TCR_Public/020501.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Wednesday, May 1, 2002, Vol. 6, No. 85


360NETWORKS: Court Okays Proposed Kajima Construction Settlement
ACT MANUFACTURING: UST Amends Creditors' Committee Appointments
AES CORP: Taps Stone & Webster to Complete Wolf Hollow Project
ADELPHIA BUSINESS: U.S. Trustee Amends Committee Membership
ARCH COAL: Will be Paying Quarterly Dividend on June 14, 2002

BRIGHTPOINT: Falls Short of Nasdaq Continued Listing Standards
CHANNELL COMMERCIAL: Appoints Bruce Gidden to Board of Directors
CLEARLY CANADIAN: Terminates McDonald's Engagement & Names COO
COMDISCO: Court Okays De Minimis Lease Rejection Protocol
CONSUMERS PACKAGING: Files Assignment in Bankruptcy in Canada

CORNERSTONE PROPANE: Working Capital Deficit Tops $11 Million
COVANTA ENERGY: Signs-Up Chilmark Partners for Financial Advice
COVENTRY HEALTH: Posts Improved Operating Results for Q1 2002
DELTA AIR LINES: Will Be Paying Cash Dividend on June 1, 2002
DELTA AIR: CEO Leo Mullin Pins Hopes on New Strategic Direction

DUANE READE: Posts Improved Sales Performance for March Quarter
ENRON: U.S. Trustee Appoints Employee-Related Issues Committee
EXIDE TECHNOLOGIES: Wants to Maintain Cash Management System
EXODUS: 3-Creditor Plan Committee will Supervise Liquidation
FEDERAL-MOGUL: Judge Newsome Names Warren Smith as Fee Auditor

FLAG TELECOM: Seeks Approval to Obtain Super-Priority Financing
FLEMING: Core-Mark Acquisition to Boost Distribution Revenues
FORMICA CORP: Committee Hires Jefferies as Financial Advisor
FRUIT OF THE LOOM: Files 2001 Annual Report on Form 10-K
GEOWORKS CORP: Commences Trading on Nasdaq SmallCap Market Today

GLOBAL CROSSING: Hutchison Buys Asian Unit's Assets for $120MM
GUARDIAN TECHNOLOGIES: Nasdaq Delists Shares Effective April 29
HAWK CORP: Pursuing Initiatives to Restructure Credit Facilities
HAYES LEMMERZ: Court Allows Panel Members to Trade Securities
ICG COMM: Wins Nod to Pay Exit Financing Expenses & Break-Up Fee

ICH CORP: Court Okays J.H. Cohn as Committee's Financial Advisor
IT GROUP: Seeks Approval to Reject 23 Non-Residential Leases
IMPSAT FIBER: Seeking Nod to Formalize Chapter 11 Restructuring
INTEGRATED HEALTH: Wants to Assume Three More New Mexico Leases
JUNIPER CBO: Fitch Hatchets Several Notes' Ratings to Junk Level

KAISER ALUMINUM: Gets OK to Hire Seyfarth Shaw as Labor Counsel
KASPER ASL: Shoos-Away Andersen and Signs-Up Ernst & Young
KMART: Wants to Reject Lease with Sun Microsystems
KMART: Taps Creative Artists Agency to Help in Brand-Building
LERNOUT & HAUSPIE: Obtains Fifth Lease Decision Period Extension

LIONBRIDGE: Has Working Capital Deficit of $1.4MM at March 31
MCLEODUSA INC: Reaches Resolution on Disputed Claim Reserve
MERRILL LYNCH: S&P Junks Class G P-T Certificates Ser. 1996-C2
NATIONAL STEEL: Pushing for July 15, 2002 General Bar Date
OGLEBAY NORTON: Taps CIBC World Markets as Financial Advisors

PETROMINERALS CORP: Fails to Meet Nasdaq Listing Requirements
PILLOWTEX CORP: Intends to Assume 3 Citicapital Lease Agreements
POLAROID CORP: Files Proposed Reorganization Plan in Wilmington
PSINET INC: Court to Hear on Texas Property Sale on May 20, 2002
REFAC: Board of Directors Adopts Shareholder Rights Plan

SAFETY-KLEEN: Wants to Preserve Avoidance Actions for 180 Days
SHELDAHL INC: Files for Chapter 11 Reorganization in Minnesota
SHENANDOAH RESOURCES: Alberta Court Grants CCAA Protection
SPECIAL METALS: Secures New $60 Million DIP Credit Facility
STARWOOD HOTELS: Taps Robert Koren to Lead W Hotels Expansion

USG CORP: Enron Unit Wants to Terminate US Gypsum Swap Agreement
U.S. STEEL: Adjusted Net Loss Narrows to $96MM in First Quarter
U.S. STEEL: Selling 8M Shares of Common Stock in Public Offering
WARNACO GROUP: Has Until July 31 to Decide on Mills Corp. Leases
WILLIAMS COMMS: Chapter 11 Cases Reassigned to Judge Bernstein

WORKGROUP TECHNOLOGY: Taps Covington to Seek Strategic Options

* Meetings, Conferences and Seminars


360NETWORKS: Court Okays Proposed Kajima Construction Settlement
360networks inc. obtained Court approval of its proposed
Stipulation with Kajima Construction Services to settle their

The Debtors and Kajima Construction Services are parties to a
Design-Build Agreement with regards to design and construction
of a POP facility at a real property known as 3554 Ruffin Road
South, in San Diego, California.

The premises were leased by the Debtors from H.G. Fenton
Company, formerly known as Western Salt Company.  Kajima
Construction alleges that the Debtors breached the Contract by
failing to pay the sum of $3,501,842 and filed for a mechanic's

The proposed stipulation provides that:

  (i) the Debtors consent to the relief from the automatic stay
      for the sole and limited purpose of permitting Kajima
      Construction to continue the State Court Action in the
      Superior Court of the State of California for the County
      of San Diego against the owner of the premises;

(ii) approval of this stipulation by the Court will constitute
      relief from stay to permit Kajima to fully enforce and
      foreclose its mechanics lien against the premises and the
      owner, provided, however, that it does not affect any
      rights and claims Kajima might assert with the Debtors or
      any property of the Debtors' estates.  The Debtors
      reserve all rights with respect to any such rights and
      claims. (360 Bankruptcy News, Issue No. 22; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)

ACT MANUFACTURING: UST Amends Creditors' Committee Appointments
J. Christopher Marshall, the United States Trustee appoints
these creditors to serve on the Official Committee of Unsecured
Creditors on the Chapter 11 cases of ACT Manufacturing, Inc.,
effective April 26, 2002:

      1. Joseph Mazzini, Credit Manager
         c/o MEMEC LLC
         296 Concord Road
         Billerica, Massachusetts 01821
               Tel. No.: 978-439-4552

      2. Richard P. MacKenzie
         c/o Heilind Electronics, Inc.
         58 Jonspin Road
         Wilmington, Massachusetts 01887
               Te. No.: 978-657-4870

      3. Frank Carroccia, VP Clerk Pro Team
         c/o Teradyne, Inc.
         44 Simon Street, MS-001
         Nashua, NH 03060-3094
              Tel. No.: 603-879-3369

      4. Guillaume D. Boccara, Portfolio Manager
         c/o R2 Investments, LDC
         301 Commerce Street Suite 2975
         Fort Worth, Texas 76102
               Tel. No.: 817-332-9500

      5. Laura L. Moran, Assistant VP
         c/o State Street Bank and Trust Co.
         2 Avenue de Lafayette
         Boston, Massachusetts 02111
               Tel. No.: 617-662-1753

      6. Robert T. Kittel
         c/o Silver Creek Management, Inc.
         1670 Bayview Avenue, Suite 308
         Toronto, Ontario, Canada M4G 3C2
               Tel. No.: 416-485-1706

      7. Dennis Losik
         c/o Avnet Em.
         3030 Sale Creek Lane, Suite 120
         Arlington Hills, Illinois 60005
               Tel. No.: 847-797-7401

      8. Lucia M. Valente, Counsel
         c/o Tyco Printed Circuit Group, LP
         12 Lynwood Court
         Courtland Manor, New York 10567
               Tel. No.: 914-734-1484

      9. Betti Monti, Corporate Counsel
         c/o Arrow Electronics, Inc.
         25 Hub Drive
         Melville, New York 11747-3509
               Tel. No.: 516-39-1300

     10. Colin Lancaster, General Counsel
         c/o Staro Asset Management, as agent
          For Stark Trading and Shepherd
          Investments International Ltd.
         1500 Market Street
         Mequon, WI 53092
               Tel. No.: 262-240-3142

ACT Manufacturing, Inc. provides value-added electronics
manufacturing services to original equipment manufacturers in
the networking and telecommunications, computer and industrial
and medical equipment markets. The company filed for chapter 11
protection on December 21, 2001. Richard E. Mikels, Esq., Deena
C. Ethridge, Esq. and Daniel S. Beck, Esq. at Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo PC represent the Debtor in its
restructuring efforts. As of December 21, 2001, the company
reported assets of $374.1 million and liabilities of $231.2

AES CORP: Taps Stone & Webster to Complete Wolf Hollow Project
Last month, AES Corporation (NYSE:AES) signed an agreement with
Stone & Webster Inc., a subsidiary of The Shaw Group (NYSE:SGR),
to provide engineering, procurement, and construction services
for the completion of the 730 mega-watt Wolf Hollow project in
Texas. AES replaced the original turn-key contractor, NEPCO
(Bothell, Wash.), a business unit of now-bankrupt Enron, some 14
months after the start of construction.

For more information including equipment and other project
details, view the entire article at

                         *   *   *

As previously reported in Troubled Company Reporter, Standard &
Poor's placed its double-'B' corporate credit and senior
unsecured debt ratings on The AES Corp., its single-'B'-plus
rating on AES' subordinated debt, and its single-'B' rating on
the company's trust preferred securities on CreditWatch with
negative implications. Standard & Poor's also placed its triple-
'B' rating on AES' subsidiary IPALCO Enterprises Inc. and its
triple-'B' rating on AES' affiliate Indianapolis Power & Light
Co., whose ratings are linked to AES, on CreditWatch with
negative implications.

AES Corporation's 10.25% bonds due 2006 (AES06USR1), DebtTraders
reports, are quoted at a price of 76. See
real-time bond pricing.

ADELPHIA BUSINESS: U.S. Trustee Amends Committee Membership
The United States Trustee for Region II amends the appointment
of the Official Committee of Unsecured Creditors, in Adelphia
Business Solutions, Inc.'s chapter 11 cases, by replacing Morgan
Stanley Investment Management with Fujitsu Network
Communications Inc. The Committee is now comprised of:

     A. Bell South Corporation
        1155 Peachtree St., Suite 1929, Atlanta, GA 30309-3610
        Attn: Bradley O. Greene, Exec. Dir. - Corp. Development
        Phone: (404) 249-4506     Fax: {404} 249-4740

     B. Fidelity Management & Research Co.
        82 Devonshire St., E20E, Boston, MA 02109
        Attn: Nate VanDuzer
        Phone: (617) 392-8129     Fax: (617) 476-5174

     C. Fujitsu Network Communications Inc.
        2801 Telecom Parkway, Richardson, TX 75082
        Attn: Charles R. Owen, Assistant General Counsel
        Phone: (972) 479-3713     Fax: (972) 479-2992

     D. Wilmington Trust Co.
        Rodny Square North, 1100 Malat St., Wilmington, DE 19801
        Attn: Michael Diaz
        Phone: (302) 656-8326     Fax: (302) 636-4140

     E. The Bank of New York
        5 Penn Plaza, 13th Floor, New York, NY 10001
        Attn: Loretta Lundborg, Vice President
        Phone: (212) 896-7273     Fax: (212) 328-7302

     F. Bank of America
        901 Main St., Dallas, Texas 75202
        Attn: Robin Phelan
        Phone: (214) 209-0966     Fax: (214) 290-9490
        (Adelphia Bankruptcy News, Issue No. 4; Bankruptcy
        Creditors' Service, Inc., 609/392-0900)

ARCH COAL: Will be Paying Quarterly Dividend on June 14, 2002
The board of directors of Arch Coal, Inc. (NYSE: ACI) has
declared a quarterly dividend of $.0575 per share on the
company's common stock.  The dividend is payable June 14, 2002,
to shareholders of record on June 4, 2002.

Arch Coal is the nation's second largest coal producer, with
subsidiary operations in West Virginia, Kentucky, Virginia,
Wyoming, Colorado and Utah. Through these operations, Arch
provides the fuel for approximately 6% of the electricity
generated in the United States.

                         *   *   *

As reported in the March 15, 2002 edition of Troubled Company
Reporter, Moody's Investors Service assigned ratings to Arch
Coal, Inc. and its subsidiary Arch Western Resources, LLC. The
rating actions are:

Arch Coal, Inc. -

     * Ba1 rating for the $350 million senior secured revolving

     * Ba1 senior implied and Ba2 senior unsecured issuer
          ratings were affirmed.

Arch Western Resources, LLC -

     * Ba1 for the $150 million  senior secured term loan due

     * Ba1 for the $525 million senior secured term loan due

Moody's changed its Outlook from positive to stable.

No rating downgrade is foreseen as this time since Arch Coal
will benefit in 2002 and 2003 from sales contracts it negotiated
last year.

Arch Coal's ratings mirrors the risks prevalent in mining
companies (adverse conditions, labor, safety and health issues)
and a near $550 million of balance sheet liabilities. However,
the company is supported by its relatively stable operating
profile and cash flow.

BRIGHTPOINT: Falls Short of Nasdaq Continued Listing Standards
Brightpoint, Inc. (NASDAQ:CELL) received a notice today from
Nasdaq of the Company's failure to comply with the U.S. $1.00
minimum bid price requirement for continued listing on the
Nasdaq National Market as set forth in Nasdaq Marketplace Rule
4450(a)(5). Accordingly, the Company's common stock is subject
to delisting from the Nasdaq National Market if the Company
cannot demonstrate that it is in compliance with the Rule by
July 29, 2002. The Company believes that delisting from Nasdaq
would have a material adverse affect on the Company and
therefore, it intends to take the actions it believes are
necessary to avoid the delisting of its common stock from the
Nasdaq National Market.

The Company's Board of Directors has approved a 1 for 7 reverse
split of its common stock. The Company intends to submit the
reverse split for approval by the Company's stockholders at the
Company's Annual Meeting of Stockholders currently scheduled for
June 26, 2002. If the Company's stockholders approve the reverse
split, the Company believes that it will be able to comply with
the Rule which should allow it to avoid delisting of its common
stock. Additionally, if the reverse split is effected, the
Company would have approximately 8 million shares of common
stock issued and outstanding of 100 million shares of common
stock authorized.

Brightpoint is one of the world's largest distributors of mobile
phones. Brightpoint supports the global wireless
telecommunications and data industry, providing quickly
deployed, flexible and cost effective third party solutions.
Brightpoint's innovative services include distribution, channel
management, fulfillment, eBusiness solutions and other
outsourced services that integrate seamlessly with its
customers. Additional information about Brightpoint can be found
on its Web site at http://www.brightpoint.comor by calling its
toll-free Information and Investor Relations line at 877-IIR-
CELL (877-447-2355).

CHANNELL COMMERCIAL: Appoints Bruce Gidden to Board of Directors
Channell Commercial Corp. (Nasdaq:CHNL) announced Bruce Glidden
has been elected to the Channell Board of Directors, replacing
Jacqueline M. Channell, who resigned from the board effective
May 1, 2002.

Channell served on the board for 36 years. Glidden was with U.S.
Steel for 29 years, holding a number of management positions
including vice president, engineering and vice president,
western region of the American Bridge Division and general
manager, design of U.S. Steel. From 1981 to 1985 he was
president of U.S. Steel's American Bridge Division. In 1985,
Glidden formed Glidden & Co., Ltd., a consulting firm serving
the engineering profession and the construction industry.

Richard A. Cude, chief executive officer, said: "On behalf of
the board of directors, I want to express our appreciation to
Jacqueline Channell for her many years of dedicated service.
Mrs. Channell has made significant contributions to the
company's growth over those years and her presence will be
missed. I am pleased to welcome Bruce Glidden to the Channell
board. He has extensive senior management experience and we look
forward to his contribution."

Channell Commercial Corp. is a global designer and manufacturer
of telecommunications equipment primarily supplied to telephone
and broadband network operators worldwide. Major product lines
include a complete line of thermoplastic and metal fabricated
enclosures, advanced copper termination and connectorization
products, fiber optic cable management systems and coaxial-based
passive RF electronics.

Channell's headquarters and U.S. manufacturing facilities are in
Temecula. International operations include facilities in
Toronto, London, Sydney, Australia and Kuala Lumpur, Malaysia.

Channell, at December 31, 2001, had a working capital deficit of
about $4 million.

CLEARLY CANADIAN: Terminates McDonald's Engagement & Names COO
Clearly Canadian Beverage Corporation (OTCBB: CCBC)(TSE: CLV)
has recently concluded the engagement of McDonald Investments as
its investment banker and financial advisor.

Working with McDonald Investments, Clearly Canadian completed a
strategic restructuring in 2001 and the first quarter of 2002,
highlighted by the Company's U.S. subsidiary's divestiture of
its U.S.-based production facility assets and bottling plant and
its branded water and private label bottled water business -
initiatives that Clearly Canadian anticipates will reduce costs
while improving its financial and operational position.

"As a result of our strategic restructuring, Clearly Canadian
can now focus on its core competencies - the marketing of
premium alternative beverages - and to direct greater focus on
the selling and marketing of the Company's beverage brands in an
effort to maximize shareholder value and to provide additional
working capital for our marketing initiatives," said Douglas
Mason, President and Chief Executive Officer of Clearly Canadian
Beverage Corporation.

                     Appointment of COO

As part of Clearly Canadian's strategic restructuring, the
Company also announced that it has recently appointed Tom Koltai
to the position of Chief Operating Officer. In his role, Mr.
Koltai will be responsible for directing the efforts of the
Company's sales, marketing and operations departments in an
effort to increase the efficient use of Company resources.

Mr. Koltai has held several senior positions within the Company
since joining Clearly Canadian in February 1995, most recently
as its Vice President of Operations. Prior to arriving at
Clearly Canadian, Mr. Koltai's experience included a 14-year
career at Molson Breweries, Petro-Canada and Gulf Canada
Products Limited. He earned his degree in Economics from the
University of Victoria.

Based in Vancouver, B.C., Clearly Canadian markets premium
alternative beverages and products, including Clearly Canadianr
sparkling flavored water, Clearly Canadian O+2r and Tre LimoneT,
which are distributed in the United States, Canada and various
other countries. Clearly Canadian also holds the exclusive
license to manufacture, distribute and sell certain Reebok
beverage products in the United States, Canada and the
Caribbean. Additional information on Clearly Canadian and CC
Beverage may be obtained on the world wide web at

COMDISCO: Court Okays De Minimis Lease Rejection Protocol
Comdisco, Inc., and its debtor-affiliates obtained the Court's
authority to establish procedures to reject certain leases of de
minimis value without further Court approval.

Felicia Gerber Perlman, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, relates that the procedures will be
used for leases with:

     (i) payments less than $10,000 per month; or

    (ii) remaining payments due, in the aggregate, total less
         than $100,000.

Specifically, the Debtors will reject each De Minimis Lease by
mailing written notice, via overnight delivery, of their
intention to reject such De Minimis Lease.

Under the proposed procedures, the Debtors are authorized to
reject any De Minimis Lease effective on the date the Debtors
mail a written notice to:

     (i) the respective lessor;

    (ii) the Creditors' Committee;

   (iii) the Equity Committee; and

    (iv) the United States Trustee.

Furthermore, Ms. Perlman relates that in any event that the
Debtors receive a properly timed objection within 10 days from
the Effective Date, the Debtors will schedule a hearing with
this Court.  However, in the event the Court overrules the
objection or the objection only relates to rejection damages,
such De Minimis Lease will still be deemed rejected as of the
Effective Date.

Ms. Perlman tells the Court that if each of the Notice Parties
indicates its approval in writing, and none provide written
notice of an objection, then the Debtors are authorized to
consummate the settlement agreement and to record an allowed
claim in the settled amount.

Moreover, Ms. Perlman asserts that the Lessors of the De Minimis
Leases will not be prejudiced by these procedures since the
rejection will not be effective until the tenth day from the
mailing of the Rejection notice. (Comdisco Bankruptcy News,
Issue No. 25; Bankruptcy Creditors' Service, Inc., 609/392-0900)

CONSUMERS PACKAGING: Files Assignment in Bankruptcy in Canada
Consumers Packaging Inc. (TSE: CGC), formerly Canada's largest
manufacturer of glass containers, has filed an assignment in
bankruptcy.  KPMG Inc. of Toronto has been appointed as trustee.

During the last 10 months, Consumers Packaging Inc. has been
operating under the protection of the Companies Creditors'
Arrangement Act. During this period, virtually all of its
Canadian and overseas assets have been sold and the claims of
its secured creditors have been settled.

The Canadian glass manufacturing business was sold to OI Canada
Corp. in October, 2001 and the Canadian plastic container
manufacturing business (Pet-Pak) was sold to Amcor PET in
December, 2001.

According to Richard Harris, Senior Vice President of KPMG: "The
bankruptcy will provide the appropriate forum for distribution
of the remaining proceeds of sale among Consumers' ordinary
creditors. KPMG estimates that valid creditors' claims of about
$400 million will be filed against residual assets of about $25
million to $30 million."

CPI's directors resigned on April 29, 2002. At the Company's
request, trading in the common shares of CPI was suspended by
the Toronto Stock Exchange on December 31, 2001.

