comdisco, Inc.'s motion to
approve the proposed break-up fee for Hewlett Packard, Judge
Barliant explains, it is necessary to deal with issues of
procedure.  In a memorandum opinion, Judge Barliant recounts
that:

    -- the Equity Committee argues that this Court's decision
       that Hewlett Packard's last bid was not in good faith and
       is binding on Hewlett Packard, precluding them from re-
       litigating any issue decided in that matter.  "The
       Committee is incorrect," Judge Barliant says.  This Court
       explicitly held that Hewlett Packard as a mere bidder,
       lacked standing at the sale hearing.  The Court did not
       permit Hewlett Packard to present evidence or participate
       in the hearing except to present one witness solely to
       expedite the hearing.  "It was the Debtors' burden and not
       Hewlett Packard's to prove Hewlett Packard's good faith,"
       the Court adds.  Since Hewlett Packard is not a party to
       the sale hearing, it is not bound by this Court's decision
       regarding that hearing.  Even if the Court's finding of
       lack of good faith were binding on Hewlett Packard, it
       would not be conclusive as to the issue of Hewlett
       Packard's right to the termination fee and expense
       reimbursement.

    -- the parties have also debated about which law to apply
       with regards to the motion to reconsider the Court's order
       approving the termination fee should be decided under.  It
       is this Court's view however, that this motion should be
       considered a motion to alter or amend a judgment.

    -- furthermore, the Court relates that such a motion must
       meet a high burden.  The Committee must show that there is
       newly discovered evidence, that the court committed a
       manifest error of law or fact or that enforcing the
       judgment would result in a manifest injustice.  The
       Committee has pointed out that no evidence was discovered
       prior to the order but was found afterwards.  Hewlett
       Packard's conduct after August 9, which is the basis of
       the motion, is not such evidence.  It is clear that this
       Court did not commit any error of law or fact when it
       entered an order under the circumstances that existed at
       the time.  That leaves the question whether enforcing the
       judgment without alteration or amendment would result in a
       manifest injustice.

    -- contrary to the Committee's argument, Hewlett Packard is
       correct that they did nothing that breached the
       acquisition agreement nor did they breach any implied duty
       of good faith and fair dealing.  "The Debtors were bound
       to honor the bidding procedures, but Hewlett Packard was
       not," the Courts says.  There has been no showing that
       anything Hewlett Packard did was in the exercise of
       discretion vested under the acquisition agreement.
       Hewlett Packard also correctly asserts that they have
       fulfilled the purposes of a stalking horse bidder.
       SunGard indeed increased its bid compared to what it had
       offered before.  It is reasonable to conclude that Hewlett
       Packard's presence as a stalking horse bidder contributed
       to that improvement.  Even if there were reason to doubt
       that Hewlett Packard provided a benefit to the estate by
       serving as a stalking horse, there is far from enough
       reason to justify relief on that ground under the manifest
       injustice standard.  One of the reasons the Court refused
       to approve Hewlett Packard's $750,000,000 offer is that
       interested parties should be able to rely on court orders
       of sales unless there are compelling reasons to deviate
       from those orders.  "If orders approving termination fees
       and other bid protections were routinely modified, and
       agreements have to be renegotiated after the fact, it will
       complicate the original negotiations in ways that would be
       adverse to the estates."

    -- nevertheless, the Court says that there are reasons why it
       would be unjust to enforce the August 9 order in its
       entirety.  It is true that when no bidders showed up in
       the auction, Hewlett Packard was in an unfair position.
       If they had made their $750,000,000 bid in accordance with
       the bidding procedures, and SunGard was still the
       successful bidder but enjoined from closing, Hewlett
       Packard would have been forced to pay $140,000,000 more
       than its contract price even though there were no other
       bidders capable of closing.  "There is no doubt why
       Hewlett Packard adopted a strategy designed to effectively
       disqualify SunGard, rather than to accept that in a real
       sense the antitrust risk has been shifted from SunGard to
       Hewlett Packard," the Court explains.  Although Hewlett
       Packard's tactics may be explicable they are not
       excusable.  That is because the dilemma in which it found
       itself was the direct and foreseeable result of the
       agreement it made when it accepted the modifications to
       the bidding procedures.  This Court was not likely to
       approve the original procedures opposed by the Committee
       and pulling out of the deal would have meant giving up the
       termination fee.  As compensation for Hewlett Packard's
       agreement to the modifications, and the risks it entailed,
       the Debtors agreed to increase the expense reimbursement
       benefit.  After receiving compensation for accepting
       greater bidding risks, Hewlett Packard then sought to
       avoid those very risks by seeking to induce the Debtors to
       breach the very changes in the procedures they have agreed
       to.  In the process, Hewlett Packard caused the estate to
       incur very significant expenses during the litigation that
       followed the $750,000,000 midnight bid.  "These are the
       circumstances that render it manifestly unjust to enforce
       the August 9 order without modification," Judge Barliant
       states.  After August 9, Hewlett Packard's actions did not
       benefit the estate; to the contrary they harmed the
       estate.  "It would be unjust to allow Hewlett Packard to
       be reimbursed by the estate for expenses it incurred in
       the course of damaging the estate and seeking to undermine
       the court ordered procedures.

Thus, the Court amends the August 9 order:

    -- the enhancement to Hewlett Packard's right to
       reimbursement of expenses will not be approved.  Hewlett
       Packard will be limited to the terms of the acquisition
       agreement prior to the August 9 order, which provided for
       a reimbursement of expenses of no more than $5,000,000.

    -- regardless of the cap, Hewlett Packard will not be
       reimbursed for expenses incurred after August 9, 2001.

    -- in all other respects, the Committee's motion will be
       denied. (Comdisco Bankruptcy News, Issue No. 25;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)


COVANTA ENERGY: Court Okays Jenner & Block as Special Counsel
-------------------------------------------------------------
Covanta Energy Corporation, and its debtor-affiliates obtained
from Judge Blackshear the authority to employ Jenner & Block LLC
as their special financing and litigation counsel in the Chapter
11 cases, in connection with those aspects of their
reorganization cases, pursuant to Section 327 of the Bankruptcy
Code.

Jenner & Block will be responsible for certain potential
litigation matters for the Debtors, which will not involve
Cleary, Gottlieb, as Debtors' counsel.

The Debtors expect Jenner & Block to render, to the extent that
these matters are not handled by Cleary, Gottlieb, ordinary  and
necessary legal services such as:

       (a) advising Ogden New York Services, Inc. and its
           affiliates with respect to its prepetition credit
           facilities, loans and bond indebtedness;

       (b) assisting Ogden New York Services, Inc. and its
           affiliates in obtaining and negotiating the terms
           and conditions of debtor in possession financing and
           use of cash collateral, and in obtaining and necessary
           or appropriate orders of the Bankruptcy Court in
           connection with the foregoing;

       (c) appearing at meetings of creditors, as necessary;

       (d) representing Ogden New York Services, Inc. and its
           affiliates in litigation in the Bankruptcy Court
           and other such courts as may be appropriate; and

       (e) advising Ogden New York Services, Inc. and its
           affiliates regarding its legal rights and
           responsibilities as a debtor and debtor in possession
           under the Bankruptcy Code, the Federal Rules of
           Bankruptcy Procedure, and the United States Trustee
           Guidelines and Requirements.

Jenner & Block intends to charge for its legal services on an
hourly basis, in accordance with the ordinary and customary
hourly rates in effect on the day that services are rendered,
and to seek reimbursement of actual and necessary out-of-pocket
expenses. Jenner & Block's hourly attorney rates have a range
of:

           Members     $350-$625/hour
           Associates  $185-$350/hour
           Paralegals  $110-$150/hour
(Covanta Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


CROWN CORK: DebtTraders Says Bankruptcy "A Less Likely Scenario"
----------------------------------------------------------------
DebtTraders reports that Crown Cork & Seal Company, Inc.'s first
quarter 2002 results "demonstrated that operations are
improving," with a 5.1% rise on EBITDA to $186 million, despite
a drop in sales by 5.5% due to currency effects, divested
operations and pass-through of lower raw material costs. The
increase in EBITDA is largely attributed to a 200 basis point
increase in gross margin and a reduction in selling, general and
administrative costs.

DebtTraders analyst Matther Breckenridge says, CFA, "We believe
that this is the first sign that CCK is making progress in
improving its operations, making it more likely that the Company
will successfully find a solution to its difficult debt
amortization schedule."

Mr. Breckenridge continued, "Following the public conference
call, we had the opportunity to speak with management. Based
upon our conversation with management, we believe that
bankruptcy is becoming an increasingly less likely scenario due
to management's firm belief that price improvements will endure
and that the Company has more options available for addressing
its aggressive debt amortization schedule."

Therefore, DebtTraders is reiterating its BUY recommendation
(SAFETY 70%; ATTRACTIVESS 80%) on the later maturities. It is
also initiating coverage on the 6.00% Senior Notes due '04 with
a BUY recommendation (SAFETY 70%; ATTRACTIVESS 80%).

According to DebtTraders, Crown Cork & Seal's 8.0% bonds due
2023 (CCK23USR1) are trading at a price of 66.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CCK23USR1for
real-time bond pricing.


ENRON CORP: Seeks Court's Nod to Escrow Iberdrola Sales Proceeds
----------------------------------------------------------------
Enron Corporation and its debtor-affiliates anticipate that
there may be a dispute in the distribution of the Proceeds from
the sale of assets to Iberdrola.  Pending the Court's final
determination, the Debtors propose to escrow the net Proceeds
of:

   (a) certain transaction costs including the professional fees
       and expenses incurred by law firms retained by ECT Europe
       and SII Espana on behalf of SII Espana and Woodlark, as
       well as costs incurred in connection with notice by
       publication of the Transaction; and

   (b) the Debt Assignment Proceeds required to consummate the
       Enron Lenders' Assignment and the SII Espana Assignment.

In order to preserve the rights of all parties, the Debtors
explain that the Net Proceeds will be escrowed in accordance
with the terms of the escrow agreements.

The principal terms of the Proceeds Escrow Agreements are:

Woodlark
Payment:      Although Iberdrola bid on the Transaction as a
               whole, $210,000,000 is to be paid to Woodlark.
               In accordance with the terms of the applicable
               Proceeds Escrow Agreement:

               (a) Woodlark causes the Woodlark Payment to be
                   transferred to a third party escrow agent; and

               (b) the Escrow Agent deducts one half of the
                   aggregate amount of the Transaction Costs and
                   deposit the balance of the Woodlark Payment
                   into an escrow account.

SII Espana
Payment:      Although Iberdrola bid on the Transaction as a
               whole, SII Espana is to be paid $105,000,000. In
               accordance with the terms of the applicable
               Proceeds Escrow Agreement:

               (a) SII Espana transfers the SII Espana Payment
                   to the Escrow Agent; and

               (b) the Escrow Agent deducts:

                    -- one half of the aggregate amount of the
                       Transaction Costs, and

                    -- all of the Debt Assignment Proceeds, from
                       the SII Espana Payment and deposit the
                       balance of the SII Espana Payment into an
                       escrow account.

Disbursement
of Escrow:    Subject to any order of the Court directing
              otherwise, on the first anniversary date of the
              Proceeds Escrow Agreements (or the first business
              day thereafter), the Escrow Agent will disburse the
              Net Proceeds only in accordance with the terms of a
              final, non-appealable order of the Court directing
              such disbursement, provided that the Escrow Agent
              has received appropriate written payment
              instructions; provided, however, that if the Court
              has not entered such an order on or before the
              first anniversary date, then the Escrow Agent will
              continue to hold the Net Proceeds until the Court
              enters such an order.

The Debtors make it clear that the Proceeds Escrow Agreements
are entered into solely for the purpose of facilitating the
closing of the Transaction and do not prejudice any party's
rights to payment of any portion of the Net Proceeds.  For all
purposes, the Debtors acknowledge that the Creditors' Committee
has ability to propose any allocation of the Proceeds pursuant
to the Purchase Agreement, Power Island Contract, and the
Proceeds Escrow Agreements, as well as to dispute any proposed
allocation submitted by any other party. (Enron Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON: Azurix's Consent Payment Deadline Extended Until Today
-------------------------------------------------------------
In connection with its previously announced tender offer and
consent solicitation for its 10-3/8 percent Series B Senior
Dollar Notes due 2007, its 10-3/8 percent Series A and B Senior
Sterling Notes due 2007, and its 10-3/4 percent Series B Senior
Dollar Notes due 2010, Azurix Corp. extends to 5:00 p.m. New
York time on Tuesday, April 30, 2002, the deadline by which
holders of these notes must tender and consent to receive the
consent payment of 1.5 percent of par. This new deadline is the
close of business on the day before Enron Corp. intends to
notify the U.S. Bankruptcy Court if it is not proceeding with
the hearing scheduled on May 2, 2002, seeking the court's
approval of Enron's approval of Azurix's proposed sale of Wessex
Water Ltd. and the tender offer and consent solicitation.

On April 26, 2002, a committee purporting to hold beneficially
approximately 31.74 percent of the outstanding senior notes of
Marlin Water Trust, a beneficiary of Azurix's largest
shareholder, Atlantic Water Trust, filed an objection to Enron's
motion before the Bankruptcy Court. These Marlin noteholders
contend, among other things, that Azurix's paying for its Senior
Notes in the tender offer and consent solicitation is not in the
best interest of Atlantic Water Trust unless Azurix also pays,
from proceeds of the Wessex sale, approximately $19 million in
debt that Azurix owes to Atlantic Water Trust, which is among
the continuing obligations of Azurix described in the Offer to
Purchase and Consent Solicitation.

Salomon Smith Barney is acting as dealer manager of the tender
offer and consent solicitation. Questions regarding the tender
offer and consent solicitation may be directed to Salomon Smith
Barney at 800/558-3745. An Offer to Purchase and Consent
Solicitation, dated April 1, 2002, and related Letter of
Transmittal and Consent describing the tender offer and consent
solicitation have been distributed to holders of notes. Requests
for additional copies of documentation can be made to Mellon
Investor Services at 866/293-6625.

Enron Corp.'s 9.125% bonds due 2003 (ENRON2) are quoted at a
price of 12, DebtTraders says. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON2


EXODUS: Liquidation Plan Vests Broad Power on Plan Administrator
----------------------------------------------------------------
Under Exodus Communications, Inc.'s Chapter 11 Plan, the Plan
Administrator is vested with broad powers to oversee the
implementation of the liquidation process. The Plan
Administrator will exercise these powers under the Plan, subject
to the ultimate supervisory authority of the Plan Committee, on
behalf of Reorganized EXDS and the estates:

A. Investing the Estates' Cash, including, but not limited to,
    the Cash held in the Reserves in direct obligations of the
    United States of America or obligations of any agency or
    instrumentality thereof that are backed by the full faith and
    credit of the United States of America, including funds
    consisting solely or predominantly of such securities; money
    market deposit accounts, checking accounts, savings accounts
    or certificates of deposit, or other time deposit accounts
    that are issued by a commercial bank or savings institution
    organized under the laws of the United States of America or
    any state thereof or any other investments that may be
    permissible under Section 345 of the Bankruptcy Code or any
    order of the District Court approved in the Debtors' Chapter
    11 cases;

B. Calculating and paying all distributions to be made under the
    Plan, the Plan Administrator Agreement and other orders of
    the District Court to holders of Allowed Claims;

C. Employing, supervising and compensating professionals
    retained to represent the interests of and serve on behalf of
    Reorganized EXDS and the Estates;

D. Making and filing tax returns for any of the Debtors or
    Reorganized EXDS;

E. Objecting to Claims or Interests Filed against any of the
    Debtors' Estates on any basis;

F. Seeking estimation of contingent or unliquidated claims under
    section 502(c) of the Bankruptcy Code;

G. Seeking determination of tax liability under Section 505 of
    the Bankruptcy Code;

H. Prosecuting avoidance actions under Sections 544, 545, 547,
    548, 549 and 553 of the Bankruptcy Code;

I. Prosecuting turnover actions under Sections 542 and 543 of
    the Bankruptcy Code;

J. Implementing the ADR;

K. Prosecuting, settling, dismissing or otherwise disposing of
    the Litigation Claims;

L. Closing the Chapter 11 Cases;

M. Dissolving Reorganized EXDS;

N. Exercising all powers and rights, and taking all actions,
    contemplated by or provided for in the Plan Administrator
    Agreement, including, without limitation, furnishing written
    reports to the Plan Committee as set forth in the Plan
    Administrator Agreement;

O. Taking any and all other actions necessary or appropriate to
    implement or consummate the Plan and the provisions of the
    Plan Administrator Agreement;

P. Object to any Claims or Interests Filed against any of the
    Debtors' estates;

E. Obtain and pay for out of the Operating Reserve all
    reasonably necessary insurance coverage for the Plan
    Administrator, the Plan Administrators' agents,
    representatives, employees or independent contractors and the
    Reorganized EXDS, including, but not limited to, coverage
    with respect to (i) any property that is or may in the future
    become the property of Reorganized EXDS or the Estates and
    (ii) the liabilities, duties and obligations of the Plan
    Administrator and its agents, representatives, employees or
    independent contractors under the Plan Administrator
    Agreement (in the form of an errors and omissions policy or
    otherwise).

F. Settle disputed claims. If the proposed amount of the
    disputed claim to be allowed is less than or equal to
    $250,000, the Plan Administrator is authorized and empowered
    to settle the Disputed Claim and execute necessary documents,
    including a stipulation of settlement or release, without
    notice to any party. The Plan Administrator will have no
    liability to any party for the reasonableness of such
    settlement. If the proposed amount at which the disputed
    claim is to be allowed is greater than $250,000 but less than
    or equal to $10,000,000, the Plan Administrator is authorized
    and empowered to settle such Disputed Claim and execute
    necessary documents, including a stipulation of settlement or
    release, only upon receipt of Plan Committee or District
    Court approval of such settlement. If the proposed amount at
    which the disputed claim is to be allowed is greater than
    $10,000,000, the Plan Administrator is authorized and
    empowered to settle the disputed claim and execute necessary
    documents, including a stipulation of settlement or release,
    only upon receipt of District Court approval of such
    settlement.

The Plan Administrator will be compensated from the Operating
Reserve pursuant to the terms of the Plan Administrator
Agreement. Any professionals retained by the Plan Administrator
are entitled to reasonable compensation for services rendered
and reimbursement of expenses incurred from the Operating
Reserve. Payments will be made in the ordinary course of
business and not subject to the approval of the District Court.
The Plan Administrator is also indemnified and held harmless in
the capacity as Plan Administrator and as officer and director
of Reorganized EXDS.

After the Plan Administrator has exhausted the Debtors' assets
by distributing cash to the stakeholders, he will:

A. Provide at the expense of the Debtors' Estates, for the
    retention and storage of the books, records and files that
    have been delivered to or created by the Plan Administrator
    until such time as all such books, records and files are no
    longer required to be retained under applicable law, and file
    a certificate informing the District Court of the location at
    which such books, records and files are being stored;

B. File a certification stating that the assets of the Debtors'
    Estates have been exhausted and Cash distributions have been
    made under the Plan;

C. File the necessary paperwork with the Office of the Secretary
    of State for the State of Delaware to effectuate the
    dissolution of Reorganized EXDS in accordance with the laws
    of the State of Delaware; and

D. Resign as the sole officer and sole director of Reorganized
    EXDS. Upon the Filing of the certificate described in Section
    B of the preceding sentence, Reorganized EXDS will be deemed
    dissolved for all purposes without the necessity for any
    other or further actions to be taken by or on behalf of
    Reorganized EXDS or payments to be made in connection
    therewith. (Exodus Bankruptcy News, Issue No. 17; Bankruptcy
    Creditors' Service, Inc., 609/392-0900)


FIVE NINE SOLUTIONS: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Five Nine Solutions Inc.
         9490 Gateway Drive, Suite 200
         Reno, Nevada 89511

Bankruptcy Case No.: 02-51315

Chapter 11 Petition Date: April 25, 2002

Court: District of Nevada (Reno)

Judge: Gregg W. Zive

Debtors' Counsel: Stephen R. Harris, Esq.
                   Belding, Harris & Petroni, Ltd.
                   417 W Plumb Lane
                   Reno, Nevada 89509
                   (775) 786-7600

Estimated Assets: $500,000 to $1 Million

Estimated Debts: $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Net Angels II              Money Loaned               $370,000
Attn: Raj Popli

Point at Double Diamond    Lease Arrears              $103,365

Wells Fargo Businessline   Money Loaned                $75,000

Kilimanjaro Consulting     Settlement                  $74,000
  Group

Gartner Group              Goods/Services              $64,000

IPS                        Goods/Services              $60,485

Skipco                     Goods/Services              $55,000

Property LS OB One Corp.   Lease Arrears               $31,404

Thomas M. Turchioe         Money Loaned/Reimb.         $31,200

Newcourt Leasing Corp.     Goods/Services              $25,000

American Express           Goods/Services              $17,000

The Manifest Funding       Goods/Services              $16,472

Transfix Software          Goods/Services              $16,055

Gagen, McCoy, McMahon      Goods/Services              $13,118

Dell Financial Services    Goods/Services              $12,000

Fliesler, Dubb, Meyer      Goods/Services              $10,670
  & Lovejoy

Christine L. O'Brien       Goods/Services              $10,488

S2 Communications          Goods/Services              $10,247

GMAA                       Goods/Services               $9,734

George Merritt             Finders Fee                  $9,600


FLAG TELECOM: Pushing for Injunction Against Utility Companies
--------------------------------------------------------------
FLAG Telecom Holdings Limited and its debtor-affiliates ask the
Court to determine that adequate assurance of payment, as
contemplated under Section 366(b) of the Bankruptcy Code, has
been given the utility companies and to establish procedures for
addressing requests for additional adequate assurances of
payment for future utility services.

Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, says
Section 366 of the Bankruptcy Code provides that within 20 days
from the commencement of a bankruptcy case, a utility may not
discontinue service to a Debtor solely on the basis of the
commencement of the case, or the failure of the Debtor to pay a
pre-petition debt. Following the 20-day period, however,
utilities arguably may discontinue service to the Debtor without
adequate assurance of future performance of post-petition
obligations.

Mr. Reilly says that not only is it essential that utility
services to the Debtors continue uninterrupted, there should
also be a mechanism in place for determining what is required in
order to provide adequate assurance of future performance of the
Debtors' post-petition obligations.

Specifically, the Debtors ask the Court for an Order that:

     (a) prohibits their utility companies from altering,
         refusing or discontinuing any utility services;

     (b) determines that the utility companies have "adequate
         assurance of payment" within the meaning of Section 366
         of the Bankruptcy Code, without the need for payment of
         additional deposits or security; and

     (c) establishes procedures for addressing requests by
         utility companies for additional assurances of future
         payment beyond those set forth in this Motion.

                  Adequate Assurance of Payment

Mr. Reilly says the Court, in determining adequate assurance, is
not required to give the utility companies the equivalent of a
guaranty of payment.  It must only determine that the utility is
not subject to unreasonable risk of nonpayment for post-petition
services. Further, in making its decision as to the need for any
additional post-petition deposit, the Court need ensure that the
utility is treating the Debtor the same as it would treat a
similarly situated, non-bankruptcy Debtor.

