TCR_Public/020524.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, May 24, 2002, Vol. 6, No. 102     

                          Headlines

ANC RENTAL: Proposes Uniform Auto Accident Claim Procedures
ADELPHIA COMMS: Rigas Family Leaves Board & Transfers Assets
ADVANSTAR: S&P Ratchets 'B+'-Rated Credit Rating Down a Notch
APPLIED DIGITAL: Violates Nasdaq Continued Listing Requirements
ARMSTRONG HOLDINGS: Ruth M. Owades Elected to Board of Directors

ASBURY AUTOMOTIVE: S&P Rates $200MM Sr. Subordinated Notes at B
BINGHAM FINANCIAL: Nasdaq Delists Shares Effective May 22, 2002
CHARMING SHOPPES: S&P Rates $130MM Sr. Unsecured Notes at BB-
CLAYTON HOMES: Fitch Assigns BB+ Rating to Senior Unsec. Debt
COMDISCO INC: Gets Approval to Pay HP $18.3MM Termination Fee

COVANTA ENERGY: Wins Nod to Hire Kilpatrick Stockton as Counsel
CUCOS INC: Banner Management Named Receiver of All Seized Assets
DALEEN TECHNOLOGIES: Fails to Meet Nasdaq Listing Standards
DECORATIVE SURFACES: American Capital Takes-Over St. Louis Ops.
DISTINCTIVE DEVICES: Working Capital Too Low to Fund Operations

EOS INTERNATIONAL: Auditors Doubt Ability to Continue Operations
ENRON CORP: EESI Wants Signed Consent Solicitations Deemed Valid
ENRON: US Trustee Proposes Neal Batson's Appointment as Examiner
ENRON CORP: Fitch Hatchets PGE Unit's Outstanding Debt Ratings
EXIDE TECHNOLOGIES: Will Continue Using Cash Management System

EXODUS COMMS: Court Okays Alvarez & Marsal as Wind-Down Advisors
FAIRCHILD DORNIER: Gets Court Nod to Convert Case to Chapter 11
FEDERAL-MOGUL: Wants Mar. 3, 2003 Bar Date for Property Claims
FINGERHUT: Petters & Deikel Offer to Purchase Certain Assets
FLAG TELECOM: Bringing-In Appleby Spurling as Bermuda Counsel

FRIEDE GOLDMAN: Inks Contract to Sell Halter Marine for $48MM++
FRIEDE GOLDMAN: Bollinger Enters Pact to Acquire Halter Marine
GLOBAL CROSSING: UST Amends Creditors' Subcommittee Appointments
ICG COMMS: Judge Walsh Confirms Second Amended Joint Reorg. Plan
IT GROUP: Judge Walrath Okays Increase in DIP Financing to $75MM

ITC DELTACOM: S&P Drops Rating to D After Interest Nonpayment
KAISER ALUMINUM: Taps Deloitte & Touche as Independent Auditors
KNOWLEDGE HOUSE: Fails to Meet 2001 Fin'l Report Filing Deadline
KSAT SATELLITE: Agrees to Discontinue Beijing Gaida Operations
LODGIAN INC: Wells Fargo Balks at Cash Collateral Use

MEDALLION FUNDING: Fitch Downgrades Senior Secured Notes to B
MILLER EXPLORATION: Wants to Transfer Listing to Nasdaq SmallCap
NATIONAL STEEL: Request for Injunction vs. Illinois Power Nixed
NETIA HOLDINGS: Nasdaq Determines to Continue ADS Listing
OCEAN MARINE: Nov. 7 Hearing Set for Continued 304 Injunction

ONVIA.COM INC: Violates Nasdaq Continued Listing Requirements
PACIFIC GAS: Files Settlement with CPUC to Extend "Gas Accord"
PERSONNEL GROUP: Selects Insights for Technology Partnership
POLAROID CORP: Committee Taps Buck Consultants as Actuaries
PRANDIUM INC: Austin Grills Proposes to Purchase All Assets

PROVANT INC: Continues Nasdaq Trading While Appeal is Pending
RELIANCE: Hearing on Compensation Protocol Issue Set for June 13
ROMARCO: Tullaree Will Drawdown $2.2 Mill. Balance of Debenture
ROMARCO MINERALS: Terminates Pact to Acquire Pocketop Shares
SULPHUR CORP: Obtains Stay Extension Under CCAA in Canada

TII NETWORK: Falls Short of Nasdaq Continued Listing Standards
US PLASTIC LUMBER: Fails to Maintain Nasdaq Listing Guidelines
USI INC: Completes Restructuring with $81M Investment from Bain
VANDERBILT MORTGAGE: Fitch Hatchets Ratings on 12 Classes to BB+  
WARNACO: Gets Nod to Conduct GOB Sales at Mills Store Locations

WHEELING-PITTSBURGH: Suing Maxim Crane to Recoup Money Transfer
WILLIAMS COMMUNICATIONS: Launches New Streaming Media Services
ZENITH NATIONAL: S&P Lowers Counterparty Credit Rating to BB+

* BOOK REVIEW: Land Use Policy in the United States

                          *********

ANC RENTAL: Proposes Uniform Auto Accident Claim Procedures
-----------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates ask the Court
to approve uniform procedures that would enable the Debtors, at
their discretion, to make payments in satisfaction of
settlements of pre-petition automobile liability claims.

Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & McCauley LLP
in Wilmington, Delaware, tells the Court the Debtors want to
establish a uniform program in order to:

A. Manage the costs of defending the Claims as well as other
    expenses including, without limitation, the costs of
    attorney's fees and claims and or defense expenses;

B. Allow the Debtors to continue to make the statutorily
    required personal injury protection payments; and

C. implement a range of settlement parameters that would permit
    the settlement of the Claims.

The Debtors are confronted with approximately 10,000 claims,
including over 1,500 personal injury claims and property damage
lawsuits pending throughout the United States arising from
automobile accidents in which the Debtors' renters, who are also
named as defendants, were the drivers.

Ms. Fatell tells the Court the Debtors seek the relief requested
because the proposed procedures will significantly streamline
the settlement process and integrate each component of the
claims resolution process, minimize administrative costs and
eliminate the necessity of filing multiple motions for
authorization to settle claims, which are heard every two weeks
by the Court. The procedures call for the settlement of
automobile liability claims subject to these aggregate caps:

A. Except as provided in the Orders approving retention of
   Ordinary Course Professionals, the Debtors may continue to
   pay the First Party Coverage Costs and the Defense Costs
   without further notice or approval of the Court. The Debtors
   will provide a monthly report or Cost Report of the payment
   of all such Costs to the Court, the United States Trustee and
   the Notice Parties.

B. The Debtors, at their sole discretion, may settle individual
   Claims without further notice and without further approval of
   the Court if the settlements are within these parameters:

   1. The face amount of the settlement of any individual Claim
      is not more than $50,000;

   2. The face amount of the settlement of any individual Claim
      is between $50,001 and $100,000, provided the settlement
      is not more than 80% of the amount reserved on the
      Debtors' books and records with respect to the Claim; and

   3. The face amount of the settlement of any individual Claim
      is between $101,000 and $650,000, provided the settlement
      amount is not more than 60% of the Reserve.

C. If the Debtors settle an individual Claim in which the face
   amount of the settlement is between $50,001 and $650,000 but
   the settlement amount exceeds the percentage of Reserves set
   forth in subparagraphs (A) and (B) above, or if the
   settlement amount exceeds $650,000, the Debtors must provide
   notice of the proposed settlement to the Notice Parties, who
   will have 15 days to notify the Debtors of an objection to
   the proposed settlement. If the Debtors are advised of an
   objection, the Debtors will file a motion seeking approval of
   such settlement with the Court providing appropriate notice
   only to the settling party, the U.S. Trustee and the Notice
   Parties.

D. The Debtors will provide a Monthly Settlement Report,
   including a Cost Report, of all settlements to the Court, the
   U.S. Trustee and the Notice Parties.

E. The Debtors may only settle Claims if the total monthly
   payments of the Settlement Amounts, the Defense Costs and the
   First Party Coverage Costs do not, in the aggregate, exceed
   $8,000,000  per month. Commencing April 1, 2002, if the
   Monthly Cap is not reached in any given month, the unused
   portion will carry over to each succeeding month.

F. The Notice Parties are:

   1. The Creditors' Committee;

   2. Counsel for Congress Financial Corporation, as agent for
      the lenders under the Borrowing Base Facility;

   3. Counsel for Lehman Brothers, Inc., as agent for the
      lenders under the Term Loan and Senior Loan Agreement; and

   4. Counsel for Liberty Mutual Insurance Company, the Debtors'
      principal surety provider.

Ms. Fatell submits that authorizing the Settlement Procedures is
in the best interest of the estates because it enables the
Debtors to comply with their various state and contractual
obligations as renters of vehicles to the public. The Settlement
Procedures will also ensure that the Debtors can present to the
various state agencies that, despite their filing of Chapter 11,
can continue to defend, adjust and pay claims for which they are
liable to provide insurance. She warns that failure to comply
with these obligations could result in states refusing to renew
the Debtors' certificates of insurance. (ANC Rental Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


ADELPHIA COMMS: Rigas Family Leaves Board & Transfers Assets
------------------------------------------------------------
The Special Committee of independent directors of Adelphia
Communications Corporation (Nasdaq: ADLAE) announced that the
Rigas family, who founded Adelphia, has agreed to relinquish
control of the Company and to transfer to the Company certain
assets valued at more than $1 billion.

As part of the agreement, John Rigas, Timothy Rigas, Michael
Rigas and James Rigas have resigned as directors of the Company.  
The Board and Special Committee have also passed resolutions
calling upon Peter Venetis, a son-in-law of John Rigas, to
resign his seat on the Board of Directors.  Two non-family
directors, to be designated by the Rigas family, will be added
to the Board.

Michael Rigas and James Rigas also resigned as officers of the
Company. Michael Rigas was the Executive Vice President,
Operations and Secretary of Adelphia.  James Rigas was the
Executive Vice President, Strategic Planning of Adelphia.  Last
week John Rigas resigned as President, Chief Executive Officer
and Chairman and Tim Rigas resigned as Executive Vice President,
Chief Financial Officer, Chief Accounting Officer and Treasurer.  
John Rigas, who founded the Company in 1952 and has been its
long-time Chairman and CEO, will receive a severance agreement
under which he will be paid $1.4 million per year for three
years.

The agreement provides that: the cash flow from cable properties
owned by Rigas family entities will be used to support the
family's obligations under the co-borrowing agreements and
Company debt held by the Rigas family group, amounting to
approximately $567 million, will be transferred to the Company
in exchange for satisfaction of the Rigas family obligations
under a $202 million stock purchase agreement and a transfer to
the Company of primary liability for approximately $365 million
under the co-borrowing agreements. Additionally, those cable
properties owned by the Rigas family that the Company chooses to
have transferred to the Company will be transferred to the
Company at their appraised value.

Further, all Adelphia stock owned by the Rigas family will be
placed in a voting trust until all obligations of the Rigas
family to the Company for loans, advances, or borrowings under
the co-borrowing agreements or otherwise are satisfied.  The
voting trust will vote these shares as directed by the Special
Committee through the Company's 2004 annual meeting and
thereafter in proportion to the votes cast by all other shares.

Also under the agreement, common and preferred stock held by the
Rigas family will be pledged to the Company as security for the
balance of the Rigas family's obligations.

Newly appointed Chairman and interim Chief Executive Officer
Erland E. Kailbourne said: "I am very pleased that the Rigas
family has agreed to transfer important assets to the Company.  
This is an appropriate and useful step on the part of the Rigas
family toward restoring the Company's credibility with
shareholders, lenders and the marketplace as a whole. Together
with the efforts to sell certain Company-owned cable properties,
which Adelphia earlier announced it is pursuing, the transfer
back to the Company of the Convertible Notes held by the Rigas
family, the cash flow with the option to transfer the assets
will help us to reduce the Company's debt, increase its EBITDA
and improve its balance sheet.  The Special Committee of
independent directors is committed to both preserving and
building on the solid value and many fundamental strengths of
this Company.  The agreement with the Rigas family will further
the realization of that objective."

Leslie J. Gelber, Chairman of the Special Committee of the Board
of Directors, added: "Although the Special Committee has a
number of issues with the Rigas family, we appreciate the
family's willingness to take this important step at this time
toward the Company's recovery."

     Expected Increase in Previously Reported Indebtedness

"Our Special Committee of independent directors," Mr. Kailbourne
added, "is committed to the full, prompt and candid disclosure
of all material information regarding Adelphia's financial
situation.  The only way to restore confidence in the Company is
to have a complete review of all questions that have been raised
and to make a full and candid disclosure of any problem the
Committee may find to exist."

The Company also announced that as a result of discussions with
the Securities and Exchange Commission, the Company has
tentatively concluded that it should increase to approximately
$2.5 billion the amount of indebtedness to be included in its
consolidated financial statements, as of December 31, 2001, to
reflect the full amount of principal borrowings and interest
expense by entities affiliated with the Rigas family under
certain co-borrowing arrangements for which the Company is
jointly and severally liable.  This higher amount now includes
co-borrowing debt associated with Rigas family entities that are
valued at approximately $1 billion.

Based on information currently available, the Company believes
that at April 30, 2002, the total amount of co-borrowings by
entities affiliated with the Rigas family for which Adelphia is
jointly and severally liable was approximately $3.1 billion.

Adelphia had previously announced that it had tentatively
concluded that the amount of such indebtedness to be included in
its consolidated financial statements as of December 31, 2001,
to reflect these borrowings was approximately $1.6 billion with
a corresponding decrease in shareholders' equity.  The proper
accounting treatment for the increased indebtedness to be
included in the Company's financial statements as of December
31, 2001 and at April 30, 2002 has not yet been determined.

             Adelphia Outlines Status of Liquidity
                      and Credit Matters

As previously announced, on May 15, 2002, Adelphia and its
subsidiaries failed to make interest payments totaling
approximately $38.3 million on outstanding debt securities and
an approximately $6.5 million dividend payment on a series of
preferred shares.  The failure to make these interest payments
will, unless cured, give rise to an event of default under the
relevant public indentures and a cross-default under the
indentures governing other public debt securities of Adelphia.  
In addition, various lenders under credit facilities of
Adelphia's subsidiaries have given notices of default relating
to failure to deliver financial statements and comply with
information delivery and other requirements.

Adelphia is determining whether it is in compliance with the
debt incurrence tests contained in its public indentures.  In
addition, Adelphia believes that it is not in compliance with
certain other covenants contained in its public indentures, in
particular, restrictions on the Company's ability to enter into
transactions with affiliates without obtaining the requisite
approval of the independent members of the Board of Directors.  
The Special Committee of the independent directors, together
with the Committee's outside advisors, including forensic
accountants, is currently investigating these and other matters.

Adelphia has initiated a dialogue with the agent banks under the
existing credit facilities of its subsidiaries.  The Company is
also in the early stages of discussions with the objective of
obtaining additional capital in the near term while continuing
its previously announced initiative to sell selected assets.  
There can be no assurances as to the outcome or timing of these
efforts.

As previously announced, trading in Adelphia's shares on the
Nasdaq National Market has been suspended since May 14, 2002 and
on May 16, 2002, Nasdaq conducted a hearing regarding the
possible delisting of the Company's shares from the Nasdaq.  
Adelphia expects to receive an indication from Nasdaq in the
near future regarding the Company's listing status.

If Adelphia's shares cease to be quoted on the Nasdaq National
Market and are not listed on a national securities exchange, the
Company would be required to make an offer to purchase all of
its outstanding 6% Convertible Subordinated Notes due February
15, 2006 and its 3.25% Convertible Subordinated Notes due May 1,
2021.  The purchase price for the notes would be equal to 100%
of their principal amount plus accrued and unpaid interest.  The
Company would be required to purchase such notes at the end of
the offer period.

Excluding amounts held by the Rigas family, as of March 31,
2002, the total outstanding principal amount of the 6%
Convertible Subordinated Notes was $862,500,000 and the total
outstanding principal amount of 3.25% Convertible Subordinated
Notes was $575,000,000.

Entities controlled by the Rigas family own $167,376,000 in
principal amount of a separate class of 6% Convertible
Subordinated Notes and $400,000,000 in principal amount of a
separate class of 3.25% Convertible Subordinated Notes.  These
Convertible Notes will immediately be transferred by the Rigas
Family to the Company, reducing the Company's balance sheet debt
by $567,376,000.

The terms of the notes held by entities controlled by the Rigas
family are substantially identical to the terms of the
comparable notes held by other parties.

The Company also intends to file a Form 8-K with the Securities
and Exchange Commission today or tomorrow, disclosing certain
related-party transactions.

Adelphia Communications Corporation, with headquarters in
Coudersport, Pennsylvania, is the sixth-largest cable television
company in the country.


ADVANSTAR: S&P Ratchets 'B+'-Rated Credit Rating Down a Notch
-------------------------------------------------------------
Standard & Poor's said that it lowered its corporate credit
rating on business-to-business media company Advanstar
Communications Inc. to single-'B' from single-'B'-plus based on
expectations that the difficult operating environment and
weakness in certain end markets will impair its profitability
and credit measures.

Standard & Poor's also lowered its debt ratings on the company.
The company has been removed from CreditWatch with negative
implications. The current outlook is negative.

The company, based in Boston, Massachussets, is analyzed on a
consolidated basis with its parent, Advanstar Inc. Total debt,
inclusive of $88 million in parent company debt, was $655
million as of March 31, 2002.

"Advanstar has been negatively affected by sector specific
problems in certain end markets, the weak advertising
environment, the decline in business travel, and the
exacerbation of these conditions as a result of September 11,"
said Standard & Poor's analyst Steve Wilkinson.

Standard & Poor's also said, however, that Advanstar has been
less affected by these issues than some of its peers because of
its fairly good revenue diversity and its limited reliance on
profits in the fourth quarter, when industry results were
severely damaged in 2001 following September 11.

The company also benefits from the relatively stable performance
of certain businesses. The strength of the company's MAGIC
fashion events is critical to earnings stability because these
semiannual shows represent about 20% of its revenue and nearly
40% of its EBITDA before corporate expenses. Still, Advanstar's
technology and travel businesses should perform poorly for the
foreseeable future.

Advanstar enjoys good competitive positions in its trade show
and publishing businesses, decent sector diversity, and the
relative stability of important parts of its portfolio. These
factors are offset by poor industry operating environment and
the company's high financial risk.

Advanstar is a leading trade magazine publisher and exhibition
organizer with a portfolio of about 90 controlled circulation
magazines and directories and 80 events.


APPLIED DIGITAL: Violates Nasdaq Continued Listing Requirements
---------------------------------------------------------------
Applied Digital Solutions, Inc. (NASDAQ: ADSXE), an advanced
technology development company, announced that its ticker symbol
will have an "E" appended to it.

As the company disclosed in a press release early Tuesday, the
timing of Grant Thornton's resignation as the company's outside
auditors (on May 14, 2002) prevented the company from filing its
Form 10-Q (filed on May 20, 2002) with an auditor's review. As a
result, late Tuesday afternoon, the company received a letter
from the Nasdaq staff indicating that the Form 10-Q does not
comply with Marketplace Rule 4310(C)(14), and, accordingly, an
"E" will be added to its trading symbol. The letter indicated
that the company's common stock is subject to delisting unless
the company requests a hearing before a Nasdaq listing
qualifications panel. The company has already informed Nasdaq
that it intends to make such a request. In accordance with
applicable Marketplace Rules, the hearing request will have the
effect of staying any action pending the decision of the hearing
panel. In the interim, the letter "E" will be appended to the
company's trading symbol.

Scott R. Silverman, President of Applied Digital Solutions,
commented on the notice from Nasdaq: "We have already informed
Nasdaq that this deficiency is of a temporary nature and that we
will hire new auditors in the very near future and file an
amended, auditor-reviewed 10-Q as soon as the new auditors can
help us do so. We are confident that we will be able to file the
auditor-reviewed 10-Q in the very near future and come into full
compliance with Nasdaq financial reporting requirements."

Applied Digital Solutions (Nasdaq: ADSXE) is an advanced
technology development company that focuses on a range of life-
enhancing, personal safeguard technologies, early warning alert
systems, miniaturized power sources and security monitoring
systems combined with the comprehensive data management services
required to support them. Through its Advanced Technology Group,
the company specializes in security-related data collection,
value-added data intelligence and complex data delivery systems
for a wide variety of end users including commercial operations,
government agencies and consumers. For more information, visit
the company's Web site at http://www.adsx.com


ARMSTRONG HOLDINGS: Ruth M. Owades Elected to Board of Directors
----------------------------------------------------------------
Armstrong Holdings, Inc., (NYSE: ACK) announces the election of
Ruth M. Owades to its board of directors.  Owades is the founder
and former chairman of Calyx & Corolla, the first fresh flower
catalog and web site.  "Armstrong will benefit from Ruth's
experience in consumer businesses which emphasize style and e-
business," said chairman and CEO Michael D. Lockhart.

Considered a pioneer in the floral industry, Owades
revolutionized the way Americans buy flowers.  She reinvented
the distribution process to make it possible for consumers to
buy flowers direct-from-the-grower.  Owades launched her first
catalog, Gardener's Eden, in 1979, selling upscale gardening
accessories.  The successful catalog was purchased by Williams-
Sonoma three years later.  She held the position of CEO until
1986.

In 1988, Owades created Calyx & Corolla, the Flower Lover's
Flower Company(TM), headquartered in San Francisco.  She
developed strategic alliances with FedEx and top growers
nationwide, making next-day, direct-from-the-grower delivery
possible.  Under her leadership, Calyx & Corolla blossomed into
a $25 million company with more than 15 million catalogs mailed
annually. The business was sold in 1999.

Owades was awarded an undergraduate degree from Scripps College
in Claremont, California, followed by a Fulbright Grant to study
theater in France.  She has an MBA from Harvard Business School.

In 1997 Business Week hailed Owades as a "Best Entrepreneur,"
for "changing the way we buy flowers."  Owades received the 1997
"Alumni Achievement Award" from Harvard Business School, the
1996 "Magnificent Seven Award" from Business and Professional
Women/USA, the 1992 "Cataloguer of the Year Award" from Target
Marketing Magazine and the 1989 "Distinguished Alumna Award"
from Scripps College.

Owades sits on the Board of Directors of Providian Financial
Corporation and The J. Jill Group, Inc.  Additionally, she is a
member of the Board of Associates of Harvard Business School,
the Board of Trustees of Scripps College, the Council on
Competitiveness, the Committee of 200, the Advisory Council for
Bank of America's Women's Banking Initiative, and the Advisory
Board of Versura Inc. (Armstrong Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

Armstrong Holdings Inc.'s 9.0% bonds due 2004 (ACK04USR1), says
DebtTraders, are quoted at a price of 58.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ACK04USR1for  
real-time bond pricing.


ASBURY AUTOMOTIVE: S&P Rates $200MM Sr. Subordinated Notes at B
---------------------------------------------------------------
Standard & Poor's said that it assigned its double-'B'-minus
corporate credit rating to Asbury Automotive Group Inc., a
retailer of automotive vehicles.

In addition, Standard & Poor's assigned its single-'B' rating to
the company's proposed $200 million senior subordinated notes
due 2012. Proceeds from the debt issue will be used to repay
indebtedness under the company's credit facility. Stamford,
Connecticut-based Asbury has total debt of about $935 million.
The outlook is stable.

"The ratings reflect Asbury's below-average business profile as
a leading supplier in the highly fragmented, cyclical, and
competitive automotive retail industry, combined with its
aggressive growth strategy and weak financial profile," said
Standard & Poor's analyst Martin King.

