TCR_Public/020507.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

               Tuesday, May 7, 2002, Vol. 6, No. 89     

                          Headlines

ANC RENTAL: Inks Final Documents to Access Billions from ARG
ABLEAUCTIONS.COM: Morgan & Company Airs Going Concern Doubts
ADELPHIA: Moody's Places Ratings on Review for Likely Downgrade
ARMSTRONG: PD Panel Asks Court to Amend Bar Date Extension Order
ATHERTON: Fitch Downgrades Certain Franchise Transactions

BELL CANADA: Re-elects Siim Vanaselja as Chief Financial Officer
BIG V SUPERMARKETS: Amends Terms for Asset Sale to Wakefern Food
BOUNDLESS CORP: Wins Creditors' Support for Financial Workout
CMI INDUSTRIES: Taps Keen Realty to Market So. Carolina Facility
CASH TECHNOLOGIES: Needs Additional Financing to Continue Ops.

COMPTON PETROLEUM: S&P Rates Proposed $150MM Senior Notes at B
COVANTA ENERGY: Seeks Approval of Monthly Compensation Protocol
DDI CORP: S&P Ratchets Ratings Down a Notch Over Weaker Profits
EASYLINK SERVICES: Sets Annual Shareholders' Meeting for May 23
EASYRIDERS: Court Okays Asset Sale to Paisano LLC for $12.3MM

ENRON CORP: Exclusive Period Extended through October 1, 2002
ENRON CORP: Wins Nod to Hold Iberdrola Sales Proceeds in Escrow
ENRON CORP: Reiten Says NW Natural-PGE Combination "Best Option"
ENRON: Azurix Ups Tender Offer Purchase Price to 92.25%
EXIDE TECHNOLOGIES: Taps Pachulski Stang as Bankruptcy Counsel

FEDERAL-MOGUL: Intends to Expand Stout Risius Engagement Scope
FLAG TELECOM: Court to Consider Financing Arrangement on May 13
FLEXIINTERNATIONAL: Mar. 31 Balance Sheet Upside-Down by $2.3MM
GENEVA STEEL: Unit Gets OK to Continue Access to Cash Collateral
GENSYM CORP: Posts Improved First Quarter 2002 Financial Results

GLOBIX CORPORATION: Court Okays Milberg Weiss as Special Counsel
GOLFGEAR: Good Swartz Brown Expresses Going Concern Doubts
HOMELIFE CORP: Gets Last and Final Plan Exclusivity Extension
HOULIHAN'S RESTAURANTS: Seeks to Extend Exclusivity to July 21
IFR SYSTEMS: Testco Offers to Acquire All Outstanding Shares

IT GROUP: Court Approves Skadden Arps' Engagement as Attorneys
INTEGRATED HEALTH: Assuming South Carolina Driftwood Lease
INTIRA CORP: Wants Court to Further Extend Lease Decision Period
JAM JOE: Debtors' Exclusive Period Intact through Sept. 30
KAISER ALUMINUM: Wants More Time to Remove Actions Until Nov. 12

KMART: Deutsche Bank Buys Burlington's Claim for 31.5% of Face
KMART: Hearing on Exclusive Period Extension Set for July 24
KMART CORP: Rejects Prepetition Contracts with L.A. Darling Co.
LODGIAN INC: Resolves Claims Dispute with Columbia Properties
LOGISTICS MGT: Pursuing Actions to Recoup Counterclaims vs. GECC

MATLACK SYSTEMS: Wants Exclusive Period Extended through June 24
MICRON TECHNOLOGY: Hynix Board Nixes Proposed Restructuring Plan
MILLENIUM SEACARRIERS: Gets OK to Contract Deloitte & Touche
MOBILE SERVICES: Market Share Concerns Prompt S&P's BB Ratings
MUTUAL RISK: Reaches Agreement to Restructure $235MM Senior Debt

NCS HEALTHCARE: Taps Brown Gibbons to Pursue Debt Workout Talks
NATIONAL ENERGY: Sets Annual Shareholders' Meeting for June 6
NATIONAL STEEL: Court Okays Ernst & Young as Debtors' Advisors
NATIONSRENT INC: Exclusivity Extension Hearing Set for May 20
NET2000 COMMS: Seeks to Convert Case to Chapter 7 Liquidation

OBSIDIAN ENTERPRISES: Completes Debt Conversion & Refinancing  
OLYMPUS HEALTHCARE: Wants More Time to Decide on Leases
PACIFIC GAS: Wins Nod to Hire Special Non-Bankruptcy Counsel
PACIFIC GAS: Says CPUC's Discl. Statement "Omits Critical Facts"
PILLOWTEX CORP: Gets OK to Assume 12 Amended LaSalle Lease Pacts

PINNACLE HOLDINGS: Likely to File Prepack. Chapter 11 This Week
POINT.360: Completes Long-Term Financing Agreement with Banks
POLAROID CORP: Joint Plan's Classification & Treatment of Claims
RAILAMERICA: Firming-Up $325MM Long-Term Debt Refinancing Pact
SEITEL INC: Seeking Waivers of Likely Loan Covenant Violations

SERVICE MERCHANDISE: Court Okays Consor as I.P. Advisor & Broker
SILVERLEAF RESORTS: Closes Exchange Offer & Debt Workout Deals
SPHERA OPTICAL: OnFiber Comms. Acquires Network Assets for $2.3M
SWEET FACTORY: Has Until May 31 to Make Lease-Related Decisions
TENGASCO INC: Files $151 Million Lawsuit Against Bank One

TIMMINCO: Working Capital Deficit Tops $16MM at Dec. 31, 2001  
TOWER PARK MARINA: Ernst & Young Raises Going Concern Doubts
TRITON NETWORK: Settles Legal Dispute with CAVU Incorporated
WARNACO INC: John T. Wyatt Takes Helm of Intimate Apparel Group
WEIRTON STEEL: First Quarter 2002 Net Loss Drops to $44 Million

WEIRTON STEEL: Seeking Consents to Amend Senior Notes Indentures
WILLIAMS COMMS: Workers' Compensation Programs Continuing
WIND RIVER: S&P Changes Outlook on B+ Credit Rating to Negative
WORLDCOM INC: J. Sidgmore Says Company Not Headed for Bankruptcy

                          *********

ANC RENTAL: Inks Final Documents to Access Billions from ARG
------------------------------------------------------------
Bonnie Glantz Fatell, Esq., at Blank Rome Comisky McCauley LLP
in Wilmington, Delaware, relates that prior to the Filing Date,
ANC Rental Corporation and its debtor-affiliates financed their
vehicle fleet primarily by leasing vehicles from certain wholly-
owned indirect non-debtor subsidiaries of ANC.  These financed
the acquisition of the fleet through the issuance of asset-
backed commercial paper, asset-backed medium-term notes and
asset-backed auction rate notes, arranged by certain special
purpose subsidiaries of ANC. These programs were financed
through ARG Funding Corp., a non-debtor special purpose entity
and a wholly-owned direct subsidiary of ANC, which issued medium
term "Rental Car Asset Backed Notes" (MTNs), auction rate notes
to the public through private placements, and variable funding
notes funded by ANC Rental Funding Corp., an indirect wholly-
owned subsidiary of ANC, and various bank multi-seller conduits
through the issuance of commercial paper to the public.

Ms. Fatell informs the Court that ARG Funding loaned the
proceeds of these securitizations to three lessor special
purpose entities (SPEs): Alamo Financing, L.P., National Car
Rental Financing Limited Partnership, and CarTemps Financing
L.P. for the purpose of purchasing vehicles. In exchange for the
funds advanced by ARG Funding to each respective Lessor SPE,
each Lessor SPE issued "Variable Funding Notes" to ARG Funding.
As of the Filing Date, the indebtedness under the Existing
Leasing Company Notes was over-collateralized by approximately
13%.

Ms. Fatell states that each Lessor SPE used these proceeds and a
portion of its partnership capital to purchase and finance
vehicles. The Lessor SPEs, in turn, leased the vehicles to ANC's
three operating companies: Alamo Rent-A-Car, LLC, National Car
Rental System, Inc., and Spirit Rent-A-Car, Inc., d/b/a Alamo
Local, each of which are debtors in the Chapter 11 cases. These
leasing arrangements between each Operating Company and each
Lessor SPE are governed by an Amended and Restated Master Lease
Agreements dated June 30, 2000, and under which ANC is a
guarantor.

According to Ms. Fatell, the Operating Companies rent the
vehicles to the public as part of their car rental businesses.
Each Operating Company uses the cash generated from its rental
operations to make the lease payments due to its respective
Lessor SPE. Each Lessor SPE, in turn, uses the lease payments to
make payments due on the Leasing Company Notes issued to ARG
Funding. ARG Funding then uses such payments to make payments
due to the holders of the MTNs, the variable funding notes, and
the auction rate notes.

Pursuant to certain Insurance Agreements, by and among MBIA
Insurance Corporation, as insurer, ARG Funding, as issuer, and
The Bank of New York, as trustee, Ms. Fatell submits that MBIA
Insurance Corporation issued certain note guaranty insurance
policies which guarantee ARG Funding's payments. In addition,
Ambac Assurance Corporation provided the "insurance wrap" in
connection with certain auction rate notes issued by ARG
Funding. However, the Debtors' bankruptcy filing constituted an
event of default under the Leasing Company Notes and
accordingly, ARG Funding is no longer required to advance the
Lessor SPEs any funds to purchase vehicles.

On February 6, 2002, Ms. Fatell recalls that the Court signed an
Order authorizing Debtors to lease automobiles, and provide
protections in connection with Master Lease Agreements, pursuant
to which, the Debtors entered into an amendment of certain
series of Notes issued by ARG permitting the release of funds
during the period from February 22, 2002 through April 30, 2002
from the Collection Accounts relating to the MBIA Notes in an
aggregate amount not to exceed $1,000,000,000. The released
funds are being used by the Lessor SPEs to fund the purchase of
Vehicles. The Lessor SPEs have issued a segregated series of
Leasing Company Notes to ARG Funding, which have been pledged by
ARG Funding for the benefit of the holders of the MBIA Notes in
exchange for the released funds. Ms. Fatell maintains that these
Segregated Leasing Company Notes are secured by a first priority
lien on the vehicles purchased with the proceeds of this
transaction and all other collateral relating to such vehicles.
The Operating Subsidiaries, in turn, entered into new leases
with respect to the vehicles purchased by the Lessor SPEs in
connection with this transaction, each dated as of February 20,
2002.

By this Motion, the Debtors seek authorization to enter into the
Amendment of the MBIA Notes issued by ARG, pursuant to the Term
Sheet, that provides for the continued release of funds from the
Series 1999-1 Collection Account, the Series 1999-3 Collection
Account, the Series 2000-4 Collection Account and the Series
2001-2 Collection Account during the period from the closing
date to the later of September 1, 2002, or if the term has been
extended in accordance with the conditions set forth in the Term
Sheet, November 1, 2002 in a maximum revolving amount not to
exceed $2,300,000,000.  Ms. Fatell tells the Court that the
funds received by the Lessor SPEs pursuant to the Amendment will
be used to fund the acquisition of the Debtors' vehicle fleet.
The MBIA Notes are secured by a first priority lien on the
vehicles purchased with the proceeds of the MBIA Notes and all
other collateral relating to such vehicles. Such vehicles
purchased by the Lessor SPEs, in turn, were leased to the
Operating Subsidiaries pursuant to the MBIA Master Lease
Agreements.

The Debtors also seek to assume, effective as of the date of the
first disbursement of funds under the Amendment, pursuant to
Section 365 of the Bankruptcy Code, the Existing Master Lease
Agreement supplements pertaining to vehicles subject to
Operating Leases existing as of the Petition Date.  This is
provided, however, that rent payments due in November and
December, 2001, will be cured as specified in the Term Sheet. In
addition, in order to induce the parties to execute the
Amendment, the Debtors also seek authorization to provide and
confirm certain protections set forth in the Term Sheet relating
to the Master Lease Agreements to the Lessor SPEs, the Trustee
and the Master Collateral Agent, for the benefit of themselves
and their beneficiaries, including MBIA and the Noteholders
described in the Existing Master Lease Agreements. In addition,
the Term Sheet provides that the order authorizing the Debtors
to enter into the New Vehicles Transaction will be satisfactory
to MBIA.

In order to induce MBIA to enter the Amendment, the Term Sheet
provides that the Debtors will provide certain fees to MBIA,
including:

A. In addition to the Surety Provider Fees and the amounts
   payable to MBIA under the Supplemental Fee Letter with
   respect to the outstanding MBIA Notes set forth in the
   existing documentation, MBIA will receive on each
   Distribution Date occurring on or after the Phase II Closing
   Date, the product of .0068 divided by 12, and the Net Book
   Value of the Phase II Vehicles, for so long as such Phase II
   Vehicles are subject to a Group II Operating Lease.

B. MBIA will receive an upfront fee in an amount equal to
   $1,000,000 payable on the first date any portion of the
   Maximum Amount is released to ARG. In addition, MBIA will
   receive the following fees:

   a. a fee in the amount of $1,000,000 if the Released Funds
      exceed $1,000,000,000,

   b. an additional fee of $500,000 if the Released Funds exceed
      $2,000,000,000 and

   c. an additional fee of $500,000 if the Released Funds exceed
      $3,000,000,000.

D. To the extent the term of this agreement is extended to
   November 1, 2002, then on September 1, 2002, MBIA will
   receive a fee in an amount equal to $1,500,000.

E. In addition to the administrative fee of $400,000 payable on
   May 13, 2002, MBIA will receive an administrative fee in the
   amount of $1,600,000, payable as follows:

   a. $400,000 on the day after the Final Order is entered plus

   b. $400,000 on each of June 13, 2002, July 12, 2002 and
      August 13, 2002. If the term is extended to the November
      1, 2002, MBIA will receive an additional administrative
      fee in the amount of $800,000, payable as follows:
      $400,000 on each of September 13, 2002 and October 11,
      2002.

F. MBIA will receive a fee in an amount not to exceed
   $12,500,000 from the assets of ARG, contingent, and payable,
   upon the consummation of either a plan of reorganization
   and/or a sale respecting the Debtors which allows a
   substantial portion of the business of the Debtors to
   continue to operate as a going concern. Such fee will be
   earned as follows:

   a. $5,000,000 if the term of this, or a modified, agreement
      provides for the continued release of funds from the
      Collection Accounts until the November 1, 2002;

   b. $5,000,000 if MBIA agrees to allow the continued release
      of funds from the Collection Accounts for the MBIA Notes
      until the earlier of the occurrence of an Emergence Event
      and May 1, 2003; and, in addition,

   c. $2,500,000 if MBIA agrees to allow the continued release
      of funds from the Collection Accounts for the MBIA Notes
      until an Emergence Event, which is the earliest to occur
      of the effective date of any plan of reorganization,
      consummation of the sale or other disposition of the
      business assets of Alamo or National, and the dismissal of
      the Debtors' Chapter 11 proceeding with respect to Alamo
      or National.

The Debtors believe that these provisions are necessary to
induce MBIA to enter into the Amendment and to allow the Lessor
SPEs to finance the purchase vehicles that are subsequently
leased to the Debtors. Ms. Fatell assures the Court that the
Debtors have investigated the possibility of obtaining fleet
financing from alternative sources and have determined that such
alternative financing arrangements would be on less advantageous
terms than the financing sought herein. The relief sought is
critical to the Debtors' ability to obtain new vehicles and to
their reorganization efforts, without which the Debtors' ability
to serve their customers and adequately maintain their business
operations will be materially impaired. The Debtors believe that
the Amendment is supported by good business reasons, is
reasonable and appropriate under the circumstances, and will
facilitate the Debtors efforts to reorganize.

The basic features of the term sheet are:

A. Release of Collections: Subject to the terms and conditions
   contained herein, MBIA will consent to an amendment
   permitting the release of funds from the Series 1999-1
   Collection Account, the Series 1999-3 Collection Account, the
   Series 2000-4 Collection Account and the Series 2001-2
   Collection Account on a revolving basis during the period
   from the Phase II Closing Date to the later of September 1,
   2002, or if the term has been extended in accordance with the
   conditions set forth under the section entitled "Agreement
   Extension" (below), November 1, 2002 in an amount such that
   the outstanding principal balance of the Group II Notes will
   not exceed $2,300,000,000 at any time.

B. Amortization Payments: The ARG Indenture will be amended to
   reflect that ARG will make a $216,666,666.67 principal
   payment on the Class A-1 and Class A-2 1999-1 MBIA Notes on
   June 20, 2002.

C. Incremental Enhancement: On each Determination Date, ANC will
   deposit directly into the Cash Collateral Account, an amount
   of cash necessary to cause the Available Enhancement to at
   least equal the Required Enhancement. The Required
   Enhancement as of any Determination Date is an amount equal
   to:

   a. for each Determination Date before July 1, 2002, 12% of
      the Invested Amount of the MBIA Notes as of such date and

   b. for each Determination Date after June 30, 2002, 13% of
      the Invested Amount of the MBIA Notes as of such date.

D. Phase II Closing Date: The date that all of the Conditions
   Precedent to the initial release of Released Funds will have
   been satisfied.

Ms. Fatell claims that the Debtors have weighed the possibility
of obtaining fleet financing from alternative sources and have
determined that such alternative arrangements would be on less
advantageous terms than the MBIA financing. The relief sought
herein is critical to the Debtors' ability to obtain new
vehicles and to their reorganization efforts and that absent
authorization and empowerment to consummate the amendment, the
Debtors' ability to serve their customers and adequately
maintain their business operations will be materially impaired.
(ANC Rental Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ABLEAUCTIONS.COM: Morgan & Company Airs Going Concern Doubts
------------------------------------------------------------
"[U]nless the Company attains future profitable operations
and/or obtains additional financing, there is substantial doubt
about the Company's ability to continue as a going concern."  
Those are the words used by Morgan & Company, Chartered
Accountants of Vancouver, Canada, in their March 21, 2002
Auditors Report concerning Ableauctions.com.

Ableauctions.com was incorporated under the laws of the state of
Florida as J. B. Financial Services, Inc. on September 30, 1996.
It changed its name to Ableauctions.com, Inc. on July 19, 1999.
From the date of incorporation until August 24, 1999, there was
no material business and no material revenues, expenses, assets
or liabilities.

Its shares began trading on the OTC Bulletin Board under the
symbol "ABLC" on July 21, 1999.

On August 24, 1999, in consideration of shares of its common
stock and cash, it acquired all of the assets and the business
operations of Able Auctions (1991) Ltd., a British Columbia
corporation engaged in the business of auctioning used
equipment, office furnishings and equipment, and other
merchandise, by acquiring all of its issued and outstanding
common shares from Dexton Technologies Corporation, a British
Columbia corporation.

Ableauctions.com's primary business activity is as a business-
to-business and consumer auctioneer. It is an early stage
company and has developed business through the acquisition of
auction houses in the United States, Canada and England.
Auctions are conducted live and about 20% are simultaneously
broadcast over the Internet. Generally, the Company acquires the
merchandise auctioned through bankruptcies, insolvencies and
defaults.

The Company auctions merchandise and equipment from a variety of
industries including antique, automotive, bakery, broadcasting,
chemical, construction, dairy, electronics, energy, food
processing, foundry, furniture, high-technology, machine tool,
metal fabrication, office, paper, pharmaceutical, plastic,
printing, restaurant, textile, and others. Auctions are open to
the public. The Company's typical auction draws approximately
300 to 500 bidders in person and offers on average approximately
1,200 items or lots of merchandise and equipment for auction.
The Company receives revenues from auction fees charged to
consignees who consign merchandise to be sold and from the
buyer's premiums charged to purchasers of the merchandise. It
also receives revenues from auctioning merchandise that it
purchases and sells at its auctions.

The Company conducts the majority of its auctions on an
unreserved basis with no minimum prices, resulting in each and
every item being sold to the highest bidder on the day of the
auction. Its policy is to prohibit consignees from bidding on
the items that they consign to Ableauctions.com for auction. The
Company attempts to differentiate its auction services from its
competitors through its "no minimum price policy" and by selling
merchandise without interference or competition from consignees.

After an auction, purchasers generally make their own
arrangements to take possession of the auctioned property. If
purchasers make arrangements with the Company, it can make
available shipping services to forward the property to the buyer
by mail freight forwarder, truck transport, or other delivery
services for a cost. As agent of the consignor, the Company
normally collects payment from the buyer for property purchased
and remits to the consignor, on the settlement date, the
consignor's portion of the buyer's payment, less consignor cash
advances, if any, and commissions payable to Ableauctions.com.
The Company sometimes releases property sold at auction to
qualified buyers (primarily dealers) on credit before it
receives payment. These qualified buyers generally have an
account or line of credit (within established credit limits)
with the Company and agree to make payment within 30 days.
Credit is extended only to buyers who have done business with
the Company in the past and have an established credit standing
with it.

During the year ended December 31, 2001,Ableauctions.com had
revenues of $10,793,219 as compared to revenues of $10,647,213
during the year ended December 31, 2000. This 1.4% increase in
revenues resulted from increases in commissions generated from
the sale of consigned merchandise. Revenues are derived
primarily from the sale of goods and from commissions generated
from the sale of consigned merchandise.

Sales of goods accounted for $6,653,656, or 61.6% of revenue as
compared to $8,607,230, or 80.8% of revenue for the 2000 fiscal
year. This decrease in the sales of goods resulted from purchase
controls on sellable merchandise. The Company anticipates that
revenues from the sales of goods will increase as a percentage
of revenues, as it plans to conduct a greater number of auctions
using inventory it purchases in buy-out and liquidation
situations, which generally result in higher gross profit
margins.

Operating expenses totalled $7,268,723 for the year ended
December 31, 2001 as compared to $10,047,058 for the year ended
December 31, 2000. Operating expenses continue to reflect start-
up costs associated with the business, the Company's acquisition
growth strategy and the development and maintenance costs
related to the auctions it conducts on the Internet. Other costs
associated with the start up of business and the acquisitions
include legal and accounting fees, personnel and consulting
expenses, management expenses, promotional and advertising costs
and general overhead.

Cost of goods sold were $5,243,698 for the year ended December
31, 2001 as compared to $8,866,530 for the year ended December
31, 2000. Gross profit was $5,549,521, or 51.4% of total revenue
for the year ended December 31, 2001 as compared to $1,780,683,
or 16.7% of total revenue for the year ended December 31, 2000.
Management believes that gross profit as a percentage of revenue
will increase in 2002, as the Company anticipates that its
revenues will increase and it intends to conduct auctions of
inventory buy outs and liquidations, which typically result in
higher gross profit margins.

Ableauctions.com had a net loss of $11,434,029, or $0.52 per
share, for the year ended December 31, 2001 as compared to
$11,837,363, or $0.58 per share, for the year ended December 31,
2000. The net loss is attributable to costs associated with
growth, start-up costs and the costs of developing  business and
technologies and the loss sustained from the write-off of
iCollector.

Unless Ableauctions.com raises additional financing through
public or private equity financing, it anticipates net operating
losses to decrease for the foreseeable future as a result of its
restructuring program to control and reduce costs and realize
the synergies from the previous acquisition program. If it is
successful in raising additional funds, the Company anticipates
certain expenses such as marketing, research and development and
professional fees to significantly increase as it expands its
Internet services, auction facilities and acquisition program.

The Company had a deficiency of $3,349,317 in working capital at
December 31, 2001. It had cash and cash equivalents of $673,829,
accounts receivables of $105,468, inventory of $257,832, and
prepaid expenses of $227,745 at December 31, 2001. It
anticipates that trade accounts receivables and inventory may
increase during the year 2002 if it is able to increase the
number and frequency of its auctions and as it expands business
operations. Cash flow used for operating activities required
$520,862 during the year ended December 31, 2001. It is
anticipated that cash will remain constant for 2002 as the
Company anticipates that all of its auction houses will achieve
profitability during 2002. Cash resources may decrease if it
completes additional acquisitions during 2002, or if it is
unable to maintain positive cash flow from business through
2002. Ableauctions.com only intends to continue its acquisition
program if additional financing is available.


ADELPHIA: Moody's Places Ratings on Review for Likely Downgrade
---------------------------------------------------------------
Moody's Investors Service lowered down the ratings for Adelphia
Communications Corporation and lefts the said ratings under
review for possible downgrade.

Rating Action                                  To        From

* Senior Secured Bank Debt                     Ba3        Ba2

* Senior Unsecured Notes (& Senior
Subordinated Notes of FrontierVision)         B3         B2

* Convertible Subordinated Notes              Caa1        B3

* Convertible and Exchangeable
  Preferred Stock                             Caa2       Caa1

* Shelf Registration: Senior/Subordinated
Debt and Preferred Stock -                   (P)B3/     (P)B2/
                                              (P)Caa1/   (P)B3/
                                              (P)Caa2    (P)Caa1

* Senior Unsecured Issuer Rating               B3          B2

* Senior Implied Rating                        B1          Ba3

The downgrade represents the company's weak financial condition,
high debt leverage and loss of investor confidence which in turn
makes it harder for the company to tap into public capital
markets.  

"Importantly, the one notch downgrade reflects our belief that
the company's many immediate obstacles, including the imminent
requirement to file its financial statements in order to cure
its current bank loan agreement defaults, the need to gain
renewed access to undrawn bank lines in order to avert a
liquidity crisis, and the need to satisfy both the NASDAQ and
the SEC and maintain its common stock listing in order to
preclude the put of convertible securities back to the company,
will all be satisfactorily addressed in very short order,"
Moody's said.

The review for possible downgrade reflects rests on the
Adelphia's intermediate-term liquidity profile. Moody's notes
that the company has realized that asset sales and corresponding
large scale and immediate debt reductions may be a likely
prerequisite to survival.

The review could be confirmed if Adelphia files its 10K and
subsidiary financial statements and improve and extend its
liquidity program. The ratings could also be lowered if the
company cannot hurdle the near-tem risks.

Adelphia Communications, based in Coudersport, Pennsylvania, is
one of the largest domestic cable system operators with
approximately 5.8 million subscribers.

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1),
DebtTraders reports, are being quoted at a price of 86.75. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


ARMSTRONG: PD Panel Asks Court to Amend Bar Date Extension Order
----------------------------------------------------------------
The Property Damage Claimants of Armstrong Holdings, Inc., and
its debtor-affiliates politely express their outrage and ask
Judge Newsome for reconsideration of his Order denying them an
extension of time to file their claims.  Alternatively, the PD
Claimants request that Judge Newsome allow a series of late-
filed proofs of claims filed on March 4, 2002, by their
attorneys at Speights & Runyan.  Additionally, the PD Claimants
consist of the County of Orange, Class Representative, the State
of Utah, and the State of Hawaii, all of whom have filed claims
on March 4, 2002, through their attorneys, the Law Offices of
Martin Dies, Attorneys P.C.

The claims of the PD Claimants arise principally from having
present in their properties "Armstrong Flooring" and "Armstrong
Resilient Flooring, Asphalt or Vinyl Asbestos Tile," which are
flooring and tiling products that Debtor Armstrong World
Industries, Inc. manufactured and distributed nationwide between
1960 and 1983, as well as asbestos containing ceiling tiles also
manufactured by Armstrong. These products contain the carcinogen
asbestos, which is widely known to cause innumerable
debilitating and life-ending diseases such as mesothelioma,
various pleural illnesses, and lung cancer.

                         The Bench Ruling

On March 1, 2002, Judge Newsome conducted an Omnibus Hearing to
consider, among other things, the Bar Date Extension Motion.  
Judge Newsome rendered a bench ruling at the Bar Date Extension
Hearing denying the Bar Date Extension Motion. The Attorneys for
the PD Claimants only fortuitously learned of the Court's ruling
the next day, and thereupon "scurried to complete proofs of
claim forms for the PD Claimants", which were hand delivered to
Trumbull in Connecticut on March 4, 2002, the very first
business day after the Bar Date Extension Hearing.

On March 20, 2002, the Court entered an Order denying the Bar
Date Extension Motion and establishing a revised bar date of
March 1, 2002. This came as a surprise because as a result of
conversations between the undersigned counsel and counsel for
the Asbestos Property Damage Committee concerning a January 16,
2002 hearing, the impression was conveyed to the parties that if
the Court denied the Bar Date Extension Motion, it would
nonetheless grant a thirty-day extension from the date of such
denial for property damage claimants to file proofs of claims.

                    The PD Claimants' Diligence

The PD Claimants detail multiple reviews of the case docket,
inquiries by their personnel to the Debtor's website, to
Trumbull, and to the AWI Claims Processing Center to determine
if a bar date had been established with respect to asbestos-
related property damage claims. They were repeatedly advised
that a new bar date had not been established and that claims
would be accepted if they were submitted. From time to time,
Daniel Speights, Esq., of Speights & Runyan, and Martin Dies,
Esq., of the Law Offices of Martin Dies, Attorneys P.C.,
discussed this and it was generally understood that the Bridge
Order was in effect, and that a new bar date had not been
established.

On March 4, 2002, at approximately 11:30 a.m., after reviewing
the docket in these cases and determining that no order had been
entered denying the Bar Date Extension Motion, a representative
of Speights & Runyan hand-delivered to Trumbull proofs of claims
on behalf of their respective clients.  In fact, on March 4,
2002, at 12:50 p.m., after the Bar Date Extension Hearing,
Rosemarie Thomas made a follow-up call to the AWI Claims
Processing Center to determine if a new bar date had been set.
Debra Miller, a representative of Trumbull, advised Ms. Thomas
that she had conferred with Amy Lewis, also of Trumbull, with
respect to the Bar Date and that Ms. Lewis had not received
notification of a new bar date as of March 4, 2002.  Ms. Miller
further advised Ms. Thomas that the claims filed on March 4,
2002 would be accepted as submitted at that time.

Additionally, on March 4, 2002, at approximately 1:50 p.m., J.
Donald Carona, Jr., an attorney of the Law Offices of Martin
Dies, Attorneys P.C., hand-delivered proofs of claims to the
office of Trumbull Services in Windsor, Connecticut by, and on
behalf of, (i) the State of Texas; (ii) the County of Orange,
State of Texas (individually and on behalf of a Class); (iii)
the State of Utah; and (iv) the State of Hawaii

Ms. Sue Micklich, an in-take clerk at Trumbull, advised Mr.
Carona while he was at Trumbull, that (i) he was at the correct
location for the proper filing of the proofs of claims; (ii) he
was within the time-period allowed for the proper and timely
filing of the proofs of claims; and (iii) the Claimants' proofs
of claims would be accepted as timely filed.  Ms. Micklich
further advised Mr. Carona that there was nothing else he needed
to do to effectuate the proper and timely filing of the proofs
of claims.