Whether a utility is subject to an unreasonable risk of
nonpayment is for the Court to determine, Mr. Reilly says.
Bankruptcy courts have the discretion and the exclusive
responsibility for determining what constitutes adequate
assurance for payment of post-petition utility charges.

The United States Court of Appeals for the Second Circuit has
held that where debtors have timely paid their utility bills
prior to the commencement of their Chapter 11 cases, the
administrative expense priority provided in Sections 503(b) and
507(a)(1) of the Bankruptcy Code constitutes adequate assurance
of payment. No deposit or other security is required.

Mr. Reilly says that additional security for the utilities would
be unwarranted, excessive and financially burdensome to the
Debtors. The Debtors had no significant defaults or arrearages
in their undisputed utility service invoices, other than payment
interruptions caused by the preparation for and commencement of
their Chapter 11 cases. The Debtors assure that they will
continue to pay all post-petition obligations, including utility
bills, as billed and when due. The Debtors have over $350
million in unrestricted cash as of the Petition Date, which
should adequately assure the utility companies of timely future
payment. FLAG Telecom Holdings Ltd. and its affiliates, in
general, have regularly paid their pre-petition obligations to
the utility companies.

Mr. Reilly says that even if the Debtors do experience
difficulties in timely satisfying their post-petition
obligations for utility services, the adequate assurance method,
that includes granting administrative expense priority to any
past-due obligations, provides more than sufficient protection
to the utility companies. The adequate assurance method is
without prejudice to the rights of any of the utility company to
move for additional adequate assurance for itself.

                           Procedures

The Debtors request that the Court issue an order establishing
procedures for addressing requests by utility companies for
additional assurances of future payment. Mr. Reilly says a
utility company may request in writing within 35 days of the
date that the Order is entered for additional assurances of
payment in the form of deposits or other security.

If, however, the Debtors consider the request for additional
assurance as unreasonable, the Debtors will file a Motion for
the Determination of Adequate Assurance of Payment and set such
Motion for a Determination Hearing.

A utility company requesting additional assurance will be
prohibited from discontinuing, altering or refusing service to
the Debtors.  It will be deemed to have adequate assurance of
payment unless and until the Court issues a final Order to the
contrary in connection with a Determination Hearing. s(Flag
Telecom Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FORMICA: Committee Wants to Hire Dewey Ballantine as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks permission
from the U.S. Bankruptcy Court for the Southern District of New
York to retain and employ Dewey Ballantine LLP as counsel,
effective March 11, 2002.

With the firm's extensive experience and expertise, the
Committee is confident that Dewey Ballantine is well qualified
to represent them in an efficient and effective manner.  The
professional services that Dewey Ballantine will render to the
Committee are:

      a) assist, advise and represent the Committee with respect
         to the administration of these cases, as well as issues
         arising from or impacting the Debtors, the Creditors or
         these chapter 11 cases;

      b) provide all necessary legal advice with respect to the
         Committee's powers and duties;

      c) assist the Committee in maximizing the value of the
         Debtors' assets for the benefit of all creditors;

      d) pursue confirmation of a plan of reorganization;

      e) investigate, as the Committee deems appropriate, among
         other things, the assets, liabilities, financial
         condition and operations of the Debtors;

      f) commence and prosecute necessary and appropriate
         actions/proceedings on behalf of the Committee that may
         be relevant to these cases;

      g) review, analyze or prepare, on behalf of the Committee,
         all necessary applications, motions, answers, orders,
         reports, schedules and other legal papers;

      h) communicate with the Committee's constituents and others
         as the Committee may consider desirable in furtherance
         of its responsibilities;

      i) appear in Court to represent the interest of the
         Committee;

      j) confer with professional advisors retained by the
         Committee so as to more properly advise the Committee;

      k) advise the Committee with respect to local practices and
         procedures as well as the rules of the Southern District
         of New York; and

      l) perform all other legal services for the Committee that
         are appropriate and necessary in these chapter 11 cases.

The Committee understands that Dewey Ballantine will seek
compensation from the Debtors' estates.  Dewey Ballantine will
charge its regular hourly rates for services performed in these
cases. Currently, Dewey Ballantine's regular hourly rates are:

           Members                    $485 to $720 per hour
           Counsel and associates     $260 to $505 per hour
           Paraprofessionals          $140 to $225 per hour

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 consolidated assets of $858.8 million and
liabilities of $816.5 million.

Formica Corp.'s 10.875% bonds due 2009 (FORMICA1), DebtTraders
says, are quoted at a price of 17. For real-time bond pricing,
see http://www.debttraders.com/price.cfm?dt_sec_ticker=FORMICA1


FRUIT OF THE LOOM: Pushing for May 31 Bar Date for Admin. Claims
----------------------------------------------------------------
Fruit of the Loom asks Judge Walsh to establish May 31, 2002 at
4:00 pm EST, as the final date and time for all parties, except
those specified, to file requests for allowance of
administrative expense claims arising under 11 U.S.C. Sections
503(b) or 507(a)(i).

The confirmed Plan provides, inter alia, for the payment in full
of certain Administrative Claims on the Effective Date of the
Plan, as well as for the assumption of other Administrative
Claims by Berkshire. It will assume Administrative Claims that
were incurred after the Petition Date in the ordinary course of
the Apparel Business.

Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy,
reminds the Court that the Assumed Administrative Claims will be
paid in the ordinary course of business and in accordance with
the ordinary business terms governing the transactions
underlying such claims.

The Plan also provides for a different treatment for those
Administrative Claims that constitute (a) Claims for
Professional Fees, (b) Adequate Protection Payments and (c) fees
and charges payable to the Court or the United States Trustee
under section 190 of title 28 of the United States Code.

The Plan Entities have the right to object to any Administrative
Claim. Furthermore, under the Plan, each Plan Entity must make a
reserve for the full asserted amount of any disputed
Administrative Claim until the dispute has been resolved.

Mr. Despins says that it is very important for Debtor to
quantify the amount of the Administrative Claims that will have
to be dealt with under the Plan. Such a determination is
necessary in order to enable each of the Liquidation Agents to
be in the position to establish the necessary reserves and
commence distributions on or promptly after the Effective Date.

Fruit of the Loom requests that the Court authorize the
claimants to either (i) utilize a proof of claim form conforming
to Official Form in Bankruptcy No. 10 or (ii) utilize any other
format for their request as long as the filed documentation
contains substantially all of the information required by the
Official Form and clearly identifies the Fruit of the Loom
company against which the particular Administrative Claim is
being asserted.

Fruit of the Loom proposes that any holder of an Administrative
Claim who is required, but fails, to file a proof of claim in
accordance with this request, be forever barred, estopped, and
enjoined from asserting the claim in the future. The holder
shall not be permitted to participate in any distribution in
these chapter 11 cases.

Proofs of claims must be sent to:

    Donlin Recano & Company, Inc.
    As Agent for the United States Bankruptcy Court
    In re Fruit of the Loom, Inc. et al., Case No. 99-04497 (PJW)
    419 Park Avenue South, Suite 1206
    New York, New York 10016

Fruit of the Loom will send, by first class United States mail,
postage prepaid, the Filing Deadline Notice and an Official Form
to all known entities that may assert an Administrative Claim
against it as soon as practicable after the entry of the
Administrative Claim Bar Date Order, but, in any event, not
later than May 1, 2002. Mailing the Filing Deadline Notice on or
before this date affords approximately 30 days notice to the
potential claimants, thus exceeding the minimum notice period of
20 days prescribed by Bankruptcy Rule 2002(a)(7). Fruit of
the Loom will also place notice in the Wall Street Journal and
the New York Times. (Fruit of the Loom Bankruptcy News, Issue
No. 55; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HAYES LEMMERZ: Committee Taps Chanin Capital for Fin'l Advice
-------------------------------------------------------------
The official Committee of Unsecured Creditors of Hayes Lemmerz
International, Inc. sought and obtained the Court's approval
authorizing the retention of Chanin Capital Partners LLC as its
financial advisors in the Debtors' Chapter 11 cases, nunc pro
tunc to February 22, 2002.

Leonard L. Rettinger, Jr., Co-Chairperson of the Official
Creditors' Committee, submits that it will be necessary to
employ and retain a financial advisor to provide these services
to the Committee:

A. Review and analyze the Debtors' operations and financial
    condition, business plans and strategy, operating forecasts
    and management;

B. Review and provide analysis and recommendations regarding any
    proposed dispositions of assets of the Debtors, DIP
    financing, proposed operational changes, and the Debtors'
    proposed non-ordinary course expenditures, including employee
    retention plans and other related programs;

C. Review and provide analysis and recommendations regarding any
    proposed dispositions of assets of the Debtors, DIP
    Financing, proposed operational changes, and the Debtors'
    proposed non-ordinary course expenditures, including employee
    retention plans and other related programs;

D. Assist the Official Creditors' Committee in developing,
    valuating, structuring and negotiating the terms and
    conditions of a restructuring of plan of reorganization,
    including the value of the securities, if any, that may be
    distributed to unsecured creditors under any such
    restructuring or plan; and

E. Provide the Official Creditors' Committee with other
    financial advisory services with respect to the Debtors,
    including valuation, general restructuring advice, and expert
    testimony with respect to financial, business and economic
    issues, as requested by the Official Creditors' Committee;

The Committee believes that Chanin possesses extensive knowledge
and expertise in the areas relevant to these Chapter 11 cases
and that Chanin is well-qualified to advise the Committee. In
selecting a financial advisor, Mr. Rettinger relates that the
Committee sought a firm with considerable experience advising
unsecured creditors' committees in Chapter 11 cases and other
debt restructuring scenarios.  The Committee also wanted
experience in international debt restructuring scenarios.
Recently, Chanin has acted in a financial advisory capacity in
these bankruptcy cases: Safety Components International Inc.,
Fruit of the Loom Inc., Great Bay Hotel & Casino Inc., Purina
Mills Inc., Talon Automotive Group Inc., and Covad
Communications Group Inc.

Steven Strom, Managing Director of Chanin Capital Partners LLC,
tells the Court that the firm has agreed to serve as financial
advisors to the Committee pursuant to a letter agreement dated
March 8, 2002, under which Chanin would be entitled to a monthly
fee equal to $150,000 per month plus reimbursement of all
reasonable out-of-pocket expenses. Chanin will also be entitled
to a transaction fee, which may be payable in cash or in kind at
the Committee's option, equal to 1% of the gross proceeds
distributed to the Debtors' unsecured creditors less:

A. 25% of the monthly fees paid by the Debtors during the period
    September 15, 2002 through and including December 14, 2002;

B. 50% of the monthly fees paid by the Debtors during the period
    December 15, 2002 through and including February 14, 2003;
    and

C. 75% of the monthly fees paid by the Debtors after February
    15, 2003;

Mr. Strom assures the Court that Chanin does not represent and
does not hold any interest adverse to the Debtors' estates or
their creditors in the matters upon which Chanin is to be
engaged, except that it has relationships with several parties-
in-interests in matters unrelated to these cases, including:

A. Secured Creditors: Merill Lynch, Alliance Capital, Bank of
    New York, Bank of Nova Scotia, Bank One, Carlyle Group,
    Citadel Investments, Conseco, Fidelity, First Union, HBK,
    Wachovia;

B. Bond Trustee: Bank of New York;

C. Major Bondholders: Bank of New York, Bank One, First Union,
    Morgan Stanley, Merill Lynch, Prudential, State Street,
    Wachovia, Wells Fargo;

D. Underwriters: Hartford Insurance;

E. Trade Creditors: PPG Industries Inc.;

F. Contract Party: GE Capital and Bank of New York;

G. Professional: Latham & Watkins, Skadden Arps, Jay Alix,
    Lazard Freres, Akin Gump, KPMG, McKinsey & Co. (Hayes Lemmerz
    Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
    Inc., 609/392-0900)


ICH CORPORATION: Signs-Up BSI for Claims and Noticing Services
--------------------------------------------------------------
ICH Corporation and its debtor-affiliates wish to bring-in
Bankruptcy Services LLC and asks for authority from the U.S.
Bankruptcy Court for the Southern District of New York to retain
BSI as official claims and noticing agent of the Court.

The Debtors relate that the size of their creditor body makes it
impracticable for the Clerk of Court to docket the large number
of claims expected in these cases, and provide notice to all
parties in interest in these Chapter 11 cases.

Subject to this Court's approval, BSI will:

      A. provide notice, subject to review and approval of the
         Clerk of the Court, to all parties in interest of the
         commencement of these chapter 11 cases and provide
         Certificate of Mailing;

      B. provide notice, subject to review and approval of the
         Clerk of the Court, to all creditors of the

           i) first meeting of creditors pursuant to section 341
              of the Bankruptcy Code;

          ii) of the bar date to be established in these chapter
              11 cases pursuant to Bankruptcy Rule 3003(c) (3);

         iii) the existence and amount of their respective
              claims, as established by the Debtors' records; and

          iv) provide appropriate Certificates of Service;

      C. assist with the preparation of the Debtors' schedules of
         liabilities as required by Federal Rule of Bankruptcy
         Procedure ("Bankruptcy Rule") 1007(a);

      D. coordinate receipt of all claims received by the Clerk's
         Office and provide copies of claims register on a
         frequency basis as determined by the Court;

      E. provide secure storage for all proofs of claim;

      F. ensure that the claims register shall specify for each
         claim docketed

      G. facilitate the claims resolution process including

           i) matching scheduled liabilities to filed claims;

          ii) identifying duplicative or amended claims;

         iii) categorizing claims into plan classes; and

          iv) coding claims and preparing exhibits for omnibus
              claims motions.

      H. provide balloting services, including, among other
         things, solicitation, calculation of votes and
         distribution as required in furtherance of confirmation
         of a plan of reorganization, including establishment of
         a toll free number for questions if needed;

      I. upon confirmation of a plan of reorganization,
         calculation of disbursement amounts, development of
         customized disbursement reports and processing of
         payment to allowed claim holders.

BSI will also comply with any further conditions and
requirements as the Clerk's Office may prescribe and provide
other administrative services that may be requested by the
Debtors.

The Debtors agree to pay BSI its customary hourly rates:

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

ICH Corporation, a Delaware holding corporation, which operates
Arby's restaurants, located primarily in Michigan, Texas,
Pennsylvania, New Jersey, Florida and Connecticut. The Company
filed for chapter 11 protection on February 05, 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.


ICH CORP: Accepts Proposed Recapitalization of Sybra Subsidiary
---------------------------------------------------------------
I.C.H. Corporation said that a committee of independent
directors has executed a letter of intent with the RTM
Restaurant Group with respect to a proposed recapitalization of
its Sybra, Inc. subsidiary.  Under the proposed terms of the
recapitalization, the RTM Restaurant Group, together with
Sybra's senior management and the key operators of each of its
regions, would invest $5 million of new equity into Sybra in
exchange for all of the outstanding capital stock of Sybra.  As
previously announced, an earlier recapitalization proposal was
received by Sybra from RTM on March 22, 2002.  Sybra is the
second-largest franchisee of Arby's restaurants, currently
operating 239 restaurants in nine states.  The RTM Restaurant
Group is the nation's largest privately-held restaurant company
and is the largest Arby's franchisee currently operating more
than 770 Arby's restaurants nationwide.  The recapitalization
proposal is not subject to due diligence or financing
contingencies, but is conditioned upon among other things, a
restructuring and/or refinancing of Sybra's outstanding debt
which modifies Sybra's annual debt service.  The closing of the
transactions contemplated by the recapitalization proposal is
subject to, among other things, higher and better offers, which
ICH will continue to pursue, as well as the approval of the
bankruptcy court supervising Sybra's chapter 11 case.

ICH is a Delaware holding corporation which, through its
principal operating subsidiaries, currently operates 239 Arby's
restaurants located primarily in Michigan, Texas, Pennsylvania,
New Jersey, Connecticut and Florida.


IT GROUP: Hearing on Removal Period Extension Set for May 10
------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates ask the Court to
extend the time period within which they may remove proceedings
pending on the petition date.  They ask that the date be through
July 15, 2002 or for 30 days after entry of an order terminating
the automatic stay regarding any particular action asked to be
removed.

Madison L. Cashman, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP in Wilmington, Delaware, asserts that the Debtors
require additional time to determine which of the state court
actions, if nay, they will remove. The Debtors are parties to
over a hundred different judicial and administrative proceedings
currently pending in various courts or administrative agencies
throughout the country. The actions involve a wide variety of
claims, some of which are extremely complex which may,
specifically, consist of all forms of environmental, commercial,
tort, employment-related, trademark and patent litigation.

Mr. Cashman maintains that the Debtors have devoted their
efforts since the petition date to stabilizing their businesses,
to implementing various cost-saving measures and to implementing
procedures to comply with the substantial reporting and
disclosure requirements imposed upon Debtors-In-Possession. They
have also undertaken to timely fulfill all such reporting
requirements. Therefore, the extension will afford the Debtors a
sufficient opportunity to make fully informed decisions
concerning the possible removal of actions, protecting the
Debtors' valuable right economically to adjudicate lawsuits if
the circumstances warrant removal. Further, the proposed
extension will not prejudice the rights of other parties to any
of the actions.

A hearing on the motion is scheduled for May 10, 2002.  By
application of Local Bankruptcy Rule 9006-2, the deadline is
automatically extended through the conclusion of that hearing.
(IT Group Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Wants to Assume Three New Mexico Leases
----------------------------------------------------------
Pursuant to sections 105(a) and Rule 6006 of the Bankruptcy
Rules, Integrated Health Services, Inc., IHS Acquisition 151 and
certain other Debtors ask the Court to authorize the Debtors'
assumption of three non-residential real property Leases, each
of which relates to a 120 bed skilled nursing facility in New
Mexico.

IHS 151 is the successor in interest to HHC Nursing Facilities,
Inc.

The Debtors consider the Leases as valuable components of their
businesses which must be preserved, through assumption, for the
benefit of the Debtors' creditors and estates. The Leases and
the EBITDA and Revenue for each of the related Facilities are as
follows:

A.  The Rio Rancho Lease

      Relates to: Rio Rancho Nursing and Rehabilitation Center
                  located at 4210 Sabana Grande Avenue, S.E., Rio
                  Rancho, New Mexico;

      Landlord:   Rio Rancho Health Care Company;

      EBITDA:     2000          2001          2002 Projected
                  $637,543      $641,089      $682,192

      Revenue:    2000          2001          2002 Projected
                  $5,332,173    $5,601,015    $5,812,530

B.  The Las Palomas Lease

      Relates to: Las Palomas Nursing and Rehabilitation Center
                  located at 8100 Palomas Avenue, N.E.,
                  Albuquerque, New Mexico;

      Landlord:   Las Palomas Health Care Company;

      EBITDA:     2000          2001          2002 Projected
                  $420,204      $356,085      $365,431

      Revenue:    2000          2001          2002 (Projected)
                  $5,224,756    $5,430,147    $5,781,048

C.  The Ladera Lease

      Relates to: the Ladera Nursing and Rehabilitation Center
                  located at 5901 Ouray Road, N.W., Albuquerque,
                  New Mexico;

      Landlord:   Ladera Health Care Company;

      EBITDA:     2000          2001          2002 Projected
                  $418,758      $256,904      $248,247

      Revenue:    2000          2001          2002 (Projected)
                  $5,087,489    $5,307,113    $5,671,709

However, the Landlords assert that the Debtors have committed
certain non-monetary defaults. In this connection, the Landlords
sent to the Debtors certain "Notices of Non-Compliance with
Lease," and a certain "Request for the Surrender of the
Premises," dated March 25, 2002 and April 1, 2002 respectively.
The Landlords assert that the non-monetary defaults have
effected the forfeiture of the Leases.

These alleged non-monetary defaults include failure to provide,
pursuant to the lease, a certain certificate of summary of
actions, evidence of compliance with insurance policies, new
policies, evidence of payment of insurance premiums, certified
balance sheet and statements, and failure to comply with certain
obligations regarding maintenance of the Premises.

The Debtors tell Judge Walrath that these non-monetary defaults
are not material in nature and not of recent vintage. The
Debtors further advise that, notwithstanding the questionable
timeliness or present relevance of the Landlords' demands, they
are curing most of the alleged defaults in response to the very
recent Notices. The Debtors indicate that they will cure any
outstanding Lease obligations which the Court directs them to
cure.

In addition, the Debtors advise that they have in fact timely
renewed the Leases and seek to assume them pursuant to section
365 of the Bankruptcy Code. Over this matter the Debtors and the
Landlords also have differences. The Debtors say they have
timely mailed the Renewal Notices to the Landlords directly. The
Landlords contend that the Renewal Notices were deficient
because notice was not additionally received by their attorney.
The Debtors argue that this should not render the Renewal
Notices inadequate. Moreover, since the Leases have not expired,
the renewal periods have not commenced under any of the Lease,
the Debtors argue.

The Debtors assert that they chose to timely exercise their
rights to renew the Leases and now, for the benefit of their
creditors and estates, seek to assume these valuable components
of their estates.

Accordingly, the Debtors request the Court's approval for them
to assume the Leases, as renewed, pursuant to section 365 of the
Bankruptcy Code. (Integrated Health Bankruptcy News, Issue No.
34; Bankruptcy Creditors' Service, Inc., 609/392-0900)


INT'L FIBERCOM: Wants to Extend Lease-Decision Period to June 11
----------------------------------------------------------------
International Fibercom, Inc. and its debtor-affiliates seek an
extension from the U.S. Bankruptcy Court for the District of
Arizona of their time period to elect whether to assume, assume
and assign, or reject unexpired nonresidential real property
leases.  The Debtors ask for an extension through June 11, 2002.

The Debtors point out that the unexpired leases remain subject
to further analysis by their management. Because the value of
the Debtors' estates is derived from operations linked to the
unexpired leases, management needs additional time to make
decisions with respect to these leases.

The Debtors' remaining leased properties are currently utilized
to carry out their ongoing business operations. The Debtors
believe that a rejection by default would undoubtedly disrupt
the ongoing operations and negatively impact their ability to
fulfill the outstanding contracts and ongoing construction
projects crucial to their reorganization.

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.


KAISER ALUMINUM: Gets Open-Ended Lease Decision Period Extension
----------------------------------------------------------------
Judge Fitzgerald grants Kaiser Aluminum Corporation and its
debtor-affiliates until the confirmation of their reorganization
plan to assume, assume and assign, or reject their unexpired
nonresidential real property leases.  This is without prejudice
to any lessors right to require the Debtors to decide on a
particular lease prior to the Confirmation Date and the Debtors'
right to oppose such. The Debtors can also elect to assume,
assign or reject each of the leases any time prior to the
Confirmation date. (Kaiser Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


KING PRODUCTS: Receiver Completes Asset Sale to Urmet Unit
----------------------------------------------------------
KING Products Inc. announced that the Court-Appointed Receiver
has completed the sale of substantially all of the assets,
property and undertaking of King to King Products and Solutions
Inc., a subsidiary of Urmet, TLC S.p.A. pursuant to the
agreement between New King and the Receiver, all as previously
announced on April 22, 2002. Under the terms of such agreement,
New King will employ substantially all of the employees of King
and has agreed to assume certain customer and other contractual
liabilities of King.