Asbury is one of the five largest U.S. retailers of automobiles
with more than $4 billion in annual revenues. With 127
franchises at 91 dealership locations in 17 market areas, Asbury
has achieved a moderate degree of geographic and brand
diversity. Asbury benefits from its leading positions and strong
brand names in its local markets. Although demand for new
vehicles is cyclical, demand should be more stable for Asbury's
higher-margin used vehicles, parts and service, and finance and
insurance products, which together account for about 70% of
gross profit.

Financial risk arises from thin profit margins and an aggressive
acquisition strategy. Although profit margins are comparable to
industry averages, they are weaker than those of some other
large, publicly-held dealerships. Efforts are underway to
improve the performance of two under-performing platforms and
several dealerships have been divested. The current strength of
the new vehicle market (influenced by generous manufacturer
incentives) and growth in Asbury's higher-margin revenue sources
have contributed to fair operating performance. Nevertheless,
the extent to which financial performance could erode in a
cyclical downturn sharper than the one recently experienced is a
major risk factor.

Asbury's strong brand mix, good revenue diversity, and
disciplined acquisition strategy should result in sustained
credit quality appropriate for the rating category.


BINGHAM FINANCIAL: Nasdaq Delists Shares Effective May 22, 2002
---------------------------------------------------------------
Bingham Financial Services Corporation (Nasdaq:BFSC) announced
that the Company's stock was delisted from the Nasdaq SmallCap
Market, effective with the opening of business Wednesday, May
22, 2002. Bingham expects that the Company's stock will now
trade on the Over the Counter Bulletin Board under the symbol
BFSC.OB.

Bingham is a specialized financial services company that
provides financing for new and previously owned manufactured
homes as well as servicing on manufactured home loans through
its Origen Financial L.L.C. subsidiary.


CHARMING SHOPPES: S&P Rates $130MM Sr. Unsecured Notes at BB-
-------------------------------------------------------------
Standard & Poor's assigned its double-'B'-minus rating to
specialty apparel retailer Charming Shoppes Inc.'s proposed $130
million senior unsecured convertible notes due in 2012. Proceeds
from the debt issuance will be used to refinance existing debt.
The double-'B'-minus corporate credit rating on the company was
also affirmed. The outlook is stable. Bensalem, Pennsylvania-
based Charming Shoppes had total debt outstanding of $263
million as of February 2, 2002.

"The ratings are based on the company's high business risk,
given its participation in the highly competitive and volatile
specialty apparel industry," Standard & Poor's credit analyst
Diane Shand said. "This is mitigated, somewhat, by the company's
good position in the faster-growing large-size women's specialty
apparel segment."

Standard & Poor's said that credit protection measures are
adequate for the rating category, with EBITDA coverage of
interest at 2.2 times and funds from operations to total debt of
20.1%. Leverage is high, with total debt to EBITDA at 6.3x. It
said the proposed debt transaction is not expected to materially
change the company's capital structure. Liquidity is provided by
a $300 million secured revolving credit facility, of which $185
million was available on February 2, 2002, and $85 million of
cash and marketable securities also on the balance sheet on
February 2, 2002. The company has no significant debt maturities
until 2006.

Charming Shoppes operates almost 2,500 women's specialty apparel
stores in 48 states, primarily under the names Fashion Bug,
Fashion Bug Plus, Catherine's Plus Sizes, and Lane Bryant.


CLAYTON HOMES: Fitch Assigns BB+ Rating to Senior Unsec. Debt
-------------------------------------------------------------
Fitch Ratings assigns Clayton Homes, Inc. (CMH) an indicative
senior unsecured rating of 'BB+'. The Rating Outlook is Stable.

The rating is based on the company's historically conservative
corporate financial policy, broad vertical integration, high
recurring stream of income and substantial free cash flow
generation that results from its operating model. Management
clearly understands the dynamics of the manufactured housing
sector and had the discipline to not over-expand during the last
cyclical upturn. Concerns with Clayton center on the high-risk
credit profile of the financial services operations (Vanderbilt
Mortgage), dependence on secured funding facilities, capital
constraints required to run a financial services unit, and
declining portfolio performance measures as a result of the
slowdown in the manufactured housing industry. Continued
pressures relating to industry consumer and wholesale credit
availability are also concerns.

Industry manufactured housing shipments declined from 372,843 in
1998 to 193,229 in 2001 and may not yet have bottomed.
Considerable industry production, retail and finance capacity
have exited the business. Yet Clayton has remained solidly
profitable, largely because of its integrated businesses and
conservative operating policies. The company is one of the few
truly vertically integrated companies in this industry. Clayton
is the largest retailer of these homes and the third largest
manufacturer. The company finances home purchase and provides
insurance. Clayton also acquires and develops, markets and
manages manufactured housing communities.

The company's financial ratios continue to be solid:
manufacturing/retail/communities EBITDA/interest incurred of
46.2 times, corporate EBITDA/interest incurred of 92.5x,
inventory turnover of 3.0x, debt/capital ratio of 7.1%
(excluding certain contingent liabilities).

Despite the high-risk nature of manufactured housing loans, the
company's more stringent underwriting guidelines have helped the
company to produce better asset quality than the majority of its
industry peers. However, as the manufactured housing industry
continues to deteriorate, Clayton's asset quality has been
increasingly impacted in recent quarters. Also, Fitch notes that
Clayton provides financial support to the asset-backed bonds
issued by Vanderbilt Mortgage helping to bolster the performance
of those securitizations. If this practice was discontinued, it
could somewhat impede the company's ability to access the
securitization markets in a cost-effective manner in the future,
hurting financial performance.

Excluding securitization, the company would need to identify
other availability for funding its loan portfolio on a long-term
basis. Without an ability to finance sales of manufactured homes
through its finance subsidiary, Fitch would expect that Clayton
might have difficulty competing for future retail sales.
Although Clayton maintains a healthy equity base at the
consolidated level, the finance unit requires a significant
amount of equity to run its business. Fitch assigns a
significant level of capital to the company's securitization-
based assets, including the corporate guarantees issued by
Clayton Homes on the subordinated tranches of existing
securitizations.


COMDISCO INC: Gets Approval to Pay HP $18.3MM Termination Fee
-------------------------------------------------------------
The Court authorizes Comdisco, Inc., and its debtor-affiliates
to pay Hewlett-Packard Company $18,300,000 as an allowed
administrative priority expense in immediately available funds.  
In addition, Judge Barliant directs the Debtors to pay the
reasonable costs and expenses incurred by Hewlett-Packard in
connection with the transactions in the Acquisition Agreement
not exceeding $5,000,000.  However, in the event that there is a
dispute regarding any portion of amount claimed by Hewlett-
Packard with regards to the expense reimbursement, which both
parties cannot resolve following good faith efforts, the Debtors
shall pay the undisputed amount and promptly file a motion
seeking a hearing before this Court for a resolution of any
disputed amount. (Comdisco Bankruptcy News, Issue No. 28;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


COVANTA ENERGY: Wins Nod to Hire Kilpatrick Stockton as Counsel
---------------------------------------------------------------
Judge Blackshear approved Covanta Energy Corporation's
application to retain Kilpatrick Stockton LLP, nunc pro tunc
effective as of April 1, 2002, as special counsel for the
Debtors in these Chapter 11 cases.

The Debtors propose to retain and employ Kilpatrick, pursuant to
Section 327(e) of the Bankruptcy Code, as their special counsel
to represent them in on-going or future litigation relating to
wrongful termination of Amended and Restated Solid Waste
Disposal Service Agreement between the Onondaga Country Resource
Recovery Agency (OCRRA) and the Onondaga Limited Partnership.

In March 2001, Onondaga Limited Partnership filed suit against
OCRRA for a variety of reasons, including, among others,
repeated breaches of the Onondaga Service Agreement and OCRRA's
failure to comply with the New York Open Meetings Law before
taking various actions against the Limited Partnership.
Specifically, OCRRA claims that a downgrade of Covanta's credit
rating in December 2001 was, without more, a sufficient basis to
terminate the Onondaga Service Agreement. Covanta disputes that
claim and has alleged that OCRRA has been engaged in a long-term
pattern of bad faith dealing.

Kilpatrick is a law firm that employs more than 500 attorneys.
The Debtors have selected Kilpatrick as special counsel because
of the firm's involvement as lead litigation counsel in this
case prior to the bankruptcy, and Kilpatrick lawyers' regular
representation of Covanta in a variety of complex litigation
matters which gives it great familiarity with Covanta's
business. Kilpatrick has indicated a willingness to act on the
Debtors' behalf to render the foregoing professional services.
Mr. Horowitz contends that the Debtors firmly believe that
Kilpatrick is well qualified to represent their interests and
the interests of their estates. If the Debtors are not permitted
to retain Kilpatrick as their special counsel, the Debtors,
their estates and all parties in interest would be unduly
prejudiced by the time and expense necessary to familiarize
themselves with the Onondaga Service Agreements and related
legal issues.

The Debtors understand that Kilpatrick intends to apply to the
Court for allowance of compensation and reimbursement of
expenses in accordance with applicable provisions of the
Bankruptcy Code, the Bankruptcy Rules and the Local Rules and
orders of this Court. Subject to Court approval under Section
330(a) of the Bankruptcy Code, compensation will be payable to
Kilpatrick on an hourly basis at its customary hourly rates for
legal services rendered that are in effect from time to time,
plus reimbursement of actual, necessary expenses incurred by the
Firm. Kilpatrick's hourly rates, subject to periodic adjustments
to reflect economic and other conditions, are:

       Partners           $230 - $500
       Of Counsel         $275 - $500
       Counsel/Associates $160 - $350
       Paralegals          $95 - $170

The Firm's standard hourly rates are set at a level designed to
compensate the Firm fairly for the work of its attorneys and
paralegals and to cover fixed and routine overhead expenses.

In connection with the reimbursement of actual, necessary
expenses, the Debtors have been informed that it is the Firm's
policy to charge its clients in all areas of practice for
expenses incurred in connection with the clients' cases. The
expenses charged to Kilpatrick's clients include, among other
things, telephone and telecopier charges, mail and express mail
charges, special or hand delivery charges, document processing
charges, photocopying charges, travel expenses, expenses for
"working meals," computerized research, transcription costs, as
well as non-ordinary overhead expenses such as secretarial
overtime. The Debtors have been informed that the Firm believes
it is fairer to charge these expenses to the clients incurring
them than to increase the hourly rates and spread the expenses
among all its clients. The Debtors have been assured that
Kilpatrick will charge the Debtors for these expenses in a
manner and at rates consistent with charges made to the Firm's
other clients. (Covanta Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CUCOS INC: Banner Management Named Receiver of All Seized Assets
----------------------------------------------------------------
On May 20, 2002 the ACLC Business Loan Receivables Trust 1998-1,
through Delaware Trust Capital Management, Inc. as owner
trustee, and Wells Fargo Bank, Minnesota, N.A., as indenture
trustee, acting through their agent, AMRESCO Commercial Finance
Inc., the principal creditor of Cucos Inc. (OTCBB:CUCO), served
on the Company orders seizing substantially all of the Company's
assets and appointing Banner Management, Inc. as keeper and
receiver of those assets pending completion of foreclosure
proceedings. This seizure was accomplished through court filings
in federal court in the Eastern District of Louisiana. A similar
filing in state court in Mississippi is expected to result in
seizure and appointment of a receiver for the Company's assets
in Mississippi.

Banner Management, Inc. is expected to employ the Company's
restaurant employees and continue the operation of all the
Company's restaurants through foreclosure and sale. The Company
does not have any other substantial assets separate from those
seized Wednesday, and the Company believes that the Company is
unlikely to be able to continue as a going concern.

Cucos Inc. common stock is traded on the NASDAQ over-the-counter
bulletin board (CUCO.OB), and the Company is headquartered
at 110 Veterans Boulevard, Suite 222, Metairie, Louisiana 70005.


DALEEN TECHNOLOGIES: Fails to Meet Nasdaq Listing Standards
-----------------------------------------------------------
Daleen Technologies, Inc. (Nasdaq:DALN), a global provider of
high performance billing and customer care software solutions
that manage the revenue chain, said that on May 16, 2002, it
received a Nasdaq Staff Determination that the company has not
met the minimum bid price requirement set forth in Marketplace
Rule 4450(a)(5) for continued listing on The Nasdaq National
Market, and that it anticipates receiving a similar Nasdaq Staff
Determination this week that it has not met the minimum market
value of publicly held shares requirement set forth in
Marketplace Rule 4450(a)(2).

As a result of each of these determinations, the company's
common stock is subject to delisting from The Nasdaq National
Market.

The company intends to request a hearing before the Nasdaq
Listing Qualifications Panel to review the Nasdaq Staff's
determinations. At the hearing, the company will be given the
opportunity to provide the Panel with arguments in support of
its continued listing. However, there can be no assurance that
the Panel will grant the company's request for continued
listing. If the appeal is not granted, or if the company decides
for business reasons not to seek the appeal, the company's
common stock will be delisted from The Nasdaq National Market.

In that event, the company plans to apply to list its common
stock on The Nasdaq SmallCap Market. The date for the hearing
has not yet been established. The company has been advised by
Nasdaq that its common stock will continue to be listed on The
Nasdaq National Market pending the outcome of the hearing.

Daleen Technologies, Inc. is a global provider of high
performance billing and customer care software solutions that
manage the revenue chain for traditional and next-generation
communication service providers, retailers and distributors of
digital media, and technology solutions providers. Offering
proven integration with leading CRM and other legacy enterprise
systems, Daleen's RevChain(TM) software and pure Internet
Integration Architecture(TM) leverage open Internet technologies
to enable providers to achieve peak operational efficiency while
driving maximum revenue from their product and service
offerings. The company is currently ranked No. 1 worldwide in
overall customer satisfaction based on timeliness of delivery,
functionality, delivery within budget, vendor support and
maintenance, system flexibility and interoperability.(a)
Additional information is available at http://www.daleen.com


DECORATIVE SURFACES: American Capital Takes-Over St. Louis Ops.
---------------------------------------------------------------
American Capital Strategies Ltd. (Nasdaq: ACAS), has invested
$13.7 million in American Decorative Surfaces Inc., to fund the
purchase of the St. Louis area operation of Decorative Surfaces
International Inc. from the DSI bankruptcy estate.  The
investment, in the form of preferred stock, gives American
Capital 100% ownership of the company and was predominately used
to retire senior debt.  The purchase price includes the
assumption of $24.5 million of debt owed to American Capital by
DSI.  American Decorative Surfaces will continue the business of
manufacturing decorative paper and vinyl surfacing material for
the home and industrial markets.  LaSalle National Bank provided
$14.3 million of senior debt to American Decorative Surfaces.

"After over a year of work, our ownership has increased from 43%
of DSI to 100% of DSI's best facility.  Over that time we have
substantially increased EBITDA available for debt service,
reduced senior debt above us by over $19 million and severely
reduced other obligations," explained American Capital Chairman,
President and CEO Malon Wilkus.  "This is the second portfolio
company in which our liens were critical to recovering value
through a bankruptcy.  We are particularly pleased that the St.
Louis business operated in bankruptcy for only 63 days, an
extremely short period."

DSI entered bankruptcy on March 19th, 2002, after its Columbus,
OH facility, which manufactured commercial wallcoverings,
experienced large operating losses.  These losses were the
result of a dramatic increase in resin and other materials
prices, as well as a precipitous drop in sales to the
manufactured housing market caused by the depression in that
industry. St. Louis, producing different products and operating
in substantially different markets, was not significantly
impacted by these developments, though sales have been depressed
by the recession.

"One of our operating principals, Bob Sharp, spent nearly ten
months on site helping DSI revamp its management team,
rationalize its cost structure and maximize the value of its
assets," said Ira Wagner, American Capital Executive Vice
President and COO.  "American Capital's Gordon O'Brien, Managing
Director, and Michael Ranson, VP, spent months assisting DSI in
its successful sale of its Columbus business to reduce debt and
eliminate operating losses.  The purchase of the on-going
operations by American Decorative Surfaces is the final step in
a long process that has allowed us to preserve value that might
have been lost by other mezzanine lenders."

"American Capital is funding the purchase of a state-of-the-art,
two year old facility that is the low-cost producer with
excellent market share.  It is producing attractive cash flows
and is well positioned to grow as the economy improves,"
observed Gordon O'Brien.

Separately, American Capital reported that the Biddeford Textile
business, a manufacturer of electric and conventional blankets,
emerged from bankruptcy, conveying title to its manufacturing
facility to Biddeford Real Estate Holdings, Inc., a wholly owned
portfolio company of American Capital.  Prior to the
reorganization, American Capital held a first lien on the
manufacturing facility as collateral for its loan to Biddeford
Textile.  Biddeford Real Estate Holdings has entered into a
market value five-year lease with Biddeford Acquisition, LLC
(BAL).  BAL sponsored the reorganization of Biddeford Textile
and is a subsidiary of Microlife Corporation, a Taiwanese and
Swiss-based manufacturer of medical and electronic equipment.  A
Microlife subsidiary has provided a letter of credit and
guarantee for the lease.

"We are pleased to achieve complete recovery of our investment
at Biddeford.  The annual lease payments on the property that we
now own will substantially exceed the interest payments on our
original loan to Biddeford. We particularly find it rewarding
that the company will return to being the number two supplier of
electric blankets in North America," concluded Mr. Wilkus.

American Capital is a publicly traded buyout and mezzanine fund
with capital resources exceeding $1 billion.  American Capital
is an equity partner in management and employee buyouts; invests
in debt and equity of companies led by private equity firms, and
provides capital directly to private and small public companies.  
American Capital funds growth, acquisitions and
recapitalizations.  The Company has paid and declared $8.98 per
share in dividends since going public in 1997.

Companies interested in learning more about American Capital's
flexible financing and ability to provide senior debt,
subordinated debt and equity should contact Mark Opel,
Principal, at 800-248-9340, or visit the Web site at
http://www.AmericanCapital.com


DISTINCTIVE DEVICES: Working Capital Too Low to Fund Operations
---------------------------------------------------------------
Distinctive Devices, Inc. incurred net losses of $189,649 and
$3,893,231 during the three months ended March 31, 2002, and the
period from February 5, 1998 (inception) to March 31, 2002,
respectively.  The Company's working capital at March 31, 2002
of approximately $690,000 is not sufficient to fund operations
at the current level.  These factors raise a substantial doubt
about the Company's ability to continue as a going concern.  
Management of the Company is considering acquiring or merging
with an operating company, commencing new operations and
obtaining financing through the issuance of debt and stock.

The ability of the Company to continue as a going concern is
dependent on management's ability to continue to obtain
financing, to successfully implement its business plan and to
establish profitable operations.  

In mid-2001, the Company abandoned its earlier plan to provide
wireless ISP services in the New York City area.  Since then,
management's efforts have been directed toward the establishment
of three new businesses.  Two of these had aggregate sales of
$437,790 during the three months ended March 31, 2002,
representing the Company's first operating revenue since its
recapitalization in 1998 (inception).

One new business involves the design, development and production
of software products and customized software and multimedia
solutions, including website design and support.  These
activities are conducted by its 96.6%-owned subsidiary,
Distinctive Devices (India), PLC, based in Mumbai (Bombay),
India, which was organized by the Company and became operational
November 30, 2001.  A second subsidiary, Webpulse Consulting,
Inc., based in Fort Lee, New Jersey, is wholly-owned and works
with its Indian counterpart and is responsible for marketing in
the U.S.  Webpulse was acquired by the Company on October 31,
2001, by the issuance of 1,770,000 shares of common stock.  The
Company's president, Mr. Mody, was, and remains, president of
Webpulse and his wife was the controlling shareholder of
Webpulse.

During the three months ended March 31, 2002, the Company
sustained a loss from continuing operations of $150,408,
compared to a similar loss of $316,034 during the same period a
year earlier.  The improvement is attributable to lower expenses
in the 2002 period, stemming from lease terminations and staff
reductions.

In the 2002 period, a further loss of $39,241 resulted from a
downward revaluation of assets remaining from the 2001
discontinuance of wireless ISP operations.

Working capital at March 31, 2002 approximated $690,000, an
amount insufficient to fund continuing operations at the current
level. Unless sales increase markedly, and profits are realized,
additional working capital will be needed.  If so, the Company
will seek to place additional amounts of debentures or capital
stock.  No assurance can be given, however, that a future
placement of securities can be accomplished, or would not be
dilutive to current shareholders.


EOS INTERNATIONAL: Auditors Doubt Ability to Continue Operations
----------------------------------------------------------------
Eos International Inc.'s operations are constrained by an
insufficient amount of working capital. At March 31, 2002, the
Company had working capital of $5,526,000. The Company has
experienced negative cash flows and net operating losses for the
three months ended March 31, 2002. Due to the seasonal nature of
the Company's business, the Company expects to generate positive
operating cash flows during the fourth quarter of 2002. However,
there can be no assurances that future income will be sufficient
to fund future operations. Eos has short term notes in the
amount of $3.0 million payable to Weichert Enterprises, LLC and
$3.5 million payable to DL Holdings I, LLC plus accrued interest
which become due May 15, 2002. The Company needed to raise
sufficient capital or arrange additional financing terms by May
15, 2002 to satisfy these obligations. The Company has
restrictions from lenders and certain note holders of its
subsidiaries that limit advances that Discovery Toys and Regal
may make to Eos to cover its corporate overhead and operating
expenses. There can be no assurance that operating cash flows
generated from future sales will be sufficient to fund the
Company's operations. For these reasons, there is uncertainty as
to whether the Company can continue as a going concern beyond
May 15, 2002. The Company's independent auditors indicated that
substantial doubt exists as to the Company's ability to continue
to operate as a going concern in their report included in the
Company's 2001 Annual Report filed on Form 10-K.  

Discovery Toys current projections indicate it will need a
relaxation of the borrowing requirements from its primary lender
in excess of $1.0 million from July through October of 2002. On
April 26, 2002, Discovery Toys entered into an amendment of its
loan agreement with its primary lender, PNC Bank, that allows
relaxation of its borrowing requirements from July 1, 2002 until
November 30, 2002. The modification eases the borrowing base
restrictions by $600,000 in July 2002, by $1 million in August
2002, $1,250,000 in September and October 2002, and $700,000 in
November 2002. PNC also permitted Discovery Toys to pay funds to
Eos for corporate overhead charges incurred by Eos in the amount
of $250,000 until June 30, 2002 and an additional $150,000
during the remainder of 2002 for $400,000 in total during the
year.

Regal has significant interest bearing obligations incurred in
connection with its purchase. Current operating projections
indicate that Regal will fully utilize its operating line of
credit during 2002. There can be no assurances that Regal will
not be required to request relaxation of its borrowing base
requirements from its primary lender on its line of credit
during the next 12 months or that, if requested, its lender will
agree to a relaxation of the borrowing base requirements.

Failure to negotiate satisfactory agreements with its lenders to
meet Eos operating cost requirements and seasonal financing
requirements of Discovery Toys and Regal or the failure to
secure additional financing or sources of capital to meet its
corporate overhead expenses and the repayment of the short term
notes could result in the cessation of operations, an
involuntary bankruptcy of Eos, or an involuntary bankruptcy of
one or more of its subsidiaries.

In connection with the issuance of short-term notes in December
2001, the Company issued warrants to purchase an aggregate of
2,600,000 shares of the Company's common stock to the short-term
noteholders. As Eos' short-term notes were not repaid by their
original maturity date of April 13, 2002, Eos will incur
$390,000 of expense associated with an increase in the price at
which the holders may sell or put their warrants back to Eos
during the secod quarter of 2002.  If the Company does not repay
its short-term notes by May 15, 2002, current agreements call
for the Company incur additional expense associated with an
increase in the price at which the Company may call the note
holders' warrants and the note holders may put their warrants
back to the Company. If the Company does not repay these short-
term notes and is unable to exercise its call option and
repurchase the warrants issued to the note holders by May 15,
2002, the Company will incur an additional $390,000 of expense
associated with an increase in the redemption value of the
warrants.  If the Company is unable to exercise its call option
and purchase the warrants issued to the note holders by August
14, 2002, the Company will incur an additional $1,170,000 of
expense associated with an increase in the redemption value of
the warrants.   