Thereafter, Ms. Micklich accepted for filing the proofs of
claims for the Claimants, and returned to Mr. Carona a file-
stamped copy of each of the proofs of claims, which were file-
stamped at approximately 2:20 p.m. on March 4, 2002.  
Additionally, on Tuesday, March 5, 2002, at 11:45 a.m., Amanda
G. Steinmeyer, a member of Speights & Runyan, contacted the AWI
Claims Processing Center to determine if a bar date had been
established for asbestos-related property damage claims. Ryan
Monroe, at Trumbull Services, advised Ms. Steinmeyer that no bar
date had been set as of March 5, 2002.  Mr. Speights kept Mr.
Dies apprised of such information.

Only upon receiving the Bar Date Extension Order, did the
Attorneys for the PD Claimants receive formal notice that the
Court set the Revised Bar Date as of March 1, 2002, conceivably
discharging all PD Claimants' claims against the Debtors and
preventing them from participating in the Debtors'
reorganization.

                  The Request for Reconsideration:
           Newly Discovered Evidence and Manifest Injustice

A motion for reconsideration is an extraordinary means of relief
in which the movant must do more than simply reargue the facts
of the case or legal underpinnings. A motion to reconsider must
rely on one of three major grounds: "(1) an intervening change
in controlling law; (2) the availability of new evidence; or (3)
the need to correct clear error [of law] or prevent manifest
injustice".

The PD Claimants assert that the Court should reconsider the Bar
Date Extension Order and the Revised Bar Date established
thereunder in light of newly discovered evidence and, most
importantly, because of the manifest injustice that results
thereunder. The PD Claimants propose that the Court extend the
Bar Date until March 20, 2002, when the Bar Date Extension Order
was entered on the docket because the bench ruling at the Bar
Date Extension Hearing does not provide adequate notice to the
PD Claimants of the Revised Bar Date. Further, by enforcing the
Revised Bar Date, the PD Claimants, as well as holders of
disputed, contingent, or unliquidated claims, that filed proofs
of claims after the Bar Date Extension Hearing, but before the
entry of the Bar Date Extension Order, are barred from
participating in the Debtors' reorganization, as their claims
are conceivably discharged by virtue of the Revised Bar Date.  
Such a result is unfairly prejudicial to the PD Claimants as
their right to assert a claim against the Debtors is irrevocably
lost.

                  Inadequate Notice of Bar Date

Inadequate notice of the claims bar date is a defect that
precludes a discharge of a claim in bankruptcy.  Further, a
claimant who is not apprised with reasonable notice of the bar
date is not bound by the legal effects of failing to file a
timely proof of claim and should be allowed to file a late proof
of claim.  "The problem here is a systemic one," the PD
Claimants assert.  Although Judge Newsome concluded that
the PD Claimants received adequate notice of the original Bar
Date, the import and effect of the original Bar Date was of
historical significance only as the Bridge Order extended the
Bar Date for an indefinite period of time.

Thus, upon entry of an order revising the Bar Date, it was again
a due process requirement that claimants be apprised of the
extended bar date. However, here, the PD Claimants did not
receive any notice of the Revised Bar Date until the Bar Date
Extension Order was entered on March 20, 2002. As such, the PD
Claimants were denied their due process rights because the Bar
Date Extension Order retroactively established the Revised Bar
Date denying the PD Claimants an opportunity to file their
proofs of claim.  Although the Court rendered a bench ruling on
the Bar Date Extension Motion, it would be impossible for the PD
Claimants to have knowledge of the Revised Bar Date and to file
proofs of claim before the prescribed deadline unless they were
present at the Bar Date Extension Hearing of which they had no
notice.

In general, due process requires notice to be "reasonably
calculated, under all the circumstances, to apprise interested
parties of the pendency of the action and afford them an
opportunity to present their objections."  Indeed, the
inadequacy of the notice of the Revised Bar Date is evident from
the conversations that transpired between representatives of
Speights & Runyan, the Law Offices of Martin Dies, Attorneys
P.C., and Trumbull, the Debtors' claims agent.

In fact, at the time this Motion is filed the Debtors' website
still reflects that August 31, 2001 is the bar date to file
asbestos-related property damage claims and there is no
information available with respect to the Bar Date Extension
Motion or the Bridge Order.

                    Bridge Order Unclear

Finally, the Bridge Order is not clear as to when the extension
of the Bar Date would be terminated; certainly, the extension of
time to file proofs of claims could have terminated either on
March 1, 2002, when the Court rendered a bench ruling on the Bar
Date Extension Motion, or on March 20, 2002, when the Court
entered the Bar Date Extension Order. The Bridge Order merely
provides that the "Bar Date is deemed extended . . . until the
disposition by the Court of the Bar Date Extension Motion."

                       Local Rule No Help

Further, United States Bankruptcy Court District of Delaware
Local Rule 9006-2 governing bridge orders is not instructive
with respect to when the extension period terminates following
the determination of the motion in question which initiates the
bridge order. Local Rule 9006-2 provides that the "time shall
automatically be extended until the Court acts on the motion."

             Retroactive Bar Date Denies Due Process

The PD Claimants assert that the appropriate date for which the
extension of the Bar Date terminates in the event of the denial
of the Bar Date Extension Motion should be the date upon which
the decision of the Court is entered on the docket, so that the
interested parties are apprised with reasonable notice of the
Revised Bar Date and the termination of the extension with
sufficient time to afford the parties an opportunity to act upon
the decision of the Court. Accordingly, an order implicating a
retroactive bar date denies the parties due process to act upon
the decision of the Court.

Moreover, the Bar Date Extension Hearing transcript does not
expressly state when the extension of the Bar Date terminates,
nor does it establish a new bar date.  The Bar Date Extension
Hearing transcript is clear only with respect to denying the Bar
Date.  Consequently, until the Bar Date Extension Order was
entered on the docket denying the Bar Date Extension Motion, the
Bar Date was extended until such time.

         Notice Only Given After the Bar Date Effective

More importantly, no notice of the Revised Bar Date was
established until the Bar Date Extension Order was entered. The
Bar Date Extension Order retroactively set the Revised Bar Date
to March 1, 2002, thereby excluding claims filed after the
Revised Bar Date but before the Bar Date Extension Order was
entered, to the detriment of the PD Claimants who relied upon
the Court's docket to file proofs of claims.11 Besides,
Trumbull's advice to the PD Claimants is consistent with the
fact that a new bar date was not established during the Bar Date
Extension Hearing. Additionally, the fact that a January 16,
2002 hearing was held whereby the parties relied upon statements
made by the Court which apparently left the impression that if
the Court denied the Bar Date Extension Motion, it would
nonetheless grant a short period of time from the date of such
denial for property damage claimants to file proofs of claims,
is also consistent with the foregoing reading of the Bar Date
Extension Hearing transcript.  In fact, the PD Claimants
believed that this time period incorporated the time between
March 1, 2002, the date of the Bar Date Extension Hearing, and
March 20, 2002, the day the Bar Date Extension Order was
entered.

                  Manifest Injustice to Bar Claims

The effect of enforcing the Revised Bar Date would cause the PD
Claimants to suffer manifest injustice as such claimants would
be barred from asserting claims against the Debtors in their
chapter 11 bankruptcy cases. Chapter 11 provides for
reorganization with the aim of rehabilitating the debtor and
avoiding forfeitures by creditors. In overseeing this process,
the bankruptcy courts are necessarily entrusted with broad
equitable powers to balance the interests of the affected
parties, guided by the overriding goal of ensuring the success
of the reorganization.

The primary issue at stake is the PD Claimants' rights to
participate in the distribution scheme under the Debtors' plan
of reorganization. Any creditor whose claim is not scheduled or
listed as disputed, contingent, or unliquidated, is required to
file a proof of claim before a bar date established by the
bankruptcy court. See Fed. R. Bankr. P. 3003(c). One who fails
to file a timely proof of claim "shall not be treated as a
creditor with respect to such claim for purpose of voting and
distribution."  Therefore, if the Court refuses to extend
the bar date to March 20, 2002, or alternatively, refuses to
allow the PD Claimants' purported late filings, the PD Claimants
would not be entitled to participate in the Debtors'
reorganization and/or receive distributions therefrom. As a
result, the PD Claimants' claims would be effectively
discharged.

Moreover, the Revised Bar Date would operate as a federally
created statute of limitations, thereby eliminating the PD
Claimants ability to exercise their rights to bring an action
against the Debtors.

Given the circumstances surrounding the Bar Date Extension
Motion, it is unfairly prejudicial to the PD Claimants to
eliminate their ability to file claims against the Debtors by
adopting the Revised Bar Date. By not extending the bar date to
March 20, 2002, the date the Bar Date Extension Order was
entered, the Court would effectively discharge the PD Claimants'
claims against the Debtors, a result which contradicts the
underlying policies of chapter 11 and the bankruptcy rules.

          Allow Late Filings As Due to Excusable Neglect

Alternatively, the PD Claimants request this Court to enter an
order allowing their late filings as a result of excusable
neglect.  By empowering the Court to accept late filings "where
the failure to act was the result of excusable neglect," Rule
9006(b)(1) contemplates that courts are permitted, where
appropriate, to accept late filings caused by inadvertence,
mistake, or carelessness, as well as by intervening
circumstances beyond the party's control.

The determination of whether neglect is excusable is at bottom
an equitable one, in which the Court should take into account
all relevant circumstances surrounding the party's omission.  
These include (i) the danger of prejudice to the debtor; (ii)
the length of the delay and its potential impact on judicial
proceedings; (iii) the reason for the delay, including whether
it was within the reasonable control of the movant; and (iv)
whether the movant acted in good faith.

The PD Claimants posit that their neglect of the Revised Bar
Date is excusable because:

       (i) the Debtors will not be prejudiced by the PD
Claimants' late filings;

       (ii) the three-day delay in filing the proofs of claims
will have no adverse impact on efficient court administration;

       (iii) the reason for the delay is outside the PD
Claimants' control; and

       (iv) the PD Claimants and their Attorneys acted in good
faith.

                   No Prejudice to Debtors

In particular, the PD Claimants' late filed claims do not
prejudice the Debtors because a bar date for asbestos personal
injury claims has not been established, a plan of reorganization
has not been filed, and no distributions to asbestos-related
claimants have been made.

Furthermore, the PD Claimants filed their proofs of claims on
the first business day after the Revised Bar Date believing that
the new bar date had not been established. The PD Claimants'
filing of the claims on March 4, 2002 will not adversely impact
the judicial proceedings.

Additionally, the PD Claimants and their Attorneys acted in good
faith by continuously and affirmatively inquiring about the bar
date since the filing of the Bar Date Extension Motion. The PD
Claimants, through their Attorneys, would periodically check the
Armstrong Bankruptcy Website and telephone the Debtors' claims
agent to determine if the Court had established a new bar date
as a result of the filing of the Bar Date Extension Motion and
the entry of the Bridge Order. Throughout the process, Dan
Speights, Esq. and Martin Dies, Esq. periodically discussed the
Bridge Order's effect and both mutually understood, based upon
conversations with representatives of Trumbull and based upon
searches of the Court's docket, that a new bar date had not been
established at the time of filing the proofs of claim.
Immediately after fortuitously learning that the Court rendered
a bench ruling at the Bar Date Extension Hearing, the PD
Claimants filed their proofs of claims by hand delivery to
Trumbull in Connecticut, the very first business day after the
Bar Date Extension Hearing, still believing, although
incorrectly based upon the Bar Date Extension Order, that the
time period for filing the proofs of claim had not terminated.

The lack of any prejudice to the Debtors or to the interests of
efficient judicial administration, combined with the good faith
of the PD Claimants and their Attorneys, weigh strongly in favor
of permitting the PD Claimants' late filed proofs of claims.

                     Delay Not Fault of PD Claimants

Finally, the PD Claimants' delay in filing the proofs of claims
was neither within the reasonable control of the PD Claimants
nor their Attorneys. First, the PD Claimants were not provided
with adequate notice of the Revised Bar Date. It was not clear
to the PD Claimants, to their Attorneys, or to the Debtors'
claims agent that the Court established a bar date prior to the
entry of the Bar Date Extension Order. As a result, when the PD
Claimants filed their proofs of claims, they were not aware that
the claims were filed late; rather, the only knowledge they
possessed was that the Court had rendered a bench ruling denying
the Bar Date Extension Motion. In fact, the transcript to the
Bar Date Extension Hearing does not even expressly provide for
the Revised Bar Date. Additionally, the terms of the Bridge
Order can reasonably be construed to set a bar date either on
the day the Court rendered its bench ruling or the day the Bar
Date Extension Order was entered. Without express instruction
from the Court, even the most experienced bankruptcy attorneys
may have been confused as to when the extension of the Bar Date
terminated.

Ordinarily, the bar date in bankruptcy should be prominently
announced and accompanied by an explanation of its significance.
The PD Claimants acknowledge that the August 31, 2001 Bar Date
complied with the requirements of notice and are not suggesting
that the same extensive notice requirements are applicable to
the Revised Bar Date. However, the PD Claimants do assert that
to provide adequate notice of the Revised Bar Date, the Court
should have entered an order which expressly provided for a new
bar date but that did not retroactively establish a date which
denied the parties due process of law and an opportunity to
react. As a result of the Bar Date Extension Order's retroactive
bar date, the fact that the PD Claimants' filed their claims
after the Revised Bar Date was beyond their reasonable control.

        Effect of Knowledge of Bridge Order on Control

Although the Debtors may argue that the failure to timely file
the proofs of claims was within the reasonable control of the PD
Claimants and their Attorneys, based upon the premise that the
Bridge Order provided ample time for the PD Claimants to file
their proofs of claims, the PD Claimants assert that this
rationale does not warrant denying the PD Claimants proofs of
claims under the circumstances described above. Such a result
would ignore the decision rendered by the United States Supreme
Court in Pioneer Investment Services Company v. Brunswick
Associates Limited Partnership, the seminal case on excusable
neglect. In its decision the Court highlighted that Congress
plainly contemplated that the courts would be permitted to
accept late filings caused by inadvertence, mistake, or
carelessness, not just those caused by intervening circumstances
beyond the party's control. Plainly, in light of the foregoing
circumstances, the PD Claimants, through the actions of their
Attorneys, inadvertently filed their proofs of claims after the
Revised Bar Date and even then they were unaware of the Revised
Bar Date as it was not until the Bar Date Extension Order was
entered on the docket, that the PD Claimants and their Attorneys
were apprised of the retroactive Revised Bar Date. Accordingly,
the PD Claimants should be afforded the ability to assert their
claims against the Debtors on the basis of excusable neglect.

                           Joinders

Anderson Memorial Hospital, represented by Theodore J.
Tacconelli of Ferry Joseph & Pearce, announces its joinder to
the Property Damage Claimants' Motion for Reconsideration,
without addition or amendment to the arguments.

Clemson University, also represented by Mr. Tacconelli, likewise
joins in the PD Claimant's Motion.

A number of asbestos-related property damage claimants
represented by Edward B. Cottingham, Jr. , Esquire of Ness
Motley in Mt. Pleasant, South Carolina, also join.  These
claimants include Albright College, Alfred University, Augustana
College, Bentley College, Broome Comm. College, Camden County
College, Carnegie Mellon University, Carroll College, Charleston
Southern University, Chriswell College, Claremont School of
Theology, Claremont College, Clarke College, Community College
of Allegheny County, Dakota County Technical College, Don Bosco
Tech. Institute, Drake University, Erie Business Center, Five
Towns College, Florida Atlantic University, Franklin College,
Furman University, George Washington University, Graceland
University, Kettering University, Knowledge Systems Institute,
Lake Superior State University, Lamson College, Lawrence
University, Lewis University, Los Angeles Harbor College, Loyola
University, Marian College, Marquette University, Mary Baldwin
College, Mid-Michigan Community College, MIT, Monmouth College,
Mt. Hood Comm. College, Ner Israel College, North Central
College, Northern Michigan University, Oregon Health & Science
Unie. Pacific School of Religion, Presbyterian College,
Presentation College, Pulaski Technical College, Queensborough
Community College, Rainy River Community College, Rensselaer @
Hartford, Restaurant School @ Walnut Hill College, Rosemont
College, Smith College, Sojourner-Douglas College, Southwestern
University School of Law, St. Johns River Community College, St.
Louis University, State University of NY System, SUNY @
Brockport. Talmudical Inst. of Upstate NY, Timberline One
Management, University of Pittsburgh, University of Notre Dame,
University of VA @Charlottesville, University of NC @ Ashville,
University of Southern CA, University of Nebraska @ Lincoln,
Vance-Granville Community College, Washington University,
Western Iowa Tech Community College, Williams College,
WilliamsTyndall College, and Yeshiva Torah Vodaath & Mestiva
Rabbinical Seminary.

On behalf of The State of Texas, John Cornyn, Attorney General
of Texas, represented by Liz Bills of that office, join in the
requests for reconsideration.

          The PD Committee's Motion for Reconsideration

The Official Committee of Asbestos-Related Property Damage
Claimants brings its own Motion asking Judge Newsome to
reconsider his Order, arguing the same law as the PD Claimants,
but putting forth different facts as the basis for the
reconsideration.

                Pulling the Rug Out From Under
                     The PD Claimants

During the week immediately after this Court's bench ruling of
March 1, 2002, and well prior to entry of the Court's Order on
March 20, 2002, over 500 asbestos-related property damage claims
were filed by major universities, school districts, hospitals,
and churches, all of whom were clearly confused by the record
created by these cases, including the Court's unqualified
statement at the January 16, 2002 Omnibus Hearing that the bar
date as to PD Claims would be extended at least thirty days from
the date of the hearing adjudicating the Bar Date Extension
Motion. These PD Claimants had no reason to believe that the rug
would be pulled out from under them on March 1, 2002.

On December 20, 2001, Judge Wolin held a case management
conference at which he stated that all motions regarding
asbestos issues were deemed withdrawn and that he would be
handling all asbestos matters. On December 21, 2001, Judge Wolin
entered a First Case Management Order which incorporated by
reference the "commentary" made at the case management
conference.

               Judge Newsome's January Statements

On January 16, 2002, Judge Newsome held an Omnibus Hearing to
clarify confusion with respect to how these Chapter 11 cases
were to proceed and to hold a scheduling conference on pending
motions. One of the matters listed on the Agenda was a Status
Conference on the Bar Date Extension Motion.  During the January
16, 2002 Omnibus Hearing, Judge Newsome stated that when the
hearing on the Bar Date Extension Motion was held at a future
date, the bar date for PD Claims would be extended for a minimum
of an additional thirty days from that date.

Specifically, Judge Newsome stated:

       "I don't see how we can have - how I can't extend the
       bar date given all the time that's passed and all the
       controversy that's gone on as to the bar date. The
       long and short of it is this, I think that the bar
       date ought to be extended for 30 days.  *  *  *  And
       when I say extend it 30 days, I mean that it would be
       extended from the time that it originally was
       supposed to expire in August all the way to 30 days
       from whenever I make a final decision that it's going
       to be extended for 30 days."

March 1, 2002 was set as the date to consider the merits of the
Bar Date Extension Motion and the PD Committee submitted a
supplemental memorandum on the due process standards for notice
articulated by the Third Circuit in Chemtron.  Surprisingly, at
the March 1, 2002 hearing, the Court terminated the Bridge Order
extension of bar date and refused to grant the additional
thirty-day extension of the bar date, as it indicated it would
at the January 16, 2002 Omnibus Hearing. Rather, the Court
summarily ruled that "The Motion to Extend Bar Date is denied."
Later in the hearing, the Court advised class counsel Dennis
Reich, Esq. of Reich & Binstock and Duane Werb, Esq., of Werb &
Sullivan that they could have another week to file class proofs
of claim.

                       500+ Claims Filed

Between March 4 and March 8, 2002, the five business days
immediately following the Bar Date Extension Hearing, more than
500 additional PD Claims were filed. These substantial PD
Claimants consist of: (1) major universities such as Stanford
University, Claremont College, MIT, Rutgers University, Williams
College, University of Southern California, Clemson University,
Carnegie Mellon University, George Washington University,
Marquette University, Smith College, University of Notre Dame,
and University of Virginia, Charlottesville; (2) school
districts throughout the country, such as San Francisco Unified
School District, Montgomery (Alabama) Public Schools, Dade
County (Florida) Public Schools, Orange County School District,
Altoona School District, Omaha School District, CheHanooga City
Schools, LaCrosse (Wisconsin) School District, Yakima School
District, Aspen School District, DeKalb County School District;
and (3) religious institutions, such as the United Methodist
Church of Morristown, St. Cecilia Convent, Diocese of LaFayette,
Louisiana, St. Paul's Lutheran Church, Yeshiva Torah Vodaath
and Mestiva Rabbinical Seminary.

Most of the additional 500 property damage proofs of claim were
filed in unliquidated amounts, but clearly will aggregate
hundreds, if not billions of dollars of claims.  The Bar Date
Extension Order stated that with the exception of claims filed
by Mr. Reich and Mr. Werb, "the Bar Date by which all holders of
asbestos-related property damage claims must have filed proofs
of claim in the Debtors' chapter 11 cases was March 1, 2002",
which, if unaltered, would presumably bar the 500 or so proofs
of claim filed in the subsequent week.

                Effectively a Nunc Pro Tunc Order

The form of order denying the PD Committee's Bar Date Extension
Motion sent to the Court by Debtors on March 14, 2002 was made
available for comment only to the PD Committee. Although the PD
Committee requested an updated list of PD Claims from the
Debtors prior to their submission to the Court of the proposed
form of Bar Date Extension Order, the Debtors did not provide
the information until March 22, 2002, two days after the entry
of Bar Date Extension Order. Thus, the PD Committee did not have
notice of the filing of these additional 500 PD Claims prior to
the submission of the proposed form of order. As to the 500
creditors who filed PD Claims, it was not until the point in
time that the Bar Date Extension Order was entered on the
Court's docket that these 500 additional PD Claimants learned
that the Court had effectively entered a "nunc pro tunc" order
and vitiated their claims.

By this Motion, the PD Committee requests that the Court amend
the Bar Date Extension Order so that the 500 plus proofs of
claim filed by PD claimants can be deemed timely filed.  At a
minimum, the Court should set March 20, 2002, the date that the
Bar Date Extension Order was docketed, as the Bar Date. The
March 20 docketing date would at least be in keeping with the
"disposition" language of the Bridge Order. (Armstrong
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


ATHERTON: Fitch Downgrades Certain Franchise Transactions
---------------------------------------------------------
Fitch Ratings downgrades Atherton Franchisee Loan Funding Notes,
Series 1997-A class B from 'BBB' to 'BB+' and class C from 'BB'
to 'B'. The downgrade is a result of low recovery prospects on
several distressed loans. Fitch anticipates weakened credit
enhancement to occur upon the final resolution of defaulted
borrowers. Of note, class A (rated 'AAA') is unaffected as it
has a Credit Enhancement Insurance Policy provided by MBIA.
Classes B and C will remain on Rating Watch Negative.

Fitch downgrades Atherton Franchisee Loan Funding Notes, Series
1999-A class A from 'AAA' to 'AA-', class B from 'AA' to 'A-',
class C from 'A' to 'BB', class D from 'BBB' to 'CCC', class E
from 'BB' to 'D' and class F from 'B' to 'D'. The downgrade of
classes A, B, and C is based on anticipated reduced credit
enhancement as a result of expected losses associated with
defaulted borrowers. The downgrade of classes D, E, and F is
based primarily on consecutive missed interest payments (Fitch
estimates a low likelihood of being cured), and partly due to
loss expectations associated with the workout of distressed
borrowers.

Defaults and delinquencies for Series 1999-A are at $35.1
million (highest level of total impaired collateral to date), of
which approximately $34.3 million is in default and $812.1
thousand is delinquent. Based on conversations with the
Servicing Advisor (Atherton Capital), approximately $3.8 million
in losses are anticipated to occur within the next two months
related to the resolution of several defaulted borrowers.
Classes A through D will remain on Rating Watch Negative.


BELL CANADA: Re-elects Siim Vanaselja as Chief Financial Officer
----------------------------------------------------------------
Bell Canada International Inc. announced the election of Mr.
Siim A. Vanaselja at its annual meeting of shareholders on
Wednesday, May 1, 2002, in Montreal.  Mr. Vanaselja who was
appointed as Chief Financial Officer of BCE Inc. in January 2001
previously held the position of Executive Vice-President and
Chief Financial Officer of BCI.

Also re-elected as directors of BCI at the annual meeting were:

     - Mr. William D. Anderson, Chairman and Chief Executive
       Officer of BCI;

     - Mr. John (Ian) Craig, corporate director;

     - The Honourable John Crosbie, P.C., O.C., Q.C., member as
       counsel of the law firm Patterson Palmer and Chancellor
       of Memorial University of Newfoundland;

     - Ms. Donna S. Kaufman, lawyer and corporate director;

     - Mr. Michel Plessis-Belair, F.C.A., Vice-Chairman, Chief
       Financial Officer and director of Power Corporation of
       Canada;

     - Mr. C. Wesley M. Scott, corporate director;

     - Mr. Louis A. Tanguay, Vice-Chairman of BCI;

     - Mr. H. Brian Thompson, Chairman, President and Chief
       Executive Officer of Universal Telecommunications Inc.

Concurrent with these changes, Mr. Jean Monty former Chairman
and Chief Executive Officer of BCE, Mr. Michael Sabia, the newly
appointed Chief Executive Officer of BCE and Mr. H. Arnold
Steinberg, Principal and director of Cleman Ludmer Steinberg
Inc. depart the BCI Board after many years of valued service.

BCI, through Telecom Americas, owns and operates 4 Brazilian B
Band cellular companies serving more than 4.5 million
subscribers in territories of Brazil with a population of
approximately 60 million. BCI is a subsidiary of BCE Inc.,
Canada's largest communications company. BCI is listed on the
Toronto Stock Exchange under the symbol BI and on the NASDAQ
National Market under the symbol BCICF. Visit the company's Web
site at http://www.bci.ca

As previously reported in Troubled Company Reporter (April 24,
2002 edition), Bell Canada's December 31, 2001 balance sheet
shows that the company has a working capital deficit of C$900
million.


BIG V SUPERMARKETS: Amends Terms for Asset Sale to Wakefern Food
----------------------------------------------------------------
Wakefern Food Corp. has entered into an agreement with Big V
Supermarkets, Inc., Fleet National Bank, as agent, the Official
Committee of the Unsecured Creditors, the unofficial committee
of holders of 11% Senior Subordinated Notes and Thomas H. Lee
Partners, LP, to amend the terms under which Wakefern will
purchase Big V Supermarkets and propose, jointly with Big V, an
amended plan of reorganization for Big V.

The purchase price, including cash and assumption of certain
secured debt and capital leases, will not be less than $185
million and will include the contribution of a portion of
Wakefern's recovery as an unsecured creditor of Big V.

The amended plan of reorganization provides for an enhanced
distribution to the lenders under Big V's pre-petition credit
facility, Big V Note Holders and general unsecured Creditors.

"This amended Asset Purchase and Sale Agreement and Wakefern
plan of reorganization will allow us to bring to conclusion the
sale of Big V," stated Thomas Infusino, Chairman of Wakefern
Food Corp. Big V supermarkets are located predominately in the
Hudson Valley region of New York State and Southern New Jersey.

According to Mr. Infusino, once the Bankruptcy Court confirms
the plan of reorganization, Wakefern intends on updating the
stores. In addition, Wakefern will also be investing in
technological and equipment upgrades. "All of our enhancements
to the stores are designed to improve our customers' shopping
experience," added Mr. Infusino.

Wakefern's subsidiary, ShopRite Supermarkets, Inc., which
currently operates eight stores located in New York and New
Jersey, will acquire the Big V stores and continue to operate
them as ShopRite stores.

Big V Supermarkets filed for Bankruptcy protection in November
2000 and operates 31 ShopRite stores in two states and is the
largest member of the Wakefern cooperative.

Wakefern Food Corp. -- http://www.shoprite.com-- is a retailer-
owned cooperative and the wholesale merchandising and
distribution arm for ShopRite supermarkets. The 41 Wakefern
members operate approximately 200 stores under the ShopRite name
and are located throughout New Jersey, New York, Pennsylvania,
Connecticut and Delaware.


BOUNDLESS CORP: Wins Creditors' Support for Financial Workout
-------------------------------------------------------------
Boundless Corporation (Amex: BND) has met the first threshold
goals for creditor negotiation set forth in the Forbearance
Agreement with its current lender, as described in the recently
released form 8-K (dated April 30, 2002).

"Many of our suppliers, some of whom will now become
shareholders, have been very supportive throughout this
restructuring by working closely with us to understand our
situation." said Boundless President & CEO, Joseph Joy. "Our
progress would not be possible without the excellent level of
cooperation we have received from them and it is greatly
appreciated. Although we have made progress and the early
results are encouraging, there is much that needs to be
accomplished over the next several weeks to complete this
restructuring."

Boundless Corporation is a global technology company and is
composed of two subsidiaries: Boundless Technologies, Inc. --
http://www.boundless.com/index-- a desktop display products  
company, and Boundless Manufacturing Services, Inc.
(http://www.boundless.com/manufacturing),an emerging EMS  
company providing build-to-order (BTO) systems manufacturing,
printed circuit board assembly, as well as complete end-to-end
solutions from design through product end-of-life to its
customers.


CMI INDUSTRIES: Taps Keen Realty to Market So. Carolina Facility
----------------------------------------------------------------
CMI Industries, Inc. has retained Keen Realty, LLC to market and
dispose of the company's manufacturing facility in Clinton,
South Carolina. Keen Realty is a real estate firm specializing
in restructuring retail real estate and lease portfolios and
selling excess assets. CMI Industries filed for Chapter 11
protection on November 26, 2001.

"This 280,000 square foot manufacturing facility is in excellent
condition," said Mike Matlat, Keen Realty's Vice President. "We
are encouraging prospective buyers to put in their offers
immediately. The marketing has just begun and will culminate in
an auction some time in June. Interested parties must move fast
as the right offer can be accepted and the property withdrawn
from the auction," Matlat added.