Urmet, an important player in the telecommunication market,
specifically in Terminal Equipment design & manufacturing, with
this transaction proves its commitment to deliver the most
effective multimedia terminals and services.

It is expected that from the proceeds of such sale that all
current "trade creditors" of King will be paid in full save and
except for the indebtedness owed by King to its largest
shareholder and "trade creditor" and that there will be no
distribution to King shareholders.

Urmet will carry on the King business through King Products and
Solutions Inc. with a vision of promoting, developing and
enhancing multimedia and architectural solutions previously
developed by King.

King trades on the Canadian Venture Exchange under the symbol
YKK.


KMART CORP: Obtains Approval to Engage DrKW as Financial Advisor
----------------------------------------------------------------
After further argument and objection, Judge Sonderby approves
Kmart Corporation's application to employ Dresdner, Kleinwort,
Wasserstein Inc. as amended.

Michael E. Wiles, Esq., at DeBevoise & Plimpton, in New York,
reports that Dresdner's fees were negotiated with the Debtors
and with the two Official Committees.  "Dresdner made a number
of concessions, including its agreement to forego payment of the
initial financial advisory fee of $112,500 that was to be due
and payable upon the execution of the Engagement Letter," Mr.
Wiles says.

To recall, Mr. Wiles notes that the United States Trustee
objected to the Engagement Letter to the extent that it might be
interpreted as permitting the Debtors to negotiate and pay a
"Financing Fee" without further application of the Court.  In
response, Mr. Wiles reminds the Court that Dresdner and the
Debtors agreed to confirm that at the time of any proposed
Financing, they would file an application seeking approval of
any additional compensation to be paid to Dresdner.

Henry S. Miller, Vice Chairman and Managing Director of Dresdner
Kleinwort Wasserstein Inc., insists that DrKW is not and was not
an investment banker for any outstanding security of the
Debtors. Neither has DrKW been, within three years before the
date of the Petition Date, an investment banker for any security
of the Debtors, Mr. Miller adds.  Clearly, Mr. Miller asserts,
DrKW is "disinterested" within the meaning of Section 101(14) of
the Bankruptcy Code.

Furthermore, Mr. Miller informs Judge Sonderby that DrKW is not
aware of any duplication in the services that Ernst & Young
Corporate Finance LLC, PricewaterhouseCoopers, and DrKW are to
provide for the Debtors.  According to Mr. Miller, DrKW is
committed to working with the Debtors and all of its advisors
and professionals to avoid any duplication in services.

Mr. Miller also emphasizes that DrKW is not being retained in
connection with a discrete individual project but instead in
connection with the Debtors' overall efforts to complete a
Restructuring.  "We anticipate that the duration of DrKW's
retention will continue until the consummation of a plan of
reorganization," Mr. Miller explains.

Moreover, Mr. Wiles relates that DrKW has attempted "to
reconsider the purposes of the indemnification provisions in an
effort to identify an alternative formulation that might prove
acceptable to DrKW, the Trustee and the Court.

Mr. Wiles explains that like other investment bankers, DrKW
seeks indemnities for a number of reasons:

   (a) First, DrKW is being retained as an independent advisor to
       the Company.  From time to time, DrKW will be directed to
       take certain actions or negotiating positions on behalf of
       the Debtors.  DrKW also intends to rely, and is entitled
       to rely, on the accuracy and completeness of the financial
       information and other information that is to be provided
       to DrKW by the Debtors.  DrKW, therefore, customarily
       seeks indemnification for liabilities and losses that
       arise out of actions or omissions by the Debtors
       themselves (including the inaccuracy of any information
       provided by the Debtors or the inaccuracy of statements
       made by the Debtors), or out of actions that DrKW may take
       with the consent of the Debtors or at the direction of the
       Debtors.

   (b) In addition, the performance of DrKW's responsibilities
       requires the exercise of professional judgments regarding
       difficult business and financial issues, as to which many
       persons may have diverse financial interests.  For
       example, DrKW may be called upon to render valuation
       opinions that will affect the distributions that various
       parties in interest may receive.  DrKW seeks
       indemnification for such matters (excluding cases in which
       DrKW has acted with gross negligence or willful
       misconduct) in order to ensure that DrKW will be free to
       exercise its best professional judgment independently, and
       without fear of litigation from persons whose financial
       interests might be adversely affected by those judgments.

Mr. Wiles points out that the Trustee had objected to the scope
of the foregoing exclusion for "gross negligence or willful
misconduct" and suggested that "negligence" should also be
excluded.  "One of the chief difficulties with a 'negligence'
exclusion, however, is that the term 'negligence' is itself
inherently general and vague," Mr. Wiles says.   According to
Mr. Wiles, there are many different kinds of business judgments
and decisions that the Debtors will need to make during the
course of their restructuring.  "These decisions require
judgments that are not made in accordance with standardized or
pre-defined rules, and that should not be second-guessed in
hindsight," Mr. Wiles explains.

DrKW proposes that the last sentence of the first paragraph of
the Indemnification Provisions be modified so as to provide
that:

   "The Company will not be responsible, however, for any losses,
   claims, damages, liabilities or expenses pursuant to Clause
   (B) of the preceding sentence which are finally judicially
   determined to have resulted primarily from:

      (i) gross negligence or willful misconduct of the person
          seeking indemnification, or

     (ii) conduct by the person seeking indemnification that was
          not in good faith or that such person did not
          reasonably and prudently believe was in the best
          interests of the Company."

Mr. Wiles notes that this language expands the exclusion beyond
"gross negligence" and "willful" misconduct" while at the same
time defining what is expected of the investment banker and
protecting the honest exercise of business and professional
judgments, using standards similar to those that govern a
director's duties of care and loyalty.

Also, Mr. Wiles adds, DrKW consents to the deletion of DrKW's
"agents" from the list of persons who are beneficiaries of the
proposed indemnification, as well as the inclusion of additional
provisions that relate to the Court's review of indemnification
expenses.

                   US Trustee Still Unconvinced

On behalf of United States Trustee Ira Bodenstein for the
Northern District of Illinois, trial attorney Kathryn Gleason
points out that DrKW's supplemental submission is just the same
as the indemnification provisions originally requested.

"Instead of proposing that the provisions be modified to exclude
-- (ii) conduct by the person seeking indemnification that was
not in good faith or that such person did not reasonably and
prudently believe was in the best interests of the Company --
DrKW fails to explain how its modification in any way limits the
nature of the claims covered," Ms. Gleason says.  Actually, Ms.
Gleason notes that all DrKW has done is propose the same
indemnification for negligence, under the guise of responding to
the concerns raised by the Court.

Ms. Gleason asserts that indemnification of a professional for
its own negligence is improper as inconsistent with
professionalism.  "As a professional, DrKW owes a duty of care
to these estates," Ms. Gleason contends.

Thus, the U.S. Trustee asks the Court to deny the Indemnity
Provisions, as modified in the Supplemental Submission.

                           *    *    *

Not persuaded by the U.S. Trustee's continued objections, in her
final order, Judge Sonderby approves the Debtors' application to
employ Dresdner, Kleinwort, Wasserstein Inc., as amended. (Kmart
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LASON INC: Court Sets Plan Confirmation Hearing for Today
---------------------------------------------------------
The voting is in on the First Amended Joint Plan of
Reorganization of  Lason, Inc., and its Subsidiary Debtors.
General Unsecured Creditors don't give their overwhelming
support to the confirmation process.

A bankruptcy judge will find that creditors grouped together in
a class  under a plan accept a plan if 2/3 of the dollar amount
of claims in that class and 1/2 of the number of claims, based
on claims actually voted, return ballots indicating acceptance.
In Lason's case, Nathan Weill III, at First Union Bank's
ClaimTrack Services Group reports, the Debtors didn't get
overwleming acceptance from their unsecured creditors.  Mr.
Weill's tabulation shows:

     Class            Dollars Accepting   Number Accepting
     -----            -----------------   ----------------
2A Secured Lender  $226,419,091  100%      11    100%
     Claims

2B Other Secured         56,764  100%       3    100%
     Claims

3  Convenience            4,369   96%      49     92%
     Claims

4  Key Manager        6,660,411  100%       6    100%
     Claims

5  General          151,973,963   76%     186     37%
     Unsecured
     Claims

10 Subsidiary                 0    0%       0      0%
     Interests

Because Lason's plan delivers to General Unsecured Creditors all
available value after senior claims are satisfied, Lason's plan
will likely proceed through the confirmation process without a
hitch.  Rejection of a plan is generally an impediment -- or at
least causes long conversations at a confirmation hearing --
when creditor classes voting to reject come up short and value
flows to junior classes.

Lason's Confirmation Hearing is scheduled for 11:30 a.m. (EST)
on April 30, 2002, in Wilmington before Judge Walrath.  Lawrence
K. Snider, Esq., Aaron L. Hammer, Esq., and Sean T. Scott, Esq.,
at Mayer, Brown & Platt, represent Lason in its chapter 11
restructuring.

Lason, headquartered in Troy, Michigan, is a leading provider of
integrated information management services, transforming data
into effective business communication, through capturing,
transforming and activating critical documents. Lason has
operations in the United States, Canada, Mexico, India and the
Caribbean. The Company currently has over 85 multi- functional
imaging centers and operates over 60 facility management sites
located on customers' premises. More information about Lason is
available on its Web site at http://www.lason.com


LERNOUT & HAUSPIE: Wants Solicitation Period Extended to June 17
----------------------------------------------------------------
On behalf of each of Lernout & Hauspie Speech Products N.V. and
L&H Holdings USA, Inc., Gregory W. Werkheiser, Esq., at Morris
Nichols Arsht & Tunnell asks Judge Judith Wizmur for a further
extension of the exclusive period within which the L&H Debtors
may solicit acceptances of their respective chapter 11 plans --
for an additional forty-five days, through and including June
17, 2002.

Mr. Werkheiser explains that the L&H Debtors seek an extension
to allow L&H NV and Holdings to amend the Joint Plan and the
Joint Disclosure Statement, gain approval a disclosure statement
and solicit acceptances of their respective plan -- all without
prejudice to the right of the L&H Debtors to seek further
extensions.

Mr. Werkheiser assures Judge Wizmur that the L&H Debtors have
been working diligently with the L&H Creditors' Committee and
are making substantial progress toward finalizing the terms of
negotiated chapter 11 plans. Furthermore, the L&H Creditors'
Committee has consented conditionally to the extension requested
herein.

Section 1121(b) of the Bankruptcy Code gives a debtor the
exclusive right to file a plan of reorganization for an initial
period of 120 days from the petition date. If the debtor files a
plan within this exclusive period, then the debtor has the
exclusive right for 180 days from the petition date to solicit
acceptances to its plan.  During these exclusive periods, no
other party-in-interest may file a competing plan of
reorganization. Section 1121(d) provides that the Court may
extend the exclusive periods "for cause" upon request of a
party-in-interest and after notice and hearing.

Although the Bankruptcy Code does not define "cause" for an
extension, this Code section grants great latitude to the
bankruptcy judge in deciding, on a case-specific basis, whether
to modify the exclusivity period on a showing of "cause".
Congress did not intend that the 120- and 180-day periods be
inflexible deadlines, instead Congress intended that the
exclusive periods be of adequate length, given the
circumstances, for the debtor to formulate, negotiate and draft
a consensual plan without the dislocation and disruption to the
business that would occur with the filing of competing plans of
reorganization.

     Ample Cause Exists For Extension Of Solicitation Period

(i) Joint Plan

Since the Petition Date, L&H NV and Holdings have been consumed
both with the exigent administrative matters of their cases
pending simultaneously in the United States and Belgium and the
business complications that accompany any chapter 11 filing. L&H
NV and Holdings began working in conjunction with their
respective creditor constituencies and the L&H Creditors'
Committee in the summer of 2001 to develop chapter 11 plans
designed to maximize value for their creditors. These efforts
culminated in the filing of the Joint Plan and Joint Disclosure
Statement in August 2001.

The Joint Plan provided, among other things, for the
reorganization of Dictaphone and the transfer of all of the
assets of the L&H Entities into two new separate entities post-
chapter 11 that would sell or otherwise dispose of assets for
the benefit of the stakeholders of such estates, through either
a joint venture or similar vehicle. It originally was
contemplated that the respective estates of the L&H Debtors
could be maximized by entering into a joint venture or similar
arrangement through a contribution of certain assets into such
joint venture (or similar vehicle); thereafter, post effective
date L&H NV and Holdings would pursue such transaction(s) and
the interests in such joint venture (or similar vehicle) would
be distributed.

Shortly after filing the Joint Disclosure Statement, and prior
to the hearing scheduled to consider the adequacy of the Joint
Disclosure Statement, however, a change in circumstances
compelled the three Debtors to decide not to seek approval at
that time of the Joint Disclosure Statement insofar as it
relates to the L&H Debtors. Specifically, the Belgian court
imposed several conditions on L&H NV that (a) might not be
consistent with the Joint Plan and (b) might affect L&H NV's
ability to consummate the Joint Plan. Moreover, insufficient
progress had been made with respect to the sale or other
disposition of the L&H Entities' Speech And Language Technology
Business, impeding the L&H Group's ability to describe
adequately in the Joint Disclosure Statement (i) the prospective
timing of any joint venture or similar transaction, (ii) the
likely consideration to be realized from such transaction, (iii)
the structure of such transaction, and (iv) the likely recovery
to the L&H Entities' creditors as a result of such transaction.

Given the existence of these unresolved matters, the L&H Group
determined that the prudent course of action would be to adjourn
final consideration of the Joint Disclosure Statement insofar as
it relates to the L&H Entities, and to proceed with seeking
approval of a disclosure statement exclusively with respect to
Dictaphone. On January 31, 2002, Dictaphone filed the Dictaphone
Plan relating solely to claims against and equity interests in
Dictaphone. The Bankruptcy Court confirmed the Dictaphone Plan
on March 13, 2002, and the Dictaphone Plan became effective on
March 28, 2002.

(ii) Progress with Plan Development

Since adjourning consideration of the Joint Plan, Holdings and
L&H NV have sold the majority of their assets, including the
Speech And Language Technology Business. Furthermore, Holdings
currently intends to file its chapter 11 plan (which was
negotiated with the L&H Creditors' Committee) on or before April
30, 2002, relating exclusively to claims against and equity
interests in Holdings, and L&H NV currently is negotiating the
terms of its own chapter 11 plan with the L&H Creditors'
Committee and certain other creditor constituencies.

Indeed, the L&H Debtors have made, and continue to make,
substantial progress toward finalizing their respective chapter
11 plans. Until now, a considerable portion of the three
Debtors' efforts and resources have been focused on finalizing
the Dictaphone Plan. With the completion of that process, the
L&H Debtors now require additional time to finalize their own
respective plans, seek approval of their related disclosure
statements, and, following such approval, solicit votes
accepting or rejecting their respective plans.

              L&H Debtors Are Not Using Exclusivity
                      To Pressure Creditors

Not Negotiation Tactic. The L&H Debtors' request for an
extension of the Solicitation Period does not constitute a
negotiation tactic. It merely reflects the fact that an
extension is required to provide sufficient time to complete the
solicitation process with respect to the remaining debtors, L&H
NV and Holdings, with Dictaphone's Plan now having been
confirmed. Throughout these chapter 11 cases, the three Debtors
have continuously conferred with the Creditors' Committees and
their retained professionals and other parties in interest with
respect to the plan development process for the Joint Plan, the
Dictaphone Plan, the Holdings Plan and any chapter 11 plan
relating to L&H NV.  Mr. Werkheiser assures Judge Wizmur that in
the event she grants the extension requested herein, this
interaction will not end.

           L&H Creditors' Committee Conditionally Consents

Further evidence of the cooperative spirit that exists among the
L&H Debtors and the L&H Creditors' Committee can be found in the
agreement that has been reached with respect to the extension
requested herein. Specifically, the L&H Creditors' Committee has
agreed to consent to the requested extension of the Solicitation
Period for an additional forty-five days. In exchange, the L&H
Debtors have agreed that the L&H Creditors' Committee will have
the right at any time during the Solicitation Period, on fifteen
days' written notice to the L&H Debtors, to move before the
Court to terminate the L&H Debtors' exclusive rights with
respect to the Solicitation Period. The L&H Debtors will bear
the burden in opposing such motion of demonstrating any need for
additional extensions of the Solicitation Periods.

Pursuant to Rule 9006-2 of the Local Rules of Practice and
Procedure for the United States Bankruptcy Court for the
District of Delaware, no bridge order is required and the
current Solicitation Periods are deemed extended through the
date that the Court acts on this Motion. See D. Del. Local
Bankr. R. 9006-2 ("If a motion to extend the time to take any
action is filed before the expiration of the period prescribed
by the Code, the Fed. R. Bankr. P., these Rules, the District
Court Rules, or Court Order, the time shall automatically be
extended until the Court acts on the motion, without the
necessity for the entry of a bridge order"). (L&H/Dictaphone
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LYONDELL CHEMICAL: Fitch Assigns BB- to Senior Credit Facilities
----------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB-' to Lyondell
Chemical Company's senior secured credit facilities, 'BB-' to
Lyondell's senior secured notes, and 'B' to Lyondell's senior
subordinated notes. Fitch has also assigned a rating of 'BB-' to
Equistar Chemicals L.P. senior secured credit facility, and 'B'
to the Equistar's senior unsecured notes. The Rating Outlook is
Negative for both Lyondell and Equistar.

The ratings reflect expectations for a significant improvement
in Equistar's profit margins by 2004 and a more modest
improvement in Lyondell's profit margins coming earlier, perhaps
as early as 2003. Lyondell and Equistar's excellent chemical
market positions and historically strong access to liquidity via
debt and equity capital markets also support the ratings, but
are offset by high debt levels and the current weakness in
Equistar's ethylene and polyethylene businesses. Liquidity via
access to the senior secured credit facilities for both Lyondell
and Equistar as well as liquidity via access to capital markets
will continue to be an important credit issue in light of
potentially large capital expenditure requirements and
cyclically weak cash flow from operations.

Although both Lyondell and Equistar have very manageable debt
maturities over the next few years, the Negative Outlook
reflects short-term concerns that access to revolving lines of
credit are conditional on compliance with financial covenants.
Equistar's covenants were recently amended and relaxed, raising
the likelihood that the company will have continued access to
the revolver. Both Lyondell and Equistar covenants demand
continuing quarterly earnings improvements. Longer term, the
Negative Outlook reflects the fact that cash flows generated
over the next few years could be diverted away from debt
reduction and instead used to fund required expenditures related
to compliance with tighter environmental regulations.

If environmental standards for sulfur in gasoline and emissions
of nitrogen oxides in the Houston-Galveston area are implemented
as currently proposed by government agencies, the company's pro-
rata share of regulatory capital expenditures could approach
$200 million at Lyondell, $250 million at Equistar (at 70%
ownership) and $300 million at Lyondell-Citgo Refining. These
figures correspond to a 90% reduction in nitrogen oxide
emissions. Expenditures related to tighter environmental
standards could consume a substantial part of incremental EBITDA
generated by the company during the expected chemical industry
recovery between now and 2004. The deadline for compliance with
new standards is 2007.

The recently proposed transaction that would have Occidental
Petroleum exchange its 29.5% stake in Equistar for equity in
Lyondell has brought Lyondell closer to its publicly stated goal
of owning 100% of Equistar. While the legal structure that
governs distributions to Equistar partners has not and is not
expected to change as a result of the Occidental transaction,
Fitch believes that the transaction could result in improved
Lyondell access to Equistar cash flows. As a result of this
improved access to Equistar cash, Equistar's ratings are not
higher than Lyondell's ratings. Additionally, the outlook for
Equistar's commodity ethylene business is weaker than Lyondell's
more stable propylene oxide business. Reinforcing the linkage
between Lyondell and Equistar are cross default provisions that
exist in Equistar's credit facility. Working to offset factors
which link Lyondell and Equistar ratings are indemnity
agreements which could require Millennium Chemical and
Occidental to contribute up to $750 million and $420 million,
respectively, to certain Equistar creditors. In a liquidation
situation these indemnity agreements could provide additional
value to Equistar creditors.

Fitch has evaluated Lyondell's credit statistics on both a
stand-alone basis and on a fully consolidated basis (including
Lyondell's pro-rata share of affiliates EBITDA and debt). Credit
statistics are cyclically weak with consolidated debt/EBITDA
approaching 8.0 times and consolidated EBITDA/Interest of less
than 2.0x. Fitch expects that an economic recovery should allow
these credit statistics to improve over the next two to three
years, so that by 2003 interest coverage exceeds 2.0x and
debt/EBITDA is roughly 5.0x. Most of this improvement is
expected to be driven by earnings improvements rather than by
debt reduction. While near-term operating cash flows have been
improved by reductions in working capital levels, longer term a
significant improvement in margins will be necessary in order
for the company to generate operating cash flow to meet capital
expenditure cash needs.

New capacity could put some short-term pressure on margins in
the core polyurethane chain business, especially if demand
remains weak. Despite new capacity coming on stream, margins in
Lyondell's polyurethane business are expected to respond quickly
to economic recovery given the fairly well balanced demand and
supply position. MTBE margins should improve during the summer
driving season and should remain strong until a MTBE phase-out
occurs given a lack of new MTBE capacity and a tight US gasoline
market. Fitch does not currently expect significant cash
outflows related to MTBE litigation. Ethylene chain margins are
expected to remain weak as a result of a historically high level
of excess capacity. Rising energy prices pose an additional risk
of margin compression in the ethylene chain, although a short
lived inventory rebuild could allow a short period of relief
from weak ethylene margins.

                     Ratings assigned:

                Lyondell Chemical Company

                  --Bank debt 'BB-';
                  --Senior secured notes 'BB-';
                  --Subordinated notes 'B'.

                 Equistar Chemicals L.P.

                  --Bank debt 'BB-';
                  --Senior unsecured notes 'B'.

DebtTraders reports that Lyondell Chemical Co.'s 10.875% bonds
due 2009 (LYOCH3) are quoted at a price of 94. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LYOCH3for
real-time bond pricing.


MARSON HOLDING: Case Summary & 8 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Marson Holding Company
         2801 Conestoga Drive
         Carson City, Nevada 89706

Bankruptcy Case No.: 02-51321

Type of Business: The Debtor -- a sister company to New Life
                   Bakery, Inc. -- leases equipment to New Life.