Failure of the Company to have adequate liquidity to meet its
corporate overhead expenses could result in failure to pay the
salary of its chairman, Peter Lund. Such a failure could
constitute a constructive termination, which would require
payment of Mr. Lund's deferred compensation in the amount of
$3.0 million. The Company would currently be unable to satisfy
this obligation. This could cause Eos to cease operations or
result in an involuntary bankruptcy.

Discussions have commenced with the primary lenders of Regal to
attempt to permit Regal to fund additional corporate overhead
incurred by Eos. This concession would be similar to the one
negotiated for Discovery Toys. There can be no assurance that a
final agreement will be reached on these amendments to the
current loan arrangements.

Management is actively pursuing new sources of financing, which
may include additional sales of the Company's securities to
provide sufficient cash to meet its short term debt
requirements, provide additional working capital and fund future
potential acquisitions. There can be no assurance that any new
sources of financing will be available on terms acceptable to
the Company, if at all.


ENRON CORP: EESI Wants Signed Consent Solicitations Deemed Valid
----------------------------------------------------------------
Irena M. Goldstein, Esq., at LeBoeuf, Lamb, Greene & MacRae LLP,
in New York, relates that Consent Solicitations were sent to all
of the Customers in Maine, Massachusetts, and Texas.  These were
pursuant to the Court-approved bidding procedures for the sale
of Enron Energy Services Inc.'s retail contracts to
Constellation Power Source Inc.  All Customers had the option:

  (1) of consenting to the assumption and assignment of their
      Retail Contracts to Constellation by signing and returning
      the Consent Solicitations, or

  (2) of declining to consent to the inclusion of their Retail
      Contracts in the Sale by not signing Consent
      Solicitations.

On April 17, 2002, Ms. Goldstein recounts that she was served
with the Conditional Consent to Assignment of Maine Contracts by
Maine Electric Consumer Cooperative and Competitive Energy
Services LLC, on behalf of Designated Maine Customers.  In their
Conditional Consent, the Agents asserted that they:

  -- are agents to the vast majority of Enron Energy's Customers
     in Maine; and

  -- have gathered signed Consent Solicitations and are
     withholding such signed Consent Solicitations from Enron
     Energy and Constellation "until the credit and cure of the
     defaults are ordered cured by the Court."

Ms. Goldstein tells the Court that Enron Energy neither admits
nor denies the existence or accuracy of any specific default
described in the Agents' Conditional Consent, because
determining the precise amount of each individual Customers'
cure is not a simple matter and the process of cure calculations
has not yet been completed.

According to Ms. Goldstein, Enron Energy attempted in good faith
to resolve the various objections raised by the Agents, as well
as other objections raised by a number of Customers in Texas and
Massachusetts, prior to the Sale Hearing.  By the time of the
Sale Hearing, Ms. Goldstein reports that nearly all of the
objections of Customers were in fact resolved, and Enron Energy
reached agreement with the majority of individual Customers that
had filed objections as to cure amounts in particular.  
"However, the Agents represent approximately 550 Customers whose
Retail Contracts and cure amounts must each be evaluated on an
individual basis, and thus, the exact cure amounts cannot be
calculated prior to the intended Closing Date for the Sale," Ms.
Goldstein explains.

Apparently, Ms. Goldstein informs Judge Gonzalez, the Agents
instructed the Maine Customers to send their signed Consent
Solicitations to the Agents instead of using the postage-prepaid
envelopes addressed to Constellation that Enron Energy had
included with the Consent Solicitations.  Despite such
instructions, Ms. Goldstein notes, some Maine Customers sent
their signed Consent Solicitations to Constellation or directly
to Enron Energy.  At the bottom of several of the signed Consent
Solicitations that Enron Energy received from Consenting Maine
Customers, Ms. Goldstein says, the phrase "Signed - Conditional
on Cure Amount Objection" was handwritten, presumably by the
Agents.

Because Enron Energy and the Agents have not reached an
agreement as to the appropriate cure amounts, Ms. Goldstein
explains that Enron Energy has agreed to escrow the entire
amount requested in the Agents' Conditional Consent.  "Enron
Energy was led to believe that it had resolved the Agents'
objections to the Sale and thus represented such resolution to
the Court," Ms. Goldstein says.  Accordingly, the Court entered
the Sale Order requiring Enron Energy to deposit in a segregated
"Cure Account" sufficient funds to cure any and all defaults
under the Retail Contracts, and to deposit additional funds for
any "Additional Security Claims."  Thus, Ms. Goldstein notes,
upon the entry of the Sale Order, the "condition" in the Agents'
Conditional Consent, and as written into the signed Consent
Solicitations, was satisfied.

But in light of the Agents' continued refusal to hand over the
signed Consent Solicitations, Enron Energy now asks Judge
Gonzalez for an order:

    (a) deeming the signed Consent Solicitations to be valid
        consents,

    (b) compelling the Agents to hand over the Consent
        Solicitations to Constellation, and

    (c) imposing appropriate sanctions.

Ms. Goldstein asserts that the Agents' continued withholding of
the Consent Solicitations serves no legitimate purpose.  Even if
the "condition" scrawled onto the Court-approved Consent
Solicitations was a valid condition to Customers' consenting to
the Sale, Ms. Goldstein argues, that condition has been
satisfied by the entry of the Sale Order.  "If the Agents had
legitimate concerns that were not addressed at the Sale Hearing
or in the Sale Order, they have had ample opportunity to raise
them before the Court or with Enron Energy directly," Ms.
Goldstein says. Instead, Ms. Goldstein notes, the Agents have
continued to hold the Consenting Maine Customers' signed
consents hostage and have feigned good faith negotiations in
what, at best, amounts to "hostile obstinacy."

Over the course of the consent solicitation process, Ms.
Goldstein relates that the Agents have periodically provided
charts to Enron Energy detailing which Customers in Maine have
consented to the Sale of their Retail Contracts.  Ms. Goldstein
informs the Court that an adequate number of Customers have
attempted to consent to the assignment of their Retail Contracts
so that, pursuant to the Maine Purchase and Sale Agreement, both
Enron Energy and Constellation are willing to close the Sale
with respect to the Retail Contracts of Consenting Maine
Customers.

Furthermore, Ms. Goldstein adds, both Constellation and counsel
for Enron Energy have made repeated efforts to obtain the signed
Consent Solicitations from the Agents.  Yet, Ms. Goldstein
notes, the Agents have responded to these attempts at resolution
by raising new obstacles that they claim prevent them from
turning over the signed Consent Solicitations. (Enron Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


ENRON: US Trustee Proposes Neal Batson's Appointment as Examiner
----------------------------------------------------------------
Atlanta bankruptcy lawyer Neal Batson, a partner with the
national law firm Alston & Bird LLP, has been proposed as
examiner in the Chapter 11 bankruptcy of Enron Corporation,
United States Trustee Carolyn Schwartz announced today.

The examiner will be responsible for investigating and reporting
to the court on transactions involving Enron and its related
entities, including so-called "off-balance sheet" transactions
not reflected in the company's financial statements.

Commenting on the rigorous review process that led to Batson's
selection, Trustee Schwartz said that he was chosen from among
some two dozen candidates for his "stature, independence and
expertise."  Schwartz went on to note that "Mr. Batson is
recognized as one of the top bankruptcy practitioners in the
country and is widely respected for his integrity as well as his
intellect."

"No one could possibly bring greater skill, dedication and
experience to this complex and critical job than Neal Batson,"
said Alston & Bird Managing Partner Ben F. Johnson, III.  
"Neal's leadership in our firm and profession and his countless
contributions to bankruptcy law and practice over more than
three decades have earned him the ungrudging respect and
admiration of clients, colleagues and bankruptcy judges alike
across the United States."

After graduating from Vanderbilt University School of Law in
1966, Batson served as clerk to Judge Griffin B. Bell of the
U.S. Court of Appeals for the Fifth Circuit.  The Nashville
native joined Alston & Bird in 1967 and was elected a partner of
the firm in 1971.  He brings to the examiner's role more than 30
years of experience serving as lead counsel to debtors,
creditors' committees, secured lenders and franchisees, as well
as a trustee and examiner in numerous high profile Chapter 11
cases.  In 1989, he was the court-appointed examiner in the
widely publicized Chapter 11 bankruptcy of Southmark
Corporation, a real estate, insurance and financial services
conglomerate with approximately 900 affiliated entities.

Batson is chairman of the American College of Bankruptcy and is
a fellow of the American College of Trial Lawyers.  He is a
member of the National Bankruptcy Conference and a former vice
chairman of the Business Bankruptcy Committee of the American
Bar Association's Section on Business Law.  From 1993 to 1999,
Batson served by appointment of Supreme Court Chief Justice
William Rehnquist as a member of the Advisory Committee on the
Rules of Bankruptcy Procedure of the Judicial Conference of the
United States.  Batson also serves as a panel member of the
American Arbitration Association and a panel member of the
Register of Mediators of the U.S. Bankruptcy Court for the
Southern District of New York.  He is a former president of the
Atlanta Bar Association and the Southeastern Bankruptcy Law
Institute.

Alston & Bird is a full-service national law firm with more than
600 lawyers in Atlanta, New York, Washington, D.C., Charlotte
and Research Triangle.  The firm's Bankruptcy, Reorganization
and Workouts Practice Group, which Batson built, enjoys a
national reputation for its representation of debtors,
creditors' committees, fiduciaries and other parties in
bankruptcy courts in more than 40 states.


ENRON CORP: Fitch Hatchets PGE Unit's Outstanding Debt Ratings
--------------------------------------------------------------
Fitch Ratings has lowered the ratings on Portland General
Electric Co.'s outstanding debt as follows: senior secured debt
to 'BBB' from 'BBB+'; senior unsecured debt to 'BBB-' from
'BBB'; and, preferred stock to 'BB' from 'BBB-'. The commercial
paper rating is lowered to 'F3' from 'F2'. PGE's securities
remain on Rating Watch Negative.

The rating action responds to the termination of the agreed
acquisition of PGE by Northwest Natural Gas. The new ratings
reflect the continuing uncertainty about the future impact on
PGE's finances of its parent Enron's bankruptcy and other
contingencies including the investigations affecting western
power market participants. PGE's ratings also recognize the
company's healthy ongoing operations, profitability, moderate
debt leverage, and the regulatory ring-fencing established by
Oregon regulators. Fitch's revised ratings and Negative Rating
Watch reflect concerns regarding PGE's reduced financial
flexibility and diminished access to capital funding while its
status continues to be that of a subsidiary of Enron exposed to
a variety of contingent liabilities that may emerge over time.
Further rating actions will depend on the company's ability to
refinance their bank facilities and to demonstrate continuing
access to unsecured funding.

Enron has announced a plan to seek bankruptcy court approval to
transfer selected assets, including the stock of PGE, into a
special purpose entity insulated from the Enron bankruptcy
proceedings pursuant to Section 363 of the Bankruptcy Code. If
approved and implemented, this structure (Opco) may serve as a
vehicle for the sale of PGE and other viable affiliates to new
owners or for their continued operation during a long Enron
bankruptcy. The timing and outcome of the transfer of PGE to the
proposed Opco structure is not assured. Furthermore, approval by
the court of the transfer to Opco would not exempt PGE from its
joint liability for certain Enron group liabilities such as
taxes, pension and post-retirement benefit plans or exposure
related to the ongoing investigation of western market
participants. At present, it is not possible to quantify these
contingent liabilities with certainty, and this uncertainty
could limit Enron's ability to sell PGE. Moreover, if a
transaction can be reached, the overhang from the contingent
liability issue, combined with ongoing investigations of western
power market participants and low asset valuations in the sector
are likely to exert downward pressure on PGE's enterprise value.

Fitch does not believe that a voluntary or involuntary
bankruptcy of PGE is likely in the near term. Based upon the
company's representations, substantive consolidation of PGE in
the bankruptcy of Enron seems unlikely, due to the separate
operations of the utility under its own name, separate officers,
maintenance of separate books and records, and avoidance of
commingling of cash and assets, and practices consistent with
Oregon Public Utility Commission (OPUC) conditions in approving
the acquisition of PGE by Enron. Since any attempt to
consolidate PGE with Enron in bankruptcy is not likely to
succeed, there is no apparent advantage to any creditors of
Enron or Enron management to force PGE into bankruptcy. Thus,
our ratings of PGE do not anticipate near-term bankruptcy of the
utility, but do contemplate reduced financial flexibility and
access to funding sources and potential exposure as a member of
the Enron control group relating to tax and employee benefit
liabilities and other contingencies.

In evaluating PGE's liquidity, Fitch considered a stress case in
which the expiring $200 million of a total of $350 million of
bank revolving credit facilities could not be replaced and in
which PGE was required by counterparties to post collateral and
establish escrow funds to support power supply activities.
Although PGE would not have sufficient availability under its
remaining $150 million of short-term credit facilities to
support these needs, PGE has approximately $650 million of first
mortgage bond capacity that could be used either to secure
financing or to provide security to counterparties. This amount
appears adequate for all foreseeable needs except those which
may ultimately arise relating to the Enron control-group issues
or other contingent liabilities.

PGE's power supply is obtained from a combination of company-
owned generation and power contracts. The contracts in place for
the summer, combined with more normal hydrological conditions in
the Pacific Northwest, reduced power demand, and manageable
forward prices, obviate concerns about power supply costs for
the coming year. Further comfort is provided by the fact that
PGE's retail power supply costs are reset annually, reflecting
the forward price of power at the time of the review. In
addition, PGE is afforded interim and timely recovery of most of
its unanticipated power supply costs via a Power Cost Adjustment
(PCA) mechanism, which includes a cost/benefit sharing
arrangement with ratepayers. Currently, PGE is recovering
deferred costs associated with high market prices in 2000-01.
Regulation by OPUC has generally been protective of PGE's
financial viability. Regulatory restrictions supported by Oregon
State law provide significant protection for PGE, barring
Enron's access to its assets. The current regulatory ring-
fencing provisions applied by the OPUC requires PGE to maintain
a 48% common equity ratio, thereby limiting the amount of cash
PGE can dividend up to its parent company. Moreover, the OPUC,
in approving the Enron merger agreement, precluded PGE from
issuing debt or equity to satisfy any Enron obligation or assume
any obligation as guarantor.

Enron Corp.'s 9.125% bonds due 2003 (ENRON2), DebtTraders
reports, are trading at about 12.5. For real-time bond pricing,
see http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON2


EXIDE TECHNOLOGIES: Will Continue Using Cash Management System
--------------------------------------------------------------
Exide Technologies and its debtor-affiliates obtained Court
authority and approval to continue using its existing cash
management system.

                      Integrated Network

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

                         Simple Structure

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

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

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

Certain of the Debtors (Exide Technologies and Exide Delaware,
LLC) maintain a total of four additional bank accounts that are
utilized for miscellaneous purposes. Two of these bank accounts
(Toronto Dominion Bank Account #'s 02747315255 and 02740511525)
collect receipts from Canadian customers, and make disbursements
related to Canadian operations. Another is a collection and
disbursements account related to Exide Delaware, LLC (First
Union Account # 2000003284009). All three of these accounts are
funded by the First Union Concentration Account. Their
collections are automatically transferred into the First Union
Concentration Account. The fourth account is a pre-funding
account maintained at Mellon Bank (Account # 900-6994) to fund
direct deposit payroll of the Debtors, which is funded by the
First Union Concentration Account. (Exide Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Exide Technologies' 10% bonds due 2005
(EXIDE2) are quoted at a price of 14.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXIDE2for  
real-time bond pricing.


EXODUS COMMS: Court Okays Alvarez & Marsal as Wind-Down Advisors
----------------------------------------------------------------
Judge Robinson approves Exodus Communications, Inc., and its
debtor-affiliates' application for approval to hire Alvarez &
Marsal as Special Advisors to wind-down their estates, nunc pro
tunc to February 6, 2002, on the condition that the
indemnification provisions of Alvarez & Marsal's engagement are
deemed ineffective and deleted in their entirety.

As previously reported, Alvarez and Marsal will be:

A. Analyzing and assisting in the development and the
     negotiations of a liquidating plan of reorganization with
     the various creditors and other parties-in-interest;

B. Preparing for meetings with and meeting with the Creditors'
     Committee and its respective professionals in assisting the
     Debtors in the preparation of reports and other information
     required by the Court; the United States Trustee, the
     Creditors' Committee and appropriate governmental
     authorities;

C. Assisting the Debtors with the claims reconciliation process
     and the collection of amounts owed to the Debtors;

D. Advising and assisting the Debtors in the assumption and
     rejection of executory contracts;

E. Assisting in analyzing potential preference payments,
     fraudulent conveyances and other causes of action;

F. Assisting and advising in the formulation of plans for and
     the completion of the Debtors' assets to an affiliate of
     Cable & Wireless;

G. Assisting in the wind-down or liquidation of foreign
     subsidiaries;

H. To the extent a liquidating plan of reorganization is filed
     and confirmed for the Debtors, serving as liquidating
     trustee, liquidating agent or in some similar capacity;

I. Subject to Court approval, serving as post-confirmation
     liquidating trustee or administrator of the Debtors' assets
     supervising the review and liquidation of claims and
     distributions to claimants; and

J. Subject to the agreement of Alvarez and Marsal, performing
     any other service that the Debtors or their counsel deem
     necessary or appropriate.

The professionals that will be primarily involved in this
engagement and their corresponding hourly rates are:

             David G. Walsh           $475
             Richard Williamson       $425
             Directors                $325
             Associates               $275 to $325
             Analyst                  $145 to $220
(Exodus Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FAIRCHILD DORNIER: Gets Court Nod to Convert Case to Chapter 11
---------------------------------------------------------------
Fairchild Dornier Corporation sought and obtained approval from
the U.S. Bankruptcy Court for the Eastern District of Virginia
to convert its involuntary chapter 7 bankruptcy case to a
voluntary reorganization proceeding under chapter 11 of the
Bankruptcy Code.  A chapter 7 involuntary petition was filed
against the Company on April 24, 2002.

Within 15 days, the Court requires the Debtor to produce:

     (a) a list of its 20 Largest Unsecured Creditors, and

     (x) a schedule of unpaid debts incurred after commencement
         of original bankruptcy case, and a list of creditors in      
         the format required by the Clerk's Office, or

     (y) a certification that no unpaid debts have been incurred
         since the commencement of the case.

Dylan G. Trache, Esq., at Wiley Rein & Fielding LLP and Thomas
P. Gorman, Esq., at Tyler, Bartl, Gorman & Ramsdell, PLC
represent the Debtor in its restructuring effort.


FEDERAL-MOGUL: Wants Mar. 3, 2003 Bar Date for Property Claims
--------------------------------------------------------------
Federal-Mogul Corporation, and its debtor-affiliates ask the
Court to establish March 3, 2003 as the deadline solely for
filing proofs of claim for asbestos-related damage to property
located in the United States and Canada.  The Debtors also ask
the Court to approve customized Proof of Claim forms and a broad
noticing program.  

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, explains that the Debtors wish to
undertake necessary steps to ascertain with finality the scope
and extent of those North American Asbestos-Related Property
Damage (PD) Claims that might be asserted against the Debtors'
estates.  These determinations will enable the Debtors to
further their reorganization process and determine what
distributions, if any, should be made on account of these PD
Claims under any plan or plans of reorganization confirmed in
these Chapter 11 cases.

The North American PD Claims are focused on:

a. Sprayed Limpet Asbestos: a spray-on fireproofing, acoustical
    and thermal insulation product by the Debtor, T&N Limited;

b. allegations that the Debtors are responsible for the products
    of Keasbey & Mattison Company, a long-defunct Pennsylvania
    company that was a subsidiary of T&N between 1934 and 1962;
    and

c. allegations that T&N was responsible for the products of
    several other U.S. companies by virtue of the fact that
    these companies incorporated into their own products raw
    asbestos fiber that was brokered by T&N.

Ms. Jones informs the Court that the Debtors propose a
comprehensive notice program aimed at potential holders of North
American PD Claims resulting from the Limpet, Keasbey products
and the Debtors' brokering of raw asbestos fiber.  The proposed
notice program consists of:

     A. direct mail,
     B. paid media advertising,
     C. media outreach,
     D. third-party notification,
     E. Internet website, and
     F. toll-free telephone assistance components.

The aim of this notice program is to provide broad, reliable
notice to the potential claimants.  The Debtors' notice agents
will research and develop a comprehensive list of addresses
where Limpet was applied.  They will then send a packet of
notice materials respecting the Property Damage Claims Bar Date
to the general counsel of each such company or organization, via
certified mail.  The notice materials sent will include:

1. a cover letter advising the recipient of the PD Claims Bar
   Date and of the Debtors' Chapter 11 cases.  The cover letter
   will also provide the internet address and a toll-free
   telephone number from which additional information respecting
   the PD Claims Bar Date may be obtained;

2. a notice of the Property Damage Claims Bar Date; and,

3. a proof of claim form.

To have an orderly and efficient consideration of Asbestos-
Related Property Damage Claims against the Debtors, Ms. Jones
suggests a specialized proof of claim to be completed by persons
or entities asserting such claims.  The Debtors' proposed claim
form is modeled after Official Form 10, with the addition of
several brief questions.  The minimal additional information
requested on the form is fundamental to the existence of any
North American Property Damage Claim.  It will enable the
Debtors -- and this Court -- to determine much more quickly
whether the claim may legitimately be asserted.   It will also
enable determination about whether asbestos property damage in
fact exists at the location provided, and whether any of the
Debtors' products may have caused the damage.  While the Debtors
believe that number should be minimal, Ms. Jones deems that it
is nonetheless possible that, in the event little or no specific
information were initially required from claimants, a large
number of parties would file protective proofs of claim on the
mere suspicion that one of the Debtors' products might be
present on their properly, forcing the Debtors to expend
significant resources investigating large numbers of claims.

Ms. Jones states that property damage claimants must
specifically identify the Debtors' products as the proximate
cause of the damage allegedly suffered to their property.  Doing
so in these cases will render the litigation more efficient, and
result in a narrowing of both the scope of the litigation and
further discovery by eliminating buildings as to which
plaintiffs cannot establish the presence of the Debtors'
asbestos-containing products.

Ms. Jones accords that the Debtors will continue to identity
potential holders of Property Damage Claims until 45 days before
the Property Damage Claims Bar Date. The Debtors further suggest
sending the Bar Date Notice Package to the Attorneys General of
all 50 states, as well as the equivalent officials in the
District of Columbia and Puerto Rico, and the equivalent
officials in Canada.  The Debtors will also send the notice
package to the two counsels representing the plaintiffs in the
two class action lawsuits based upon alleged asbestos-related
property damage pending against the Debtors as of the petition
date.