Available to users and investors is a 280,000 sq. ft.
manufacturing facility in Clinton, South Carolina. The facility
is located on 30.5 acres of land. The office space is on 1 level
and the warehouse has 18 to 19 ft. clearance to the bottom of
the roof joists. There are overhead doors and a rail spur. The
building is well maintained and has good access to all major
transportation routes.

For over 20 years, Keen Consultants has had extensive experience
solving complex problems and evaluating and selling real estate,
leases and businesses in bankruptcies, workouts and
restructurings. Keen Consultants, a leader in identifying
strategic investors and partners for businesses, has consulted
with over 130 clients nationwide, evaluated and disposed of over
180,000,000 square feet square of properties, and repositioned
nearly 11,000 stores across the country.

Companies that the firm has advised include: Edison Bros.,
Cosmetic Center, Long John Silver, Caldor, Citibank, N.A. (Ames
Dept. Stores), Cumberland Farms, Fayva Shoe, Herman's Sporting
Goods, K-Mart, Merry-Go-Round Stores, Neiman Marcus, Petrie
Retail Inc., and Woodward & Lothrop. Most recently Keen has sold
over $80 million of excess retail properties and sold a
distribution facility in Montgomery, NY for $23,200,000 for
Service Merchandise and , raised approximately $5 million for
Filene's Basement, $4 million for CODA/Jeans West, and raised
$5.5 million for Learningsmith Inc. In addition to CMI
Industries, other current clients include: Anamet Industrial,
Footstar, Graham Field, Cooker Restaurants, Rodier Paris,
Warnaco Retail, Matlack Trucking and Eel River Racing.

For more information regarding the sale of this facility for CMI
Industries, please contact Keen Realty, LLC, 60 Cutter Mill
Road, Suite 407, Great Neck, NY 11021, Telephone: 516-482-2700,
Fax: 516-482-5764, e-mail: krc2@keenconsultants.com Attn: Mike
Matlat.


CASH TECHNOLOGIES: Needs Additional Financing to Continue Ops.
--------------------------------------------------------------
Cash Technologies, Inc., is a Delaware Corporation, incorporated
in August 1995. The Company, Cash Technologies, Inc., includes
its wholly-owned subsidiaries, National Cash Processors, Inc., a
Delaware corporation, incorporated in May 1994, which became a
subsidiary of the Company in January 1996; CoinBank Automated
Systems, Inc., a Delaware corporation, incorporated in November
1995; CoinBank Automation Handels GmbH, Salzburg, Austria
incorporated in February, 1998 and Cintelia Systems, Inc.,
incorporated in December, 2001.

In 1996, the Company began its development of an enhanced
version of an automated teller machine which was designated the
ATM-X(TM). The ATM-X was designed to provide a range of services
not typically offered by ATM machines, such as electronic bill
payment, instant activated phone cards, event ticketing and
others. As development efforts proceeded, the Company discovered
the need to create a robust transaction processing system that
could link the new ATMs with the worldwide financial networks in
order to provide these new services to ATMs, kiosks and wireless
devices.

In December of 1997, the Company filed a patent application
describing its transaction processing and networking
technologies, which resulted in the issuance of patent, number
6,308,887, by the U.S. Patent and Trademark Office on October
30, 2001. The technology, which was later named EMMA (E-commerce
Message Management Architecture), allows for the seamless
integration of conventional ATM and credit card networks with
non-bank networks and the Internet. The explosion of Internet e-
commerce has created, in management's opinion, a demand for
EMMA's unique capabilities to provide advanced financial
services on ATMs, POS (point of sale) terminals and wireless
devices.

Technological feasibility was achieved in September of 1999 and
from that point forward all expenses related to the EMMA
software development had been capitalized. As of December 31,
2001, the Company had capitalized $2,771,536 in development and
related costs. The EMMA product was available for release to the
public in January 2002 thus all development costs since have
been expensed. Furthermore the capitalization is being amortized
over a seven year period. During the quarter ended February 28,
2002 the Company recognized $65,989 in amortization expenses.

Gross revenues include the value of the cash processed and
CoinBank machine sales for the three months ended February 28,
2002, amounted to $4,745,888 compared to $5,874,652 for the
quarter ended February 28, 2001. Net revenues for the 2002
period decreased to $69,823, or 1.47% of gross revenues,
compared to $123,526, or 2.10% of gross revenues for 2001
period. The decrease in net revenue was primarily attributable
to the decrease in the amount of coin machines sold during the
period. CoinBank machines sold in the quarter ended February 28,
2001 provided gross proceeds of $43,422 compared to zero for the
same period this year.

Cost of revenues for the three months ended February 28, 2002,
was $32,389 compared to $80,377 for the quarter ended February
28, 2001. The decrease in direct costs was primarily the result
of a decrease in the cost of coin machines sold. Included in
cost of revenues is depreciation expense of $407 and $3,137 for
the three months ended February 28, 2002 and 2001, respectively.

Gross profit for the three months ended February 28, 2002 was
$37,439 compared to a gross profit of $43,149 for the three
months ended February 28, 2001. The decrease in gross profit was
directly related to the decrease in CoinBank machines sold
during the current quarter.

Net losses for the three months ended February 28, 2002 and
2001, were $1,014,704 and $1,089,335 respectively.

The Company continues to suffer recurring losses from operations
as of February 28, 2002, and has not generated sufficient
revenue producing activity to sustain its operations. The
Company's auditors have included an explanatory paragraph in
their report for the year ended May 31, 2001, indicating there
is substantial doubt regarding the Company's ability to continue
as a going concern. The Company is attempting to raise
additional capital to meet future working capital requirement
and launch new products, but may not be able to do so. Should
the Company not be able to do so, it may have to curtail
operations.

The Company's capital requirements have been and will continue
to be significant and its cash requirements have been exceeding
its cash flow from operations. As of February 28, 2002, the
Company had unrestricted cash and cash equivalents of $695,781
compared to $113,569 as of February 28, 2001. Also on February
28, 2002, the Company had a working capital deficit of
$10,272,401 compared to $2,342,720 on February 28, 2001. The
increase in working capital deficit is primarily the result of
reclassifying the $3,756,070 of GE Capital debt and the
$3,362,000 of Secured Convertible Promissory Notes to short term
debt. There can be no assurance though that the remaining
convertible debt will be successfully restructured. The
Company's contract with the Los Angeles County Metropolitan
Transit Authority (LACMTA) to count currency expires on June 30,
2002 and there can be no assurance that LACMTA will renew the
agreement, which may result in a significant reduction in the
Company's gross and net revenue.


COMPTON PETROLEUM: S&P Rates Proposed $150MM Senior Notes at B
--------------------------------------------------------------
On May 2, 2002, Standard & Poor's assigned its single-'B' senior
unsecured debt rating to Compton Petroleum Corp.'s proposed
US$150 million debt issue maturing in 2009. At the same time,
Standard & Poor's affirmed its single-'B'-plus corporate credit
rating on the Calgary, Alberta-based company. Outlook is stable.

Standard & Poor's also withdrew its single-'B'-minus
subordinated debt rating on Compton's originally proposed US$150
million issue, as this senior unsecured issue is being offered
in lieu of the original subordinated notes. As the company's
secured bank facility, which will be decreased to C$175 million
following the bond issue, represents a priority claim on the
company's assets and ranks ahead of these bonds, the senior
unsecured rating is one notch lower than the company's corporate
credit rating. The outlook is stable.

The ratings on Compton reflect the following:

The company's recent acquisition-related growth strategy;
Compton's internal growth prospects;

The company's near- to medium-term focus on development
drilling, as it begins to exploit its undeveloped land portfolio
following several years of exploratory drilling activity; and
Compton's operating cost profile, which is consistent with the
quality of the hydrocarbons being produced and competitive with
other junior producers.

Should Standard & Poor's hydrocarbon price forecast prevail,
Compton would require further debt financing, in the future, to
partially fund its internal growth strategy and further
acquisitions, which is an offsetting factor.

The company's below-average business risk profile reflects a
business strategy focused on growth through the exploration and
development of its existing portfolio of assets and
acquisitions, as well as its emphasis on deep natural gas
exploration and production. Compton's high total cost profile is
due to the recent spending on up-front exploratory drilling,
including land acreage purchases, and seismic and infrastructure
development; however, Standard & Poor's expects Compton's
finding and development (F&D) costs will begin trending lower in
2002. Between 1998 and 2001, Compton's F&D costs reflected the
company's disproportionate spending on exploratory drilling,
without corresponding reserve additions. As the company shifts
to development drilling in 2002 and beyond, its F&D costs are
expected to trend toward its five-year average of C$7.72 per
proven barrel of oil equivalent, net of royalties. As F&D costs
decrease, Compton's recycle ratio also will improve. Between
1999 and 2001, the company's recycle ratio largely reflected its
high up-front exploratory capital expenditures. Production
costs, however, will remain relatively stable over the forecast
period, as drilling and other related costs are expected to
trend marginally higher. Compton's reserve life index benefits
from the relatively lower decline rates attributed to deeper
natural gas wells in the Western Canadian Sedimentary Basin; the
average decline rate for deep gas wells is about 20%, while
shallow wells have an average decline rate of about 40%.
Compton's reserve life index should continue to improve as the
company's deep natural gas prospects are developed.

Compton's aggressive financial risk profile reflects its
spending policies, in which drill-bit-related growth is funded
through internally generated cash flows, and acquisitions
financed with both bank debt and equity. Incorporating Standard
& Poor's 2002 commodity price assumptions of a US$19 West Texas
Intermediate crude oil price and a Henry Hub natural gas price
of US$2.25 per million BTU, Compton's profitability and cash
flow protection measures will trend lower between 2002 and 2004,
as the company continues to expand. Furthermore, Compton's
unhedged position leaves its crude oil and natural gas
production exposed to hydrocarbon price volatility. As the
company intends to spend heavily in the near to medium term to
develop its assets, its financial flexibility, during an
extended period of low hydrocarbon prices, could become
compromised, assuming projects are not deferred. Under these
assumptions, Compton's EBITDA interest coverage and funds from
operations to total debt ratios are expected to trend below 5.0
times and 50%, respectively.

                         Outlook

Standard & Poor's expects Compton will continue to build on its
four core operating areas in Western Canada, where its existing
portfolio of assets will generate reserves and production beyond
the near term. In light of the company's aggressive growth
strategy and unhedged position, Standard & Poor's will continue
to monitor Compton's financial profile, should hydrocarbon
prices trend below their expected midcycle ranges.

                         Ratings List

                    Compton Petroleum Corp.

                  * Senior unsecured debt B


COVANTA ENERGY: Seeks Approval of Monthly Compensation Protocol
---------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates requested
and were granted an Order pursuant to Sections 105(a) and 331 of
Title 11, United States Code establishing procedures for monthly
compensation and reimbursement of expenses of professionals,
says Deborah M. Buell, Esq. at Cleary, Gottlieb.

By separate applications, the Debtors are seeking approval of
the employment of professionals pursuant to Sections 327(a) and
327(e) of the Bankruptcy Code. The Debtors, in the future, may
seek to retain additional professionals in connection with these
Chapter 11 cases. Moreover, one or more statutory committees is
likely to be appointed in these cases, which in turn will, in
all likelihood, retain counsel and other professionals to
represent them. Pursuant to Section 331 of the Bankruptcy Code,
all professionals are entitled to submit applications for
interim compensation and reimbursement of expenses every 120
days, or more often if the Court permits. In addition, Section
105(a) of the Bankruptcy Code authorizes the court to issue any
order "that is necessary or appropriate to carry out the
provisions of [the Bankruptcy Code]," thereby codifying the
bankruptcy court's inherent equitable powers.

The Debtors seek the entry of an order in accordance with the
standing General Order of the Bankruptcy Court for the Southern
District of New York, signed on January 24, 2000.  This would
establish the procedures for monthly compensation and
reimbursement of expenses of professionals. It is pursuant to
Sections 105(a) and 331 of the Bankruptcy Code and Rule 2014 of
the Bankruptcy Rules and consistent with the procedures
established in other complex cases in this district. In re Enron
Corp., et al., Case No. 01-16034 (AJG) (Bankr. S.D.N.Y. 2001);
In re Bethlehem Steel Corp., Case Nos. 01-15288 through 01-
15302, 01-15308 through 01-15315 (BRL) (Bankr. S.D.N.Y. 2001).

The Debtors request that procedures for compensating and
reimbursing court-approved professionals on a monthly basis be
established. Such an order will permit the Court and all other
parties to effectively monitor the professional fees incurred in
these Chapter 11 cases. Specifically, the Debtors propose that
the payment of compensation and reimbursement of expenses of
professionals be structured as follows:

   a) By the 20th day of each month following the month for
      which compensation is sought, each professional
      seeking compensation under this Motion will serve a
      monthly statement, by hand, facsimile or overnight
      delivery on the Debtors, the Debtors' counsel, the United
      States Trustee, counsel for the Debtors' pre-petition
      secured lenders and post-petition lenders, and counsel for
      any statutory committee appointed in these cases (the
      "Committee");

   b) The monthly statement need not be filed with the Court and
      a courtesy copy need not be delivered to the presiding
      judge's chambers because this Motion is not intended to
      alter the fee application requirements outlined in
      Sections 330 and 331 of the Bankruptcy Code. Moreover,
      professionals are still required to serve and file interim
      and final applications for approval of fees and expenses
      in accordance with the relevant provisions of the
      Bankruptcy Code, the Federal Rules of Bankruptcy Procedure
      and the Local Rules for the United States Bankruptcy Court
      for the Southern District of New York;

   c) Each monthly fee statement must contain a list of the
      individuals and their respective titles (e.g. attorney,
      accountant, or paralegal) who provided services during the
      statement period, their respective billing rates, the
      aggregate hours spent by each such individual, a
      reasonably detailed breakdown of the disbursements
      incurred and contemporaneously maintained time
      entries for each individual in increments of tenths (1/10)
      of an hour.  No professional should seek reimbursement of
      an expense which would otherwise not be allowed by this
      Court's Administrative Orders dated June 24, 1991 and
      April 19, 1995 or the United States Trustee Guidelines for
      Reviewing Applications for Compensation and Reimbursement
      of Expenses Filed under 11 U.S.C. Section 330 dated
      January 30, 1996;

   d) Each entity receiving a statement will have at least
      15 days after receipt to review it and, in the event that
      the entity has an objection to the compensation or
      reimbursement sought in a particular statement, such
      entity will, by no later than the 35th day following the
      end of the month for which compensation is sought, serve
      upon the professional whose statement is objected to, and
      the other entities designated to receive statements in
      paragraph (a), a written "Notice Of Objection To Fee
      Statement," setting forth the nature of the objection and
      the amount of fees or expenses at issue;

   e) At the expiration of the 35 day period, the Debtors will
      promptly pay eighty percent (80%) of the fees and 100% of
      the expenses identified in each monthly statement to which
      no objection has been served in accordance with paragraph
      (d);

   f) If the Debtors receive an objection to a particular fee
      statement, they must withhold payment of that portion of
      the fee statement to which the objection is directed and
      promptly pay the remainder of the fees and disbursements
      in the percentages set forth in paragraph (e);

   g) Similarly, if the parties to an objection are able to
      resolve their dispute following the service of a Notice Of
      Objection To Fee Statement and if the party whose
      statement was objected to serves on all of the parties
      listed in paragraph (a) a statement indicating that the
      objection is withdrawn and describing in detail the terms
      of the resolution, then the Debtors will promptly pay, in
      accordance with paragraph (e), that portion of the fee
      statement which is no longer subject to an objection;

   h) All objections that are not resolved by the parties, will
      be preserved and presented to the Court at the next
      interim or final fee application hearing to be heard by
      the Court (See paragraph (j) infra);

   i) The service of an objection in accordance with the
      paragraph (d) will not prejudice the objecting party's
      right to object to any fee application made to the Court
      in accordance with the Bankruptcy Code on any ground,
      whether raised in the objection or not. Furthermore, the
      decision by any party not to object to a fee statement
      will not be a waiver of any kind or prejudice that
      party's right to object to any fee application
      subsequently made to the Court in accordance with the
      Bankruptcy Code;

   j) Approximately every 120 days, but no more than every 150
      days, each of the professionals will serve and file with
      the Court an application for interim or final (as the case
      may be) Court approval and allowance, pursuant to Sections
      330 and 331 of the Bankruptcy Code, of the compensation
      and reimbursement of expenses requested;

   k) Any professional who fails to file an application seeking
      approval of compensation and expenses previously paid
      under this Motion when due is (1) be ineligible to
      receive further monthly payments of fees or expenses as
      provided herein until further order of the Court and (2)
      may be required to disgorge any fees paid since retention
      or the last fee application, whichever is later;

   l) The pendency of an application or a Court order that
      payment of compensation or reimbursement of expenses was
      improper as to a particular statement period shall not
      disqualify a professional from the future payment of
      compensation or reimbursement of expenses as set forth
      above, unless otherwise ordered by the Court;

   m) Neither the payment of, nor the failure to pay, in whole
      or in part, monthly compensation and reimbursement as
      provided herein will have any effect on the Court's
      interim or final allowance of compensation and
      reimbursement of expenses of any professionals; and

   n) Counsel for any Committee may, in accordance with the
      foregoing procedure for monthly compensation and
      reimbursement of professionals, collect and submit
      statements of expenses, with supporting vouchers, from
      members of the Committee such counsel represents;
      provided, however, that such Committee counsel ensures
      that these reimbursement requests comply with this Court's
      Administrative Orders dated June 24, 1991 and April 19,
      1995;

Ms. Buell asserts the procedures suggested herein will not only
enable the Court and interested parties to closely monitor the
costs of administration, but will also allow the Debtors
to implement efficient cash management procedures. The Debtors
further request that the Court limit the notice of hearings to
consider application for interim compensation.  Notice of
hearing should be limited to the United States Trustee, counsel
for the Debtors, counsel for the Debtors' pre-petition secured
lenders and post-petition lenders, and all parties who have
filed a notice of appearance with the Clerk of this Court and
requested such notice.  She adds that this will reduce
duplication and mailing costs while keeping the parties most
active in these Chapter 11 cases fully informed. (Covanta
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


DDI CORP: S&P Ratchets Ratings Down a Notch Over Weaker Profits
---------------------------------------------------------------
Standard & Poor's on May 2, 2002, lowered its corporate credit
rating and senior secured bank loan ratings on circuit maker DDi
Corp. to single-'B' from single-'B'-plus after the company said
it expected weaker profits due to a sharp drop in sales. At the
same time, Standard & Poor's lowered the subordinated note
rating to triple-'C'-plus from single-'B'-minus.

The corporate credit rating on Details Capital Corp., a ratings
family member, was lowered to single-'B' from single-'B'-plus,
and its senior unsecured note rating was lowered to triple-'C'-
plus from single-'B'-minus.

Anaheim, California-based DDi Corp., the parent of DDi Capital
Corp. and Dynamic Details Inc., provides "quick-turn" and pre-
production printed circuit board (PCB) fabrication and design
services primarily to the communications, networking, and
computing market segments. DDi is the leader in the highly
fragmented quick-turn market, which is undergoing consolidation
as independent PCB fabricators strive to increase the size and
scope of their operations to meet the global needs of their
customers. This time-critical segment of the electronic
manufacturing services industry is characterized by relatively
high operating margins, greater customer diversity, and lower
working capital needs.

DDi Corp.'s sales fell by more than one-half in its fiscal first
quarter ended March 2002 from the same period in 2001, the
company said. The decline resulted in subpar credit measures for
its rating. Slumping end-market demand and increased pricing
pressures have hurt operating performance, and management
expects sales to remain depressed in the near term. DDi's
operating profitability fell well below Standard & Poor's
expectations to about 2% from nearly 30% in the same period in
2001.

Operating margins, which were in the 20% to 25% range during the
past three years, are likely to remain pressured and below 5% in
the near term because of lower sales. Deteriorating cash flow
protection measures are a concern as EBITDA coverage of interest
is likely to be below 1 times in the first half of 2002, down
from more than 5x in the first half of 2001. Management's
capacity reduction and rationalization efforts should help
improve profitability measures in the intermediate term. A cash
balance of over $70 million as of April 30, 2002, provides
limited financial flexibility. DDi's operations are likely to
consume only marginal free cash flow, as capital expenditures
are modest.

                    Outlook: Negative

Ratings could be lowered in the near term if cash flow measures
fail to show meaningful sequential improvement in the second
half of 2002.

                       Ratings list:

                         DDi Corp.

               - Corporate Credit Rating B

               - Senior Secured B

               - Subordinated CCC+

                    Details Capital Corp.

               - Senior unsecured CCC+


EASYLINK SERVICES: Sets Annual Shareholders' Meeting for May 23
---------------------------------------------------------------
The Annual Meeting of Stockholders of EasyLink Services
Corporation, a Delaware corporation, will be held at the
Woodbridge Hilton located at 120 Wood Avenue South, Iselin, New
Jersey on Thursday, May 23, 2002, at 10:00 a.m. local time for
the following purposes:

      1. To elect seven directors of EasyLink to serve until the
         2003 Annual Meeting of Stockholders or until their
         respective successors are elected and qualified;

      2. To approve the Company's 2002 Stock Option Plan; and

      3. To transact such other business as may properly come
         before the Annual Meeting and any adjournment or
         postponement thereof.

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

EasyLink Services delivers e-mail and more. The company manages
outsourced e-mail systems for businesses and provides other
electronic message delivery services, including telex and
desktop fax. It also provides virus protection and help desk
services. The former Mail.com has expanded by buying messaging
provider Swift Telecommunications, which had acquired AT&T's
EasyLink Services messaging unit. EasyLink Services has sold its
e-mail advertising business and its consumer e-mail business,
which served some 5 million active users, and it plans to sell
its domain name development business, WORLD.com. Chairman Gerald
Gorman controls nearly 60% of the company's voting power.  

As previously reported (Troubled Company Reporter Feb. 5, 2002
edition), the Company transferred 14,239,798 shares of its Class
A common stock to AT&T and gave AT&T immediately exercisable
warrants to purchase an additional 10,000,000 shares at a price
of $0.61 per share, in connection with the restructuring of
approximately $35,000,000 of indebtedness owed by EasyLink
Services, Inc., to AT&T, including the retirement of portions of
the Indebtedness and an extension of the maturity date with
respect to the remaining indebtedness. The Indebtedness was
created by the Company's default under the terms of a promissory
note made by EasyLink in favor of AT&T. The promissory note
evidenced the Company's obligation to pay AT&T for certain
services under a Transition Services Agreement between EasyLink
and AT&T, dated January 31, 2001.

As a result of the debt restructuring of EasyLink,  AT&T
acquired the Class A Common Stock.  AT&T  intends to treat the
common stock of EasyLink as a passive investment and will
realize a gain or loss, if any, on the sale of the shares.


EASYRIDERS: Court Okays Asset Sale to Paisano LLC for $12.3MM
-------------------------------------------------------------
Easyriders Inc. (AMEX:EZR) said that a sale of all its assets
was approved at a hearing held on May 1, 2002 in the United
States Bankruptcy Court for the Central District of California,
San Fernando Valley Division.

A bidding process took place before the Bankruptcy Court at the
hearing held on May 1, 2002 between Vintage Capital Group, LLC
and Paisano Publications, LLC. The Bankruptcy Court concluded
that an all cash bid of $12.3 million submitted by Paisano
Publications, LLC was the winning bid. Paisano Publications, LLC
is wholly owned by former Company chairman Joseph Teresi.

The sale of all of the operating assets of Easyriders, Inc. and
Paisano Publications, Inc. to Paisano Publications, LLC closed
on May 2, 2002.

Mr. Teresi was a founder of Paisano Publications, Inc. 31 years
ago, and sold his ownership interests in this magazine
publishing enterprise in a corporate reorganization in September
1998 which created the publicly-held company known as
Easyriders, Inc.

"Life has come full circle with respect to regaining sole
ownership of the Paisano publishing and Easyriders trademarked
assets," comments Teresi. "I am looking forward to returning the
business to the profitability it enjoyed for the many years
before new management was brought in following the
reorganization of 1998, and to pursuing other opportunities for
additional growth."

As reported by Easyriders, Inc. on April 24, 2002, the Company
will be delisted from the American Stock Exchange on May 6,
2002.

Easyriders is a publicly-held, diversified company which, up
until yesterday, owned publishing, retail, and entertainment
interests dedicated to serving the independent, free-spirited
motorcycling and related lifestyles market.

Heretofore, through its ownership of Paisano Publications, Inc.,
Easyriders published more than a dozen popular motorcycle,
special interest and lifestyle magazines, with a total worldwide
readership of more than 6 million. The company also licensed
Easyriders retail stores throughout the United States and
Canada, Easyriders Events, and the Bros Club road service
company.


ENRON CORP: Exclusive Period Extended through October 1, 2002
-------------------------------------------------------------
Several parties objected to the extension of the Enron
Corporation and its debtor-affiliates' exclusive periods
asserting that:

    -- no cause exists to justify an extension of the Filing and
       Solicitation Periods for Enron North America, and

    -- they lack confidence in the Debtors' management.

On the other hand, Martin J. Bienenstock, Esq., at Weil, Gotshal
& Manges LLP, in New York, asserts, "cause does exist to justify
the extension of the Filing and Solicitation Periods for all of
the Debtors, including Enron North America."

Mr. Bienenstock explains that the Debtors need time to review
and analyze the ENA Examiner's report and its implications to
ENA and all of the Debtors.

Furthermore, Mr. Bienenstock adds, the Debtors' preparation and
filing of their schedules and statements and the convening of
the 341 meeting necessitates the extension of time before the
Debtors can file a meaningful plan.  The Debtors' deadline to
file their Schedules has been extended to June 17, 2002.  "The
initial meeting of creditors pursuant to Section 341 of the
Bankruptcy Code will not take place until May or June this year,
and a bar date has not been fixed in these cases," Mr.
Bienenstock points out.

The Debtors also assure the Court that they have every intention
of filing a Chapter 11 plan for Enron North America as soon as
possible.  "It's just that overhead allocation among the
Debtors, treatments of intercompany claims, allowability and
priority of other claims, and the working out of the trading
book will take time," Mr. Bienenstock explains.

As to the creditors' loss of confidence in the Debtors'
management, Mr. Bienenstock emphasizes that the Debtors have
already made some changes:

    -- Kenneth Lay resigned as CEO and Chairman of the Board,
    -- Stephen Cooper is now Chief Restructuring Officer and
       CEO,
    -- Jeff McMahon is the new President and Chief Operating
       Officer,
    -- Ray Bowen is the new Chief Financial Officer,
    -- Rob Walls is the new GC, and
    -- Richard Lydecker is the new CAO.

In addition, Mr. Bienenstock notes, the Court's appointment of
the ENA Examiner shows that appropriate controls are in place
for ENA, and progress to a plan is steadily being made.

                          *     *     *

A compromise met with Judge Gonzalez's approval.  Enron North
America has the exclusive right until August 31, 2002 to file
its plan of reorganization and receives a concomitant extension
of its exclusive solicitation period through October 30, 2002.
Enron Corp. and the rest of the Debtors' exclusive period to
file a plan expires on October 1, 2002 and their exclusive
period to solicit acceptances ends on November 30, 2002. (Enron
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ENRON CORP: Wins Nod to Hold Iberdrola Sales Proceeds in Escrow
---------------------------------------------------------------
Pending final determination by this Court regarding Enron
Corporation's appropriate distribution of the Proceeds from the
sale of Iberdrola assets, Judge Gonzalez rules that the Proceeds
will be held in escrow pursuant to the Proceeds Escrow
Agreements, provided that such Proceeds are the net of:

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

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

The Court authorizes the escrow of the Net Proceeds in
accordance with the terms of the Proceeds Escrow Agreements
pursuant to Section 105(a) of the Bankruptcy Code. This is
"provided, that the Proceeds Escrow Agreements and the
allocation of the purchase price set forth therein are to be
entered into solely for the purpose of facilitating the closing
of the Transaction, and that they are not intended to, and do
not, prejudice any party's rights with respect to payment of any
portion of the Net Proceeds." (Enron Bankruptcy News, Issue No.
23; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON CORP: Reiten Says NW Natural-PGE Combination "Best Option"
----------------------------------------------------------------
Richard G. Reiten, Chairman and CEO, NW Natural, issued this
statement:

     "We continue to believe that combining NW Natural and
Portland General Electric (PGE) is the best option for all
concerned, including PGE, its customers and employees and
Enron's creditors.

     "Our mission over the last year has been to create a great
new Oregon company. We have fulfilled our obligations under the
Stock Purchase Agreement that we signed with Enron last October.
We have obtained, or are well along in the process for
obtaining, the necessary regulatory approvals. We also have in
place a committed financing package that would allow the
transaction to close as soon as the remaining approvals are
received.

     "Nevertheless, we have been advised that under federal
bankruptcy laws Enron has the ability to assume or reject the
Stock Purchase Agreement to sell PGE to NW Natural. In the
reorganization plan released Friday, Enron has indicated its
preference to keep PGE. However, it has not formally notified NW
Natural that it has rejected the Agreement. NW Natural will work
with Enron over the next two weeks to clarify Enron's
intentions."


ENRON: Azurix Ups Tender Offer Purchase Price to 92.25%
-------------------------------------------------------
Azurix Corp. is increasing the purchase price in its previously
announced tender offer and consent solicitation for its 10-3/8
percent Series B Senior Dollar Notes due 2007 and 10-3/4 percent
Series B Senior Dollar Notes due 2010 to US$922.50 per US$1,000
principal amount and for its 10-3/8 percent Series A and B
Senior Sterling Notes due 2007 to Pounds Sterling 922.50 per
Pounds Sterling 1,000 principal amount.

The consent amount and consent payment deadline described in
previous announcements and in the Offer to Purchase and Consent
Solicitation, dated April 1, 2002, are eliminated. Accordingly,
if the tender offer is consummated, Azurix will pay the full
92.25 percent of par for notes tendered regardless of the date a
holder tenders its notes and delivers the related consents,
provided that tenders and deliveries occur before the expiration
date. Azurix also is extending the expiration date of the tender
offer and consent solicitation to 5:00 p.m. New York time on
Thursday, May 16, 2002. The remaining terms of the tender offer
and consent solicitation remain in effect.