CORNERSTONE PROPANE: Working Capital Deficit Tops $11 Million
CornerStone Propane Partners, L.P. (NYSE: CNO) reported earnings
before interest, taxes, depreciation, amortization and non-
recurring charges ("EBITDA") of $32.7 million for its fiscal
third quarter ended March 31, 2002, compared with $42.7 million
in the same period in 2001.  Results for the period were
adversely affected by lower sales volumes due to continued mild
winter weather in the regions served by the Partnership.
Weather for the months of January, February and March was 8.5%
warmer than the same quarter last year and 10.2% warmer than the
thirty year normal average as computed by the National Oceanic
and Atmospheric Administration.  Year to date the weather has
been 16.7% warmer than last year in the markets served by the

The Partnership reported net income of $10.7 million for the
fiscal third quarter, compared with net income of $19.5 million
during the same period last year.  Fiscal third quarter 2002
results include a non-recurring charge of $2.3 million related
to the divestiture of assets and closure of the U.S. crude, U.S.
natural gas and Canadian natural gas operations that were
included in the Coast Energy Group segment.  CEG's ongoing
businesses will be natural gas liquids marketing and supply
operations (consisting primarily of propane) and the logistics

"We've taken a number of steps to mitigate the effects of lower
sales volume resulting from warm winter weather," said Keith G.
Baxter, president and chief executive officer of CornerStone.
"We continue to reduce cash operating expenses and interest
expenses, and we have reduced our working capital balance by $59
million from March 31, 2001 to March 31, 2002. Operating
expenses in our retail propane distribution operations were $4.3
million or 13.5% lower than the prior year.  We also continue to
focus on internal growth.  Through the third fiscal quarter,
we've set approximately 9,000 net new propane tanks this fiscal
year vs. approximately 5,000 at the same time last year.  We
have substantially reduced our risk profile by restructuring CEG
operations to focus on our core propane operations."  Baxter
continued, "In addition to the progress made to improve our base
business in the face of very warm winter weather, we have
continued to serve our customers and have expanded our markets
while pursuing the strategic options announced in January.  I am
very proud of our team members."

                    Credit Facility Update

Reducing leverage has been a key objective of the Partnership.
Borrowing levels on CornerStone's $50 million credit facility as
of March 31, 2002 totaled $10.7 million, with $0 on the working
capital line, $10.7 million in term debt and $5.6 million in
outstanding letters of credit.  The credit facility extends to
November 28, 2002.  The Partnership has met the clean down
requirement and is in compliance with all covenants of debt
agreement.  The amount outstanding under the credit facility
decreased by $59 million from $69.7 million a year ago.

                    Business Restructuring

The restructuring of Coast Energy Group is nearly complete.  All
operations for the U.S. crude, U.S. natural gas and Canadian
natural gas businesses have been divested or closed as of this
date, with only final accounting activities and a few minor
transactions remaining to be closed. The remaining transactions
are offsetting, therefore exposure is expected to be immaterial.
Substantially all activities related to these businesses within
CEG will be completed by June 30, 2002.

                    Strategic Options Review

As announced on Jan. 18, 2002, the Partnership has retained
Credit Suisse First Boston Corporation (CSFB) to pursue
strategic options, including the possible sale or merger of the

To date, a significant number of parties, both within and
outside the propane industry, have expressed serious interest in
a sale or merger and have signed confidentiality agreements as a
condition in the process.  A series of management presentations
have been conducted with potential partners, and preliminary
non-binding valuations have been received.  A second round of
due diligence meetings is currently underway with selected
organizations. Selection of a partner for final negotiations is
planned within the next two months.  There can be no certainty,
however, that any transaction will occur.

The Partnership is currently formulating alternative plans in
the event a sale or merger is not realized.  These approaches
include efforts to continue to serve our customer base and
successfully operate in our current markets, to manage the
maturity of the credit agreement, to deal with the expiration of
NorthWestern Corporation's commitment to guaranty the credit
agreement, and to satisfy the Partnership's payment obligations
on its senior notes beginning in July 2003.  There can be no
assurance that these issues will be successfully addressed or
what effect they will have on the Partnership going forward.

                       Operating Results

Revenues for CornerStone's third fiscal quarter decreased to
$277.2 million from $865.4 million reported for the same quarter
last year. The revenue decline is due primarily to the sale and
exit of certain businesses of Coast Energy Group as it focused
on its natural gas liquids business.  Retail revenues for the
third quarter were $117.7 million, compared with $172.6 million
for the same quarter last year.  The reduction in retail
revenues stemmed primarily from lower propane prices and
secondarily from fewer gallons sold due to the warmer weather
compared to last year's quarter.

Fiscal third quarter 2002 retail sales volumes were 93.3 million
gallons, representing a decrease of 8.2 million gallons or 8.1%
from the same period last year.

Overall operating expenses for the quarter totaled $38.3
million, a decrease of $2.6 million or 6.3% from the same period
last year.  This decrease is a result of the Partnership's
continuing efforts to reduce overall administrative and
operational expenses and, to a lesser extent, the sale of
certain business units in both the retail and CEG segments.

Depreciation and amortization expenses decreased to $9.9 million
in the quarter from $12.3 million last year.  The decrease is
related to the implementation of SFAS No. 142, Goodwill and
Other Intangible Assets, which impacted amortization by
approximately $2.0 million.  Non-recurring charges for the
quarter and year to date relate to the impact of divesting and
closing certain business units primarily within CEG.  Interest
expense for the quarter decreased to $9.0 million, from $10.5
million for the same quarter last year, primarily due to lower
working capital requirements and lower interest rates.

At March 31, 2002, CornerStone Propane Partners, L.P. reported a
working capital deficit of about $11 million.

CornerStone Propane Partners, L.P. is a master limited
partnership.  The Partnership is one of the nation's largest
retail propane marketers, serving approximately 440,000
customers in more than 30 states.  For more information, please
visit the Web site at

COVANTA ENERGY: Signs-Up Chilmark Partners for Financial Advice
Jeffrey R. Horowitz, Covanta's Senior Vice President-Legal
Affairs, applies to the Court to authorize the retention of
Chilmark Partners, LLC, nunc pro tunc effective as of April 1,
2002, as investment banker to Covanta Energy Corporation and its
debtor-affiliates in the Chapter 11 cases.

The Debtors have determined that, during the administration of
these cases, it is necessary to engage investment bankers with
knowledge and experience in the area of Chapter 11
reorganization cases and workouts. Chilmark has such experience,
having assisted and advised debtors, creditors and other
constituencies in numerous Chapter 11 cases.

Mr. Horowitz continues that the Debtors, therefore, propose to
retain and employ Chilmark as their investment bankers.
Chilmark is one of the country's leading investment banks with
expertise in mergers and acquisitions, reorganizations and other
financial advisory services. Chilmark also has extensive
experience representing the interests of debtors, creditors and
institutional investors in business reorganizations and workouts
both in and out of Chapter 11 and in representing clients in a
wide range of industries. Chilmark is well qualified to provide
the Debtors with financial advice and services in connection
with their Chapter 11 cases. He adds that significant
reorganizations in which Chilmark or its principals have
participated include: ContiGroup Companies, Inc.; Global Marine,
Inc.; Fruit of the Loom, Inc.; Genesis Health Ventures, Inc./The
Multicare Companies, Inc.; MTS, Inc.; MobileMedia
Communications, Inc.; Long John Silver's Restaurants, Inc.;
Iridium Operating LLC; Revco D.S., Inc; Chrysler Corporation;
Zapata Corporation; Bruno's, Inc.; Itel Rail Corporation; AM
International; USG Corporation; SI Corporation; and Lodgian,

On March 28, 2002, Covanta entered into an agreement with
Chilmark to provide investment banking services to the Debtors.
Pursuant to the Agreement, Chilmark is to provide these services
to the Debtors:

    a) Develop valuation, debt capacity and recovery analyses in
       connection with developing and negotiating a potential
       restructuring of the Debtors;

    b) Based on a review and analysis of the Debtors'
       businesses, prospects, long-term business plan, and
       financial liquidity, Chilmark will advise Debtors with
       respect to its alternatives regarding its Obligations;

    c) Evaluate the Debtors' debt capacity and alternative
       capital structures to develop various restructuring
       scenarios and analyze the recoveries of different
       stockholders under these scenarios;

    d) Assist in the development of a negotiating strategy and,
       if requested by the Debtors, assist in negotiations with
       the Debtors' creditors and other interested parties with
       respect to a potential Restructuring or Disposition;

    e) Facilitate and advise with respect to the value of
       securities offered by the Debtors in connection with a
       potential restructuring of the Debtors; and

    f) Provide such other advisory services as are customarily
       provided in connection with the analysis and negotiation
       of a Restructuring, as reasonably requested by the

  Other principal and salient terms of Agreement:

    a) Term: Retention will commence on March 28, 2002 and
       continue on a month-to-month basis until terminated
       by either party upon 30 days' written notice without
       cause, or at any time for cause.

    b) Compensation: The Debtors agree to pay the following fees
       to Chilmark for its financial advisory services:

       (i) A monthly advisory fee in the amount of $150,000 per
           month. The Debtors have paid Chilmark a retainer of
           $450,000 to cover the period from March 28, 2002
           through June 27, 2002.

      (ii) Upon either a Successful Restructuring or a
           Disposition, an additional fee equal to
           $7,000,000. The term "Successful Restructuring"
           means the execution, confirmation, effectiveness, and
           consummation of a Chapter 11 plan for Covanta or any
           of its subsidiaries.

     (iii) If the Debtors sell, spin-off, or otherwise dispose
           of all or substantially all of the assets of the
           Debtors or its subsidiaries, Chilmark will be paid a
           fee in cash equal to 1.0% of the Aggregate
           Consideration upon completion of the transaction.
           This will not include the distribution of stock, debt
           or other consideration pursuant to a stand-alone
           Chapter 11 plan or reorganization.

     (iv)  If the Debtors make an extraordinary distribution of
           cash, stock or other value, Chilmark will be paid a
           fee in cash equal to 1.0% of the value of each
           distribution upon completion of the distribution.
           However, if the extraordinary distribution consists
           of the proceeds of (iii) above, Chilmark will not be
           paid both the Transaction Fee and the Distribution
           Fee. Additionally, this does not include the
           distribution of stock, debt or other consideration
           pursuant to a stand-alone Chapter 11 plan of

      (v)  If a Transaction Fee or a Distribution Fee is
           payable, the fee will reduce the Restructuring Fee,
           but not to an amount less than zero.

    (vi)   Reimbursement of all reasonable out-of-pocket
           expenses incurred during this engagement, payable
           promptly following delivery of invoices setting forth
           in reasonable detail the nature and amount of such


The Debtors will indemnify and hold harmless Chilmark for any
losses, claims, damages or liabilities in connection with any
matters related to this engagement, unless it is finally
judicially determined to have resulted from gross negligence or
bad faith on the part of Chilmark. If for any reason this
indemnification is unavailable to Chilmark, the Debtors will
contribute to the amount paid or payable by Chilmark taking into
account the relative economic interests of the Debtors and
Chilmark as well as the relative fault of the Debtors and

Mr. Horiwitz relates that the Debtors also seek approval of the
Fee Structure, as defined and as provided for in the Agreement,
in accordance with Section 328(a) of the Bankruptcy Code,
which provides, in relevant parts, that a debtor "with the
court's approval, may employ or authorize the employment of a
professional person under Section 327 on any reasonable terms
and conditions of employment, including a retainer, on an hourly
basis, or on a contingent fee basis." (11 U.S.C. Section
328(a).) Section 328(a), therefore, permits the Court to approve
the Fee Structure. The Fee Structure appropriately reflects the
nature of the services to be provided by Chilmark and types of
fee structures typically utilized by Chilmark and other leading
investment bankers, which do not bill their clients on an hourly

Although Chilmark does not bill by the hour, states Mr.
Horowitz, Chilmark will maintain general, daily records of time
spent by its professionals in connection with the rendering of
services for the Debtors.

In addition to Chilmark, by separate application the Debtors
have also sought to employ Loughlin Meghji & Co. (LM) as their
financial advisors. The Debtors will utilize LM and Chilmark in
such a way as to avoid duplication of services. Chilmark will
provide investment banking services, which LM does not provide.
For example, Chilmark will provide ongoing valuation analysis
for the Debtors' businesses, which will be essential to the
restructuring process.

Another example is that the Debtors may require additional
financing in connection with an exit from these Chapter 11
proceedings. The services of an investment bank are essential to
arrange such financing. In the event the Debtors are successful
in attracting additional equity financing from KKR or another
investor, the investment banking services of Chilmark will be
indispensable to complete such a transaction. LM, on the other
hand, will assist the Debtors, on a day to day basis, with
respect to the financial and other decision making
requirements of the Debtors In Possession for issues relating to
the assumption or rejection of contracts, distribution of the
proceeds of the Debtors' assets to be liquidated and debtor in
possession financial reporting obligations. The Debtors submit
that the retention of Chilmark and LM represents distinct needs
of the estate.

In connection with Chilmark's provision of investment banking
services to the Debtors, the Debtors hereby disclose that the
Debtors comprise a large and complex organization and that there
are complicated relationships among them. These relationships
demonstrate that the Debtors' affairs are significantly
interconnected and the Debtors' interests are substantially
identical. To facilitate evaluation of the Debtors'
relationships, the Debtors offer these facts:

    a) Covanta owns 100% of the equity of Covanta Energy Group
       Inc., Ogden Services Corporation, Ogden Management
       Services Inc. and Covanta Financial Services Inc., of
       which two - Ogden Services Corporation and Covanta
       Financial Services, Inc. - are debtor entities in these
       Chapter 11 proceedings. The remaining 121 Debtors are
       either indirectly wholly owned subsidiaries of Covanta
       or partnerships in which Covanta owns the majority
       interest. In addition, the Debtors have 77 non-debtor
       domestic affiliates and 85 non-debtor foreign affiliates.

    b) The Debtors are separate corporate entities, but, along
       with their non-debtor affiliates and subsidiaries, act in
       a consolidated manner with respect to various corporate
       functions. In addition, they share a number of common
       officers and directors.

    c) Various services required by the Debtors, including
       without limitation, financial, audit and legal, are
       coordinated on a company-wide basis. The financial
       statements of the Debtors and their non-debtor affiliates
       are audited on a consolidated basis.

    d) There is a significant amount of inter-company accounting
       by the Debtors in connection with or related to:

      (i) payment of all revenues and receipts earned at the
          subsidiary level up to Covanta;

     (ii) disbursements and payments made by Covanta in respect
          of all expenses incurred at the subsidiary level; and

    (iii) the Debtors' operations in the ordinary course of
          business. The amounts of any inter-company claims are,
          to the Debtors' knowledge, undisputed.

The Debtors do not believe that their relationships to each
other and to their non-debtor affiliates pose any conflict of
interest in these Chapter 11 cases because of the general unity
of interest at all levels, offers Mr. Horowitz.  Accordingly,
the Debtors submit that Chilmark's provision of investment
banking services to all Debtors is permissible under Section 327
of the Bankruptcy Code and is in the best interest of all
creditors of these estates.

To the best of the Debtors' knowledge, and except as set forth
herein the members and other professionals of Chilmark do not
have any connection with the Debtors, their creditors, equity
security holders or any other parties in interest in any matters
relating to the Debtors or their estates. As disclosed in
the Rosenberg Declaration, Chilmark currently provides and may
also in the future provide investment banking and business
advisory services to certain of the Debtors' creditors, equity
holders and other parties in interest in matters wholly
unrelated to these proceedings. Chilmark has fully informed the
Debtors of its ongoing relationship with such entities, and the
Debtors have consented to Chilmark's continued provision of
investment banking and financial advisory services to these
entities in matters unrelated to these proceedings.

The Debtors believe that Chilmark's current and future
relationship with these entities will not in any way adversely
affect Chilmark's provision of investment banking services to
the Debtors. To the best of the Debtors' knowledge and as
disclosed in the Rosenberg Declaration, Chilmark does not hold
or represent any interest adverse to the Debtors or their
estates, Chilmark is a "disinterested person" as that phrase is
defined in Section 101(14) of the Bankruptcy Code, as modified
by Section 1107(b) of the Bankruptcy Code, and Chilmark's
employment and retention is necessary and in the best interests
of the Debtors and their estates.

Mr. Horowitz reminds Judge Blackshear that, as discussed above,
upon retention, Chilmark was paid a retainer of $450,000 to
cover the Monthly Fees for the period from March 28, 2002
through June 27, 2002. Chilmark holds no claim against the
Debtors for amounts owing for prepetition services rendered. The
Debtors understand that Chilmark intends to apply to the Court
for allowance of compensation and reimbursement of expenses in
accordance with applicable provisions of the Bankruptcy Code,
the Bankruptcy Rules and the Local Rules and orders of the

In connection with the reimbursement of actual, necessary
expenses, the Debtors have been informed that it is the Firm's
general policy to charge its clients for all other reasonable
incremental expenses incurred in connection with the clients'
cases. The expenses charged to Chilmark's clients include, among
other things, telephone and telecopier toll, mail and express
mail charges, special or hand delivery charges, document
processing charges, photocopying charges, travel expenses,
expenses for "working meals," computerized research,
transcription costs, as well as non-ordinary overhead expenses
such as secretarial overtime.

The Debtors have been assured that Chilmark will charge the
Debtors for these expenses in a manner and at rates consistent
with charges made to other clients and maintain or submit the
necessary documentation.  Mr. Horowitz asserts that no promises
have been received by either the Firm or any member,
professional or other employee thereof as to compensation or
payment in connection with this case other than in accordance
with the provisions of the Bankruptcy Code. Chilmark has no
agreement with any other entity to share with such entity any
compensation received by Chilmark in connection with these
Chapter 11 cases.

The Debtors request that an order be entered authorizing them to
employ and retain the firm of Chilmark Partners, LLC as their
investment banker, nunc pro tunc effective as of April 1, 2002,
under a general retainer in these cases under chapter 11 of
the Bankruptcy Code, and that the Court grant to the Debtors
such other and further relief as is just and proper. (Covanta
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

COVENTRY HEALTH: Posts Improved Operating Results for Q1 2002
Coventry Health Care, Inc. (NYSE: CVH) reported operating
results for the first quarter ended March 31, 2002.

Operating revenues totaled $848.5 million for the quarter, a
12.9% increase over the first quarter of 2001. Net earnings were
$28.4 million, or $0.45 per diluted share, a 46.1% increase over
net earnings first quarter of 2001 and 55.2% on a per share

"This was an outstanding quarter of superior earnings results
for our company and shareholders" said Allen F. Wise, president
and chief executive officer of Coventry. "We were able to
continue to expand our operating margins through prudent risk
selection and financial discipline. Although commercial
membership declined in total, it was the result of continued
pruning of unprofitable business; new business growth in the
first quarter was strong and we are seeing similar sales results
for the second and third quarters. This sales momentum, coupled
with acquisition opportunities like the recently announced New
Alliance transaction, will provide our company tremendous
opportunity for continued profitable growth."

First Quarter Highlights:

     --  Membership. As of March 31, 2002, Coventry had a total
of 1.81 million members, an increase of 80,734 members, or 4.7%,
over the prior year. As compared to the prior year, commercial
risk membership decreased 36,988 members or 3.1% due to the
previously announced loss of 25,000 members in the Raytheon
group in Wichita as well as other pricing-related membership
losses in recent acquisitions. Medicaid membership grew 72,389
members or 35.1% due to continued growth in existing markets as
well as participation in a new mental health program in the
Pennsylvania market starting in the fourth quarter of 2001.
Medicare+Choices membership grew 10,618 members or 22.0%
primarily due to acquisition and organic growth in the Kansas
City market. Non-risk membership grew 34,715, or 12.1% primarily
through acquisition.

     --  Commercial Rate Increases. Coventry achieved commercial
rate increases in excess of 15% on first quarter renewals,
representing 55% of membership. These rate increases were over
50 basis points higher than previously announced expectations.
The Company expects commercial rate increases to exceed 18% for
the second quarter of 2002 representing a little over 5% of its

     --  Medical Loss Ratio (MLR). MLR was 84.5% for the
quarter, a 130 basis point improvement over the fourth quarter
of 2001 and a 170 basis point improvement over the prior year
first quarter. Commercial MLR of 84.1% was a 270 basis point
improvement over the prior year quarter and was the main driver
of overall MLR improvement. Total commercial inpatient days per
thousand in the first quarter of 224 were 5.5% lower than the
prior year quarter. Lower than expected inpatient utilization
coupled with price increases contributed to the MLR improvement.

     --  Selling, General & Administrative (SG&A) Expenses. SG&A
expenses were 12.3% of operating revenues for the quarter, an
increase of 30 basis points over the prior quarter and 10 basis
points over the prior year. The increase in the SG&A rate was
partially due to certain timing and seasonal issues related to
broker commissions, employee commissions, and payroll taxes that
the company historically has experienced in the first quarter of
the year.

     --  Balance Sheet. Cash and investments grew to $959.2
million during the quarter, up $6.7 million from the prior year-
end. Total days in medical liabilities decreased less than half
a day and remain at the high end of historical ranges.

     --  Cash Flow. Cash flow from operations was $13.8 million
for the first quarter. Cash flow adjusted for the timing of CMS
payments for Medicare+Choices beneficiaries was $44.2 million.

     --  Effect of Accounting Rule Changes. Effective January 1,
2002, the company adopted FAS 142 which requires companies to
cease amortization of goodwill. For the year ended December 31,
2001, goodwill amortization averaged approximately $1.9 million
per quarter.

Coventry Health Care is a managed health care company based in
Bethesda, Maryland operating health plans and insurance
companies under the names Coventry Health Care, Coventry Health
and Life, Carelink Health Plans, Southcare, Group Health Plan,
HealthAmerica, HealthAssurance, HealthCare USA, Southern Health
and WellPath.

The Company provides a full range of managed care products and
services including HMO, PPO, POS, Medicare+Choice, and Medicaid
to 1.81 million members in a broad cross section of employer and
government-funded groups in 12 markets throughout the Midwest,
Mid-Atlantic and Southeast United States. More information is
available on the Internet at

At December 31, 2001, Coventry Health Care has a working capital
deficit of about $173 million, down from $186 million recorded
at September 30, 2001.

DELTA AIR LINES: Will Be Paying Cash Dividend on June 1, 2002
The Board of Directors of Delta Air Lines (NYSE: DAL) declared a
cash dividend of two and one-half cents per common share at its
regular meeting held in Washington, D.C.

The dividend is payable on June 1, 2002 to shareowners of record
at the close of business on May 8, 2002.

Delta Air Lines, the #3 US carrier (behind UAL's United and
AMR's American), is expanding its US regional operations while
building a global alliance. With hubs in Atlanta, Dallas/Fort
Worth, Cincinnati, New York City (Kennedy), and Salt Lake City,
Delta flies to 205 US cities and about 45 foreign destinations.
It also serves more than 220 US cities and nearly 120
destinations abroad through code-sharing agreements. In the US,
Delta owns regional carriers Delta Express, Atlantic Southeast,
and COMAIR. Internationally, it has formed the SkyTeam alliance
with Air France, AeroMexico, and Korean Air Lines to compete
with rival alliances Star and Oneworld. Delta also owns 40% of
computer reservation service WORLDSPAN.