The Debtors will also publish notice of the PD Claims Bar Date:

a. twice in the national edition of The Wall Street Journal;

b. twice in the Friday/weekend edition of USA Today;

c. once in a weekday edition and once in a Sunday edition in the
   national edition of The New York Times;

d. once in the seven leading newspapers in the US Territories
   and Possessions, including Puerto Rico, Guam and the US
   Virgin Islands;

e. once in the Sunday newspaper supplements Parade and USA
   Weekend, which are included in over 900 newspapers every
   Sunday, as well as once in the Spanish Sunday supplement
   Vista;

f. once in each of the 35 specialized trade publications aimed
   at persons who may own, operate or be familiar with structure
   that might potentially contain an asbestos-containing product
   manufactured or sold by the Debtors;

g. once in the Sunday edition of any of 102 local regional
   newspapers located in areas where the Debtors' products were
   distributed that carry neither Parade nor USA Weekend;

h. once in each of the following magazines: National Geographic,
   TV Guide, People, Money, Fortune, Newsweek, Better Homes &
   Gardens, and Reader's Digest;

i. Internet banner advertisements (14,500,000 impressions) on
   major Internet web portals such as Yahoo!, MSN, Ask Jeeves,
   Excite, and Lycos; and,

j. in Canada, in a major Canadian Weekly news magazine, nine
   major Canadian newspapers (three of which are French), and 18
   specialized Canadian Trade publications aimed at persons who
   may own, operate or be familiar with structures that might
   potentially contain an asbestos-containing product
   manufactured or sold by the Debtors.

Ms. Jones maintains that the Debtors will also supplement the
published Bar Date notice by issuing a press release describing
the Chapter 11 proceeding, prominently identifying the PD Claims
Bar Date, and setting forth contact information.  The notice
will be distributed over PR Newswire to over 2,400 media outlets
as well as fax the press release directly to certain reporters
covering asbestos and bankruptcy litigation.

Ms. Jones cites that failure to file the proof of claim within
the North American Property Damage Bar Date will disqualify a
potential claimant from:

a. asserting any North American Property Damage Claim against
   the Debtors; or,

b. voting upon, or receiving distributions under, any plan of
   reorganization in respect of such North American Property
   Damage Claims.

Ms. Jones discusses that, for the North American PD Claim to be
validly and properly filed, a signed original of a completed PD
Proof of Claim form, together with any accompanying supporting
documents and information required by such form, must be
delivered to the Debtors' Claims Agent, the Garden City Group,
Inc. at the address identified on the PD Claims Bar Date Notice
on the set deadline.  All filed proofs of claim must conform
with the PD Proof of Claim Form and provide the documents and
information required.  Properly completed claim forms must be
submitted in person or by courier service, hand delivery or
mail. Electronic submissions like email and facsimile will not
be accepted.  Proofs of claim will be considered filed when
actually received by the Claims Agent.  If an entity wishes to
receive acknowledgement of the Claims Agent's receipt of the
proof of claim, the claimant must also include a copy of the
original proof of claim and a self-addressed envelope, postage
prepaid.

In addition, Ms. Jones tells the Court that all entities
asserting North American Property Damage Claims against more
than one Debtor will be required to file a separate Property
Damage Proof of Claim Form.  There must be a separate form filed
with respect to each Debtor and it must identify on each
Property Damage Proof of Claim form the particular Debtor
against which their claim is asserted.  Otherwise, it may become
administratively unworkable for the Debtors' Claim Agent to
maintain separate claims registers for each Debtor.

Ms. Jones relates that, after the passage of the Property Damage
Claims Bar Date, the Debtors expect to file motions seeking to
differentiate invalid North American Property Damage Claims from
those that may have merit, if any.  A primary objective of the
motions will be to eliminate those claims that lack adequate
evidence of identification as to the Debtors' products. Proofs  
of claims or interest on account of any other claims against or
equity interest in any of the Debtors will not be required to be
filed by the proposed North American Property Damage Claims Bar
Date.  The Debtors intend to set additional bar date or dates
for filing proofs of claims or interests on account of all other
types of claims at a later time.  This is including asbestos-
related Property Damage Claims arising from damage to property
located in countries other the U.S. and Canada.

             Creditors' Committee Supports the Request

Charlene D. Davis, Esq., at The Bayard Firm in Wilmington,
Delaware, tells the Court that the Committee has no objection to
establishing a Bar Date for Asbestos-Related Property Damage
Claims.  The Committee has worked together with the Debtors in
producing an appropriate proof of claim form.  However, the
Debtors failed to mention why such a long period of time need
elapse prior to the Bar Date.  It is the desire of the Committee
that the case move forward expeditiously.  Based upon the
Committee's understanding of the limited nature of the
liability, the Committee suggests that the Bar Date be set for a
date that is three months after the Debtors' initial mailing has
been completed.  This will provide a sufficient amount of time
for the appropriate parties to be notified of the Bar Date and
to file their claims. (Federal-Mogul Bankruptcy News, Issue No.
17; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FINGERHUT: Petters & Deikel Offer to Purchase Certain Assets
------------------------------------------------------------
Federated Department Stores, Inc. (NYSE:FD)(PCX:FD) has signed a
non-binding letter of intent with Thomas J. Petters and Theodore
Deikel for the purchase of certain Fingerhut assets, subject to
the negotiation of a definitive purchase agreement.

Assets included in the non-binding letter of intent are the
distribution center and other additional facilities in St.
Cloud, MN; the subsidiary's Minnetonka, MN, corporate
headquarters; the data center in Plymouth, MN; the distribution
center facility in Piney Flats, TN; and the Fingerhut name, Web
site and existing inventory, as well as other owned property and
equipment.

Federated also said that it will suspend the implementation of
ongoing liquidation activities pending negotiations on a final
agreement.

"This represents clear progress toward our objective of
disposing of the Fingerhut business and we are pleased that the
buyers have indicated a desire to rehire a number of Fingerhut
employees," said Ronald W. Tysoe, Federated's vice chairman.
"Although both parties still must come to terms on a final
purchase agreement, we are hopeful that we will be able to do so
and Federated is prepared to move as quickly as possible to get
this done."

Deikel is a former chief executive of Fingerhut and Petters is a
wholesaler based in Eden Prarie, MN.

Federated, with corporate offices in Cincinnati and New York, is
one of the nation's leading department store retailers, with
annual sales from continuing operations of more than $15.6
billion. Federated currently operates more than 460 stores in 34
states, Guam and Puerto Rico, under the names of Macy's,
Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus
and Rich's, as well as macys.com and Bloomingdale's By Mail.


FLAG TELECOM: Bringing-In Appleby Spurling as Bermuda Counsel
-------------------------------------------------------------
FLAG Telecom Holdings Limited and its debtor-affiliates ask the
Court for authority to employ Appleby, Spurling & Kempe to serve
as special Bermuda counsel retroactive April 12, 2002.

FLAG Telecom Holdings Ltd., FLAG Ltd., FLAG Atlantic Ltd. and
FLAG Asia Ltd., which are incorporated in Bermuda, have
commenced winding up proceedings in the Supreme Court of
Bermuda. These entities have been placed under the watchful eye
of court-appointed Joint Provisional Liquidators. Under Bermuda
law, a bankruptcy filing in the United States requires the
commencement of liquidation proceedings in Bermuda.

Kees van Ophem, Secretary and General Counsel of FLAG Telecom
Holdings Ltd., says the Debtors have selected Appleby as their
special Bermuda counsel because of their expertise in the areas
of corporate and insolvency law in Bermuda.  This firm was also
selected because of its knowledge of the Debtors' businesses,
properties and financial affairs, and its extensive general
experience.

The Firm has been the Debtors' primary counsel in Bermuda since
October 1992. It provided the Debtors advice on incorporations,
corporate administration, initial public offerings, employment
regulations and disputes, joint venture agreements and general
corporate legal advice. Appleby consists of 69 lawyers, 10
paralegals and legal assistants.

Mr. van Ophem says Appleby is uniquely able to provide the
services the Debtors seek, among them:

   (a) representing the Debtors in the provisional liquidation
       proceedings in Bermuda, including filing various
       applications and motions and instructing counsel,
       including where appropriate, Queen's Counsel with respect
       to Court appearances;

   (b) identifying issues under Bermuda law that will arise in
       the provisional liquidation and during the course of
       these Chapter 11 proceedings, and counseling the Debtors
       with regard to the issues;

   (c) coordinating as necessary with the Debtors' United States
       counsel with respect to the Debtors' Chapter 11 cases;

   (d) continuing with the representation of FLAG Limited in
       relation to ongoing litigation that was commenced in the
       Supreme Court of Bermuda in 1998. (Appleby currently
       represents FLAG Ltd. in a declaratory action that it
       commenced against Nicholas Reda and Jamal Abdul-Jalil.
       The Declaratory Action was commenced in the Supreme Court
       of Bermuda in 1998 with Judgment being entered on 23
       March 2000. There have been subsequent appeals of that
       decision and it is currently being determined before the
       Judicial Committee of the Privy Council in the United
       Kingdom. The Privy Council hearing commenced the week of
       15 April 2002.)

   (e) providing such other services relating to issues arising
       under Bermuda law as the Debtors reasonably request
       from time to time with respect to the reorganization of
       its business.

                       Conflicts Check

Jennifer Yolande Fraser, Esq., a Partner of Appleby, says the
Firm does not represent any interest adverse to that of the
Debtors and their estates. Ms. Fraser says Appleby will review
its files periodically during the pendency of the Debtors' cases
to ensure that no conflicts or other disqualifying circumstances
exist or arise.

                         Compensation

Appleby bills for its services on an hourly basis:

       Partners     $425 to $525 per hour
       Associates   $200 to $475 per hour
       Paralegals   $150 to $200 per hour

The partners, counsels, associates and paralegals currently
expected to work on the engagement are:

       Professional                 Compensation
       ------------                 -------------
       John Riihiluoma              $500 per hour
       Peter Bubenzer               $500 per hour
       Jennifer Fraser              $475 per hour
       Geoffrey Bell                $425 per hour
       Susan Davis                  $275 per hour
       Jeremy Leese                 $420 per hour
       Bal Bhullar                  $390 per hour
       Ian Stone                    $470 per hour
       Arabella di Iorio            $425 per hour
       Dianne Alleyne               $200 per hour

Appleby will be reimbursed for out of pocket expenses, such as
travel expenses, duplicating charges, computer and research
charges, messenger services and telephone charges.

Previous to the Chapter 11 filing, the Debtors paid the Firm
about $220,000 for pre-petition professional services rendered
over the past 13 months. Appleby was paid $300,000 as retainer
for post-petition services. (Flag Telecom Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FRIEDE GOLDMAN: Inks Contract to Sell Halter Marine for $48MM++
---------------------------------------------------------------
Friede Goldman Halter, Inc. (OTCBB: FGHLQ) has entered into a
contract with Bollinger Shipyards, Inc. to sell the assets and
activities of Halter Marine, Inc. for $48.0 million cash and
other considerations. Halter is one of three business units
presently operated by Friede Goldman Halter and is a leading
builder of small to medium sized vessels. The agreement
contemplates Bollinger acquiring all the operating assets and
properties of Halter, including the assets at Halter Pascagoula,
Halter Moss Point, Moss Point Marine, Halter Port Bienville
Halter Lockport, Halter Gulfport East Central and Three Rivers.
The acquisition is subject to approval by the United States
Bankruptcy Court and the closing is expected to take place in
late July or early August 2002.

"The sale of Halter Marine to Bollinger Shipyards is a major
step in providing a return to the creditors. The continued
loyalty of the employees, customers and suppliers has made this
possible," said Jack Stone, President and Chief Executive
Officer of Friede Goldman Halter.

Donald "Boysie" Bollinger, chairman and CEO of Bollinger said,
"We are very excited about this pending acquisition as it will
expand our capacity and capabilities in new construction,
establish our presence and visibility in new foreign and
domestic markets and will compliment our extensive inventory of
designs. Best of all, we will retain substantially all of
Halter's dedicated employees thereby gaining hundreds of highly
talented and skilled designers and shipbuilders whose excellent
reputation is known around the world. We look forward to
welcoming them to the Bollinger family."

"Our goal," said Bollinger, "is to make the transition for our
new employees and customers as seamless as possible. The
transition went very smoothly when we acquired Halter's repair
division in August 2000, and we will do it again."

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


FRIEDE GOLDMAN: Bollinger Enters Pact to Acquire Halter Marine
--------------------------------------------------------------
Bollinger Shipyards, Inc., Lockport, La., has signed a contract,
pursuant to approval of the U.S. Bankruptcy Court, to acquire
the assets and operations of Halter Marine from Friede Goldman
Halter, Inc. (OTCBB: FGHLQ).

If approved, Bollinger contemplates acquiring substantially all
of Halter's operating assets, properties, extensive design
library and construction projects in progress, including the
following Shipyards: Halter-Pascagoula; Halter-Moss Point; Moss
Point Marine; Halter-Port Bienville; Halter-Central; Gulfport-
East, and Halter-Three Rivers-all in Mississippi and Halter-
Lockport, in Louisiana.

Donald "Boysie" Bollinger, chairman and CEO of Bollinger said,
"We are very excited about this pending acquisition as it will
expand our capacity and capabilities in new construction,
establish our visibility and presence in new foreign and
domestic markets and compliment our extensive inventory of
designs. Best of all, we will retain substantially all of
Halter's dedicated employees thereby gaining hundreds of highly
talented and skilled designers and shipbuilders whose excellent
reputation is known around the world. We look forward to
welcoming them to the Bollinger family."

"Our goal," said Bollinger, "is to make the transition
for our new employees and customers as seamless as possible.
The transition went very smoothly when we acquired Halter's
repair division in August 2000, and we will do it again."
Jack Stone, president and CEO of Friede Goldman said,
"The sale of Halter Marine to Bollinger Shipyards is a major
step in providing a return to the creditors. The continued
loyalty of the employees and customers has made this
possible."

This acquisition will add eight new construction shipyards to
Bollinger's three new construction and eleven repair and
conversion shipyards for a total of 22 facilities with 43
drydocks strategically located from Pascagoula, MS to Houston,
TX.

Family-owned and operated since 1946, Bollinger --
http://www.bollingershipyards.com-- is the foremost provider of
marine repair and conversion services and a leading provider
of new construction services to the energy, commercial and
government marine markets specializing in a wide variety of
small to medium-sized offshore and inland vessels.

Halter Marine is a significant domestic and international
designer and builder of small and medium sized vessels for the
government, commercial, and energy markets.


GLOBAL CROSSING: UST Amends Creditors' Subcommittee Appointments
----------------------------------------------------------------
Effective May 15, 2002, and pursuant to Section 1102(a) of the
Bankruptcy Code, The U.S. Trustee amends his appointment of the
Subcommittee of the Official Committee of Unsecured Creditors of
Global Crossing Ltd., and its debtor-affiliates, by replacing
Nationwide Insurance with Wilmington Trust Company. The
Subcommittee is now composed of:

     A. Wilmington Trust Company, as Indenture Trustee
        520 Madison Avenue, New York, New York 10022
        Attention: Mr. James D. Nesci, Vice President
        Phone: (212) 415-0508

     B. U.S. Trust Company
        499 Washington Boulevard, Jersey City, New Jersey 07310
        Attention: Mr. Corwin Chen, Senior Vice President
        Phone: (201) 533-6875  Telecopier (212) 597-0160

     C. Knights of Columbus
        1 Columbus Plaza, New Haven, CT 06510
        Attention: Mr. Michael Terry, VP, Public Bonds
        Phone: (203) 865-1710  Telecopier (203) 772-0037
        (Global Crossing Bankruptcy News, Issue No. 10;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


ICG COMMS: Judge Walsh Confirms Second Amended Joint Reorg. Plan
----------------------------------------------------------------
On Monday, May 20, 2002, Timothy R. Pohl, Esq., from Skadden,
Arps, Slate, Meagher & Flom appeared before Judge Walsh to lay-
out ICG Communications, Inc.'s case for why their Second Amended
Joint Plan of Reorganization should be confirmed.

William Suddell, Esq., of the Wilmington firm of Morris Nichols
Arsht & Tunnell appeared, representing the Creditors' Committee
as local counsel; Don Beguone, Esq., for the United States
Trustee, Laurie Silber Silverstein, Esq., of Potter Anderson
representing the SBA Affiliates; Scott Shelley, Esq., of
Shearman & Sterling representing Royal Bank of Canada, as well
as Pauline K. Morgan, Esq., of the Wilmington firm of Young
Conaway Starglatt & Taylor; Daniel K. Astin, Esq., representing
the Holdings Subcommittee; and Regina Torii, Esq., of Ashby &
Geddes representing Power & Telephone Supply.

                   98% of Creditors Accept the Plan

Mr. Pohl presents the tallied votes of each creditor class and
announces that nearly 98% of those creditors voting voted in
favor of the Plan.

Mr. Pohl reminds Judge Walsh that two groups of claim holders
are not entitled to vote: Class H-1 "Other Priority Claims
Against the Holdings Debtors", Class H-2 "Other Secured Claims
Against the Holdings Debtors", Class S-1 "Other Priority Claims
Against the Services Debtors", and Class S-2 "Other Secured
Claims Against the Services Debtors."  Mr. Pohl explains that
each of the claimants in these classes are unimpaired by the
Plan and they are thus deemed to have accepted it.  In addition,
Class H-5 "ICG Interests and Subordinated Claims Against the
Holdings Debtors", and Class S-6 "ICG Interests and Subordinated
Claims against the Services Debtors" are impaired, but will
neither receive nor retain any property under the Plan, and  
these classes are deemed to have rejected the Plan.

Mr. Pohl describes the Plan as "the culmination of extraordinary
efforts by all of the Debtors' primary stakeholders to reach a
fair, equitable and expeditious resolution of the complex
business and legal issues" in these cases.  The Plan is the end
product of extensive negotiations among, and has received the
full support of the Official Committee of Unsecured Creditors, a
subcommittee of the Creditors' Committee called the Holdings
Subcommittee, which consists of significant creditors of the
Holdings Debtors, and the Debtors' prepetition bank group, the
Debtors' primary secured creditors. Creditors have thus had
substantial input into the Plan, Mr. Pohl says, and not
surprisingly have overwhelmingly accepted the Plan.  Moreover,
despite total estimated claims aggregating approximately $2.6
billion and the distribution of plan solicitation material to
more than 5,000 parties, only a few objections to confirmation
were brought and of those, only one from the United States
Trustee remains unresolved.

                The Balloting & Tabulation Process

Kathleen M. Logan, President of Logan & Company, the court-
appointed claims, noticing and ballot tabulating agent, presents
the vote count and describe the tabulation process.

Ms. Logan describes the process of giving notice to al creditors
and parties in interest of the plan and confirmation process,
and the solicitation of ballots on the acceptance or rejection
of that plan.

As voting tabulation agent, employees of Logan, under Ms.
Logan's supervision:

       (1) opened the ballot envelopes as received,

       (2) removed and date-and-time-stamped each ballot,

       (3) inspected the ballots to determine compliance with
the Bankruptcy Court's guidelines,

       (4) divided the ballots into groups of approximately 25,
assigned each group a "batch" number,

       (5) sequentially numbered "1" through "25" ballots
assigned to each batch, and

       (6) entered into the voting tabulation portion of the
claims database the date received, the batch number, the
sequence number, and whether the ballot indicated an acceptance
or rejection of the Plan.

To the extent that a creditor had previously submitted a ballot,
the subsequent ballot was stapled to the prior ballot(s)
submitted by that creditor, and the claims database also
maintained by Logan was modified to reflect the last timely
ballot received from that creditor.

Ms. Logan then tabulated the votes on the Plan in accordance
with the terms in Judge Walsh's Order approving the Disclosure
Statement and the court-approved instructions on each ballot.  
Logan audited the tabulations on a daily basis, and, in
accordance with its standard practice, again following the
expiration of the Voting Deadline.  Ms. Logan adds that, due to
time constraints and in line with instructions from the Debtors
and the Debtors' attorneys, Skadden Arps, Logan also accepted
faxed transmissions of ballots.

Ms. Logan then presents the tabulations of votes in the five
classes authorized to vote on the Plan:

                         Plan Class

          H-3 Convenience Claims - Holdings
          H-4 General Unsecured Claims - Holdings
          S-3 Convenience Claims - Services
          S-4 General Unsecured Claims - Services
          S-5 Secured Lender Claims

              # of        % of        Acceptance     Acceptance
Class       Acceptance  Acceptances    Amount        Percentage
-----       ----------  -----------  ----------      ----------
H-3          64          98.46     $     131,976.07     99.75
H-4         291          98.64       968,750,419.06     99.97
S-3          17          85.00            37,898.48     96.94
S-4          85          97.70       698,797,630.14     99.97
S-5          14         100.00        71,989,667.89    100.00

         # of             % of       Rejection        Rejection
Class  Rejection       Rejection      Amount         Percentage
-----       ----------  -----------  ----------       ----------
H-3       1              1.54      $         333.00     0.25
H-4       4              1.36            313,921.11     0.03
S-3       3             15.00              1,198.25     3.06
S-4       2              2.30            205,162.50     0.03
S-5       0              0.00                  0.00     0.00

This testimony by Ms. Logan clearly shows that the Plan has been
accepted by the statutory requisite of 2/3 of those claimants
voting and more than half of the dollar amount of claims in each
class.

                     Objections to Confirmation

Mr. Pohl briefly reviews the objections to confirmation and
announces that all but one has been resolved by changes which
will be reflected in the order of confirmation to be submitted
for Judge Walsh's review. Principally, several taxing
authorities had objected to confirmation of the Plan, saying
that under applicable non-bankruptcy law the interest rate
provided under the Plan is too low.  Mr. Pohl announces that the
Debtors have resolved all of these objections by agreeing to
reconcile and pay the undisputed tax claims on the Effective
Date of the Plan, and where and to the extent these claims are
not paid in full on the Effective Date, to increase the interest
rate to be paid for these priority tax claims.  This leaves only
an objection by the United States Trustee.

                      The US Trustee's Objection

Mr. Don Beguone explains the Trustee's objection.  Donald F.
Walton, the Acting United States Trustee for Region Three,
objects to the "broad exculpatory provisions" of Section 5.12(b)
of the Plan, which indicates that the confirmation of the Plan
constitutes a broad release by each holder of a claim or
interest that so elects on its ballot of any claim that such
holders had arising prior to the Effective Date against not only
the Debtors, the Committee and Committee Members, but also
nondebtor subsidiaries as well as all directors, officers,
employees, agents and professionals for the Debtors, the
Committee, and nondebtor subsidiaries.

Since non-voting creditors and interest holders have not been
provided an opportunity to decide affirmatively whether to
release any claims they have against nondebtors, the release
cannot be operative as to them. Releases of third-party claims
cannot be accomplished without "the affirmative agreement of the
creditor affected." Therefore, the UST objects to confirmation
of the Plan unless an express provision is placed in the
Confirmation Order clarifying that the Plan shall not
constitute a release of nondebtors by holders of claims and
interests in nonvoting classes.

In In re PWS Holdings, 228 F.3d 224 (3rd Cir. 2000), the Court
of Appeals for the Third Circuit approved a form of exculpatory
clause, which is the subject matter addressed by section 12.11
of the Plan. In In re Genesis Health Ventures, Inc., 266 B.R.
591, (Bankr. D.Del. 2001), the Court disapproved of releases and
exculpatory provisions that exceeded the scope of the
exculpation approved in PWS.  The exculpatory clause found at
Section 12.11(a) of the Plan goes beyond the permissible scope
of such an exculpatory clause under PWS and Genesis in the
following respects, which are similar to some of the provisions
expressly disapproved by the Genesis court:

       a. It seeks to exculpate "former" officers, directors,
employees, etc. of the Debtors (going back forever?); and

       b. It seeks to relieve the exculpated parties not only of
liability to holders of Claims and Interests, as allowed in PWS
and Genesis, but also of liability to "any other party in
interest, or any of their respective agents, employees,
representatives, financial advisors, attorneys or affiliates, or
any of their successors or assigns."

Section 12.11(b) of the Plan either is surplusage to the extent
it merely restates the exculpations permissible under PWS and
Genesis, or alternatively it states further exculpations which
are beyond the scope of those allowed under PWS and Genesis.
Either way, it should be stricken.