Azurix has received commitments from holders of more than 80
percent of each series of Senior Dollar Notes that they will
tender their notes and deliver the related consents after
Azurix's announcement of the increased price described above.
Promptly after a majority of holders of a series of Senior
Dollar Notes have tendered, Azurix expects to execute a
supplemental indenture for that series with the trustee under
the indenture under which the notes were issued, as described in
the Offer to Purchase and Consent Solicitation. On execution of
the supplemental indenture, tenders of notes and deliveries of
related consents by holders of Senior Dollar Notes in that
series will become non-withdrawable and irrevocable. As
previously announced, tenders of Senior Sterling Notes may not
be withdrawn and consents in respect of tendered Senior Sterling
Notes are irrevocable.

Holders of notes who already have delivered (and not withdrawn)
their tenders and consents do not need to take any further
action to receive the increased purchase price. As of May 1,
2002, holders of an aggregate principal amount of approximately
US$23 million of the Senior Dollar Notes due 2007, approximately
Pounds Sterling 74 million of the 10-3/8 percent Senior Sterling
Notes due 2007 and approximately US$17 million of the Senior
Dollar Notes due 2010 have validly tendered and not withdrawn
their notes pursuant to Azurix's tender offer and consent
solicitation. These totals exclude the holders of Senior Dollar
Notes who have committed to tender with the increased price.

Azurix also announced that, this afternoon, the U.S. Bankruptcy
Court in which the reorganization proceedings for Enron Corp.
and its affiliates is pending granted Enron's motion to approve,
among other things, the votes by Enron designees to the boards
of directors of Azurix and its stockholders approving the sale
of Wessex Water Ltd. and the tender offer and consent
solicitation.

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


EXIDE TECHNOLOGIES: Taps Pachulski Stang as Bankruptcy Counsel
--------------------------------------------------------------
Exide Technologies and its debtor-affiliates seek to employ and
retain Pachulski Stang Ziehl Young & Jones P.C. as their
bankruptcy counsel with regard to the filing and prosecution of
their Chapter 11 Cases. Accordingly, the Debtors request the
entry of an order pursuant to Bankruptcy Code Section 327(a)
authorizing them to employ and retain Pachulski as their
attorneys under a general retainer to perform the legal services
that will be necessary during the Chapter 11 Cases.

Craig H. Muhlhauser, the Debtors' President and Chief Executive
Officer, explains that the Debtors seek to retain Pachulski as
their attorneys because of Pachulski's extensive experience and
knowledge in the field of debtors' and creditors' rights and
business reorganizations under chapter 11 of the Bankruptcy Code
and because of the Firm's expertise, experience and knowledge
practicing before this Court. In preparing for its
representation of the Debtors in these cases, Pachulski has
become familiar with the Debtors' business and affairs and many
of the potential legal issues that may arise in the context of
the Chapter I1 Cases.

Subject to Court approval in accordance with Bankruptcy Code
Section 330(a), compensation will be payable to Pachulski on an
hourly basis, plus reimbursement of actual, necessary expenses
and other charges incurred by the firm. The principal attorneys
and paralegals presently designated to represent the Debtors and
their current standard hourly rates are:

      Laura Davis Jones           $550.00 per hour
      James E. O'Neill            $370.00 per hour
      Christopher J. Lhulier      $260.00 per hour
      Kathleen M. DePhillips      $225.00 per hour
      Karina Yee                  $125.00 per hour

The professional services that Pachulski will render to the
Debtors include, but are not be limited to, the following:

A. provide legal advice with respect to their powers and
    duties as debtors in possession in the operation and
    reorganization of their businesses and their properties;

B. prepare and pursue confirmation of a reorganization plan
    and approval of a disclosure statement;

C. prepare on behalf of the Debtors necessary applications,
    motions, answers, orders, reports and other legal papers;

D. appear in Court and to protect the interests of the Debtors
    before the Court; and

E. perform all other legal services for the Debtors which may
    be necessary and proper in these proceedings.

Laura Davis Jones, a shareholder of the firm of Pachulski Stang
Ziehl Young & Jones P.C., assures the Court that the firm has
not represented the Debtors, their creditors, equity security
holders, or any other parties in interest, or their respective
attorneys, in any matter relating to the Debtors or their
estates. In addition, the firm does not hold or represent any
interest adverse to the Debtors' estates, and is a
"disinterested person" as that phrase is defined in Bankruptcy
Code Section 101(14) of the Bankruptcy Code.

Ms. Jones informs the Court that Pachulski has received
$100,000.00 from the Debtors as a general retainer for pre- and
post-petition services and has received $3,320.00 from the
Debtors to filing fees for these cases. The Firm is current as
of the Petition Date, and will apply the unused retainer to post
petition fees and expenses. (Exide Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

  
FEDERAL-MOGUL: Intends to Expand Stout Risius Engagement Scope
--------------------------------------------------------------
Federal-Mogul Corporation and its debtor-affiliates seek to
amend the Retention Order of Stout Risius Ross, Inc. to enlarge
the scope of Stout Risius' employment to include a valuation
analysis of the Debtors' goodwill impairment in accordance with
SFAS No. 142.

SFAS No. 142 refers to a Statement of Financial Accounting
Standards issued by the Financial Accounting Standards Board,
which eliminates the amortization of goodwill and indefinite-
lived intangible assets and initiates an annual review for
impairment of such assets. The amortization provisions of SFAS
No. 142 apply to goodwill and intangible assets acquired after
June 30, 2001. Public companies such as the Debtors are required
to adopt the pronouncement in their fiscal year beginning after
December 15, 2001 in order to comply with GAAP, with respect to
goodwill and intangible assets they acquired before July 1,
2001.

According to David M. Sherbin, vice president, deputy general
counsel and secretary, for Federal-Mogul Corporation, the
Debtors will require expanded services of Stout Risius in order
to comply with this newly adopted standard:

A. Phase I: performing a valuation of each of Federal-Mogul's
   reporting units, by estimating the Fair Value of each
   reporting unit based on consideration of the discounted Cash
   Flow Method, the Guideline Public Company Method, and the
   Market Transaction Method and on consideration of any
   applicable control premiums;

B. Phase II: performing a valuation of the tangible and
   intangible assets of certain reporting units, with the
   ultimate scope of Phase II to be determined by working with
   the Debtors and Ernst & Young after Phase I, based on the
   results of Phase I testing; and,

C. Providing any additional related valuation services as may be
   agreed upon by Stout Risius Ross, Inc. and the Debtors.

Mr. Sherbin informs the Court that Stout Risius estimates that
it will charge the Debtors approximately $60,000 to $80,000,
plus out-of-pocket expenses related to the services, for Phase I
of its valuation services, barring unforeseen complications. In
addition, any subsequent consultation and additional analysis
will be billed at the firm's most current standard hourly rate.
The firm will meet with the Debtors at the end of Phase I to
determine the scope and fee arrangement for Phase II, consistent
with its standard hourly rates. Stout Risius will also seek
reimbursement for reasonable and necessary expenses incurred in
connection with the services rendered, in addition to the hourly
rates.

Mr. Sherbin believes that the firm is well qualified and able to
provide the additional services to the Debtors in a cost-
effective, efficient, and timely manner based upon its prior
valuation work and its restructuring familiarity with the
Debtors and their businesses. (Federal-Mogul Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FLAG TELECOM: Court to Consider Financing Arrangement on May 13
---------------------------------------------------------------
Michael E. Foreman, Esq., at Proskauer Rose LLP, says FLAG
Telecom Holdings Limited's request was not detailed enough as to
where the funds will come from, how the funds will be applied
and how the financing will enhance the value of the Debtors'
estates.

For instance, while the Debtors budget $500,000 for the
FLAG Europe-Asia Network, the FLAG Atlantic-1 Network and the
FLAG North Asian Loop Network, $3,500,000 is allocated for "FLAG
Other" capital expenditures. Mr. Foreman assails the lack of
specificity as illustrating the inadequacy of the Debtors'
explanation for how they intend to use the funds.

Kees van Ophem, Secretary and General Counsel of FLAG Telecom
Holdings Ltd., submits to the Court a budget detailing the
Debtors' estimated projected financial forecast for the 30 days
following the Petition Date for each of the Debtors:

Cash Receipts & Disbursements - FLAG Draft - ($ in millions)

                                               Consolidated
                           Consolidated(1)     without Atlantic
                           6 Week  4/6th of    6 Week  4/6th of
                           Totals  6wk need    Totals  6wk need
                           ----------------    ----------------

Sources of Cash
---------------

Capacity Sales(2)             1.0    0.7          1.0      0.7
O&M Receipts(3)               1.0    0.7          1.0      0.7
Restoration                     -      -            -        -
Other (example: Interest)     0.6    0.4           0.6     0.4
Total Sources of Cash         2.6    1.7           2.6     1.7


Uses of Cash
------------

Total SG&A(4)                (14.5)  (9.7)        (14.5)   (9.7)
Total O&M                     (6.4)  (4.2)        (5.1)    (3.4)
Total Network                 (7.9)  (5.3)        (6.3)    (4.2)
Other (example: taxes)        (1.6)  (1.0)        (1.6)    (1.0)

Total Operating Expenses     (30.4) (20.2)        (27.5)  (18.3)

Critical Capital Exp.(5)      (4.0)  (2.7)         (4.0)   (2.7)

Total Uses of Cash           (34.4) (22.9)        (31.5)  (21.0)

Net Sources/(Uses) of Cash  ($31.8) ($21.2)      ($28.9) ($19.2)


      1 Weeks starting Monday April 15

      2 Rough estimate of Capacity sales already contracted but
not paid. To be revised.

      3 Rough estimate of O&M sales already contracted but not
paid. To be revised.

      4 SG&A incurred by "Flag other" and then allocated into
all other entities.

      5 Capex represents rough estimates of critical capex of
entities that have not filed. To be revised.

Cash Receipts & Disbursements - FLAG Ltd. Draft - Confidential
($ in millions)

                             6 Week  4/6th of
                             Totals  6wk need
                             ------  --------

Sources of Cash
---------------

Capacity Sales                  -       -
O&M Receipts                  0.6     0.4
Restoration                     -      -
Other (example: Interest)     0.0     0.0
Total Sources of Cash         0.0     0.0


Uses of Cash
------------

Total SG&A                   (5.2)   (3.5)
O&M                          (3.1)   (2.0)
Network                         -       -
Other (example: taxes)       (0.6)   (0.4)
Total Operating Expenses    ($8.6)  ($5.7)

Capital Expenditures         (0.5)   (0.3)

Total Uses of Cash          ($9.1)   (6.1)

Net Sources/(Uses) of Cash  ($9.1)   (6.1)

Cash Receipts & Disbursements -- FLAG Atlantic Draft --
Confidential ($ in millions)

                             6 Week  4/6th of
                             Totals  6wk need
                             ------  --------

Sources of Cash
---------------

Capacity Sales                  -       -
O&M Receipts                    -       -
Restoration                     -       -
Other (example: Interest)       -       -
Total Sources of Cash        $0.0    $0.0


Uses of Cash
------------

Total SG&A                   (1.4)   (0.9)
O&M                          (1.3)   (0.9)
Network                      (1.6)   (1.1)
Other (example: taxes)          -       -
Total Operating Expenses    ($4.3)  ($2.8)

Capital Expenditures            -       -

Total Uses of Cash          ($4.3)   (2.8)

Net Sources/(Uses) of Cash  ($4.3)   (2.8)

Cash Receipts & Disbursements -- FLAG North Asia Loop
Draft - Confidential
($ in millions)

                             6 Week  4/6th of
                             Totals  6wk need
                             ------  --------

Sources of Cash
---------------

Capacity Sales                  -       -
O&M Receipts                  0.6     0.4
Other (example: Interest)     0.1     0.0
Total Sources of Cash        $0.7    $0.4


Uses of Cash
------------

Total SG&A                   (1.6)   (1.1)
O&M                          (2.0)   (1.3)
Network                         -       -
Other (example: taxes)          -       -
Total Operating Expenses    ($3.6)  ($2.4)

Capital Expenditures        ($0.0)  ($0.0)

Total Uses of Cash          ($3.6)  ($2.4)


Cash Receipts & Disbursements -- FLAG Other Draft --
Confidential ($ in millions)


                             6 Week  4/6th of
                             Totals  6wk need
                             ------  --------

Sources of Cash
---------------

Total Capacity                  -       -
Total O&M                     2.0     1.3
Restoration                     -       -
SG&A Reimbursed from Limited  5.2     3.5
SG&A Reimbursed from Atlantic 1.4     0.9
SG&A Reimbursed from FNAL     1.6     1.1
Other (Example: Interest)     0.6     0.4
Total Sources of Cash       $10.7    $7.2


Uses of Cash
------------

Total SG&A                  (14.5)   (9.7)
O&M                             -       -
Network                      (6.3)   (4.2)
Other (example: taxes)       (1.0)   (0.6)
Total Operating Expenses   ($21.0) ($14.0)

Capital Expenditures        ($3.5)  ($2.3)

Total Uses of Cash         ($24.5) ($16.3)

Net Sources/Uses of Cash   ($13.8) ($9.2)

French telecom-equipment giant Alcatel and Debtor Flag Asia Ltd.
are parties to a December 28, 2000 contract to build an
integrated optical fiber cable system, known as FWACS, that
links Japan, Hong Kong and South Korea. FLAG Telecom Holdings
Ltd., or FTHL, was a guarantor to that contract under which
Alcatel was to engineer, provide, install, test, commission and
warrant the system. Flag Asia Ltd. was in default under the
contract for failing to make payments on February 24, 2002 and
after a 30-day grace period expired.

Mr. Foreman says Alcatel also objects to the Debtors' Motion to
the extent that it seeks an Order granting FTHL a senior lien on
FWACS, arguing that Alcatel has sole ownership to that system.
On that basis, Mr. Foreman describes as inaccurate the claim of
the Debtors that they are the owners of FLAG North Asian Loop
Network. The network, still under construction, will integrate
FWACS and the North Asia Cable System, or NACS, which connects
Japan and Hong Kong via Taiwan. Alcatel, along with Fujitsu
Ltd., also builds NACS for REACH, a third-party
telecommunications operator that has a separate contractual
relationship with Flag Asia Ltd.

Mr. Foreman says any liens or other rights granted to FTHL
should be subordinate to the administrative expense claims or
other valid claims of parties providing goods and performing
services post-petition to any of the systems.

                          Interim Order

Judge Allan L. Gropper grants, on an interim basis, the Debtors
authority to obtain emergency post-petition loans from FLAG
Telecom Holdings Ltd. and sets a May 13, 2002 hearing to
consider putting a financing arrangement in place on a final
basis. (Flag Telecom Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FLEXIINTERNATIONAL: Mar. 31 Balance Sheet Upside-Down by $2.3MM
---------------------------------------------------------------
FlexiInternational Software, Inc. (OTCBB:FLXI.OB), a leading
designer, developer and marketer of Internet-enabled financial
and accounting software and outsourcing services, announced its
results for the first quarter ended March 31, 2002.

                      Financial Results

For the first quarter of 2002, revenues were $2.3 million as
compared to revenues of $3.2 million for the first quarter 2001
and $2.0 million for the fourth quarter of last year. Software
license revenue was $0.2 million in the first quarter of the
current year, a decrease of 85.7% over the comparable quarter
last year and 66.7% decrease over the level of the fourth
quarter of 2001. Net income for the first quarter of 2002 was
$549,000 as compared to net income of $97,000 for the first
quarter of 2001 and $178,000 in the fourth quarter of last year.

FlexiInternational Software's March 31, 2002 balance sheet shows
that the company has a working capital deficit of about $2
million, and a total shareholders' equity deficit of $2.3
million.

                   Comments from Management

"We are pleased to report our eighth--out of the last nine--
profitable quarter, which reflects the stabilization of our
business as well as the one-time revenue from the sale of the
dodge.com URL," said Stefan R. Bothe, Chairman and Chief
Executive of FlexiInternational Software, Inc.

"Given our focus on building our accounting outsourcing
business, we will show lower new license revenue until the
recurring monthly revenue from outsourcing contracts builds over
time. We believe that accounting outsourcing offers significant
business opportunities for Flexi, and we signed up a new
accounting outsourcing affiliate in the second quarter of 2002.
At the same time we have closed a major software sale in the
second quarter. We believe that our strategy of maintaining a
steady software licensing business while investing our resources
in an accounting outsourcing business will provide significant
benefits for Flexi."

FlexiInternational Software, Inc., with offices in Shelton CT,
Naples FL, and London, United Kingdom, is a leading designer,
developer and marketer of Internet-enabled financial and
accounting software and outsourcing services. Flexi serves
clients in banking, healthcare, utilities, transportation,
financial, accounting and management services. Additional
information is available at http://www.flexi.com


GENEVA STEEL: Unit Gets OK to Continue Access to Cash Collateral
----------------------------------------------------------------
On April 26, 2002, Geneva Steel LLC, a wholly owned subsidiary
of Geneva Steel Holdings Corp. (OTC Bulletin Board: GNVH),
reached agreement with its secured lenders for continued access
to cash proceeds of sales of inventory and collections of
accounts receivable through July 1, 2002. Access to cash
pursuant to the agreement is subject to compliance with several
conditions, including the filing of an application under the
Emergency Steel Loan Guarantee Program by June 17, 2002, by a
qualified lender representing the Company and a budget for cash
disbursements. Any failure to satisfy these conditions may
result in the immediate termination of the Company's access to
cash, with the exception of certain rights to pay accrued
employee wages and benefits. There can be no assurance that the
Company will be able to access cash under the agreement, that
any available cash proceeds will be sufficient to fund Geneva's
activities through July 1, that an application under the
Emergency Steel Loan Guarantee Program will be filed by a
qualified lender representing the Company by June 17, 2002, or
that the Company will be able to reach any further agreement for
access to cash collateral or other capital, if any is available,
after the current agreement ends.

The Company is seeking a new $250 million credit facility to
repay its existing term loan of approximately $108.4 million and
to finance the Company's electric arc furnace strategy. The
Company continues to work with potential lenders, including a
possible application under the Emergency Steel Loan Guarantee
Program. Geneva expects to seek approval of the bankruptcy court
to pay a lender a fee in connection with its due diligence
efforts. There can be no assurance that the Company will be
successful in obtaining a credit facility, that an application
will be filed under the Emergency Steel Loan Guarantee Program
or that any facility will be sufficient for the Company's needs.

Geneva Steel's steel mill is located in Vineyard, Utah. The
Company's facilities can produce steel plate, hot-rolled coil,
pipe and slabs for sale primarily in the western, central and
southeastern United States.


GENSYM CORP: Posts Improved First Quarter 2002 Financial Results
----------------------------------------------------------------
Gensym Corporation (OTC Bulletin Board: GNSM), a leading
provider of software and services for expert operations
management, reported revenues of $4.3 million and net income of
$.5 million for the quarter ended March 31, 2002. In the first
quarter of 2001, Gensym had revenues of $5.4 million and a net
loss of $2.2 million.

At March 31, 2002, Gensym Corp.'s balance sheet shows a working
capital deficit of about $1.2 million. Its total shareholders'
equity swings-up to $37,000 from a deficit of $436,000 at
December 31, 2001.

"I am pleased to report a profit for the quarter just ended.
This is an excellent start to the year and consistent with our
plans for 2002," said Lowell Hawkinson, Gensym's chairman,
president and CEO. "By the end of the fourth quarter of 2001, we
had completed the restructuring of the company. Now we are
moving forward on the first phase of a partner-centric strategic
plan that we expect will lead to future growth.

"In early April, we held a very successful Gensym User's Group
meeting that featured a keynote talk by George Brown of Intel as
well as twenty other user presentations. We also demonstrated
the latest versions of our products, all of which had been
released in the first quarter of this year. In general, we have
been working hard to rejuvenate our ties with our customers,
getting input from them on how to continue to enhance our G2 and
G2-based products. Gensym's decision to focus on our existing
base of end users and partners and on our established products
continues to meet with a positive response from the market.

"Looking ahead," Mr. Hawkinson continued, "we anticipate
operating profitably in the remainder of 2002, as we had
indicated earlier. The Company's balance of cash and marketable
securities as of March 31, 2002 was approximately $3 million,
compared to $2 million on December 31, 2001. The Company has no
outstanding debt."

Gensym Corporation -- http://www.gensym.com-- is a provider of  
software products and services that enable organizations to
automate aspects of their operations that have historically
required the direct attention of human experts. Gensym's product
and service offerings are all based on or relate to Gensym's
flagship product G2, which can emulate the reasoning of human
experts as they assess, diagnose, and respond to unusual
operating situations or as they seek to optimize operations.

With G2, organizations in manufacturing, communications,
transportation, aerospace, and government maximize the
performance and availability of their operations. For example,
Fortune 1000 manufacturers such as ExxonMobil, DuPont, LaFarge,
Eli Lilly, and Seagate use G2 to help operators detect problems
early and to provide advice that avoids off-specification
production and unexpected shutdowns. Manufacturers and
government agencies use G2 to optimize their supply chain and
logistics operations. And communications companies such as AT&T,
Ericsson Wireless, and Nokia use G2 to troubleshoot network
faults so that network availability and service levels are
maximized. Gensym has numerous partners who can help meet the
specific needs of customers. Gensym and its partners deliver a
range of services, including training, software support,
application consulting and complete solutions. Through partners
and through its direct sales force, Gensym serves customers
worldwide.


GLOBIX CORPORATION: Court Okays Milberg Weiss as Special Counsel
----------------------------------------------------------------
Globix Corporation and its affiliates debtors obtain approval
from the U.S. Bankruptcy Court for the District of Delaware to
employ Milberg Weiss Berchad Hynes & Lerach as their special
corporate counsel to assist them in their continuing business
concerns.

Under this Engagement, Milberg Weiss will be required to render
these services:

     i) representation on such matters of securities, corporate
        and litigation law as the Debtors shall desire, from
        time to time; and

    ii) representation of Globix and certain of its directors
        and executive officers in purported class actions filed
        against Globix and such individuals by persons and
        entities who purchased or otherwise acquired Globix
        securities.

The Debtors agree to pay Milberg Weiss on an hourly basis. The
professionals currently employed in this representation and
their hourly rates are:

          David J. Berchad     $615
          Arnold N. Bressler   $495
          Benjamin Kaufman     $395
          Samuel H. Rudman     $360
          Diane Phillips       $340
          Wai Y. Chan          $300
          David B. Manno       $265

Globix Corporation, a leading full-service provider of Internet
solutions to businesses, filed for chapter 11 protection on
March 01, 2002. Jay Goffman, Esq. and Gregg M. Galardi, Esq. at
Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, it listed $524,149,000 in total
assets and $715,681,000 in total debts.


GOLFGEAR: Good Swartz Brown Expresses Going Concern Doubts
----------------------------------------------------------
Golfgear designs, develops markets golf clubs and related golf
products.  The Company utilizes its proprietary forged face
insert technology to offer a full line of golf equipment.  The
Company's patent portfolio with respect to insert technology is
the largest and most comprehensive in the golf industry, with
eight domestic and two foreign patents issued related to forged
face insert technology.  These patents incorporate a wide
variety of forged face insert materials, including titanium,
beryllium copper, stainless steel, carbon steel, aluminum, and
related alloys thereof, and include technology relating to
varying the face thickness of an insert.  The Company is
considering various legal responses to the recent introduction
of potentially infringing products by several of  the Company's
competitors.

The Company operates in one business segment.  It sells its
products to customers and distributors in the United States, the
Far East and Europe.

For the year ended December 31, 2001, sales to customers in the
United States, the Far East and  Europe were $1,635,065 (76%),
$414,765 (20%) and $93,541 (4%), respectively.  For the year
ended December 31, 2000, sales to customers in the United States
and the Far East were $2,480,596 (78%) and $714,014 (22%),
respectively.

During the year ended December 31, 2001, six customers accounted
for $960,320 (45%) of total sales,  and one such customer
accounted for $102,000 (30%) of net accounts receivable at
December 31, 2001.  During the year ended December 31, 2000,
three customers accounted for $1,666,284 (52%) of total sales,
and two such customers accounted for $237,497 (48%) of net
accounts receivable at December  31, 2000.

The Company is attempting to increase revenues through various
means, including expanding brands and product offerings, new
marketing programs, and possibly direct marketing to customers,
subject to the availability of operating working capital
resources.  To the extent that the Company is unable to increase
revenues in 2002, the Company's liquidity and ability to
continue to conduct operations  may be impaired.

Sales decreased to $2,143,371 in 2001 from $3,194,610 in 2000, a
decrease of $1,051,239, or 32.9%.  A significant portion of this
decrease in sales was to the Company's major customers and
distributors.  Sales decreased in 2002 as compared to 2001 as a
result of inclement weather in the early part of the season, a
general slowdown in the economy, and the terrorist attacks of
September 11, 2001.  In order to attempt to increase sales, the
Company will require additional capital to fund increased sales
and marketing activities, as well increased inventory levels.

Gross profit decreased to $937,762 in 2001 from $1,505,416 in
2000, and decreased as a percentage of sales to 43.8% in 2001
from 47.1% in 2000.  The decrease in gross profit in 2001 as
compared to 2000 was due to reduced sales.  The decrease in
gross profit margin in 2001 as compared to 2000 was due to
decreased sales and the inability of the Company to take
advantage of volume purchase pricing and  long lead time
shipping costs.

Net loss was $1,016,981 in 2001, as compared to a net loss of
$962,256 for 2000.

Good Swartz Brown & Berns LLP of Los Angeles, California, in its
April 4, 2002, Auditors Report has stated that the Company has
incurred recurring operating losses and requires additional
financing to continue operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.


HOMELIFE CORP: Gets Last and Final Plan Exclusivity Extension
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Homelife Corporation and its debtor-affiliates
obtained an extension of their exclusive periods.  The Court
gives the Debtors until June 10, 2002 the exclusive right to
file their plan of reorganization and until August 12, 2002 to
solicit acceptances of that Plan.

The Honorable Judge John C. Akard adds that the Court will not
grant further exclusivity extensions in these cases.

Privately-held HomeLife shut down all of its 128 retail
locations before it filed for chapter 11 bankruptcy protection
on July 16, 2001 in the U.S. Bankruptcy Court for the District
of Delaware.  The Debtors listed both assets and liabilities of
over $100 million each in its petition. Laura Davis Jones, Esq.
at Pachulski, Stang, Ziehl, et al represents the Debtors in
their restructuring efforts.


HOULIHAN'S RESTAURANTS: Seeks to Extend Exclusivity to July 21
--------------------------------------------------------------
Houlihan's Restaurants, Inc., along with its debtor-affiliates,
ask the U.S. Bankruptcy Court for the Western District of
Missouri to extend their exclusive periods to file a plan and to
solicit acceptances of that plan.

The Debtors assure the Court that they have been negotiating
with their various constituencies regarding a consensual plan of
reorganization since the petition date. The Debtors hope to
arrive a consensual plan by July 21, 2002, the requested
exclusivity plan filing period. The Debtors also ask for an
extension on their exclusive period to solicit acceptances on
this plan through September 29, 2002.

The Debtors add that this motion is not filed to delay the
proceedings but to permit them the opportunity to propose a
viable plan and submit a comprehensive disclosure statement.

Houlihan's Restaurants, Inc. filed for chapter 11 protection
together with affiliates on January 23, 2002. Cynthia Dillard
Parres, Esq. and Laurence M. Frazen, Esq. at Bryan, Cave LLP
represent the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
estimated debts and assets of more than $100 million.


IFR SYSTEMS: Testco Offers to Acquire All Outstanding Shares
------------------------------------------------------------
IFR Systems, Inc. has filed a statement with the Securities &
Exchange Commission relating to the offer by Testco Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of
Aeroflex Incorporated, to purchase all of the outstanding shares
of common stock and the associated Rights, at a purchase price
of $1.35 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Purchaser's Offer
to Purchase, dated April 19, 2002, and in the related Letter of
Transmittal.

The Offer is described in a Tender Offer Statement on Schedule
TO, filed by Aeroflex and the Purchaser with the Securities and
Exchange Commission on April 19, 2002. The Offer is being made
in accordance with the Agreement and Plan of Merger, dated April
13, 2002, between Aeroflex, the Purchaser and the Company. The
Merger Agreement provides that, subject to the satisfaction or
waiver of certain conditions, following completion of the Offer,
and in accordance with the General Corporation Law of the State
of Delaware, the Purchaser will be merged with and into the
Company. Following the consummation of the Merger, the Company
will continue as the surviving corporation and will be a wholly
owned subsidiary of Aeroflex. At the effective time of
the Merger, each issued and outstanding Share (other than Shares
owned by Aeroflex, the Purchaser, any of their respective
subsidiaries or the Company, which will be cancelled, and
Shares, if any, held by stockholders who did not vote in favor
of the Merger Agreement and who comply with all of the
relevant provisions of Section 262 of the DGCL relating to
dissenters' rights of appraisal) will be converted into the
right to receive $1.35 in cash or any greater amount per Share
paid pursuant to the Offer.

As previously reported on April 23, 2002 in Troubled Company
Reporter, Aeroflex Incorporated (Nasdaq Symbol: ARXX) commenced
a tender offer for all shares of IFR Systems, Inc. (Nasdaq
Symbol:IFRS), for $1.35 net per share in cash. The tender offer
is pursuant to the previously announced definitive agreement,
which was approved by the boards of directors of both Aeroflex
and IFR.

Upon any acceptance for purchase of IFR shares in the tender
offer, Aeroflex will make a loan to IFR in the amount of $48.8
million to repay IFR's bank indebtedness of approximately $84
million, including interest. IFR is currently in default under
the terms of its bank indebtedness. Following the tender offer,
it is expected that there will be a merger in which all
remaining shares of IFR will be converted into the right to
receive the same cash price of $1.35 per share in accordance
with the agreement. The entire transaction is valued at
approximately $60 million.

The consummation of the tender offer is conditioned on receipt
of 50.1% of IFR's then outstanding shares on a fully diluted
basis. The tender offer and the other transactions contemplated
by the agreement are also subject to customary conditions, as
well as the continued forbearance of IFR's bank lenders and the
discharge of IFR's obligations under its credit agreement.


IT GROUP: Court Approves Skadden Arps' Engagement as Attorneys
--------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates obtained Court
approval, authorizing each of them to employ and retain Skadden
Arps Meagher & Flom LLP as their attorneys under a general
retainer to perform the legal services that will be necessary
during their chapter 11 cases.