As reported in the September 25, 2001, edition of the Troubled
Company Reported, Standard & Poor's lowered its corporate
credit, senior secured debt and senior unsecured debt ratings on
Delta Air Lines Inc., to the low-B level, and were placed on
CreditWatch with negative implications.

The downgrades, S&P said, reflected the severe impact of sharply
reduced air traffic since the September 11 terrorist attacks in
New York City and Washington, D.C., with expectations for only a
slow recovery in the coming months. This worsens significantly
an already grim airline industry outlook, with depressed
business travel and higher labor costs.

The extent of the downgrades was determined principally by:

    * The risk of a downward rating action prior to the current
      crisis, and thus how much credit "cushion" was available
      within those ratings;

    * The cash and bank lines available to Delta Air Lines Inc.,
      as well as the amount of owned, unsecured aircraft that
      could be used in secured debt or sale-leasebacks to raise
      further funds; and

    * The ability of Delta Air Lines to reduce cash operating
      expenses and commitments for capital spending.

Delta Air Lines' 9.75% bonds due 2021 (DAL21USR1) are quoted at
a price of 91, DebtTraders reports. For real-time bond pricing,

DELTA AIR: CEO Leo Mullin Pins Hopes on New Strategic Direction
Delta Air Lines (NYSE: DAL) CEO Leo F. Mullin reported at the
company's annual shareowners meeting that "Delta will thrive,
and emerge as a better, stronger, more competitive and more
successful company than ever before."

"Prior to 9/11, Delta had developed a strong foundation which
served us well in the aftermath of the crisis and will continue
to serve us going forward," Mullin said in Washington, D.C.
"Delta has a well-defined strategic direction which builds on
our strong foundation and provides us with more opportunities to
succeed than any other airline."

Mullin cited Delta's strong, industry-leading position, with the
strongest balance sheet of the nation's hub and spoke carriers.

"In key financial measures for the industry -- including
operating profit margin, cost per available seat mile and return
on investment -- Delta exceeded all hub and spoke airlines,"
said Mullin.

Mullin said that, going forward, the airline "must think through
the fact that old assumptions no longer prevail, and think
through how to both respond to these changed assumptions and
also how to take advantage of them."

Delta is not, he said, "waiting for the world to come back and
fill its flights once more."

Mullin stressed that the airline must continue to put customers
first, find innovative ways to meet the growing strength of low-
cost carriers, and work with the government to ensure that
returning airline passengers experience the level of customer
service they deserve.

Delta Air Lines, the world's second largest carrier in terms of
passengers carried and the leading U.S. airline across the
Atlantic, offers 5,581 flights each day to 410 destinations in
72 countries on Delta, Delta Express, Delta Shuttle, Delta
Connection and Delta's worldwide partners.  Delta is a founding
member of SkyTeam, a global airline alliance that provides
customers with extensive worldwide destinations, flights and
services.  For more information, please go to

DUANE READE: Posts Improved Sales Performance for March Quarter
For the first quarter ended March 30, Duane Reade's (New York,
NY) net income, before the cumulative effect of a change in
accounting practices and the adoption of SFAS 142, increased
76.9% to $4.6 million, as total sales grew 12.6% to $305.8
million.  The improvements, F&D Reports observes, were largely
the result of opening 33 new stores, while closing only five,
over the last 12 months, combined with an 80 basis point
improvement in SG&A margin.  Despite the strong top and bottom
line gains, comparable-store sales left much to be desired as
overall comps increased 5.3% and front-end comps dropped 1.3%.

Looking ahead, the Company anticipates sales growth of 9.5% to
approximately $335.0 million in the second quarter and 15% - 18%
to approximately $1.32 - $1.35 billion for the full year.
Exclusive of one-time charges, earnings per share are expected
to be between $0.40 - $0.44 for the quarter and $1.64 - $1.68
for the year, compared to $0.36 and $1.20 for the corresponding
periods of the previous year.  Analysts' consensus EPS estimates
for the quarter and the year are $0.41 and $1.65, respectively.

                           *   *   *

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

ENRON: U.S. Trustee Appoints Employee-Related Issues Committee
Pursuant to Section 1102(a) and 1102(b) of the Bankruptcy Code,
and effective March 29, 2002, Assistant United States Trustee
Mary Elizabeth Tom for the Southern District of New York
appoints these Enron Corporation's former and current employees
and plan fiduciary to the Employment-Related Issues Committee,
for the purpose of investigating the issues relating to:

  (1) the continuation of health or other benefits for former
      employees of the Debtors;

  (2) the investigation of claims uniquely held by employees, as
      such, against the Debtors;

  (3) the treatment of employees' claims under any plans of
      reorganization or liquidation;

  (4) possible Warn Act violations by the Debtors in discharging

  (5) possible violation by the Debtors of state labor laws and
      certain provisions of ERISA; and

  (6) dissemination of non-confidential information regarding
      the issues that will be investigated to employees, former
      employees, or groups:

    -- Michael P. Moran Esq.

    -- Richard D. Rathvon

    -- Diana S. Peters

    -- Jess Hyatt

    -- State Street Bank and Trust Company, in its capacity as
       special fiduciary for certain Enron plans
       Independent Fiduciary Services Department
       2 International Place
       Boston, Massachusetts 02110
       Attn: Ms. Monet Ewing

Ms. Tom explains that State Street Bank's inclusion in the
Committee is made on the assumption that the Court will approve
the Debtors' motion to approve its fiduciary services agreement
with State Street Bank. (Enron Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

EXIDE TECHNOLOGIES: Wants to Maintain Cash Management System
Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, informs the Court that Exide
Technologies' Cash Management System is an integrated network of
approximately 22 bank accounts maintained by the Debtors, and
six bank accounts maintained by Exide U.S. Funding Corp.,
Exide's non-debtor subsidiary.  The Cash Management System
facilitates the timely and efficient collection, concentration,
management, and disbursement of funds used by the Debtors and
their non-debtor affiliates. The Debtors' Cash Management System
has two components: the Exide concentration system and the Exide
miscellaneous bank accounts. All of the three U.S. operating
global business units are part of the Exide concentration
system, which accounts for the majority of the Debtors' banking
activities. Recently, in an effort to consolidate their Cash
Management System, the Debtors have closed several unused or
little-used bank accounts at various banks. As part of this
continued effort, the Debtors may in the future determine to
close additional bank accounts.

Although the Cash Management System as it relates to the Exide
concentration system includes numerous accounts, Ms. Jones
submits that the Debtors' Cash Management System has a simple
and logical structure. The Debtors maintain three concentration
accounts.  Exide U.S. Funding maintains one additional
concentration account.

Ms. Jones explains that funds that are received in the United
States through operations of the Debtors are deposited into one
of 10 collection accounts held at First Union National Bank,
Mellon Bank and Citibank.  Five of these accounts are maintained
by the Debtors, and five accounts by Exide U.S. Funding. These
funds are received from the Debtors' customers through checks
processed through lockboxes, wire transfers, and other
miscellaneous deposits. The funds in nine of the collection
accounts are automatically swept into concentration accounts at
each of the three banks. The funds collected by the 10th
collection account (Bank One of Louisiana Account #
247900315796, maintained by the Debtors and used to collect
check deposits made to Exide's Baton Rouge smelter) are
automatically swept into a disbursement account maintained by
Exide at Bank One of Louisiana (Account # 7900649082) which pays
for certain medical benefits services of the Debtors. The vast
majority of funds from customers are received by the five Exide
U.S. Funding collection accounts at its accounts with First
Union, Citibank and Mellon.

With respect to disbursement accounts, Ms. Jones states that the
Debtors' Cash Management System includes approximately 10
accounts that are held at Citibank, Mellon, First Union, Bankers
Trust, Bank One of Louisiana and Wells Fargo, all of which are
maintained by the Debtors. The Exide Disbursement Accounts
include three accounts that are used to fund payroll for certain
of the Debtor entities; three accounts that are used to fund
accounts payable for certain of the Debtor entities; one which
funds junk battery returns; one imprest account for Exide's
Baton Rouge plant; and two two accounts which are used to pay
medical benefits. Disbursements are made by check, wire
transfer, or ACH debit. Nine of these disbursement accounts are
funded directly from the concentration accounts at Citibank,
Mellon, or First Union on a daily basis. The 10th disbursement
account, held at Bank One of Louisiana, is funded primarily by
Exide's collection account at Bank One of Louisiana. To the
extent that this account is not fully funded, it receives
additional funding from the First Union Concentration Account.

Certain of the Debtors (Exide Technologies and Exide Delaware,
LLC) maintain a total of four additional bank accounts that are
utilized for miscellaneous purposes. Two of these bank accounts
(Toronto Dominion Bank Account #'s 02747315255 and 02740511525)
collect receipts from Canadian customers, and make disbursements
related to Canadian operations. Another is a collection and
disbursements account related to Exide Delaware, LLC (First
Union Account # 2000003284009). All three of these accounts are
funded by the First Union Concentration Account. Their
collections are automatically transferred into the First Union
Concentration Account. The fourth account is a pre-funding
account maintained at Mellon Bank (Account # 900-6994) to fund
direct deposit payroll of the Debtors, which is funded by the
First Union Concentration Account.

Given the size and complexity of the Debtors' operations, Ms.
Jones believes that a successful reorganization of the Debtors'
businesses simply cannot be accomplished if there is substantial
disruption in the Debtors' cash management procedures. It is
essential, therefore, that the Debtors be permitted to continue
to consolidate management of their cash and transfer monies from
entity to entity as needed and in the amounts necessary to
continue the operation of their business.

According to Ms. Jones, the Debtors have used the basic
structure of the Cash Management System described herein for
more than five years and it constitutes the Debtors' ordinary,
usual and essential business practices. The Cash Management
System is similar to those commonly employed by corporate
enterprises comparable to the Debtors in size and complexity.
The widespread use of such systems is attributable to the
numerous benefits they provide, including the ability to tightly
control corporate funds, invest idle cash at higher returns,
ensure cash availability, and reduce administrative expenses by
facilitating the movement of funds and the development of timely
and accurate account balance and presentment information. These
controls are particularly important given the significant amount
of cash that flows through the Debtors' consolidated Cash
Management System on an annual basis.

Given the corporate and financial structure of the Debtors and
their non-debtor affiliates, Ms. Jones believes that it would be
difficult, if not impossible, for the Debtors to establish an
entirely new system of accounts and a new cash management system
for each separate legal entity. For example, if the Debtors were
required to open separate accounts as Debtors In Possession and
to rearrange their Cash Management System, it would require
reopening roughly 22 separate accounts. There would also be
attendant delays in the Debtors' ability to operate their
businesses while pursuing these arrangements. Therefore,
preserving the "business as usual" atmosphere and avoiding the
unnecessary distractions that would inevitably be associated
with any substantial disruption in the Debtors' Cash Management
System obviously will facilitate the Debtors' reorganization

If the Debtors are not permitted to continue to utilize their
consolidated Cash Management System in its current form
(modified to the extent necessary by the debtor in possession
financing arrangements), Ms. Jones claims that their operations
would be severely, and perhaps, irreparably, impaired.
Accordingly, the Court should authorize the Debtors' continued
use of their existing cash management system.

Ms. Jones contends that it is critical both to the continued
operation of the Debtors' businesses and to the preservation of
the value of those businesses that the Debtors continue to
utilize their existing Cash Management System without
disruption. Accordingly, it is appropriate and, equally
important, entirely consistent with applicable provisions of the
Bankruptcy Code and case law, for the Court to approve the
Debtors' centralized Cash Management System in its current form
(except to the extent it needs to be modified in accordance with
the Debtor In Possession financing arrangements). (Exide
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

EXODUS: 3-Creditor Plan Committee will Supervise Liquidation
Exodus Communications, Inc.'s Creditors' Committee, until the
Effective Date of the Liquidating Chapter 11 Plan, will continue
to exercise its powers and perform its duties specified in
Section 1103 of the Bankruptcy Code.  It will also perform other
duties as it may have been assigned by the District Court prior
to the Effective Date. However, the Committee will be dissolved
and its members deemed released of all their duties,
responsibilities and obligations in connection with the Chapter
11 Cases or the Chapter 11 Plan and its implementation. The
retention or employment of the Creditors' Committee's attorneys,
accountants and other agents will terminate, except with respect
to all Fee Claims and any appeals of the Confirmation Order.

A Plan Committee, on the effective date, will be formed and
constituted and consist of three Creditors' Committee members
who will be appointed by the Creditors' Committee. Membership to
the Plan Committee is on an institutional and not on an
individual basis. Thus, in the event that a member of the Plan
Committee resigns from the position on the Plan Committee, such
member has the right to designate a successor. If the resigning
member does designate a successor to the Plan Committee within
ten days after resignation, the non-resigning members of the
Plan Committee have the right to designate a successor.

The Plan Committee will have independent standing to appear and
be heard in the District Court on any matter relating to the
Plan, the Plan Administrator, the Estates or Reorganized EXDS
and shall have ultimate supervisory authority over the Plan

The Plan Committee and the Plan Committee will have the power to
remove the Plan Administrator and are responsible for:

A. Instructing and supervising Reorganized EXDS and the Plan
   Administrator with respect to their responsibilities under
   the Plan and the Plan Administrator Agreement;

B. Reviewing and approving the prosecution of adversary and
   other proceedings, if any, including approving proposed
   settlements thereof;

C. Reviewing and approving objections to and proposed
   settlements of Disputed Claims;

D. Performing other duties that may be necessary and proper to
   assist the Plan Administrator and its retained professionals,
   and remain in existence until such time as the final
   distributions under the Plan have been made by the
   Reorganized EXDS.

Except for reimbursement of actual expenses, the Plan Committee
members will serve without compensation for their services.
They will be indemnified and held harmless for acts or omissions
in the fulfillment of their duties as Committee members. Lawyers
and other professionals retained by the Plan Committee are
entitled to reasonable compensation and reimbursement of actual,
necessary expenses upon the submission of invoices to the
Reorganized EXDS. (Exodus Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

FEDERAL-MOGUL: Judge Newsome Names Warren Smith as Fee Auditor
Judge Newsome directs the employment of Warren H. Smith &
Associates, P.C. as the fee auditor in Federal-Mogul Corporation
and its debtor-affiliates' chapter 11 cases.  Mr. Smith will act
as a special consultant to the Court for professional fee and
expense review and analysis effective, nunc pro tunc, to March
1, 2002. Judge Newsome arrives at this decision after having
determined that the size, complexity and duration of the Debtors
jointly administered cases will result in numerous and lengthy
written applications for payment of professional fees and
reimbursement of expenses in significant amount,

Warren Smith will serve:

A. all professionals in these cases employed or to be employed;

B. all members of the official committees;

C. the Legal Representative for Future Claimants; and,

D. any claims for reimbursement of professional fees and
   expenses to the extent permitted by the Court except:

   a. professionals providing services pursuant to a flat
      monthly fee arrangement;

   b. ordinary course professionals retained upon the Court's

   c. fees earned by professionals that represent a percentage
      of a specified transaction; and,

   d. as otherwise ordered by the Court.

The specific duties of the Warren Smith are:

A. The auditor will review in detail Interim Fee Requests and
   Final fee applications filed with the Court by applicants;

B. During the course of its review and examination, the auditor
   will consult with each applicant concerning such applicant's
   fee application if he notes any areas of concern regarding
   reasonable, actual and necessary fees and expenses;

C. During the course of his review, the Auditor may review any
   filed documents in these cases and is be responsible for
   general familiarity with the docket in these Chapter 11

D. Within 30 days after service of a fee application, the
   auditor must communicate in writing to the applicant
   concerning the auditor's initial report regarding such fee

E. Within 15 days after the date of the initial report, if the
   Auditor has noted any issues with respect to an applicant's
   fee application in such initial report, the auditor must
   contact the affected applicant concerning the finding, and
   the auditor and the affected applicant will engage in an
   informal response process;

F. Within 45 days after the date of the initial report, the
   auditor will conclude the informal response process by filing
   with the Court a final report with respect to each fee

G. The auditor serves each final report upon the affected
   applicant and the Notice Parties; and,

H. The auditor must be available for deposition and cross-
   examination by the Debtors, each of the Committees, the
   United States Trustee and other interested parties,
   consistent with Rule 706 of the Federal Rules of Evidence.

Judge Newsome declares that the fees and expenses of Warren
Smith are subject to application and review and will be paid
from the Debtors' estates as an administrative expense. The
compensation of Warren Smith will be charged at the lesser
amount of (1) the ordinary hourly rate of the auditor for
services of this nature, or (2) 1% of the aggregate applicable
billings reviewed by the auditor that are subject to the Court's
Order over the life of the Debtors' bankruptcy proceeding.
(Federal-Mogul Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

FLAG TELECOM: Seeks Approval to Obtain Super-Priority Financing
FLAG Telecom Holdings Limited and its debtor-affiliates move the
Court for interim and final Orders authorizing them to incur
secured indebtedness with administrative super-priority.

The Debtors contemplate borrowing cash from FLAG Telecom
Holdings Ltd., or FTHL, to fund operations and then repay that
cash either through the collection of receivables or through a
global reorganization of the Debtors.  Upon approval of this
borrowing arrangement, the $210,000,000 million transferred from
FTHL to its wholly owned subsidiary, FLAG Pacific Holdings
Limited, will be returned.

The terms and conditions for the use of the FTHL cash are:

The Lender: FLAG Telecom Holdings Limited

Debtor-Borrowers: FLAG Limited, FLAG Pacific USA
    Limited, FLAG Telecom Group Services, FLAG Telecom
    Limited, FLAG Telecom USA Ltd., and FLAG Asia Limited

The Non-Debtor Subsidiary Borrowers: FLAG Telecom Development
    Limited and its direct and indirect subsidiaries (FLAG
    Telecom Global Network Limited, FLAG Telecom France
    Services, FLAG Telecom Deutschland GmbH, FLAG Telecom
    Services Italia Srl, FLAG Telecom Nederland BV, FLAG
    Telecom Hellas AE, FLAG Telecom Austria GmbH, FLAG
    Telecom Korea Limited, FLAG Telecom Taiwan Services

Use of Cash: The Borrowers are authorized to use the cash of
    FTHL to pay actual expenses incurred in the ordinary course
    of business as consistent with past practice and in the
    amounts set forth in the monthly budget.  This is provided,
    however, that the amount of the Debtors' disbursements does
    not exceed 110% of the total amount set forth in the budget
    without consent of a majority of the Official Committee of
    Unsecured Creditors, or if no Creditors' Committee has been
    duly appointed, by consent of a majority of a committee
    composed of the bondholders of FTHL willing to serve and
    Alcatel and Reach Ltd. (if willing to serve).

Disclosure of Use of Cash: The Debtors will disclose to the
    Creditors' Committee, or the Steering Committee if no
    Creditors' Committee has been duly appointed, the use of the
    FTHL cash on a rolling weekly basis for each week. The
    disclosure of each week's cash use will be transmitted to
    counsel to the Creditors' Committee, or if no Creditors'
    Committee has been duly appointed, then to Kasowitz, Benson,
    Torres & Friedman LLP (counsel to the ad hoc FTHL
    bondholders' committee) and Proskauer Rose LLP (counsel to
    Alcatel) within seven days after the end of each weekly

Adequate Protection for Use of Cash: As adequate protection for
    the use of the FTHL's cash, FTHL will be granted (i) a
    super-priority administrative claim, subject only to $7
    million carve-out for professionals retained by the Debtors'
    estates pursuant to Section 364(c)(1) against each Debtor-
    Borrower receiving cash, in the amount of cash received by
    such Debtor-Borrower that cash has not be repaid to FTHL and
    (ii) a lien on such Debtor-Borrower's inter-company accounts

Borrowing by Non-Debtor Subsidiaries: Any disbursement of FTHL
    cash to a Non-Debtor Subsidiary (which may occur through
    direct or indirect funding by FTHL) is deemed to be an
    inter-company loan to such Non-Debtor Subsidiary. Such
    inter-company loans will be secured by a lien on the inter-
    company account receivable of such Non-Debtor Subsidiary
    receiving FTHL cash.

Borrowing by FLAG Atlantic: If the financial institutions that
    lent money to FLAG Atlantic Limited pursuant to that certain
    Credit Agreement dated as of October 8, 1999 consent, which
    consent will be communicated to the Debtors and the Court
    by the agent, then FTHL's cash will be lent to FLAG
    Atlantic pursuant to an approved budget in accordance with
    the provisions regarding Use of Cash of FTHL and Disclosure
    of use of cash.

Adequate Protection for Borrowing by FLAG Atlantic: As adequate
    protection for the use of FTHL's cash to FLAG Atlantic, FTHL
    will receive a priming lien on all assets of FLAG Atlantic,
    its wholly-owned subsidiaries and FLAG Atlantic Holdings
    Limited pursuant to section 364(d), and a priority
    administrative expense claim pursuant to section 364(c) in
    the amount of FTHL cash received by FLAG Atlantic.

Events of Default and Remedy: If the Borrowers fail to provide a
    monthly budget after the end of the period covered by the
    monthly budget, the cash use order and the Borrowers' and
    FLAG Atlantic's authority to use the cash of FTHL will
    terminate at the end of the period covered by the latest

Enforceability: The Creditors' Committee, or the Steering
    Committee if no Creditors' Committee is duly appointed,
    will be entitled to enforce the rights contained herein.

The Debtors have prepared a Budget, that they have shared with
counsel to the ad hoc committee of FTHL bondholders, counsel to
the ad hoc committee of FLAG Limited bondholders, counsel to the
Lenders under the FLAG Atlantic Credit Agreement and counsel to
Alcatel Submarine Networks.

Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, says it
is essential that the Debtors obtain access to sufficient use of
cash for the success of their Chapter 11 cases. Without access
to the working capital financing that will be available to the
Debtors under the proposed Term-sheet on an interim and final
basis, the Debtors will be unable to fund their payroll and
other crucial operating costs of their businesses.  Therefore,
they will be unable to preserve their values as going concerns.
Or, absent such use of cash, the Debtors' cases could possibly
be converted to cases under Chapter 7 of the Bankruptcy Code.
The Debtors' continued viability and their ability to reorganize
successfully depend heavily upon the timely approval of the use
of FTHL Cash as contemplated in the Term-sheet.