To the extent that the release and exculpation provisions are
inappropriate, they render the plan unconfirmable as a matter of
law because the court shall confirm a plan only if "the plan has
been proposed in good faith and not by any means forbidden by
law." The UST therefore objects to confirmation of the Plan
unless the exculpatory provisions are modified to conform to
those approved in PWS and Genesis.

In response, the Debtors indicate that they have (1) stricken
Section 12.11(b) from the Plan as the UST requested, and (2)
modified Section 12.11(a), the Plan's exculpation provision,
with the language "to the fullest extent allowed by Third
Circuit law" to ensure that the language of that clause does not
exceed circuit law.  These changes are accepted and address the
UST's concerns.

                   Confirmation Standards

Mr. Pohl notes that the Debtors have the burden of showing that
they have complied with each statutory element for confirmation.  
Mr. Pohl then begins the critical process of presenting evidence
on each of the 13 elements on which Judge Walsh must find in
ICG's favor in order to confirm the Second Amended Plan by
calling Kenneth A. Buckfire to testify to the restructuring
efforts, and particularly to the issue of valuation.

             Kenneth A. Buckfire Explains Valuation

Mr. Buckfire introduces himself as a managing director of
Dresdner Kleinwort Wasserstein, Inc., with offices in New York.  
DrKW was engaged as the financial advisors to the Debtors to
assist in the development, structuring, negotiation and
implementation of a plan.  As part of those services, DrKW
dedicated a team of restructuring, investment banking, and M&A
professionals to ICG's restructuring.

DrKW performed a valuation analysis for the purpose of
determining the value available to distribution to the holders
of claims and interests under the Plan, and to analyze relative
recoveries to the holders of claims and interests.  This
analysis is based on the debtors' pro forma financial
projections shown in the Disclosure Statement, as well as market
conditions and statistics at the time the analysis was
conducted.  The values are as of an assumed effective date of
April 30, 2002, and are based on information available to and
analysis undertaken by DrKW in February and March 2002.

DrKW has evaluated the enterprise value of ICG.  DrKW's
valuation established the value of the Debtors on a going-
concern basis as between $350 million and $500 million at the
time the analysis were conducted.  Under the Plan, as of the
Effective Date Reorganized ICG will issue for distribution the
New Common Shares to the holders of Allowed Claims in Classes H-
4 and S-4.  8,000,000 shares will be distributed to the holders
of claims in these classes - all of the issued and outstanding
New Common shares, subject to dilution.  The valuation of the
Debtors' going-concern value results in a valuation of the New
Common Shares, in the aggregate, of an amount between
approximately $142 million and $292 million, with a midpoint of
$217 million.

Mr. Buckfire says DrKW derived the value of the New Common
Shares by subtracting from the Debtors' enterprise value the
projected funded debt (prior to issuance of the Convertible
Notes) on the pro forma balance sheet for the company on the
effective date.

Because Class H-4 accepted the Plan, Mr. Buckfire adds that DrKW
has ascribed a value to the New Holdings Creditor Warrants of
approximately $7 to $11 million for these warrants to purchase
the 800,000 New Common shares at $20 per share.  This analysis
is based on the Black-Scholes option pricing model.  Mr.
Buckfire concludes by testifying as to the assumptions and
models used in reaching the valuation amounts.

                     Randall Curran Testifies

At the conclusion of Mr. Buckfire's testimony, Mr. Pohl presents
the testimony of Randall E. Curran, ICG's Chief Executive
Officer, on the remaining issues of confirmation.

Mr. Curran reviews in detail the events leading up to the
Chapter 11 filing, the significant events postpetition, the
Debtors' development of a business plan and the resultant Plan's
structure, the distribution to each class of creditors, the
financial projections and other assumptions included in the
plan.  Mr. Curran assures Judge Walsh that there are adequate
means to implement the Plan as presented.  He asserts his
believe that, based on the projections included in the
Disclosure Statement, Reorganized ICG will have sufficient cash
to make all payments required to be made on the Effective Date
of the Plan.  He echoes and endorses Mr. Buckfire's valuation of
the New Common Stock and Warrants as well.  He believes the Plan
is feasible and confirmation is not likely to be followed by the
need for any further reorganization.  He testifies affirmatively
to the remaining issues for confirmation without contradiction.

                       Judge Walsh's Ruling

At the conclusion of this evidence, Judge Walsh agrees that the
Debtors have met the requisite showing for confirmation of the
Plan, and he notes that the various constituencies overwhelming
accepted this Plan. He therefore rules that the Plan is
confirmed, and makes findings on each confirmation issue
favorable to the Debtors.

                           *   *   *

ICG Communications, Inc., a premier facilities-based nationwide
communications provider announced the U.S. Bankruptcy Court for
the District of Delaware has confirmed the company's Plan of
Reorganization which includes a $65 million re-capitalization
financing package. The court's approval follows a recently
completed vote by ICG creditors that resulted in 98 percent
acceptance of the Plan.

ICG will emerge from bankruptcy protection with approximately
$248 million in funded debt and approximately $100 million in
cash, eliminating approximately $2.5 billion in liabilities.  
Under the Plan, ICG's creditors will receive eight million
shares of new common stock valued initially at $160 million. The
company's old common and preferred stock will be cancelled.

"We are thrilled to be moving forward with ICG's emergence, and
want to acknowledge the outstanding support of the creditors,
our customers and employees," said Randall E. Curran, chief
executive officer, ICG. "We have fixed our balance sheet, we are
EBITDA positive and ICG will continue to provide all our
customers including ISPs, medium to large corporations and
carriers with superior service through our nationwide and local
footprint."

ICG reported approximately $40 million in EBITDA for 2001 with
annual revenue of approximately $500 million. The company's new
securities will initially be traded over the counter until ICG
qualifies for re-listing on the NASD National Market. (ICG
Communications Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


IT GROUP: Judge Walrath Okays Increase in DIP Financing to $75MM
----------------------------------------------------------------
Judge Walrath enters an Amended DIP Financing Order allowing The
IT Group, Inc., and the Post-petition lender to enter into an
agreement to increase the maximum aggregate outstanding
principal amount of DIP indebtedness to $60,000,000 from
$55,000,000.  Judge Walrath found that increasing the lending
commitment of the Sugar Acquisition (NVDIP) DIP Credit Facility
will (i) benefit the Debtors and their estates, (ii) maximize
the ability of the Debtors to reorganize successfully under
Chapter 11, and (iii) maximize the value of the Debtors' assets.
The first $25,000,000 of the lending commitment will be provided
in cash. The remainder of the commitment may be provided either
in cash, or, at the request of the borrowers, in the form of a
single Surety Bond or multiple Surety Bonds, or a combination of
Cash and a single Surety Bond or multiple Surety Bonds. Except
as for these modifications, the provisions of the Second Interim
DIP Order are hereby ratified and remain in full force.

If, for any reason, any of the provisions of this Order are
hereafter stayed, modified, terminated, or vacated, on any
material matter without the Post-petition Lender's written
consent (including without limitation, by subsequent order of
this Court or any other Court), Judge Walrath rules that, in
this event:

A. the Post-petition Lender is entitled, but not obligated,
    to discontinue any further loans, extensions of credit or
    financial accommodations hereunder or under the DIP Credit
    Documents; and,

B. the DIP indebtedness, together with all interest, fees, cost,
    expenses and charges of any nature that may have accrued in
    connection therewith, will upon notice to the Debtors from
    the Post-petition Lender, become due and payable on delivery
    of this notice, without further notice or order of the
    Court. (IT Group Bankruptcy News, Issue No. 11; Bankruptcy
    Creditors' Service, Inc., 609/392-0900)  


ITC DELTACOM: S&P Drops Rating to D After Interest Nonpayment
-------------------------------------------------------------
Standard & Poor's lowered its corporate credit rating on
integrated telecommunications services provider ITC DeltaCom
Inc. to 'D' from double-'C' and removed the rating from
CreditWatch following the company's missed May 15, 2002,
interest payments on its 9.75% senior unsecured notes due in
2008 and 4.50% convertible subordinated notes due in 2006. The
ratings on these note issues were also lowered to 'D' from
single-'C' and removed from CreditWatch.

In addition, Standard & Poor's lowered its rating on West Point,
Ga.-based ITC's $160 million senior secured credit facility to
single-'C' from double-'C'. This rating remains on CreditWatch
with negative implications. The single-'C' ratings on the
company's 11% senior unsecured notes due in 2007 and 8.875%
senior unsecured notes due in 2008 also remain on CreditWatch
negative.

On May 14, 2002, ITC announced that it would miss the scheduled
June 1, 2002, interest payment on its 11% senior unsecured
notes. "The rating on this issue will be lowered to 'D' on non-
payment of the interest," said Standard & Poor's analyst
Rosemarie Kalinowski. The next scheduled interest payment on the
8.875% senior unsecured notes is September 1, 2002.

ITC is engaged in negotiations to restructure its debt to
alleviate the constraints on its liquidity. As of March 31,
2002, the company's cash balance was about $25 million.

ITC DeltaCom provides integrated voice and data
telecommunications services to midsize and major regional
businesses. The company is also a leading regional provider of
wholesale long-haul services to other telecommunications
companies in the Southwest.


KAISER ALUMINUM: Taps Deloitte & Touche as Independent Auditors
---------------------------------------------------------------
Kaiser Aluminum Corporation and its wholly owned subsidiary,
Kaiser Aluminum & Chemical Corporation said they have dismissed
Arthur Andersen LLP as their principal independent accountant
and have engaged Deloitte & Touche LLP as their principal
independent accountant.

The decision to change principal independent accountants was
recommended by the Audit Committees of both KAC and KACC and was
approved by the boards of both KAC and KACC. The change is
effective immediately.

Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading
producer of alumina, primary aluminum and fabricated aluminum
products.

                            *    *    *

On April 30, 2002, Kaiser Aluminum Corporation and its
wholly owned operating subsidiary, Kaiser Aluminum & Chemical
Corporation, dismissed Arthur Andersen LLP as their principal
independent accountant and engaged Deloitte & Touche LLP as
their principal independent accountant. The decision to change
principal independent accountants was recommended by the Audit
Committees and was approved by the Boards of Directors of the
Companies. The change will be effective immediately.

Andersen's reports on the consolidated financial statements
of the Companies for the year ended December 31, 2001, were
qualified as to the Companies' ability to remain going concerns
given that the Companies and certain of their subsidiaries filed
for reorganization under Chapter 11 of the United States
Bankruptcy Code on February 12, 2002. Andersen's reports on the
consolidated financial statements of the Companies for the year
ended December 31, 2000, did not contain an adverse opinion or a
disclaimer of opinion, nor were such reports qualified or
modified as to uncertainty, audit scope, or accounting
principles. During the past two fiscal years and through the
date of this Current Report, there have been no disagreements
with Andersen on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the satisfaction of
Andersen, would have caused it to make reference to the subject
matter in connection with its reports on the Companies'
consolidated financial statements for such years., nor have
there been any reportable events as listed in Item 304(a)(1)(v)
of Regulation S-K.

During the past two fiscal years and through the date of
this Current Report, the Companies have not consulted with
Deloitte & Touche on the application of accounting principles to
a specified transaction, either completed or proposed, or the
type of audit opinion that might be rendered on the Companies'
financial statements. Nor have the Companies consulted with
Deloitte & Touche during the last two fiscal years or through
the date of this Current Report regarding any matter that was
either the subject of a disagreement, as defined in Item
304(a)(1)(iv) of Regulation S-K, or a reportable event as listed
in Item 304(a)(1)(v) of Regulation S-K. (Kaiser Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


KNOWLEDGE HOUSE: Fails to Meet 2001 Fin'l Report Filing Deadline
----------------------------------------------------------------
Knowledge House Inc. (TSX:KHI) wishes to advise that it is in
default of filing its annual Audited Financial Statements for
the period ended December 31, 2001 which were to have been filed
on or before May 21, 2002 pursuant to relevant securities laws
because of a requirement to change auditors.

Mr. Daniel F. Potter, Chairman of the Board and the Chief
Executive Officer of Knowledge House advises that the Company
was unable to meet its deadline due to a change in auditors of
the Company, given that the current auditors will be taking
shares of the Company pursuant to its proposal to creditors,
discussed below. As a result of the delay in the completion and
filing of the annual Audited Financial Statements, the Company
will also be late in filing its Interim Financial Statements for
the first quarter ended March 31, 2002 which are due to be filed
on or before May 30, 2002. The Company expects to file the
Audited Financial Statements and the Interim Financial
Statements on or before July 21, 2002.

The Company has obtained from the Nova Scotia Securities
Commission a management cease trade order pursuant to Section
134 of the Securities Act (Nova Scotia) and CSA Staff Notice 57-
301 with respect to securities of the Company. Such order will
place restrictions on the trading of the Company's securities by
certain persons who have been directors, officers or insiders of
the Company since the Company's most recent financial statements
were filed in accordance with prescribed filing requirements.

Should the Company fail to file its financial statements on or
before July 21, 2002, the Nova Scotia Securities Commission and
other security commissions or regulators may impose an issuer
cease trade order that all trading in securities of the Company
cease for such period as specified in the order.

The Company intends to issue a Default Status Report on a bi-
weekly basis for as long as it remains subject to the management
cease trade order or in default of prescribed filing
requirements. An issuer cease trade order may be imposed sooner
if KHI fails to file its Default Status Report on time.

As noted in material change reports and press releases issued by
the Company, on November 26, 2001, KHI's unsecured creditors
approved its proposal filed on October 26, 2001, under the
Bankruptcy and Insolvency Act (Canada). The proposal has not yet
been approved by the Supreme Court of Nova Scotia and remains
subject to court, shareholder and other required regulatory
approvals. The Company will file material change reports
containing the same information it provides to creditors at the
same time the information is provided to creditors throughout
the period it remains in default.


KSAT SATELLITE: Agrees to Discontinue Beijing Gaida Operations
--------------------------------------------------------------
KSAT Satellite Networks Inc. has agreed to discontinue the
Beijing Gaida Satellite Communication Network Co. Ltd.
established with Beijing WRIC Electronic Technology Development
Corporation, a Chinese entity under the control of the Ministry
of Water Resources.

The SJV was established on June 6, 1997 as a cooperative joint
venture and was involved in the construction of a nation-wide
Supervisory Control and Data Acquisition VSAT network for
collecting water information such as rainfall and water levels.
It was also involved in the provision of communications related
to flood prevention and control for the Ministry of Water
Resources and the provision of engineering and consulting
services in relation thereto.

SJV faced challenges securing contracts in 2001 and the Company
sustained losses during the year ended December 31, 2001. The
joint venture partners conducted a strategic review of the joint
venture subsequent to the year end and were of the view that
they would continue to experience difficulty in securing
contracts to allow the joint venture to be financially viable.
Accordingly, the partners have agreed to wind down the
activities of the SJV with effect from May 16, 2002 with a view
to the eventual discontinuation of the SJV subject to terms to
be agreed between joint venture partners. WRIC has indicated its
intention to continue use of the VSAT system for the nation-wide
Supervisory Control and Data Acquisition VSAT network.

KSAT is in the satellite telecommunications business in China.
The common shares of KSAT trade on the Canadian Venture Exchange
under the trading symbol "KSA". KSAT's current business involves
the manufacture and sale of very small aperture terminals, the
investment in and development of VSAT service networks in China
and the provision of VSAT private network services through its
Chinese joint venture partners to corporate and government
customers.

                         *    *    *

As reported in the January 11, 2002 edition of Troubled Company
Reporter, KSAT Satellite Networks Inc., (CDNX- KSA) determined
that it expected to have an unaudited shareholders' deficiency
of approximately US$9,700,000 as at December 31, 2001.

The shareholders' deficiency is the result of significant
changes and economic pressures in the Corporation's area of
focus, the telecommunications and satellite industry in China,
and the general slowdown in the economy and the operating
climate in China in fiscal 2001.  In particular, the major
state-owned telecommunications companies have undergone a
period of restructuring and consolidation which has had an
impact on capital expenditures for the expansion and upgrading
of existing systems and on the sales the Corporation was able to
close in fiscal 2001.  Due to these changes in the economic
conditions and the operating environment, management of the
Corporation has recommended, and the board of directors of the
Corporation has approved, the write down and creation of
provisions against certain assets of the Corporation, namely
inventory, trade receivables, capital assets and pre-operating
expenses, of approximately US$7,600,000 as at December 31, 2001.


LODGIAN INC: Wells Fargo Balks at Cash Collateral Use
-----------------------------------------------------
Wells Fargo Bank Minnesota, National Association, f/k/a and
successor by merger to Norwest Bank Minnesota, National
Association, as Trustee for the Registered Holders of First
Union-Lehman Brothers-Bank of America Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates Series 1998-C2,
ask the Court to vacate the automatic stay to permit Wells Fargo
to assert its rights against Lodgian, Inc., and its debtor-
affiliates.  These rights include the commencement and
prosecution of a mortgage foreclosure action. Wells Fargo also
seeks to prohibit the Debtors from further unauthorized use of
cash collateral and to account for all cash collateral from the
commencement of this case to date.

According to Kenneth S. Yuddell, Esq., at Aronauer Goldfarb
Sills & Re LLP in New York, New York, Wells Fargo is the holder
of the first mortgage lien on the sole asset of debtor Columbus
Hospitality Associates L.P., which is real property located at
and known as the Holiday Inn Columbus City Center, 175 E. Town
Street, Columbus, Ohio.  Columbus is in default because it has
made no payments to Wells Fargo since the commencement of this
case more than 4 months ago.  Wells Fargo is entitled to relief
from the Automatic Stay for cause pursuant to 11 U.S.C. Section
362(d)(1) because of the Debtors' failure to make any post-
petition mortgage payments to Wells Fargo, failure to make
payments for tax and other reserves, and because of Columbus'
unauthorized use of cash collateral.  Upon information and
belief, Columbus has been using the cash collateral generated by
the Premises without the consent of Wells Fargo or an order of
this Court.

On December 22, 1997, Mr. Yudell relates that Columbus executed
a mortgage note in which the Debtors promised to pay to the
order of Lehman Brothers Holding, Inc. the principal amount of
$6,100,000, plus interest as set forth in the Note.  As security
for the Note, on or about December 22, 1997, Columbus executed
and delivered to Lehman a certain Mortgage, Deed of Trust,
Assignment of Leases and Rents and Security Agreement.  The
Mortgage was duly recorded and is a valid, perfected first
mortgage lien on the Premises.  As additional security for the
Note, Columbus also delivered to Lehman:

A. an assignment of leases and rents concerning the Holiday Inn
    Columbus City Center,

B. a security interest in and lien on all personal property
    located at Holiday Inn Columbus City Center, and

C. an assignment of agreements, licenses, permits and contracts
    in which Columbus has an interest.

By certain assignment documents, dated as of December 22, 1997,
Lehman assigned all of its right, title and interest in and to
the Loan Documents to Wells Fargo.

Mr. Yudell informs the Court that the Debtors have defaulted
under the Note and Mortgage by its failure to make the monthly
payments due thereunder from and after January 1, 2002.  Indeed,
the Debtors have not made any payments to Wells Fargo since the
commencement of this bankruptcy case more than 4 months ago.  As
of April 30, 2002, there is due and owing on the Note and
Mortgage is $5,772,467.62 in principal, $263,913.94 in interest,
plus late fees and other amounts due under the Loan Documents
including, but not limited to, costs and expenses, including
attorneys fees, incurred by Wells Fargo as a result of Columbus'
default.

Mr. Yudell adds that Columbus has also defaulted by failure to
make the required payments for the tax reserve and the
replacement reserve.  While the real estate taxes are not yet
past due, the tax reserve has been almost totally depleted, and
Wells Fargo will need to advance funds for the next tax payment.
Further, maintaining the replacement reserve is extremely
important in this matter because this is a hotel property, which
can deteriorate quickly.

Holiday Inn Columbus City Center is operated as a hotel.  Mr.
Yudell believes that Columbus has continued to operate the hotel
and has used and continues to use the cash collateral generated
by the Premises.  Wells Fargo has not consented to Columbus' use
of the cash collateral and does not consent to the use of the
cash collateral.  Further, Columbus has not received authority
from the Court to use the cash collateral and has not even
applied for such authority.  While Lodgian and certain other
debtors have received authorization to use cash collateral, no
such application has been made by or on behalf of Columbus.  As
such, Columbus' use of the cash collateral violates the express
provisions of Section 363(c)(2) of the Code.

Moreover, Mr. Yudell points out that Wells Fargo has not
received or been offered any adequate protection for Columbus'
unauthorized and improper use of the cash collateral.
Accordingly, it is requested that the Court issue an Order
directing Columbus to immediately cease its unauthorized use of
cash collateral and to account for all cash collateral generated
by the Premises since the commencement of this case.

Mr. Yudell contends that cause exists for lifting the stay
because of Columbus' monetary defaults under the Mortgage,
including its failure to make mortgage payments, tax escrow
payments and replacement reserve payments.  Cause also exists
because of Columbus' use of cash collateral without the consent
of Wells Fargo or authorization from the Court.  All of
Columbus' defaults, including Debtor's unauthorized use of Wells
Fargo's cash collateral, have reduced the value of Wells Fargo's
collateral and placed the loan at much greater risk.  Columbus
currently owes more than $263,000 in past due interest, and
interest continues to accrue at the rate of $1,747.77 per diem.
Taxes continue to accrue against the Premises.  Each day that
passes places Wells Fargo at further risk and further reduces
the value of the collateral. (Lodgian Bankruptcy News, Issue No.
10; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


MEDALLION FUNDING: Fitch Downgrades Senior Secured Notes to B
-------------------------------------------------------------
Fitch Ratings has lowered Medallion Funding Corp.'s (MFC) senior
secured notes to 'B' from 'BB+' and places the rating on Rating
Watch Negative. Approximately $31 million of securities are
impacted by Fitch's actions.

MFC is the principal operating subsidiary of Medallion Financial
Corp.  Medallion is in default under the terms of its secured
bank facility. Specifically, this facility matured on May 15,
2002 and Medallion was unable to repay the $56 million
outstanding. Due to cross default provisions, MFC's senior
secured bank credit facility, due June 28, 2002, and senior
secured notes, due in 2004, also defaulted. MFC's secured bank
facility and senior secured notes each have 30 day cure periods
before lenders can accelerate debt repayment.

Medallion is in the process of refinancing all of its bank debt
with another lender. Management's expectation was that this
process would be completed before May 15, 2002. The Rating Watch
Negative reflects Fitch's view that the completion of the new
facility is not completely certain. Given the limited cure
period before debt acceleration, the likelihood that an
alternative facility could be structured and closed is remote.

Headquartered in New York City, Medallion Financial Corp. is a
specialty finance holding company focused on taxicab medallion
and lower middle market commercial lending as well as taxicab
rooftop advertising.


MILLER EXPLORATION: Wants to Transfer Listing to Nasdaq SmallCap
----------------------------------------------------------------
Miller Exploration Company (Nasdaq: MEXP), announced filing of
application to transfer to the Nasdaq Small Cap Market.

The Company received a Nasdaq Staff Determination on May 16,
2002, indicating that the Company has not complied with the
minimum bid price requirement for continued listing set forth in
Marketplace Rule 4450(a)(5), and that its securities are,
therefore, subject to delisting from the Nasdaq National Market.

On May 21, 2002, the Company applied for a transfer to the
Nasdaq Small Cap Market.  There can be no assurance that the
transfer will be granted, however, it is management's belief
that the Company is in compliance with all quantitative and
qualitative requirements of the Small Cap Market with the
exception of the minimum bid price.