Specifically, Skadden will:

A. advise the Debtors with respect to their powers and duties as
     debtors and debtors-in-possession in the continued
     management and operation of their businesses and
     properties;

B. attend meetings and negotiate with representatives of
     creditors and other parties in interest and advise and
     consult on the conduct of the chapter 11 cases, including
     all of the legal and administrative requirements of
     operating in chapter 11;

C. take all necessary action to protect and preserve the
     Debtors' estates, including the prosecution of actions on
     their behalf, the defense of any actions commenced against
     those estates, negotiations concerning all litigation in
     which the Debtors may be involved and objections to claims
     filed against the estates;

D. prepare on behalf of the Debtors all motions, applications,
     answers, orders, reports and papers necessary to the
     administration of the estates;

E. negotiate and prepare on the Debtors' behalf plan(s) of
     reorganization, disclosure statement and all related
     agreements and documents and take any necessary action on
     behalf of the Debtors to obtain confirmation of such
     plan(s);

F. advise the Debtors in connection with any sale of assets;

G. appear before this Court, any appellate courts, and the U.S.
     Trustee, and protect the interests of the Debtors' estates
     before such courts and the U.S. Trustee; and

H. perform all other necessary legal services and provide all
     other necessary legal advice to the Debtors in connection
     with these chapter 11 cases.

Based upon the Engagement Agreement, the Firm's bundled
rate structure will apply to these cases. Skadden Arps will also
continue to charge the Debtors for all other services provided
and for other charges and disbursements incurred in the
rendition of services. Presently, the hourly rates under the
bundled rate structure are:

      Partners                                $480-$695
      Counsel and Associates                  $230-$470
      Legal Assistants and Support Staff      $ 80-160
(IT Group Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


INTEGRATED HEALTH: Assuming South Carolina Driftwood Lease
----------------------------------------------------------
Pursuant to sections 105(a) and 365 of the Bankruptcy Code and
Rule 6006 of the Bankruptcy Rules, the Court has granted
Integrated Health Services, Inc. and its debtor-affiliates'
motion for assumption of the Driftwood Lease, nunc pro tunc to
December 1, 2001.  The Lease relates to  non-residential real
property and improvements comprising the skilled nursing
facility known as Driftwood on the Ashley, located at 2375 Baker
Hospital Boulevard, Charleston, South Carolina. IHS-Driftwood is
the tenant under the lease with Driftwood Health Care Managers,
Inc., as Landlord.

The Facility's EBITDA for the year 2001 was $1,113,053.
Furthermore, the Facility's revenue has steadily increased since
the year 2000 from an amount of $7,005,282.00 for the year 2000
to $7,389,335.00 during the year 2001, and is projected to
increase to approximately $7,514,519 for the year 2002.

Notwithstanding the Facility's positive financial performance,
the rent payable under the Existing Lease was above the market
rate. Accordingly, several months ago, the Debtors and the
Landlord commenced to re-negotiate the Existing Lease. As a
result, the Debtors sought a rent concession that would render
the rent under the Existing Lease marked to the current market.

The Debtors and the Landlord then negotiated and agreed to and
executed the "Amendment to Lease," dated as of December 1, 2001.
The rent payable under the Driftwood Lease for the two-year
period beginning December 1, 2001, is $735,000 per annum. The
rent reduction represents a savings to the Debtors' estates
totaling $78,000 per annum.

In consideration of the aforementioned rent concession, the
Debtors then agreed to assume the Driftwood Lease, to affirm the
guaranty originally associated with the Existing Lease, and to
exercise their first five year renewa1 option which extends the
term of the Driftwood Lease to June 30, 2007.

The Debtors are convinced that the Existing Lease is a valuable
component of the Debtors' estates and assumption of it is
an exercise of sound business judgment. (Integrated Health
Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


INTIRA CORP: Wants Court to Further Extend Lease Decision Period
----------------------------------------------------------------
Intira Corporation asks the U.S. Bankruptcy Court for the
District of Delaware to further extend its time to elect whether
to assume, assume and assign, or reject unexpired nonresidential
real property leases until the earlier of May 30, 2002 or the
Effective Date of the Company's Chapter 11 Plan.

The Court recently approved the Sale of substantially all of the
Debtor's assets to divine, Inc.  divine is still in the process
of negotiating the Leases and continues to use the relevant
premises as the Debtor's remaining assets and operations are
being administered. If the Plan is confirmed, the Debtor adds,
such unexpired leases of nonresidential real property that have
not been assumed or rejected by the Debtor will be deemed
rejected as of the Effective Date.

Intira Corporation, a pioneer and industry leader in
netsourcing, outsourcing of information technology and network
infrastructure used to support internet or private network-based
applications. The Company filed for chapter 11 protection on
July 30, 2001. Laura Davis Jones at Pachulski Stang Ziehl Young
& Jones P.C. represents the Debtors.  When the company filed for
protection from its creditors, it listed $112,970,000 in assets
and $152,700,000 in debt.


JAM JOE: Debtors' Exclusive Period Intact through Sept. 30
----------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Jam Joe, LLC and its debtor-affiliates obtained an
extension of their exclusive periods.  The Court gives the
Debtors until September 30, 2002 the exclusive right to file
their plan of reorganization and until October 31, 2002 to
solicit acceptances of that Plan.

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


KAISER ALUMINUM: Wants More Time to Remove Actions Until Nov. 12
----------------------------------------------------------------
According to Paul N. Heath, Esq., at Richards, Layton & Finger
in Wilmington, Delaware, Kaiser Aluminum & Chemical Corporation,
has been named a defendant in tens of thousands of product
liability lawsuits relating to asbestos. In addition, as of the
petition date, the Debtors were parties to numerous non-asbestos
related civil actions pending in multiple courts and tribunals.

The Debtors ask for an extension of the period within which they
may remove those lawsuits to the District of Delaware for
further litigation.  The Debtors ask that their removal period
be extended to the later of November 12, 2002, or 30 days after
the entry of an order terminating the automatic stay for any
particular action sought to be removed.

Due to the number and complexity of the actions, the Debtors
require time to determine, which, if any, of the actions should
be removed, and, if appropriate, which should be transferred to
this District. Mr. Heath submits that the relief requested will
protect the Debtors' valuable right economically to adjudicate
lawsuits under Bankruptcy Code Section 1452 if the circumstances
warrant removal. Absent the relief requested, the potential
consolidation of the Debtors' affairs into one court may be
frustrated and the Debtors may be forced to address these claims
and proceedings in a piecemeal fashion to the detriment of their
creditors.

Mr. Heath assures the Court that permitting such an extension
will not prejudice the plaintiffs in the stayed actions because
the parties may not prosecute the actions without relief from
the automatic stay. Furthermore, nothing herein will prejudice
any party to an action that the Debtors seek to remove from
pursuing remand under Bankruptcy Code Section 1452(b).

A hearing on the motion is scheduled on May 21, 2002. By
application of Local Rule 9006-2, the Debtors' deadline to
remove actions automatically extends through the conclusion of
that hearing. (Kaiser Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


KMART: Deutsche Bank Buys Burlington's Claim for 31.5% of Face
--------------------------------------------------------------
Burlington Industries, Inc., advises parties-in-interest in its
chapter 11 cases pending before the U.S. Bankruptcy Court for
the District of Delaware that it signed a deal it sell its
$1,020,304 general unsecured claim against Kmart Corp. for
31.50% of the face value of the claim, or $321,396, to Deutsche
Bank Securities, Inc.  

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
advises the Delaware Bankruptcy Court that Burlington's lenders
-- Chase Manhattan Bank and JPMorgan Chase Bank -- consent to
the sale and the release of their lien on the Kmart Claim.  


KMART: Hearing on Exclusive Period Extension Set for July 24
------------------------------------------------------------
In a bridge order, Judge Sonderby schedules the hearing on Kmart
Corporation and its debtor-affiliates' Motion to extend their
Exclusive Periods to July 24, 2002 at 11:00 a.m.  Accordingly,
Judge Sonderby extends the Plan Proposal period to and including
August 7, 2002 and the Solicitation Period to and including
October 4, 2002.

As previously reported, Kmart Corporation and its 37 debtor-
affiliates asked the Court to extend their exclusive periods to
file and solicit acceptances of plan through the critical fourth
quarter holiday sale season. The Debtors ask the Court to extend
its exclusive period in which to file a plan of reorganization
until March 31, 2003 and asks that the deadline for soliciting
creditors' acceptances of that plan run through June 30, 2003.
(Kmart Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


KMART CORP: Rejects Prepetition Contracts with L.A. Darling Co.
---------------------------------------------------------------
Kmart Corporation and its debtor-affiliates sought and obtained
the Court's authority to reject certain unexpired pre-petition
agreements with L.A. Darling Company, pursuant to which L.A.
Darling agreed to sell to Kmart certain fixtures, shelving and
other products used in Kmart's in-store displays of merchandise,
effective as of April 12, 2002.

The Debtors emphasize they are not rejecting any similar
agreements with L.A. Darling that were entered into after the
Petition Date, as of this time.

Mark A. McDermott, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, relates that Kmart has been
purchasing Fixtures from L.A. Darling since 1996 for the
construction of new stores and remodeling of existing stores.  
"Majority of these Fixtures are manufactured specifically for
use in Kmart stores," Mr. McDermott says.

The Agreements are comprised of a series of minimum purchase
contracts between Kmart and L.A. Darling.  Under each Agreement,
Mr. McDermott explains, Kmart agreed to purchase from L.A.
Darling a specific amount of Fixtures at a set price over a
specified period of time, usually 12 months.  During this
period, Kmart must submit purchase orders for certain amounts of
Fixtures specified in the Agreements.  If, by the end of the
period, Kmart does not deplete the inventory of Fixtures
requested under the Agreement, the parties may negotiate the
disposition of the Fixtures and any changes to the prices of the
Fixtures.  "On many occasions, the parties have continued
Agreements where Kmart did not deplete all of the Fixtures in
the specified time period," Mr. McDermott tells the Court.  In
addition, Mr. McDermott continues, the parties entered into
additional Agreements to address special needs for Fixtures that
arose from time to time.

According to Mr. McDermott, the Debtors rejected the Agreements
because Kmart determined it does not need the Fixtures ordered
but not yet delivered under the Agreements.  The Debtors saved
an estimated $9,271,552 from the rejection of the unexpired pre-
petition Agreements.  "While the Debtors intend to continue
purchasing Fixtures from L.A. Darling on a post-petition basis,
they expect that, in the future, they will need to purchase
Fixtures that are different from, and less expensive than, those
available under the Agreements," Mr. McDermott says.

Accordingly, the Court allows L.A. Darling to dispose of the
Fixtures. (Kmart Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LODGIAN INC: Resolves Claims Dispute with Columbia Properties
-------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates sought and obtained
entry of an order approving a stipulation with Columbia
Properties Richmond Ltd.

According to Adam C. Rogoff, Esq., at Cadwalader Wickersham &
Taft in New York, New York, on November 18, 2000, the Debtors,
as seller, and Columbia (as the assignee of Columbia Sussex
Corporation), as purchaser, entered into a Sale-Purchase
Agreement with Columbia pursuant to which the Debtors agreed to
sell a hotel property to Columbia located in Richmond, Virginia.
Pursuant to the Agreement, the Debtors remained as the manager
of the construction project until the delivery date upon
completion of the construction. As provided under the Purchase
Agreement, on December 15, 2000, the Debtors, as construction
manager, and Columbia, as owner, entered into a construction
management agreement.

Mr. Rogoff informs the Court that one material item of
compensation due to the Debtors under the Agreement was a
management fee equal to the amount by which construction costs
were under $28,500,000. The Agreement also provided for
liquidated damages to the extent that the completed Hotel was
delivered to Columbia after the targeted completion date of May
1, 2001.  Liquidated damages were to be $8,000 per day. Further,
the Agreement also provided that the targeted completion date
could be delayed to June 1, 2001 for "causes beyond the control
of or not foreseen by" the Debtors.

Mr. Rogoff submits that a number of issues have arisen with
respect to the respective obligations of the Debtors and
Columbia under the Agreement. The parties dispute the amount of
certain change-order and post-delivery adjustments. In addition,
the time of the delivery of the hotel from the Debtors to
Columbia was delayed. The parties dispute whether the delay was
beyond the control of the Debtors or was foreseeable.  
Accordingly, they dispute the treatment under the Agreement of
the costs and damages alleged to have arisen due to the delayed
delivery.

Both Debtors and Columbia agree that the Debtors completed the
Hotel at a cost $1,656,488.66 under $28,500,000 which entitles
the Debtors to a management fee of up to $1,656,488.66, subject
to certain deductions. Due to numerous factors, however, Mr.
Rogoff states that the Debtors did not deliver the completed
Hotel prior to the targeted delivery date of May 1, 2001. The
Debtors assert that these factors were "causes beyond the
control of or not foreseen by" the Debtors, thereby justifying a
delay in the targeted delivery date from May 1 to June 1, 2001.
The Debtors also assert that the completion date occurred no
later than June 25, 2002. Accordingly, the Debtors believe that
the delivery of the Hotel after the targeted delivery date
should effect a reduction in the purchase price by no more than
$200,000.

In contrast, Columbia asserts that the factors for the delay
were foreseeable and within the Debtors' control. Because
Columbia further asserts that the delivery date occurred no
earlier than July 31, 2001, it claims that the management fee
should be reduced by liquidated damages of $736,000. In addition
to the disputes regarding fixing the dates for each of the
targeted and actual delivery dates, Mr. Rogoff maintains that
the amount of the management fees also are subject to claims
relating to the impact of a change order and to various
miscellaneous credit items under the Agreement.  These claims
and credit items do not exceed $21,800 in the aggregate. Based
upon the foregoing disputes, the Debtors assert that it is owed
at least $1,376,236.66 from Columbia, whereas Columbia asserts
that it owes Lodgian Richmond an amount not greater than
$818,436.66.

To resolve these issues in an efficient and cost-effective
manner, Mr. Rogoff tells the Court that the parties entered into
negotiations to reach a comprehensive settlement of the disputes
relating to the Agreement. As a result of their negotiations,
Columbia and the Debtors negotiated a settlement to resolve
these disputes. The Debtors and Columbia now agree to settle the
disputes between them regarding the completion date, furniture,
fixtures, and any change order issues on the terms set forth in
the Stipulation.  This is to avoid the further risk, expense,
uncertainty, inconvenience and distraction of litigation, and to
minimize the losses incurred by Lodgian's estates if this matter
continues unresolved.  If the matter continues unresolved it
will consume the time and attention of the debtors.  It also
gives the risk of a less satisfactory outcome in litigation.

The salient terms of the Stipulation are:

A. Upon approval of the Stipulation, and on receipt by the
   Debtors of the Settlement Payment from Columbia, the
   Stipulation provides a complete release and discharge of
   any disputed amounts due under the Agreement, of all of the
   respective obligations of each party under the Agreement and
   resolves all disputes relating to the Agreement, including,
   but not limited to:

   a. resolving Columbia's alleged right to pursue damages under
      the Agreement and

   b. resolving the Debtors' alleged right to pursue payment of
      the full contractual amount set forth in the Agreement.

B. Upon approval of the stipulation, Columbia pays the Debtors
   $1,154,436.66 by wire transfer.

The Debtors submit that approval of the stipulation is in the
best interests of the Debtors' estates, given the uncertainty of
success in the litigation of the Agreement claims coupled with
the probability of additional litigation costs for the estates.
(Lodgian Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


LOGISTICS MGT: Pursuing Actions to Recoup Counterclaims vs. GECC
----------------------------------------------------------------
Logistics Management Resources, Inc. (OTCBB:LMRI) issued a
statement in the matter of G.E. Capital Corporation vs. the
Company:

     G.E. Capital Corporation commenced an action against the
Company on October 1, 2001 in the U.S. District Court for the
Western District of Kentucky, Louisville Division, alleging a
breach of the Company's obligations under a Restructuring
Agreement executed by G.E. Capital Corporation, the Company, its
subsidiaries and certain affiliates on November 28, 2000. The
agreement between the Company and G.E. Capital related to the
restructuring of certain obligations to G.E. Capital in
connection with a revolving credit facility and equipment loans
extended to the Company's operating subsidiaries. The operating
subsidiaries filed for Chapter 11 Bankruptcy in November of
2000. The Chapter 11 was subsequently converted to a Chapter 7
by the Court appointed Trustee.

     The Company has filed a responsive pleading asserting
substantial counterclaims. On January 4, 2002 G.E. Capital made
a motion to dismiss the Company's counterclaims and on March 1,
2002 the Company opposed that motion and filed a cross-motion to
dismiss the complaint filed by G.E. Capital, or, the
alternative, to stay this action pending the resolution of
certain proceedings pending in the U.S. Bankruptcy Court for the
Middle District of Florida, which involve certain subsidiaries
of the Company. The Company intends to aggressively defend
against this action and to seek recovery under its counterclaims
against G.E. Capital.

Logistics Management Resources, Inc. is a holding company with
its headquarters in Louisville, Kentucky. The Company's
operating revenues are derived from its wholly owned subsidiary,
Interstate University, Inc. a driver training school
headquartered in Evansville, Indiana. The Company continues to
investigate acquisition and merger opportunities.


MATLACK SYSTEMS: Wants Exclusive Period Extended through June 24
----------------------------------------------------------------
For the fifth time, Matlack Systems, Inc. and its debtor-
affiliates ask the U.S. Bankruptcy Court for the District of
Delaware to extend their exclusive periods to file a plan and
solicit acceptances of that plan.  The Debtors want to extend
their exclusive plan filing period through June 24, 2002 and
their exclusive right to solicit acceptances of that plan
through August 26, 2002.

After undertaking all necessary options to reorganize, the
Debtors realize that winding down will maximize the estates'
returns. Since the initiation of these cases, the Debtors and
their advisors have devoted substantial attention to:

     i) handling countless operational issues, including
        responding to creditor, vendor, dealer, customer and
        employee concerns and questions;

    ii) continuing to assess the prospect for a sale of all the
        Debtors assets; and

   iii) continuing the claims administration process, in which
        thousands of claims filed against the Debtors and listed
        on their schedules of liabilities are being reviewed and
        analyzed.

The Debtors assert that an extension is based upon a realistic
view of what steps must still be taken to finalize a plan of
reorganization. The Debtors tell the Court that they are
actively working with their own professionals, the Creditors'
Committee and their prepetition lenders to negotiate a
reorganized plan.

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


MICRON TECHNOLOGY: Hynix Board Nixes Proposed Restructuring Plan
----------------------------------------------------------------
Micron Technology, Inc. (NYSE:MU) received notification that the
Board of Directors of Hynix Semiconductor, Inc., has decided not
to accept the restructuring plan proposed by the Hynix
Creditors' Council. As a result, the previously announced
Memorandum of Understanding signed by Micron, Hynix and Hynix
Creditors' Council representatives for the sale of Hynix's
semiconductor memory operations to Micron did not become
effective. The effectiveness of the MOU was subject to approval
by the Boards of Directors of Hynix and Micron and the Hynix
Council of Creditors by 6 p.m., Korea time, on April 30, 2002.

Micron Technology, Inc., and its subsidiaries manufacture and
market DRAMs, very fast SRAMs, Flash Memory, other semiconductor
components, and memory modules. Micron's common stock is traded
on the New York Stock Exchange (NYSE) under the MU symbol. To
learn more about Micron Technology, Inc., visit the company's
Web site at http://www.micron.com

                         *   *   *

As reported on April 25, 2002 in Troubled Company Reporter,
Standard & Poor's placed its 'BB-' corporate credit rating on
Micron Technology Inc. on CreditWatch with negative
implications, reflecting the company's discussions of a possible
acquisition of the memory operations of Korea-based Hynix
Semiconductor Inc.

The ratings on Boise, Idaho-based Micron Technology Inc. reflect
its position in the highly volatile semiconductor memory market,
as well as its conservative financial policies. Micron is
expected to retain a strong position in the industry through the
course of the business cycle. Still, industry conditions are
very challenging. Revenues of $646 million in the February 2002
quarter were only 28% of the cyclical peak of $2.3 billion set
in August 2000. Unit demand normally rises 70%-100% annually,
offset by extremely aggressive pricing. The company reported a
net loss of $30 million for the February 2002 quarter, compared
to net income of $736 million in the August 2000 peak quarter.

Still, due to conservative capitalization, Micron's debt-
protection measures have remained good for the rating level
through the business cycle, with an historical peak debt below
30% of capital. Micron had about $460 million of debt at Feb.
28, 2002, while cash balances totaled $1.5 billion.


MILLENIUM SEACARRIERS: Gets OK to Contract Deloitte & Touche
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave its stamp of approval to Millenium Seacarriers, Inc. and
its debtor-affiliates to retain and employ Deloitte & Touche as
their independent accountants and auditors, nunc pro tunc to
January 25, 2002.

As accountants and auditors Deloitte & Touche will:

     i) audit and report the annual financial statements of the
        Debtors;

    ii) perform unaudited reviews of interim financial
        statements;

   iii) provide accounting advice on acquisitions/dispositions;

    iv) render accounting and other assistance in connection
        with reports requested by the Court, including monthly
        operating reports, schedules of assets and liabilities,
        statements of financial affairs, and such other reports
        that may be requested of the Debtors by the U.S. Trustee
        or any parties in interest;

     v) assist with such matters as the Debtor, its attorneys,
        or financial advisors may from time to time request,
        including assisting with cash flow projections,
        assisting with the refinements of the Debtors' cash
        management and cash flow forecasting process and
        monitoring of actual cash flow versus projections,
        reviewing prepetition and postpetition payments,
        assisting with assessment of executory contracts
        including assumption versus rejection considerations,
        and assisting with evaluating and reconciling claims
        asserted including potential reclamation claims.

Deloitte & Touche will be compensated at its regular hourly
rates:

          a) Partners          $450 to $625
          b) Senior Managers   $400 to $530
          c) Managers          $340 to $460
          d) Staff             $240 to $340

Millenium Seacarriers, Inc. is a holding company of
international shipping company subsidiaries engaged in the
transportation of cargo around the world on vessels acquired and
operated through its subsidiaries. The Company filed for chapter
11 protection on January 15, 2002 in Southern District of New
York. Christopher F. Graham, Esq., at Thacher Proffitt & Wood
represent the Debtors in their restructuring effort. When the
Company filed for protection from its creditors, it listed
$85,078,831 in assets and $112,874,053 in liabilities.


MOBILE SERVICES: Market Share Concerns Prompt S&P's BB Ratings
--------------------------------------------------------------
On May 2, 2002, Standard & Poor's assigned its 'BB' corporate
credit rating to Los Angeles, California-based Mobile Services
Group Inc., parent of Mobile Storage Group Inc. Standard &
Poor's also assigned its 'BB' rating to Mobile Storage's $60
million secured revolving credit facility maturing 2007 and $140
million secured term loan maturing 2009, which are guaranteed by
Mobile Services. The outlook is stable.

Ratings on Mobile Services incorporate its relatively strong
financial profile for a transportation equipment lessor after
its intended IPO, offset by the company's relatively small, but
growing market share, within the niche portable storage
industry. Mobile Services provides portable storage solutions
through the rental and sale of portable storage containers,
over-the-road trailers, and portable office units in the U.S.
and U.K.

The new bank facilities are rated at the same level as the
corporate credit rating. The loans are secured by all the
company's assets. While the collateral is viewed favorably,
under Standard & Poor's bankruptcy scenario, a decline in value
could cause recovery by the secured lenders to be insufficient
if the facilities were fully drawn (there is no borrowing base).
The covenants are customary for facilities of this type.
Financial covenants include minimum EBITDA/interest; maximum
total debt/EBITDA, with an initial covenant of 3.5 times
(expected to be 2.7x pro forma for the recapitalization); and
minimum net worth.

Portable storage provides its customers a flexible, cost-
effective, and convenient alternative to permanent warehouse
space and self-storage sites. However, portable storage is a
relatively small niche segment of the large self-storage
business. Mobile Services, with a national presence, is one of
the larger participants in this fragmented industry, but still
has only a share of approximately 5%. The company has
approximately 75,000 customers across a broad range of
industries, including commercial service providers; construction
contractors; retail chains that utilize the units for seasonal
inventory; government and military entities; and a variety of
other industries. Like other transportation equipment leasing
sectors, this business has tended to generate strong and stable
cash flow, even in times of economic weakness. Mobile Services
has grown rapidly over the past several years, primarily through
acquisitions financed through debt, which had resulted in
relatively weak credit ratios. However, along with the
refinancing of the company's existing bank facilities, privately
held Mobile Services intends to complete an IPO, with proceeds
used to repay debt. As a result, the company's credit ratios
will improve significantly--with debt to capital expected to
decline to around 50% from close to 80%, a very strong level for
a transportation equipment lessor. The IPO will also aid Mobile
Services' financial flexibility, as it will open up potential
new sources of financing that it did not have access to as a
privately held company.

                           Outlook

Mobile Services' earnings and cash flow are expected to increase
over the next several years. This should allow it to continue
its acquisition strategy and/or to repurchase equity. As a
result, its credit ratios are expected to remain at levels
suitable for a transportation equipment lessor within the rating
category.

                          Rating List

                   Mobile Services Group Inc.

          - Corporate credit rating     BB/Stable/--

                   Mobile Storage Group Inc.

             - Senior secured debt*            BB
               (*Guaranteed by Mobile Services Group Inc.)


MUTUAL RISK: Reaches Agreement to Restructure $235MM Senior Debt
----------------------------------------------------------------
Mutual Risk Management Ltd. has reached an agreement in
principle to restructure its senior debt.

The principal amount of the debt is $235 million, comprised of
approximately $131 million owing under the Company's credit
facility and $104 million owing to holders of the Company's 9-
3/8% debentures. Under the proposed restructuring, the senior
debt holders would exchange their existing debt for preferred
stock and warrants to purchase 15% of the common stock of the
Company on a fully diluted basis as well as debt, preferred
stock and 80% of the common stock of the Company's subsidiary,
MRM Services Ltd.  MRM Services holds the Company's fee-based
businesses.

After the proposed restructuring, the Company's remaining
principal assets would be 20% of the common shares of MRM
Services and all of the common stock of its U.S. insurance
companies. These common shares will be subordinate to the debt
and preferred stock of MRM Services and the Company. The value
of the Company's investment in its U.S. insurance companies is
dependent on the outcome of the previously announced
rehabilitation proceedings. The restructuring is proposed to be
effected through a Scheme of Arrangement under Bermuda Law.

MRM Services comprises the following main subsidiaries:

     --  MRM Specialty Brokers Ltd.;

     --  MRM Global Captive Group Ltd. (including International
Advisory Services Ltd. and Shoreline Mutual Management);

     --  The IPC Companies;

     --  CRS Services, Inc.;

     --  Captive Resources, Inc.; and

     --  Mutual Trust Management Ltd.;

The Company is in the process of negotiating the sales of
Captive Resources, Inc. and Mutual Trust Management Ltd. These
companies are not expected to form part of ongoing operations.
The various options available in relation to CRS Services and
the IPC Companies continue to be evaluated.

The new management team of MRM Services will be headed by David
Ezekiel as Chief Executive Officer. Mr. Ezekiel will continue to
serve as President of both MRM Global Captive Group Ltd. and
International Advisory Services Ltd. Paul Scope, CEO of MRM
Specialty Brokers Ltd., and Richard Turner, President of CRS
Services, Inc., will also hold senior positions on the new
management team.

Commenting on the proposed plan, Mr. Ezekiel said "The proposed
restructuring will provide an opportunity for MRM Specialty
Brokers and MRM Global Captive Group to continue their strong
growth and profitability. Both entities will continue to operate
as autonomous and strong units independent of Mutual Risk's U.S.
insurance companies in rehabilitation."

The agreement in principle is not binding on the senior
creditors or Mutual Risk and remains subject to final
negotiation, regulatory approval and the approval of other
creditors.


NCS HEALTHCARE: Taps Brown Gibbons to Pursue Debt Workout Talks
---------------------------------------------------------------
NCS HealthCare, Inc. (OTC Bulletin Board: NCSS.OB) announced
financial results for its fiscal third quarter ended March 31,
2002.

For the three months ended March 31, 2002, revenues increased
5.8% to $163,816,000 from $154,890,000 recorded in the third
quarter of the previous fiscal year. Net loss for the quarter
was $1,323,000 as compared to net loss of $20,807,000 for the
fiscal third quarter of the previous year.

For the nine months ended March 31, 2002, revenues increased
2.5% to $483,360,000 from $471,373,000 recorded in the nine
months ended March 31, 2001. Net loss for the nine months ended
March 31, 2002 was $11,741,000 as compared to net loss of
$35,123,000 for the comparable period in the previous fiscal
year.

Kevin B. Shaw, President and Chief Executive Officer of NCS
commented, "Further operating efficiencies realized during the
quarter enabled us to offset lower reimbursement rates from
third party payers, leading to a meaningful improvement in the
Company's quarterly Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA). This has been
accomplished while NCS has continued to enhance its ability to
provide customers with timely information to help them reduce
pharmacy costs."

Mr. Shaw added, "NCS has also improved its use of working
capital, reducing net days sales outstanding from 52 days to 49
days in the last quarter. Inventories remained at historically
low levels and cash collected as a percentage of pharmacy
revenues remained strong. We are encouraged by the progress we
have made in operations, customer focus and working capital
management."

Gross margin for the three months ended March 31, 2002 was 16.1%
of revenues as compared to 16.3% of revenues for the previous
quarter. The decline in gross margin was due primarily to the
continued shift toward lower margin payer sources such as
Medicaid and third party insurance, and lower Medicaid and
insurance reimbursement levels. Medicaid and insurance revenues
accounted for 60.1% of revenues in the fiscal 2002 third quarter
versus 59.8% in the previous quarter and 58.5% in the third
quarter of fiscal 2001.

Selling, general and administrative expenses as a percent of
revenues declined to 13.2% for the fiscal 2002 third quarter as
compared to 15.5% of revenues during the previous quarter. This
improvement was due primarily to continued operating
efficiencies and lower bad debt expense. The improvement in bad
debt expense resulted from the implementation of front-end
processes targeted at improving collection rates.

Depreciation and amortization expense for the three months ended
March 31, 2002 was $3.3 million, as it was during the previous
quarter. Net interest expense decreased to $6.1 million for the
most recent quarter as compared to $6.5 million for the quarter
ended December 31, 2001 due primarily to lower interest rates.