The Debtors believe that given the general economic climate and
current market conditions of the telecom industry, they would
not be able to secure financing from any other source.

              Request for Immediate Interim Relief

Pending the Final Hearing, the Debtors request that the Court
schedule an interim hearing as soon as practicable to consider
authorizing them to obtain emergency interim use of FTHL's cash.
Mr. Reilly says the Debtors require immediate financing to pay
payroll and continue to provide services to its customers.

                     Existing Indebtedness

Until the Petition Date, FLAG Atlantic Limited, FLAG Atlantic
Holdings Limited, FLAG Atlantic USA Limited and certain of their
non-debtor subsidiaries received operating financing under a
Credit Agreement. As of the Petition Date, amounts outstanding
under the Credit Agreement totaled approximately $257 million.
As security for all obligations under the Credit Agreement, the
FLAG Atlantic Group granted the Lenders a security interest in
substantially all of their personal property assets, including
accounts receivable, inventory, general intangibles and proceeds
and certain real property.

FTHL, pursuant to two indentures dated as of March 17, 2000,
issued $300 million in principal amount of 11-5/8% Senior Notes
due 2010 and 300 million Euros in principal amount of 11-5/8%
Senior Notes due 2010 for an aggregate of approximately $450
million. Also, pursuant to an indenture dated as of January 30,
1998, FLAG Limited issued $430 million in principal amount of 8-
1/4% Senior Notes due 2008. (Flag Telecom Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)

FLEMING: Core-Mark Acquisition to Boost Distribution Revenues
F&D Reports (April 29, 2002 edition) says that following the
successful completion of Fleming's proposed acquisition of Core-
Mark, the company will soon have another opportunity to
potentially boost its convenience-store distribution revenues by
more than $2.00 billion.

Core-Mark is currently the largest supplier of 7-Eleven (Dallas,
TX) franchise locations in the US, while Wal-Mart's McLane
Company supplies 7-Eleven's US corporate units.  However, 7-
Eleven's 10-year distribution agreement with McLane expires in
November, and 7-Eleven is "obtaining and evaluating proposals
from McLane and other companies to provide distribution services
after the current contract expires," F&D says.  One factor in
Fleming's favor: 7-Eleven officials have hinted at their
disappointment with the current contract, by stating that any
future distribution agreement, regardless of who it is with,
will "be on terms more favorable than those set forth in the
existing agreement with McLane."

7-Eleven expects improved terms due to "the increased
competition in the marketplace with potential suppliers, the
size of the Company's current store base and the attractiveness
of its growth strategy to a potential supplier."  During fiscal
2001, over 40% of all merchandise purchased by 7-Eleven, or more
than $2.00 billion, was purchased from McLane.  Commenting on
its supply situation at a recent conference call, in which F&D
Reports analysts participated, 7-Eleven indicated that it
expects to have a new distribution agreement finalized by the
fourth quarter and in place by the first quarter of next year.
With or without new competitive bidding, 7-Eleven's financially
distressed position 10 years ago certainly was the primary
factor in negotiating terms of the McLane contract.

                         *   *   *

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

FORMICA CORP: Committee Hires Jefferies as Financial Advisor
The Official Committee of Unsecured Creditors of Formica
Corporation's chapter 11 cases asks the U.S. Bankruptcy Court
for the Southern District of New York for permission to retain
Jefferies & Company, Inc as its financial advisor, effective
March 13, 2002.

The Committee tells the Court that it selected Jefferies because
of the Firm's expertise in providing financial advisory services
to debtors and creditors in bankruptcy and distressed

The Committee will look to Jefferies to:

     a) become familiar with and analyze the business,
        operations, properties, financial condition and
        prospects of the Company as directed by the Committee
        and as reasonably necessary;

     b) advise the Committee on the current state of the
        "restructuring market";

     c) assist and advise the Committee in developing a general
        strategy to effectuate a restructuring of the Debtors'
        outstanding indebtedness;

     d) assist and advise the Committee in formulating and
        implementing a Plan;

     e) assist and advise the Committee on developing a strategy
        with respect to recapitalization possibilities for the

     f) assist and advise the Committee in evaluating and
        analyzing Restructuring transactions, including valuing
        any securities that may be issued under a Plan;

     g) advising the Committee in evaluating the value of the
        Company and its assets, including preparation and
        provision of expert testimony relating to valuation, if

     h) assist the Committee and counsel in identifying
        potential financing sources for a recapitalization; and

     i) such other services as the Committee may reasonably
        request from time to time in connection with the Chapter
        11 cases.

Jefferies will charge a $125,000 monthly fee and wants a 1%
success fee based on the Total Consideration received by the
Debtors' unsecured creditors.

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

DebtTraders reports that Formica Corp.'s 10.875% bonds due 2009
(FORMICA1) are quoted at a price of 17. See
real-time bond pricing.

FRUIT OF THE LOOM: Files 2001 Annual Report on Form 10-K
Fruit of the Loom, Inc., delivered its Annual Report on Form 10-
K to the Securities and Exchange Commission.  A full-text copy
of that filing is available at no charge at:

Fruit of the Loom, Ltd.'s parallel Form 10-K is available at:

                          Kmart Fallout

Reporting on the effects of Kmart's bankruptcy filing, Fruit of
the Loom management states, on January 22, 2002, Kmart
Corporation and certain of its affiliates filed petitions for
relief under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the Northern District of Illinois.
Kmart has been Fruit of the Loom's second largest customer, as a
percentage of Net sales, in each of the three years in the
period ended December 29, 2001.

The collectability of accounts receivable from Kmart and the
prospects for future business with Kmart cannot be estimated at
this time. The effect of Kmart's Chapter 11 cases on Reorganized
Fruit of the Loom's future performance cannot be predicted at
this time. The Company believes adequate provision has been made
in the accompanying consolidated financial statements for
estimated losses on Kmart's account receivable as a result of
Kmart's Chapter 11 cases.

                  Management Discussion & Analysis

Net sales decreased $522,200,000 in 2001 compared to 2000. Net
sales to unrelated parties decreased $211,800,000 or 13.6% in
2001 compared to 2000. The decrease in Net sales to unrelated
parties was principally caused by the elimination of non-core
product lines and less profitable products, decreased production
and sales of irregulars, reduced pricing on certain products,
and a loss of market share in certain segments. In the first
quality product category, $185,700,000 of the decrease was due
to a reduction in volume and a change in product mix, and
$27,900,000 was attributable to lower pricing in the face of
increased competition.

Gross earnings increased $58,000,000 in 2001 compared to 2000.
Gross earnings on sales to unrelated parties increased
$72,500,000 or 31.2% in 2001 compared to 2000, and gross margin
increased 7.7 percentage points to 22.7% for the year. Gross
earnings in 2001 were favorably impacted by lower production
costs of $133,700,000, the finalization of prior year
promotional programs of $9,900,000, a favorable impact of
$27,400,000 related to closeouts and irregulars, decreased
freight charges related to the reduced volume of $6,200,000,
improvements in obsolete inventory as a result of reduced
obsolescence charges of $4,600,000 and duty refunds in 2001 of
$5,300,000. Cost reductions were partially offset by price
decreases aggregating $27,900,000, sales volume and production
mix declines totaling $58,200,000, increased physical inventory
adjustments of $8,900,000, a $9,000,000 reversal in 2000 of an
accrual for property taxes and duty costs and unfavorable
miscellaneous adjustments of $10,600,000. The volume declines
were in line with the Company's strategy of eliminating low
volume and unprofitable SKU's.

Operating selling, general and administrative expenses in 2001
were equal to 2000 even though the Company reinstituted
television advertising in 2001, which offset other decreases.
During 2001, advertising and promotion expenses increased
$30,100,000, and bad debt expense increased $6,300,000 over
2000, principally related to the Chapter 11 bankruptcy filing of
a major customer in January 2002. These increases were offset by
a $12,600,000 reduction in salaries and employment costs, a
$5,900,000 reduction in office and related expenses, a
$7,800,000 reduction in software expense and a $7,200,000
decrease in royalty expense as a result of the decrease in Net

The Company incurred and recognized several one-time or non-
recurring costs in both 2001 and 2000. In 2001 and 2000, the
Company incurred $42,600,000 and $73,300,000, respectively, in
consolidation costs recorded in Selling, general and
administrative expenses, principally related to the closure of
certain of the Company's higher cost production facilities.

Interest expense decreased $26,900,000 or 21.6% in 2001 compared
to 2000. The decrease reflected a lower average interest rate
and lower average borrowing levels in 2001 compared to 2000.

Reorganization items represent costs incurred by the Company
related to the Reorganization Cases. Reorganization items in
2001 and 2000 aggregated approximately $33,800,000 and
$48,200,000, respectively, and consist of professional fees that
include legal, accounting, consulting and other services
provided to the Company related to the Reorganization Cases.

As a result of the foregoing, Fruit of the Loom produced a net
loss of $175,800,000 in 2001, compared to a net loss of
$225,700,000 in 2000. (Fruit of the Loom Bankruptcy News, Issue
No. 55; Bankruptcy Creditors' Service, Inc., 609/392-0900)

GEOWORKS CORP: Commences Trading on Nasdaq SmallCap Market Today
Geoworks Corporation (Nasdaq: GWRX) announced that Nasdaq has
approved the Company's request to have its common stock traded
on the Nasdaq SmallCap Market effective May 1, 2002.  The
securities will continue trading under the symbol GWRX.  The
Company has until May 30, 2002 to satisfy Nasdaq's requirement
that there be three independent directors on the Company's audit
committee.  The Company is actively seeking qualified candidates
for its audit committee.  Geoworks must also continue to meet
the other Nasdaq listing requirements in order for its common
stock to remain listed.

Geoworks Corporation is a provider of leading-edge software
design and engineering services to the mobile and handheld
device industry.  With nearly two decades of experience
developing wireless operating systems, related applications and
wireless server technology, Geoworks has worked with industry
leaders in mobile phones and mobile data applications including
Mitsubishi Electric Corporation and Nokia.  Based in Emeryville,
California, the company also has a European development center
in the United Kingdom. Additional information can be found on
the World Wide Web at

GLOBAL CROSSING: Hutchison Buys Asian Unit's Assets for $120MM
Asia Global Crossing and Hutchison Telecommunications Limited, a
wholly owned subsidiary of Hutchison Whampoa Limited announced
that they have reached an agreement for Hutchison to acquire
Asia Global Crossing's stake in their respective joint venture
companies in Hong Kong, namely Asia Global Crossing's 50 percent
interest in Hutchison Global Crossing, its 42.5 percent interest
in ESD Services and its 50 percent interest in Hutchison
Globalcenter, for a total consideration of US$120 million in

Under the agreement, Hutchison Global Crossing and Hutchison
Globalcenter will become wholly owned subsidiaries of Hutchison,
while Hutchison will have an indirect 85 percent stake in ESD

HWL Group Managing Director Canning Fok said, "Hutchison Global
Crossing, Hutchison Globalcenter and ESD Services have always
been important assets of the Hutchison Group, and we are pleased
to acquire control of the Hong Kong businesses."

Mr. Fok reassured customers of the three companies that
operations will not be affected by the change in ownership and
the core management team will remain largely unchanged.

"We have a very good working relationship with the management of
Asia Global Crossing and our companies will continue commercial
relationships with Asia Global Crossing in Hong Kong," Mr. Fok

Hutchison and Asia Global Crossing have agreed to continue to
use each other's services.  Hutchison will access the Asia
Global Crossing networks for its regional capacity needs, and
Asia Global Crossing will continue to provide city-to-city
services in Hong Kong through Hutchison Global Crossing.

"The telecommunications industry and regulatory landscape have
changed since we formed Hutchison Global Crossing three years
ago, and Hutchison and Asia Global Crossing each have business
goals that are better met with a continuing commercial
relationship instead of through the existing joint venture.
Asia Global Crossing's business strategy is to be the leading
telecommunications infrastructure and services provider among
the major business centers in Asia, so we are pleased to
continue to connect to Hutchison Global Crossing for our Hong
Kong requirements," said Jack Scanlon, vice chairman and acting
chief executive officer, Asia Global Crossing. "Additionally,
this divestiture benefits our ongoing financial restructuring
activities, and we expect that the US$120 million will extend
our runway well into 2003."

Hutchison Whampoa is a Hong Kong-based multinational
conglomerate with origins dating back to the 1800s.  Hutchison
is also part of the Li Ka-shing group of companies, which
together represent about 15% of the total market capitalization
of the Hong Kong stock market.  In 2001, HWL's consolidated
turnover (including associates) was HK$89,038 million and net
profit was HK$12,088 million.

With over 100,000 employees worldwide, Hutchison operates and
invests in five core businesses in 36 countries: ports and
related services; telecommunications; property and hotels;
retail and manufacturing; and energy and infrastructure.

Worldwide, the Group is one of the leading owners and operators
of telecommunications infrastructure, offering a wide range of
related services. These include mobile telephony (voice and
data), fixed-line services, Internet services, fibre optic
broadband networks, paging, trunked mobile radio and radio
broadcasting services.  For more information, visit

Asia Global Crossing, a company whose largest shareholders
include Global Crossing, Softbank (Tokyo Stock Exchange: 9984),
and Microsoft (Nasdaq: MSFT), provides the Asia Pacific region
with a full range of integrated telecommunications and IP
services.  Through a combination of undersea cables, terrestrial
networks, city fiber rings and complex web hosting data centers,
Asia Global Crossing is building one of the first truly pan-
Asian networks, which will provide seamless connectivity among
the region's major business centers.  In addition, in
combination with the Global Crossing Network, Asia Global
Crossing provides access to more than 200 cities worldwide.  As
part of its strategy to provide city-to-city services, Asia
Global Crossing partners with leading companies in each country
it connects to provide backhaul networks.

Asia Global Crossing's 13.375% bonds due 2010 (AGCX10USN1),
DebtTraders says, are quoted at a price of 22. See
for real-time bond pricing.

GUARDIAN TECHNOLOGIES: Nasdaq Delists Shares Effective April 29
Guardian Technologies International, Inc. (Nasdaq:GRDN), has
been notified by NASDAQ that the Company's securities will be
delisted from the NASDAQ Stock Market effective with the open of
business April 29, 2002, for failure to meet NASDAQ's
maintenance requirement for continued listing with respect to
net tangible assets/shareholders equity.

The Company was further notified that its securities are
automatically eligible for trading on the OTC Bulletin Board
once the Company's Annual Report on Form 10K is filed with the
Securities and Exchange Commission.

Guardian, through its wholly-owned subsidiary Guardian Security
& Safety Products, Inc. (GSSP), serves the law enforcement,
security and military communities and the global security
industry. GSSP's majority-owned subsidiary, ForceOne, LLC,
manufactures a variety of high-end ballistic protective
equipment including patented personal protection devices
commonly referred to as body armor. Guardian, through its
wholly-owned subsidiary Guardian Steel, is engaged in structural
steel fabrication and provides among its products, structural
steel used primarily in military base refurbishments and other
projects under Federal contract.

HAWK CORP: Pursuing Initiatives to Restructure Credit Facilities
Hawk Corporation (NYSE: HWK) reported a net loss for the first
quarter ended March 31, 2002 of $0.07 per diluted share compared
to net income of $0.10 per diluted share in the first quarter of
2001.  The reported results were better than analysts' estimates
for the quarter.

The Company reported net sales of $49.8 million in the first
quarter of 2002, a 7 percent decrease from $53.8 million in the
year-ago first quarter. As expected, the Company did not see a
full rebound in the markets it serves. Although the friction
products and precision components business segments were below
the corresponding first quarter of 2001, both segments posted
gains above the revenue levels achieved in the fourth quarter of
2001.  Net sales in the motor segment increased over year
earlier first quarter levels as net sales from the Company's
Mexican facility increased.

The Company reported income from operations of $1.2 million in
the first quarter of 2002, a decrease of $2.7 million or 69
percent compared to income from operations of $3.9 million for
the comparable quarter in 2001.  The decline in operating income
was due primarily to volume declines in the quarter, product mix
and to a lesser extent, continued funding of the Company's
Mexican, Chinese and metal injection molding start-up

Compared with the fourth quarter of 2001, net sales increased
$8.8 million, or approximately 21 percent.  Income from
operations improved by $3.0 million, to $1.2 million in the
first quarter of 2002, from a loss of $1.8 million in the fourth
quarter of 2001.  The improvements in net sales and income from
operations were due to improving economic conditions in the
United States, a continuing comeback in the Company's aerospace
market, the seasonal growth during the quarter in some of the
markets served by the Company, including lawn and garden and
agriculture, as well as continued emphasis on the Company's
previously announced cost cutting initiatives.

"Although we still operated in difficult market conditions
during the quarter, we have experienced positive signs since the
end of 2001," said Ronald E. Weinberg, Chairman and CEO.  "We
expect this gradual recovery in our markets to continue through
the balance of 2002.  We have improved our cost structure during
the last six months and our new product applications should
provide us additional operating benefits as the economy
continues to recover."

                         Segment Results

In the friction products segment, first quarter net sales
decreased 12 percent to $26.0 million from $29.6 million a year
ago.  Compared to the year-ago quarter, the friction products
segment experienced volume declines in most of its markets
during the quarter, especially the aerospace market, which
declined 27 percent, primarily as a result of the events of
September 11. However, sales to the aerospace market increased
by $0.5 million, or 12 percent in the first quarter of 2002 from
the fourth quarter of 2001. Overall, compared to the fourth
quarter of 2001, sales in the friction products segment
increased 13 percent.  Income from operations during the first
quarter of 2002 was $0.8 million, a decrease of $2.1 million, or
72 percent, from $2.9 million in the comparable quarter of the
prior year. The decline in operating income was caused primarily
by volume declines, product mix and continuing start-up costs at
the Company's Chinese facility. Nevertheless, the Chinese
facility continues to operate on target for 2002 and we expect
the facility to contribute operating profits by the fourth
quarter of 2002.

In the precision components segment, net sales decreased 3
percent to $17.2 million in the first quarter of 2002 from $17.8
million in the year-ago quarter.  The decline during the quarter
was due to volume reductions primarily from customers in the
lawn and garden, heavy truck and office equipment markets.  The
segment reported income from operations in the first quarter of
2002 of $0.1 million compared to income from operations of $1.1
million during the comparable quarter of 2001.  This segment
experienced increased sales of 30 percent compared to the fourth
quarter of 2001.

Net sales in the Company's performance automotive segment, which
consists of high performance racing clutches and drive train
components, decreased 7 percent, to $3.9 million, in the first
quarter of 2002, from $4.2 million in the year-ago quarter.
This decrease was the result of the soft economy reducing
sponsorship money for race teams in 2002. The segment reported
income from operations for the first quarter of 2002 of $0.8
million compared to income from operations of $0.4 million in
the comparable prior year period. The increase in operating
income was primarily the result of cost cutting initiatives
undertaken by the Company in the latter half of 2001.

In the Company's motor segment, first quarter 2002 net sales
increased $0.5 million, or 23 percent, to $2.7 million from $2.2
million a year ago. This increase is due to new customers at the
Company's Mexican facility. Losses from operations during the
first quarter of 2002 were $0.5 million compared to a loss of
$0.4 million in the comparable quarter of 2001. Revenues in this
market increased 17 percent compared to the fourth quarter of
2001 as the Mexican facility continues to increase its volumes.

                         Balance Sheet

The Company's bank credit facilities are due in March 2003.  As
a result, during the first quarter of 2002, the Company
reclassified $29.3 million of debt outstanding under these
facilities as current portion of long-term debt. As previously
stated, the Company is in the process of pursuing strategic
financing alternatives, including the restructuring or
refinancing of its debt and bank credit facilities, both of
which are due in 2003.

Working capital assets increased in the first quarter of 2002,
primarily as a result of increased sales activity during the
quarter in addition to seasonal stocking programs for customers
in its lawn and garden markets which typically require extended
payment terms.  The terms of these programs provide for the
collection of the receivables in the second quarter of 2002.

                         Business Outlook

"The first quarter performed to our expectations as we gradually
emerge from this difficult economic environment," according to
Mr. Weinberg.  "We are beginning to see the return of our
revenue base, especially when compared to fourth quarter levels
and we remain confident with regard to our expectations for the
rest of the year.  In spite of the tentative economic outlook,
we still expect to see revenue growth in a range of 5 to 10
percent for 2002, as a result of new product introductions in
the friction and precision component segments, as well as new
customer relationships being established in the Company's motor

The Company still expects that the improvements in the economy
will be gradual and will be more pronounced during the second
half of the year.  Mr. Weinberg stated that, "The Company is
still expecting its EBITDA for the full year 2002 to be
approximately 20 percent higher than the EBITDA achieved in

                         Accounting Change

The first quarter 2002 results reflect the elimination of
goodwill amortization as required by the Statement of Financial
Accounting Standard 142 "Goodwill and Intangible Assets."  The
elimination of goodwill amortization in the first quarter of
2002 had a favorable impact on the Company's operating income of
$0.8 million.  The Company is in the process of preparing the
valuation analysis required by this new standard to determine if
there is any goodwill impairment.  The analysis will be
completed in the second quarter of 2002.

Hawk Corporation is a leading worldwide supplier of highly
engineered products. Its friction products group is a leading
supplier of friction materials for brakes, clutches and
transmissions used in airplanes, trucks, construction equipment,
farm equipment and recreational vehicles.  Through its precision
components group, the Company is a leading supplier of powder
metal components for industrial applications, including pump,
motor and transmission elements, gears, pistons and anti-lock
sensor rings.  The Company's performance automotive group
manufactures clutches and gearboxes for motorsport applications
and performance automotive markets.  The Company's motor group
designs and manufactures die-cast aluminum rotors for fractional
and subfractional electric motors used in appliances, business
equipment and HVAC systems.  Headquartered in Cleveland, Ohio,
Hawk has approximately 1,550 employees and 16 manufacturing
sites in five countries.

HAYES LEMMERZ: Court Allows Panel Members to Trade Securities
Judge Walrath grants the Hayes Lemmerz International, Inc.'s
Unsecured Creditors Committee's motion to permit members'
securities trading in its entirety and overrules all objections
to the motion.