If approved, transfer to the Nasdaq Small Cap Market will afford
the Company a grace period, expiring August 2002, to execute its
business plan and to achieve compliance with the National Market
requirements.  The Company also may be eligible for an
additional 180 day grace period through February 2003 if
additional time is needed to achieve compliance.  If the Company
regains compliance with the Nasdaq National Market requirements
during either of the grace periods, it will be allowed to
transfer back to the Nasdaq National Market without paying the
initial listing fees.

Miller is an independent oil and gas exploration and production
company with established exploration efforts concentrated
primarily in the Mississippi Salt Basin, Alabama, and Blackfeet
Indian Reservation in Montana.  Miller emphasizes the use of 3-D
seismic data analysis and imaging, as well as other emerging
technologies, to explore for and develop oil and natural gas in
its core exploration areas.  Miller is the successor to the
independent oil and natural gas exploration and production
business first established in Michigan by members of the Miller
family in 1925.  Miller's common shares trade on the NASDAQ
under the symbol MEXP.


NATIONAL STEEL: Request for Injunction vs. Illinois Power Nixed
---------------------------------------------------------------
In light of the rejection of Granite City Steel Company's
Electric Service Contract with Illinois Power Company, National
Steel Corporation and its debtor-affiliates ask the Court to
declare they are eligible and qualified for the purchase and
delivery of electric service under the Rider PPO-Power Purchase
Option Service.

Furthermore, the Debtors seek the entry of a temporary
restraining order, preliminary injunction, and permanent
injunction compelling Illinois Power to provide the Debtors with
the purchase and delivery of electric service under the Rider
PPO, effective 12:01 a.m. on April 24, 2002.

Mark A. Naughton, Esq., at Piper Rudnick, in Chicago, Illinois,
relates that the Contract contained the terms and conditions for
the sale and delivery of electric service by Illinois Power to
Granite City Steel.  Illinois Power is a regulated public
utility under the Illinois Public Utilities Act.  It is also an
electric utility within the meaning of the Electric Service
Customer Choice and Rate Relief Law of 1997.  Pursuant to the
Electric Service Customer Choice Law, Illinois Power is required
to provide delivery of electric service to customers, such as
the Debtors, as of October 1, 1999.

Since October 1, 1999, under Illinois law, Mr. Naughton tells
the Court, customers of Illinois Power have these options for
the purchase and delivery of electric service:

    (1) to purchase and receive electric service from Illinois
        Power -- bundled service;

    (2) to purchase electricity from third parties with delivery
        provided by Illinois Power, and

    (3) to purchase separately electricity and delivery services
        from Illinois Power under the Rider PPO.

According to Mr. Naughton, for a customer to be eligible for
electric service under the Rider PPO, it must:

    -- be eligible for delivery services,
    -- have a transition charge greater than zero,
    -- give 30 days' notice of its intent to take service under
       the Rider PPO, and
    -- commit to a one-year contract furnished by Illinois
       Power.

The procedure for taking service under the Rider PPO is approved
by the Illinois Commerce Commission.  Mr. Naughton recounts that
Granite City Steel provided notice to Illinois Power of its
intent to reject the Contract on March 22, 2002 and submitted a
Request for Service to Illinois Power.  The Debtors' Request for
Service sought electric service under the Rider PPO beginning at
12:01 a.m. on April 24, 2002.

With the rejection of the Contract, Mr. Naughton says, Granite
City Steel is entitled to commence service under the Rider PPO
beginning on April 24, 2002.  "That is, Granite City Steel will
be entitled to begin taking delivery service, have a transition
charge greater than zero, have provided 30 days notice of its
intent to begin service under the Rider PPO, and have agreed to
take service under the Rider PPO for a period of one year," Mr.
Naughton explains.

The Debtors estimate that the charges for the purchase of
electricity under the Rider PPO will be approximately 25% less
than that under the Contract.  So if the Court determines that
the Debtors are entitled to take service under the Rider PPO,
Mr. Naughton anticipates that the Debtors will save over
$6,000,000 annually.

However, Mr. Naughton complains that Illinois Power sent a
letter denying the Debtors' request for service under the Rider
PPO. The Debtors asked for reconsideration, but was denied for
the second time.

                      Illinois Power Responds

"The Debtors are not eligible for service under the PPO Rider,"
Illinois Power insists.

According Theodore F. Kommers, Esq., at Gould & Ratner, in
Chicago, Illinois, the new market rates for power under the
Rider PPO for the period of May and June 2002 have been
calculated and became effective on May 1, 2002.  "Granite City
Steel will not have a positive transition charge after April 30,
2002, and Granite City Steel will not be eligible for service
under Rider PPO during the period of May and June 2002," Mr.
Kommers asserts.

Basically, Illinois Power denies most of the Debtors'
allegations.  Pursuant to Rule 9015 of the Federal Rules of
Bankruptcy Procedure and incorporating Rule 38 of the Federal
Rules of Civil Procedure, Illinois Power demands a trial by
jury.

                          *   *   *

Listening to the parties' arguments, Judge Squires finds no
reason for the bankruptcy court to issue a preliminary
injunction and rejects that request. (National Steel Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


NETIA HOLDINGS: Nasdaq Determines to Continue ADS Listing
---------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIAQ, WSE: NET), Poland's largest
alternative provider of fixed-line telecommunications services,  
has received a favorable decision by the Nasdaq Listing
Qualifications Panel regarding the continued listing of its
American Depositary Shares on The Nasdaq National Market.

On March 21, 2002, Netia received a Nasdaq Staff Determination
that it was not in compliance with the continued listing
requirements of The Nasdaq National Market and that its ADSs
were subject to delisting. On March 25, 2002, Netia requested an
appeal of the Staff Determination through an oral hearing and
submission of supporting documentation and presented its appeal
before the Nasdaq Listing Qualifications Panel in an oral
hearing on April 18, 2002.

In its decision, the Nasdaq Listing Qualifications Panel
determined to continue the listing of Netia's ADSs on The Nasdaq
National Market subject to the following conditions: on or
before July 9, 2002, Netia must provide to Nasdaq (1)
documentation evidencing that Netia has either (a) received
approval of its creditors and the court in Poland presiding over
its arrangement proceedings to move forward with its
restructuring plan, or (b) received written agreements from a
sufficient number of creditors to allow Netia to withdraw from
the arrangement proceedings and proceed with a voluntary
exchange offer in its restructuring; and (2) a schedule by which
Netia will consummate its restructuring plan and satisfy all of
the requirements for continued listing on The Nasdaq National
Market. After July 9, 2002, Nasdaq will review the additional
documentation provided by Netia and determine whether continued
listing of its ADSs on The Nasdaq National Market remains
appropriate and, if so, on what terms.

The arrangement proceedings for Netia and its subsidiaries are
occurring in the context of the restructuring of Netia's balance
sheet.

Netia Holdings SA's 13.50% bonds due 2009 (NETH09PON2) are
quoted at a price of 18, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09PON2
for real-time bond pricing.


OCEAN MARINE: Nov. 7 Hearing Set for Continued 304 Injunction
-------------------------------------------------------------
                  UNITED STATES BANKRUPTCY COURT
                  SOUTHERN DISTRICT OF NEW YORK

IN RE:                          :
                                :
PETITION OF CHRISTOPHER JOHN    :
WILKINSON HILL AND PAUL CLARKE, : CASE NO. 99-B-42545 (BRL)
AS JOINT PROVISIONAL            :
LIQUIDATORS OF OCEAN MARINE     :
MUTUAL INSURANCE ASSOCIATION    :
LIMITED.                        :

   Notice is hereby given that on May 8, 2002, the Bankruptcy
Court entered an order continuing the preliminary injunction
order pursuant to 11 U.S.C. Sec. 304 originally entered in this
case on May 5, 1999.  The Order shall remain in effect pending a
hearing to consider whether it shall be continued, which hearing
is scheduled to be held on November 7, 2002 at 10:00 a.m. before
the Honorable Burton R. Lifland, in Room 623 of the Alexander
Hamilton Custom House, One Bowling Green, New York, New York.  
All papers submitted for the purpose of opposing continuation of
the Order after the Return Date shall be filed with the Court,
with a copy to the chambers of the Honorable Burton R. Lifland
and served on counsel for the Petitioners listed below, so as to
be received at least fourteen days prior to the Return Date.  
Any person wishing to obtain a copy of the Order should contact
counsel to the Petitioners.

                         CHADBOURNE & PARKE LLP
                         Attorneys for the Petitioners
                         30 Rockefeller Plaza
                         New York, New York 10112
                         (212) 408-5100
                         Attn:  Howard Seife, Esq.


ONVIA.COM INC: Violates Nasdaq Continued Listing Requirements
-------------------------------------------------------------
Onvia.com, Inc. (Nasdaq: ONVI) announced that on May 16, 2002,
it received notice from the Nasdaq National Market regarding a
deficiency in the Company's compliance of one of Nasdaq National
Market's continued listing requirements and that, if not
remedied, could result in the delisting of the Company's common
stock from the Nasdaq National Market.

In particular, the Company was notified that its common stock
has failed to maintain a minimum closing bid price of $1.00
during the 90 day period ending on May 15, 2002, as required by
Nasdaq Marketplace Rule 4450, and that its common stock would be
delisted if, by May 24, 2002, the Company does not either
transfer to be listed on the Nasdaq SmallCap Market or file an
appeal to the Nasdaq Listing Qualification Panel.

On May 17, 2002, Onvia filed an appeal before the Nasdaq Listing
Qualifications Panel pursuant to Nasdaq Marketplace Rule 4800
Series.  Onvia seeks to remain listed on the Nasdaq National
Market by instituting a 1-for-10 reverse stock split.  The
reverse stock split was approved by Onvia's Board of Directors
and will be put in front of Onvia's shareholders for approval at
the Company's annual meeting on July 11, 2002.

"The 1-for-10 reverse stock split will help us maintain our
listing on Nasdaq , and will benefit our shareholders long-term
by providing them with a more attractively priced security.  
Subsequent to the reverse stock split, the Company will retain
over $5 per share in cash.  Maintaining our Nasdaq listing is a
top priority for the Company and for our shareholders," stated
Mike Pickett, chairman and chief executive officer.

In response to Onvia's appeal request, Nasdaq notified the
Company on May 20, 2002 that a hearing has been scheduled for
June 20, 2002 to review the impact of Onvia's proposed 1-for-10
reverse stock split.  The Nasdaq Listing Qualifications Panel
will render a decision within 45 days of June 20, 2002. No
action will be taken regarding the potential delisting of the
Company's common stock until the Panel's decision.

Onvia.com, Inc. helps businesses secure government contracts and
government agencies find suppliers online.  Onvia assists
businesses in identifying and responding to bid opportunities
from more than 43,000 government purchasing offices in the $600
billion federal, state, and local government marketplace.  Onvia
also manages the distribution and reporting of requests for
proposals and quotes from more than 400 government agencies
nationwide.  The size and strength of Onvia's network allows
suppliers and agencies to find better matches quickly, saving
time and money.  For more information, contact Onvia.com, Inc.:  
1260 Mercer St., Seattle, WA 98109. Tel:  206/282-5170, fax:  
206/373-8961, or visit http://www.onvia.com


PACIFIC GAS: Files Settlement with CPUC to Extend "Gas Accord"
--------------------------------------------------------------
Pacific Gas and Electric Company has filed, on behalf of itself
and multiple other parties, a settlement with the California
Public Utilities Commission (CPUC) which, if approved, will
extend for one year the "Gas Accord," a comprehensive set of
rules for Pacific Gas and Electric gas transmission and storage
system.  The settlement would give gas suppliers and other
Pacific Gas and Electric Company customers the opportunity to
extend existing contracts for firm gas transportation and
storage services, and also would set up an "open season" for
capacity not subscribed through contract extensions.  It also
would fix all rates for gas transmission and storage services at
existing 2002 levels.

This "Gas Accord II" Settlement has wide support from all
sectors of the natural gas and electric power industries,
including representatives of residential ratepayers.  The
Settlement will help ensure that ample supplies of
competitively-priced natural gas are in place for the winter
heating season.  By providing suppliers the opportunity to
continue existing transmission and storage contracts for a one-
year period, the Settlement would also help stabilize the
electric market, since gas is a primary fuel for electricity
generation.

This proposed Gas Accord II settlement establishes the market
structure, rates, and terms and conditions of service for gas
transmission and storage under the jurisdiction of the
California Public Utilities Commission.  The settlement allows
for the continuation of transmission contracts for a one- year
period from January 1, 2003, to December 31, 2003, and storage
service from April 1, 2003, to March 31, 2004.  The contracts
would remain in place for the one-year time period, or could be
converted to contracts under the jurisdiction of the Federal
Energy Regulatory Commission if Pacific Gas and Electric
Company's Bankruptcy Plan of Reorganization is approved.

In October 2001, Pacific Gas and Electric Company filed an
application with the CPUC, proposing a two-year extension of the
Gas Accord, in order to keep in place the existing market
structure and rates pending resolution of Pacific Gas and
Electric Company's bankruptcy case. The Gas Accord II Settlement
now provides for a one-year extension along the line of Pacific
Gas and Electric Company's original proposal, and also
establishes procedures for resolving issues related to the
second year, as necessary.

The Gas Accord II Settlement is supported by several groups;
including the Office of Ratepayer Advocates, shippers and large
customers.  The settling parties have asked the California
Commission to approve the Settlement on an expedited basis, so
that gas supply arrangements can be in place in time for the
upcoming winter season.


PERSONNEL GROUP: Selects Insights for Technology Partnership
------------------------------------------------------------
Personnel Group of America, Inc. (NYSE:PGA), a leading
information technology and professional staffing services
company, has selected Insights, Inc. as its exclusive call
scripting automation systems technology provider. Insights, Inc.
is a leader in eEnabled interactive solutions for recruiting and
staffing -- http://www.insights-interactive.com  

In a statement released Wednesday, PGA Senior Vice President,
Thomas Wittenschlaeger, said, "This strategic alliance will
provide yet another source of technology leverage for PGA. It
will combine Insight's expertise in recruitment strategy and
innovative conversation support technology, with PGA's proven
track record of turnkey information technology integration and
search, as well as personnel staffing services. Realizing the
capital efficiencies of technology partnerships is a strategy
that PGA adopted some months, and represents an important avenue
for building shareholder value."

"Insights has always provided exceptional strategic, creative
and technical solutions aimed towards the staffing industry,"
notes Insights CEO, Christopher Brown. "Now with PGA, a premier
company that recognizes the value of technological and process
innovation, as a strategic partner, our solutions can reach a
much broader audience."

Terms of the agreement will enable Venturi Technology Partners
to customize the content of Insights' interactive Real-time
Conversation Builder(TM) application. This software is a key
component of the Insights recruitment training and automation
solution.

Personnel Group of America, Inc. is a nationwide provider of
information technology consulting and custom software
development services; high-end clerical, accounting and other
specialty professional staffing services; and technology systems
for human capital management. The Company's IT Services
operations now operate under the name "Venturi Technology
Partners" and its Commercial Staffing operations are being
rebranded "Venturi Staffing Partners" over the balance of 2002.
The Company also plans to seek shareholder approval at its May
2002 annual meeting for a charter amendment to change its
corporate name to "Venturi Partners, Inc.(TM)." If approved, PGA
expects to complete its corporate name change in the second half
of 2002.

Insights specializes in the training and development of
personnel engaged in recruitment, search and employee placement.
The Insights Success Kit serves as an off-the-shelf,
standardized, professional recruitment and search training
program. The Kit prepares individuals for every element of a job
as a recruitment and search professional. It combines an
industry unique interactive CD-Rom Conversation Builder(TM) with
hundreds of proven successful scripts, rebuttals and objections
which are delivered "real time." It also contains a general
learning guide, with a series of interactive workbooks. In
addition, the Insights Success Kit includes a two-hour video
overview presentation structured in a non-linear format that
gives a global and strategic approach to the business. For more
information, please visit http://www.insights-interactive.com  

                         *   *   *

As previously reported, Credit Suisse First Boston has filed a
Schedule 13D filing with the SEC, expressing interest in
discussions with Personnel Group of America on potential
deleveraging strategies. The Company has now retained UBS
Warburg as an advisor to help evaluate this and other
constructive alternatives. With the refinancing of its senior
debt facility behind it, PGA now has the time to act or not to
act in a manner most beneficial to the collective interests of
the Company.

"We are encouraged by the results of our cost containment and
bank debt reduction initiatives and by the economic forecasts
suggesting a recovery during the second half of this year,"
remarked James C. Hunt, Chief Financial Officer. "With the
improvements we have made, the revised financial covenants in
our amended credit facility should give PGA the flexibility to
operate its businesses until the broader economy improves.
Our plan is to continue an intense focus on our balance sheet
and on all spending. As a result of changes in the Federal
income tax regulations enacted during the first quarter of 2002,
the Company expects to recover approximately $15.0 million to
$18.0 million of Federal income taxes previously paid. These
Federal income taxes are expected to be recovered in the second
half of 2002 and are expected to be used to further repay our
bank indebtedness."


POLAROID CORP: Committee Taps Buck Consultants as Actuaries
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Polaroid
Corporation and its debtor-affiliates, and the Agent for the
Pre-petition Lenders jointly seek the Court's authority to
retain and employ Buck Consultants, Inc. as actuarial and
benefits consultants, nunc pro tunc to January 11, 2002.

Kimberly Turner of JPMorgan Chase Bank relates that Buck is one
of the country's largest human resources consulting firms and
possesses the necessary expertise in providing consultation and
advice on actuarial, pension plan and benefit issues. In fact,
Buck has provided actuarial services to, among others, Western
Union, LTV Steel Company, Inc., Safety-Kleen Corp., Service
Merchandise Company, Inc. and Acme Steele Company,
International, Inc.

Stephen D. Diamond, F.S.A., a Principal and Consulting Actuary
of Buck Consultants, informs Judge Walsh that Buck will provide
these services:

  (a) evaluating the actuarial assumptions relating to the
      Debtors' pension plan;

  (b) evaluating the Debtors' proposed funding requirements for
      the Debtors' pension plan;

  (c) estimating the funding requirements for the Debtors'
      pension plan;

  (d) testifying in court on behalf of either or both of the
      Applicants, if necessary;

  (e) participating and assisting in discussions with
      government agencies;

  (f) formulating and evaluating alternatives and options
      respecting the Debtors' pension plan; and

  (g) performing any other necessary services as the Applicants
      or their counsel may reasonably request from time to time.

As compensation for the services to be rendered, Mr. Diamond
discloses that Buck will charge the Applicants on an hourly
basis in accordance with the firm's hourly rates:

    Professional                  Hourly Rate
    ------------                  -----------
    Principals                    $464 - 660
    Associate Principals           380 - 452
    Senior Consultants             272 - 360
    Consultants                    240 - 272
    Senior Associates              196 - 216
    Associates                     140 - 192
    Employees                      140

Buck will also seek reimbursement of out-of-pocket expenses,
such as travel, long distance calls, messenger service, mailing,
photocopies and entertainment.  Mr. Turner assures the Court
that Buck's fees and expenses will be limited to $135,000,
provided that the fee cap may be increased upon joint written
consent of the Applicants.

Mr. Diamond reports that Buck is a disinterested entity and does
not represent or hold any interest adverse to the Debtors'
estates and creditor pursuant to the services to be rendered.
However, Mr. Diamond says, Buck is a large firm and may have
represented certain of the Debtors' creditors, equity holders or
other parties-in-interest in mattes unrelated to these cases. As
such, Mr. Diamond promises Judge Walsh that Buck will
immediately disclose to the Court any connection Buck may have
with parties-in-interest to the Debtors' Chapter 11 cases.
(Polaroid Bankruptcy News, Issue No. 17; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PRANDIUM INC: Austin Grills Proposes to Purchase All Assets
-----------------------------------------------------------
Austin Grills, Inc., a growing, Washington D.C. based Tex-Mex
restaurant group, has submitted a proposal to purchase the
assets of Prandium, Inc. (OTC Bulletin Board: PDIMQ) of Irvine,
California and each of its wholly-owned subsidiaries, including
FRI-MRD Corporation.  Prandium, which is currently in Chapter 11
bankruptcy, operates a portfolio of full-service and fast-casual
restaurants including Chi-Chi's, Koo Koo Roo and Hamburger
Hamlet.

Austin Grills' proposal, which is subject to approval of the
bankruptcy court, details a plan to acquire all of Prandium's
assets and reorganize the Company's current outstanding notes
and equity.  The Company has brought in the leadership and has
secured funding commitments to complete this transaction, which
will create a substantial benefit to the current bondholders and
creditors of Prandium, Inc.

Austin Grills, Inc. was founded in 1988 by Rob Wilder and is led
by Chris Patterson, president and chief operating officer.  
Headquartered in Bethesda, Maryland, Austin Grill specializes in
authentic Austin, Texas-style Tex-Mex cuisine.  A favorite
destination for Washington DC area residents, the company
continues to generate highly profitable store level economics.

"Austin Grill is fully-prepared for expansion.  Chris has
assembled a first-class team of professionals to allow our
company to complete this venture successfully," Rob Wilder,
chairman, said.  "We have been actively pursuing opportunities
to expand our concept, as well as acquire a complementary
business.  This deal would accomplish both goals for Austin
Grill."

Named the "Metropolitan Washington Neighborhood Restaurant of
the Year" by the Restaurant Association of Metropolitan
Washington, Austin Grill lives up to its name by transporting
diners to an experience that comes straight from the heart of
Texas.

"We believe that our offer provides Prandium's bondholders with
significantly more value than the reorganization plan that was
recently filed by the company," Patterson said.  "Austin Grill
provides a unique dining experience with its focus on the
sights, sounds, and flavors of Austin, Texas. The goal of our
talented team is to share the fun with a few million new
friends."

Austin Grill's senior management team has extensive restaurant
industry experience that will be an important asset for the
acquired company.  Rob Wilder, founder and chairman of Austin
Grill, is also the co-founder of Amy's Ice Cream of Austin,
Texas and two Jaleo restaurants in the DC area.  Chris
Patterson, president and COO, has served as President of Iowa-
based GNC Restaurant Concepts; market partner for LeeAnn Chin;
and former regional director with Canyon Cafe.

Larry Lavine, a current member of Austin Grill's board of
directors and founder and former Chief Executive Officer of
Chili's, Inc., expects to assume an active role in the day-to-
day operations of the acquisition company.

Mr. Lavine has more than 30 years of industry experience in both
start-up and turn-around situations since opening the first
Chili's in 1975.

Austin Grills expects to begin a period of due diligence, and
with the bankruptcy court's approval, to negotiate and complete
this transaction as soon as possible.


PROVANT INC: Continues Nasdaq Trading While Appeal is Pending
-------------------------------------------------------------
Provant, Inc. (NASDAQ: POVT), a leading provider of performance
improvement training services and products, has received
notification from The Nasdaq Stock Market that it intends to
delist the Company's common stock from The Nasdaq National
Market, effective at the opening of business on May 24, 2002,
due to the Company's failure to comply with the U.S. $1.00
minimum bid price requirement for continued listing on The
Nasdaq National Market.

Provant has requested an oral hearing before a Nasdaq Listing
Qualifications Panel to appeal Nasdaq's determination. The
Company's common stock will continue to be listed on The Nasdaq
National Market while the appeal is pending. Provant expects
that it will be four to six weeks before the appeal is heard by
the Panel. There can be no assurance that the Panel will grant
the Company's request for continued listing. Provant plans to
apply to transfer its common stock to The Nasdaq SmallCap Market
in the event that the Panel denies Provant's request for
continued listing on The Nasdaq National Market.

As a leading provider of performance improvement training
services and products, Provant helps its clients maximize their
effectiveness and profitability by improving the performance of
their people. With over 1,500 corporate and government clients,
the Company offers blended solutions combining web-based and
instructor-led offerings that produce measurable results by
strengthening the performance and productivity of both
individual employees and organizations as a whole.