The results for the three and nine month periods ended March 31,
2002 reflect the previously announced adoption of Statements of
Financial Accounting Standards (SFAS) No. 141, "Business
Combinations" and No. 142, "Goodwill and Other Intangible
Assets," which resulted in discontinuing the amortization of
goodwill effective July 1, 2001. As a result of the early
adoption of SFAS No. 142, net loss for the three and nine month
periods ended March 31, 2002 was reduced by $2.6 million and
$7.8 million, respectively. As required by SFAS No. 142, the
results for the three and nine month periods ended March 31,
2001 are as originally reported and include goodwill
amortization.

The Company early adopted SFAS No. 142 effective July 1, 2001.
Under SFAS No. 142, goodwill and other indefinite lived
intangible assets will no longer be amortized. Under this non-
amortization approach, goodwill and other indefinite lived
intangible assets will be reviewed for impairment using a fair
value based approach as of the beginning of the year in which
SFAS No. 142 is adopted. The Company was required to complete
the initial step of the transitional impairment test by December
31, 2001 and is required to complete the final step of the
transitional impairment test by the end of the current fiscal
year. Going forward, these assets will be tested for impairment
on an annual basis or upon the occurrence of certain triggering
events as defined by SFAS No. 142. Any impairment loss resulting
from the transitional impairment test will be recorded as a
cumulative effect of a change in accounting principle as of the
beginning of the current fiscal year.

The Company has completed the initial step of the transitional
impairment test, which indicates that the goodwill of the
Company is potentially impaired. The Company does expect that it
will be required to recognize an impairment loss as a result of
the adoption of SFAS No. 142. The amount of the impairment loss
is not known at this time; however, it could be material to the
Company's financial position.

The results for the three and nine month periods ended March 31,
2001 include 1) $10,043,000 of additional bad debt expense to
fully reserve for remaining accounts receivable of non-core and
non-strategic businesses exited during the previous twelve
months, 2) $1,034,000 of restructuring and other related charges
and 3) $2,106,000 in fixed asset impairment charges recorded in
accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long Lived Assets to be
Disposed Of."

As previously reported, net losses incurred during fiscal 2000
resulted in certain technical covenant defaults under the
Company's senior credit facility. The Company continues to make
all interest payments to its senior lenders in accordance with
the credit facility. The Company has elected to not make the
$2,875,000 interest payments due February 15 and August 15, 2001
and February 15, 2002 on its 5-3/4% Convertible Subordinated
Debentures due 2004. As a result of these non-payments, the
Company has received a formal Notice of Default and Acceleration
and Demand for Payment from the indenture trustee.

Brown, Gibbons, Lang & Company Securities, Inc., continues to
act as the Company's financial advisor in its continuing
discussions with the Company's senior lenders and with an ad hoc
committee of holders of the 5-3/4% Convertible Subordinated
Debentures due 2004, with respect to the defaults and to
restructuring options. BGL&Co. is also discussing various
strategic alternatives with third parties. No decision has been
made to enter into any transaction or as to what form any
transaction might take. NCS can give no assurance with respect
to the outcome of these discussions or negotiations.

NCS HealthCare, Inc. is a leading provider of pharmaceutical and
related services to long-term care facilities, including skilled
nursing centers, assisted living facilities and hospitals. NCS
serves approximately 209,000 residents of long-term care
facilities in 33 states and manages hospital pharmacies in 14
states.


NATIONAL ENERGY: Sets Annual Shareholders' Meeting for June 6
-------------------------------------------------------------
The annual meeting of shareholders of National Energy Group,
Inc., a Delaware corporation, will be held at the University
Amphitheater, Holiday Inn Select-Dallas Central, 10650 North
Central Expressway, Dallas, Texas 75231 at 9:00 a.m., Central
Time, on June 6, 2002, to consider and vote on the following
matters:

         1. To elect ____ members of the Board of Directors of
            the Company to hold office until the next annual
            meeting of shareholders or until their successors
            have been duly elected and qualified;

         2. To amend the Company's Certificate of Incorporation
            to effect a reduction in the aggregate number of
            shares of common stock the Company is authorized to
            issue from 100,000,000 shares to 15,000,000 shares
            (the "Charter Amendment");

         3. To consider and vote upon a proposal to ratify the
            selection of KPMG LLP as the Company's independent
            auditors for the current fiscal year ending
            December 31, 2002; and

         4. To transact such other business as may properly come
            before the meeting or any adjournments.

The Board of Directors has fixed the close of business on April
9, 2002 as the record date for determination of those
shareholders entitled to vote, and only shareholders of record
at the close of business on that date will be entitled to notice
of and to vote at the meeting.

National Energy Group, Inc., headquartered in Dallas, Texas, is
an independent energy company engaged in the acquisition,
exploration, exploitation, development and production of oil and
natural gas properties. The Company's core areas of operations
are located in major producing basins in Texas, Louisiana,
Oklahoma, and Arkansas. Operations have been focused in areas
where the Company has developed geological, geophysical and
engineering expertise in order to maximize the potential of its
core properties. The Company seeks to operate the properties in
which it owns an interest. This emphasis on control of
operations has enabled the Company to utilize its expertise to
reduce and control lease operating expenses in order to maximize
profit margins and production. The Company has recently
completed a successful reorganization. Pursuant to the
Bankruptcy Court Plan of Reorganization, the Company has become
a fifty percent interest holder in a limited liability company
into which it has contributed all of its oil and gas properties
and for which it will provide management services. At September
30, 2001, National Energy had a total shareholders' equity
deficit of about $84 million.


NATIONAL STEEL: Court Okays Ernst & Young as Debtors' Advisors
--------------------------------------------------------------
National Steel Corporation and its debtor-affiliates obtained
Court permission to retain Ernst & Young Capital Advisors LLC as
their financial and restructuring advisors.

Ernst & Young is expected to perform services such as:

  (i) advise the Debtors' management on its development of
      business plans, cash flow forecasts and financial
      projections;

(ii) advise the Debtors' management with respect to available
      capital restructuring and financing alternatives, advising
      with respect to the design, negotiation and implementation
      of alternative restructuring and transaction structures;

(iii) assist the Debtors in preparing schedules and statements
      of affairs and operating reports;

(iv) advise the Debtors' management in its preparation of
      financial information that may be required by the Debtors'
      creditors and other stakeholders, and in coordinating
      communications with the parties-in-interest and their
      respective advisors;

  (v) advise the Debtors' management in preparing for, meeting
      with and presenting information to parties-in-interest and
      their respective advisors, specifically the Debtors'
      senior lenders, other debt holders and potential sources
      of new financing and their respective advisors;

(vi) advise the Debtors' management with respect to the
      development of a Plan of Reorganization; and

(vii) other services as  may be requested from time to time by
      the Debtors or its counsel and agreed to by Ernst & Young.

As agreed between the Debtors and Ernst & Young, the firm will
be compensated as:

    (i) a monthly advisory fee of $200,000, starting on the
        effective date until the termination of the engagement;

   (ii) upon notice, a hearing and this Court's approval, at the
        completion of the services to be performed under the
        engagement and at the discretion of the Debtors, the
        Debtors may pay Ernst & Young an additional fee which
        represents the acknowledgement of any extraordinary
        services or benefit rendered by the firm.

In addition, the Debtors anticipate that they will also
reimburse Ernst & Young for its actual and necessary out-of-
pocket expenses incurred in connection with the services
provided. These expenses include travel costs, lodging, meals,
research, overnight mail and courier services.

As stated in the Debtors' motion, the monthly advisory fee and
the premium fee reflect a balance between a fixed monthly fee
and contingency amounts tied to the successful completion of the
Debtors' reorganization cases.  Ernst & Young will file interim
and final applications for allowance of its fees and expenses.  
The firm will also maintain time records in a streamlined or
summary format of services rendered by each professional and the
amount of time spent. (National Steel Bankruptcy News, Issue No.
6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NATIONSRENT INC: Exclusivity Extension Hearing Set for May 20
-------------------------------------------------------------
Neil B. Glassman, Esq., at the Bayard Firm in Wilmington,
Delaware, believes that an extension of NationsRent Inc., and
its debtor-affiliates' Exclusive filing period through June 30,
2002 and a corresponding 60-day extension of the Exclusive
Solicitation Period, through August 30, 2002, are more
appropriate based on the particular facts of these cases.

Mr. Glassman explains that the Committee recognizes an initial
request to extend the Exclusive Periods for four months is not
unusual in a case of this size and nature. Indeed, given that
the Debtors have yet to select a CEO and that the review and
analysis of the equipment leases will probably not be concluded
until at least the fall of this year, the Committee is aware
that the Debtors and their creditors must address significant
issues that can have material impact upon the formulation and
negotiation of a plan.

Mr. Glassman submits that the Committee objects to the requested
four months extension because the Final DIP Order imposes June
30, 2002, as the deadline for filing a plan.  One of the
conditions of the DIP Loan Documents is the filing of a plan of
reorganization by June 30, 2002, and the selection and retention
of a new CEO acceptable to the Bank Group by the same date.  As
noted in the Debtors' Motion, a new CEO has not yet been
selected -- let alone been retained.  In short, the Final DIP
Order and DIP Loan Documents require the filing of a plan of
reorganization by June 30, 2002, at the time a new CEO will be
coming on board purportedly to lead and direct the company.

The Committee is also concerned about the significant open
issues which must be addressed, combined with the Bank Group's
leverage over the Debtors through the Final DIP Order. The
Committee is extremely concerned that the Debtors will file a
plan on or before June 30, 2002 which will improperly place the
interests of the Bank Group over those of the unsecured
creditors. In particular, the Committee is concerned that the
Bank Group may be improperly pressuring the Debtors to file a
plan without affording the Debtors and their creditors a
reasonable opportunity to implement measures necessary to
maximize the value of the Debtors' businesses, thereby, allowing
the Bank Group to retain, at the expense of the unsecured
creditors, a disproportionate share of the value of the
reorganized entity.

Mr. Glassman admits that although it certainly has no desire to
let the Debtors' cases linger in Chapter 11, the Committee seeks
to negotiate a plan with both the Debtors and the Bank Group.
This would ensure that a fair and equitable plan of
reorganization is proposed to constituents and that the
interests of unsecured creditors are not prejudiced by the
filing of a plan that may be unfairly leveraged by the Bank
Group.

Mr. Glassman submits that under the circumstances of this case
any extension of the Exclusive Filing Period should be limited
to June 30, 2002, with a corresponding extension of the
Exclusive Solicitation Period through August 30, 2002.  Given
that the Debtors have essentially committed to filing a plan by
June 30, 2002, by virtue of the Final DIP Order, there is no
compelling basis for extending the Exclusive Periods.  Such an
extension will serve no useful purpose.

The Mr. Glassman and the Committee ask that the Court:

A. deny the Debtors' Motion as requested;

B. grant the Debtors an extension of their Exclusive Filing
   Period through and including June 30, 2002;

C. grant the Debtors an extension of the Exclusive Solicitation
   Period, through and including August 30, 2002;

D. expressly reserve the Committee's right to seek termination
   of the Exclusive Periods; and

E. grant such other and further relief as is just and proper.

                           *   *   *

The parties gathered for a hearing before Judge Walsh and agreed
to adjourn the hearing to decide the length of the Debtors'
Exclusive Periods to May 20, 2002 at 4:00 p.m.  Judge Walsh
ruled from the bench that the Debtors' Exclusive Period during
which to propose and file a plan of reorganization will remain
intact through conclusion of that hearing. (NationsRent
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


NET2000 COMMS: Seeks to Convert Case to Chapter 7 Liquidation
-------------------------------------------------------------
Net2000 Communications, Inc. and its debtor-affiliates wants to
convert their chapter 11 cases to liquidation proceedings under
chapter 7 of the U.S. Bankruptcy Code, effective May 31, 2002.

The Debtors tell the U.S. Bankruptcy Court for the District of
Delaware that since the consummation of the sale transaction
with Cavalier, they have been focused on winding down their
affairs and disposing any of their remaining assets.

The Debtors assert that they are eligible to be debtors under
chapter 7. Section 109 of the Bankruptcy Code provides that a
person may be a debtor under chapter 7 only if such person is
not:

     1) a railroad;

     2) a domestic insurance company, bank, savings bank,
        cooperative bank, savings and loan association, building
        and loan association, homestead association, a small
        business investment company licensed by the Small
        Business Administration under subsection (c) or (d) of
        section 301 of the Small Business Investment Act of
        1958, credit union, or industrial bank or similar
        institution which is an insured bank as defined in
        section 3(h) of the Federal Deposit Insurance Act; or

     3) a foreign insurance company, bank, savings bank,
        cooperative bank, savings and loan association, building
        and loan association, homestead association, or credit
        union, engaged in such business in the United States.

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


OBSIDIAN ENTERPRISES: Completes Debt Conversion & Refinancing  
-------------------------------------------------------------
Obsidian Enterprises, Inc. (OTC Bulletin Board: OBSD), a
Delaware corporation, reported the completion of the second in a
series of debt conversion and refinancing transactions designed
to increase the net equity of Obsidian.

On April 30, 2002, the Board of Directors of Obsidian approved
the conversion of $1,289,299 of debt and accrued interest owed
to Obsidian Capital Partners, L.P. and $596,236 of debt and
accrued interest owed to Fair Holdings, Inc. to equity through
the issuance to OCP and Fair of a total of 589,230 shares of
Series C Convertible Preferred Stock which are convertible into
an aggregate of 11,784,600 shares of common stock of Obsidian.
The resulting net equity pick up to Obsidian is $1,885,535.
Although the number of outstanding shares will increase, this
and other debt restructuring currently being negotiated by
Obsidian will substantially reduce Obsidian's total debt and
increase its net worth. The OCP and Fair debt to equity
conversion is the second in a series of contemplated
transactions that are more fully described in Obsidian's most
recently filed 10K.

For additional information regarding Obsidian and its
businesses, including discussion of certain risks associated
with Obsidian, its operations and financial condition, please
refer to the Obsidian's Report on Form 10-K for the period ended
October 31, 2001 and the Report on Form 10-Q for the period
ended January 31,2002.


OLYMPUS HEALTHCARE: Wants More Time to Decide on Leases
-------------------------------------------------------
For the fourth time, Olympus Healthcare Group, Inc. and its
debtor-affiliates ask the U.S. Bankruptcy Court for the District
of Delaware to grant them an extension of their lease decision
period.  The Debtors want their time period to elect whether to
assume, assume and assign, or reject unexpired nonresidential
real property leases to run through June 21, 2002.

The Debtors remind the Court that it approved the First Amended
Disclosure Statement relating to the First Amended Joint Plan of
Reorganization.  Pursuant to the Plan, the Debtors will assume
two non-residential real property leases -- the Braintree and
Natick Facility.  The Debtors anticipate confirmation of the
plan in short order and that the plan will take effect shortly
thereafter.

The Debtors tell the Court that their leasehold interests are
among the most significant assets of their bankruptcy estates.  
Each lease must be carefully evaluated to determine what role it
will play in their ultimate reorganization.  Unless the lease
decision period is extended, the Debtors and other parties-in-
interest will have insufficient time to fully and fairly assess
the value of such leases.

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


PACIFIC GAS: Wins Nod to Hire Special Non-Bankruptcy Counsel
------------------------------------------------------------
By way of a Fourth Supplement to Amended Application for
Authority to Employ Special Counsel, Pacific Gas and Electric
Company and its debtor-affiliates sought and obtained
authorization by the Court (i) to employ Adamski, Moroski &
Green LLP as special counsel, effective as of April 1, 2002,
(ii) to continue employing Coblentz, Patch, Duffy & Bass LLP as
special counsel, pursuant to Section 327(e) of the Bankruptcy
Code, on the same terms and conditions as set forth in the
Court's Order authorizing PG&E's employment of special counsel.

   (i) Adamski, Moroski & Green LLP

Adamski, Moroski & Green LLP (AM&G) began work for PG&E on or
about April 1, 2002. AM&G has not previously represented PG&E.
Martin P. Moroski was formerly a partner with the law firm of
Sinsheimer, Schiebelhut & Baggett, a law firm that was
previously approved as special counsel. Now that Mr. Moroski has
joined AM&G as a partner, PG&E has requested that AM&G represent
PG&E in connection with employment litigation defense and real
property litigation defense. Based upon the statements set forth
in the Declaration of Martin P. Moroski, PG&E believes that AM&G
does not hold or represent any interests adverse to PG&E or its
estate and is a disinterested person under Section 101(14) of
the Code.

   (ii) Coblentz, Patch, Duffy & Bass, LLP.

Coblentz, Patch, Duffy & Bass, LLP (CPDB) was previously
approved as special counsel pursuant to the Order for purposes
of representing PG&E in connection with real property advice and
litigation, plaintiffs commercial litigation, and plaintiffs
public agency litigation.

PG&E has recently requested that CPDB perform services relating
to the implementation of the Plan proposed by PG&E and its
parent corporation, PG&E Corporation. Specifically, these
services relate to the transfer of, or application for,
government entitlements necessary for the functioning of PG&E's
electric generation, gas transmission, and electric transmission
businesses, including city and county franchises or equivalent
regulatory operating permits or licenses, and the transfer of
real property interests and related fixtures and personal
property. CPDB may also represent PG&E in connection with
public, administrative or judicial proceedings relating to such
transfers or applications.

The additional services remain within the scope of the services
described in the special counsel Order and are of a non-
bankruptcy nature; however, these additional services relate to
the implementation of the Plan. CPDB and PG&E believe that the
additional services constitute employment of counsel for "a
specified special purpose, other than to represent the trustee
in conducting the case," in accordance with Section 327(e) of
the Code.

The Parent has employed CPDB to render certain real estate and
franchise services for the Parent, certain officers or directors
of the Parent, and subsidiaries of the Parent (other than PG&E).
The real estate and franchise services provided by CPDB relate
to a variety of transactions involving the Parent or its non-
debtor subsidiaries. These transactions do not relate to PG&E or
its estate, PG&E represents.

PG&E assures that CPDB has not rendered and will not render
services to PG&E in connection with any real estate or franchise
transaction or any other transaction in which CPDB represents
the Parent, any of the officers or directors of the Parent, or
any non-debtor subsidiaries of the Parent.

Based upon the statements set forth in the Declaration of
Richard R. Patch of CPDB, PG&E is informed and believes that
CPDB does not represent or hold any interest adverse to PG&E or
its estate with respect to the matters on which it represents or
will represent PG&E. (Pacific Gas Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PACIFIC GAS: Says CPUC's Discl. Statement "Omits Critical Facts"
----------------------------------------------------------------
PG&E Corporation (NYSE: PCG) and Pacific Gas and Electric
Company Friday filed objections to the California Public
Utilities Commission's disclosure statement with the U.S.
Bankruptcy Court.

After reviewing the CPUC's alternative plan, PG&E continues to
believe its plan of reorganization is the only feasible solution
that restores the company to investment grade credit levels and
gets the State of California out of the power buying business.

As it promised to the Bankruptcy Court, PG&E will not raise
objections that the CPUC's alternative plan is unconfirmable
during this phase of the case and will reserve those objections
for the confirmation hearing. However, PG&E believes the CPUC's
disclosure statement, as currently drafted, omits critical facts
and may be misleading. As a result, the disclosure statement
needs to be amended to include additional information in several
areas, including:

     -- That the CPUC is maintaining sovereign immunity and the
Bankruptcy Court might not have the authority to require the
Commission to implement its plan or to enforce the commitments
made by the Commission in its plan. The CPUC cannot continue to
claim sovereign immunity when it is submitting an alternative
plan. The CPUC's disclosure statement needs to reveal explicitly
the risk that the CPUC may decide not to implement its plan or
take actions inconsistent with the plan, and that as long as it
asserts sovereign immunity there would be a dispute over whether
the Bankruptcy Court could force the Commission to comply with
the plan.

     -- That the CPUC may take the position that it is not bound
by the plan it filed and may change its plan at any time. The
CPUC has previously taken the position that it is not bound by
its decisions, and therefore may take the position that its plan
is not binding on future Commissions and may be amended, altered
or rescinded at any time. However, before the Bankruptcy Court,
the CPUC said that it is legally authorized to submit and be
bound by its plan. This assertion appears to be inconsistent
with California law as interpreted by the CPUC, which says the
CPUC may not bind itself or future Commissions on matters within
its regulatory jurisdiction, and in fact may, at any time,
rescind, alter or amend any order or decision it previously has
made.

     -- That there are two pending proceedings that could force
the CPUC to change or possibly withdraw its alternative plan.
The CPUC is currently involved in proceedings that may require
that its plan be modified, altered or rescinded, and require
that the CPUC hold public hearings and issue further decisions
before it may proceed with or be bound by its plan. The
proceedings, which relate to the CPUC's authority to propose and
implement its alternative plan of reorganization, include a
lawsuit by the Foundation for Taxpayer and Consumer Rights in
the California Supreme Court and a CPUC Bankruptcy
Investigation, which the Commission has initiated itself.

     -- That the CPUC's plan does not require the utility to be
an investment grade company. The CPUC's alternative plan states
the requirement that the utility's investment grade credit
rating be restored can be waived at any time. Receiving an
investment grade credit rating is an essential requirement in
PG&E's plan of reorganization, which may not be waived. Without
an investment grade credit rating, the likelihood of success for
the CPUC's plan is highly uncertain, which would likely force
the State of California to remain in the power buying business
for several more years.

     -- That the CPUC's alternative plan requires preemption of
existing state law in order to confiscate assets and cash, which
belong to PG&E. The CPUC has not disclosed that it needs to
preempt state law to confiscate the utility's return on
investment and other assets, such as the Filed Rate Doctrine
claim and other claims. The CPUC's alternative plan would
require the Bankruptcy Court to preempt the Commission's own
decisions, state law and the California Constitution to
expropriate the $1.6 billion Pacific Gas and Electric Company
would earn as a return on the investment it makes to build and
maintain the transmission and distribution infrastructure to
serve customers, as well as other assets of the utility.

     -- The CPUC needs to detail the approvals necessary to
implement its plan. The CPUC fails to identify the numerous
regulatory approvals required for implementing its alternative
plan, the anticipated time frame associated with the approvals
and whether the CPUC is reserving the right to deny the
approvals that it would need to provide.

In the filing, PG&E also noted the CPUC's plan contains
provisions that are materially different from those presented in
the CPUC's Term Sheet, which raise fundamental legal issues
concerning the confirmability of the CPUC's alternative plan. In
particular, the CPUC's plan attempts to close the cash shortfall
in its Term Sheet by requiring the utility to take on $3.8
billion of new debt, selling $1.75 billion in new common stock
and obtaining from lenders a new $1.9 billion secured credit
facility to fund working capital and other collateral
obligations. Each of these new sources of revenue improperly
burdens the utility and the rights of thousands of PG&E
Corporation shareholders and investors.


PILLOWTEX CORP: Gets OK to Assume 12 Amended LaSalle Lease Pacts
----------------------------------------------------------------
Pillowtex Corporation and its debtor-affiliates seek the Court's
authority to assume, as modified, 12 Lease Agreements with
LaSalle National Leasing Corporation regarding the Debtors use
of production equipment necessary for their manufacturing
operations.

Jason W. Harbour, Esq., at Morris, Nichols, Arsht & Tunnell, in
Wilmington, Delaware, states that the Lease Agreements each have
a term of 96 months with an option at the end of the term to
purchase the production equipment for fair market value.  The
aggregate monthly rent under the Agreements is approximately
$87,447.  As of the Petition Date, the Debtors owed LaSalle
approximately $37,900 for payments due under the Lease
Agreements.

"Although the Debtors filed a prior motion to reject the Lease
Agreements, both parties continued to discuss a possible
restructuring that materially reduces the amount of lease
payments owed to LaSalle," Mr. Harbour relates.  Both parties
agreed to certain amendments such as:

   -- The Lease Agreements are to be assumed, as modified by the
      Amendment.

   -- Each of the Lease Agreements will has a 48 month term,
      beginning April 1, 2002 and ending March 31, 2006.

   -- The Debtors are required to pay LaSalle $500,000 within 30
      days after the Effective Date of any confirmed Plan of
      Reorganization.

   -- The aggregate balance due under the Lease Agreements as of
      April 1, 2002 is $5,849,874.  As of April 1, 2002, LaSalle
      will reduce the aggregate balance due to $3,000,000, the
      agreed fair market value of the production equipment.  The
      new aggregate balance due under the Lease Agreements will
      be equal to the fair market value less the down payment.

   -- The new principal balance will be amortized over the new
      term, with aggregate monthly payments of $60,072.

   -- The Debtors will pay interest on the new principal balance
      at the rate of 7.5% compounded monthly.

   -- The cure amount will not be paid as an administrative
      expense claim, but will be included in LaSalle's allowed
      unsecured claim.  LaSalle will be entitled to an allowed
      unsecured claim for $2,849,874, which is the difference
      between the old lease balance and the new principal
      balance.

   -- Provided that the Debtors remains current under the Lease
      Agreements, as modified, the Debtors have the option to
      acquire title to the production equipment at the end of
      the new term for $650,000.

Mr. Harbour asserts that assumption of the Lease Agreements
enables the Debtors to continue using the production equipment
necessary for their manufacturing operations and substantially
reduces their lease obligations.  The restructuring will also
convert over $2,800,000 of the amount under the Lease Agreements
into general unsecured claims against the Debtors' estates.

                         *   *   *

Judge Robinson authorizes the Debtors to assume the 12 Lease
Agreements, as modified, with LaSalle National Leasing
Corporation. (Pillowtex Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    


PINNACLE HOLDINGS: Likely to File Prepack. Chapter 11 This Week
---------------------------------------------------------------
Pinnacle Holdings Inc. (Nasdaq: BIGT) announced that the
previously announced expiration of the forbearance agreement
that it and its subsidiaries, including Pinnacle Towers Inc.,
entered into on November 16, 2001, as amended on December 12,
2001, February 6, 2002 and as amended and restated on March 8,
2002, with the lenders under their senior credit facility, has
been renewed until May 10, 2002, the date by which Pinnacle is
required under the terms of the amended and restated forbearance
agreement to have filed its previously announced proposed pre-
negotiated bankruptcy plan under chapter 11 of the U.S.
Bankruptcy Code.

During this extension period the lenders have agreed not to
exercise remedies available to them as a result of Pinnacle's
non-compliance with certain covenants under its senior credit
facility.

The terms of the forbearance agreement: (1) provide that the
interest rate on Pinnacle's borrowings be LIBOR plus 3.75% and
LIBOR plus 4.0; (2) eliminate Pinnacle Towers' ability to make
additional draws under the senior credit facility; (3) restrict
the amount of money that can be invested in capital expenditures
by Pinnacle Towers; (4) limit Pinnacle Towers' ability to incur
additional debt; (5) limit Pinnacle Towers' current ability to
distribute funds to Pinnacle Holdings in connection with
Pinnacle Holdings 5.5% Convertible Subordinated Notes due 2007;
and (6) require Pinnacle to establish a $2.5 million cash escrow
account to support outstanding letters of credit. As of March
15, 2002, Pinnacle Holdings has not made the last interest
payment due on its Convertible Notes, which constitutes a
default under the Convertible Notes indenture and a cross
default under Pinnacle's senior credit facility.

Because of these defaults, or, in the case of Pinnacle's senior
credit facility, if Pinnacle fails to satisfy the conditions
under the forbearance agreement, the holders of Pinnacle
Holdings' 10% Senior Discount Notes due 2008 (the "Senior
Notes") and the Convertible Notes or the lenders under
Pinnacle's senior credit facility could declare a default and
demand immediate repayment and, unless Pinnacle cures the
defaults, they could seek a judgment and attempt to seize
Pinnacle's assets to satisfy the debt to them. The security for
Pinnacle's senior credit facility consists of substantially all
of Pinnacle and Pinnacle Towers' assets, including, the stock of
direct and indirect subsidiaries. The defaults under these
agreements could adversely affect Pinnacle's rights under other
commercial agreements.

As announced on April 26, 2002, Pinnacle has entered into a
definitive agreement with Fortress Investment Group and
Greenhill Capital Partners LLP, that contemplates Pinnacle
restructuring certain of its indebtedness through a Bankruptcy
Plan to be filed in Delaware under chapter 11 of the U.S.
Bankruptcy Code. Holders of at least two-thirds of the aggregate
principal amount of the Senior Notes have agreed to vote in
favor of the Bankruptcy Plan. Under the terms of the transaction
documents, holders of approximately two-thirds of the aggregate
principal amount of the Senior Notes have agreed, for a period
of up to 60 days from April 25, 2002, not to exercise certain
rights such holders may have against Pinnacle under the terms of
the indenture governing the Senior Notes, including the right to
receive principal of, and interest on, the Senior Notes.

Pinnacle currently expects to file the Bankruptcy Plan later
this month. It is contemplated that the Bankruptcy Plan will be
funded by two new sources of capital: (1) an equity investment
made by the Investors of up to approximately $205.0 million, and
(2) a new credit facility of up to $340.0 million to be led by a
syndicate arranged by Deutsche Bank Securities Inc. with Bank of
America, N.A.

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

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

Pinnacle is a leading provider of communication site rental
space in the United States and Canada. At December 31, 2001,
Pinnacle owned, managed, leased, or had rights to in excess of
4,400 sites. Pinnacle is headquartered in Sarasota, Florida. For
more information on Pinnacle visit its Web site at
http://www.pinnacletowers.com  

DebtTraders reports that Pinnacle Holdings Inc.'s 10% bonds due
2008 (BIGT1) are being quoted at a price of 26. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BIGT1for  
real-time bond pricing.


POINT.360: Completes Long-Term Financing Agreement with Banks
-------------------------------------------------------------
Point.360 (Nasdaq: PTSX), a leading provider of media asset
management services, has completed a long-term financing
agreement with its existing banks.

In entering the agreement, the Company made an initial principal
payment of $2 million after which the Company's cash balance was
approximately $4.4 million. The loan will bear interest at the
banks' prime rate plus 1.25% which is less than the rate paid
previously.