Chapter 11 Petition Date: April 25, 2002

Court: District of Nevada (Reno)

Judge: Gregg W. Zive

Debtor's Counsel: Jeffrey L. Hartman, Esq.
                   419 W Plumb Lane
                   Reno, Nevada 89509
                   (775) 324-2800

Total Assets: $0

Total Debts: $2,982,746

Debtor's 8 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Wells Fargo Equipment                                 $721,119
Mark Carpenter
PO Box 1450
Minneapolis, Minnesota 55485
(801) 246-3024

G.E. Capital                                          $606,220
Richard Lamy
6130 Stoneridge Mall
Suite 300
Pleasanton, California 94588

Zion CC                                               $601,294
Rich Buchanan
PO Box 3954
Salt Lake City, Utah 84110

Bankers Leasing (Soft Tech)                           $415,074
Bill Glikoff
4201 Lake Cook Road
Northbrook, Illinois 60062

Banc One 0591                                         $292,730
Steve Showman
111 Polaris Parkway
Suite A-3
Columbus, Ohio 43240

Keycorp Leasing                                       $173,669

G.E. Capital                                          $161,536

CIT Group                                              $11,100


MCLEODUSA: Automatic Stay Terminated Effective April 16, 2002
-------------------------------------------------------------
             IN THE UNITED STATES BANKRUPTCY COURT
                 FOR THE DISTRICT OF DELAWARE

In re:                       )
MCLEODUSA INCORPORATED,      )        CHAPTER 11
            DEBTOR.           )        CASE NO. 02-10288 (RAB)

           NOTICE OF THE EFFECTIVE DATE OF AMENDED PLAN OF
   REORGANIZATION OF MCLEODUSA INCORPORATED DATE APRIL 5, 2002

TO CREDITORS AND OTHER PARTIES-IN-INTEREST
OF McLEODUSA INCORPORATED (THE "DEBTORS"):

      PLEASE TAKE NOTICE that, on April 5, 2002, the United
States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court") entered the Findings of Fact, Conclusion of
Law, and Order (the "Confirmation Order") Under 11 U.S.C. ss
1129(a) and (b) and Fed. R. Bankr.P.3020 confirming the Plan of
Reorganization of McLeodUSA Incorporated, Dated April 5, 2002
(the "Plan").

      PLEASE TAKE FURTHER NOTICE that on April 16, 2002, all of
the conditions to the Effective Date under the Plan, pursuant to
Article IX of the Plan, occurred or were waived in accordance
with the Plan and the Confirmation Order.  Accordingly, April
16, 2002 is the Effective Date for the Plan.

                    TERMINATION OF AUTOMATIC STAY

      PLEASE TAKE FURTHER NOTICE that, as of the Effective Date,
the automatic stay under Bankruptcy code section 362 has been
terminated.

          Dated:  Wilmington, Delaware
                  April 16, 2002

                  Seth E. Jacobson
                  SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
                  333 West Wacker Drive
                  Chicago, IL 60606-1285
                  (312) 407-0700

                     /s/  Eric M. Davis
                  ----------------------------------------
                  Gregg M. Galardi ( ID NO 2991)
                  Eric M. Davis ( ID NO 3621)
                  SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                  One Rodney Square, PO Box 636
                  Wilmington, DE 19899-0636
                  (302) 651-3000

                  Attorneys for Reorganized Debtor


MOTIENT CORP: Virginia Court Confirms Joint Reorganization Plan
---------------------------------------------------------------
Motient Corporation said that the United States Bankruptcy Court
for the Eastern District of Virginia confirmed its amended joint
Plan of reorganization.  The Plan is expected to be effective on
May 1, 2002.

As previously announced, the Company's bondholders will exchange
their $335 million of senior notes for 25,000,000 shares of
Motient's new common stock, or approximately 97 percent of the
company (undiluted).  Current holders of the Company's common
stock will receive warrants for 5 percent of the new common
stock (diluted) subject to certain exercise terms and
conditions.  Under the plan, all shares of common stock
outstanding on April 26, 2002 will be cancelled.

Walter V. Purnell, Jr., president and CEO said, "We are
extremely pleased to be emerging from these proceedings so
quickly.  The support we have received from our Bondholders has
allowed us to move through this process with relative ease.  We
believe we have taken the steps needed to solidify Motient's
financial position and can now focus on promoting our
capabilities as a premium provider of advanced wireless data
solutions to enterprises.  We are especially proud of the fact
that during these proceedings we were able to provide customers
with the same high level of service they have come to expect of
Motient.  I would like to extend our deepest appreciation to our
customers and business partners for their loyalty during this
process.  I would also like to extend my personal thanks to all
of our employees who have worked so diligently during these past
months to ensure the success of this process and the future of
our company."

Motient Corporation -- http://www.motient.com-- owns and
operates the nation's largest two-way wireless data network --
the Motient(TM) network -- and provides a wide-range of mobile
and Internet communications services principally to business-to-
business customers and enterprises. The company provides
eLink(SM) and BlackBerry(TM) by Motient two-way wireless email
services. Motient's wireless email services operate on the RIM
850 and RIM 857 Wireless Handhelds(TM) and Motient's MobileModem
for the Palm(TM) V series handhelds. Motient serves a variety of
markets including mobile professionals, telemetry,
transportation and field service, offering coverage to all 50
states, Puerto Rico and the U.S. Virgin Islands.


NATIONAL STEEL: Wants More Time to Make Lease-Related Decisions
---------------------------------------------------------------
National Steel Corporation and its debtor-affiliates seek the
Court's authority to extend the time within which they must
decide whether to assume, assume and assign, or reject unexpired
nonresidential real property leases.  The Debtors ask that the
deadline by which they must make those decisions be extended
until November 6, 2002.

David N. Missner, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, states that the Debtors are parties to
approximately 100 unexpired leases.  "Having filed their
petitions only last month, the Debtors are just beginning to
review their unexpired leases," Mr. Missner says.  Accordingly,
until the Debtors complete their initial evaluation and develop
a strategic business plan, they are unable to determine at this
early juncture which of the unexpired leases they need to assume
to continue to operate their businesses.

As evidenced by the fact that the Debtors have already filed
several motions to reject executory contracts, they are not
passive in evaluating their assets.  "The Debtors will not
hesitate to file motions to reject individual unexpired leases
that they deem burdensome or unnecessary as they complete their
review," Mr. Missner adds.  Once the decision is made regarding
which unexpired leases are necessary for their continuing
operations, they must evaluate the value of the remaining
leases. "Such decisions cannot be made properly and responsibly
without an extension since the size and complexity of these
cases cannot be challenged," Mr. Missner asserts.

Mr. Missner explains that if the period is not extended, the
Debtors may be compelled to prematurely assume substantial
liabilities under the unexpired leases or forfeit benefits
associated with some leases. (National Steel Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NUCENTRIX BROADBAND: Violates Nasdaq Listing Requirements
---------------------------------------------------------
Nucentrix Broadband Networks, Inc. (NASDAQ: NCNX) reported that
the Company has received a Nasdaq Staff Determination indicating
that the Company failed to comply with Nasdaq's filing
requirements in Marketplace Rule 4310(C)(14) and, therefore,
that the Company's common stock is subject to delisting from The
Nasdaq Stock Market's National Market. As reported earlier, the
Company did not file its Annual Report on Form 10-K for the year
ended December 31, 2001 before the deadline of April 16, 2002,
as it was continuing work to complete its audit at this time.
The Company has requested a hearing on the Staff Determination
in accordance with Nasdaq rules, which will stay any delisting
action pending the outcome of the hearing.

The Company expects to conclude the audit very soon and file its
Form 10-K as soon as practicable after completion of the audit.
The Company plans to file its 10-K before the requested hearing
with Nasdaq is set, and believes that the filing of this report
will eliminate the need for a hearing and result in the
continued listing of its common stock on Nasdaq. However, the
Company can make no assurances that Nasdaq will not require a
hearing or that, if a hearing is conducted, the Company will
receive a favorable determination for the continued listing of
its common stock.

Nucentrix Broadband Networks, Inc. provides broadband wireless
Internet and multichannel video services using up to 200 MHz of
radio spectrum at 2.1 GHz and 2.5 GHz, commonly referred to as
Multichannel Multipoint Distribution Service (MMDS) and
Instructional Television Fixed Service (ITFS). Nucentrix offers
high-speed Internet services in Austin and Sherman-Denison,
Texas. Nucentrix holds the rights to an average of approximately
150 MHz of FCC-licensed spectrum, covering an estimated 9
million households, in 95 primarily medium and small markets
across Texas, Oklahoma and the Midwest. Nucentrix also holds 20
MHz of Wireless Communications Service (WCS) spectrum at 2.3 GHz
in 19 markets in Texas and Louisiana. For more information,
please visit http://www.nucentrix.com


PACIFIC GAS: Wins Nod to Spend Up to $183MM on San Jose Project
---------------------------------------------------------------
Pacific Gas and Electric Company sought and obtained
authorization by the Court, pursuant to Sections 363 and 105 of
the Bankruptcy Code, to spend up to $183 million, to construct
and energize the Northeast San Jose Transmission Reinforcement
Project (NESJ Project). As previously reported, $50 million is
the capital expenditure limit for projects in the Ordinary
Course for which PG&E does not have to seek court approval.

The purpose of the NESJ Project is to build electric
transmission facilities to solve transmission deficiencies in
the cities of San Jose, Santa Clara and Milpitas and the Silicon
Valley (collectively the San Jose area). The San Jose area has
key businesses and industries affecting the overall California
economy. With only a small number of electric generation
facilities in the area, PG&E relies heavily on its electric
transmission facilities to import power to serve customer
demand. To support the load growth and correct violations of the
ISO reliability criteria, the ISO has found, and the CPUC has
agreed, that substantial additions to PG&E's transmission system
will be required to be in place by 2003 to meet demand and
ensure system reliability.

As with the Tri-Valley Project, CPUC has issued an Order for
PG&E to construct the project but has set a "cost cap" for it.
In this case, the cost cap is set at $147,542,555 (approximately
$35.5 million less than PG&E estimates the Project will cost to
build) pursuant to a final decision by the CPUC (the CPUC Order)
in December, 2001. PG&E disputes the purported bases for CPUC to
set the cost cap and, with the consent of the Committee, moved
the Court for authority to spend up to the maximum amount
anticipated at the time of the motion, which exceeds the cost
cap set by CPUC. As was the case with PG&E's recent motions,
PG&E indicates that it is not asking the Court to address or
rule on any state law regulatory issues but rather only seeks
authorization to incur the subject capital expenditures pursuant
to Section 363 of the Bankruptcy Code.

PG&E tells the Court that its previous dealings with CPUC
regarding the project has resulted in delay and, with the
passage of time and CPUC-ordered changes, a higher expected cost
for the project. Before PG&E's Chapter 11 filing in July 1998,
PG&E applied to the CPUC pursuant to applicable provisions of
the California Public Utilities Code for a certificate of public
convenience and necessity (a CPCN) to construct the NESJ
Project. PG&E originally scheduled construction on the NESJ
Project to begin in 2001 so that the Project would become
operational in June 2002. According to PG&E, because of delays
in the CPUC proceedings, the NESJ Project currently is behind
schedule. To meet the relevant operational deadlines for 2003,
PG&E tells the Court that construction must begin no later than
May 2002.

The CPUC asserts authority to set a "cost cap" based on
California Public Utilities Code Section 1005.5(a), which
provides:

    Whenever the commission issues to an electrical or gas
    corporation a certificate authorizing the new construction of
    any addition to or extension of the corporation's plant
    estimated to cost greater than fifty million dollars
    ($50,000,000), the commission shall specify in the
    certificate a maximum cost determined to be reasonable and
    prudent for the facility. The commission shall determine the
    maximum cost using an estimate of the anticipated
    construction cost, taking into consideration the design of
    the project, the expected duration of construction, an
    estimate of the effects of economic inflation, and any known
    engineering difficulties associated with the project.

PG&E contends that: (a) the CPUC has been deprived of state law
authority to set "cost caps" on transmission projects by the
California Legislature's transfer of responsibility for the
electrical transmission grid to the ISO; and (b) any CPUC
authority to "cap" transmission projects' costs is preempted by
the FERC tariff with the ISO. Through the enactment of AB 1890,
the California Legislature created the ISO, transferred control
of the electrical transmission grid from the CPUC to the ISO,
and ordered the ISO to submit control of the transmission grid
to FERC jurisdiction. The ISO now operates the transmission grid
pursuant to a FERC-approved tariff, which has the force of
federal law. Because the recovery of transmission costs is under
FERC jurisdiction, the CPUC cannot legally constrain
transmission cost recovery by setting a "maximum reasonable and
prudent cost."

Even the CPUC seems to concede this point, PG&E notes, as the
CPUC has previously ruled that the Project is a FERC-
jurisdictional transmission project and FERC will address cost
recovery for this Project. See 2000 Cal. PUC LEXIS 239, Decision
00-02-046 (February 17, 2000) at 322, Part 3 of 4 ("The
Northeast San Jose Transmission Relief [sic] [Reinforcement]
Project is a transmission project, and the costs of this project
will be recovered through FERC-approved transmission rates").

Further, PG&E asserts that the CPUC may not prevent PG&E from
recovering those costs that FERC has found recoverable and, for
the same reasons may not conduct "a reasonableness review" of
PG&E's Project costs because FERC will do so. Mississippi Power
& Light Co. v. Mississippi ex rel. Moore, 478 U.S. 354, 369-70
(1988) (no state prudence review where FERC approves the rates).

Moreover, even if the CPUC has authority to set a "cost cap" for
the NESJ Project pursuant to Section 1005.5(a), PG&E may apply
to the CPUC for an increase in such "cost cap" specified in the
CPCN. The CPUC Order recognizes such right. Dasso Decl. Ex. 2
(CPUC Order at 7, 30).

Finally, the CPUC's "cost cap" is not contained in those
paragraphs setting forth conditions that PG&E is required to
acknowledge acceptance in writing pursuant to the CPUC Order.

Another paragraph (Paragraph 4) in the May CPUC Decision, of the
May CPUC Decision does state: "This order shall become effective
once the Commission reviews the cost data and comments thereon
and incorporates a cost cap and any other necessary changes into
this decision." However, PG&E does not believe that the CPUC may
require PG&E to agree that it will not seek to recoup all of the
actual Project costs in transmission rates.

"In addition to being the only CPUC-certified approach for
providing the electric transmission capacity required to serve
the projected loads in the San Jose area," PG&E says, "the NESJ
Project is the lowest cost alternative to serve new electric
customer demand in the San Jose area." PG&E expects the overall
NESJ Project to increase the Company's revenue requirement by a
net present value of $243 million. Generally speaking, the cost
of transmission facilities is expected to be included in PG&E's
base utility revenue requirements and is expected to earn the
rate of return authorized by the Federal Energy Regulatory
Commission (FERC). (Pacific Gas Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PINNACLE HOLDINGS: Will File Prepack. Chapter 11 Plan Next Month
----------------------------------------------------------------
Pinnacle Holdings Inc. (Nasdaq: BIGT) said that it has entered
into a definitive agreement with Fortress Investment Group and
Greenhill Capital Partners LLP, pursuant to which Pinnacle will
be recapitalized through a pre-negotiated bankruptcy plan to be
filed in Delaware under chapter 11 of the U.S. Bankruptcy Code.
Holders of at least two-thirds of the aggregate principal amount
of Pinnacle Holdings's 10% Senior Discount Notes due 2008 have
agreed to vote in favor of the Bankruptcy Plan. Pinnacle expects
to file the Bankruptcy Plan during the month of May. Immediately
following confirmation of the Bankruptcy Plan, Pinnacle Holdings
would be merged into a newly formed Delaware corporation formed
by the Investors with New Pinnacle being the surviving
corporation.

The Bankruptcy Plan will be funded by two new sources of
capital:

      (1) an equity investment made by the Investors of up to
          approximately $205.0 million, and

      (2) a new credit facility of up to $340.0 million to be led
          by a syndicate arranged by Deutsche Bank Securities
          Inc. with Bank of America, N.A.

Under the terms of the Purchase Agreement with the Investors,
Fortress will purchase up to approximately 13,735,000 shares of
common stock of New Pinnacle and Greenhill will purchase up to
approximately 6,765,000 shares of common stock of New Pinnacle.
The Purchase Agreement provides for the cancellation of the
Senior Notes in exchange for up to $114.0 million (or $350.77
per $1,000 par value bond) in cash or, at the Senior
Noteholder's election, a combination of cash and up to 49% of
New Pinnacle's outstanding common stock. The number of Investor
Shares (and hence their cash investment) will be proportionately
decreased by the number of shares purchased by holders of the
Senior Notes.

The Purchase Agreement also provides for the cancellation of
Pinnacle's 5-1/2% Convertible Subordinated Notes due 2007 in
exchange for up to $500,000 in cash and five-year warrants to
purchase up to approximately 205,000 shares of New Pinnacle's
common stock at approximately two times the price of the
Investor Shares.  Convertible Note holders can double this
amount to a total of $1.0 million in cash and warrants to
purchase 410,000 shares, representing approximately 2% of New
Pinnacle's equity capitalization, if the Convertible Note
holders agree to give certain releases. The Purchase Agreement
further provides for cancellation of the outstanding shares of
Pinnacle common stock.  Former stockholders and plaintiffs in a
stockholder class action shall receive five-year warrants to
purchase up to 102,500 shares of New Pinnacle common stock
(representing approximately 1/2% of New Pinnacle's equity
capitalization) at approximately two times the price of the
Investors Shares. This amount can be doubled to 205,000 shares,
representing approximately 1% of New Pinnacle's capitalization,
if the stockholders agree to give certain releases. Trade and
other creditors will be paid in full in the ordinary course.

Under the terms of the transaction documents, holders of
approximately two-thirds of the aggregate principal amount of
the Senior Notes have agreed, for a period of 60 days from the
date of the execution of the Agreement, not to exercise any
rights such holders may have against Pinnacle under the terms of
the indenture governing the Senior Notes, including the right to
receive principal of, and interest on, the Senior Notes.

"After having considered numerous alternatives in a process that
was commenced over six months ago, Pinnacle has concluded that
this transaction best serves the interests of all constituents.
We intend to implement the restructuring in a timely, efficient
manner," said Steve Day, Chief Executive Officer of Pinnacle.
Additionally, Mr. Day pointed out, "The proposed restructuring
plan allows the holders of the Senior Notes to realize a cash
distribution and an opportunity to participate as equity holders
in a significantly deleveraged company supported by dedicated
sponsors." Mr. Day further stated, "Because the holders of at
least two-thirds of the aggregate principal amount of the Senior
Notes have agreed to the terms of the restructuring, we expect
to emerge from this process relatively quickly. Our trade
creditors and customers will be unaffected by the
reorganization, and that was important to us, too."

Pinnacle's current board of directors will remain in place until
the closing of the transaction. Upon the consummation of the
transaction, a new nine-member board of directors will be
elected.  The Investors have the right to appoint five directors
to the new board for so long as the Investors hold a majority of
the outstanding shares of common stock. In addition, Pinnacle
will implement a new equity-based incentive plan, with one-half
of the options issued thereunder priced at an exercise price
equal to the price of the Investor Shares and one-half priced at
two times the price of the Investor Shares, and all of which
shall vest over a three year period.

Following the completion of the restructuring, the Investors
will own at least a majority of New Pinnacle's common equity.
In addition, Wesley R. Edens, Chairman and Chief Executive
Officer of Fortress Investment Group will assume the role of
Chairman of the Board of Pinnacle.  "The Investors are extremely
pleased with the proposed restructuring plan.  The significant
deleveraging will allow Pinnacle to focus on its core operating
strategy and will provide the financial flexibility to
capitalize on investment opportunities within its industry,"
said Mr. Edens.  Robert H. Niehaus, Chairman of Greenhill
Capital Partners, who will become Vice Chairman of New
Pinnacle's Board of Directors, said, "We are impressed with the
diversification of both the customers and technologies that
reside on Pinnacle's towers.  We believe that Pinnacle's
anticipated new capital structure will give it a competitive
advantage in the market place."

The transaction is subject to a number of conditions, including
customary regulatory approvals, the requisite creditors'
approvals in bankruptcy and confirmation of the Bankruptcy Plan.
The Purchase Agreement also contains customary terms and
conditions, including certain exclusivity rights and a
termination fee of $12.0 million to be paid by Pinnacle to the
Investors if the Purchase Agreement is terminated under certain
circumstances and Pinnacle consummates an alternative
transaction.

Based on recent discussions, Pinnacle anticipates that the
lenders under its senior credit facility will be supportive of
this transaction, and Pinnacle is in the process of seeking that
support by means of a new forbearance agreement allowing time to
implement the transaction.

During the bankruptcy process, Pinnacle anticipates operating in
the ordinary course of business, subject to the provisions of
the U.S. Bankruptcy Code, and does not currently expect that its
trade suppliers, unsecured trade creditors, employees and
customers will be materially impacted.

Pinnacle is a provider of communication site rental space in the
United States and Canada. At December 31, 2001, Pinnacle owned,
managed, leased, or had rights to in excess of 4,000 sites.
Pinnacle is headquartered in Sarasota, Florida. For more
information on Pinnacle visit its Web site at
http://www.pinnacletowers.com

Fortress Investment Group LLC is an alternative investment and
asset management company with headquarters in New York City.
Founded in 1998, Fortress currently manages in excess of $1.2
billion of private equity and invests in asset-based operating
companies on a domestic and international basis.  Fortress seeks
to provide capital to capable operating partners with the
highest quality assets, whose valuation and access to capital is
impaired by association with the distress of a particular asset
class.

Greenhill Capital Partners LLP is a $420 million private equity
fund managed by Greenhill & Co., an independent merchant banking
firm owned entirely by its partners.  Greenhill Capital Partners
identifies investment opportunities by focusing on the
proprietary deal flow provided by Greenhill & Co.'s insights
into, and relationships within, the telecommunications,
technology, financial services and consumer products industries.
From their offices in New York, London and Frankfurt, Greenhill
& Co. provides a broad range of advisory and investment
services.

According to DebtTraders, Pinnacle Holdings Inc.'s 10% bonds due
2008 (BIGT1) are trading at about 26. For real-time bond pricing
see http://www.debttraders.com/price.cfm?dt_sec_ticker=BIGT1


PLANETRX.COM INC: Agrees to Merge with Paragon Homefunding
----------------------------------------------------------
PlanetRx.com, Inc. (OTC Bulletin Board: PLRX) has entered into a
definitive agreement to merge with Paragon Homefunding, Inc.
Pursuant to the merger, a wholly-owned subsidiary of PlanetRx
will merge with and into Paragon, and PlanetRx will issue shares
of common stock to the Paragon stockholders equaling 90% of the
total outstanding shares of PlanetRx common stock immediately
after the merger.  Paragon is a privately held, development
stage company based in Ponte Vedra Beach, Florida, that intends
to enter the financial services market through a series of
planned acquisitions.

The merger is expected to close in late May 2002.  The
consummation of the merger is subject to various customary
conditions, including the receipt by PlanetRx of an opinion that
the merger is fair to its stockholders from a financial point of
view.  Once the merger is completed, Paragon's management will
assume control of PlanetRx.  As a result of the merger, the
current stockholders of PlanetRx will see their ownership stake
reduced from 100% to 10% of the outstanding common stock.  There
could be further dilution of this interest following the merger
in the event that PlanetRx issues additional shares of common
stock.