RELIANCE: Hearing on Compensation Protocol Issue Set for June 13
----------------------------------------------------------------
The Official Unsecured Creditors Committee and the Official
Unsecured Bank Committee, in the chapter 11 cases of Reliance
Group Holdings, Inc., and its debtor-affiliates, present Judge
Gonzalez with a memorandum of law supporting their motion for an
amendment to the Compensation Protocol Order.

Anthony Princi, Esq., of Orrick, Herrington & Sutcliffe, counsel
for the Official Unsecured Creditors Committee and Andrew
Denatale, of White & Case, attorney for the Official Unsecured
Bank Committee, start by attacking the position of the
Liquidator in her objection to the Committee's request for an
amendment.

The attorneys note that the Liquidator does not dispute that she
conceded that funds received by the Debtors post-petition were
not subject to her constructive trust claim and could be used by
the Debtors for any lawful purposes, including the payment of
professionals.  The Liquidator does not dispute that she is now
ignoring her previous admissions and concessions and is
attempting to taint the proper administration of these cases by
claiming that all of the cash in the Debtors' estates --
including funds received from the liquidation of estate assets
pursuant to Section 363 of the Bankruptcy Code -- are subject to
a constructive trust in favor of RIC.

Rather than offer any reason why her prior admissions and
concessions are not binding, the Liquidator contends that no
relief should be granted and the Order to Show Cause should not
have been issued because:

  (1) procedural irregularities require that the motion be
      denied;

  (2) this Court lacks jurisdiction over the constructive
      trust action; and

  (3) this Court lacks jurisdiction over the Liquidator.

The Committees' attorneys confidently assert that these
arguments all fail.

             The Order to Show Cause is Appropriate

The Liquidator contends that the requested amendment cannot be
granted except in the context of an adversary proceeding.
However, it was the Liquidator herself who raised the issue of
what funds are and are not subject to her constructive trust
action in relation to administrative expense payment. For
example, the Liquidator's previous objections have been premised
on the position that all of the Debtors' cash was encumbered by
her constructive trust allegations and could not be used for the
payment of professionals.  Further, it was in the context of her
motions and objections that the Liquidator admitted and conceded
that post-petition funds of the Debtors' estates are not subject
to her constructive trust action.

The Liquidator cannot explain why she could seek a ruling on
these issues without commencing an adversary proceeding but
other parties cannot. Additionally, the Liquidator should not
now, as a procedural tactic, be permitted to argue that an
adversary proceeding is necessary to determine the same issues
that she raised by her prior motions and objections.

Further, no new proceeding is required for this Court to grant
the relief requested. This Court has the power, fom1alized in
Bankruptcy Rule 9024, to reconsider, modify or vacate previously
entered orders as necessary to serve the interests of justice.
In re Blutrich Hem1an & Miller v. Three Park Avenue Building Co.
L.P., 227 B.R 53,59 (Bankr. S.D.N.Y. 1998); In re Maxwell
Newspapers Inc. v. Travellers Indemnity Co., 170 B.R 549,550
(Bankr. S.D.N.Y. 1994). Here, the admissions and concessions by
the Liquidator about post-petition funds resulted in several
orders of this Court relating to the payment of administrative
expenses. However, those admissions and concessions are not
currently reflected in the orders. Now that the Liquidator is
threatening to seek inconsistent relief in a different forum,
the Compensation Protocol Order should be amended or modified to
ensure that the Liquidator is bound by the positions she took
before this Court. The attorneys say that this does not require
a new proceeding, but rather a simple examination of the prior
proceedings in these cases.

As the Liquidator acknowledges, even in situations where an
adversary proceeding might otherwise be required, the procedural
requirements of the Federal Bankruptcy Rules can be relaxed
under appropriate circumstances.  In re Belyea, 253 B.R. 312,
316 (Bankr. D.N.H. 1999); In re Sutton, 1990 WL 25050, *3
(D.N.J. 1990); In re Sky Int'l., Inc., 108 B.R 86, 91 (Bankr.
W.D. Pa. 1989). The Bankruptcy Rules mandate that they are to
"be construed to secure the expeditious and economical
administration of every case under the Code and the just,
speedy, and inexpensive determination of every proceeding
therein." Fed. R Bankr. P. 1001.

The Liquidator attempts to distinguish In re Sky Group Int'l.,
arguing in that case "both parties were permitted to present all
of the evidence on the question they wished to present." The
Liquidator asserts that she was deprived of any such opportunity
because the Order to Show Cause required her to serve answering
papers and attend a hearing within a matter of days. However,
pursuant to the Standstill Agreement entered into between the
parties after the Order to Show Cause was issued, the Liquidator
was given nearly a month to submit her opposition papers.
Additionally, under the current version of that Agreement, the
hearing on the Order to Show Cause will be held, at the
earliest, over two months after it was entered. Thus, the
Liquidator's contention that she will have had insufficient
notice and opportunity to be heard on the matters raised by the
Order to Show Cause has no merit.

The attorneys tell Judge Gonzalez that requiring an adversary
proceeding under current circumstances would be extraordinarily
wasteful and would further deplete the limited resources of
these estates. The Liquidator has already admitted and conceded
that post-petition funds are not subject to her constructive
trust action. Moreover, in her opposition papers, the Liquidator
does not offer any basis for concluding otherwise. Thus, her
insistence to initiate an adversary proceeding must be viewed as
a delay tactic intended to buy time to obtain relief in the
Pennsylvania Court, should the constructive trust action
ultimately be remanded.  During any period of delay, the cloud
over these cases due to the Liquidator's conduct would remain,
severely hampering the Debtors' abilities to reorganize.
Accordingly, the Order to Show Cause should not be dismissed
based on any alleged procedural irregularities.

It is ironic that the Liquidator has continuously professed a
desire to preserve assets in these proceedings that she
maintains are property of RIC and yet, at every turn, has
generated additional litigation that eats away at those assets.
The Liquidator's insistence on formal adversary proceedings is
yet another example of her disregard for preserving the assets
of these estates.

                     This Court Has Jurisdiction

The Liquidator's opposition papers rest on the fundamentally
flawed position that this Court must have jurisdiction over the
constructive trust action in order to grant the relief
requested. Not so the attorneys assert. This Court has
jurisdiction over the Debtors' estates pursuant to 28 U.S.C
Section 1334(b), which provides that federal district courts
and, by extension, bankruptcy courts to which cases are
referred, have jurisdiction over "all civil proceedings arising
under Title 11, or arising in or related to cases under Title
11." There is no question that determining whether funds
received by the Debtors post-petition are property of their
estates falls within this broad grant of jurisdiction. The fact
that the Liquidator filed her constructive trust action does not
divest this Court of its own jurisdiction over the Debtors'
estates. Even if the constructive trust action were remanded to
Pennsylvania State Court and allowed to proceed, that action
would merely constitute a parallel state proceeding concerning a
potential claim by the Liquidator against the Debtors' estates.

In general, there is no requirement that a federal court defer
to parallel state proceeding. Colorado River Water Conservation
District v. United States, 424 U.S. 800, 817-819 (1976). To the
contrary, "[a]bstention from the exercise of federal
jurisdiction is the narrow exception, not the rule," and the
federal courts have a "virtually unflagging obligation" to
exercise their jurisdiction. Id. at 813-14,817.

The attorneys remind Judge Gonzalez that the Liquidator
previously filed a motion requesting that this Court dismiss or
abstain from exercising jurisdiction over these cases in favor
of the constructive trust action. The Liquidator withdrew that
motion. Thus, there is no basis for the Liquidator to assert
that this Court does not have jurisdiction to enter a finding,
consistent with the Liquidator's admissions and concessions,  
that post-petition funds are property of the Debtors' estates
and can be used for any lawful purpose, including the payment of
professionals.

Because this Court's jurisdiction to decide the issues at hand
does not depend on whether this Court has jurisdiction over the
constructive trust action, all of the Liquidator's arguments
based on the fact that Judge Carey's Orders have been appealed,
are irrelevant. Whether this Court should dismiss or abstain
from exercising jurisdiction over these cases in favor of the
constructive trust action was not before Judge Carey. Thus, no
decision was rendered on those questions and they are not on
appeal. The only issue before Judge Carey, and now before the
District Court of the Eastern District of Pennsylvania, was
whether the constructive trust action should be remanded and/ or
transferred to this Court.

                 The Estate Controls Jurisdiction,
                           Not the Party

The Liquidator states that this Court lacks jurisdiction to
order her to appear and show cause because she purportedly has
appeared in this action only "on a limited and special basis to
contest this Court's jurisdiction over property and matters
properly within the jurisdiction of the Commonwealth Court of
Pennsylvania." In fact, the Liquidator has appeared in this
action repeatedly, made numerous motions and objections, and has
participated in essentially every facet of these cases. Further,
the attorneys' write that her efforts have been, "almost
uniformly attempted to obstruct."  Her repeated incantation,
included in every paper she has filed, that she is not
consenting to the general jurisdiction of the Court cannot alter
reality. Otherwise, merely by including such recitations in
every pleading, a party could litigate an entire case without
ever consenting to the jurisdiction of the court. Here, the
Liquidator clearly consented to having this Court resolve the
question whether certain assets of the Debtors' estates are
encumbered by her constructive trust action when she filed her
objections and motions. The Liquidator cannot have it both ways.
She cannot participate in these proceedings only when it suits
her strategic designs, and then claim that she is exempt from
this Court's jurisdiction when she fears that another party's
motion might be successful.

Even if this Court were to conclude that it lacks in personam
jurisdiction over the Liquidator, there is no question that this
Court does have jurisdiction over the assets of the Debtors'
estates. Thus, this Court has jurisdiction to enter the relief
ultimately requested, which is an Order amending and/or
supplementing the Compensation Protocol Order to reflect the
fact that post-petition funds are property of the Debtors'
estates. If the Liquidator does not wish to appear and be heard
on that issue, so be it. The Committees would then ask that the
Court enter the requested Order based on an unopposed motion.

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

Judge Gonzalez has scheduled a hearing on this matter for June
13, 2002, at 4:00 pm. (Reliance Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    


ROMARCO: Tullaree Will Drawdown $2.2 Mill. Balance of Debenture
---------------------------------------------------------------
Tullaree Capital Inc. (TSXV: "TUL") announces that the
independent directors of the Board has determined and approved
the drawdown of the balance, being $2,219,044, of the 2 year
convertible debenture issued to Romarco Minerals Ltd. (TSE: "R")
dated August 3, 2000, subject to certain legal conditions
anticipated to be completed within the next two weeks.  As
Romarco currently holds 79.99% of the outstanding common shares
of Tullaree, this drawdown will not be converted into units
until such time as such conversion would not result in Romarco
holding in excess of 80% of the issued shares of Tullaree.  The
aggregate unconverted amount ($2,416,044.20) will bear interest
at a rate of one percent per annum until conversion.  Upon
conversion of the unconverted  balance, Tullaree will be
required to issue to Romarco an additional 8,053,480 common
shares and an additional 2,013,370 warrants to purchase an
additional 2,013,370 common shares at a price of $0.60 per share
for a period of two years.  Upon completion of this drawdown,
Tullaree will have drawn down the entire Romarco Debenture and
will have working capital of approximately $4.4 million.  The
beneficiaries of the Tullaree shares being drawndown will be the
Romarco shareholders.

Tullaree is presently reviewing and assessing potential
investment opportunities, including the possibility of
increasing its interest in The Pocketop Computer Corporation.  
Tullaree has retained consultants and advisors to assist it in
evaluating and carrying out due diligence on, two specific
investment opportunities which it is currently actively
negotiating with in addition to Pocketop. Further details will
be released as deemed appropriate.

                           *   *   *

As reported in the May 3, 2002 edition of Troubled Company
Reporter, Romarco Minerals Inc. (TSXV: "R") announced that a
Special Committee of its board of directors was formed to review
the terms and conditions of the offer announced by Bradstone
Equity Partners, Inc. on April 17, 2002. To date no formal offer
has been made.

The Special Committee has engaged the services of Research
Capital Corporation to act as financial advisor to the Special
Committee in its review of the terms and conditions of
Bradstone's offer, to consider strategic alternatives, to
solicit and evaluate any other offers and to assist the Special
Committee in responding to Bradstone's offer.

Research Capital, in conjunction with the Special Committee,
will evaluate all potential alternatives for maximizing
shareholder value.

In another report, the Toronto Stock Exchange suspended Romarco
shares trading due to noncompliance of certain continued listing
guidelines.


ROMARCO MINERALS: Terminates Pact to Acquire Pocketop Shares
------------------------------------------------------------
ROMARCO MINERALS INC. (TSXV: "R") announced further information
relating to its proposed restructuring.

    Ratio Determined with Respect to Distribution of Tullaree
                Shares to Romarco Shareholders

Based upon the current number of Romarco shares outstanding and
(i) the termination of the previously announced agreement
entered into by Romarco to acquire 2.3 million shares of the
Pocketop Computer Corporation; (ii) the acquisition by Romarco
of an additional 8,053,480 shares of Tullaree Capital Inc.
(TSXV:  "TUL"); and (iii) the cancellation of 5 million Romarco
shares currently owned by GMS Worldwide Inc., Romarco
shareholders will receive approximately 1.80 Tullaree shares for
every Romarco share they own. The distribution of the Tullaree
shares is subject to Romarco obtaining all requisite shareholder
and regulatory approvals and the approval of the Ontario Court
of Justice (General Division). The exact number of Tullaree
shares to be received by Romarco shareholders will be based upon
the actual number of Romarco shares outstanding at the time of
distribution.

         Tullaree to Draw Down Additional CDN$2,219,044

     Romarco to Receive 8,053,480 Additional Tullaree Shares

Romarco has been notified of Tullaree's intention to draw down
the remaining CDN$2,219,044 of the convertible debenture
previously entered into between Romarco and Tullaree in August
2000. Subject to the receipt by Tullaree of the approval of the
TSX Venture Exchange, Romarco will receive an additional
8,053,480 Tullaree shares in connection with the conversion of
this draw down. As a result, Romarco will own approximately
39,583,000 Tullaree shares which will be distributed to Romarco
shareholders as part of the previously announced plan of
arrangement.

            Agreement to Acquire Pocketop Shares
               by Romarco is Terminated

The agreement entered into by Romarco to purchase shares of
Pocketop, as previously announced in a press release issued by
Romarco on April 18, 2002, has been terminated upon the mutual
consent of the parties to the agreement.

           GMS Worldwide Inc. Agrees to Cancellation
                  of 5 Million Romarco Shares

GMS Worldwide Inc. has agreed, as part of, and subject to
completion of the proposed statutory plan of arrangement, to
terminate agreements previously entered into with Romarco.  The
termination of these agreements will result in the return to GMS
of its granite, marble and stone business and the cancellation
of 5 million Romarco shares currently owned by GMS and held in
escrow pending attainment by GMS of certain cash flow
milestones.

       Additional Details Re Statutory Plan of Arrangement

The proposed Statutory Plan of Arrangement will result in two
classes of shares being created for new Romarco, namely common
shares and preference shares.  The preference shares will be
distributed to Romarco shareholders on a pro rata basis and will
be redeemed in consideration for a redemption price which will
be satisfied by way of a pro rata distribution of all the issued
and outstanding Tullaree shares held by Romarco at the date of
the completion of the arrangement.  The redemption date of the
preference shares is anticipated to be within 14 business days
following Romarco's annual and special meeting of shareholders.

                      The New "Romarco"

Romarco will re-establish itself as a significant participant in
the precious metals mining and exploration business and will
work aggressively toward creating value for its shareholders.  
Romarco, together with its financial advisor, Research Capital
Corporation, continue to evaluate several precious metals
entities which have expressed an interest in pursuing a
potential transaction which Romarco.

As part of the proposed restructuring of Romarco, management
will nominate a reconstituted slate of directors at Romarco's
upcoming annual and special shareholders meeting. The newly
restructured board will consist of a majority of independent
directors with seasoned mining experience.

After completion of the arrangement there will be approximately
21,959,000 Romarco shares issued and outstanding.

                  Tullaree Corporate Update

After completion of the arrangement, Tullaree will have
approximately 47,468,617 shares issued and outstanding.  The
distribution of the Tullaree shares to Romarco shareholders will
significantly broaden the Tullaree shareholder base and will
provide an excellent opportunity for Romarco shareholders to
directly participate in a promising technology company.  
Tullaree retains its 50.3% ownership in Pocketop.

         Bradstone Equity Partners, Inc. Withdraws Bid

On May 17, 2002, Bradstone announced its decision not to pursue
its previously announced bid for 49.4% of the outstanding common
shares of Romarco at CDN$0.38 per share.


STRATEGIC HOTEL: S&P Drops Classes D & E Ratings to Low-B Level
---------------------------------------------------------------
Standard & Poor's lowered its ratings on three classes of Ten
Affiliates of Strategic Hotel Capital LLC's SHC floating-rate
commercial mortgage-backed securities series 2001-SHC1. At the
same time, ratings are affirmed on four other classes in the
pool.

The downgrades reflect the deterioration in the pool's overall
operating performance as evidenced by a decrease in debt service
coverage and an increase in the loan-to-value ratio since
issuance. This is the result of a 24% decrease in net cash flow
since issuance just one year ago. The rating actions also
reflect the primary locations of the assets in the pool as well
as the strong experience of their operators.

Using results for the 12 months ending Feb. 28, 2002, Standard &
Poor's arrived at a stabilized NCF of $64.6 million. Utilizing a
blended capitalization rate of 11.1%, the LTV is estimated at
78% and the debt service coverage ratio is 1.39 times, based on
a refinance constant of 10.25%. These levels have deteriorated
from Standard & Poor's initial review in May of 2001, when the
LTV was 66% and the DSCR was 1.65x. However, because of the low
interest rate environment of the last year, actual DSCR was
2.80x for this same period.

This transaction consists of one loan secured by 10 cross-
collateralized and cross-defaulted hotels including: The Westin
Essex House; New York Marriott East Side; Hyatt Regency La
Jolla; Hilton Burbank Airport; Embassy Suites Santa Clara;
Embassy Suites Lake Buena Vista; Embassy Suites Crystal City;
Marriott Schaumburg; Renaissance Beverly Hills; and Embassy
Suites Orlando International Airport. The two largest assets are
The Essex House and the New York Marriott East Side both in New
York City (representing 26% and 17% of the pool's total NCF),
which have seen revenue per available room decline by 19% and
21%, respectively, since issuance. Overall occupancy at the 10
hotels declined to 70.6% for the 12 months ending Feb. 28, 2002
from 76.2% at original underwriting. While expenses declined by
9% during this period, this favorable trend was more than offset
by a 13% decline in revenues.

The current insurance policy, which includes terrorism insurance
for this portfolio of hotels, expires in July 2002. Standard &
Poor's will continue to monitor this issue. The rating actions
also reflect the belief that 2001 represented a trough, and that
the operating performance of this portfolio of hotels should
rebound to levels that are consistent with these rating actions
by the time of the mortgage loan's maturity in 2004.

                          Ratings Lowered

          Ten Affiliates of Strategic Hotel Capital LLC
           SHC floating-rate commercial mortgage-backed
                         sec ser 2001-SHC1

               Rating
     Class   To      From     Balance ($ mil.) LTV (%) DSCR(x)
     C       BBB     A-       86.6             59.5    1.82
     D       BB+     BBB      69.3             71.5    1.52
     E       BB      BBB-     21.5             75.1    1.44

                          Ratings Affirmed

          Ten Affiliates of Strategic Hotel Capital LLC
          SHC floating-rate commercial mortgage-backed
                         sec ser 2001-SHC1

     Class    Rating    Balance ($ mil.)  LTV (%)  DSCR (x)
     A        AAA       154.5             26.5     4.08
     B        AA        105.3             44.6     2.43
     X-1      AAA       288.2*            N/A      N/A
     X-2      AAA       454.1*            N/A      N/A
     *Notional balance of interest only classes


SULPHUR CORP: Obtains Stay Extension Under CCAA in Canada
---------------------------------------------------------
Sulphur Corporation of Canada Ltd has requested and obtained a
Stay Extension under the Companies' Creditors Arrangement Act.
The initial Order was to expire on May 17, 2002 and was extended
until June 18, 2002.

The Order has the effect of staying the rights of all creditors
to enable SCC to restructure its financial affairs. SCC proposes
to file with the courts a Plan of Arrangement or restructuring
proposal on or before the expiration of the extended Stay period
being June 18, 2002.


TII NETWORK: Falls Short of Nasdaq Continued Listing Standards
--------------------------------------------------------------
TII Network Technologies, Inc., (NASDAQ:TIII), a leading
provider of telecommunications network protection and management
products, has received a Nasdaq Staff Determination Letter dated
May 16, 2002 indicating that its common stock fails to comply
with Nasdaq's minimum bid price requirements for continued
listing on The Nasdaq National Market (NMS) as set forth in
Nasdaq's Marketplace Rule 4450(a)(5) and that the Company's
common stock is, therefore, subject to delisting from the NMS.

However, under Nasdaq Marketplace Rules, TII has requested an
oral hearing before the Nasdaq Listing Qualifications Panel to
review the Staff Determination and to request continued listing.
The hearing request will defer the potential delisting of the
Company's common stock pending the Panel's decision. There can
be no assurance that the Panel will grant the Company's request
for continued listing. If the Company's common stock is to be
delisted from the Nasdaq National Market, the Company intends to
apply to transfer its common stock to The Nasdaq SmallCap
Market.

TII is a proven technology leader specializing in providing the
telecommunications industry with innovative, network protection
and management products, including station protectors, network
interface devices, DSL protectors, filters and splitters and
power and data-line protectors, as well as creative, custom
design solutions to meet customers' individual requirements.


US PLASTIC LUMBER: Fails to Maintain Nasdaq Listing Guidelines
--------------------------------------------------------------
U.S. Plastic Lumber Corp. (Nasdaq:USPL), has received notice
from the NASDAQ National Market advising that the Company's
stock will be delisted because its common stock has failed to
maintain a minimum bid price of $1.

USPL reported that while there are several options available
that could permit the Company to regain compliance with Nasdaq
listing requirements, it has filed an application to transfer
its securities to The Nasdaq SmallCap Market. USPL will maintain
listing on the Nasdaq National Market System pending the
decision of Nasdaq on the application to transfer to the
SmallCap Market. If USPL's transfer application is accepted,
USPL will be permitted to trade on the Nasdaq SmallCap Market
and will have until August 13, 2002 to regain compliance with
the minimum bid price requirement of $1.00. If the Company
regains compliance by August 13, 2002, it may stay on the
SmallCap Market or re-apply to be listed on the National Market
System once again. If it does not regain compliance by August
13, 2002, USPL may qualify for an additional grace period to
come in to compliance until February 13, 2003. If USPL meets the
initial listing criteria for the SmallCap Market, USPL will have
until February 13, 2003 to regain compliance or it will be
delisted from the SmallCap Market.


USI INC: Completes Restructuring with $81M Investment from Bain
---------------------------------------------------------------
USi, Inc., the leading Application Service Provider, has
completed its restructuring, with its Plan of Reorganization
becoming effective on May 21, 2002. Upon completion of the
restructuring, USi has received an investment of $81.25 million
from an affiliate of Bain Capital, a global private equity firm
with over $12 billion in assets under management.

USi also announced an agreement to merge operations with
Interpath, another leading ASP in which Bain Capital owns a
controlling interest, to create the largest enterprise ASP, with
over 130 customers and combined revenues of nearly $150 million
in 2001.  Andrew Stern, CEO of USi, will become Chairman and CEO
of the combined company, which will be headquartered in
Annapolis, Maryland. Integration of the two companies will
commence immediately and is expected to be completed shortly.