Haig S. Bagerdjian, the Company's Chairman, stated: "Reaching a
long-term arrangement is a major achievement as we prepare for
future growth and profitability. Strong operating performance by
Luke Stefanko and his team has exceeded our expectations
enabling the Company to generate cash sufficient to meet and
exceed previously set objectives and permit a mutually
beneficial bank restructuring. Our balance sheet has been
strengthened since January 1, 2001 as we have reduced vendor
liabilities by approximately $5.6 million and increased cash by
approximately $5.7 million (prior to the $2 million initial
principal payment). As a result of operational efficiencies
already implemented, we are generating sufficient cash to enable
us to not only fulfill our obligations to creditors, but give us
funds necessary to invest in the future. The bank agreement also
removes the condition that caused the qualified audit opinion in
our recently filed Form 10-K."

R. Luke Stefanko, the Company's President and Chief Executive
Officer, said: "This new financial arrangement is a validation
of the path we are taking. The agreement removes any issues
that, from time to time, caused concern among our customers and
vendors regarding our creditworthiness. Achieving this milestone
is a credit to the entire Point.360 team which has positively
responded to the challenges we have faced during the last year.
We believe the team and processes now in place are the best in
the industry enabling us to embark on further improving long-
term performance which will yield positive earnings."

Point.360 is one of the largest providers of video and film
asset management services to owners, producers and distributors
of entertainment and advertising content. Point.360 provides the
services necessary to edit, master, reformat, archive and
ultimately distribute its clients' film and video content,
including television programming, spot advertising, feature
films and movie trailers.

The Company delivers commercials, movie trailers, electronic
press kits, infomercials and syndicated programming, by both
physical and electronic means, to hundreds of broadcast outlets
worldwide.

The Company provides worldwide electronic distribution, using
fiber optics, satellites, and the Internet.

Point.360's interconnected facilities in Los Angeles, New York,
Chicago, Dallas and San Francisco provide service coverage in
each of the major U.S. media centers. Clients include major
motion picture studios such as Universal, Disney, Fox, Sony
Pictures, Paramount, MGM, and Warner Bros. and advertising
agencies TBWA Chiat/Day, Saatchi & Saatchi and Young & Rubicam.


POLAROID CORP: Joint Plan's Classification & Treatment of Claims
----------------------------------------------------------------
Pursuant to Section 1123(a)(1) of the Bankruptcy Code,
Administrative and Priority Tax Claims have not been classified
under Polaroid Corporation's proposed Joint Plan of Liquidation.

The rest of the Claims are classified from Class 1-8:

                                                  Entitled
Class  Description         Treatment              to Vote
-----  ----------------    ------------------     --------
   -    Administrative      cash payment in          no
        Claims              amounts allowed

   -    Priority Tax        cash payment in          no
        Claims              amounts allowed

   1    Non-Tax Priority    cash payment in          no
        Claims              amounts allowed

   2    Secured Lender      cash payment in          no
        Claims              amounts allowed

   3    Other Secured       cash payment in          no
        Claims              amounts allowed

   4    Convenience         cash payment in          yes
        Claims              amounts allowed

   5    Notes Claims        cash payment in          yes
                            amounts allowed

   6    General Unsecured   pro rata share of        yes
        Claims              the Class 6
                            Distribution Amount

   7    Inter-company       none                     no
        Claims

   8    Subordinated        none                     no
        Claims

The Cash will be distributed to the Claimant on, or reasonably
after the Distribution Date, as of the Effective Date, or on the
first Quarterly Distribution Date after the date the Claim
becomes an Allowed Claim.

Class 6 Claimants may opt to be treated as Class 4 Claimants by
casting their Ballots timely and by agreeing to waive the right
to collect from the Debtors any amounts greater than $500. Such
claim will then be treated as an allowed Class 4 Claim in the
amount of $500.

Classes 4, 5 and 6 will have accepted the Plan if:

  (a) the holders of at least 2/3 of the Allowed Claims actually
      voting in the Class have voted to accept the Plan; and

  (b) the holders of more than 1/2 of the Allowed Claims
      actually voting in the Class have voted to accept the
      Plan

Classes 7 and 8 are deemed to have rejected the Plan as they are
not entitled to receive or retain any property under the Plan.

Unless otherwise specifically provided for in the Plan or
Confirmation Order, or required by applicable bankruptcy law,
post-petition interest will not accrue or be paid on any Claims.
No holder of a Claim is entitled to interest accruing on or
after the Petition Date.

On each Quarterly Distribution Date, the Reorganized Polaroid
will make all distributions that have become deliverable.  This
includes those that have been claimed since the Distribution
Date or the immediately preceding Quarterly Distribution Date,
as the case may be, together with any interest actually earned
thereon.

                      Allocation of Payment

To the extent that any Allowed Claim is comprised of
indebtedness and accrued but unpaid interest thereon, the
distribution will, for federal income tax purposes, be allocated
to the principal amount of the Claim first. Then it will be
allocated to the extent the consideration exceeds the principal
amount of the claim, to the portion of such Claim representing
accrued but unpaid interest.

Payments of Cash made pursuant to the Plan must be in U.S.
dollars and be made, at the option and in the sole discretion of
the Reorganized Polaroid, by checks drawn on or wire transfer
from a domestic bank selected by Reorganized Polaroid. If so
requested in writing and received no later than five business
days after the Confirmation Date, Cash payments of $500,000 or
more to be made pursuant to the Plan will be made by wire
transfer from a domestic bank. Cash payments to foreign
creditors may be made, at the option of the Reorganized
Polaroid, in such funds and by such means as are necessary or
customary in a particular foreign jurisdiction.

The Reorganized Polaroid may, pursuant to Section 553 of the
Bankruptcy Code or applicable non-bankruptcy laws, set off
against any Claim and the payments or other distributions to be
made pursuant to the Plan in respect of such Claim, claims of
any nature whatsoever that the Debtors or the Reorganized Debtor
may have against the holder of such Claim.

                         Litigation Claims

At any time after the Confirmation Date and before the Effective
Date, notwithstanding anything in this Plan to the contrary, the
Debtors may settle some or all of the Litigation Claims with the
approval of the Bankruptcy Court pursuant to Bankruptcy Rule
9019. (Polaroid Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


RAILAMERICA: Firming-Up $325MM Long-Term Debt Refinancing Pact
--------------------------------------------------------------
RailAmerica, Inc. (NYSE: RRA), the world's largest short line
and regional railroad operator, reported record financial
results for its first quarter ended March 31, 2002.

Income from continuing operations for the quarter ended March
31, 2002 increased 91% to $5.3 million, compared to income from
continuing operations of $2.8 million for the quarter ended
March 31, 2001.

Consolidated revenues for the first quarter of 2002 increased
21% to $111.2 million from $92.0 million during the same period
in 2001. Operating income and EBITDA for the first quarter of
2002 were $20.7 million and $29.4 million, respectively,
compared to operating income of $17.9 million and EBITDA of
$24.7 million for the same period in 2001.

"In the first quarter of 2002, our Company continued to make
significant progress in solidifying its position as the world's
largest operator of short line and regional freight railroads,"
said Gary O. Marino, Chairman, President and Chief Executive
Officer of RailAmerica. "The acquisitions of StatesRail and
ParkSierra both expanded our geographic coverage and helped
diversify our commodity mix, which in turn mitigate the effects
of regional and economic downturns. We are pleased that despite
extended weakness in the economy, our 'same railroad' carloads
and revenues for the quarter compare very favorably to others in
the rail industry."

North American revenues for the first quarter of 2002 increased
32% to $82.0 million from $62.0 million during the same period
in 2001. "Same railroad" revenues were essentially unchanged
year-over-year from the first quarter of 2001, despite "same
railroad" freight carloads decreasing 3.1% due to the prolonged
downturn in the economy. For the quarter ended March 31, 2002,
the North American adjusted operating ratio of 77.7% was
comparable to the operating ratio of 77.2% reported for the same
period in 2001. The operating ratio in the first quarter of 2002
was affected by higher costs associated with the newly acquired
ParkSierra and StatesRail railroads, offset by a decrease in the
cost of fuel.

International revenues for the first quarter of 2002 decreased
3% to $29.1 million from $30.0 million during the same period in
2001, reflecting the weak Australian dollar, as current quarter
freight carloads were unchanged from the prior year period. For
the quarter ended March 31, 2002, the international operating
ratio was 79.0% compared to 76.5% for the same period in 2001,
primarily as a result of increased depreciation in Australia in
the current quarter.

First Quarter 2002 Highlights

     * In January 2002, acquired StatesRail, which owned and
operated eight railroads with 1,647 miles of track in eleven
states, for total consideration of $90 million ($67 million in
cash and 1.7 million shares of RailAmerica common stock totaling
$23 million);

     * In January 2002, acquired ParkSierra, which owned and
operated three railroads with 703 miles of track in four western
states, for total consideration of $48 million ($23 million in
cash and 1.8 million shares of RailAmerica common stock totaling
$25 million);

     * On March 27, 2002, sold the Georgia Southwestern Railroad
and certain operating assets for total consideration of $7.1
million.

"RailAmerica's financial position is stronger than ever,"
commented Bennett Marks, Senior Vice President and Chief
Financial Officer. "In the first quarter of 2002, we continued
our efforts to reduce interest charges, and we are currently in
the process of finalizing the refinancing of approximately $325
million of our long-term debt. Accordingly, we expect to
significantly reduce our interest costs, which should result in
annual savings of approximately $8-10 million in the first year.
In connection with this refinancing, RailAmerica recently
received improved credit ratings from Standard & Poors as well
as a 'positive' outlook from Moody's Investors Service."

Marino added, "We expect that the anticipated strengthening of
the economy should result in increased commercial activity,
which will benefit the entire rail industry. RailAmerica is well
positioned to capitalize on this projected economic upturn
because of our broad geographic and commodity diversity. In
North America, we remain focused on an acquisition strategy
which promotes geographic clustering and a committed customer
base. We believe that there are numerous acquisition
opportunities as a result of additional rationalization by
certain Class I railroads and further consolidation among
existing short line and regional railroads."

Included in the financial results reported by the Company for
the first quarter of 2002 were certain special items, consisting
of: 1) a gain on the sale of Georgia Southwestern Railroad, net
of its results of operations through the date of sale, of
approximately $3.7 million ($.07 per share after tax); 2)
estimated costs of $2.4 million for our unsuccessful bid to
acquire two Australian railroads, as previously disclosed ($.05
per share after tax); 3) acquisition-related costs of $350,000
for the purchase of the ParkSierra and StatesRail railroads
($.01 per share after tax); and 4) restructuring charges of
$267,000 incurred to date as part of the integration of RailTex,
Inc. related to the relocation to Florida of the accounting and
human resources functions currently located in Texas ($.01 per
share after tax).

RailAmerica, Inc. -- http://www.railamerica.com-- the world's  
largest short line and regional railroad operator, owns 49 short
line and regional railroads operating approximately 12,900 route
miles in the United States, Canada, Australia and Chile. In
North America, the Company's railroads operate in 27 states and
six Canadian provinces. Internationally, the Company operates an
additional 4,300 route miles under track access arrangements in
Australia and Argentina. In October 2001, RailAmerica was ranked
85th on Forbes magazine's list of the 200 Best Small Companies
in America; in July 2001, the Company was named to the Russell
2000(R) Index.

                              *   *   *

As previously reported on April 25, 2002, Standard & Poor's
rates RailAmerica's $475 million senior secured credit
facilities at BB.


SEITEL INC: Seeking Waivers of Likely Loan Covenant Violations
--------------------------------------------------------------
Seitel, Inc. (NYSE: SEI; TSE: OSL) filed a current report on
Form 8-K, disclosing certain amendments to parts of its annual
report on Form 10-K that was previously filed on April 1, 2002,
with the Securities and Exchange Commission. The amendments
followed meetings with the SEC staff and provide new information
concerning the reasons for its restatements of financial
condition announced on April 1 and concerning other matters
previously referenced in the April 1 Form 10-K. The additional
information provided in these amendments will not change any of
the previously announced re-stated financial statements and will
not require additional changes in accounting policies.

The amended 10-K also discloses that the Company will be in non-
compliance with certain loan covenants as of March 31, 2002, and
is currently in discussions with its lenders seeking waivers and
amendments to the loan documents. The Company's outside auditors
have advised that unless the Company successfully cures the non-
compliance through amendments to the covenants, the auditors
will include "going concern" qualification of any future report
that they may be called upon to issue. Failure to obtain such
waivers and amendments in addition to an election by the lenders
to accelerate the debt could cause substantial liquidity
problems for the Company.

     Additional Information Regarding Reasons For Restatement

The 10-K amendments will provide additional information
regarding the matters discussed in its April 1 announcement
restating financial results for FY 2000 and the first nine
months of FY 2001. After consultations with Staff of the
Securities and Exchange Commission subsequent to the April 1
filing, the Company's amendments to its previously filed Form
10-K will provide additional information regarding its
accounting methodology and reasons for the restatement,
including the following:

     -- additional information concerning the valuation process
used by the Company to reach a fair valuation of non-cash data
exchanges of the Company's licensed data in return for data to
be owned by the Company, including the Company's obtaining
third-party fairness opinions;

     -- additional information concerning the reasons these non-
cash exchanges are not like-kind exchanges;

     -- following its consultations with the SEC Staff during
April 2002, the Company explains that its previously announced
restatement of revenues in relation to certain seismic data
access and license agreements is based on SAB 101;

     -- additional information explaining the Company's 10 year
amortization schedule for its seismic data, including why it is
consistent with the Company's long-standing business experience
and business model and how the Company's business model differs
from others in the industry that may use a shorter amortization
schedule.

The SEC staff has informed the Company that it is has no further
questions regarding these issues at this time.

          Non-Compliance With Certain Loan Covenants

The 10-K amendments also state that due to increased interest
expense and decreased revenues in the first quarter of 2002, the
Company will not be in compliance with various covenants under
its Senior Note Agreements, including coverage ratios, as of
March 31, 2002. In addition, in its April 1 Form 10-K, the
Company reported that it was not in compliance with financial
covenants in its Revolving Line of Credit, and it reports in the
amendments filed today that, while it currently has no
borrowings outstanding under that Line of Credit, it continues
to be in non-compliance through March 31, 2002.

The Company is in the process of seeking amendments to its loan
agreements from the Senior Note Holders and lenders on the
Revolving Line of Credit to cure any such non-compliance. If the
Company is unable to obtain such amendments, the note holders
could elect to accelerate the debt, and there is no assurance
that the Company could obtain replacement financing.

                    Recently Filed Litigation

The 10-K amendments also state that a derivative action has been
filed by a single shareholder. The Company is confident that the
action is without merit. However, to ensure a full and fair
determination, the Board of Directors intends to conduct an
independent investigation of the allegations and, upon
completion of the investigation, take whatever action may be
appropriate.

The amended 10-K also notes that an action alleging violations
of securities laws has been filed against the Company and
various current and former officers of the Company. The
plaintiff is seeking certification as a class action.

Seitel markets its proprietary seismic information/technology to
more than 400 petroleum companies, selling data from its library
and creating new seismic surveys under multi-client projects. It
also selectively participates in oil and natural gas exploration
and development programs.


SERVICE MERCHANDISE: Court Okays Consor as I.P. Advisor & Broker
----------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
sought and obtained the Court's authority to retain and employ
Consor as Intellectual Property advisor and broker.

Paul G. Jennings, Esq., at Bass, Berry & Sims, PLC, in
Nashville, Tennessee, tells Judge Paine that Consor has a wide
experience in evaluating and advising financially troubled
companies on their intellectual property holdings and how best
to market and sell such holdings.  Mr. Jennings explains that
the Debtors need Consor's expertise to ensure that they get the
appropriate value of their Intellectual Property Assets.

As Intellectual Property advisor and broker, Consor will conduct
private and public transactions by sale, license, transfer or
otherwise in order to liquidate the Intellectual Property
assets. In order to do this, Consor will assist the Debtors and
their advisors in:

   (a) evaluating the Debtors' rights to sell such Intellectual
       Property assets;

   (b) valuing the Intellectual Property Assets;

   (c) identifying potential acquirers;

   (d) identifying and engaging third party facilitators,
       agents and consultants where necessary to facilitate a
       sale of certain Intellectual Property Assets;

   (e) recommending potential structures for a sale or auction
       process to dispose of the IP Assets quickly; and

   (f) negotiating and in consultation with the Debtors
       structuring "stalking horse" contracts for sales through
       the Bankruptcy Court, where appropriate;

As compensation of the services to be rendered, the Debtors will
pay Consor:

  (a) a fixed monthly fee of $25,000 -- the Initial Fee, with
      an option for renewal on a month-to-month basis thereafter
      -- the Continuation Fee. The Initial Fee and the
      Continuation Fee will be disbursed against Consor's
      Success Fees from the sale of the assets;

  (b) reimburse Consor of any reasonable out-of-pocket expenses;

  (c) a Success Fee of 10% of the Gross Consideration received
      by the Debtors less the first $125,000. In addition, in
      the discretion of the Debtors and the Committee, Consor
      will be eligible to earn an additional 2.5% on all Gross
      Consideration to the extent the Gross Consideration
      exceeds $1,250,000 or 3.5% to the extent the Gross
      Consideration exceeds $2,500,000.

Weston Anson, Chairman of Consor, assures Judge Paine that the
principals and professionals of Consor:

    (a) do not have any connection with the Debtors, their
        creditors or any other party-in-interest, or their
        respective attorneys or accountants;

    (b) are "disinterested persons" under Section 1107(b) of the
        Bankruptcy Code; and

    (c) do not hold or represent an interest adverse to the
        estate.

Mr. Jennings relates that since some of the sale might be below
$250,000, the De Minimis Assets Order will automatically
authorize the sale.  However, for sales above $250,000, Mr.
Jennings states that the Debtors will seek specific Court
approval for such sale.

Mr. Jennings points out that the Intellectual Property assets
sale will create value to the Debtors' estates for an asset that
they no longer require in connection with the wind-down.  In
fact, Mr. Jennings states, the sale of the Intellectual Property
assets will terminate any and all costs associated with
maintaining such assets. (Service Merchandise Bankruptcy News,
Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SILVERLEAF RESORTS: Closes Exchange Offer & Debt Workout Deals
--------------------------------------------------------------
Silverleaf Resorts, Inc. announced completion of the exchange
offer commenced on March 15, 2002 regarding its 10-1/2% senior
subordinated notes due 2008.

A total of $56,934,000 in principal amount of the Company's
10-1/2% senior subordinated notes were exchanged for a
combination of $28,467,000 in principal amount of the Company's
new class of 6.0% senior subordinated notes due 2007 and
23,937,489 shares of the Company's common stock representing
approximately 65% of the common stock outstanding after the
exchange offer. Under the terms of the exchange offer, tendering
holders will collectively receive cash payments of $1,335,544.61
on May 16, 2002, and a further payment of $334,455.11 on
October 1, 2002. A total of $9,766,000 in principal amount of
the Company's 10-1/2% notes were not tendered and remain
outstanding. As a condition of the exchange offer, the Company
has paid all past due interest to non-tendering holders of its
10-1/2% notes. Under the terms of the exchange offer, the
acceleration of the maturity date on the 10-1/2% notes which
occurred in May 2001 has been rescinded, and the original
maturity date in 2008 for the 10-1/2% notes has been reinstated.
Past due interest paid to non-tendering holders of the 10-1/2%
notes was $1,827,805.62. The indenture under which the 10-1/2%
notes were issued was also consensually amended as a part of the
exchange offer.

The Company also announced that it has completed amendments to
its credit facilities with its principal senior lenders as well
as amendments to a $100 million conduit facility through one of
its subsidiaries. Finalization of its exchange offer and the
amendment of its principal credit facilities marks the
completion of the Company's previously announced debt
restructuring which was necessitated by severe liquidity
problems first announced by the Company on February 27, 2001. As
a part of the debt restructuring, the Company's noteholders and
senior lenders waived all previously declared events of default.


SPHERA OPTICAL: OnFiber Comms. Acquires Network Assets for $2.3M
----------------------------------------------------------------
OnFiber Communications Inc., a leader in optical metropolitan
connectivity, has acquired network assets and customer contracts
of Sphera Optical Networks Inc. for approximately $2.3 million
as part of Sphera's reorganization filing under Chapter 11.

The acquisition will give OnFiber access to four new
metropolitan markets, an expanded customer base, and more than
$400,000 of additional monthly revenue. With this acquisition,
OnFiber will extend its network reach to ten markets: Atlanta,
Chicago, Dallas, Houston, Los Angeles, New York City,
Philadelphia, San Jose, Seattle and Washington, D.C.

"This purchase is a natural progression for OnFiber's business
strategy. We will be able to cost-effectively expand our network
footprint to penetrate new markets and offer our customers more
options," said Danny Bottoms, President and CEO of OnFiber. "The
OnFiber team is committed to creating strong relationships with
Sphera's customers and assuring no interruptions to their
business operations."

"With slowing market conditions, OnFiber has controlled
expenditures while continuing to search for a cost-effective
means to expand its network," said Vinod Khosla, General
Partner, Kleiner Perkins Caufield & Byers. "This financially
conservative approach has provided OnFiber the opportunity to
develop and maintain one of the best operating cost structures
in the telecommunications space."

Through the purchase of Sphera metro optical networks, OnFiber
secures access to four new markets: Atlanta, Chicago, Los
Angeles, and New York City, and augments its existing
Washington, D.C. market. This purchase will expand OnFiber's
traffic aggregation points from 32 to 53, significantly
increasing the connectivity options in the metro core. Because
of the companies' synergies, the integration of the Sphera
assets into OnFiber's network will be seamless and will enable
OnFiber to expand within the new markets immediately.

"Acquiring assets in this challenging market shows the viability
of OnFiber as a metro access service provider," said Keith
Mayberry, Analyst, RHK. "Companies like OnFiber that are able to
expand their networks and obtain new customers by purchasing
distressed assets will be well positioned once the market turns
around."

OnFiber Communications is a metro core and access provider
constructing and operating fiber optic networks in major
metropolitan areas nationwide. The company delivers broadband
connectivity services including SONET, Ethernet, and Optical
Wavelength to service providers and enterprises. OnFiber's
unique HomeRun Fiber(sm) network architecture offers customers
rapid provisioning, high reliability, and maximum scalability,
giving customers the flexibility to choose the service to fit
their needs. OnFiber currently operates networks in the Atlanta,
Chicago, Dallas, Houston, Los Angeles, New York City,
Philadelphia, San Jose, Seattle and Washington, D.C. metro
areas. OnFiber Communications is financed by Kleiner Perkins
Caufield & Byers, Incepta, Bear Stearns & Co., TeleSoft
Partners, Amerindo Investment Advisors, GE Capital, and numerous
other leading investment firms. Privately-held, OnFiber
Communications is headquartered at 11921 North Mopac Expressway,
Suite 100, Austin, Texas 78759; telephone 877/266-3423.
Additional information is available at http://www.onfiber.com  

OnFiber Communications Inc., OnFiber, Coil Design, and HomeRun
Fiber are trademarks of OnFiber Communications. All other
products or service names mentioned herein may be the trademarks
of their respective owners.


SWEET FACTORY: Has Until May 31 to Make Lease-Related Decisions
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
Sweet Factory Group, Inc. and its debtor-affiliates' requested
extension of their lease decision period.  The Debtors have
until the earlier of the Effective Date of the Plan or
May 31, 2002 to decide whether to assume, assume and assign, or
reject unexpired nonresidential real property leases.

The Court adds that the Debtors shall continue to perform
obligations under the terms of any unexpired leases among
Debtors and Ontario Mills Limited Partnership and Concord Mills
Limited Partnership that have not been rejected by the Debtors.
If the Debtors cease operations at any store location that is
subject of a Mills Lease, this lease shall be deemed rejected
without further order of the Court.

Sweet Factory Group Inc. filed for chapter 11 protection on
November 15, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. Laura Davis Jones at Pachulski, Stang, Ziehl Young
& Jones represents the Debtors in their restructuring efforts.


TENGASCO INC: Files $151 Million Lawsuit Against Bank One
---------------------------------------------------------
Tengasco, Inc. (Amex: TGC) has filed suit in Federal Court in
the Eastern District of Tennessee, Northeastern Division at
Greenville, Tennessee to restrain Bank One, N.A. (NYSE: ONE)
from taking any steps pursuant to its credit facility agreement
with the Company to enforce its demand that the Company reduce
its loan obligation or else be deemed in default.

It is the position of the Company that Bank One's demand that
the Company reduce its loan from $9,101,776.66 to $3,101,776.66
within thirty days, coming as it does only four months after the
loan was made, in the absence of any change in the condition of
the Company's assets, without any warning and without any basis
or explanation is a violation of the terms of the credit
agreement and an act of bad faith. The Company is seeking a jury
trial and actual damages sustained by it as a result of this
arbitrary, wrongful demand, in the amount of $51,000,000 plus
punitive damages in the amount of $100 million.

It is not expected that the Company's dispute with Bank One will
have any adverse effect on the Company's ability to proceed with
its drilling program pursuant to which it envisions drilling
approximately 20 new wells in its Swan Creek Field by the end of
2002 or the well it is drilling in Cocke County, Tennessee. The
Company also does not expect that transportation of gas through
its 65-mile intrastate pipeline will be affected. The Company's
management is prepared to provide funding for drilling
activities and other operations if necessary. Tengasco made a
monthly $200,000 principal payment plus interest to Bank One
yesterday in compliance with the provisions of the credit
agreement thereby reducing the outstanding principal to $8.9
million. The Company continues to actively engage in
negotiations to replace Bank One as a lender, and is actively
involved in obtaining other sources of funding and is highly
confident that a near-term agreement is likely.

M. E. Ratliff, CEO of Tengasco, said that, "We believe that this
suit is necessary to fully protect the Company and its
shareholders from the unwarranted and unconscionable actions by
Bank One that are not supported by the letter or the spirit of
our credit agreement. We will continue to vigorously assert the
Company's rights."

Knoxville-based Tengasco is a fully integrated energy company
with operations in Tennessee and Kansas. In Hancock County,
Tennessee, Tengasco has its 50,500-acre Swan Creek Field, from
which it produces oil and natural gas. The Company also has more
than 32,000 acres of oil and gas leases in the heart of the mid-
continent area in Kansas.


TIMMINCO: Working Capital Deficit Tops $16MM at Dec. 31, 2001  
-------------------------------------------------------------
Timminco Limited -- the world leader in manufacturing and
supplying engineered magnesium extrusions and an international
leader in the production and marketing of specialty magnesium,
calcium and strontium metals and alloys -- announced financial
results for the fourth quarter of 2001 and for fiscal year 2001.

                  Management Discussion And Analysis

This Management Discussion and Analysis should be read in
conjunction with the 2001 financial statements and notes.

          Financial Results - Fourth Quarter and Full-Year

In the fourth quarter of 2001 Timminco recorded net income of
$3.0 million compared to a loss of $13.6 million in the same
quarter of 2000.

Full-year 2001 net income was $4.4 million compared to a loss of
$24.1 million during fiscal 2000. These improved results are
primarily due to:

    - cost reductions resulting from the successful start-up and
achievement of commercial production levels at the Haley
casthouse;

    - proficiency in purchasing commodity-grade magnesium at
favourable prices;

    - cost savings realized from the implementation of the
previously announced reorganization program; and

    - improved operations at both the Haley and Aurora plants.

Sales in the fourth quarter were 9% higher than in the
corresponding quarter of 2000 and for the full year were 4%
higher than in 2000. Contributing to the increased revenue in
the fourth quarter and full year were higher volumes of
magnesium slab, extrusions, fabricated magnesium
racks/containers, and Mag-Cal as well as gains realized from the
translation of US dollar denominated sales into Canadian
currency at rates approximately 4% higher than in the same
quarter of the preceding year and 4% higher for the full-year.
These gains more than offset market share losses in primary
magnesium applications, strontium products and aluminium
granules due primarily to foreign pricing pressures and the
resultant shift by some customers to commodity-grade material.
Also contributing to increased sales on a full-year basis was
the natural gas surcharge implemented in March of 2001. This
surcharge effectively offset the increased natural gas costs.
The surcharge was reduced through the third quarter as gas
prices declined and was discontinued at the start of the fourth
quarter, 2001.

The gross profit of $7.9 million in the fourth quarter of 2001
represented 25.4% of sales compared to $4.7 million or 16.5% in
the fourth quarter of 2000. The gross profit of $29.2 million in
fiscal 2001 represented 23.7% of sales compared to $15.1 million
or 12.8% in fiscal 2000. The improvements in margin were
attributable in large part to the cost reductions from the
operation of the casthouse, proficiency in purchasing commodity-
grade magnesium, and improved operations at both the Haley and
Aurora plants. Natural gas prices in the fourth quarter were
lower than those in 2000; but for the full year of 2001
increased cost-of-sales by approximately 0.6%. Purchases in US
dollars increased cost-of-sales by roughly 3% for the quarter
and 3% for the year. Cost-of-sales includes foreign exchange
losses of $1.4 million in 2001 and $0.7 million in 2000 due
principally to the revaluation of assets owned outside of
Canada.

Selling and administration costs were $1.0 million lower in the
fourth quarter and $2.6 million lower for the year than in 2000,
largely due to the implementation of the Corporation's
previously announced reorganization program. The reorganization
included the elimination of several positions and the
combination of others.

Amortization of capital assets was $0.5 million higher in the
fourth quarter and $0.2 million lower for the full-year than in
2000, due largely to the operating levels of the casthouse for
which a units-of-completion method of amortization is used. As
previously disclosed, the ramp-up of the casthouse in 2000 was
curtailed by a fire in November 2000, casthouse operations did
not resume operations until the completion of repairs in May
2001, and commercial operations of the casthouse were not
achieved until July of 2001.

Interest expense decreased from 2000 to 2001 by approximately
$0.9 million to $4.6 million. The decrease in interest expense
was attributable to lower average balances and lower interest
rates, in part offset by increased lending spreads as a result
of the Corporation's failure to comply with certain provisions
of its credit agreement.

Expenses of $0.7 million and $1.6 million were incurred in the
fourth quarter of 2001 and for the full year of 2001,
respectively, in respect of the ongoing financial restructuring.
The financial restructuring is described below under the
activities of the "Special Committee", and the expenses
include related consulting, legal, and financing fees.

Costs and operating inefficiencies associated with starting the
casthouse were separately identified for both 2000 and 2001.
Such expenses ceased when the casthouse reached commercial
production levels in the second quarter of 2001.

