TCR_Public/020527.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

               Monday, May 27, 2002, Vol. 6, No. 103

                          Headlines

ANC RENTAL: Signs AutoNation-Related IRS Closing Agreement
APW LTD: Brings-In Quarles & Brady as Special Litigation Counsel
ACCUHEALTH INC: Trustee Wishes to Engage Oxman Tulis as Counsel
ACME PACKAGING: Wants to Further Extend Exclusivity to July 15
ADELPHIA COMMS: Files Form 8-K Disclosing Related-Party Deals

BMK INC: Court Approves Asset Sale for $70MM to Sun Capital Unit
BELL CANADA: Falls Short of Nasdaq Continued Listing Standards
BILL KNAPP'S: Voluntary Chapter 11 Case Summary
CANADIAN IMPERIAL: Shareholders Re-Elect Board of Directors
CASTLE DENTAL: Continues Workout Talks Re Defaulted Debt Pacts

CENTERPULSE: Requests Final Decision Period Stretched to May 31
CHINOOK ENERGY: Selling Assets & Business Operations for $2.25MM
CLASSIC COMMUNICATIONS: Has Until July 10 to Decide on Leases
CORAM HEALTHCARE: Trustee Needs More Time to Decide about Leases
COVANTA ENERGY: Signs-Up Loughlin Meghji as Business Advisors

DIRECTRIX INC: Evaluating Options Including Bankruptcy Filing
DIVINE INC: Board Approves Proposed 1-For-25 Reverse Stock Split
EASYRIDERS: Paisano Acquires Assets for $12.3 Million at Auction
ELECTRIC LIGHTWAVE: ELI Acquisition Offers to Purchase Shares
EMAC OWNER TRUST: Fitch Cuts Certain Franchise Deal Ratings

EMAGIN: Stretches Maturity Date of Promissory Notes to May 31
ENGAGE INC: Continues Nasdaq Trading Pending Hearing Results
ENRON: Exco Balks At Milbank's Engagement as Committee Counsel
E.SPIRE: Has Until July 1, 2002 to Make Lease-Related Decisions
EVANSWOOD BETHZATHA: Sets Bondholders' Meeting on May 29 in MA

EXCHANGE APPLICATIONS: Violates Nasdaq Min. Listing Requirements
FEDERAL-MOGUL: Proposes Uniform Asimco Sale Bidding Procedures
FRIEDE GOLDMAN: T. Jay Collins Elected as Board Chairman
GS INDUSTRIES: Closes Sale of IGM Business to Scaw Metals
GENSCI: Delayed Audit Triggers Late Filing of Financial Reports

GLOBAL CROSSING: Seeks Approval of Employee Retention Program
HALO: Inks Definitive Pact to Sell Upshot to Equity Marketing
HEALTHGATE DATA: Commences Trading on OTCBB Effective May 24
ICG: Creditors Will Control Reorganized Debtors' Board
IT GROUP: Wants to Stretch Plan Filing Exclusivity to August 14

IMPSAT FIBER: Nasdaq Delists Shares Effective May 24, 2002
JONES MEDIA: KPMG Replaces Andersen as Independent Accountants
KNOWLEDGE HOUSE: Defaults on Filing Annual Financial Statements
LTV: PNC Bank Tapped as Retirees' Health Plan Principal Trustee
MARTIN INDUSTRIES: Accountants Express Going Concern Doubt

MEDMIRA INC: Closes $3.25 Million Private Placement Financing
METROCALL INC: Executes Pacts with Creditors for Restructuring
NII HOLDINGS: Commences Chapter 11 Reorganization in Delaware
NII HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
NATIONAL AIRLINES: U.S. Trustee Seeks Reduction of Dresdner Fees

NEXELL THERAPEUTICS: Fails to Maintain Nasdaq Listing Standards
OWENS CORNING: Seeks Removal Period Extension to Feb. 21, 2003
PACIFICARE: Fitch Ups Bank & Senior Secured Debt Ratings to BB
P-COM INC: Requests Hearing to Appeal Nasdaq Staff Determination
PENTACON INC: Anixter Agrees to Acquire Assets for $121 Million