"Over the last 18 months, USi has made significant progress in
improving and strengthening the operational side of the
business, being the first in the industry to become EBITDA
positive, while delivering the highest service levels in our
history," said Andrew Stern, CEO, USi. "With the balance sheet
restructuring complete, a fully-funded business plan in place,
and an operational merger with Interpath underway, USi will be
able to grow the business and execute against the dramatic
potential of the market we serve as the industry leader."

"Long on experience, with great technical ability and stellar
employees, the combined company will share a service-oriented
culture built on a tradition of service excellence," added
Stern.  "This merger will enhance our financial strength,
improve our ability to attract prospects, and allow us to build
on our leadership advantage."

"USi and Interpath have a long history of providing superior
services to their customers, and have played an integral part in
the evolution of the ASP industry," said Andrew Balson, Managing
Director, Bain Capital.  "Combining these two companies confirms
USi's market leadership position, creating a firm with industry
leading technology and a sound economic model."

USi, Inc., the leading Application Service Provider, delivers
enterprise and e-commerce software as a service. The company's
portfolio of service offerings delivers the functionality of
leading software from Ariba, BroadVision, Lawson, Microsoft,
Oracle, PeopleSoft, and Siebel as a continuously supported,
flat-rate monthly service via an advanced, secure global data
center network. Additionally, USi's AppHost managed application
hosting services provide the most advanced solutions for
enterprises, software companies, marketplaces, public sector
clients and system integrators that are seeking a better way to
deliver solutions over the Internet to their customers and end
users. For more information, visit http://www.usi.com  

Interpath is an established, full-service Application Service
Provider/Application Infrastructure Service Provider. Through a
combination of skills, support, security, and stability,
Interpath enables customers to be secure in the knowledge they
can focus on their core competencies. Interpath partners with
customers to offer application development, integration and
hosting solutions and services. Interpath's applications
expertise, combined with its state-of-the-art data and
operations centers, offers customers a single, high-quality
source for application development, management and hosting. The
company is based in Research Triangle Park, North Carolina.  For
more information about Interpath, visit the company's Web site
at: http://www.interpath.net  

Bain Capital is a global private equity firm that manages
several pools of capital including private equity, high-yield
assets, mezzanine capital and public equity with over $12
billion in assets under management.  Since its inception in
1984, the firm has made private equity investments and add-ons
in over 225 companies, in a variety of industries, including
technology and communications, healthcare, consumer goods and
industrial products. Bain Capital partners with exceptional
management teams in order to build long term value in its
portfolio companies. Headquartered in Boston, Bain Capital has
offices in New York, San Francisco, and London.  For more
information, please visit http://www.baincap.com


VANDERBILT MORTGAGE: Fitch Hatchets Ratings on 12 Classes to BB+  
----------------------------------------------------------------
Fitch Ratings downgrades 12 limited guarantee classes of
Vanderbilt Mortgage & Finance Corp. to 'BB+' from 'BBB' and
affirms 9 classes at 'BBB'.

This action follows Fitch's assignment of an indicative senior
unsecured rating of 'BB+' to Clayton Homes, Inc. (CMH). For more
information regarding Fitch's rating of CMH, please see the
Fitch Ratings press release, also dated May 22, 2002 and
available on the Fitch Ratings web site at
'www.fitchratings.com'.

To date, all of the company's manufactured housing
securitizations include bonds that are enhanced by a limited
guarantee from CMH and are all currently rated 'BBB' by Fitch.
The ratings on these securities typically reflect the ability of
CMH to make payments under the limited guarantee. If the limited
guarantee were the only credit enhancement for these securities
they would be downgraded to 'BB+' as well. However, each of
these securities is also supported by additional credit
enhancement in the form of excess interest, and for all
variable-rate (Group II) pools, by over-collateralization (o/c).
Fitch has evaluated the potential for each bond to achieve a
rating above the 'BB+' rating of CMH based on the additional
credit enhancement available.

Fitch performed a variety of analyses on 12 securitizations
representing 21 pools. One involved evaluating whether there is
sufficient liquidity for the transactions based on a trend
analysis of excess interest and imputed loss. Given that CMH
purchases each defaulted loan from VMF at 100% of the full
unpaid principal balance, VMF securitizations have historically
shown no losses. In addition, Fitch compared the remaining
expected losses for each transaction with estimated remaining
credit enhancement. Fitch imputed losses for each pool going
forward since it cannot rely on CMH's purchase of the defaulted
loans from the VMF transactions as credit enhancement. The
credit enhancement for these transactions going forward includes
an evaluation of future available excess interest and, if
applicable, O/C.

Given Fitch's estimated loss expectations, for all 12 fixed-rate
pools, the available excess interest is not sufficient to
support a rating above 'BB+'. However, all 9 variable-rate
(Group II) pools are able to maintain a 'BBB' rating, despite
the rating of 'BB+' of CMH.

As of March 31, 2002, CMH has guarantees relating to subordinate
bonds in its manufactured housing securitizations of
approximately $394.66 million. To date, 21 of these securities
representing $208.1 million are rated by Fitch. The following
securities are affirmed at 'BBB':

     --1998-A class II-B3, $4,779,000;
     
     --1998-B class II-B3, $5,193,000;

     --1998-C class II-B3, $6,110,000;

     --1998-D class II-B3, $7,101,000;

     --1999-A class II-B3, $6,982,000;

     --1999-B class II-B3, $6,598,000;

     --1999-C class II-B3, $10,121,000;

     --1999-D class II-B4, $9,259,000;

     --2000-A class II-B3, $5,974,000.

   The following securities are downgraded to 'BB+' from 'BBB':

     --1998-A class I-B2, $6,074,000;

     --1998-B class I-B2, $7,784,000;

     --1998-C class I-B2, $7,324,000;

     --1998-D class I-B2, $12,261,000;

     --1999-A class I-B2, $10,328,000;

     --1999-B class I-B2, $28,934,000;

     --1999-C class I-B2, $16,660,000;

     --1999-D class I-B2, $10,070,000;

     --2000-A class I-B2, $12,792,000;

     --2000-C class B-2, $17,194,404;

     --2000-D class B-2, $15,305,694; and,

     --2001-B class B-2, $19,000,000.


WARNACO: Gets Nod to Conduct GOB Sales at Mills Store Locations
---------------------------------------------------------------
Mills Corporation and its affiliates have some concerns on The
Warnaco Group, Inc. and its debtor-affiliates' proposed
procedure in the rejection of the store leases where the going-
out-of-business sales are to be conducted.

For the issues to be resolved, the Debtors and Mills Corporation
agree on a Stipulation containing these terms and conditions:

  (a) The Debtors are authorized to conduct the going-out-of-
      business sale at the Mills Store Locations pursuant to
      the agreed Going-out-of-Business Sale Guidelines;

  (b) The Debtors are authorized to conduct the Sale at the
      Mills Store Locations through and including September 3,
      2002, unless such authority is extended by an Order of
      the Court, obtained upon prior written notice to Mills,
      or written agreement between the Debtors and Mills;

  (c) The Debtors must provide not less than 15 days prior
      written notice to Mills of the Debtors' intent, if any,
      to reject the Mills Leases for either or both of the
      Mills Locations;

  (d) Notwithstanding anything to the contrary contained in the
      Agency Agreement, the Debtors will remain liable and
      responsible for the timely payment of all post-petition
      rent and other sums due and payable pursuant to the Mills
      Leases for the Mills Store Locations should the Debtors'
      Agent fails to timely pay such sums;

  (e) The Debtors or its Agent must continue to perform the
      Debtors' post-petition obligations under the Mills Store
      Leases through and including the later of:

      -- the 15th day after receipt of notice of rejection of
         the relevant Mills Lease by counsel for Mills, and

      -- the date the Debtors surrender the property subject to
         the Mills Lease;

  (f) In the event that one or more of the Mills Store
      Locations "goes dark" in violation of the terms of the
      relevant Mills Lease prior to its rejection, Mills may
      present an order to this Court rejecting the Mills Lease
      for the particular locations/premises that has
      "gone dark" in violation of the terms of the Lease on
      five business days notice to:

      -- the Debtors' undersigned bankruptcy counsel,

      -- the counsel for the Debt Coordinators for the Debtors'
         pre-petition banks,

      -- counsel to the agent for the Debtors' post-petition
         secured lenders, and

      -- counsel for the Official Committee of Unsecured
         Creditor,

      to which the parties have the right to object to the entry
      of same.

The Parties agree on the Sale Guidelines that states:

  (a) The Agent will sell the same types of inventory that the
      Debtors currently sell from the stores that are subject
      to these sale guidelines;

  (b) The extent and content of signage used to advertise the
      store closing sales is limited to:

      -- The advertising and signage may only promote or
         advertise the Sale in the Store as a "Store Closing,"
         or "Going out of Business at this Location." No
         signage may use the term "Bankruptcy."  No signage
         may use Day-Glo or neon colors;

      -- No signs may be placed on the exterior of any
         Stores, windows or buildings and will not be affixed
         to the outside of the windows. Window signs must not
         cover more than 50% of a Store's windows; and

      -- The Agent must use reasonable efforts to disperse
         such signs evenly throughout the interior of the Store;

  (c) Unless otherwise authorized under the lease for a Store
      the Agent cannot make any structural or material non-
      structural alterations to the storefront or exterior
      walls of any Store during the Sales;

  (d) Sales will be conducted using currently existing Store
      fixtures or replacement fixtures consistent with those
      currently in the Store;

  (e) The Agent must maintain the hours of operation and
      operating procedures, and the same "window dressing" and
      "good housekeeping" standards during the course of the
      Sales as are currently maintained by the Debtors. Sales
      are to be considered "final," and conspicuous signs
      will be posted in the cash wrap areas of each affected
      Store to the effect that all sales are "final" and that
      customers with any questions or complaints subsequent to
      the conclusion of the Sale may contact a named
      representative of the Agent and/or the Debtors at a
      specified telephone number;

  (f) The Agent is prohibited from soliciting, promoting
      or advertising Sales in the common areas of the shopping
      center or in any area outside the affected Store. No
      banners, flashing lights, or amplified sound will be
      permitted in or outside of a Store. The Agent may not
      distribute handbills, leaflets or other written materials
      to customers outside any Store's premises, but may
      solicit customers within the Stores themselves;

  (g) Sale of the Debtors' furniture, fixtures or equipment may
      be allowed in the Store, provided that delivery of these
      items must be made only at the shopping center's or
      mall's delivery bays and not from the front of the Store,
      unless otherwise impracticable;

  (h) The Agent may not remove from the Store any property
      owned by the landlord that is affixed to and a part of
      the real estate;

  (i) The Agent or the Debtors must remove all inventory,
      furniture, equipment, supplies and other personal
      property other than the "Fixtures" from the Store by the
      later of the conclusion of a Sale or the rejection of the
      Lease. Any Personal Property left in the Store after the
      effective date of any lease rejection will be deemed
      abandoned to the Landlord, and the Landlord will have
      the right to dispose of same as Landlord so chooses
      without any liability whatsoever and without further
      order of the Court;

  (j) Prior to the conclusion of the Sale, the Landlord will
      be allowed reasonable access to the Store to conduct a
      walk through. At the conclusion of a Sale, the Agent
      must leave the Store in "broom clean" condition;

  (k) Upon the conclusion of a Sale, the Landlord will have
      access to the Store to "dress" or barricade the windows.
      Any such dressing or barricading of windows will not
      be deemed to be an acceptance of Landlord of surrender of
      the premises;

  (l) All media advertising of the Sales must be consistent
      with the terms of this Guidelines. As applicable, the
      Debtors agree to report all sales to the Landlord within
      15 days following the end of each month during which
      Sales are conducted. The Debtors will be required to
      pay, on time when due, percentage rent if and as provided
      in the Lease;

  (m) Except as modified hereby or by the Store Closing Sale
      Order entered in these Chapter 11 cases, all provisions
      of the Lease must be complied with in a timely manner
      and will remain in effect;

  (n) The Agent must provide to the Landlord, the name,
      address and telephone number of a contact person within
      the Agent's and the Debtors' organizations to address any
      problems that may arise with respect to the conduct of
      the Sale.

  (o) The Agent or the Debtors must provide the Landlord with
      at least two days' prior notice of the anticipated
      conclusion of a Sale; and

  (p) In the event a dispute arises between Landlord and the
      Agent or the Debtors regarding these guidelines, either
      party may seek immediate relief from the Court. (Warnaco
      Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)  


WHEELING-PITTSBURGH: Suing Maxim Crane to Recoup Money Transfer
---------------------------------------------------------------
On behalf of Wheeling-Pittsburgh Steel Corp., Henry G. Grendell
of the Cleveland firm of Calfee Halter & Friswold, brings suit
against Anthony Crane Rental L.P. dba Maxim Crane Works to
recover a transfer of money described as "preferential" by WPSC.

For many years, ACR has supplied goods and services to WPSC.  As
part of the parties' course of dealings, ACR provided a 3%
discount for timely payments (e.g., payments within 30 days) and
a 50% discount for second shift use of equipment.

On December 4, 1998 citing the down trend in the United States
steel market, ACR initiated a 6% discount on all rental
equipment.  This discount has continuously been applied since
that time, has never been revoked by ACR, has been relied upon
by WPSC as an integral part of its relationship with ACR, has
been a substantial factor in WPSC maintaining its relationship
with ACR, and has become a part of the parties' course of
dealings.

Before the Petition Date, ACR agreed to provide WPSC with goods
and services in connection with various projects.  WPSC
delivered payments to ACR totaling approximately $1,544,993.45.

In connection with these projects, in October 2000 Citibank NA
issued (i) its Irrevocable Letter of Credit to WPSC in the
amount of $3,001,000.  ACR is listed as the beneficiary of the
October letter of credit.  The amount of this Letter of Credit
was later increased to $3,201,000.

WPSC had previously pledged certain of its property to Citibank
as collateral to secure all indebtedness owed to Citibank,
including the Letter of Credit.  Despite the fact that the
Letter of Credit authorized payment for six specified purchase
orders, ACR made draws against the Letter of Credit for work
other than the work specified in the Letter of Credit.  ACR's
draws against the Letter of Credit failed to include the
discounts.

WPSC says transfers made to ACR within 90 days of the Petition
Date permitted ACR to receive more than it would have received
if WPSC had commenced a liquidating case, the transfers had not
been made, and ACR had received payment of its debt to the
extent permitted in the liquidating case under the Bankruptcy
Code.

The Letter of Credit was issued to secure payment at least in
part of an unsecured antecedent debt owed by WPSC to ACR.  This
Letter of Credit was issued when WPSC was insolvent, and
permitted a preferential transfer of property of the Debtor to
or for the benefit of ACR.  The various draws made by ACR in the
aggregate totaled the full amount of the Letter of Credit.  
Citibank was oversecured so that the issuance of the secured
Letter of Credit to ACR resulted in a diminution of the assets
of WPSC's estate.  WPSC's transfer of its property to Citibank
as collateral to secure each Letter of Credit constitutes an
avoidable preferential transfer to ACR, which WPSC now wants to
recover.

WPSC alleges a turnover action for the discounts, saying that
before issuance of the Letter of Credit ACR applied discounts on
WPSC's payments to it.  But when ACR made draws on the Letter of
Credit, it discontinued providing WPSC the discounts and,
instead, drew upon the Letter of Credit for the entire amount
owed "without justification". The amount of the draws which
should not have been made because of application of the
discounts exceed $600,000.  ACR also drew upon the Letter of
Credit to pay purchase orders which were not authorized by WPSC
to be paid with the Letter of Credit.  These amounts are still
being calculated by WPSC.  These improper draws constitute
property of WPSC's estate and WPSC wants them back.

WPSC therefore asks for judgment against ACR:

       (1) as a preference in the aggregate amount of
$1,544,993.45, with interest permitted by law;

       (2) as a preference avoiding the proceeds of the Letter
of Credit up to an aggregate amount of $3,200,000, with interest
permitted by law;

       (3) in an amount in excess of $4,500,000, with interest
permitted by law;

       (4) ordering ACR to immediately pay, in cash, an amount
equal to the aggregate amount of the transfers received by it,
and as an unauthorized transfer, an amount equal to the
aggregate amount of preferential transfers paid through the
Letter of Credit;

       (5) directing ACR to immediately turn over to WPSC the
amount of the improper draws in the total amount of at least
$600,000, with interest permitted by law; and

       (6) awarding WPSC, to the fullest extent permitted by
law, all costs (including attorney's fees) incurred in the
commencement and prosecution of this adversary proceeding.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 21; Bankruptcy  
Creditors' Service, Inc., 609/392-0900)  


WILLIAMS COMMUNICATIONS: Launches New Streaming Media Services
--------------------------------------------------------------
Williams Communications (OTC Bulletin Board: WCGRQ), a leading
provider of broadband services to bandwidth-centric customers,
has launched new streaming media services over its nationwide
fiber-optic network.  The new services include live and on-
demand streaming, wholesale streaming and subscription/pay-per-
view streaming.  These products complement Williams
Communications' current streaming media offerings, including the
popular TalkPoint(TM) and ActiveCast(TM) services and enable
customers to create efficient communications with internal and
external audiences worldwide.

Coinciding with the launch of these services, Williams
Communications will provide exclusive live and on-demand
streaming media services to Digicast Corporation, a digital
broadcasting provider.  Over the past year, Digicast has
produced and broadcast more than 220 live sports and
entertainment events over the Internet to a global audience.

Live and on-demand streaming enables businesses to make
streaming an integral communications tool, increasing
flexibility and opportunity for growth through quick, easy and
professional communications via the Internet, while wholesale
streaming gives large-volume streaming customers, including
media and entertainment content owners or streaming media re-
sellers, carrier- class scalability.  Subscription/pay-per-view
streaming enables customers to generate revenue by distributing
existing video content to new Internet audiences, and includes
all streaming administration requirements, including
registration, payment processing and reporting, and is capable
of managing high-traffic events.

All of these services are powered by the industrial-strength
infrastructure of Williams Communications' tier-one Internet
Protocol backbone and content distribution network.  The company
can serve thousands of live and on-demand streams
simultaneously, deliver behind the firewall and over the public
Internet, as well as host, store and archive content, giving
customers unrivaled options and flexibility in service levels.

"Our full complement of streaming media services and unmatched
connectivity to media content owners and other venues enable
current and prospective customers to seamlessly acquire, encode
in multiple formats and stream media content," said Matthew
Bross, senior vice president and general manager of Emerging
Markets for Williams Communications.  "Given that we have
carried the most highly mission-critical transmissions for
global media and entertainment companies over our network for 13
years, customers can be assured they are utilizing a service
provider with unmatched expertise in transporting and managing
their content."

Bross also said that customers should remain assured that
Williams Communications will remain committed to its high levels
of customer service as the company moves through its balance
sheet restructuring.

"The restructuring process should have a minimal impact on day-
to-day operations and the company will continue to focus on
execution and meeting its customers' needs as we always have,"
Bross said.

Through its various streaming media offerings, Williams
Communications currently moves more than 63 million audio and
video streams over its network on a monthly basis.  The
company's expanding portfolio of IP-based services provides
customers with the ability to leverage the Internet and new web-
based technologies over a nationwide, MPLS-enabled IP network.  
Through its expanding IP services and comprehensive broadband
media services, including content gathering and distribution,
digital media management and streaming media, Williams
Communications can create unmatched end-to-end customer
solutions.

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


ZENITH NATIONAL: S&P Lowers Counterparty Credit Rating to BB+
-------------------------------------------------------------
Standard & Poor's lowered its counterparty credit rating on
Zenith National Insurance Corp. (ZNT) to double-'B'-plus from
triple-'B'-minus and its ratings on ZNT's affiliates, Zenith
Insurance Co. and ZNAT Insurance Co. (Zenith), to triple-'B'-
plus from single-'A'-minus due to poor but improving operating
results in workers' compensation and large losses in 2000 and
2001 in assumed reinsurance. It also said the outlook is stable.
"The Zenith organization has a long history of successful
operations," observed credit analyst Charles Titterton, "but has
suffered in recent years because of bad conditions in its
primary workers' compensation markets. Assumed reinsurance, a
secondary line also written for many years, has generally been
profitable but has suffered heavy losses from weather-related
events and from the terrorist attacks on the World Trade
Center."

By consistently adhering to its strategy, Zenith has positioned
itself to take advantage of good conditions in the California
market for the next year or two, despite the activities of the
State Fund. Results in California should be good enough to
outweigh lackluster results in Florida. If profitability in
assumed reinsurance is at roughly the average of what Zenith has
produced in this line over the years, ZNT and Zenith should
record satisfactory earnings through at least 2002.
Capitalization should remain satisfactory and perhaps continue
to be a marginal strength for the rating.


* BOOK REVIEW: Land Use Policy in the United States
---------------------------------------------------
Author: Howard W. Ottoson
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://amazon.com/exec/obidos/ASIN/1587980991/internetbankrupt

In 1962, marking the 100th anniversary of the signing of the
Homestead Act by President Lincoln, 20 nationally recognized
economists, historians, a political scientist, and a geographer
presented papers at the Homestead Centennial Symposium at the
University of Nebraska. Their task was to appraise the course
that United States land policy had taken since independence. The
resulting papers are presented in this book, grouped into five
major areas: historical background; social factors influencing
U.S. land policy; past, present and future demands for lands in
the U.S.; control of land resources; and implications for future
land policy.

This book begins with a summary of the Homestead Act, its
antecedents, the arguments of its supporters and detractors, and
its intent versus implementation. The Act offered a quarter
section (160 acres) of public land in the West to citizens and
intended citizens for a $14 filing fee and an agreement to live
on the land for five years. The program ended in 1935.

Advocates claimed that frontier lad had no value to the
government until it was developed and began generating tax
revenue. Opponents feared the Act would lower land valued in the
East and pushed for government sale of the land. In practice,
states, territories, railroads and investors were able to set
aside more land than was eventually handed over to the
homesteaders.

One paper deals with land policy before 1862. From the start,
the U.S. required that "all grants of land by the federal
government should embody a description of the land not merely in
quality, but in place as defined by relation to an actual
survey." This policy avoided countless boundary disputes so
vexing to other countries.

Perhaps most interesting are the social history chapters:
Czechoslovakians pushing wheelbarrows across Nebraska,
"Daughters and Sons of the Revolution.(living) next
to.Mennonites," and "an illiterate.neighborly with a Greek and a
Hebrew scholar from a colony of Russian Jews." Mail-order
brides, "defectors from civilization," the importance of the
Mason jar, the Jeffersonian dream of a nation of agrarian
freeholders, and Santayana's observation that the typical
American skitters between visionary idealism and crass
materialism, all make for fascinating reading.

The land-use policy problems discussed certainly haven't been
solved today. And, although land use conflicts in the U.S.
haven't always been resolved equitably, "the big step forward
taken by the United States during the last one hundred and fifty
years in the age-long struggle of man towards the ideals of
mutuality and equity has been the working out of a system
wherein the sovereign superior who prescribes the working-rules
for land use and decision making have become, himself, a
collective of the citizenry."

A chapter is devoted to the arguments between the family farm ad
the "sentiment against concentration of wealth in the hands of a
few." The discussion of the Land Grant college system and its
contribution to international development closes with a quote
from Chester Bowles:

"Can we, now the richest people on earth, become creative
participants in the unprecedented revolutionary changes of our
era, changes that the most privileged people will oppose tooth
and nail, but which for the bulk of mankind offer the hopeful
prospect of a little more food, a little more opportunity, a
doctor for their sick child, and sense of personal dignity?"

                          *********


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

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

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

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

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

                          *********

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

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

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

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

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

                     *** End of Transmission ***