In 2001, the Corporation recognized an additional $2.7 million
in reorganization cost principally for the following:

    - On May 28, 2001, Mr. J. Thomas Timmins retired from the
position of Chief Executive Officer of the Corporation. Under a
post employment arrangement, Mr. Timmins receives a
predetermined monthly consulting fee. As a result of the
reorganization, the Corporation elected to treat the monthly
payments as a retirement benefit. The actuarially determined
present value of the retirement benefit accrued on May 28, 2001
was $1.8 million. $1.7 million of the liability is classified as      
a long term liability.

    - As a result of the retirement of Mr. Timmins, the
Corporation wrote-off an asset related to a key man life
insurance policy in the amount of $578,000.

    - On September 7, 2000, the Corporation entered into an
employment agreement with Mr. Anthony S. Meketa, President and
Chief Operating Officer, for a term ending on the earlier of
December 31, 2004 and a date on which one of a list of certain
specific events referred to as a "Change of Control" occurs. The
agreement provides that Mr. Meketa is entitled to receive the
greater of two times his annual base salary or US $700,000. The
Corporation has accrued this liability in its entirety in 2001,
offsetting a partial reversal of an accrual in 2000 for other
costs of reorganization that did not materialize.

In the third quarter of 2001, Timminco reassessed its
environmental liability resulting in the recognition of $0.8
million of additional expenses. The majority of the additional
liabilities arose due to the extended time frame to remove
contaminants from the sites of inactive operations in Toronto,
Ontario and Beauharnois, Quebec.

As the Corporation presently has no plan to close its quarrying
operation at Haley, Ontario, its recorded liability for the
closure of that mine under the Ontario Mines Closure Act is
small. Included in other long term provisions is $30,000, which
represents the estimated present value of the material but
uncertain cost of the future closure, assuming a fifty-year life
and a nine percent discount-rate.

A review of workplace safety insurance rates at the Haley plant,
initiated by the Corporation and conducted by the Workplace
Safety and Insurance Board, resulted in a rate reclassification
and a premium refund in the amount of $0.8 million for the
periods 1998 through 2000. As the refund, received in December
2001, related to prior years, it has been denoted as "other
income".

In 2000 there was a write off of capital assets of $2.4 million
as a result of a determination that their future use was
uncertain. In 2001, there was a write off of $0.2 million due to
the limited future use of certain capital assets.

At December 31, 2001, the Corporation had net future income tax
assets before valuation allowance of approximately $16.2 million
available to reduce future years' income for income tax
purposes. Management has concluded that there is sufficient
uncertainty as to the realization of the future income asset
that it is appropriate to have a valuation allowance of
approximately $11.4 million.

At December 31, 2001, the company's balance sheet shows a
working capital deficit of $16 million.

            Casthouse and Other Capital Expenditures

In the first half of 2001, capital spending for the casthouse,
including its repair and reconstruction, was completed at a cost
of approximately $5.7 million. Of this amount approximately $3.4
million was covered by insurance. The balance of $2.3 million
was incurred in order to:

    - incorporate modifications to the equipment that are
intended to significantly reduce the risk of a similar event;
and

    - complete modifications to the process water system and to
improve internal plant ventilation systems, projects that were
commenced in the summer of 2000 and completed in early 2001.

Until the completion of repairs to the casthouse, the
Corporation's requirements for magnesium billet were met through
the draw-down of inventories and supply from third parties. This
third-party supply was obtained at significantly higher costs
than when the casthouse reached commercial production rates. As
a result, $2.0 million of business interruption insurance claims
were accrued, offsetting these higher costs.

Fourth quarter cash outflows for capital of $1.0 million were
principally for the development of dual casting capabilities at
Haley. The capability to cast using different methods is
expected to enhance flexibility and productivity and to allow
the casting of more varied shapes; thereby facilitating
increased casting capacity, reduced costs and new-business
development. The development of dual casting capability is
expected to cost approximately $1.6 million, including $0.9
million expended through 2001, and is to be completed by mid-
2002. Capital expenditures of roughly $3.8 million are
forecasted for 2002. Operating cash flows are forecasted to
provide the funding.

      Working Capital, Bank Debt and Future Operations

On December 13, 2001, Timminco entered into a forbearance
agreement with its principal lender, the Bank of Nova Scotia.
Under the terms of the forbearance agreement, the Bank will not
enforce its rights arising from certain failures to comply with
the principal loan agreement while the Corporation pursues
strategic alternatives to maximize shareholder value. The
strategic alternatives may include a direct investment,
strategic alliance, refinancing, or a sale of all or a part of
its operations. Credit lines were maintained in aggregate with
the Bank providing revolving credit lines of Canadian $2.0
million and US $5.0 million and non-revolving lines aggregating
US $24.9 million. At year-end 2001, these lines of credit
approximated Canadian $49.7 million, a figure that varies with
the Canadian/US exchange rate. In accord with the forbearance
agreement, the credit lines were subsequently reduced in 2002 by
the amount of fixed asset-sale proceeds received after December
13, 2001, approximately $2.0 million as of this writing. The
Corporation's bank indebtedness was $44.1 million at year-end
2001, compared to $44.9 million at September 30, 2001 and $46.6
million at December 31, 2000.

The Corporation has requested an extension of the forbearance
agreement and anticipates that the extension will be granted,
but not until after April 30, 2002.

The Corporation anticipates new credit lines, terms, and
conditions of ongoing credit support for the post April 30, 2002
period as a result of its financial restructuring efforts
discussed below as activities of the "Special Committee".
Notwithstanding this situation and the continuation of a working
capital deficiency related to treating all of the bank debt as a
current liability, the Corporation's financial statements for
2000 and 2001 have been prepared on the basis of accounting
principles applicable to a going concern. The ability of the
Corporation to continue as a going concern, realize full
value on its assets, and discharge its liabilities in the normal
course of business, is dependent on its ability to negotiate and
maintain continued access to financing and to maintain
profitable operations.

The Corporation's overall financial condition improved in 2001
when positive cash flows of $12.3 million were generated by
operations compared to a negative $5.4 million cash outflow from
operations in 2000. The cash generated by operations and other
sources in 2001 was principally used to fund a non-cash working
capital increase of $5.1 million necessitated primarily by a
need to reduce an overly high level of trade indebtedness, fund
capital expenditures of $3.9 million, pay down bank debt of $2.5
million, and fund reorganization expenditures of $2.4 million.

At year-end 2001 the Corporation's working capital deficiency,
$15.9 million, was significantly below the $26.7 million
deficiency at year-end 2000. Although inventories were drawn
down $6.9 million in 2001, with a $2.6 million decrease in the
fourth quarter; there was an increase in the cash requirement to
fund a reduction in accounts payable of $10.6 million, $3.9
million of this being in the fourth quarter. Accounts receivable
increased $3.2 million in 2001 due principally to the timing and
strength of December 2001 sales and the $2.0 million receivable
from business interruption insurance claims.

                             Labour

The Corporation and its Haley plant hourly employees,
represented by the United Steelworkers of America, Local 4632,
successfully concluded negotiations of their collective labour
agreement for the period October 19, 2000 to May 31, 2004.
Agreement on the final offer tabled was reached on August 14,
2001, with a vote of 87% in favour.

                      Special Committee

As previously reported, a Special Committee of the Board of
Directors of the Corporation was established on April 26, 2001.
The mandate of the Special Committee, comprised of independent
directors, is to:

    - engage in discussions with the Corporation's bank lender;

    - consider all alternative financing proposals from third
parties; and

    - solicit offers and review each and every reasonable offer
that the Corporation may receive with respect to the purchase of
assets of the Corporation.

The Special Committee is authorized to engage legal counsel and
any other consultants in accordance with its mandate and the
Corporation shall pay any reasonable expenses including the
costs to Special Committee members for their time spent actively
pursuing its mandate. CIBC World Markets Inc. was engaged on
November 28, 2001 by the Special Committee to act as the
Corporation's financial advisor in regard to the development of
strategic alternatives outlined in the forbearance agreement
discussed above. The Special Committee reports to the Board of
Directors.

                          Outlook

Timminco anticipates continued improvement in its financial
results in 2002 as a full year of cost reductions will be
realized from: the casthouse operations, favourable purchasing
contracts, the prior reorganization, lower natural gas costs,
and lower interest rates. The Corporation is predicting somewhat
lower revenue in 2002 due to the slow North American economy and
the loss of some customers to foreign suppliers. Market
development and revenue growth within related niche markets
needs to be an area of increased focus. Cost savings from the
dual casting capability in the casthouse and savings from
certain alloy development work are expected in 2003.

The ability of Timminco to continue as a going concern, realize
full value on its assets, and discharge its liabilities in the
normal course of business, is dependent on its ability to
successfully complete its financial restructuring and/or
successfully negotiate and maintain continued access to
financing. Management's efforts continue to be directed to a
viable financial restructuring, including satisfactory credit
arrangements. Management anticipates receiving an extension to
the previously discussed forbearance agreement although not
until after April 30, 2002.

Improving cash flows and profitability through more efficient
operations and purchasing strategies is a priority for
management. The Corporation expects the global magnesium market
to remain highly competitive for the next few years.


TOWER PARK MARINA: Ernst & Young Raises Going Concern Doubts
------------------------------------------------------------
Tower Park Marina Investors, L.P. (f/k/a PS Marina Investors I),
is a publicly held limited partnership organized on January 6,
1988 under the California Revised Limited Partnership Act.
Commencing August 4, 1988, the Company offered 12,000 units
(including options) of limited partnership interest to the
public at $5,000 per Unit in an interstate offering. The
offering was terminated on November 27, 1989, with limited
partners purchasing 4,508 Units for an aggregate purchase price
of $22,540,000.

The Company's general partners were originally Westrec
Investors, Inc., (formerly PS Marina Investors, Inc.) a
California corporation and B. Wayne Hughes. Effective March 1,
1997 Tower Park Marina Operating Corporation, a wholly-owned
subsidiary of Westrec Financial, Inc., a California corporation
was substituted for Mr. Hughes. The Corporate General Partner is
a wholly-owned subsidiary of Westrec Properties, Inc., a
California corporation, which is a wholly-owned subsidiary of
Westrec Financial. The limited partners of Tower Park Marina
Investors have no right to participate in the management or
conduct of the Company's business and affairs.

Tower Park Marina Investors has entered into a management
agreement with Westrec Marina Management, Inc., a California
corporation and a wholly-owned subsidiary of Westrec Financial,
whereby WMMI has agreed to manage Tower Park Marina Investor's
properties for monthly fees generally equal to 6% of gross
revenues from the operation of Tower Park Marina. The management
agreement is cancelable on 60 days' notice by either party with
or without cause. WMMI also manages marina properties for other
entities affiliated with the General Partners and for
unaffiliated third parties.

The Company was formed to acquire and improve existing marinas
and related facilities and, to a lesser extent, to develop
marina facilities. Marina facilities typically contain wet
and/or dry boat storage facilities, gasoline sales facilities
and may contain one or more related facilities such as a
recreational vehicle ("RV") or campground facilities, boat
trailer storage facilities, boat rental and sales facilities,
restaurants or similar facilities, and boat supply and sundries
stores. Substantially all of the Company's income is derived
from the rental of wet and/or dry boat storage facilities and
related facilities such as R.V. facilities and boat trailer
storage facilities, and from the receipt of rental payments
under leases or subleases.

According to Ernst & Young LLP, independent auditors for the
Company:

     "the Partnership's property is not generating a
     satisfactory level of cash flow and cash flow projections
     do not indicate significant improvement in the near term.
     These circumstances raise substantial doubt about the
     Partnership's ability to recover the carrying value of its
     assets (notwithstanding the write-down of the marina
     facility to its net realizable value) and to continue as a
     going concern."  

This statement was first included in Ernst & Young's Auditor's
Report on March 25, 2000.

For the year ended December 31. 2001, Tower Park Marina reported
a net loss before extraordinary item of $463,000, a decline of
$35,000 over 2000. The decline is the net result of increased
operating costs, offset by a $53,000 decline in interest
expense. The savings in interest are the result of lower
interest costs on advances from affiliates. Included in the net
loss of $463,000 is $238,000 of depreciation and amortization.
Excluding these non-cash items, the Company incurred a cash flow
deficit of $225,000. This deficit was covered by additional
advances from the General Partner and by the deferral of
interest and management fee payments due to the General Partner
and/or its affiliates.

For the year ended December 31, 2001, the net operating cash
flow (Tower Park's operating income before debt service,
depreciation and partnership administrative costs) for Tower
Park Marina was $339,000, compared to $304,000 in 2000. Tower
Park Marina's slip rental revenues (which includes both wet slip
and dry storage revenues) declined $14,000 to $696,000 in 2001,
which is attributable to a slight decline in occupancies.

RV park revenues increased $145,000 to $957,000 in 2001, due to
higher occupancies and increased rates.

In response to numerous customer complaints during 1999,
management implemented a program to increase the operating hours
of the restaurant and bar at Tower Park Marina. Due to the
disappointing results of the changes the restaurant operations
were significantly curtailed beginning January 1, 2001.

Retail store revenues declined $29,000 to $423,000, with net
operating income from retail sales declining $38,000 to $65,000
in 2001.

Fuel sales declined $9,000 to $243,000 due to lower costs and
lower retail prices. Operating income from fuel sales rose
$8,000 to $44,000 as a result of improved margins.

Water and sewer revenues increased $24,000, which was primarily
due to increased usage and demand. Water and sewer expenses
increased $54,000 partially in response to the increase in usage
and also as a result of increased administrative costs.

Lease income increased $37,000. The Company has entered into a
five year lease with an independent restaurant operator that
commenced May 1, 2001. The lease requires payments of 4% of
gross revenues (escalating to 7% by year four) with a minimum of
$2,000 per month.

Boat service revenue declined $27,000 to $46,000, due to the
Company limiting the level of service it offers to customers to
a minimum, while it continues its attempt to secure an operator
to lease the facility. Although revenues declined, the net
operating deficit incurred improved $5,000 to $16,000.

Other income increased $16,000 due primarily to a $10,000
payment received from a cellular service provider for leasing
space for a cell tower.

Cost of operations increased $144,000, which was primarily the
result of a $60,000 increase in maintenance costs and a $49,000
increase in utility costs.

Interest expense declined $53,000, which was primarily the
result of a $49,000 decline in interest paid to affiliates
because of lower interest rates.

Depreciation and amortization increased $31,000 in 2001 due to
the amortization of new improvements at Tower Park Marina.

Management fees declined $14,000 in 2001 due primarily to the
leasing of the restaurant.

The net loss for the year 2001 was $463,000 as compared to the
net loss in the year 2000 of $428,000.


TRITON NETWORK: Settles Legal Dispute with CAVU Incorporated
------------------------------------------------------------
Triton Network Systems, Inc. settled a lawsuit with CAVU, Inc.
d/b/a CAVU/E-XPEDIENT, Inc. on April 10, 2002, resulting in a
cash payment of $50,000.00 and a use license to CAVU's successor
in interest for the use of certain software employed in
connection with the Company's products previously sold to CAVU.

CAVU had claimed that the Company breached a supply agreement by
announcing the intention to liquidate and dissolve the Company,
thereby becoming unable to perform certain ongoing maintenance
and service obligations under the supply agreement. CAVU filed
the action seeking damages in the Circuit Court of the Ninth
Judicial Circuit of the State of Florida, Orange County Civil
Division in October 2001. CAVU's bankruptcy trustee and the
Company have agreed to dismiss the CAVU lawsuit with prejudice,
with each party being responsible for their own legal fees.

Triton Network Systems, which is in the process of liquidating,
made broadband wireless equipment for consecutive-point
networks. Triton's units, for which it claimed reliability equal
to fiber-optic networks and higher than point-to-point wireless
networks, consisted of a transmitter, receiver, modem, and
network card and were based around microchip technology licensed
from Lockheed Martin. Triton sold its equipment directly to
service providers and equipment makers. Struggling with the
downturn in the networking and telecommunications markets and
failing to find a buyer for the company, Triton is liquidating
its assets, winding down operations, and closing its doors.


WARNACO INC: John T. Wyatt Takes Helm of Intimate Apparel Group
---------------------------------------------------------------
The Warnaco Group, Inc. (OTC: WACGQ.OB) has named John T. Wyatt
as President of its Intimate Apparel group.

The Intimate Apparel group manufactures and merchandizes brands
such as Warner's, Olga and Bodyslimmers.

Wyatt, 46, joins Warnaco from Saks Inc., where he most recently
served as Executive Vice President of Corporate Strategy and
Planning and E-Business Strategy. He joined that company as
President of its Parisian unit in 1998. Prior to Saks Inc.,
Wyatt served as group president of Warnaco's Intimate Apparel
division. He joined Warnaco in 1997 after more than 23 years
with VF Corporation.

Additionally, the Company said that Roger Williams has been
promoted to President of Authentic Fitness, Warnaco's Swimwear
group. Williams has been Chief Operating Officer of Authentic
Fitness since December.

Tony Alvarez, Chief Executive Officer of Warnaco, said, "I am
very pleased to welcome Tom back to Warnaco. Tom has an
extensive proven track record in brand management in the
intimate apparel and retailing industries, and we are happy to
have such an experienced person leading our Intimate Apparel
group."

"Roger Williams has done a tremendous job at Authentic Fitness
in a short period of time, and I extend my congratulations to
Roger on a well-deserved promotion," said Alvarez.

Alvarez continued, "Warnaco's turnaround is proceeding very
well. The success of our turnaround strategy is in large part
thanks to the strong new management team that we have recruited
to lead our key businesses. In November 2001, I announced that
we would be restructuring the Company into three operating
groups - Intimate Apparel, Sportswear and Swimwear - and would
be recruiting new leaders for these units. In February 2002, I
hired John Kourakos to head our Sportswear group. Roger's
promotion and Tom's hiring complete our senior recruitment
effort. All of us are committed to continuing to strengthen the
business and increase its value."

Tom Wyatt said, "I am thrilled to re-join Warnaco and especially
excited to become part of Tony's new team. I look forward to
putting my experience to work in managing and growing its strong
intimate apparel brands. This is an exciting time to join
Warnaco, as it offers the opportunity to be a part of an
organization under Tony's leadership and direction that is
remaking itself in a very positive fashion."

As previously announced, Warnaco filed for protection under
Chapter 11 of the U.S. Bankruptcy Code on June 11, 2001.

The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear, jeanswear, swimwear,
men's and women's sportswear, better dresses, fragrances and
accessories sold under such brands as Warner's(R), Olga(R),
Lejaby(R), Bodyslimmers(R), Chaps by Ralph Lauren(R), Calvin
Klein(R) men's and women's underwear, men's accessories, and
men's, women's, junior women's and children's jeans,
Speedo(R)/Authentic Fitness(R) men's, women's and children's
swimwear, sportswear and swimwear accessories, Polo by Ralph
Lauren(R) women's and girls' swimwear, Anne Cole Collection(R),
Cole of California(R) and Catalina(R) swimwear, and A.B.S.(R)
Women's sportswear and better dresses.


WEIRTON STEEL: First Quarter 2002 Net Loss Drops to $44 Million
---------------------------------------------------------------
Weirton Steel Corporation (OTC Bulletin Board: WRTL) reported a
net loss of $44.6 million in the first quarter of 2002. This
compares to a net loss of $75.3 million in the first quarter of
2001, which includes a $12.3 million restructuring charge
associated with an involuntary reduction program for management
employees and an $18.1 million write-off of joint venture
interests. Excluding these one-time charges, the first quarter
2001 net loss would have been $44.9 million. Net sales in the
first quarter of 2002 were $236.1 million on shipments of
565,700 tons, compared to $252.2 million on 587,100 tons of
shipments for the same period in 2001.

As a result of the Section 201 tariffs on steel imports and
domestic supply constraints, business fundamentals are
improving. "Order rates and selling prices for our products have
begun to recover from historically low levels, and we expect to
see improved results for the second quarter," said John H.
Walker, President and CEO.

During the first quarter of 2002, the Company had substantially
implemented its cost savings program, which includes a workforce
reduction of approximately 550 employees, reduction of employee
benefit costs and other operating cost savings, and also
received an additional $24 million in liquidity improvements
under previously announced financing programs entered into
primarily with the Company's vendors.

In addition, during the first quarter the Company reached an
agreement with an informal committee of senior noteholders
regarding an exchange offer of its outstanding 11-3/8% Senior
Notes due 2004 and 10-3/4% Senior Notes due 2005.

The Company announced on April 29, 2002 that the City of
Weirton, West Virginia, at the request of the Company commenced
an exchange offer for 100% of its outstanding 8.625% Pollution
Control Revenue Refunding Bonds due 2014. Concurrently with this
exchange offer, the City of Weirton is soliciting consents from
the holders of its outstanding bonds to amend the loan agreement
between the City and Weirton Steel Corporation relating to these
bonds.

Weirton Steel Corporation is a major integrated producer of flat
rolled carbon steel with principal product lines consisting of
tin mill products and sheet products. The Company is the second
largest domestic producer of tin mill products with
approximately 25% of the domestic market share.


WEIRTON STEEL: Seeking Consents to Amend Senior Notes Indentures
----------------------------------------------------------------
Weirton Steel Corporation (OTC Bulletin Board: WRTL) is offering
to exchange up to $134.2 million in aggregate principal amount
of new 10% Senior Secured Notes due 2008 and shares of new
Series C Convertible Redeemable Preferred Stock for all of its
outstanding unsecured 11-3/8% Senior Notes due 2004 and 10-3/4%
Senior Notes due 2005. Concurrently with this exchange offer,
the Company is soliciting consents from the holders of its
outstanding Senior Notes to amend the indentures that govern
those notes.

The consent solicitation will expire at 5:00 p.m., New York
time, on May 23, 2002, unless extended, and the exchange offer
will expire at 12:00 midnight, New York time, on May 31, 2002,
unless extended.

Representatives of an informal committee of institutional
holders of approximately 58% of the aggregate principal amount
of both series of outstanding Senior Notes have agreed to tender
in this exchange offer and to consent to the proposed amendments
to the indentures governing the outstanding Senior Notes.

The Senior Secured Notes due 2008 will be secured by a security
agreement and second lien deeds of trust in Weirton Steel's
strip mill, No. 9 tin tandem mill and tin assets, which are
integral facilities in the Company's downstream steel processing
operations. The lenders under its senior credit facility will
hold first priority security interests in the same collateral.

Under the terms of the exchange, for each $1,000 in principal
amount of outstanding notes validly tendered before the consent
solicitation expires, holders will receive the total
consideration of $550 principal amount of new 10% Senior Secured
Notes due 2008, which includes a consent payment of $50
principal amount of new senior secured notes, and $450 in
liquidation preference of Series C Preferred Stock. Holders who
tender outstanding notes after the consent solicitation expires
but before the exchange offer expires will receive only the
exchange offer consideration of $500 principal amount of Senior
Secured Notes due 2008 and $450 liquidation preference of Series
C Preferred Stock.

Currently, the City of Weirton is offering, at the Company's
request, to exchange all of its outstanding Series 1989
Pollution Control Revenue Refunding Bonds for its new Series
2002 Secured Pollution Control Revenue Refunding Bonds, which
are secured on a parity with the Company's new Senior Secured
Notes due 2008. The consummation of this Senior Notes exchange
offer and the Series 1989 Bonds exchange offer are each
conditioned upon consummation of the other exchange offer.

The purpose of the exchange offers is to restructure the
Company's long- term debt and reduce its debt service
requirements, particularly over the next three years, as part of
the Company's announced five point strategic plan.

The dealer manager for the exchange offers and consent
solicitations is Lehman Brothers Inc. A copy of the prospectus
relating to the registered exchange offer for outstanding Senior
Notes can be obtained from Lehman Brothers Inc., 745 Seventh
Ave., 3rd Floor, New York, New York 10019, Attention: Hyonwoo
Shin, (212) 528-7581 (call collect) or (800) 438-3242 or can be
obtained from D. F. King & Co., Inc., 77 Water Street, 20th
Floor, New York, New York 10005, banks and brokers call: (212)
269-5550 (call collect) or (800) 431-9643. These securities are
offered only by means of a written prospectus and this is
neither an offer to sell nor a solicitation of an offer to buy.

Weirton Steel Corporation is a major integrated producer of flat
rolled carbon steel with principal product lines consisting of
tin mill products and sheet products. The Company is the second
largest domestic producer of tin mill products with
approximately 25% of the domestic market share.


WILLIAMS COMMS: Workers' Compensation Programs Continuing
---------------------------------------------------------
Williams Communications Group, Inc., and its debtor-affiliates
sought and obtained Court permission to continue the Insurance
Programs and Workers' Compensation Programs in the ordinary
course of business.

In the ordinary course of business, Erica M. Ryland, Esq., at
Jones Day Reavis & Pogue in New York, New York, relates that the
Debtors currently maintain, or is in the process of negotiating,
various property and liability insurance programs through
several different carriers. The Insurance Programs provide the
Company with insurance coverage for claims relating to, among
other things, automobile liability, general liability,
professional liability, fiduciary liability, directors' and
officers' liability, excess liability, crime and various
property-related coverage. The Debtors do not make any payments
for the Insurance Programs since all premiums and amounts owed
under the Insurance Programs, including claims deductibles, are
paid, and will continued to be paid, by Williams Communications
LLC, a non-debtor subsidiary of the Debtors. Accordingly, the
Debtors do not seek authority to pay pre-petition claims or
other amounts under the Insurance Programs.

According to Ms. Ryland, substantially all of the Debtors'
Insurance Programs are slated to expire on April 23, 2002. Prior
to the Petition Date, the Company engaged in extensive
negotiations with its existing Insurance Carriers as well as
American International Group, Inc. (AIG) for the continuation,
renewal or implementation of the Insurance Programs. AIG has
tentatively agreed to provide certain critical insurance
coverage to the Company. To the extent the Company is unable to
renew all of its Insurance Programs with their existing
Insurance Carriers or AIG, the Company will obtain retention-
based insurance coverage.

In addition, the Debtors maintain workers' compensation coverage
in approximately 40 states and the District of Columbia for the
benefit of its non-debtor subsidiaries. All of the Company's
obligations in connection with the Workers' compensation
Programs are paid by Williams LLC. Under the laws of the various
states in which they operate, Ms. Ryland explains that the
company is required to maintain workers' compensation insurance
policies and programs to provide their employees with workers'
compensation benefits for claims arising from and related to
their employment.

Ms. Ryland tells the Court that the Debtors only seek entry of
an order confirming that the Debtors may continue to maintain
the Insurance Programs and Workers' Compensation Programs in the
ordinary course of business. The Debtors have not, and will not,
make any payments on account of pre-petition or post-petition
obligations thereunder. The Debtors must be permitted to
continue the Insurance Programs for several reasons and must
continue the Insurance Programs, in full force and effect, to
provide a comprehensive range of coverage for the Company and
its businesses and properties, as required by the United States
Trustee. If the Insurance Programs are discontinued, Ms. Ryland
fears that the Company, including the Debtors, would be exposed
to substantial liability. Finally, if the Debtors are unable to
continue or renew the Insurance Programs, they will be required
to obtain insurance coverage at a much higher cost.

Ms. Ryland claims that any disruption in the Workers'
Compensation Programs could irreparably impair workforce morale
at the very time when the dedication, confidence, and
cooperation of the Company's employees is most critical. Without
the support of this key constituency, the Company's operations
would be severely impaired. On the other hand, the continuation
of the Workers' Compensation Programs will foster a sense of
"business as usual" at the Company that will facilitate the
Debtors' reorganization efforts.

Without continuation of the Workers' Compensation Programs, Ms.
Ryland contends that the Debtors would be required to make
alternative arrangements for workers' compensation coverage
because coverage is required under all applicable state workers'
compensation laws.  There are severe penalties if an employer
fails to comply with these laws. If workers' compensation
coverage is not maintained without interruption, as required by
the laws:

A. employees could bring lawsuits for potentially unlimited
    damages;

B. the Company's ongoing business operations in certain states
    could be enjoined; and

C. the Company's officers could be subject to criminal
    prosecution. (Williams Bankruptcy News, Issue No. 2;
    Bankruptcy Creditors' Service, Inc., 609/392-0900)


WIND RIVER: S&P Changes Outlook on B+ Credit Rating to Negative
---------------------------------------------------------------
On May 3, 2002, Standard & Poor's revised its outlook on Wind
River Systems Inc. to negative from stable following the
company's announcement that it expected to report sales in the
April 2002 quarter fell short of expectations.

The outlook revision reflects Standard & Poor's view that
deteriorating customer spending on software development
projects, particularly among the company's communications
customers, is likely to pressure profitability and cash flow
over the near term.

At the same time, Standard & Poor's affirmed its 'B+' corporate
credit and 'B-' subordinated ratings on the Alameda, California-
based developer of software operating systems and development
tools. Those systems and tools allow customers to create real-
time software applications for embedded computers. The ratings
on Wind River Systems Inc. continue to reflect the company's
good market position and technology competence, offset by a
limited product portfolio and the challenges of integrating past
acquisitions.

R&D spending by Wind River's top customers has declined 25%-40%
over the past year and continues to slow, limiting the company's
revenue visibility. The company expects to report sales in the
April 2002 quarter of about $65 million, down from $110 million
in the year-earlier period. Cost savings expected from the
company's planned level of expense reductions would take time to
realize and may not be sufficient to compensate revenue
shortfalls. As such, Wind River may be challenged to restore
profitability, and credit protection measures are likely to
continue to be very weak for the ratings level over the near
term. Unrestricted cash and investments, at about $275 million
as of January 2002, exceeded lease-adjusted debt of about $200
million and provide adequate liquidity.

                          Outlook

Ratings could be lowered in the near term if Wind River is
unable to restore profitability and cash flow measures
appropriate for the rating.

                        Ratings List

                    * Corporate credit B+

                    * Subordinated debt B-


WORLDCOM INC: J. Sidgmore Says Company Not Headed for Bankruptcy
----------------------------------------------------------------
New WorldCom CEO John Sidgmore insisted that the telecom giant
isn't headed for bankruptcy and can be an "engine for growth
again," according to a USA Today report. Sidgmore replaced CEO
Bernie Ebbers, who resigned on Monday last week. WorldCom is
facing bankruptcy fears, $30 billion in debt, a federal probe of
its accounting, eroding sales and a beaten-down stock price.
According to the story, Sidgmore said, "I would not have taken
this job if I thought we would be out of business next week." He
added that WorldCom would pare debt, sell or buy assets or,
perhaps, merge with another company. (ABI World, May 2, 2002)

                          *********

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of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

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

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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.

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