As previously disclosed, PlanetRx closed its online health care
store in March 2001 and shortly thereafter began preparing a
plan of liquidation and dissolution.  In an effort to realize as
much value as possible for its stockholders, PlanetRx has
explored and evaluated various strategic options, including a
possible merger or sale, while taking steps to monetize its
assets and settle its liabilities in a manner that is consistent
with the consummation of either a merger or sale or its
liquidation and dissolution. These steps have included the sale
of assets such as equipment, inventory, facilities, domain names
and other intellectual property; the assignment or negotiated
cancellation of leases, secured obligations and other contracts;
the payment or settlement of other liabilities and obligations;
and the reduction of personnel to only three key managers.  This
process is substantially complete.  As of December 31, 2001,
PlanetRx's total assets and total liabilities had been reduced
to $477,000 and $224,000, respectively. Pending the merger with
Paragon, PlanetRx intends to continue to monetize its assets
and, to the extent possible, use the proceeds from such sales
and available cash to pay its remaining liabilities and
obligations.  The few assets remaining to be sold consist
primarily of internet domain names that are listed for sale on
the http://www.AllNetCommerce.comWeb site.

Commenting on the pending merger with Paragon, Michael
Beindorff, the chairman and chief executive officer of PlanetRx,
said, "Over the last several months, we have monetized the
assets and reduced the liabilities of PlanetRx in an orderly,
efficient manner.  Now, after extensive deliberation and
evaluation, we have concluded that the merger with Paragon
presents the best available option for preserving the remaining
value for PlanetRx's stockholders.  We hope that the Paragon
merger will bring a brighter future for PlanetRx as it embarks
on a new and different business path."

PlanetRx.com, Inc. -- http://www.planetrx.com-- formerly a
leading internet healthcare destination, is headquartered in
Memphis, Tennessee.


PROVELL INC: Eyeing Chapter 11 Filing to Reorganize Operations
--------------------------------------------------------------
Provell, Inc. (Nasdaq:PRVLE) has received a Nasdaq Staff
Determination indicating that the Company is not in compliance
with requirements for continued listing under Marketplace Rules
4310(C)(13)-(14), including failure to file an annual report
containing audited financial statements and failure to pay the
2002 annual fee to Nasdaq. Therefore, the Company's securities
are subject to delisting from the Nasdaq National Market,
effective April 29, 2002.

As reported in its most recent annual report on Form 10-K, cash
expected to be generated from continuing operations and
availability under the Company's credit facility will likely not
be sufficient to provide adequate liquidity in the immediate
short term to fund Company operations. The Company is exploring
strategic alternatives to meet its immediate and future
liquidity needs, including seeking additional financing or
filing a petition under Chapter 11 of the United States
Bankruptcy Code. There can be no assurance that the Company will
be able to raise additional capital or otherwise resolve its
immediate liquidity problems.

Additionally, the Company announced financial results for its
first quarter ended March 30, 2002. Highlights of the quarter
include a return to operating profitability ahead of the
schedule established in the Company's previously announced
turnaround timetable, reversing the trend of operating losses
experienced in each of the quarters in fiscal 2001. For the
first quarter of 2002, the Company reported net revenue of $36.9
million compared to $32.9 million in the first quarter of 2001,
a 12.2% increase. Operating income for the quarter was $1.1
million compared to an operating loss of $(6.5) million in the
comparable quarter last year, for an operating improvement of
$7.6 million. Despite a $4.1 million increase in reserves held
by the Company's payment processor, cash flow from continuing
operations was $(8.9) million, within the range of estimates
previously provided by the Company. Deferred operating margin,
or the difference between deferred membership revenue and
deferred membership solicitation costs as reflected on the
Company's balance sheet, grew from $15.2 million in the fourth
quarter of 2001 to $15.8 million in the first quarter of 2002.

Operating results for 2002 reflect the favorable impact of the
Company's decision mid-2001 to pare economically unattractive
member acquisition marketing, lower consumer returns, continued
strength in membership renewal rates and price points, as well
as the positive impact from ongoing cost reduction efforts. Net
loss available to common shareholders was $0.2 million for the
quarter compared to a loss of $16.6 million in the first quarter
of 2001. First quarter 2001 net results were significantly
impacted by a non-cash charge to earnings of $(11.5) million for
amortization of the note discount related to the private
placement of $14.2 million in 10% Senior Convertible Notes on
February 27, 2001.

Provell, Inc., develops, markets and manages an extensive
portfolio of unique and leading-edge membership and customer
relationship management programs. Members of the Company's
proprietary programs receive value-added benefits, insightful
information, and exclusive savings opportunities on a wide range
of related products and services in the areas of shopping,
travel, hospitality, entertainment, health/fitness, finance, and
affinity activities such as cooking and home improvement. As of
March 30, 2002, nearly 2.7 million consumers enjoyed benefits
provided through Provell's membership programs. The Company was
founded in 1986 and is headquartered in Minneapolis, Minnesota.


PSINET INC: Court Okays Asset Purchase Pact Terms with Cogent
-------------------------------------------------------------
The terms and conditions of the Asset Purchase Agreement between
PSINet, Inc., and Cogent Communications are approved by the
Court in all respects pursuant to Sections 363(b) and 365 of the
Bankruptcy Code.

Except to the extent otherwise provided in the Asset Purchase
Agreement, pursuant to Sections 105(a), 363(f), and 365 of the
Bankruptcy Code, the Acquired Assets shall be transferred to the
Buyer and upon the Closing under the Asset Purchase Agreement
shall be free and clear of all mortgages, security interests,
pledges, liens, claims, interests, judgments, demands,
encumbrances, restrictions or charges of any kind or nature,
fixed or contingent (collectively, the Liens).

The Debtors are authorized and directed, subject to the terms
and conditions of the Asset Purchase Agreement and except
insofar as the Stipulations provide otherwise, to

(a) assume and assign certain of the Assumable Contracts
     specifically designated in writing by Buyer prior to the
     expiration of the Transition Period (Designated Assumable
     Contracts), subject to an amended schedule to be filed with
     the Court,

(b) pay the applicable Cure Amounts as set forth in the
     Stipulations, and

(c) execute and deliver to the Buyer such documents or other
     instruments as may be reasonably necessary to assign and
     transfer such assumed contracts to the Buyer.

The Cure Amounts are set forth in stipulations among the
Debtors, the Buyer, and counterparties to executory contracts.
The Debtors and the Buyer have entered Stipulations regarding
Cure Amounts with the following: AT&T Corp., BellSouth,
Broadwing Communications Services Inc., Qwest Corporation and
Qwest Communications Corporation, Southern California Edison,
Southwestern Bell, and Verizon Communications Inc.

The Court's order addresses a number of the responses/objections
raised in response to the motion. All objections to the Motion
that have not been withdrawn, waived, or settled, are overruled
on their merits.

With respect to the response by Cisco, the Debtors acknowledge
that:

(1) no transfer of any license or right of the Debtors to use or
     hold any property of Cisco Systems, Inc. or its affiliates
     is accomplished by the Court's approval of the Sale Motion;

(2) no transfer of any equipment leased or otherwise transferred
     by Cisco to the Debtors or equipment of the Debtors financed
     by Cisco, is accomplished by the Court's approval of the
     Sale Motion, unless such equipment is owned free and clear
     by the Debtors,

(3) the Sale Motion does not attempt to transfer any rights or
     interests in equipment acquired by the Debtors from Cisco,
     unless the Debtors hold such equipment free and clear of all
     liens and interests, and

(4) the Debtors must comply with the provisions of Sections 363
     and/or 365 of the Bankruptcy Code in the event the Debtors
     seek to assign to any third party any rights they have in
     software licensing agreements between the Debtors and Cisco
     or to transfer equipment not owned free and clear by the
     Debtors.

The Debtors acknowledge that entry of an order approving the
Sale Motion does not determine that the Debtors hold the
Disputed Equipment listed in Schedule E to the Sale Motion, free
and clear of liens, and whether or not the Debtors have any
legal or equitable interest in the Disputed Equipment. The
parties reserve all rights in or related to the Disputed
Equipment, and stipulate that their respective rights in the
Disputed Equipment, if any, will be determined in future
litigation. The foregoing provisions do not prejudice the rights
of Cisco, Buyer, the Debtors, or any subsidiary thereof under
any license agreements or lease or financing agreements in
existence between or among any of such parties.

Cisco agrees to withdraw its Objection to the Sale Motion, but
respectfully reserves all issues raised therein or related
thereto.

The Court's order also provides for the following, among other
things:

        -- If either EMC Corporation and Banc One Leasing
Corporation identifies equipment that it leased to Debtors and
that is being conveyed to Buyer in this transaction, Debtors
will grant the entity a replacement lien attaching to the
proceeds of this sale, without prejudice to the rights of any
party to contest the validity or extent of any such lien.

        -- The sale does not include any equipment acquired from
or with financing provided by NTFC Capital Corporation or
General Electric Capital Corporation (GECC).

        -- The executory contract with the Aircraft Owners and
Pilots Association shall not be assumed and assigned, and no
cure amounts shall be due on account of such contract.

        -- No executory contract to which e.spire Communications,
Inc. is a counterparty shall be assumed and assigned absent
further Order of the Court or upon a stipulation among the
parties, which is expected to be filed promptly.

        -- All executory contracts to which MCI/WorldCom is a
counterparty shall be rejected at the end of the Transition
Period absent further order of the Court or agreement of the
parties. (PSINet Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PSINET INC: Enters Into Pact to Sell Europe Unit for $9.5MM
-----------------------------------------------------------
PSINet Inc. has entered into a definitive share purchase
agreement for the sale of PSINet Europe B.V. and its
subsidiaries to a group of investors led by Israel Corporation,
a publicly held corporation, and ClearBlue Technologies Holdings
Limited for cash in the amount of U.S. $9.5 million.

Because the transaction was structured as a stock purchase, the
purchasers also agreed to assume all liabilities and obligations
of PSINet Europe.

The share purchase agreement provides, among other things, that
the proposed transaction will be subject to the approval of the
U.S. Bankruptcy Court and other customary conditions, including
applicable regulatory approvals. As is customary in these
situations, the share purchase agreement is the result of a
court supervised auction process at which other qualified
bidders were entitled to bid for PSINet Europe.

PSINet expects that its operations in Europe will continue to
operate in the normal course of business, providing reliable
services to its customers. PSINet's operating subsidiaries in
Europe are not part of the filing by PSINet Inc. and certain of
its U.S. subsidiaries under Chapter 11 of the U.S. Bankruptcy
Code.

PSINet Europe provides corporate Internet access and private
networks, Web hosting, co-location and managed security, and
voice, fax and other audio-video products and applications in
Europe.

Dresdner Kleinwort Wasserstein provided financial advice to
PSINet on the transaction. Legal representation on the
transaction was provided to PSINet by Nixon Peabody LLP and
Wilmer, Cutler & Pickering.

Allen & Overy provided legal representation on the transaction
to Israel Corporation, and Heller Ehrman White & McAuliffe
provided legal representation to ClearBlue.

PSINET Inc.'s 11% bonds due 2009 (PSINET2) are quoted at a price
of 10, DebtTraders reports. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PSINET2


RELIANCE: May 16 Hearing Set on Compensation Protocol Dispute
-------------------------------------------------------------
The Official Unsecured Creditors' Committee, the Official
Unsecured Bank Committee and the Pennsylvania Liquidator of
Reliance Insurance Company are at each other's throats again.

The Committees ask Judge Arthur Gonzalez to amend the Interim
Compensation Protocol to make it crystal clear that the Debtors'
use of funds not subject to the Liquidator's Constructive Trust
Action are available to pay the Committees' Professionals' fees
and expenses.  The Liquidator backed-down previously on this
issue, but there's nothing in the record that gives the
Committees' Professionals' assurance that she won't come back
around and change her mind at some later point in time.

No, no, no way, says M. Diane Koken, now that the specific
request is in front of the Court.  She argues that the
Committees are acting in a duplicitous manner, are attempting to
circumvent the proper legal procedures and that this Court is
not the appropriate venue for consideration of this issue.

                       The Committees' Request

Anthony Princi, Esq., of Orrick, Herrington & Sutcliffe, counsel
for the Official Unsecured Creditors Committee and Andrew
Denatale, Esq., of White & Case, counsel for the Official
Unsecured Bank Committee, provide some much needed background
information in this complex issue.

Postpetition, the Liquidator filed a series of motions and
objections to motions by the Debtors that claimed these estates
had no money to administer and reorganize. The Liquidator's
position was based on her argument that all of the Debtors'
liquid assets were the subject of a constructive trust in favor
of RIC.

The Liquidator attempted to use the Constructive Trust Action as
a basis to interfere with or object to other aspects of the RGH
reorganization. On August 3, 2001, the Liquidator filed an
objection to the Debtors' motion for the establishment of
procedures for the monthly compensation and reimbursement of
expenses of professionals.  The basis for the Procedures
Objection was that the Debtors should not be permitted to use
any of the funds subject to the Constructive Trust Action.  At
that time, the Liquidator asserted that the funds constituted
all of the liquid assets of the estates to pay professionals.

In Joint Opposition Papers, the Debtors and Committees explained
that the Liquidators' applications were fundamentally flawed for
many reasons.  Foremost, the Liquidator failed to acknowledge
that RGH undisputedly has funds that are not subject to any
claim for a constructive or resulting trust.  These undisputed
funds include:

    * Funds that RGH has obtained since its Chapter 11 filing,
      which totaled approximately $3 million at the time; and

    * Approximately $6.5 million in cash held by Reliance
      Development Group, a wholly owned non-insurance subsidiary
      of RGH that owed RGH a $66 million receivable.

The Liquidator's position threatened the Debtors' ability to
administer these estates. RGH and the Committees filed
responsive pleadings demonstrating the complete lack of merit to
Ms. Koken's constructive trust arguments.  They also sought a
prompt resolution of these issues in order to lift the cloud
that the Liquidator had cast over the administration of these
cases.

The Liquidator at an October 1, 2001, hearing here, withdrew her
motions and objections and conceded that funds received by the
Debtors post-petition were not subject to her constructive trust
argument and could be used by the Debtors for any lawful
purposes, including the payment of professionals.

The Liquidator referenced that "as set forth in the Declaration
of George E. Bello dated September 7, 2001 filed in connection
with the various motions dealing with the retention or
compensation of professionals, it is made clear that [RGH] had
cash receipts of in excess of $3 million of which approximately
$2.7 million represents proceeds of a split dollar life
insurance policy that RGH previously maintained on behalf of
Saul P. Steinberg." The Liquidator also stated that, in light of
these facts and related assurances by the Debtors and the
Committees that they would not use assets ultimately determined
to be part of RIC's estate, the Liquidator "has no need to seek
the relief of dismissal or suspension of the Chapter 11 cases."

Moreover, the Liquidator represented that "[w]ith these assets,
there appear to be estates which the Debtors may administer
under either Chapter 11 or Chapter 7 of the Bankruptcy Code." On
this basis, the Liquidator withdrew the remainder of the
Dismissal Motion.

The Liquidator conceded that the existence of Undisputed Funds
from which professionals and administrative expenses could be
paid rendered her Procedures Objection, Ordinary Course Motion
and PwC Objection "premature."  The Liquidator requested that
those applications be deferred so long as the Debtors did not
attempt to use the "Disputed Funds" to pay professionals and
expenses. The Liquidator further requested in that she be served
with monthly statements of compensation for each of the
professionals seeking compensation.

On March 1, the Liquidator, RGH and the Committees appeared
before Judge Carey in the Bankruptcy Court for the Eastern
District of Pennsylvania, for a hearing on a request by the
Debtors and the Committees for a stay pending appeal. At that
hearing, the Liquidator's counsel indicated that funds received
post-petition may be subject to the constructive trust action
and refused to acknowledge Ms. Koken's prior concessions and
agreements made in this Court. Because these statements were
directly contrary to the Liquidator's prior representations, on
March 7, 2001, counsel for the Bank Committee sent a letter to
Ms. Koken's counsel that pointed out the "misunderstanding."
Counsel for the Bank Committee emphasized that this
"misunderstanding" was particularly troubling because it placed
faith in the Liquidator's representations, for example by taking
actions to move additional cash into RGH's estate. The Bank
Committee requested that the Liquidator inform the Committees
whether, notwithstanding her prior admissions and concessions,
she now claims that the Undisputed Funds are subject to her
Constructive Trust Action.

Messrs. Princi and Denatale assert that in light of the detailed
factual record above, it is incredible that the Liquidator is
attempting to reverse course and ignore her admissions that
funds transferred to the estates post-petition are excluded from
her Constructive Trust Action. The only explanation can be that
the Liquidator, having secured her preferred forum to resolve
the bulk of the issues related to the Constructive Trust Action,
now believes that she can safely abandon her prior concessions
and agreements on the Undisputed Funds. Messrs. Princi and
Denatale contend that to permit the Liquidator to succeed in
this strategy would be wholly inequitable and would prejudice
the Debtors and Committees.

The potential prejudice to the Debtors and Committees from the
Liquidator's litigation tactics cannot be overstated. The
Debtors and the Committees are currently preparing a joint plan
of reorganization that they believe will allow these estates to
reorganize. The Liquidator's attempt to cast doubt on the
estates' administrative solvency will impede their ability to
retain professional services necessary to print, mail and
tabulate the votes on a plan and retain the services of the
employees and officers necessary to administer these estates. In
addition, the Debtors and the Committees are entitled to rely on
Ms. Koken's earlier assurances that there are funds available to
pay their financial and legal advisors.

What has happened is precisely the result that the Debtors and
Committees sought to avoid by having this Court rule on the
various objections and motions filed by the Liquidator. The sole
reason that the Debtors and Committees are in their current
position is because the Liquidator admitted and conceded that
the Undisputed Funds could be used to pay administrative
expenses in these cases and now attempts to abandon those
admissions and concessions.

Further, it is clear that the funds that the Debtors have
obtained post-petition, including the Insurance Proceeds and the
RDG cash, have absolutely no relationship with the funds at
issue in the Constructive Trust Action. Thus, there is no basis
for the Liquidator to contest RGH's use of such funds to pay
administrative expenses in these cases.

The Committees request that the Court supplement and/or amend
the October 3, 2001 Order to include a finding that funds
received by the Debtors post-petition from sources other than
tax refunds or other postpetition sources are property of
estates under Section 541 of the Bankruptcy Code, are not
subject to the relief sought in the constructive trust action
initiated by the Liquidator and can be used by the Debtors in
these cases for all purposes authorized by the Bankruptcy Code.

Ms. Koken, Insurance Commissioner of the Commonwealth of
Pennsylvania opposes this request. She says the Debtor and the
Committees have engaged in duplicitous behavior all along.
Jerome B. Richter, Esq., of Blank, Rome, Comisky & McCauley,
recounts the events leading his group to this conclusion.

          RGH and the Committees are not being Forthright

On February 28, 2002, RGH and the Committees filed in the
Pennsylvania Bankruptcy Court a motion to stay that court's
order remanding the Constructive Trust Action pending resolution
of the Constructive Trust Action appeal. On March 1, 2002, the
Pennsylvania Bankruptcy Court denied the motion for stay and
granted RGH and the Committees ten days to seek relief in the
Pennsylvania District Court. Shortly thereafter, RGH and the
Committees filed a Motion for Stay Pending Appeal in the
Pennsylvania District Court. RGH and the Committees also
requested that the Pennsylvania District Court expedite
consideration of their Motion for Stay.

During a telephone conference call with the parties, on March 7,
2002, the Pennsylvania District Court scheduled a hearing on the
Motion for Stay Pending Appeal for March 14, 2002, and informed
the parties that the court would hear argument on the merits of
the appeal and cross appeal then.

Mr. Richter says that within days, and without notice to the
Liquidator, without observing required procedures designed to
safeguard due process, on an ex parte basis, and without
informing this Court of the imminent hearing before the
Pennsylvania District Court on the Committees' appeal of the
Constructive Trust Action, the Committees sought and obtained an
Order to Show Cause from this Court on March 11, 2002. A hearing
on the Motion was scheduled that commanded Ms. Koken to appear
and show cause on March 13, 2002.

Adding insult to injury, the OTSC was docketed on the afternoon
of March 11.  However, the Committees did not serve the
Liquidator with the OTSC or the Motion until after business
hours on March 11 despite requests from the Liquidator to
immediately be provided with the relevant papers.

Mr. Richter first learned of the OTSC not from the Committees,
but through the electronic filing website maintained by the New
York Bankruptcy Court. Given the late hour of service, counsel
otherwise would have had no notice of the Motion or the OTSC
until the morning of March 12, 2002, one day before the
Liquidator was originally ordered to appear, show cause and
submit a brief on the issues in this Court.

              RGH has Circumvented Procedural Authority

Mr. Richter outlines his side's legal issues with the RGH
request.  He argues that a proceeding for a declaratory judgment
as to whether certain property constitutes property of the
estate must be brought as an adversary proceeding. See In re Sky
Group International, Inc., 108 B.R. 86, 91 (Bankr. W.D. Pa.
1989) (proceeding by motion was procedurally defective) (citing
Rule 7001 of the Federal Rules of Bankruptcy Procedure).

The relief requested by the Committees, that funds received by
RGH are property of the Debtors' estates, requires the filing of
an adversary proceeding complaint seeking a declaratory judgment
and an opportunity for the Liquidator to respond in due course
under the Federal Rules of Bankruptcy Procedure and Federal
Rules of Civil Procedure.

Even assuming that the procedure employed by the Committees
(i.e., proceeding by motion rather than by adversary proceeding)
is correct, the OTSC should not have been entered because the
Motion failed to include the required Local Bankruptcy Rule
affidavit. Rule 9077-1(a) of the Local Bankruptcy Rules for the
Southern District of New York provides, in pertinent part, that
"[n]o order to show cause shall be granted except upon a clear
and specific showing by affidavit of good and sufficient reasons
why proceeding other than by notice of motion is necessary."
Here, there has been no such showing. Indeed, the Committees
failed even to submit the required affidavit.

Because of the manner in which the Committees obtained the OTSC,
the Liquidator must assume that the affidavit requirement of the
Local Bankruptcy Rule was ignored because the Committees
improperly, without any notice to the Liquidator, chose instead
to engage in an ex parte proffer to the Court.  This was done to
advocate their view of the facts underlying the need for the
Motion, which resulted in entry of the OTSC without the
Liquidator's participation or the most basic opportunity to be
heard.

            This Court has no Jurisdiction over
              the Constructive Trust Action

According to Mr. Richter, this Court lacks jurisdiction to
decide the scope of the constructive trust res, which is the
issue framed in the OTSC. The OTSC, on an emergency basis,
commands Ms. Koken to defend the merits of the Constructive
Trust Action.  The CTA is a civil action commenced in the state
courts of Pennsylvania and is currently pending on appeal in the
Pennsylvania District Court, a court whose jurisdiction
supersedes the jurisdiction of this Court.  Without notice to
the Liquidator and despite the availability of counsel, the
Committees sought the OTSC so that the issue of this Court's
jurisdiction could not properly be raised.

The OTSC requires this Court to make a legal and factual
determination central to the relief sought by the Liquidator in
the Constructive Trust Action. The determination the Committees
seek, if granted, would ignore and run contrary to the order of
the Pennsylvania Bankruptcy Court and would impermissibly invade
the appellate jurisdiction of the Pennsylvania District Court,
the only court presently with jurisdiction over the Constructive
Trust Action.