As previously reported, those Committee members have a fiduciary
duty to maximize returns for their clients through the buying
and selling of securities.  But as members of the Official
Committee of Unsecured Creditors, these securities firms and
their affiliates also owe a fiduciary duty to other creditors
not to divulge any confidential or inside information regarding
the Debtors. If a securities firm is barred from trading in the
Debtors' securities during the pendency of these cases because
of the firm's duties to other creditors, then that firm risks
the loss of a beneficial investment opportunity for its clients.
On the other hand, if that securities firm resigns from the
Creditors' Committee, the interests of its shareholders may be
compromised because that firm will now take less active role in
Hayes Lemmerz' reorganization process.

With this Court approval, the Creditors' Committee is allowed to
adopt screening wall procedures that will allow them to trade in
the Debtors' securities and at the same time remain as
productive committee members, without violating their fiduciary
duty to either constituency.

The Court, thus, determined that those committee members, acting
in any capacity, engaged in the trading of securities as a
regular part of their business, can trade in the Debtors' stock,
Notes, Bank Debt, and Synthetic Lease Debt obligations, or any
other claim or interest against the Debtors' estates, without
violating their duties as committee members.  The members,
therefore, will not subject their claims to possible
disallowance, subordination, or other adverse treatment by
engaging in any trading activities.

A screening wall refers to a procedure established by an
institution to isolate its trading activities from its
activities as a member of the Creditors' Committee in a chapter
11 case.  This screening wall includes features such as the
employment of different personnel to perform each function and
physical separation of office and file space.  The Securities
Firms must establish and effectively implement information
blocking policies and procedures to prevent the misuse of non-
public information obtained through their activities as
Committee members.

Additionally, along with the motion's approval, the Court to
gives its blessing to these policies and procedures to implement
an effective screening wall for the Securities Firms to use:

A. Each person employed by a securities firm involved in
     committee matters shall execute a letter acknowledging that
     they may receive non-public information regarding the
     Debtors and that they are aware of the information blocking
     procedures which are in effect with respect to the non-
     public information and the securities;

B. The employee of that firm shall not directly share any non-
     public information concerning these cases with other
     employees of that securities firm, except for regulators,
     auditors and legal personnel who will render legal advice
     to such employees and who will not share such non-public

C. Each of the firm's employee shall maintain all files
     containing non-public information received in connection
     with or generated from committee activities in places that
     are not accessible to other employees of the securities

D. Each of the firm's employees shall not receive any
     information regarding the firm's trades in the securities
     in advance of the execution of such trades, except the
     usual and customary internal and public reports showing
     such securities firm's purchases and sales and the amount
     and class of securities owned by such securities firm,
     including the securities; and,

E. The securities firm's compliance department shall, from time
     to time, review the screening wall procedures to ensure
     compliance therewith and shall maintain records of such
     review. (Hayes Lemmerz Bankruptcy News, Issue No. 10;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)

ICG COMM: Wins Nod to Pay Exit Financing Expenses & Break-Up Fee
ICG Communications, Inc. and its subsidiaries and affiliates
Debtors, represented by Marion M. Quirk  of the Wilmington
office of Skadden Arps Slate Meagher & Flom, present Judge Peter
Walsh with an emergency motion for an order approving certain
expense reimbursement and break-up fee provisions for the
providers of a commitment for $65 million in new financing in
connection with the Debtors' Second Amended Joint Plan of

                   The New Financing Commitment
                          From Cerberus

The Debtors' Plan is dependent upon the closing of transactions
that will provide the reorganized Debtors with $65 million in
exit financing. The Debtors have pursued numerous exit financing
alternatives for many months, including new debt or equity
investments in the Debtor, and the exit financing set forth in
the proposed Plan and Disclosure Statement is the most favorable
-- and in fact the only -- new financing that the Debtors have
been able to obtain from any party.

As Ms. Quirk assumes Judge Walsh is well aware, it is extremely
difficult to obtain financing in the highly troubled
telecommunications industry in which the Debtors operate. Months
ago, the Debtors entered into preliminary discussions with one
potential source of new financing, Cerberus Capital Management,
L.P. Indeed, the Debtors obtained this Court's authority on or
about September 26, 2001 to reimburse CCM's due diligence costs,
up to $500,000, in order to incentivize CCM to proceed to the
next phase of negotiations and due diligence with respect to
potential exit financing.

              $25M Term Loan On Consummation of Plan

As contemplated by the Prior CCM Order, after many months of
arms-length negotiations between the parties, on April 3, 2002,
CCM and certain other parties executed a letter committing to
provide $25 million of new financing to the reorganized Debtors,
in the form of a $25 million secured subordinated term loan in
connection with the proposed Plan, to be funded on the Plan's
effective date, if the Plan is confirmed and consummated.

         ICG to Issue $40M Debentures; CCM to Purchase $35M

In addition, on April 3, 20002, CCM and certain other parties
executed commitment letters for an additional $40 million in new
financing to the reorganized Debtors, in the form of $40 million
of convertible unsecured debentures, of which CCM will purchase
$35 million, in connection with the proposed Plan, to be funded
on the Plan's effective date, if the Plan is confirmed and

The Debtors believe that the terms and conditions negotiated
with CCM and the other parties for the financing are reasonable,
appropriate, and in the best interests of the Debtors' estates.

            The Debtors Pay Up to $1.1M in Expenses;
                      $3.25M Break-Up Fee
                     and Provide Indemnity

Taken together, the commitment letters require the Debtors to:

       (i) reimburse the Investors for all reasonable costs,
fees and expenses incurred by or on behalf of them in connection
with the negotiation, preparation, execution of the commitment
letter, the term sheets attached to the commitment letters, and
any and all definitive documents relating thereto, including the
reasonable fees and expenses of their counsel and consultants,
up to a maximum aggregate reimbursement of $1.1 million, with
$575,000 to be advanced by April 30, 2002.  Unused advances
shall be returned to the Debtors if the Financing is not

       (ii) pay break-up fees of $3.25 million, which
constitutes approximately 5% of the total financing, in the
event that the Debtors consummate, on or before the six month
anniversary of the execution of the commitment letters,

             (a) a debt financing (other than the refinancing of
the Debtors' existing $85 million bank credit facility with
another similar facility) or equity financing (other than the
Financing), or

             (b) a sale of all or substantially all of its
assets; and

       (iii) provide certain indemnification to the Investors,
as set forth in the commitment letters.

                        The Indemnity

The Indemnity in the commitment letter provides that, subject to
Judge Walsh's approval, ICG agrees to indemnify and hold
harmless the Lenders, their respective affiliates, directors,
officers, employees, agents and assignees (including affiliates)
from any and all losses, claims, damages, liabilities or other
expenses to which such indemnified party may become subject,
insofar as such losses, claims, damages, liabilities (or actions
or proceedings commenced or threatened) or other expenses arise
out of or in any way relate to or result from this commitment
letter, the term sheet, or the commitment made in it, or in any
way arise from any use or intended use of this commitment
letter, the term sheet, or the proceeds of the financing, and
ICG agrees to reimburse each indemnified party for any legal or
other expenses incurred in connection with investigating,
defending or participating in such loss, claim, damage,
liability or other action or proceeding (whether or not the
indemnified party is a party to the action or proceeding out of
which indemnified expenses arise), but excluding all expenses,
losses, claims, damages or liabilities that are finally
determined in a non-appealable decision of a court of competent
jurisdiction to have resulted solely from the gross negligence
or willful misconduct of the indemnified party.

In the event of any litigation or dispute involving the
commitment letter, term sheet or the financing, no Lender shall
be responsible or liable to ICG or any other person or entity
for any special, indirect, consequential, incidental or punitive
damages.  The obligations of ICG under this indemnity shall
remain effective whether or not any of the transactions
contemplated by the commitment letter are consummated, any
definitive legal documents executed, and notwithstanding any
termination of this commitment letter, and shall be binding upon
Reorganized ICG in the event any plan of reorganization is

                      Fair and Reasonable Terms

The Debtors, with the assistance of their advisors, have been
negotiating with the Investors for the past several months with
respect to the proposed terms of the Financing. The Investors
have insisted that their commitments be conditioned upon Court
approval of the Expense Reimbursement, the Break-Up Fee and the

The Debtors believe that the Break-Up Fee, Expense Reimbursement
and Indemnification are fair and reasonable. The Investors have
undertaken intensive analysis and due diligence prior to
executing the commitment letters. Extensive documentation will
now be required to implement the Financing. The Debtors do not
anticipate pursuing any alternate financing, having done so
extensively for many months.

To be able to have the commitment letters remain binding on the
Investors, and thus be in a position to confirm the Plan, the
Debtors are required to have the Break-Up Fee, Expense
Reimbursement and Indemnification approved by this Court by
April 30, 2002.  Accordingly, the Debtors are seeking approval
of these provisions.

                     The Debtors' Argument

Historically, bankruptcy courts have approved bidding incentives
such as break-up fees and expense reimbursement under the
"business judgment rule," which proscribes judicial second-
guessing of the actions of a corporation's board of directors
taken in good faith and in the exercise of honest judgment.
Recently, the Third Circuit Court of Appeals propounded
standards for determining the appropriateness of bidding
protections in the bankruptcy context.  The court held that
even though bidding incentives are measured against a business
judgment standard in nonbankruptcy transactions, the
administrative expense provisions of Bankruptcy Code section
503(b) govern in the bankruptcy context. Accordingly, to be
approved, bidding incentives must provide some benefit to the
debtor's estate.

The Circuit Court identified at least two instances in which
bidding incentives may provide benefit to the estate. First,
benefit may be found if "assurance of a break-up fee promoted
more competitive bidding, such as by inducing a bid that
otherwise would not have been made and without which bidding
would have been limited." Second, where the availability of
bidding incentives induce a bidder to research the value of the
debtor and submit a bid that serves as a minimum or floor bid on
which other bidders can rely, "the bidder may have provided a
benefit to the estate by increasing the likelihood that the
price at which the debtor is sold will reflect its true worth."

Whether evaluated under the "business judgment rule" or the
Third Circuit's "administrative expense" standard, the Expense
Reimbursement and Break-Up Fee pass muster. After months of
discussions with numerous third parties for new financing, the
Investors' commitments are the only commitments received by the
Debtors to date. Numerous parties are, however, aware that the
Debtors have been looking for new investment commitments. Until
the Plan is confirmed, it is theoretically possible (albeit
highly unlikely) that an alternate investor could emerge and
offer a commitment for financing on higher and better terms, and
that if so, the Debtors could be obligated to consider it. The
Investors' commitments, issued after extensive diligence and
negotiation, provides a floor against which other potential
investors can rely and which the Debtors can disclose in their
Disclosure Statement accordingly. The amount of the Break-Up Fee
-- 5% of the value of the Financing -- constitutes a fair and
reasonable percentage of a proposed investment.

Importantly, here, while a 5% break-up fee is on the high end of
break-up fees authorized in chapter 11 cases, the Debtors
believe that the unusually extensive efforts undertaken by the
Investors here, coupled with the virtual impossibility of
obtaining new capital investments in telecommunications
companies in today's market, plus the fact the confirmation
hearing is literally a month away (making the likelihood of the
break-up fee coming into play highly remote), justifies this

Further, the Investors would not have executed the commitment
letters absent the Expense Reimbursement and Break-Up Fee.
Therefore, such incentives will have "induc[ed] a bid that
otherwise would not have been made and without which bidding
would [be] limited."  Moreover, the mere existence of the
Expense Reimbursement and the Break-Up Fee permits the Debtors
to insist that competing bids or offers be materially higher or
otherwise better than the agreements with the Investors, which
is a clear benefit to the Debtors' estates.

                      Judge Walsh Agrees

Acting quickly to keep this case moving toward confirmation,
Judge Walsh grants the Motion, approves the fees and indemnity,
and authorizes the Debtors to pay CCM as described in the
Motion. (ICG Communications Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

ICH CORP: Court Okays J.H. Cohn as Committee's Financial Advisor
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases commenced by ICH Corporation secured approval
from the U.S. Bankruptcy Court for the Southern District of New
York to retain J.H. Cohn to perform certain accounting and
financial advisory services.

Specifically, J.H. Cohen will:

     a) review Debtors' short-term cashflow projections for

     b) gain an understanding of Debtors' accounting systems;

     c) monitor Debtors' post-petition operating results and
        cash flows;

     d) ascertain Debtors' current financial condition;

     e) review historical financial information;

     f) review key employee retention plans;

     g) review proposed financing commitments;

     h) review Debtors' expense structure and identify
        opportunities for further reductions;

     i) prepare a liquidation analysis;

     j) analyze restaurant-by-restaurant profitability to
        determine if additional unprofitable restaurant closings
        are appropriate;

     k) identify and/or evaluate strategies to maximize the
        value of the estate, including the sale of non-strategic

     l) review the books and records of Debtors for related
        party and/or potential avoidance actions;

     m) ascertain the reasonableness of Debtors' long-term
        viability and plan of reorganization;

     n) render other bankruptcy and consulting services, attend
        hearings and/or meetings, and render such assistance as
        the Creditors' Committee and its counsel may deem

The Debtors relate that J.H. Cohn will be rendering services on
an hourly basis at the Firm's customary hourly rates:

          Senior Partner      $450
          Partner             $385
          Director            $350
          Senior Manager      $300
          Manager             $275
          Supervisor          $250
          Senior Accountant   $210
          Staff               $160
          Paraprofessional    $110

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 5, 2002. Peter D.
Wolfson, Esq., at Sonnenschein Nath & Rosenthal represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed debts and assets of
over $50 million.

IT GROUP: Seeks Approval to Reject 23 Non-Residential Leases
The IT Group, Inc. and its debtor-affiliates ask for Court
approval to surrender 23 nonresidential real property leases and
related subleases, effective March 31, 2002. The Debtors have
determined that these office and warehouse spaces are no longer
needed in the Debtors' ongoing operations. The Debtors, however,
remain obligated under the respective leases. The Debtors also
waive their right to withdraw this Motion.

Marion M. Quirk, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP in Wilmington, Delaware, accords that the rent and expenses
for the leases is approximately $171,128 a month. These expenses
due under the leases constitute unnecessary administrative
expenses and only drain the Debtors' cash flow. Moreover, the
Debtors do not believe that they would be able to obtain any
value for the leases by assigning them to third parties, as
revealed by the below-market sublease arrangements currently in
place in regard to both the subleases proposed to be rejected.

Mr. Quirk submits that the Debtors have sent letters to each
affected landlord that the premises are abandoned. The keys to
such premises have been returned by separate letter or hand
delivery. The Debtors also arranged for utility charge accounts
listed under any Debtors' name pursuant to the terms of the
Leases, if any, either to be disconnected or switched over into
the landlord's name, as appropriate.

The Debtors also propose to return security deposits to
subtenants, if any.  The return of deposits would be pursuant to
the terms of the master lease and any sublease to the extent
appropriate pursuant to the non-bankruptcy law.  This would be
accomplished within 10 days after entry of the Court's approval
of the rejection. In addition, they also propose to pay the
undisputed administrative rent claims of the landlords whose
contracts will be rejected.

Similarly, Mr. Quirk says, the Debtors intend to remit to the
lessors any and all monies paid to the Debtors by subtenants
pursuant to any sublease to the extent such payment represents
payment for rent or other obligations accrued on after the
rejection date.  This would be accomplished within 10 days after
approval from the Court. In turn, the Debtors require the
lessors to return any security deposits to the Debtors pursuant
to the terms of any lease within 10 days after the Court
approves this Motion.

Mr. Quirk informs the Court that the leases and subleases to be
rejected are:

   Landlord/ Nondebtor Party               Site
   -------------------------   ---------------------------------
   Prudential Jack White       Business Park Blvd, Anchorage, AK
   Fyfe Partnership            East 59th St, Anchorage, AK
   East-West Towers            Suite 200, Bethesda, MD
   Gateway 51 Partnership      Columbia Gateway Dr, Columbia, MD
   Oregon Venture Group        Bertelsen Rd, Eugene, OR
   Global Finance              Airport Way, Fairbanks, AK
   College Partners            College Ave, grand Rapids, MI
   PARMCO                      Broadway SW, Grandville MI
   Highwoods Realty            Patewood Dr, Greenville SC
   Hunter's Chase Apartments   Marlton, NJ
   H & W Realty                Boundary Rd., Midlothian, VA
   Cary Gateway                Morrisville, NC
   Skillman Corp.              New Brighton, MN
   Woodmen of the Word Society Farnam, St., Omaha, NE
   W. 42nd Street Realty       E. Wood St., Phoenix, AZ
   Washington Real Estate Inv  Parklawn Dr., Rockville, MD
   Technology Park Partners    San Bernardino, CA
   Transcontinental Realty     San Francisco, CA
   Starwood Asset Management   Washington, DC
   Geis Realty Group           Drummers Lane, Wayne, PA
   Promenade Office Park       Westlake Village, CA
   Walter M. Rose              Kennedy Business Pk, Windsor, CT
   Windsor Industrial Park.    Windsor, NJ
   (IT Group Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
   Service, Inc., 609/392-0900)

IMPSAT FIBER: Seeking Nod to Formalize Chapter 11 Restructuring
IMPSAT Fiber Networks, Inc. (NASDAQ: IMPT), a leading provider
of integrated telecommunications services in Latin America,
announced that as of May 1, 2002, Guillermo Jofre will step down
as chief financial officer of the Company to pursue personal

Hector Alonso will replace Mr. Jofre and will be responsible for
all financial and administrative functions including treasury,
accounting, information technology, risk management and
auditing. Mr. Alonso joined Impsat in 1993 and has held a number
of senior executive positions with the Company, including his
most recent one as chief operating officer.

Commenting on the announcement, Impsat's chief executive
officer, Ricardo Verdaguer stated, "We are very pleased to have
Hector Alonso direct the financial operations of Impsat. His
excellent performance as a member of the senior management along
the past nine years, and his knowledge of the company and
finance gives us great confidence in his abilities to help the
company at this crucial time.

"Guillermo Jofre has been an enormous contributor to our
expansion across South America," continued Mr. Verdaguer. "He
directed our efforts to obtain the financing that allowed us to
develop the first pan-Latin telecommunications network during
the past several years, and has been instrumental in the
coordination of the Company's financial restructuring. We're
pleased that he will continue as an advisor to the Company. On
behalf of Impsat, we wish him the best in his personal

Mr. Jofre stated, "These past seven years at Impsat have been
filled with exceptional professional rewards. I will always be
grateful for them. After careful consideration, I've decided to
begin a new phase in my life and undertake some personal
initiatives that I had previously postponed."

As recently announced, Impsat has reached an agreement in
principle with several of its largest creditors in support of a
restructuring plan to reduce the Company's overall indebtedness.
The Company is currently involved in obtaining additional
creditor support to formalize its financial restructuring plan
under Chapter 11.

Impsat Fiber Networks, Inc. is a leading provider of fully
integrated broadband data, Internet and voice telecommunications
services in Latin America. Impsat has recently launched an
extensive pan-Latin American high capacity broadband network in
Brazil, Argentina, Chile and Colombia using advanced
technologies, including IP/ATM switching, DWDM, and non-zero
dispersion fiber optics. The Company has also deployed fourteen
facilities to provide hosting services. Impsat currently
provides services to 3,000 national and multinational companies,
government entities and wholesale services to carriers, ISPs and
other service providers throughout the region. The Company has
local operations in Argentina, Colombia, Venezuela, Ecuador,
Mexico, Brazil, the United States, Chile and Peru. Visit us at

According to DebtTraders, Impsat Corp.'s 13.75% bonds due 2005
(IMPT05ARR1) (with IMPSAT Fiber Networks as underlying issuer)
are quoted at a price of 4. For real-time bond pricing, see

INTEGRATED HEALTH: Wants to Assume Three More New Mexico Leases
Integrated Health Services, Inc., including IHS Acquisition No.
151, moves the Court, pursuant to Secs. 105(a) and 365(a) of the
Bankruptcy Code and Bankruptcy Rule 6006, for entry of an order
authorizing the Debtors to assume three leases of improved real
property in New Mexico. IHS 151 operates a health care facility
at each of the locations covered by the three leases.

The three leases are:

A.  The Casa Arena Blanca Nursing Center Lease:

     Location: 205 Moonglow, Alamagordo, NM 88310;

     Date of Lease: March 12, 1993;

     Term of Lease: Ten years, with four option periods of five
                    years each;

     Landlord: LTC Properties, Inc.;

     Present Tenant: IHS 151;

B.  The Casa Maria Healthcare Center Lease:

     Location: 1601 S. Main St., Roswell, NM 88201;

     Date of Lease: November 1, 1992;

     Term: Ten years, with four option periods of five years

     Landlord: LTC Properties, Inc.;

     Present Tenant: IHS 151.

C.  The Las Cruces Nursing Center Lease:

     Location: 2029 Sagecrest Ct., Las Cruces, NM 88001;

     Date of Lease: April 5, 1991 (three amendments made in
                    1991, 1992 and 1995 respectively);

     Term: Expires March 31, 2007;

     Present Landlord: Las Cruces Associates, L.P.;

     Present Tenant: IHS 151.

The Debtors wish to assume the Leases because they are all
profitable, and generate a not-insignificant portion of the net
revenue the Debtors need in order to reorganize. Specifically,
the EBITDA numbers for fiscal year-end are:

                  2000         2001      (Projected)
                --------     --------    -----------
Casa Arena     $120,149     $150,014      $324,083
Casa Maria     $597,087     $722,556      $687,418
Las Cruces     $683,172     $685,921      $969,611
(Integrated Health Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

JUNIPER CBO: Fitch Hatchets Several Notes' Ratings to Junk Level
Fitch Ratings has downgraded its ratings on seven classes of
notes issued by Juniper CBO 1999-1 Ltd. The deal is a
collateralized bond obligation (CBO) backed predominantly by
high yield bonds.

The securities have been downgraded and removed from Rating
Watch Negative:

     --$134,000,000 Class A-1 notes to 'AA-' from 'AAA';

     --$34,000,000 Class A-2 notes to 'A-' from 'AA+';

     --$60,000,000 Class A-3A notes to 'CCC-' from 'BB-';

     --$40,000,000 Class A-3B notes to 'CCC-' from 'BB-';

     --$26,000,000 Class B-1 notes to 'C' from 'B-';

     --$13,000,000 Class B-2 notes to 'C' from 'CC';

     --$10,000,000 Class B-2A notes to 'C' from 'CC'.