The Committees' characterize their request for relief as a
determination under 11 U.S.C. Section 541, regarding what is and
is not property of the Debtors' estates.  They appear to think
this characterization immediately puts the issue before this
Court. But the opposite is true, as the characterization itself
demonstrates why this Court may not act on the Motion. In
addressing precisely the same issue, the Pennsylvania Bankruptcy
Court held that it would transfer the Section 541 issues to this
Court but only after the state law constructive trust issues,
including the issue of what funds are subject to the
Liquidator's constructive trust remedy, have been resolved by
the Commonwealth Court of Pennsylvania.

Mr. Richter declares that the Committees executed an end-run
around the Pennsylvania Courts by obtaining a hearing from this
Court one day before the Pennsylvania District Court was
scheduled to hear their appeal. The Committees' actions are
intended only to avoid the appropriate exercise of jurisdiction
by the Pennsylvania Bankruptcy and District Courts and to
frustrate the settled law governing the Constructive Trust
Action. State law constructive trust issues must be resolved
before a "property of the estate" determination under Section
541. See In re Howard's Appliance Corp., 874 F.2d 88, 93 (2d
Cir. 1989) (stating that the bankruptcy estate is automatically
deprived of any funds that state law finds subject to a
constructive trust).

Mr. Richter holds that the Pennsylvania District Court has sole
and exclusive jurisdiction over matters affecting the merits of
the Constructive Trust Action because (1) the Constructive Trust
Action was removed to the United States District Court for the
Eastern District of Pennsylvania and that court alone has
jurisdiction over the matter until the matter is transferred to
this Court or remanded to the Commonwealth Court of
Pennsylvania; and (2) the filing of the Notices of Appeal and
Notice of Cross-Appeal from the Pennsylvania Bankruptcy Court's
Order on the Constructive Trust Action vested jurisdiction in
the Pennsylvania District Court and divested this and all other
bankruptcy courts of jurisdiction over the Constructive Trust
Action, pending resolution of the appeal.

It is well established here and throughout the federal court
system that the filing of a notice of appeal divests the lower
court of all jurisdiction over the aspects of the case involved
in the appeal. See Griggs v. Provident Consumer Discount Co.,
459 U.S. 56, 58-59 (1982); In re Winimo Realty Corp., 270 B.R.
99, 105-06 (S.D.N.Y. 2001).

Here, this black letter law requires this Court to defer to the
Pennsylvania District Court. The Constructive Trust Action and
all issues related to the disputed property, including the scope
of the constructive trust res, and the applicability of Section
541 to the disputed property, are the subject of the appeals
pending before the Pennsylvania District Court. Accordingly,
this Court lacks jurisdiction to enter orders or to entertain
motions which are within the ambit of the exclusive appellate
jurisdiction of the Pennsylvania District Court.

If this Court proceeds with the Motion there is also a
significant risk of inconsistent results. Were this Court to
enter an order purporting to define the property covered by the
Liquidator's constructive trust remedy, and subsequently, the
Pennsylvania District Court held that mandatory abstention
applied to the Constructive Trust Action, this Court's ruling
would be in clear conflict with the decision of the Pennsylvania
District Court.  This Court's order would be void as having been
entered without jurisdiction under Section 1334, and the limited
resources of the Debtors and the liquidation estate, as well as
this Court's judicial resources, will be "wasted on useless
litigation." Winimo Realty, 270 B.R. at 108.

The divestiture rule is mandatory and this Court was divested of
all jurisdiction to enter orders relating to the Constructive
Trust Action upon Debtors' and the Committees' filing of their
Notices of Appeal and the Liquidator's filing of her Notice of
Cross-Appeal. Griggs 459 U.S. at 58 (holding that it is the
filing of the notice of appeal which is the event of
jurisdictional significance). Accordingly, because the
Committees' Motion seeks relief in the form of a legal and
factual "finding" regarding the relief sought by the Liquidator
in the Constructive Trust Action, and because the Constructive
Trust Action is presently the subject of the Committees' own
appeal to the Pennsylvania District Court, as well as a cross-
appeal filed by the Liquidator, this Court has been divested of
all jurisdiction to grant the relief sought in the Motion and
referenced in the OTSC.

                  The Bankruptcy Court Lacks
              Jurisdiction Over the Liquidator

Mr. Richter last argues that because this Court lacks
jurisdiction over the Liquidator, it may not permissibly "order"
the Liquidator to "appear" and "show cause." The Liquidator is
not party to this bankruptcy matter. Nor has the Liquidator
consented to the general jurisdiction of this bankruptcy court.
Ms. Koken has appeared in this matter on a limited and special
basis to contest this Court's jurisdiction over property and
matters properly within the jurisdiction of the Commonwealth
Court of Pennsylvania. See, e.g., Loyd v. Stewart & Nuss, Inc.,
327 F.2d 642, 646 (9th Cir. 1964) (special appearance to contest
jurisdiction of bankruptcy court over disputed property does not
constitute consent to general jurisdiction of bankruptcy court);
In re National Cattle Congress, 247 B.R. 259, 268 (Bankr. N.D.
Ill. 2000), (recognizing special appearance).

In every document submitted to this Court, the Liquidator has
explicitly stated that the submission is not, and should not be
deemed to be, a general consent by Ms. Koken to this Court's
jurisdiction.  It has long been the law in this Circuit and
throughout the federal court system that "no court can make a
decree which will bind anyone but a party; a court of equity is
as much so limited as a court of law; it cannot lawfully [order
or] enjoin the world at large, no matter how broadly it words
its decree." Alemite Manufacturing Corp. v. Staff, 42 F.2d 832
(2d Cir. 1930 (Learned Hand, J.); see Lynch v. Rank, 639 F.
Supp. 69, 72 (N.D. Cal. 1985).

By entering the OTSC, this Court exercised jurisdiction over the
Liquidator commanding her to "appear" and "show cause," despite
the fact that "due process dictates and principles of fairness
counsel that [the Liquidator have] . . . an opportunity to
challenge's the . . . court's assertion of jurisdiction over
it." Gilchrist v. General Elec. Capital Corp., 262 F.3d 295, 300
(4th Cir. 2001) (quoting R.M.S. Titanic, Inc. v. Haver, 171 F.3d
943 (4th Cir. 1999)). Here, the Liquidator, a non-party, was
deprived of any opportunity to object to the jurisdiction of
this Court. She was deprived even of notice prior to the entry
of the OTSC. As the Gilchrist court discussed, unless a non-
party is properly served with process, and the court has
personal jurisdiction over the non-party, the court "is without
power" to command the non-party to submit to the authority of
the court. Gilchrist, 262 F.3d at 301.

Mr. Richter tells Judge Gonzalez that the above-described lapses
in appropriate procedure and the lack of jurisdiction provide
sufficient bases for this Court to vacate the OTSC and to deny
the Motion.

Judge Gonzalez has scheduled a hearing on this matter for May
16, 2002 at 4:00 pm EST. (Reliance Bankruptcy News, Issue No.
22; Bankruptcy Creditors' Service, Inc., 609/392-0900)


REPUBLIC TECH.: USWA Says Proposed Deal Stalls Asset Liquidation
----------------------------------------------------------------
The United Steelworkers of America said that the proposed
acquisition of Republic Technologies International by RTI
Acquisition Corporation, a newly-formed partnership between KPS
Special Situations Fund and Pegasus Partners, will prevent
Chapter 7 liquidation of most of the bankrupt steelmaker's
assets, thereby preserving the wages and benefits of
approximately 2,500 workers.

"The USWA is committed to ensure we preserve as many jobs as
possible," said USWA District Director David McCall.
"Discussions with representatives of the new company have
already led to several improvements to the Successor Labor
Agreement negotiated with RTI in January."

The improvements call for RTI to declare that all plants covered
by the current collective bargaining agreement will be declared
permanently shut down, and as a result, employees eligible for
Rule of 65 and 70/80 Retirements (pensions based on age plus
years of service) may apply for and receive their pensions.

In addition, faced with liquidation and the loss of all retiree
health care benefits the USWA was able to negotiate a partially
funded Voluntary Employee Benefit Association for retiree health
care.  In addition, at locations that the new company operates,
employees who qualify for shut down pensions will be entitled to
receive their pensions while continuing to work for the new
company.

Other improvements include a continuation of the current RTI
health insurance plan for active employees and the creation of a
pool that will be funded up to $550,000 for employees who may be
subject to involuntary layoff at the un-acquired facilities.

"Ohio has been among the states hardest hit by the current
crisis in the steel industry," McCall said, "and if RTI
continued to operate in its present form and slipped into
eventual Chapter 7, all the plants would have closed. Some might
have been bought and re-opened, but all of RTI's employees would
be in a far worse position."

For more information, contact: Pat Gallagher (216) 292-5683, or
visit the Web site: http://www.uswa.org


RHINO ENTERPRISES: Weaver Steps Down from Board of Directors
------------------------------------------------------------
Rhino Enterprises Group, Inc. (OTC Bulletin Board: RHNO)
announced that Daniel H. Weaver has resigned from the Company's
Board of Directors effective March 27, 2002.  Mr. Weaver will
continue to provide assistance to the Company as a financial
consultant and to evaluate other potential Board members.  It
was indicated that Mr. Weaver will focus on identifying and
developing intellectual properties and, where appropriate,
working closely with Rhino in this effort.

Joe Glover, the company's Chairman stated, "Mr. Weaver joined
the Company in 1998 to serve as Treasurer, with the intention of
assisting Rhino for a limited period of time in fulfilling the
Company's public reporting requirements and in implementing the
company's strategic plan.

"Dan has been a key member of Rhino's executive team, and I
thank him for his commitment, leadership and firm commitment to
Rhino during this very difficult period," Glover continued.

Rhino recently consolidated operations with a target acquisition
while continuing to pursue additional funding for implementation
of its strategic plan.

For additional information, please visit the Company's Web site
at http://www.Rhino-Inc.com

                          *    *    *

Rhino Enterprises' balance sheet at September 30, 2001 showed a
working capital deficit of close to $6 million, and a total
shareholders' equity deficit of about $4.4 million.

                Liquidity And Capital Resources

Since restarting operations in 1999, Rhino Enterprises incurred
losses and accumulated a deficit of approximately $7,376,000.
In addition, its has approximately $5,697,000 of current
liabilities against approximately $71,813 of current assets.

The company has been able to obtain long term capital resources
through private placement offerings of its common and preferred
stock, and to arrange for short term liquidity by issuing notes
payable. However, there can be no assurance that it may not
continue to experience liquidity problems or be successful in
obtaining sufficient working capital on a timely basis in the
future. The company anticipates that it will have to continue to
sell common and/or preferred stock and borrow additional funds
to provide sufficient working capital to fund operations during
2001.


SAFETY-KLEEN: Taps BBM/MSG to Help Prosecute Claims Against PwC
---------------------------------------------------------------
Represented by Michelle McMahon, Esq., at Connolly Bove Lodge &
Hutz LLP in Wilmington, Safety-Kleen Corp., and its debtor-
affiliates seek entry of an order, pursuant to section 327(a) of
the Bankruptcy Code, authorizing them to employ and retain BBM
Corp./MSG as consultants.  The Debtors seek to retain BBM
Corp./MSG to assist the Debtors in investigating and prosecuting
certain causes of action held by the Debtors, including, but not
limited to, the estate's claims against PwC.

BBM Corp./MSG will analyze the financial information available
and develop additional information as necessary to assist the
Debtors and their counsel in investigating and prosecuting
certain causes of action held by the Debtors, including, but not
limited to, the PwC Claims. BBM Corp./MSG has extensive
experience consulting on accounting and financial issues central
to on-going or potential litigation and would be an integral
part of this investigation and litigation.

Section 327(a) of the Bankruptcy Code authorizes a debtor, with
court approval, to retain ". . . professional persons that do
not hold or represent an interest adverse to the estate, and
that are disinterested persons, to represent or assist the
[debtors] in carrying out the [debtors'] duties under this
title." 11 U.S.C. Sec. 327(a).   Ms. McMahon tells Judge Walsh
that BBM Corp./MSG's services are necessary and would be in the
best interests of the Debtors and their estates. BBM Corp./MSG's
advice is critical to the Debtors' investigation of the conduct
of PwC and in prosecuting whatever litigation is warranted.
Without such advice, the Debtors may unknowingly forego
pursuing, or inadequately pursue, what could be a valuable claim
of their estates.

BBM Corp./MSG intends to apply to the Court for payment of
compensation and reimbursement of expenses in accordance with
the applicable provisions and standards of the Bankruptcy Code,
the Bankruptcy Rules, the guidelines promulgated by the Office
of the United States Trustee, and the local rules of this Court.
Subject to Court approval in accordance with section 330(a) of
the Bankruptcy Code, compensation will be payable to BBM
Corp./MSG on an hourly basis, plus reimbursement of actual,
necessary expenses incurred by BBM Corp./MSG. BBM Corp./MSG's
standard hourly rates are:

        Position                         Hourly Billing Rate
        --------                         -------------------
     Managing Director                          $545
     Senior Expert                              $545
     Vice President                             $475
     Manager                                    $445
     Associates                                 $250 - $325
     Analyst                                    $225
     Junior Analysts                            $ 75 - $125

These rates are subject to adjustment annually as of January 1st
of each year. The individuals principally assigned to assisting
the Debtors will be Dr. Dennis Logue, Dr. Allen Michel and
Heather Tullar, whose hourly rates are respectively, $545, $545
and $445. Additionally, other BBM Corp./MSG employees may assist
in providing services to the Debtors as needed. The rates listed
above are BBM Corp./MSG's current rates charged to bankruptcy
and nonbankruptcy clients alike.

Allen J. Michel, a Managing Director of The Michel/Shaked Group,
a division of Back Bay Management Corporation, which maintains
its office at 566 Commonwealth Avenue, Suite 100, Boston,
Massachusetts, avers to Judge Peter Walsh that neither BBM
Corp./MSG nor any of its employees, insofar as Mr. Michel has
been able to ascertain after due inquiry, currently represents
any interest adverse to the Debtors or their estates. To the
best of my knowledge, as set forth below, BBM Corp./MSG is a
"disinterested person" within the meaning of section 101(14) of
the Bankruptcy Code.  Neither BBM Corp./MSG nor any of its
employees, insofar as I have been able to ascertain after due
inquiry, has any prior connection (connection being defined as a
professional relationship) with the Debtors, their creditors,
any other party in interest in this case, their respective
attorneys and accountants, the United States Trustee for the
Region of New Jersey, Delaware and Pennsylvania, or any other
person employed in the office of the United States Trustee,
except to the extent that certain of BBM Corp./MSG's employees
(i) may have advised in the past and may advise in the future
in unrelated situations where one or more of said parties may be
involved, and (ii) may have advised or may advise one or more of
said parties in matters wholly unrelated to this case.

To the best of Mr. Michel's knowledge, after due inquiry, BBM
Corp./MSG:

        (a) is not a creditor of the Debtors, an equity security
holder of the Debtors, or an "insider" of the Debtors,

        (b) does not have an interest materially adverse to the
Debtors' estates, or of any class of creditors or equity
security holders, by reason of any direct or indirect
relationship to, connection with, or interest in, the Debtors or
an investment banker, and

       (c) is disinterested within the meaning of the Bankruptcy
Code in the matters for which approval of employment is sought.
(Safety-Kleen Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


STARWOOD HOTELS: Negotiating to Refinance Senior Credit Facility
----------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) reported
results for the first quarter of 2002.

First Quarter Financial Results

      - EPS, excluding special items, was $0.08 compared to $0.30
in 2001. Including special items, EPS was $0.16 compared to
$0.30 in 2001.

      - Total revenues, excluding other revenues from managed and
franchised properties, decreased 11.8%. Revenue per available
room for Same-Store Owned Hotels decreased 15.3% in North
America and 16.2% worldwide when compared to 2001.

      - Total Company EBITDA was $228 million compared to $335
million in 2001. EBITDA at Comparable Owned Hotels worldwide
decreased 29.8% to $190 million. EBITDA at Comparable Owned
Hotels in North America decreased 29.0% to $152 million.

      - Total Company EBITDA margin was approximately 25.5%.
EBITDA margin at Comparable Owned Hotels in North America was
27.3%, up 270 basis points from the fourth quarter of 2001.

              First Quarter Ended March 31, 2002

Excluding net benefits for special items of $23 million in 2002
and net benefits of $1 million in 2001, EPS was $0.08 compared
to EPS of $0.30 in the corresponding period of 2001. Including
these special items, EPS was $0.16 compared to EPS of $0.30 in
2001. Total revenues were down 11.8% to $894 million compared to
the same period of 2001. Operating income, excluding special
items, was $101 million compared to $192 million in the same
period of 2001 and net income, excluding special items, was $17
million compared to $61 million in the same period of 2001.
Though in line with the Company's expectations, results were
adversely impacted by the weakened worldwide economic
environment and the shift of the negative impact of the
Passover/Easter holiday from the second quarter in 2001 to the
first quarter in 2002. However, operating results were
significantly improved when compared to the fourth quarter of
2001 as a result of an improving demand environment, a continued
focus on cost control and a significant increase in vacation
ownership interest results. Depreciation expense increased when
compared to the first quarter of 2001 due to the continued
renovation program and the repositioning and acquisition of
certain hotels. Results further benefited from reduced interest
expense resulting from a reduction in interest rates and the
completion of financing transactions in the past year and a
$16.0 million after-tax reduction in goodwill amortization as a
result of a new accounting rule pertaining to goodwill and
intangible assets.

                       Comments from the CEO

Barry S. Sternlicht, Chairman and CEO said, "We were generally
pleased with our first quarter performance. More importantly,
trends are encouraging as REVPAR improved sequentially nearly
every week up to the Passover/Easter holiday period and into
April. Combined with tight cost controls, we now expect to
exceed our earlier forecasts and feel comfortable raising our
annual estimates. The important New York City market is
recovering well and Europe and Asia appear likely to exceed our
original expectations. Conditions remain challenging in South
America. Our owned portfolio is concentrated in the larger urban
markets which have been disproportionately impacted by the air
travel situation and the continued slowdown in business and
international travel. We are, however, very encouraged by the
declining trends in new construction and perhaps the discipline
for new supply that new investor scrutiny of off-balance-sheet
financing will bring. Our brand momentum is strong, our guest
satisfaction scores are increasing across all brands, our
management and franchise business is expanding under difficult
conditions and without much balance sheet support, particularly
in the Asian markets where we have secured valuable contracts,
the St. Regis' team is seasoning and we are very pleased with
terrific results from our interval ownership projects. In the
quarter, we also launched a new Westin advertising campaign and
recently announced the launch of our latest initiatives behind
Sheraton."

Concluding, Mr. Sternlicht said, "We are pleased to have
completed the $1.5 billion senior notes offering and expect to
complete a new bank facility in the coming months to refinance
all remaining near-term maturities. We are actively working with
potential buyers of CIGA assets and would expect to enter
binding agreements in the next few months subject to tax and
other structuring issues."

                First Quarter 2002 Operating Results

At the Company's Comparable Owned Hotels worldwide, revenues
decreased approximately $136 million to $719 million from $855
million in 2001 and EBITDA decreased 29.8% to $190 million from
$271 million in 2001. EBITDA at the Company's Comparable Owned
Hotels in North America decreased 29.0% to $152 million when
compared to the same period of 2001. EBITDA at the Company's
Comparable Owned Hotels internationally decreased 32.6% to
approximately $38 million when compared to the same period of
2001 (a 26.7% decrease excluding the unfavorable effects of
foreign exchange). The decline in operating results at
Comparable Owned Hotels in North America when compared to 2001
reflect the impact of lower REVPAR primarily attributable to the
weakened global economies.

REVPAR at Same-Store Owned Hotels worldwide decreased 16.2% when
compared to the same period of 2001 as a result of a decline in
occupancy rates of 580 basis points to 60.9% and a decline in
average daily rate ("ADR") of 8.3% from the prior year. REVPAR
at Same-Store Owned Hotels in North America decreased 15.3% to
$93.94 when compared to the same period of 2001 as a result of a
decrease in occupancy rates to 61.6% from 67.1% in the prior
year, while ADR decreased 7.8% to $152.43. Internationally,
Same-Store Owned Hotel REVPAR decreased 19.5%.

EBITDA margins at Comparable Owned Hotels worldwide decreased to
26.5% when compared to 31.7% in the same period of 2001. In
North America, EBITDA margins at Comparable Owned Hotels
decreased to 27.3% when compared to 32.5% in the same period of
2001 but increased 270 basis points when compared to 24.6% in
the fourth quarter of 2001. Internationally, EBITDA margins at
Comparable Owned Hotels decreased to 23.8% when compared to
29.1% in the same period of 2001 but increased 170 basis points
when compared to 22.1% in the fourth quarter of 2001.

During the first quarter of 2002, the Company added nine
management and franchise contracts representing approximately
2,500 rooms, including the Sheraton Krabi Beach Resort (246
rooms) in Krabi, Thailand; the Westin Miyako Kyoto (516 rooms)
in Kyoto, Japan; and the Four Points Seoul (269 rooms) in Seoul,
Korea. Through the end of 2003, the Company's backlog of quality
hotels and resorts around the world includes 47 new destinations
with more than 14,000 rooms.

Starwood Vacation Ownership, Inc. currently has 15 interval
ownership resorts in its portfolio. SVO is selling VOI inventory
at ten resorts and engaged in pre-opening sales at two others
currently under construction (Westin Mission Hills Resort Villas
in Rancho Mirage, California and Westin Kaanapali Ocean Resort
Villas in Maui, Hawaii). Sales in the first quarter were
particularly strong at the Maui and Mission Hills resorts. SVO
will begin construction of its fourth Westin-branded interval
ownership resort later this year featuring 158 villas located
adjacent to the Westin Kierland Resort & Spa in Scottsdale,
Arizona. The resort is scheduled to open in late 2002. The
Company did not sell any notes receivable originated by the
vacation ownership operations in the first quarter of 2002.

                          Dispositions

The Company continues to review its portfolio for disposition
candidates. In January, the Company announced that it had
initiated the formal sale process for the CIGA portfolio of 25
luxury hotels, land, golf courses and marinas. The Company has
reviewed indications of interest, is working toward binding
agreements, and expects to enter into contracts for sale in the
next few months.

                            Capital

During the first quarter of 2002, the Company invested
approximately $58 million in capital assets, including
completion of the W Times Square, the guest room and lobby
renovation at the Westin Excelsior in Rome (316 rooms) and VOI
construction at Westin Mission Hills Resort Villas in Rancho
Mirage, California and Westin Ka'anapali Ocean Resort Villas in
Maui, Hawaii as well as the ongoing development of the St. Regis
Museum Tower in San Francisco (269 rooms and 102 condominiums)
scheduled for completion in 2004. Work also continues on the new
Sheraton prototype. The Company spent an additional $14 million
on other hotel investments including completion of the buyout of
its minority partners at the W Los Angeles and minority
investments in a number of new hotel projects including the W
Mexico City (228 rooms) and the W San Diego (261 rooms).

                           Financing

On March 31, 2002, the Company had total debt of $5.566 billion
and cash and cash equivalents of $174 million. At the end of the
first quarter of 2002, after giving effect to the Senior Notes
Offering and related termination of certain floating interest
rate swaps and new fixed interest rate swaps described below,
the Company's debt was approximately 56% fixed rate and 44%
floating rate and its weighted average maturity was 6.1 years.
As of March 31, 2002, the Company had cash and availability
under its domestic and international revolving credit facilities
of approximately $731 million and the Company's debt had a
weighted average interest rate of 5.26% (5.47% after giving
effect to the Senior Notes Offering).

In December 2001, the Company entered into an 18-month 450
million Euro loan with an interest rate of Euribor plus 195
basis points. The proceeds of the Euro loan were drawn down in
two tranches; the first 270 million Euros was drawn down in
December and used to repay the previously outstanding 270
million Euro facility and the remaining 180 million Euros was
drawn down in January 2002 and the proceeds were used to pay
down a portion of the Company's domestic revolving credit
facility.

In April 2002, the Company sold $1.5 billion of senior notes in
two tranches -- $700 million principal amount of 7-3/8% senior
notes due 2007 and $800 million principal amount of 7-7/8%
senior notes due 2012 (the "Senior Notes Offering"). The Company
used the proceeds to repay all of its senior secured notes
facility and a portion of its senior credit facility. The
Company expects to refinance the senior credit facility over the
coming months.

In connection with the repayment of debt with the senior notes
offering proceeds and the anticipated refinancing of the
remaining senior credit facility, the Company expects to incur
approximately $30 million of one-time charges in the second
quarter. These charges relate to the write-off of deferred
financing costs, termination fees for the early extinguishment
of debt, and terminated interest rate swaps associated with the
repaid debt.

At March 31, 2002, Starwood had approximately 202 million shares
outstanding (including partnership units and exchangeable
preferred shares).

                            Dividend

In January 2002, Starwood Hotels & Resorts paid a fourth quarter
dividend of $0.20 per share, representing a 16% increase over
the prior year quarterly dividend. In 2002, the Company has
shifted from a quarterly dividend to an annual dividend. The
final determination of the amount of the dividend will be
subject to economic and financial considerations and Board
approval in the fourth quarter of 2002.

                          Special Items

The Company recorded net benefits of $23 million (pretax) for
special items in the first quarter of 2002 when compared to net
benefits of $1 million in the same period of 2001.

The net benefits in the first quarter of 2002 primarily
represent a non-cash foreign exchange gain of approximately $24
million (pretax), which reduced selling, general, administrative
and other costs, resulting from the devaluation of the Argentine
Peso and a credit for the reversal of impairment charges for an
e-business investment and certain receivables no longer deemed
impaired, offset by a $3 million loss on asset dispositions
primarily related to an impairment charge to reduce the carrying
value of a hotel to its fair value. The foreign exchange gain
represents the mark-to-market, in accordance with Statement of
Financial Accounting Standards No. 52, of a U.S. dollar
intercompany receivable in Argentina.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading
hotel and leisure companies in the world with more than 740
properties in over 80 countries and 110,000 employees at its
owned and managed properties. With internationally renowned
brands, Starwood is a fully integrated owner, operator and
franchiser of hotels and resorts including: St. Regis(R), The
Luxury Collection(R), Sheraton(R), Westin(R), W(R) and Four
Points(R) by Sheraton brands, as well as Starwood Vacation
Ownership, Inc., one of the premier developers and operators of
high quality vacation interval ownership.

                          *    *    *

As previously reported, Fitch Ratings has assigned a 'BB+'
rating to Starwood Hotels & Resorts Worldwide, Inc.'s (NYSE:HOT)
$1.0 billion in senior notes issued under Rule 144A. The
proposed senior notes was issued in two tranches, five-year
senior notes due 2007 and 10-year senior notes due 2012. The
proceeds from the issuance were used to repay $500 million in
Increasing Rate Notes (IRNs) and a portion of HOT's senior
credit facility. Revolver availability at Dec. 31, 2001, was
approximately $440 million. The Rating Outlook is Negative.

The following ratings have been affirmed:

Starwood Hotels & Resorts Worldwide Inc.:

--Implied senior unsecured rating at 'BB+';
--$1.1 billion revolving credit facility due 2003 at 'BB+';
--$775 million term loan due 2003 at 'BB+;'
--$423 million term loan due 2003 at 'BB+';
--$507 million in series A & series B convertible notes due
   2021 at 'BB+'.

ITT Corporation:

--$250 million 6.75% notes due 2003 at 'BB+';
--$450 million 6.75% notes due 2005 at 'BB+';
--$448 million 7.375% debentures due 2015 at 'BB+';
--$148 million 7.75% debentures due 2025 at 'BB+'.


TELEGLOBE INC: S&P Junks Ratings After Parent Cuts-Off Funding
--------------------------------------------------------------
Standard & Poor's lowered its ratings on Teleglobe Inc. on April
24, 2002. The 'CC' ratings remain on CreditWatch with negative
implications, where they were placed April 9, 2002.

The downgrade follows the announcement by Teleglobe's parent
company, BCE Inc., that BCE will cease further long-term funding
to Teleglobe, and will only provide short-term periodic funding
up to a maximum amount of US$125 million.

The ratings actions are based on the expectation that Teleglobe
will enter into negotiations with its debtholders to restructure
its debt and explore possibilities for a business combination.

Subsequent to the successful completion of a recapitalization,
Standard & Poor's will reassess the company's future ratings
based on its revised business and financial profile. On
completion of an offer, the long-term corporate credit rating
will be lowered to 'SD' (selective default) and the senior
unsecured debt rating will be lowered to 'D'. Standard & Poor's
would consider the completion of the exchange to be tantamount
to a default since bondholders will be receiving less than par
as a result of the offer.


TITAN CORP: S&P Rates $450 Mill. Senior Credit Facilities at BB-
----------------------------------------------------------------
On April 26, 2002, Standard & Poor's assigned a 'BB-' rating to
Titan Corp.'s $450 million senior secured credit facilities and
affirmed its corporate credit and preferred stock ratings on the
San Diego-based company. Outlook is stable.

The ratings on The Titan Corp. and Titan Capital Trust reflect
predictable revenue and cash flow generation, a well-diversified
program portfolio, and favorable growth prospects for its
commercial businesses. Titan develops and deploys communication
and information technology solutions and services for both
government and commercial customers. Titan competes in a
consolidating industry with many participants, some of which are
much larger. In addition, the company has an active acquisition
growth strategy.

With fiscal 2001 revenues exceeding $1.1 billion and pro forma
net income of $29 million, Titan's focus is primarily on the
government IT sector, which represents more than 80% of revenue,
cash flow, and backlog. Near-term revenue growth in this segment
is expected to be in the 10% range, while operating margins are
in the 8% range.

Opportunities exist, however, to expand Titan's currently small
but profitable commercial businesses. This segment includes
international telecommunications, E-business solutions, and
emerging technologies. Capital expenditures are moderate but
could expand over the next few years to support these commercial
initiatives.

Earnings and cash flow visibility is supported by a respectable
contract backlog, exceeding $3 billion. At current ratings
levels, debt to EBITDA is expected to fluctuate between the 3.5
times area and lower levels, depending upon acquisition
opportunities.

                             Outlook

A stable cash flow base limits downside credit risk. Management
is expected to structure and pace acquisitions to support
current credit quality.


TRINITY INDUSTRIES: Q1 2002 Net Loss Narrows to $8.6 Million
------------------------------------------------------------
Trinity Industries, Inc., (NYSE: TRN) reported financial results
for the first quarter of 2002.

For the quarter ended March 31, 2002, the company reported a net
loss of $8.6 million on revenues of $384.3 million. This
compares to a net loss of $39.7 million on revenues of $418.7
million in the first quarter of 2001.  The prior year quarter
included unusual charges of $55.8 million ($35.7 million after
tax) primarily related to plant closings and litigation.

"I am pleased our non-rail related business segments improved
profitability over the prior year," said Timothy R. Wallace,
Trinity's chairman, president and CEO.  "We are continuing to
benefit from the diversification of our other businesses while
the railcar industry is experiencing a major downcycle."

"The U.S. industry orders for railcars and the deliveries of
railcars are at a 14 year low point.  While we have seen a small
increase in demand for a few types of railcars, we are not in a
position to predict the timing of a turn around for the industry
at this point.  Our current outlook for 2002 is a small loss in
the range of 5 to 25 cents per share," Wallace said.

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

                          *   *   *

As reported in the March 1, 2002 edition of Troubled Company
Reporter, Trinity Industries said that its appetite for capital
for additions to the lease fleet might put pressure on its
financial debt covenants as presently structured in the second
half of the year.  The company expects to renegotiate its credit
lines before the end of June and consider other sources of
capital.  While the company does not intend to give specific
earnings guidance, its present profit outlook for the year is
around breakeven on a consolidated basis and a loss for the Rail
Group.


USG CORP: Asks Court to Approve Bar Dates & Claims Procedures
-------------------------------------------------------------
Paul N. Heath, Esq., at Richards, Layton & Finger, relates that
in order to help USG Corporation and its debtor-affiliates
complete the reorganization process and make distributions under
any plan or plans or reorganization confirmed in these cases,
the Debtors require complete and accurate information regarding
the claims' nature, validity and amount that will be asserted in
these Chapter 11 cases.

He tells Judge Newsome, pursuant to Bankruptcy Rule 3003(c)(3)
and Local Bankruptcy Rule 2002-1(e), the Debtors want him to
establish the Bar Dates and the proposed related claims
procedures and approve the form and manner of the claim notice.

The General Bar Date, continues Mr. Heath, will apply to all
claims of any kind EXCEPT "Asbestos-Related Personal Injury
Claims."

Without limiting the foregoing, claims that must be filed by the
General Bar Date include:

        * any personal injury or wrongful death claim that is NOT
          an Asbestos-Related Personal Injury Claim: and

        * all "Asbestos-Related Property Damage Claims."

                     The General Bar Date

Bankruptcy Rule 3003(c)(3), Mr. Heath explains, requires that
the Court fix a time within which proofs of claims must be
filed. The Debtors anticipate that they will serve all known
entities holding potential General Claims notice of the Bar
Dates.  They will also provide a proof of claim form within 15
days after the date that an order is entered approving this
Motion and establishing the Bar Dates. As a result, the Debtors
request that Court establish November 15, 2002 as the General
Bar Date by which all entities holding pre-petition General
Claims, including governmental units, must file proofs of claim
with respect to such General Claims. Establishing November 15,
2002 as the General Bar Date will provide entities with General
Claims against the Debtors approximately six months from the
commencement of the proposed notification period to file such
claims.

                      The Rejection Bar Date

The Debtors anticipate that certain entities may assert claims
in connection with the Debtors' rejection of executory contracts
and unexpired leases pursuant to Section 365 of Bankruptcy Code.
The Debtors propose that, for any claim relating to a Debtor's
rejection of an executory contract or un-expired lease approved
by the Court pursuant to an order entered prior to confirmation
of the applicable Debtor's reorganization plan, the Rejection
Bar Date for that claim will be the later of the General Bar
Date; and 30 days after the date of the Rejection Order. The
Debtors will recite the Rejection Bar Date in any order
approving the rejection of an executory contract or unexpired
lease.

                     The Amended Schedule Bar Date

Mr. Heath states the Debtors further propose that they will
retain the right:

      * to dispute, or assert offsets or defenses against, any
        filed claim or any claim listed or reflected in the
        Schedules as to nature, amount, liability,
        classification, or otherwise;

      * subsequently designate any claim as disputed, contingent,
        or un-liquidated; and

      * otherwise amend their Schedules.  This is provided
        however, that if a Debtor amends their Schedules to
        reduce the undisputed, non-contingent, and liquidated
        amount or to change the nature or classification of a
        claim against the Debtor, the affected claimant will have
        until the Amended Schedule Bar Date to file a proof of
        claim in respect of the amended scheduled claim. The
        Debtors request that the Amended Schedule Bar Date be
        established as the later of the General Bar Date; and 30
        days after the date that notice of the applicable
        Schedules amendment is served on the claimant. The notice
        will recite the Amended Schedule Bar Date. Nothing
        contained here would preclude the Debtors from objecting
        to any claim, whether scheduled or filed, on any grounds.


    Proofs of Claim that Must be Filed by the General Bar Date

The Debtors also propose, continues Mr. Heath, that certain
claims holders subject to the Rejection Bar Date or the Amended
Schedule Bar Date, must file proofs of claim with respect to
General Claims on or before the General Bar Date:

      * any entity whose pre-petition claim against a Debtor is
        not listed in the applicable Debtor's Schedules or is
        listed as disputed, contingent, or un-liquidated and that
        desires to participate in any of these Chapter 11 cases
        or share in any distribution in any of these Chapter 11
        cases; and

      * any entity that believes that its pre-petition General
        Claim is improperly classified in the Schedules or is
        listed in an incorrect amount and desires to have its
        General Claim allowed in a classification or amount other
        than that identified in the Schedules.

    Proofs of Claim Not Required Filed by the General Bar Date

These entities need not file proofs of claim:

      * any entity that already has properly filed a proof of
        claim against one or more of the Debtors in accordance
        with procedures described here;

      * any entity whose claim against a Debtor is not listed as
        disputed, contingent, or un-liquidated in the Schedules,
        and that agrees with the nature, classification, and
        amount of its claims as identified in the Schedules;

      * any entity whose claim against a Debtor previously has
        been allowed by, or paid pursuant to, an order of the
        Court;

      * any of the USG Companies, including any Debtors that hold
        claims against one or more of the other Debtors;

      * any entity whose claim is limited exclusively to a claim
        for the repayment by the applicable Debtor of principal,
        interest and other applicable fees and charges on or
        under USG's Five Year Credit Agreement or 364-Day Credit
        Agreement, each dated June 30, 2000; USG's 9 1/4 % Senior
        Notes Due 2001; USG's 8 1/2 % Senior Notes due 2005;
        various issuances by the Debtors of industrial revenue
        bonds; or indentures in respect to any of these.  This is
        provided however, that the administrative agent bank
        under the Pre-petition Credit Agreement will be required
        to file a proof of claim on account of Debt Claims on or
        under the Pre-petition Credit Agreement on or before the
        General Bar Date; the indenture trustees under the
        Indentures will be required to file proofs of claim on
        account of Debt Claims on or under the applicable Debt
        Instruments on or before the General Bar Date; and any
        holder of a Debt Claim under the Pre-petition Credit
        Agreement, other than a Debt Claim, will be required to
        file a proof of claim on or before the General Bar Date,
        unless another exception identified in this paragraph
        applies; and

      * an administrative expense of any Debtor's Chapter 11 case
        under Section 503(b) of the Bankruptcy Code.

Mr. Heath adds that the Debtors propose that the General Bar
Date not apply to Asbestos-Related Personal Injury Claims,
without prejudice to the Debtors' right to request the
establishment of one or more bar dates with respect to Asbestos-
Related Personal Injury Claims.

               No Requirement to File Proofs of Claim

The Debtors propose that any entity holding an interest in any
Debtor, and the interest is based exclusively on the ownership
of common preferred stock in a corporation; a membership
interest in a limited liability company; or warrants or rights
to purchase, sell, or subscribe to such a security or interest,
need not file a proof of interest on or before the General Bar
Date.  This is provided however, that the Interest Holders that
wish to assert claims against any of the Debtors must file
proofs of claim on or before the General Bar Date, unless
another exception applies.

              Effect of Failure to File Proofs of Claim

The Debtors propose that, pursuant to Bankruptcy Rule
3003(c)(2), relates Mr. Heath, any entity that fails to file a
proof of claim by the applicable Bar Date is forever barred,
estopped, and enjoined from asserting any General Claim against
the Debtors. In the Schedules, explains Mr. Heath, the Debtors
dispute all Asbestos-Related Property Damage Claims. As a
result, any entity that does not properly file an Asbestos-
Related Property Damage Claim by the General Bar Date will be
forever barred, estopped and enjoined from a) asserting that
Asbestos-Related property Damage Claim against the Debtors.

              Procedures for Providing Bar Date Notice

The Debtors propose to serve on all known entities holding
potential pre-petition Non-Asbestos Claims a Bar Dates notice
and a proof of claim form.

The Bar Date Notice states that proofs of claim for Non-Asbestos
Claims must be filed with Logan on or before the applicable Bar
Date, no later than 15 days after the date the Court enters the
Bar Date Order. The Debtors intend to mail the Non-Asbestos Bar
Date Notice Package by first class mail, postage prepaid, to all
known potential holders of Non-Asbestos Claims.

The Claim form will state, along with the claimant's name:

      * whether the claimant is listed in the schedules; and, if
        so,

      *the Debtor against which the Non-Asbestos Claimant's claim
       is scheduled;

      *whether the claim is listed as disputed, contingent, or
       unliquidated; and

      *whether the Non-Asbestos Claim is listed as secured,
       unsecured, or priority.

If a claim is listed in the Schedules in a liquidated amount
that is not disputed or contingent, the dollar amount of the
claim also will be identified on the Non-Asbestos Proof of Claim
Form. Any entity that relies on the information in the Schedules
will bear responsibility for determining that its claim is
accurately listed therein.

A signed, original of a completed Claim Form, together with
accompanying documentation required by Bankruptcy Rules 3001(c)
and 3001(d), must be delivered to Logan at the address on the
Bar Date Notice and received no later than 5:00p.m. Eastern
Time, on the applicable Bar Date. The claims must be written in
English, denominated in U.S. currency and conform to the Non-
asbestos Proof of Claim Form. The Debtors ask that the Claims be
submitted in person or by courier, hand delivery, or mail. Faxed
and emailed proofs of claim will not be accepted.

The Debtors suggest a date approximately six months after the
Debtors serve the Non-Asbestos Bar Date Notice Package in these
Chapter 11 cases to give the claimants ample time to review the
Schedules and prepare and file proofs of claim.

The Debtors also request that entities asserting Non-Asbestos
Claims against more than one Debtor be required to file a
separate proof of claim with respect to each Debtor. This will
enable Logan to maintain separate claims registers for each
Debtor. Claimants also must identify the Debtor against which a
claim is asserted.

The Debtors request Judge Newsome's permission to publish notice
of the Bar Dates, pursuant to Bankruptcy Rule 2002(1), twice in
each of the Chicago Tribune and the national editions of the
Wall Street Journal, The New York Times, an USA Today. The first
publication will be within 45 days of entry of the Bar Date
Order, and the second publication will not be more than 90 days
and not less than 60 days before the General Bar Date. The
General Publication Notice will contain a website address where
potential Non-Asbestos Proof of Claim Form and related
instructions and a toll-free number where potential Non-Asbestos
Claims which may not be contained in the General Publication
Notice. (USG Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


USDATA CORP: Has Working Capital Deficit of $1.4MM at March 31
--------------------------------------------------------------
USDATA Corporation (Nasdaq:USDC), a global provider of
industrial automation software and services, announced operating
results for the first quarter of 2002.

The company reported a loss from operations, before
restructuring charge, of $511,000 for the first quarter of 2002
compared to a loss from operations of $478,000 in 2001. Loss
from operations including the restructuring charge was $867,000.
Net loss applicable to common stockholders was $1.6 million for
the first quarter of 2002 compared to net loss applicable to
common stockholders of $8.7 million in 2001.

During the first quarter ended 2002, the company amended its
office lease agreement, which provides for the landlord removing
approximately 44,400 square feet of excess office space under
its facility lease. This will be a cash savings to the company
of approximately $1.0 million in lease costs during 2002.

Revenues were $2.6 million for the first quarter ended 2002
compared to $3.5 million for the same period in 2001,
representing a decline of 25%.

Net cash flow provided by operations was $590,000 for the first
quarter ended 2002, a significant improvement when compared to a
negative cash flow from operations of $721,000 in 2001. Earnings
before interest, taxes, depreciation and amortization, excluding
restructuring charges, were $294,000 for the first quarter ended
2002, compared to $419,000 in 2001.

Also, at March 31, 2002, the company's total current liabilities
exceeded its total current assets by about $1.4 million.

Bob Merry, President and Chief Executive Officer of USDATA
commented on today's announcement, "The softness in revenue for
the first quarter 2002 continues to be consistent with overall
industry performance." Mr. Merry continued, "Although these are
challenging times for our industry, we have aligned our plan
with current market conditions and we are building a strong
foundation for the future. As we begin 2002, our focus is on
revenue generation and developing customer solutions with our
partners around the world. For example, we have recently stepped
up our advertising and completed our TechTour 2002 seminars in
23 cities in North America and Western Europe. When the industry
recovers, we will be prepared with well designed, innovative
products and services to help our customers achieve their goals
with the lowest total cost of ownership and risk."

Now in its 27th year, USDATA Corporation, headquartered in
Richardson, Texas (NASDAQ: USDC) is a leading global provider of
software and services that gives enterprises the knowledge and
control needed to perfect the products they produce and the
processes they manage. Based upon a tradition of flexible
service, innovation and integration, USDATA's software currently
operates in more than 60 countries around the globe, including
seventeen of the top twenty-five manufacturers. USDATA's
software heritage is borne out of manufacturing and process
automation solutions and has grown to encompass the industry's
deepest product knowledge and control solutions. With an eye
towards the future of e-business, USDATA continues to innovate
solutions that will support the integration of enterprise
production and automation information into the supply chain. The
company has six offices worldwide and a global network of
distribution and support partners. For more information, visit
USDATA on the Web at http://www.usdata.com


U.S. INDUSTRIES: Hubbell Acquires LCA Group Assets for $250MM
-------------------------------------------------------------
Hubbell Incorporated (NYSE: HUBA, HUBB) announced the completion
of its acquisition of LCA Group, Inc., the domestic lighting
division of U.S. Industries, Inc., (NYSE: USI).

The purchase price was $250 million in cash subject to
adjustment based on certain circumstances.

The newly acquired operations manufacture a comprehensive range
of indoor and outdoor lighting products for industrial,
commercial, institutional, and residential markets. The group
has major manufacturing facilities in six states and multiple
distribution centers strategically located throughout the United
States. In combination with the Company's existing operations
serving the same end-markets, Hubbell's lighting businesses will
generate annual sales in excess of $800 million.

"We are excited about the tremendous opportunity that this
addition brings to Hubbell," said Tim Powers, President and
Chief Executive Officer. "It is an ideal acquisition in every
detail:

      -   A perfect fit to our strategic objective of larger
acquisitions affording rapid integration into Hubbell's core
businesses,

      -   It is immediately accretive to earnings beginning today
even before operating synergies are achieved,

      -   It adds complementary product lines with minimal
overlap that moves Hubbell into the top tier of U.S. lighting
fixture suppliers,

      -   And, of equal importance, Hubbell has gained a skilled,
results-oriented management team, in-place, and ready to move
forward."

The new Hubbell Lighting is one of the largest lighting product
manufacturers in North America. Its portfolio of prominent brand
names comprises a product offering second-to-none in the
industry. These include:

      Alera Lighting: Specification grade commercial and
institutional architectural fluorescent fixtures for offices,
schools, and airports.

      AAL (Architectural Area Lighting): Flood lights, step
lights, sconces, bollards, poles and mounting arms in period,
contemporary and customer designs for commercial and industrial
applications.