As of its April 2, 2002 report, Juniper CBO 1999-1 Ltd. was
failing its class A OC ratio at 98.3% with a trigger of 115% and
its class B OC ratio at 87.2% with a trigger of 104%. The
transaction's portfolio has experienced over $29.3 million (7.1%
of collateral) in new defaults since the beginning of March
2002. Fitch previously downgraded six classes from this
transaction on Feb. 4, 2002.

In reaching its rating actions, Fitch reviewed the results of
its cash flow model runs after running several different stress

KAISER ALUMINUM: Gets OK to Hire Seyfarth Shaw as Labor Counsel
Kaiser Aluminum Corporation, and its debtor-affiliates wins the
Court's approval to employ and retain Seyfarth Shaw as labor,
employment and benefits counsel in their chapter 11 cases.

Among other things, Seyfarth is expected to:

A. Advise and assist the Debtors regarding issues relating to
        their collective bargaining agreements, employee benefit
        plans, and retiree benefit plans;

B. Advise and assist the Debtors in collective bargaining
        negotiations with unions and other employee and retiree
        representations in connection with labor employment and
        benefit matters;

C. Advise and assist the Debtors regarding labor practices and
        union representation matters;

D. Advise and assist the Debtors in connection with grievances
        and arbitrations;

E. Advise and assist the Debtors in connection with claims of
        employee discrimination; and,

F. Advise and assist the Debtors in such other labor, employment
        and benefit matters as may be requested by the Debtors;

Seyfarth's professionals who are primarily responsible for
rendering services to the Debtors postpetition and their
corresponding hourly rates are:

          Professional          Position      Hourly Rate
       --------------------   ------------   -------------
       Jeremy P. Sherman        Partner          $375
       William Factor           Partner          $300
       Mark A. Casciari         Partner          $335
       Joel H. Kaplan           Partner          $410
       Ronald J. Kramer         Partner          $265
       Philip A. Miscimarra     Partner          $435
       Peter C. Miller          Partner          $335
       Stacy C. Shartin         Partner          $385
       Diana Tabacopoulos       Partner          $315
       Kristin E. Michaels      Partner          $280
       Gregory M. Davis        Associate         $260
       Christopher DeGregoff   Associate         $260
       Brian Stolzenbach       Associate         $170
       Michael Gallion         Associate         $235
       Catherine Yepsen        Paralegal         $130
(Kaiser Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

KASPER ASL: Shoos-Away Andersen and Signs-Up Ernst & Young
Bankrupt Kasper A.S.L. Ltd. dismissed auditor Arthur Andersen
LLP and has hired Ernst & Young LLP, according to a Form 8-K
filed on Wednesday with the Securities and Exchange Commission.
The New York-based Kasper did not report any disagreements with
Andersen on accounting principles or practices.

In its chapter 11 petition filed on February 5, 2002 with the
U.S. Bankruptcy Court in Delaware, Kasper listed assets of
$308.8 million and debts of $255.2 million. (ABI World, April

KMART: Wants to Reject Lease with Sun Microsystems
---------------------------------------------------------------- LLC seeks the Court's authority to reject --
effective as of April 3, 2002, these leases with Sun
Microsystems Finance:

    (1) Master Lease $7099118 and the accompanying six Lease
        Schedules (Schedule #001, #002, #003, #004, #005, and
        #006); and

    (2) Master Lease #SL7099118 and the accompanying five Lease
        schedules (#64310453, #6408983AA, #64308983AB,
        #64308983AC, and #64308980).

Pursuant to the Master Leases and the accompanying Lease
Schedules, J. Eric Ivester, Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, relates that Sun
Microsystems agreed to lease certain personal property,
primarily computer equipment, to  In return, pays for the Equipment.

Prior to the Petition Date, Mr. Ivester tells the Court that used the Equipment for its eCommerce business.
Specifically, Mr. Ivester says, the Equipment was used to serve
applications in the web store and in merchandising, customer
care and financial systems applications.

In September 2001, decided to outsource its
technology operations to a third party provider.  All
applications were migrated in October 2001 and
discontinued using the Equipment in December 2001.  Accordingly, returned the Equipment covered by Master Lease
#7099118 in December 2001. also informed Sun
Microsystems that the Equipment covered by Master Lease
#SL7099118 was available for immediate return.

According to Mr. Ivester, was paying Sun
Microsystems approximately $212,000 a month in lease payments
for the Equipment.  Since the Equipment is no longer necessary
for's ongoing operations, Mr. Ivester asserts that
the Debtors' rejection of the Master Leases and the Lease
Schedules are appropriate. (Kmart Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

KMART: Taps Creative Artists Agency to Help in Brand-Building
Building upon its recent aggressive marketing efforts, Kmart
Corporation (NYSE: KM) retained Creative Artists Agency (CAA),
the world's leading talent and literary agency, to provide
entertainment-related marketing strategies and brand-building
programs to the 103-year-old retailer.

One of the nation's largest retailers, Kmart will look to CAA
and its experienced brand marketing teams to identify and
capitalize on entertainment- based initiatives in film,
television, music and video games as they relate to Kmart's
existing marketing efforts and exclusive core brands.

"Entertainment provides a powerful means to connect with our
customers," said Steven Feuling, SVP of marketing for Kmart, one
of the leading sellers of music CDs, home videos, DVDs and video
games in the U.S.  "CAA's extremely early exposure and insight
into entertainment properties, and its relationships with the
talent and organizations behind these projects, will afford
Kmart critical marketing opportunities that will help build a
stronger brand and increase consumer reach and loyalty during
our current restructuring process."

Kmart recently launched a comprehensive, new brand positioning
campaign including commercials directed by Academy-Awardr
nominee Spike Lee.  The commercials, featuring the tagline
"Kmart.  The Stuff of Life," focus on how Kmart's core assets,
such as its exclusive brands, convenience and value, meet the
needs and wants of American families every day of their lives.

Kmart joins Coca-Cola, Motorola and Boeing, among other
marketers, who look to CAA for entertainment-related marketing
strategies and programs.

Kmart Corporation is a $37 billion company that serves America
with more than 2,100 Kmart and SuperCenter retail outlets, and
through its e-commerce shopping site

K Mart Corp.'s 9.875% bonds due 2008 (KMART18), an issue
currently in default, are quoted at a price of 46, DebtTraders
reports. For real-time bond pricing, see

LERNOUT & HAUSPIE: Obtains Fifth Lease Decision Period Extension
Judge Judith H. Wizmur entered an order further extending the
time period during which Debtors Lernout & Hauspie Speech
Products N.V. and L&H Holdings USA, Inc., may assume, assume and
assign, or reject unexpired nonresidential real property leases.
Judge Wizmur extends the period as to those leases where either
of the Debtors is a lessee or sublessee to the effective date of
a confirmed plan relating to L&H NV or Holdings, respectively.

LIONBRIDGE: Has Working Capital Deficit of $1.4MM at March 31
Lionbridge Technologies, Inc. (Nasdaq: LIOX), announced
financial results for the quarter ended March 31, 2002.  The
Company reported total revenues of $24.9 million for the
quarter, compared to revenue of $27.3 million for the first
quarter of 2001.

Lionbridge reported a net loss of $1.9 million for the quarter,
based on 31.5 million weighted average common shares
outstanding. This compares to a net loss of $5.5 million for the
first quarter of 2001.

At the end of the first quarter, the Company's cash position was
$10.3 million, compared to $11.7 million for fourth quarter
2001.  The Company also reduced its total debt by $1.8 million
during the quarter.  Positive cash flow from operations was in
excess of $650,000.

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

"At a time when IT companies are facing a continued depressed
economic environment, Lionbridge is staying the course with
steady financial results from quarter to quarter," said Rory
Cowan, Chairman and CEO, Lionbridge.  "We are seeing the results
of our broadened customer mix, strong recurring revenue and
customer loyalty.  With continued focus on top-line growth, cost
control and organizational stability, we are look forward to a
strong second quarter and positive net income occurring during
the second half of the year."

In the core localization business and in VeriTest, Lionbridge
continued to broaden its customer base with new activity in the
life sciences, financial and consumer goods industries.
Lionbridge also benefited by the high recurring revenue nature
of its business model and its loyal and satisfied customer base.
About 70% of Lionbridge revenue for the quarter came from
customers that have consistently done business with the Company
within each of the past eight consecutive quarters.

"Lionbridge continues to deliver high quality services to
clients, while shedding excess costs.  Many new customer
projects began in the first quarter and our sales activity looks
strong.  This, combined with significant work in process,
suggests a strong Q2 and the likelihood of meeting or exceeding
previously communicated targets. These results demonstrate just
how well Lionbridge is executing in this challenging economic
climate," continued Cowan.

Highlights for the quarter included:

     -- Premier localization customer wins.  In the first
quarter, Lionbridge secured multi-million dollar contracts with
British Telecom, Microsoft (Digital Media Division and Windows
Update Division) and the Lexmark consumer printer division.

     -- Testing and certification programs expand.  VeriTest,
the testing division of Lionbridge, expanded its Microsoft
certification programs with the addition of Pocket PC 2002 and
Smartphone 2002 certification programs.  VeriTest also secured a
win at Blue Cross Blue Shield of Massachusetts and was selected
as the company's primary testing partner.

     -- Operational Efficiencies:  Lionbridge continued to
reduce its Sales and Marketing and G&A expenses both quarter on
quarter and year on year, confirming the Company's continued
focus on fixed expense reduction.

Lionbridge Technologies, Inc. provides solutions for worldwide
deployment of technology and content to global 2000 companies in
the technology, life sciences and financial services industries.
Lionbridge testing and compatibility services, globalization
solutions, and multilingual content management technologies help
clients reduce cost, speed time to market, and ensure the
integrity of global brands.  Based in Waltham, Mass., Lionbridge
maintains facilities in England, Ireland, The Netherlands,
France, Germany, China, South Korea, Japan, Taiwan, Brazil, and
the United States. To learn more, visit

MCLEODUSA INC: Reaches Resolution on Disputed Claim Reserve
McLeodUSA Incorporated (Nasdaq:MCLDD), one of the nation's
largest independent competitive local exchange carriers, reached
an agreement with representatives of purported class action
securities claimants concerning the amount of new common stock
to be reserved under the Amended Plan of Reorganization of
McLeodUSA Incorporated pending a resolution of the disputed
claims. Under the Reserve Agreement, 36,775,663 shares of new
common stock will be available for initial distribution to the
holders of old common stock and a holdback will be set at
18,000,000 shares of new common stock pending a resolution of
the disputed claims. The Reserve Agreement only involves the
size of the reserve and does not address the validity, if any,
of the alleged class action securities claims.

As previously announced, under the Plan, McLeodUSA is not able
to make any distribution of the 54,775,663 shares available for
old common stockholders and purported class action securities
claimants until the Court establishes a reserve of a portion of
the available shares and permits the distribution of the
remainder. Once the Court enters the order approving the Reserve
Agreement, the Company will be able to make the initial
distribution of 36,775,663 shares of new common stock to the
holders of McLeodUSA old common stock. The Company expects that
such an order will be entered on or before Friday, May 3, 2002.

The initial distribution will equal approximately one share of
new common stock for every 17.0695 shares of old common stock
held on April 5, 2002, the distribution record date under the
Plan. The reserve shares remaining, if any, after resolution of
the disputed claims, will be distributed pro-rata to the holders
of old common stock as of the distribution record date.

Holders of the Company's old common stock who hold those shares
in certificated form will receive a letter of transmittal from
Wells Fargo Bank Minnesota, NA, the Company's disbursing agent.
This letter must be completed and returned with the certificated
shares in order for a holder to receive the shares of McLeodUSA
new common stock to which that holder is entitled under the
Plan. Holders of the Company's old common stock who hold their
shares in street name will receive shares of McLeodUSA new
common stock through their broker or other nominee. The Company
expects to mail the letter of transmittal by the end of business
on Friday, May 3, 2002.

The Plan is described in detail in the Disclosure Statement with
Respect to Amended Plan of Reorganization of McLeodUSA
Incorporated filed as Exhibit 99.1 to Current Report on Form 8-K
filed with the Securities and Exchange Commission on March 5,
2002 and, in less detail, in the Annual Report on Form 10-K
filed with the SEC on April 12, 2002. The confirmed Plan of
Reorganization is filed as Exhibit 2.2 to Current Report on Form
8-K filed with the SEC on April 22, 2002.

McLeodUSA new common stock resumed trading on Nasdaq on April 18
under the symbol "MCLDD." McLeodUSA new Series A preferred stock
also began trading on Nasdaq on April 18 under the symbol

McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states. The Company is a facilities-based
telecommunications provider with, as of December 31, 2001, 42
ATM switches, 60 voice switches, 485 collocations, 525 DSLAMs,
and over 31,000 route miles of fiber optic network. Visit the
Company's Web site at

DebtTraders reports that McLeodusa Inc.'s 11.375% bonds due 2009
(MCLD2) are trading at about 25.25. See
real-time bond pricing.

MERRILL LYNCH: S&P Junks Class G P-T Certificates Ser. 1996-C2
Standard & Poor's lowered its rating on class G of Merrill Lynch
Mortgage Investors Inc.'s mortgage pass-through certificates
series 1996-C2, to triple-'C' from single-'B' and removed it
from CreditWatch with negative implications, where it was placed
on Jan. 3, 2002. At the same time, the rating on the class F
certificates is lowered to double-'B'-minus from double-'B'. In
addition, ratings are affirmed on seven classes of the same

The downgrades reflect sizeable appraisal reductions, and high
delinquency levels. Delinquencies and REOs total $98.7 million,
or 11.9% of the scheduled pool balance. Of the delinquent
mortgages, $81.4 million are specially serviced. Of particular
concern are the REO properties, which have created a cumulative
appraisal reduction of $7.2 million.

The affirmations are driven by the increased subordination
levels, which are offset by the flat performance of the
remaining mortgages in the pool, resulting in a weighted average
debt service coverage ratio (WADSCR) of 1.37 times up from 1.32x
at the last review, and 1.42x at issuance. The coverage levels
are based on only about one-half of the pool reporting 2000 and
2001 financial information.

Three REO properties, including two lodging properties and one
retail property, total $17.4 million (or 2% of the pool). CRIIMI
MAE Services L.P. has receivers in place at all three
properties, while aggressively marketing the properties for
sale. Based on 2000 and 2001 appraisals, CRIIMI MAE has applied
appraisal reductions of $7.2 million. All three REOs have
created an interest rate shortfall of $2.2 million to the
unrated class H.

A total of 27 mortgages are 90-days delinquent and total $78
million (or 9%). The mortgages include Shilo Properties Inc.,
Service Merchandise Co., Frank's Nursery & Crafts, and two
multifamily properties.

The Shilo Properties' loan represents $32.2 million (or 3.7%);
the four mortgages are crosscollateralized and crossdefaulted.
CRIIMI MAE has initiated foreclosure proceedings on all of the
Shilo Properties, and the single-purpose entity responded by
filing for Chapter 11 bankruptcy protection for all four hotels
by March 27, 2002. As part of the foreclosure process, CRIIMI
MAE requested that an independent auditor assess the financial
condition of the hotels. The auditor found that the financial
condition of the properties had improved, resulting in a WADSCR
for the mortgages of 1.04x (October 2001), up from 1x (year-end
2000). In addition, the weighted average daily rate has
increased to $90.02, from $89.38, during the same time period.
CRIIMI MAE has requested an updated appraisal, to determine any
potential losses.

Both SMC and Frank's Nursery & Crafts are involved with proceeds
from the bankruptcy court, for either liquidation or
reorganization. SMC, which has

18 mortgages totaling $37.8 million (or 4.3%) are secured by
properties owned by SMC-SPE Inc., a subsidiary of SMC, filed for
Chapter 7 liquidation in March 2001. Frank's Nursery & Crafts
filed for bankruptcy protection in March of 1999; the company is
the borrower/tenant for six mortgages totaling
$2.9 million (or 0.3%) that are supported by six separate garden
and crafts stores. CRIIMI MAE reported that all mortgages are
secured by properties that are well-located and desirable.
Consequently, CRIIMI MAE disclosed that the SMC properties are
garnering strong interest from prospective buyers, at levels
above the current outstanding principal balance.

As for the remaining mortgages, totaling $8.4 million (or 0.9%),
CRIIMI MAE does not anticipate that they will result in
significant losses to the trust.

CRIIMI MAE's watchlist includes $169.5 million in mortgage loans
(or 19.5%), which is historically higher than what was reported
at the end of last year ($23.7 million), and reflects changes to
the Commercial Mortgage Servicers Association watchlist
requirements. These changes result in an expanded watchlist,
because they include, all tenant bankruptcies, lease
expirations, and maturities occurring within two years.
Discussions with CRIIMI MAE revealed that seven mortgages,
totaling $35.9 million, are of particular concern. These
mortgages are secured by hotels located across the country.

Based on discussions with CRIIMI MAE, the special servicer,
Standard & Poor's stressed the mortgages in its analysis and
determined that the current and stressed credit enhancement
levels adequately support the assigned ratings.

As of March 2002, the loan pool consisted of 249 fixed-rate
mortgage loans totaling $869.5 million down from 300 mortgages
totaling $1.138 billion. The top 10 mortgages represent 20.3% of
the pool, down from 16.5%. The large majority of property types
are concentrated in multifamily (42.2%) and retail (26.8%), with
the remainder evenly distributed throughout a variety of
property types. Only three states California (13%), Florida
(12.8%), and Texas (10.5%), exceed a 10% geographic
concentration. Debt service coverage for the pool has increased
slightly to 1.37x, using 15% of the year-end 2001 and 40.1%
year-end 2000 financials from 1.34x at issuance. To date,
cumulative realized losses total $538,000.

       Rating Lowered And Removed From Creditwatch Negative

             Merrill Lynch Mortgage Investors Inc.

            Mortgage pass-thru certs series 1996-C2

               Class    Rating

                       To      From           Credit Support (%)

               G       CCC     B/Watch Neg    2.95

                        Rating Lowered

             Merrill Lynch Mortgage Investors Inc.

            Mortgage pass-thru certs series 1996-C2

               Class    Rating

                       To      From    Credit Support (%)

               F       BB-     BB      6.45

                        Ratings Affirmed

             Merrill Lynch Mortgage Investors Inc.

            Mortgage pass-thru certs series 1996-C2

               Class    Rating    Credit Support (%)

                A-1      AAA       40.52
                A-2      AAA       40.52
                A-3      AAA       40.52
                B        AA+       32.67
                C        A+        25.47
                D        BBB       18.92
                E        BBB-      11.95

NATIONAL STEEL: Pushing for July 15, 2002 General Bar Date
National Steel Corporation and its debtor-affiliates ask the
Court to establish procedures and fix the final date within
which proofs of claim can be filed against their estates.  The
Debtors further request that in the interest of efficiency, the
Court authorize them to send a combined notice of the Bar Date,
the Petition Date of these cases, and the 341 meeting of

Mark P. Naughton, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, states that the Debtors propose that the Bar
Date be set for July 15, 2002 except for governmental units
which shall have a Bar Date of September 6, 2002.  "The Debtors'
schedules of assets and liabilities are due on or before May 21,
2002 thus, the Debtors want to establish a Bar Date to determine
what claims are asserted against them in addition to those
listed on the schedules," Mr. Naughton adds.

Furthermore, the Debtors request that creditors, on account of
claims arising before the Petition Date, file proofs of claim.
Creditors asserting these types of claims need not file a proof
of claim:

  (a) any entity that has already properly filed a proof of
      claim against one or more of the Debtors in accordance
      with the procedures in this Bar Date notice;

  (b) any entity that:

      -- agrees with the nature, classification and amount of
         such claim in the schedules;

      -- whose claim against a Debtor is not listed as disputed,
         contingent or unliquidated in the schedules;

  (c) any entity whose claim against the Debtors previously has
      been allowed or paid by an order of the Bankruptcy Court;

  (d) any entity asserting a claim allowable as an
      administrative expense of the Debtors' Chapter 11 cases;

  (e) any of the Debtors or any direct or indirect subsidiary of
      National Steel Corporation that holds claims against one
      or more of the Debtors.

In addition, Mr. Naughton asks that holders of the Debtors'
equity securities not be required to file a proof of interest
solely on account of holder's ownership interest in or
possession of such equity securities.  However, any holder that
wishes to assert a claim based upon transactions in the Debtors'
securities, including to claims for damages or rescission based
on the purchase or sale of such securities must file a proof of
claim on or prior to the Bar Date.

The Debtors also request that proofs of claim for any rejection
damages claims arising during the Chapter 11 cases be filed by
30 days after the latest of these events: (i) date of any order
authorizing the rejection of such executory contract or
unexpired lease or (ii) the Bar Date.  "Proofs of claim for any
other claims that arose prior to the Petition Date under a Lease
or Contract must be filed by the Bar Date," Mr. Naughton adds.

Mr. Naughton explains that to provide ample time for mailing
approximately 60,000 Bar Date notices and allowing the creditors
time to prepare and file proofs of claim, the Debtors request
that this Court fix July 15, 2002 as the Bar Date, with notices
to be made no later than May 15, 2002.

Accordingly, Mr. Naughton relates that the United States Trustee
has scheduled the meeting of Creditors for June 10, 2002 at 1:30
p.m.  "Because there are more than 50,000 entities to whom such
notice will be given, the Debtors request that a combined notice
of the Bar Date and the meeting of creditors be given," Mr.
Naughton says. (National Steel Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

OGLEBAY NORTON: Taps CIBC World Markets as Financial Advisors
Oglebay Norton Company (Nasdaq: OGLE) selected CIBC World
Markets as its financial advisor to assist the Company in
developing a plan to refinance its bank debt, due April 3, 2003.
The Company anticipates presenting a plan to its bank group no
later than June 30, 2002; however does not anticipate making its
plans public at that time.

In other news, at the Company's Annual Meeting held April 24,
2002, the shareholders of the Company elected all nine nominees
for the position of director to serve for a period of one year
and approved the 2002 Stock Option Plan. Elected as directors

     * John N. Lauer, who also serves as the Chairman of the
       Board and Chief Executive Officer of the Company

     * Michael D. Lundin, who also serves as the President and
       Chief Operating Officer of the Company

     * Albert C. Bersticker, who also serves as the outside Lead
       Director of the Company

     * Malvin E. Bank

     * William G. Bares

     * James T. Bartlett

     * Madeleine W. Ludlow

     * William G. Pryor

     * John D. Weil

PETROMINERALS CORP: Fails to Meet Nasdaq Listing Requirements
Petrominerals Corporation (Nasdaq: PTROE) said that as a result
of reserving for certain Environmental Protection Agency
liabilities, it is no longer in compliance with the Nasdaq Small
Cap minimum equity standard of $2.0 Million and is subject to
delisting upon further review by a Nasdaq Listing Qualification
Hearing Panel.  A previous delinquency resulting from the late
filing of the Company's Form 10KSB for the year ended December
31, 2001 has been cured.