      Chalmit: Fixtures and components for harsh and hazardous
locations.

      Columbia: Specification and commercial grade fluorescent
fixtures for commercial and industrial applications.

      Devine: Decorative and durable outdoor luminaries including
the broadest step light and walkway offering in the industry.

      Dual-Lite: Commercial and industrial safety products
including exit signage, emergency lighting, and control AC
inverter systems.

      Hubbell: Multiple product lines for down, track, and
emergency lighting, lighting controls, and components for
industrial, commercial, and residential markets.

      Hubbell Entertainment: Specialized luminaries for stage,
arena, and concert facilities.

      Killark: Standard application and harsh and hazardous
location fixtures for industrial and commercial applications.

      Kim: Outdoor area and architectural fixtures combining
custom design, high performance optics, and elegant styling for
area, roadway, pedestrian and landscape lighting.

      Prescolite: Recessed and surface mounted down lights and
track lighting for commercial and residential markets.

      Progress: Residential and light commercial decorative
fixtures including chandeliers, hall and foyer, sconces, track,
recessed and outdoor and landscape lighting.

      Security: Outdoor and indoor area and building lighting
fixtures specially designed for commercial and retail
facilities.

      Spaulding: Outdoor and indoor lighting for commercial
applications such as shopping malls, automobile dealerships,
quick service restaurants and convenience stores.

      Sportsliter Solutions: The most complete sports lighting
product package in the industry for indoor/outdoor sports,
parks, and recreation facilities.

      Sterner: The premium name in specification grade and custom
designs for flood and area lighting, sports and arenas.

"We expect to achieve substantial success with this
acquisition," Powers added. "Our growth objective is to expand
in Hubbell's core businesses where we can leverage our market
position and experience. This addition is a prime example.
Hubbell Lighting now brings to the market one of the broadest
lines of lighting products and a portfolio of prominent brand
names that will bring benefits to distributors, end-users, and
to Hubbell."

Hubbell Incorporated is an international manufacturer of quality
electrical and electronic products for commercial, industrial,
utility, and telecommunications markets. Hubbell Incorporated
operates manufacturing facilities in North America, Puerto Rico,
Mexico, Italy, Switzerland, and the United Kingdom, participates
in a joint venture in Taiwan, and maintains sales offices in
Singapore, Hong Kong, South Korea, People's Republic of China,
and the Middle East. The corporate headquarters is located in
Orange, CT.


U.S. INDUSTRIES: LCA Group's Chair and CEO to Resign After Sale
---------------------------------------------------------------
U.S. Industries, Inc. (NYSE-USI) has completed the previously
announced sale of its domestic lighting companies, including LCA
Group Inc., to Hubbell Incorporated, of Orange, Connecticut.

U.S. Industries also announced that James O'Leary, currently
Chairman and Chief Executive Officer of LCA Group, would leave
to pursue other interests following a transitional period.

David H. Clarke, Chairman and Chief Executive Officer of U.S.
Industries, said, "We are pleased to have completed this
important transaction while in the process finding an owner
whose businesses complement those of LCA. Jim has made important
contributions to USI and has helped us fulfill a number of
important strategic objectives culminating with the successful
divestiture of LCA and I want to wish him tremendous success in
his future pursuits."

Following the completion of its Disposal Plan, which has been
previously announced, U.S. Industries will own several major
businesses selling branded bath and plumbing products, along
with its consumer vacuum cleaner company. The Company's
principal brands will include Jacuzzi, Zurn, Sundance Spas,
Eljer, and Rainbow Vacuum Cleaners.


VELOCITY EXPRESS: Closes Fin'l Workout via Reverse Stock Split
--------------------------------------------------------------
Velocity Express Corporation, (Nasdaq:VEXPD), the largest
nationwide network of customized, time-critical delivery
solutions, announced financial results for its third fiscal
quarter, ended March 30, 2002, and the enactment of a one-for-
five reverse stock split.

The Company showed an improvement of $11.5 million in earnings,
as its net loss for the quarter was $180,000, compared to a net
loss for the same quarter last fiscal year of $11.7 million
(including a $4.4 million restructuring charge taken in the same
quarter last fiscal year). EBITDA was $1.7 million, an
improvement of $4.6 million over the same quarter last fiscal
year.

According to Jeff Parell, Velocity's Chief Executive Officer,
"The continued earnings improvement was a direct result of our
substantial reduction in general and administrative expenses
during the past year and the Company's focus on leveraging a
variable cost model nationwide. With the completion of our
balance sheet restructuring through the reverse stock split, the
Company is now properly positioned to implement its aggressive
growth strategy."

Revenue for the quarter ended March 30, 2002 decreased $30.7
million to $81.5 million, as compared to the same period last
fiscal year. This decrease consisted of $26.2 million,
eliminated through consolidation or closing of unprofitable
locations and exiting of low-margin business and $4.5 million
from the divesting of the air courier non-core business
operations. According to Mark Ties, Velocity's Chief Financial
Officer, "The Company was adversely impacted by the soft economy
in the months of January and February, however, sales in March
were strong, as the Company improved its daily revenue by $1.5
million annually over February's trend."

Cost of Service for the third fiscal quarter of 2002 was $62.3
million, a reduction of $28.2 million as compared to the same
period last fiscal year. According to Mr. Ties, "Continued
efficiencies were gained in insurance and vehicle related
expenses as the Company expanded implementation of its variable
cost model, using independent contractors and employee-owner
operators. As a result, we achieved a 4.2 percentage point
improvement in gross profit percentage over the same period last
fiscal year, and a 0.8 percentage point increase over the second
quarter of fiscal 2002."

Selling, general and administrative expenses for the fiscal
third quarter of 2002 were $15.4 million, a reduction of $8.3
million as compared to the same period last fiscal year. The
Company realized a year-over-year improvement of 2.2 percentage
points as a percent of revenue. According to Mr. Ties, "The
centralization of the back office functions, with one common
platform, has allowed us to leverage our cost structure
resulting in the year over year improvement. Through the
implementation of additional technology initiatives currently
underway, we believe further efficiency gains will continue to
occur."

EBITDA and cash net income for the fiscal third quarter were
$1.7 million and $1.0 million, increasing $4.6 million and $5.2
million, respectively, as compared to the same period last
fiscal year. The Company considers EBITDA and cash net income
important indicators of the operational strength and performance
of its business, including the ability to provide cash flows to
service debt and fund capital expenditures.

Net loss applicable to common shareholders was $180,000 for the
quarter ended March 30, 2002 as compared with $11.7 million for
the same period last fiscal year. According to Mr. Ties, "Now
that our consolidation initiatives are completed we are properly
positioned to leverage our cost structure, increase our
efficiency, and improve our earnings as revenue is added."

                One for Five Reverse Stock Split

Effective 12:01 a.m., April 25, 2002, the Company implemented a
one-for-five reverse stock split. The reverse stock split had
previously been approved at a special meeting of the Company's
shareholders held March 20, 2002. For the next twenty days the
Company's common stock will trade under the symbol "VEXPD" to
indicate that the stock has recently split. After such time the
stock will again trade under the ticker symbol "VEXP".

As a result of the reverse stock split, each stockholder will
own a reduced number of shares of common stock, but will hold
the same percentage of the outstanding shares (subject to
adjustments for fractional interests resulting from the reverse
stock split) as such stockholder held prior to the reverse stock
split. The number of shares of common stock that may be
purchased upon the exercise of outstanding options, warrants,
and through the conversion of preferred stock, will be adjusted
appropriately to reflect the reverse stock split.

According to Jeff Parell, Velocity's Chief Executive Officer,
"We have long felt that the reverse stock split would strengthen
the marketability of the common stock of the Company by
maintaining a share price that appeals to a broad range of
investors, including large institutions. With the completion of
this piece of our balance sheet restructuring and the continued
improving financial results, we believe we have properly
positioned the Company to maximize shareholder value going
forward.

The Company's earnings call will take place on April 30, 2002,
today, at 8:00 A.M. (CDT). Interested parties can call 800-310-
6649, access code 795537. An audio replay of the call can be
heard at 1-888-203-1112, access code 795537. The replay will be
available from 1:00 P.M. (CDT) April 30 through May 3, 2002.

Velocity Express is the largest nationwide network of
customized, time-critical delivery solutions in North America.
Velocity is a fully insured Company, providing scheduled,
distribution, and targeted on-demand services. Velocity's
services are supported by a customer-focused technology
infrastructure, providing customers with the reliability and
information they need to manage their transportation systems.
The Company makes over 150,000 deliveries each day, with a 98%
on-time performance record, serving blue chip companies such as
Bank of America, Sun Microsystems and Cardinal Health. Velocity
is led by a seasoned management team of transportation and
logistics professionals and backed by active investors and
strategic partners such as TH Lee Putnam Ventures, MCG Global
and East River Ventures.


WARNACO GROUP: Has Until July 31 to Decide on Milford Leases
------------------------------------------------------------
For the third time, The Warnaco Group, Inc., and Crown Milford,
LLC sign into a Stipulation that states:

   (a) The time to assume or reject the Milford Lease is further
       extended through and including July 31, 2002, without
       prejudice to the rights of:

          (i) the Debtors to seek further extensions, or

         (ii) Crown Milford to object to same;

   (b) Crown Milford has the right to file a motion with the
       Court to shorten the deadline to assume or reject the
       Milford Lease for cause, and the Debtors have the right to
       object to same; and

   (c) In the event that the Debtors seek to reject the Milford
       Lease on or before July 31, 2002, the Debtors will
       continue to fulfill all their administrative obligations
       under the Milford Lease, as the case may be, including,
       without limitation, timely payment of rent, as provided
       therein, until the later of:

           (i) the date of the entry of the order approving each
               such rejection,

          (ii) the rejection effective date set forth in the
               order approving each such rejection,

         (iii) the 90th day following receipt of notice of such
               rejection by counsel for Crown Milford, and

          (iv) the date the Debtors surrender the property
               subject to the Milford Lease. (Warnaco Bankruptcy
               News, Issue No. 23; Bankruptcy Creditors' Service,
               Inc., 609/392-0900)


WASTE CONNECTIONS: S&P Rates New $150MM Convertible Notes at B+
---------------------------------------------------------------
On April 25, 2002, Standard & Poor's assigned its 'B+' rating to
Waste Connections Inc.'s proposed $150 million floating rate
convertible subordinated notes due 2022, offered under Rule 144A
with registration rights. Note proceeds are expected to be used
to repay debt under the firm's revolving credit facility. Total
debt outstanding is about $465 million.

At the same time, Standard & Poor's affirmed its 'BB' corporate
credit rating and other ratings on the company. The ratings for
Folsom, California-based Waste Connections are supported by its
position as a major regional solid waste management firm (2002
revenues estimated at $475 million-$500 million), efficient
operations, and generally favorable industry fundamentals. These
factors are partially offset by a somewhat below-average
financial profile and risks associated with an active growth
strategy.

Waste Connections provides collection, recycling, transfer, and
disposal services in secondary (nonurban) markets, primarily in
the Western U.S. The company serves more than 925,000
residential, commercial, and industrial customers. Approximately
50%-55% of revenues and a greater percentage of cash flows are
generated under exclusive contract arrangements, with the
balance derived from competitive markets.

Waste Connections has expanded rapidly in the past three years,
primarily through acquisitions, taking advantage of the
fragmented nature of many Western markets. However, internal
growth has also been a meaningful contributor due to the
markets' favorable demographics. The firm's growth has been
financed by a combination of debt, equity, and internal cash
flow.

Although the solid waste management industry is mature and
competitive, earnings prospects for Waste Connections are
enhanced by the essential nature of services, some pricing
flexibility, and expected benefits from acquisitions. Challenges
include management of an acquisition-based growth strategy,
continued weakness in commodity prices, lower special waste and
commercial construction-related volumes, and upward trending
insurance costs. However, the weaker economy has not had a
material adverse impact on financial performance, evidencing the
company's relatively small exposure to more cyclical industrial
markets.

Despite Waste Connections' moderate scale of operations, its
operating profit margins of about 36% are impressive and among
the highest in the industry, reflecting exclusive contract
arrangements, low cost structure, and improving integration of
services (waste internalization is in a respectable low 60s
area). In the near term, credit protection measures are expected
to be appropriate for the rating, with funds from operations to
debt about 20%, debt to EBITDA 3.0 times -3.5x, EBIT interest
coverage 3.0x-3.5x, and debt to capital in the 50%-55% range.

                        Outlook: Stable

Leading market positions and efficient operations should offset
risks associated with the firm's growth strategy and a slower
economy, thus maintaining a credit profile consistent with the
ratings.


WESTERN RESOURCES: S&P Concerned About Frail Fin'l Measurements
---------------------------------------------------------------
Standard & Poor's assigned its 'BB-' rating to Western Resources
Inc.'s Unsecured notes. It also assigned its 'BBB-' to the
company's first mortgage bonds. At the same time, Corporate
Credit Rating was affirmed at 'BB+'. Rating outlook is negative.

The ratings for Western Resources, Inc. and its subsidiary
Kansas Gas & Electric Co. reflect frail financial measurements
relative to the company's average business profile and
uncertainty surrounding the company's restructuring plan.
Western Resources' business position is a function of relatively
low system-wide production costs, solid nuclear performance and
limited environmental exposure. These attributes are partially
offset by an unsupportive regulatory climate, ownership of
riskier unregulated monitored security businesses, high fixed
costs at KG&E, and the inherent challenges of owning and
operating a nuclear unit.

The company has presented a financial plan to The Kansas
Corporation Commission (KCC) that will reduce its exceptionally
heavy debt burden over the next one to three years. The KCC will
conduct a hearing on May 31, 2002 to examine Western Resources'
debt and financial plan; a commission decision is expected
shortly thereafter.

Western Resources' plan incorporates an offering of shares of
Westar Industries common stock by subsidiary Westar Industries
(which owns Western Resources' interests in Protection One,
Inc., Protection One Europe, ONEOK Inc. and other non-utility
businesses) through a rights offering to Western Resources
shareholders. Westar Industries will use the proceeds from the
rights offering to repurchase Western Resources or KG&E
outstanding debt. On February 10. 2003, these debt securities
will be exchanged for Western Resources common stock at not less
than $24 per share.

If Westar Industries trades for 45 consecutive trading days at a
price that is 15% above the price necessary to reduce total debt
to an amount less than $1.8 billion, Western Resources will be
required to sell enough of its shares in Westar Industries or
its common stock to reduce debt to $1.8 billion. This debt
excludes about $550 million of off-balance-sheet debt, such as
lease obligations and account receivable financings.

Western Resources recently filed notice with the Securities and
Exchange Commission that it may reduce its investment in ONEOK
through any available means. The company effectively owns 45% of
ONEOK. A sale of part or all of Western Resources' investment in
ONEOK for debt repayment would help to restore some balance to
the company's liberally leveraged capital structure. While
disposal of a portion of ONEOK stock would reduce the level of
steady dividends, Standard & Poor's considers the deleveraging
of Western Resources a more critical near-term goal in
supporting the company's creditworthiness.

Although Western Resources' restructuring plan demonstrates an
attempt by management to begin shoring up credit quality, the
outlook will remain negative in light of the company's very weak
financial profile. The initial debt reduction of up to $175
million will only marginally enhance key financial ratios,
lifting funds from operations to total debt to about 12%, cash
flow coverage to about 2.8 times, total debt to 67% and pretax
interest coverage to around 1.5x. The aforementioned ratios
exclude the bulk of outstanding debt at Protection One, which
Western Resources does not guarantee.

Although this plan is important to enhancing credit quality,
Standard & Poor's does not expect to revise Western Resources
outlook until debt is further reduced and the company's
financial condition strengthens. To achieve investment-grade
ratings, Western Resources will need to retire at least $1.2
billion of debt to bring its short-term and long-term debt
outstanding to about $1.8 billion.

                          Outlook

The negative outlook reflects Western Resources' frail financial
condition, limited financial flexibility, absence of a
supportive regulatory environment in Kansas, and uncertainties
surrounding the company's restructuring plan.


WISE ALLOYS: S&P Assigns Low-B's to Credit Rating & Other Issues
----------------------------------------------------------------
On April 25, 2002, Standard & Poor's assigned its 'B+' corporate
credit rating to Wise Alloys LLC (WAL). Standard & Poor's also
assigned its 'BB-' rating to WAL's $50 million secured revolving
credit facility that matures April 2007 with a $15 million sub-
limit for letters of credit, and assigned its 'B+' rating to
WAL's $150 million senior secured notes. Outlook is stable.

The bank loan is secured by accounts receivable, inventory and a
second lien on property, plant and equipment. The senior secured
notes are secured by a first priority lien on property, plant,
and equipment, and a second lien on accounts receivable and
inventory. The higher rating on the revolving credit facility
reflects Standard & Poor's assessment that under a default
scenario the value of the collateral securing the revolving
credit facility is sufficient to provide full recovery of the
loans. Drawdowns of the bank loan would be used for working
capital and general corporate purposes. Proceeds from the senior
secured notes will be used to refinance existing debt.

The ratings on Linthicum, Maryland-based WAL reflect the
company's lack of operating diversity, customer concentration
risk, and aggressive capital structure. However, ratings are
supported by predictable end use demand and somewhat stable
margins provided through contractual arrangements. WAL, a wholly
owned subsidiary of Wise Metals Group LLC, is a processor of
scrap aluminum into can sheet. Through the structure of its
contractual arrangements with its two beverage can producers,
Ball Corp. and Crown Cork & Seal, WAL functions as a toller,
which substantially reduces its commodity and raw material
pricing risk while locking in margins. Given the company's focus
on smaller beverage can buyers, such as RC Cola and Cott, who
require smaller orders and runs, WAL is somewhat insulated from
direct competition from much larger can producers such as Alcoa
and Alcan, whose facilities are better suited for larger orders
and standardized runs. WAL benefits from a variable cost
structure and a greater degree of production flexibility than
many of its integrated peers, which have a higher degree of
operating leverage and need to maintain high capacity
utilization rates to cover their fixed costs. For WAL,
profitability improvement is gained through lowering conversion
costs, increasing production, and product mix adjustments. In an
attempt to increase its low capacity utilization rate of 66%,
WAL is attempting to reduce its reliance on the mature beverage
can industry by changing its product mix to enter the automotive
market.

Nevertheless, WAL's business risk is heightened by its
concentration of operations at a single facility. The company
operates the 900 million pound capacity Listerhill plant,
located in Muscle Shoals, Alabama, which was formerly owned by
Reynolds Metals. The facility accounts for 14% of U.S. rolling
mill capacity. Prospective operational problems at the facility
could compromise WAL's ability to service its customers. In
addition, with the majority of its business transacted with only
Ball Corp. and Crown Cork & Seal, which account for 95% of
sales, WAL faces high customer concentration risk. Such high
customer concentration could be a problem if one of the buyers
stopped purchasing from WAL. Indeed, the weak financial profile
of Crown Cork & Seal remains of particular concern and could
threaten terms and conditions under the current contract with
WAL. Still, WAL has limited credit exposure currently to Crown
Cork & Seal and it is unlikely that Crown Cork & Seal would
cease operations altogether.

The operating performance of the Listerhill facility had been
extremely poor due to overstaffing, inefficient processes and
unfavorable contractual terms with Crown Cork & Seal's European
can division, Carnaud. With the majority of these issues
favorably addressed and the relocation of its coating operations
from Sheffield to Listerhill during 2002, Standard & Poor's
expects operating performance to improve slightly from the 6%
operating margin of 2001. Owing to its business model, WAL is
somewhat able to maintain relatively stable operating margins.
However, WAL's capital structure remains very aggressive. Upon
completion of the transaction total debt to total capital will
be 78%. The company's debt to EBITDA was 3.4 times at fiscal
year-end 2001. WAL's coverage ratios, although relatively weak,
with EBITDA to interest coverage of 2.3x in 2001, are
appropriate for the rating category. These ratios are expected
to improve marginally in 2002. At the close of the transaction,
the company will have full availability under the bank line. The
company should be able to meet general corporate needs through
internally generated cash flow. Cash flow generation will be
aided as net operating losses will eliminate tax payments
through 2003. WAL's owners view the company as a strategic long-
term investment and have stated that the company will not pay
dividends until certain balance sheet thresholds are met.

                           Outlook

The company primarily operates in the stable, low growth
beverage can market, which has demonstrated its resilience and
stability through economic cycles. Standard and Poor's expects
WAL to maintain relatively stable margins and cash flow
measures. However, the company's small size and exposure to one
market will likely constrain its ratings.


WORKFLOW MANAGEMENT: Seeks Waiver of Default Under Credit Pact
--------------------------------------------------------------
Workflow Management, Inc. (Nasdaq: WORK), a leading outsourcer
of graphic services, has amended its January 31, 2002 form 10-Q
to report that the Company was not in compliance with its
secured revolving credit facility (the "Credit Facility").

The Company is currently working with its lenders to obtain a
waiver for its default and to amend certain provisions of the
Credit Facility. Management is confident that it should be able
to obtain a waiver for its default in the next 30 days.

The Credit Facility requires the Company to remain in compliance
with certain financial covenants which include a total debt to
pro forma EBITDA maximum of 3.75 to 1.0. Effective April 30,
2002, the Credit Facility provides an additional covenant of
senior, Credit Facility debt to pro forma EBITDA maximum  of 3.5
to 1.0. At January 31, 2002, the Total Leverage Ratio calculated
under the Credit Facility was 3.82 to 1.0. Accordingly, the
Company was, and remains, in default of the Credit Facility's
financial covenants. Additionally, the Company does not believe
that it will be in compliance with the Senior Leverage Ratio at
April 30, 2002.

While the terms of the waiver and amendment of the Credit
Facility have not been fully negotiated, the Company will likely
be required to pay fees to its lenders. The Company is also
considering and pursuing strategic alternatives that could
generate cash to reduce borrowings under the Credit Facility.
There can be no assurance that the Company will be able to
obtain the waiver and amendment of the Credit Facility from its
lenders or that the Company will be able to generate cash to
reduce borrowings under the Credit Facility. In the event that
the Company's default under the Credit Facility is not waived by
its lenders, the Company's financial condition is likely to be
materially and adversely affected.

Workflow Management, Inc. is a leading provider of end-to-end
outsource solutions for print. By providing a variety of print
solutions; including the printing of promotional items with a
company logo to multi-color annual reports, Workflow has built a
reputation of reliability and leadership within the industry.
Workflow's complete cadre of service solutions includes unbiased
outsource and enterprise document strategy consulting, full-
service print manufacturing and outsourcing; warehousing;
fulfillment and Workflow's proprietary iGetSmart(TM) system; the
industry proven, e-procurement, management and logistics system.
Utilizing a customized combination of these services, the
Company is able to deliver substantial savings to its customers
by targeting and eliminating much of the hidden costs within the
print supply chain. And, by outsourcing these non-core business
processes to Workflow, customers are able to streamline their
operations and focus on their core business objectives.

                           *********

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

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

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

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

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

                           *********

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

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

Copyright 2002.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without
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contained herein is obtained from sources believed to be
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                      *** End of Transmission ***