In September 1989 and again in February 2000, the Company was
advised by the EPA that it was potentially responsible for
clean-up of waste disposal sites in Monterey Park, California,
and Casmalia, California, respectively. Both sites involved the
permitted disposition of non-hazardous drilling mud and oil
field fluids.  In 1973, 1975, and 1977 the waste disposed of at
the Monterey Park site was from drilling operation of Century
Oil Corporation, subsequently merged into Petrominerals and in
1980 and 1981 waste was disposed of at the Casmalia site from
the Company's drilling operations in the Santa Maria, California
area.  Following protracted negotiations, Petrominerals settled
both claims for future payments of approximately $725,000.

Under the terms of Petrominerals' Nasdaq SmallCap Market Listing
Agreement, the Company is required to maintain certain
eligibility criteria, including a minimum shareholder equity of
$2.0 million.  After reserving for the EPA liabilities discussed
above, Petrominerals' shareholder equity at December 31, 2001
fell to $1.3 million.  The Company notified Nasdaq of this
development concurrent with the filing of this Form 10-KSB.
Management is currently engaged in negotiations on two separate
projects, either one of which is expected to cure the Company's
minimum equity deficiency.  However, if neither of these efforts
is successful or if the Company is unable to gain the time
required to consumate one of these transactions, Petrominerals
may be delisted from trading on the Nasdaq SmallCap Market.  In
this event, the Company intends to apply for a listing on the
OTC bulletin Board.

PILLOWTEX CORP: Intends to Assume 3 Citicapital Lease Agreements
Pillowtex Corporation and its debtor-affiliates seek the Court's
authority to assume, as modified, three lease agreements with
Citicapital SKA wherein the Debtors lease certain production
equipment they use in their manufacturing operations.

Donna L. Harris, Esq., at Morris, Nichols, Arsht & Tunnell, in
Wilmington, Delaware, states that each Lease Agreement has a
term of 96 months and an option at the end of the term to
purchase the equipment for fair market value.  "The aggregate
monthly rent under the Lease Agreements is approximately
$39,470," Ms. Harris adds.  As of the Petition Date, the Debtors
owed Citicapital approximately $17,104 for payments due under
the Lease Agreements.

According to Ms. Harris, as part of the Debtors' strategy to
restructure their production equipment leases, the Debtors have
negotiated a restructuring of the Lease Agreements with
Citicapital.  The amendment of the Agreements materially reduces
the amount of lease payments owed to Citicapital.   Ms. Harris
relates the material terms of the Amendments as:

   -- The Lease Agreements will be assumed, as modified by the

   -- Each of the Lease Agreements will have a 60-month term,
      beginning January 1, 2002, and ending December 31, 2006.

   -- The aggregate balance due under the Lease Agreements as of
      January 1, 2002 is $2,970,250. As of January 1, 2002,
      Citicapital will reduce the aggregate balance due under
      the Lease Agreements to $1,460,000, the agreed fair market
      value of the Production Equipment. The new aggregate
      balance due under the Lease Agreements is equal to the
      Fair Market Value plus the Cure Amount.

   -- The New Principal Balance will be amortized over the new
      term, with aggregate monthly payments of $29,215.16.

   -- The Debtors will pay interest on the New Principal Balance
      at the rate of 7.5%, compounded annually.

   -- Citicapital would be entitled to submit an unsecured claim
      against the Debtors' estates for $1,510,250, which is the
      difference between the Old Lease Balance and the New
      Principal Balance.

   -- Provided that the Debtors remain current under the Lease
      Agreements, as modified, the Debtors would have the option
      to acquire title to the Production Equipment at the end of
      the new term for no additional consideration.

"Assumption of the Lease Agreements, as modified, enables the
Debtors to continue using the Production Equipment, which is
necessary for their manufacturing operations, and substantially
reduces their lease obligations," Ms. Harris asserts. In fact,
the restructuring of the lease payments would convert over $1.5
million of the amounts due under the Lease Agreements into a
general unsecured claim against the Debtors' estates. (Pillowtex
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

POLAROID CORP: Files Proposed Reorganization Plan in Wilmington
Polaroid Corporation has filed a proposed plan of reorganization
with the U.S. Bankruptcy Court in Wilmington, Delaware.

The reorganization plan assumes that the court approves a
previously announced sale of the company to One Equity Partners
or to some other organization with a higher or better offer.  It
provides a general outline for the distribution of Polaroid's
assets, including possible sale proceeds, to creditors.

Polaroid also asked the court for more time to file a disclosure
statement, which will provide specific information regarding the
proposed distribution to creditors.  The company continues to
believe it is unlikely that there will be any recovery for

Gary T. DiCamillo, chairman and chief executive officer, said,
"The proposed reorganization plan establishes a general
framework for settling our debts based on the sale of Polaroid
to a strong buyer.  It's another step forward in our efforts to
maximize value for our creditors and to emerge from Chapter 11
as an independent, ongoing business."

Polaroid Corporation (OTC Bulletin Board: PRDQE) is the
worldwide leader in instant imaging. The company supplies
instant photographic cameras and films; digital imaging
hardware, software and media; secure identification systems; and
sunglasses to markets worldwide. Additional information about
Polaroid is available on the company's Web site at

PSINET INC: Court to Hear on Texas Property Sale on May 20, 2002
On May 20, 2002, at 9:30 a.m. Eastern time, Judge Gerber will
conduct the Texas real property Sale Hearing

As previously reported, PSINet, Inc., and its debtor-affiliates
proposed the sale of its real property located at 1333 Crestside
Drive in Coppell, Texas. The Property consists of a building of
approximately 80,000 square feet of rentable space improved with
raised flooring, supplemental HVAC and redundant fiber network
and power to make it suitable for use as a hosting center,
together with approximately 6.527 acres of land.

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

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

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

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

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

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

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

                 Competitive Bidding Procedures

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

The Staubach Company - Northeast will help the Debtors actively
market for sale. In this regard, Staubach expects to, among
other things, make outgoing calls to potentially interested
parties. Those parties that express an interest in purchasing
the Property will be provided a copy of the Purchase Agreement.
(PSINet Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

REFAC: Board of Directors Adopts Shareholder Rights Plan
Refac (AMEX:REF) said that on April 26, 2002 its Board of
Directors adopted a Stockholder Rights Plan in which rights will
be distributed as a dividend at the rate of one Right for each
share of common stock, par value $0.10 per share, of the Company
held by stockholders of record as of the close of business on
May 9, 2002.

The Company previously announced that it will reposition itself
for sale or liquidation. The adoption of the Rights Plan should
enhance the ability of the Company to carry out its plan in a
manner which will be fair to all stockholders.

Each Right initially will entitle stockholders to buy one ten-
thousandth of a share of preferred stock for $5.95. The Rights
generally will be exercisable only if a person or group acquires
beneficial ownership of 15% or more of the Company's common
stock or commences a tender or exchange offer upon consummation
of which such person or group would beneficially own 15% or more
of the Company's common stock. The Rights will expire on April
26, 2012.

A copy of the Stockholder Rights Plan will be filed with the
Securities and Exchange Commission shortly.

For 50 years, Refac has been a recognized international leader
in intellectual property management. Today, we are a leading
consulting firm with expertise in licensing, product
development, and graphic design and communications.

SAFETY-KLEEN: Wants to Preserve Avoidance Actions for 180 Days
Pursuant to sections 108 and 546 of the Bankruptcy Code, Safety-
Kleen Corp., and its debtor-affiliates have until two years
after the entry of the order for relief to commence avoidance
and other causes of action pursuant to sections 544, 545, 547,
548 and 553 of the Bankruptcy Code, as well as to pursue various
causes of action under applicable bankruptcy and non-bankruptcy
law for which the applicable statute of limitations, but for the
chapter 11 filing, would otherwise have expired during the
initial two years of these chapter 11 cases.

Avoidance actions include the recapture of preference payments
(money unfairly paid to prepetition creditors on the eve of
bankruptcy) and the estate's assertion of fraudulent conveyance
claims (prepetition transactions that didn't realize full value
from the debtor's perspective).

The Debtors are currently analyzing the relevant financial
information and payment histories to identify those causes of
action that they believe the pursuit of which may ultimately
yield value to these estates. In order to preserve those causes
of action, the Debtors arguably will be required to bring them
prior to June 9, 2002. However, the Debtors are mindful that
there is a distinct possibility that certain, if not most of the
potential causes of action the Debtors identify may be released
or otherwise resolved in connection with the confirmation of a
plan or plans of reorganization in these cases.

Accordingly, the Debtors are proposing procedures that will
permit the Debtors to preserve the causes of action without
unnecessarily alarming potential defendants, many of whom are
the Debtors' current vendors, and to prevent the Debtors, the
potential defendants and the Court from having to expend time,
effort and money on immediately pursuing full scale litigation
with respect to proceedings that ultimately may be dismissed or
otherwise disposed of without the need for litigation. Pursuant
to these procedures, the Debtors are requesting that the Court
permit the Debtors to file an initial summons and notice of
pretrial conference and complaint with respect to each adversary
proceeding under seal.

The Debtors further request that the Court extend the time in
which the Debtors would otherwise be required to serve the
summons and Complaint on the defendant to 180 days.  In the
event the Debtors determine to pursue any sealed adversary
proceeding, it will so notify the Clerk of the Court and will
file and serve on the defendant the Complaint and an Amended
Summons, setting forth an appropriate response deadline and a
pretrial hearing date consistent with the local rules. At that
point the adversary proceeding will become unsealed and will
proceed in the usual manner in accordance with the applicable
local rules and Federal Rules of Civil Procedure.

Given the large number of potential Adversary Proceedings, the
Debtors are also requesting the implementation of certain
procedures to permit orderly and efficient case management and
administration. The Procedures include:

      (a) intake procedures for the commencement of the
Adversary Proceedings;

      (b) procedures for sealing the Adversary Proceedings;

      (c) procedures with respect to the issuance and service of
process; and

      (d) procedures for establishing response deadlines and
dates for pretrial conferences.

Finally, the Debtors request authority to abandon those causes
of action that upon the completion of their review the Debtors
determine are of inconsequential value and benefit to the

The Debtors believe that implementing the proposed Procedures
will reduce the administrative and economic burdens placed on
the Debtors, the Court and the potential defendants, will
preserve what may prove to be a valuable asset of the estates
and will do so in a way that does not unnecessarily disrupt
critical ongoing business relationships. The Procedures will
permit the Debtors to file under seal and not immediately serve
the Adversary Proceedings, thereby:

       (i) saving litigation costs that would otherwise be
incurred now in the prosecution and defense of the Adversary

       (ii) reducing the immediate burden on the Court's
resources, and

       (iii) providing the Debtors with sufficient time to
finalize a plan or plans of reorganization and thereby know
which, if any, of the Adversary Proceedings will be pursued and
which will be disposed of or otherwise resolved pursuant to the
terms of a confirmed plan.

                       The Procedures

The Procedures the Debtors propose are:

        (a)  Scope of the Procedures. These Procedures are
intended to apply to each Adversary Proceeding initiated prior
to June 9, 2002 that the Debtors identify to the Clerk as  being
subject to these Procedures.

       (b)  Commencement Procedures. Rule 7003-1 of the Local
Rules of Bankruptcy Practice and Procedure of the United States
Bankruptcy Court for the District of Delaware require the filing
of an adversary proceeding cover sheet in connection with the
commencement of an Adversary Proceeding.  Notwithstanding Local
Rule 7003-1, the Debtors understand that a Cover Sheet is not
used in conjunction with the Court's electronic filing
procedures. The Debtors request that the Court waive the
requirement of Local Rule 7003-1 that a Cover Sheet be filed
with each Complaint.

      (c)  Filing Under Seal and Electronic Filing.  The Debtors
will manually file with the Clerk the Complaint and the Initial
Summons for each Adversary Proceedings under seal pursuant to
Local Rule 5003-1(b). Additionally, the Debtors will
electronically file a single page document, using a unique
identifier or other placeholder as a Substitute for the name of
the defendant, indicating that the Adversary Proceeding was
filed under seal with the Clerk of the Court in lieu of
electronically filing the actual Initial Summons and Complaint.
The Debtors will then provide the Clerk of the Court with a list
that shows the case number assigned to each Adversary
Proceeding. Upon completion of the procedures set forth in this
paragraph, the Complaint shall be deemed filed.

       (d)  Service of Process. The Debtors will prepare the
Initial Summons, the form of which will be consistent with Form
108 of the Local Rules, except that information relating to the
defendant's time to answer and a date to attend a pretrial
conference will not be indicated. The initial Summons will be
filed under seal with the Complaint, but neither the Complaint
nor the Initial Summons will be served on the defendants until
and unless the Debtors decide to proceed with the litigation and
the Complaint is then unsealed. If the Debtors decide to
prosecute an Adversary Proceeding, then the Debtors will prepare
an amended Summons, which will contain the information required
by Rule 4(b) of the Federal Rules, made applicable to the
Adversary Proceedings by Rule 7004(a) of the Federal Rules of
Bankruptcy Procedure, and the Amended Summons will be filed with
the Clerk and served with the Complaint upon the applicable
defendant. At such time the Adversary Proceeding will become
unsealed and will proceed according to the applicable rules and
any further orders of this Court.

      (e) Enlargement of Time for Service of Process. Bankruptcy
Rule 7004(e) provides that all summonses issued by the Court in
the Adversary Proceedings must be served within ten days of the
date of issuance.  To avoid incurring significant costs and
expenses associated with pursuing the Adversary Proceedings that
may ultimately be dismissed, the Debtors seek entry of an order
with respect to each defendant located and served within the
United States, extending the time limit for service of the
Amended Summons and Complaint to 180 days after the filing of
the Complaint, subject to the Debtors' right to seek additional
extensions, if necessary, upon a showing of good cause. Further,
the Debtors request that notwithstanding Bankruptcy Rule
7004(a), no Initial Summons or Amended Summons be deemed stale
until the expiration of the 180-day period.

The Debtors believe that implementation of the Procedures will
promote the efficient administration of these cases and
potentially avoid significant and time-consuming litigation that
may prove wholly unnecessary.  Additionally, the Procedures will
permit the Debtors to preserve potentially valuable assets
without prematurely disrupting existing business relationships.

                 Abandonment of Potential Actions

The Debtors are additionally seeking authority to abandon
potential causes of action that they determine, upon completion
of their review and in consultation with counsel to the
Creditors' Committee and counsel to the secured lenders, are of
inconsequential value or benefit to the estates to pursue. In
the course of their investigation, the Debtors anticipate that
they will identify many causes of action that, in the exercise
of their reasonable business judgment, should not be pursued.
The causes of action to be abandoned likely will include:

       (i) causes of action that have little or no value to the
estates, or if pursued, the costs of litigating those causes of
action would likely exceed the expected value of any recovery,

       (ii) causes of action where the Debtors believe the
defendants have valid defenses, or

       (iii) causes of action that, if pursued, the potential
harm to the Debtors' business in pursuing the causes of action
would likely be outweighed by any potential recovery. The
Debtors will notify the Creditors' Committee and secured lenders
of those causes of action the Debtors intend to abandon. To the
extent there is a significant disagreement between the Debtors
and the Creditors' Committee or the secured lenders on a
potential cause of action the Debtors propose to abandon that
cannot be resolved, the party opposing the proposed abandonment
can bring the matter before Judge Walsh for a ruling on whether
the proposed abandonment is a reasonable exercise of the
Debtors' business judgment.

                   The Debtors' Arguments for

The Debtors remind Judge Walsh that he has broad discretion to
control his own docket.  Moreover, section 105 of the Bankruptcy
Code grants bankruptcy courts broad authority and discretion to
take such actions and implement such procedures as are necessary
to enforce the provisions of the Bankruptcy Code.  The Debtors
believe that the proposed procedures are entirely appropriate in
this situation and will serve the interests of all involved.  As
a result of the two-year statute of limitations to commence
certain causes of action, the Debtors are required to commence
adversary proceedings against certain defendants now or
potentially forfeit their causes of action.  However, initiating
litigation at this stage of these cases against a potentially
significant percentage of the Debtors' current vendors could
result in substantial harm to these estates and the Debtors'
ability to complete the reorganization.  The Debtors are thus
faced with the tension of preserving potentially valuable assets
for their estates and maintaining the strong support and
creditor relationships that the Debtors have forged during the
course of their reorganization. The Debtors believe that
implementing the Procedures, which permit the Debtors to file an
adversary proceeding under seal and not to serve them on
defendants until it is known whether or not these adversary
proceedings will be pursued, will effectively balance these
competing concerns.

Moreover, the Procedures serve the interests of judicial
economy.  It would be an enormous waste of limited judicial
resources to force the Debtors to proceed at this point, as the
only way of preserving potentially valuable causes of action,
with the litigation of what could be thousands of adversary
proceedings when it is possible that many, if not most, of those
adversary proceedings will be settled or otherwise resolved
without the need for litigation under the terms of a confirmed
plan of reorganization.

Finally, it is similarly in each potential defendant's interest
that these procedures be adopted.  By sealing adversary
proceedings and not requiring service at this time, the
defendants are not required to engage counsel and undertake the
time and expense of defending against a proceeding that may
ultimately be resolved in a plan of reorganization without the
need for litigation.

Moreover, no defendant will be prejudiced by the Procedures.  In
the event that the Debtors determine it is appropriate to pursue
an adversary proceeding, the seal will be lifted, an Amended
Summons will be issued, and the Complaint and Amended Summons
will be served on the defendant in accord with applicable rules.
The defendant will then be afforded every protection and
applicable time period as if the complaint was first filed on
the day the Adversary Proceeding is unsealed.  According,
implementing the Procedures serves the interests of all

                    The Debtors' Arguments
                        For Abandonment

Similarly, authorizing the Debtors to abandon those causes of
action they determine are of inconsequential value or benefit to
the estates is appropriate.  The debtor is afforded significant
discretion in determining the value and benefits of a particular
property for the purposes of the decision to abandon the
property.  The Debtors expect that, following the conclusion of
their review, they will identify a significant portion of the
tens of thousands of transactions that they believe should not
be pursued.  In many cases, it may simply not be cost-effective
based on the size of the transaction to pursue the cause of
action.  In other cases the Debtors may determine that the
available defenses will likely reduce any potential recovery so
significantly that it is not cost-effective to pursue the cause
of action. Additionally, in certain instances the Debtors may
determine that the potential harm to the Debtors' business
operations may outweigh any potential recovery from pursuing a
cause of action.

The Debtors will determine, in the exercise of their sound
business judgment, the causes of action that they believe are
burdensome to pursue or of inconsequential value or benefit to
the estates and will not pursue those causes of action.
Moreover, the Debtors will share their analysis with counsel to
the Creditors' Committee and counsel to the Lenders.  In the
event either disagree with the Debtors' decision to abandon one
or more of the causes of action, the party opposing the
abandonment may bring the matter before Judge Walsh for
decision. (Safety-Kleen Bankruptcy News, Issue No. 34;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

SHELDAHL INC: Files for Chapter 11 Reorganization in Minnesota
Sheldahl Inc. filed a voluntary petition for Chapter 11
reorganization with the U.S. Bankruptcy Court for the District
of Minnesota.

The Company said it intends to reorganize by selling
substantially all of its assets under a Section 363 sale
pursuant to the U.S. Bankruptcy Code. Ampersand Venture Capital,
Molex Inc. and Morgenthaler Partners, Sheldahl's three largest
shareholders have indicated their intention to acquire the
assets of Sheldahl in such a transaction. Sheldahl expects to
continue to operate its business and meet all customer

"We believe the transaction contemplated is the best alternative
to maintain our service to customers, the confidence of our
vendors and to retain as many employees as possible. Regrettably
we do not anticipate any residual value for shareholders," said
Benoit Pouliquen, President and Chief Executive Officer. "Over
the last year we have successfully reorganized our operations to
concentrate on our core Materials and Flex Interconnect
businesses. Today's actions are intended to provide the capital
structure to support the future growth of the business."

Additionally Ampersand, Molex and Morgenthaler will provide the
company with $1.5 million of Debtor-in-Possession (DIP)
financing. Sheldahl anticipates receiving prompt approval for
that financing from the Bankruptcy Court.

John Lutsi, Chairman of the Board of Sheldahl and General
Partner with Morgenthaler said, "Upon the consummation of the
contemplated transaction, a new Company will emerge with
sufficient capital to invest in key projects. This will help
ensure the survival of a strong competitor in the Materials and
Interconnect industry for years to come."

Over the last year, Sheldahl's management has aggressively
worked to lower its cost structure and position the Company to
capitalize on growth opportunities in its core businesses,
Materials and Flex Interconnect. The Company recently announced
the closing of its Endicott, New York facility which is
proceeding according to plan. In the fourth Quarter of 2001 the
Company reported Earnings before interest, taxes, depreciation
and amortization (Ebitda) of ($251,000) excluding write-offs for
impairment of fixed assets, goodwill and intangible assets, a $6
million improvement over the prior Quarter. The Company further
expects to report a slight improvement in its first Quarter 2002

Mr. Pouliquen concluded," The improvement of our financial
performance over the last six months in spite of difficult
market conditions is a significant achievement. The fact that
our Materials and Flex Interconnect operations located in
Northfield have achieved positive operating cash flow (Ebitda)
in the last two Quarters demonstrates the success of our
operational restructuring. The restructuring of our balance
sheet is the next logical step in our efforts and will allow us
to capitalize on future growth opportunities. We are committed
to the restructuring of our finances and believe that with the
resources of Ampersand, Molex and Morgenthaler, we will be
successful in our efforts."

Sheldahl, Inc. is a leading producer of high-density substrates,
high-quality flexible printed circuitry, and flexible laminates
primarily for sale to the automotive, electronics and data
communications markets. The company, which is headquartered in
Northfield Minnesota, has operations in Northfield; Longmont,
Colorado; Endicott, NY; Toronto, Ontario, Canada; and Chihuahua,
Chih., Mexico. Sheldahl's Common Stock trades on the Nasdaq
National Market tier of the Nasdaq Stock Market under the
Symbol: SHEL. Sheldahl news and information can be found on the
World Wide Web at

SHENANDOAH RESOURCES: Alberta Court Grants CCAA Protection
Shenandoah Resources Ltd. (CDNX: "SNN") said that an Interim
Order has been granted by the Court of Queen's Bench of Alberta
which provides creditor protection to Shenandoah and permits it
to develop a financial restructuring plan to present to its
creditors. The Order was granted under the Companies' Creditors
Arrangement Act. The Court granted a stay of proceedings which
prevents creditors from taking any legal actions against
Shenandoah or its assets. Shenandoah is currently in discussions
with certain parties with respect to structuring a financial
arrangement which will provide the company with required
funding. Shenandoah's banker, which is its primary secured
creditor, supports the restructuring efforts being undertaken by

Shenandoah's shares have been halted pending review of its tier
maintenance requirements by the TSX Venture Exchange. Before re-
instatement will occur, an additional press release will be

SPECIAL METALS: Secures New $60 Million DIP Credit Facility
Special Metals Corporation (OTC: SMCXQ) announced that the
Company and its U.S. subsidiaries have closed on a new $60
million debtor-in-possession revolving credit facility with
Credit Lyonnais, as agent for a bank group.

The new financing ensures that the Company will have sufficient
liquidity to continue the normal operation of its businesses. As
previously reported, the credit facility is subject to final
court approval. The final hearing on the credit facility has
been rescheduled from May 2, 2002 to May 10, 2002 to allow for
review by the newly-formed creditors' committee and their

Special Metals President T. Grant John said, "This is an
important step forward in our reorganization process. Not only
does the new facility provide the Company with additional
financial resources to support normal day-to-day operations, it
also enables us to focus our efforts on our goal of emerging
from the reorganization as a stronger, financially stable

Special Metals is the world's largest and most-diversified
producer of high-performance nickel-based alloys. Its specialty
metals are used in some of the world's most technically
demanding industries and applications, including: aerospace,
power generation, chemical processing, and oil exploration.
Through its 10 U.S. and European production facilities and a
global distribution network, Special Metals supplies over 5,000
customers and every major world market for high-performance
nickel-based alloys.

STARWOOD HOTELS: Taps Robert Koren to Lead W Hotels Expansion
An accomplished 19-year international hotel executive and expert
in the art of service has been tapped by Starwood Hotels &
Resorts Worldwide, Inc. (NYSE:HOT) to spearhead W Hotels global
expansion efforts.

On April 29, 2002, Starwood named Robert Koren as Vice President
of Operations for W Hotels. Koren, who most recently managed
Starwood's award-winning luxury properties in Costa Smeralda,
will be responsible for the future global development of the W
brand, as well as oversee the hotel operations of W's growing
16-property portfolio.

"We are delighted to be able to attract such a uniquely talented
candidate like Robert, who possesses exceptional experience with
some of the most highly-rated hotels in the world, to lead W to
new heights of innovation and success," said Barry S.
Sternlicht, Chairman and CEO for Starwood. "Robert brings with
him a wealth of international hotel experience after holding top
operations positions that span across four continents, and his
appointment marks Starwood's commitment to the progression and
further global development of the W brand."

In his new role, Koren will oversee the ongoing development and
evolution of the brand, and will also lead the efforts in
building a brand operations team dedicated to ensuring that W
remains the industry leader and innovator through the modern
design, style and superior service. One of the first projects
Koren will oversee is the development of W's first property in
Latin America, the 239-room W - Mexico City. Other openings in
2003 include the debut of the second W property in the Asia-
Pacific region, the W Seoul - Walker Hill, and the W - San Diego
in California.

With more than 19-years of experience, Koren has extensive
knowledge of the international and luxury hotel market, and most
recently served as the Area Manager for Starwood's famed Costa
Smeralda and Malta hotels, and as General Manager of the Hotel
Cala di Volpe in Porto Cervo, Italy. Under his leadership, the
Hotel Cala di Volpe was featured in Conde Nast Traveller's UK
list of the Top Golf Resorts in 2000, as well as the magazine's
Top 15 European Resorts 2000 List. In 1983, Koren joined
Sheraton Hotels & Resorts, and held various operational
positions in Asia, Africa, Europe and Australia. A graduate of
the University of New South Wales in Sydney, Australia, Koren
will be located at Starwood's corporate offices in White Plains.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading
hotel and leisure companies in the world with more than 740
properties in more than 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, The
Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W
brands, as well as Starwood Vacation Ownership, Inc., one of the
premier developers and operators of high quality vacation
interval ownership resorts. For more information, please visit

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+'.

USG CORP: Enron Unit Wants to Terminate US Gypsum Swap Agreement
Enron North America Corporation asks Judge Gonzalez in the New
York Bankruptcy Court to approve a settlement with United States
Gypsum Company, a USG Corporation affiliate, and to authorize
the rejection of their

Enron and USG are parties to an ISDA Master Agreement dated
August 1, 2000, according to Enron attorney Melanie Gray, Esq.,
at Weil, Gotshal & Manges LLP, in New York.

Under the Master Agreement, Ms. Gray says, Enron North America
and USG entered into certain swaps and other financially-settled
derivative transactions.

To secure the performance of Enron North America's obligations
under the Master Agreement, Ms. Gray relates that Enron Corp.
executed a Guaranty, dated August 1, 2000, for the benefit of
USG. Similarly, to secure the performance of USG's obligations
under the Master Agreement, USG Corp. executed a Guaranty, dated
as of August 1, 2000, for the benefit of Enron North America.

Since the Petition Date, Ms. Gray informs Judge Gonzalez that
Enron North America has conducted a review of its operation and
has determined that the Agreements should be rejected pursuant
to Section 365 of the Bankruptcy Code.

"USG has likewise determined in the exercise of its business
judgment that the Agreements should be terminated," Ms. Gray

Enron North America and USG have agreed to a settlement of
matters relating to the Agreements, which provides for the
rejection and termination of the Master Agreement, the Swap
Transactions, the Enron Guaranty and the USG Guaranty.

The Termination Agreement is summarized:

(a) Within two business days after this Court approves of
    the Termination Agreement, USG will pay $2,100,000 to Enron
    North America;

(b) The Agreements are rejected and will terminate
    immediately upon receipt by Enron North America of the
    Termination Consideration; and

(c) USG and Enron North America will release and waive any and
    all claims against each other, Enron, or USG Corp.
    relating to or arising from the Agreements.

Ms. Gray observes that the Termination Agreement enables Enron
North America to reject the Agreements and receive a significant
payment from USG, thereby benefiting its estate and its
creditors, as well as extinguish any obligations related to the
Enron Guaranty.

Ms. Gray assures the Court that USG has represented and
warranted to Enron that the USG Bankruptcy Court has already
authorized USG to enter into and consummate the Termination
Agreement. (USG Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

U.S. STEEL: Adjusted Net Loss Narrows to $96MM in First Quarter
United States Steel Corporation (NYSE: X) reported a first
quarter 2002 adjusted net loss of $96 million, compared with an
adjusted net loss of $98 million, or $1.09 per share, in first
quarter 2001.

In first quarter 2002, U. S. Steel reported a net loss of $83
million, or 93 cents per share, including the net favorable
after-tax effect of special items, which in total increased net
income by $13 million.  First quarter 2002 net income reflects a
tax benefit for pre-tax losses at the estimated annual effective
tax rate for 2002 of approximately 13 percent.  In first quarter
2001, net income of $9 million included special items that had a
net favorable after-tax effect of $107 million.

Loss from operations before special items in the first quarter
of 2002 was $81 million, improved from a loss from operations
before special items of $97 million in the first quarter of 2001
and about half of the loss from operations before special items
of $158 million recorded in the fourth quarter of 2001.

U. S. Steel Chairman, CEO and President Thomas J. Usher said,
"While continuing losses are disappointing, we demonstrated
marked operating improvements from the fourth quarter.  In
addition, we believe that flat-rolled prices bottomed in the
first quarter.  Our flat-rolled steel shipments increased by 15
percent versus the fourth quarter 2001, and our domestic raw
steel production increased to 92 percent of capability to
support the higher steel order rate."

Effective with the first quarter 2002, U. S. Steel established a
new internal financial reporting structure, which has resulted
in a change in reportable segments.  In addition, the
presentation of several items of income and expense applicable
to reportable segments has been revised.  Reported results for
the first quarter of 2001 have been conformed to the current
year presentation.

U. S. Steel now has three reportable segments which are: Flat-
rolled Products (Flat-rolled); Tubular Products (Tubular); and
U. S. Steel Kosice (USSK).  In addition, all other U. S. Steel
businesses, including the domestic raw materials units, are
reflected in Other Businesses.

The Flat-rolled segment includes the operating results of U. S.
Steel's domestic integrated steel mills and equity investees
involved in the production of sheet, plate and tin mill
products.  Loss from operations for the Flat-rolled segment was
$70 million, or $30 per ton, an improvement from the $63-per-ton
and $71-per-ton losses recorded in the first and fourth quarters
of 2001, respectively.  On a constant mix basis, prices were
flat versus the fourth quarter; however, average realized prices
declined by $19 per ton, primarily reflecting the loss of high-
value electrogalvanized shipments following the December fire at
Double Eagle Steel Coating Company and the return to supplying
lower valued hot-rolled bands to USS-POSCO, following the
restart of USS-POSCO's cold mill, compared to the cold-rolled
product supplied in the fourth quarter.

The Tubular segment includes the operating results of U. S.
Steel's domestic tubular production facilities and an equity
investee.  Tubular recorded income from operations of $2
million, or $11 per ton, a decline from the $88-per-ton and $44-
per-ton income recorded in the first and fourth quarters of
2001, respectively.  Shipments remained depressed and average
realized prices declined by $41 per ton from the fourth quarter,
due to a decline in North American oil and gas drilling activity
and a continuing surge of imports of these products, which are
not covered by the recent Section 201 action.  On March 29, U.
S. Steel joined other major producers of oil country tubular
goods in filing trade actions against 14 countries.

The composition of the USSK segment is unchanged from prior
periods and includes the operating results of our integrated
steel mill located in the Slovak Republic, a production facility
in Germany, and equity investees, primarily located in Central
Europe.  USSK recorded a loss of $1 million, or $1 per ton, for
the quarter as weak European economic conditions and delays in
restarting operations following a blast furnace outage
constrained shipments while the average realized steel price
declined by $48 per ton and $6 per ton versus the first and
fourth quarters of 2001, respectively.  With all three blast
furnaces operational beginning in late January, the raw steel
operating rate increased to 73.5 percent of capability from 66.4
percent in the fourth quarter.  Recent operating rates have been
in excess of 90 percent in anticipation of increasing second
quarter shipments.  USSK recently commissioned a new vacuum
degasser to improve its ability to serve value-added markets.

In addition, USSK announced in March that it had entered into a
conversion and tolling agreement and a facility management
agreement with Sartid, a.d., an integrated steel company with
facilities located in Smederevo and Sabac in the Republic of
Serbia.  The tolling agreement provides for the conversion of
slabs into hot-roll bands and cold-roll full hard into tin-
coated products. USSK will retain ownership of the materials to
be converted and will market the products in its own
distribution system.  The facility management agreement permits
USSK, or an affiliated company, to have management oversight
of Sartid's tin processing facilities at Sabac.  Also, USSK, the
Government of the Republic of Serbia and Sartid have signed a
letter of intent that provides USSK with the opportunity to
explore possibilities for involvement in the restructuring of

Other Businesses, which do not individually constitute a
reportable segment, are involved in the production and sale of
coal, coke and taconite pellets; transportation services; steel
mill products distribution (Straightline Source); the management
of mineral resources and development of real estate; and
engineering and consulting services.  In total, these units
recorded a loss from operations of $12 million, a substantial
improvement from the $30-million and $24-million losses recorded
in the first and fourth quarters of 2001, respectively.  Versus
last year's first quarter, iron ore operations improved
significantly based on higher shipment levels and lower natural
gas prices.

On April 10, U. S. Steel announced that it had signed a letter
of intent to sell coal and related assets associated with U. S.
Steel Mining Company's West Virginia and Alabama mines. The
sale, which involves cash consideration and is subject to
several contingencies, is expected to result in a pre-tax gain,
excluding the potential recognition of the present value of
obligations related to a multi-employer health care benefit plan
created by the Coal Industry Retiree Health Benefit Act of 1992,
which were broadly estimated to be $76 million at December 31,

Available sources of liquidity at quarter-end amounted to $496
million consisting of cash and amounts available under the
Receivables Purchase Agreement, the Inventory Facility, and the
USSK credit facilities.  This quarter-end amount decreased from
the year-end liquidity position of $705 million primarily due to
the sale of $200 million of accounts receivable under the
Receivables Purchase Agreement to support an increase in working
capital as business activity increased and to pay the $54
million cash settlement to Marathon Oil Corporation related to
the Separation.

In the second quarter of 2002, shipments and average realized
prices for Flat-rolled products are expected to increase,
although plate markets continue to be weak.  For full-year 2002,
Flat-rolled shipments are expected to be approximately 9.8
million net tons.

For Tubular, we expect continued weak markets with second
quarter shipments and prices remaining about flat versus the
first quarter results. Shipments for full-year 2002 are
projected to be approximately 0.9 million net tons.

USSK's average realized prices in second quarter 2002 are
expected to improve slightly, with shipments increasing
significantly.  Shipments in 2002 are projected to be
approximately 3.8 million net tons.

Commenting on U. S. Steel's outlook, Usher said, "We are
encouraged by improving economic conditions in both the U.S. and
Europe.  In addition, the removal of some domestic capacity and
the 30 percent tariffs President Bush announced in March under
his Section 201 remedy should provide relief for our Flat-rolled
segment.  Our domestic order rate for second quarter sheet
product shipments has been strong and prices are improving.  As
a result, we're currently operating these facilities near
capacity, which should continue to have a major effect in
lowering our per-unit operating costs.  In summary, we currently
anticipate that we will be profitable for 2002."

For more information on U. S. Steel, visit our Web site at

                         *   *   *

As previously reported, Fitch currently rates the senior
unsecured debt of U.S. Steel 'BB', with stable outlook.

U.S. STEEL: Selling 8M Shares of Common Stock in Public Offering
United States Steel Corporation (NYSE: X) announced that it
intends to sell 8 million shares of its common stock in a public
offering.  The company also anticipates that it will grant the
underwriters a customary over allotment option of up to 1.2
million additional shares.  The managing underwriters for the
offering, which is expected to commence next week, are Credit
Suisse First Boston and J.P. Morgan Securities, Inc.

United States Steel Corporation is engaged in the production,
sale and transportation of sheet, plate, tin mill and tubular
steel mill products, coke, taconite pellets and coal; the
management of mineral resources; real estate development; and
engineering and consulting services in the United States and the
production and sale of steel products in Central Europe.

Sales will be made only pursuant to a prospectus which may be
obtained from Office of the Secretary, United States Steel
Corporation, 600 Grant St., Pittsburgh, PA 15219-2800.  A copy
of the prospectus may also be obtained from Credit Suisse First
Boston Corporation, Prospectus Department, Eleven Madison
Avenue, New York, NY  10010-3629 (Telephone Number 212-325-2580)
or from J.P. Morgan Securities Inc., Prospectus Library, 277
Park Avenue, 11th Floor, New York, NY  10172 (Telephone Number

WARNACO GROUP: Has Until July 31 to Decide on Mills Corp. Leases
To give The Warnaco Group, Inc. and its debtor-affiliates more
time to evaluate the necessity of the two Mills Leases, the
Debtors and Mills Corporation agree through a Stipulation to
extend the period for which the Debtors may assume or reject the
two Leases. Judge Bohanon approves these terms:

  (a) The Debtors' time to assume or reject the Leases is
      further extended through and including July 31, 2002
      subject to the terms set forth herein, without prejudice
      to the rights of the Debtors to seek further extensions
      or for Mills to object to same;

  (b) The Debtors must provide Mills at least 30 days prior
      written notice of rejection for each of the Leases prior
      to the later of:

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

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

  (c) The Debtors agree to continue to perform their obligations
      as Lessee pursuant to the terms of the Leases through the
      term of this extension, and in the event that one or more
      of the stores subject to the Leases "goes dark" or
      otherwise operates in violation of the terms of the
      Leases prior to July 31, 2002, Mills may present an order
      to this Court rejecting the Lease for the particular store
      that has "gone dark" in violation of the terms of the
      Lease, after providing five business days' notice to:

          (i) counsel to the Debtors, Sidley Austin Brown & Wood

         (ii) counsel to the Debtors' Post-petition Secured
              Lenders, Weil, Gotshal & Manges LLP,

        (iii) counsel to the Debt Coordinators for the Debtors'
              Pre-petition Banks, Shearman & Sterling,

         (iv) the Office of the United States Trustee for this
              District, and

          (v) counsel to the Official Committee of Unsecured
              Creditors, Otterbourg, Steindler, Houston & Rosen,
              P.C. (Warnaco Bankruptcy News, Issue No. 23;
              Bankruptcy Creditors' Service, Inc., 609/392-0900)

WILLIAMS COMMS: Chapter 11 Cases Reassigned to Judge Bernstein
Vito Genna, Chief Deputy Clerk of the Bankruptcy Court for the
Southern District of New York, reassigns Williams Communications
Group, Inc., and its debtor-affiliates' cases from Judge Allan
L. Gropper to Chief Judge Stuart M. Bernstein due to an
unspecified conflict of interest. (Williams Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

WORKGROUP TECHNOLOGY: Taps Covington to Seek Strategic Options
Workgroup Technology Corporation (NASDAQ: WKGP), a leading
provider of Web-enabled, extended enterprise collaborative
product data management software solutions, today announced that
it has retained Covington Associates, a Boston, MA based
technology investment banking firm, to render financial advisory
and investment banking services in connection with its ongoing
exploration of strategic alternatives.

WTC develops, markets and supports WTC ProductCenter(TM), a Web-
enabled, extended enterprise collaborative Product Data
Management (PDM) solution that provides document management,
design integration, configuration control, change management,
and enterprise integration for optimizing product development.
Based in Burlington, Massachusetts, the Company differentiates
itself on the basis of its controlled and secure accessibility,
enterprise integration, and quick adaptability of its software.
Thousands of users at mid-sized and global companies are in
production and benefit from WTC products, including ABB Flexible
Automation; Baker Oil Tools; Eaton Corporation; General Electric
Company; Goodrich Turbine Fuel Technologies; Honeywell;
Millipore Corporation; Siemens Energy & Automation, Inc.; U.S.
Army; and Whirlpool Corporation. The Company's Web site is
located at

* Meetings, Conferences and Seminars
May 13, 2002 (Tentative)
      New York City Bankruptcy Conference
         Association of the Bar of the City of New York
         New York, New York
            Contact: 1-703-739-0800 or

May 15-18, 2002
      18th Annual Bankruptcy and Restructuring Conference
         JW Mariott Hotel Lenox, Atlanta, GA
            Contact: (541) 858-1665 Fax (541) 858-9187 or

May 24-27, 2002
      54th Annual New England Meeting
         Cranwell Resort and Gold Club, Lenox, Massachusetts
            Contact: 312-781-2000 or or

May 26-28, 2002
      International Insolvency 2002 Conference
         Dublin, Ireland
            Contact: Tel +44 207 629 1206 or

June 6-9, 2002
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800 or

June 13-15, 2002
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
      Drafting, Securities, and Bankruptcy
         Seaport Hotel, Boston
            Contact: 1-800-CLE-NEWS or

June 20-21, 2002
      Fifth Annual Conference on Corporate Reorganizations
         Fairmont Hotel, Chicago
            Contact: 1-800-726-2524 or

June 27-29, 2002
      Chapter 11 Business Reorganizations
         Fairmont Copley Plaza, Boston
            Contact: 1-800-CLE-NEWS or

June 27-30, 2002
      Western Mountains, Advanced Bankruptcy Law
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 770-535-7722 or

July 11-14, 2002
      Northeast Bankruptcy Conference
         Ocean Edge Resort, Cape Cod, MA
            Contact: 1-703-739-0800 or

July 12-17, 2002
      108th Annual Convention
         Grand Summit Hotel, Park City, Utah
            Contact: 312-781-2000 or or

July 17-19, 2002
      Bankruptcy Taxation Conference
         Snow King Resort, Jackson Hole, WY
            Contact: (541) 858-1665 Fax (541) 858-9187 or

August 7-10, 2002
      Southeast Bankruptcy Conference
         Kiawah Island Resort, Kiawaha Island, SC
            Contact: 1-703-739-0800 or

September 26-27, 2002
      Corporate Mergers and Acquisitions
         Marriott Marquis, New York
            Contact: 1-800-CLE-NEWS or

October 9-11, 2002
      Annual Regional Conference
         Beijing, China
            Contact: or

October 24-28, 2002
      Annual Conference
         The Broadmoor, Colorado Springs, Colorado
            Contact: 312-822-9700 or

November 21-24, 2002
      82nd Annual New York Conference
         Sheraton Hotel, New York City, New York
            Contact: 312-781-2000 or or

December 5-8, 2002
      Winter Leadership Conference
         The Westin, La Paloma, Tucson, Arizona
            Contact: 1-703-739-0800 or

April 10-13, 2003
      Annual Spring Meeting
         Grand Hyatt, Washington, D.C.
            Contact: 1-703-739-0800 or

May 1-3, 2003 (Tentative)
      Chapter 11 Business Organizations
         New Orleans
            Contact: 1-800-CLE-NEWS or

May 8-10, 2003 (Tentative)
      Fundamentals of Bankruptcy Law
            Contact: 1-800-CLE-NEWS or

July 10-12, 2003
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
         Securities, and Bankruptcy
            Eldorado Hotel, Santa Fe, New Mexico
               Contact: 1-800-CLE-NEWS or

December 3-7, 2003
      Winter Leadership Conference
         La Quinta, La Quinta, California
            Contact: 1-703-739-0800 or

April 15-18, 2004
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or

December 2-4, 2004
      Winter Leadership Conference
         Marriott's Camelback Inn, Scottsdale, AZ
            Contact: 1-703-739-0800 or

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to are encouraged.


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

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

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

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

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


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

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

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

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

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

                     *** End of Transmission ***