PENTACON INC: Case Summary & 20 Largest Unsecured Creditors
PERSONNEL GROUP: Wins Support to Proceed with Rebranding
PLASTIC SURGERY: Fails to Comply with AMEX Listing Standards
PRANDIUM INC: Taking Stand-Alone Plan to Confirmation June 14
PROVIDIAN FINANCIAL: Fitch Lowers Rating on Senior Debt to B

QUALMARK CORPORATION: Sells OVS 2.5 Chamber to Continental ISAD
RAZORFISH: Sets Annual Shareholders' Meeting for July 11, 2002
SL INDUSTRIES: Lenders Waive Events of Default Under Credit Pact
SAVVIS COMMS: Will Apply for Listing on Nasdaq SmallCap Market
SCAN-OPTICS: Convening Annual Meeting on June 6, 2002 in Conn.

SCIENT INC: Request Hearing on Nasdaq Listing Determination
SYNSORB BIOTECH: Fails to Comply with Nasdaq Minimum Bid Price
TACT: Fails to Comply with Nasdaq Continued Listing Requirements
TNK INTERNATIONAL: Fitch Affirms B+ Senior Unsecured Rating
VECTOUR: Obtains Extension Until August 12 to Decide on Leases

VIADOR INC: Total Shareholders' Equity Deficit Narrows to $159K
VIALINK: Shareholders' Meeting to Convene on June 4, 2002
VIATEL INC: Delaware Court Confirms Plan of Reorganization
W.R. GRACE: Amends PricewaterhouseCoopers' Engagement Terms
WARNACO: Court Sets June 24 Bar Date for Prologis Trust Claims

WILLIAMS COMMS: Lays-Out Proposed Chapter 11 Reorganization Plan

* BOND PRICING: For the week of May 27 - May 31, 2002

                          *********

ANC RENTAL: Signs AutoNation-Related IRS Closing Agreement
----------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates ask the Court
to authorize ANC Rental Corporation to enter into a Closing
Agreement with the Internal Revenue Service and AutoNation Inc.
so as to avoid certain pre-petition tax liabilities.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, relates that AutoNation was a common
parent of an affiliated group of corporations that filed a
consolidated federal income tax return on a calendar year basis.
Prior to July 1, 2000, the AutoNation Group included the Debtor
ANC and certain other debtors and non-debtor foreign and
domestic subsidiaries.

Pursuant to the terms of a Separation and Distribution
Agreement, Mr. Packel states that AutoNation on June 30, 2000
distributed all of its ANC stock to its shareholders on a pro
rata basis, a transaction intended to qualify as tax-free under
Section 355 of the Internal Revenue Code. Pursuant to the said
agreement, ANC and AutoNation also entered into the Tax Sharing
Agreement, under which ANC and AutoNation attempted to agree
upon the allocation of tax liabilities attributable to periods
before the distribution and any taxes resulting from
transactions contemplated by the Distribution Agreement. The Tax
Sharing Agreement also provides that ANC and AutoNation enter
into a closing agreement with the IRS after the distribution.

According to Mr. Packel, on their consolidated federal income
tax returns for years ending December 31, 1996, 1997, 1998,
1999, and 2000, the AutoNation Group claimed certain Dual
Consolidated Losses (DCL) amounting to approximately
$30,000,000.  This amount is attributable to the ANC Group. The
distribution was a triggering event under Treas. Reg. Section
1.15032 requiring recapture of the DCLs of the AutoNation Group.
The distribution will not have constituted a triggering event
requiring Recapture if the former consolidated group (the
AutoNation Group which included the ANC Group) and the new
consolidated group (the ANC Group) file a closing agreement with
the IRS and comply with the other requirements of Treas. Reg.
Section 1.1503-2.

Mr. Packel states that the AutoNation Group and the ANC Group
will be jointly and severally liable for the total amount of
Recapture of the DCLs and the related interest charges. In
connection with entering into the Closing Agreement, AutoNation
has agreed to indemnify the ANC Group for any and all
liabilities arising from any other Recapture event, including
those in connection with the structuring of any future
dispositions of ANC's foreign subsidiaries.

Mr. Packel submits that entering into Closing Agreement is in
the best interests of the Debtors as well as their creditors and
their estates. He warns that in the absence of the Closing
Agreement, the Distribution would trigger immediate recapture of
approximately $30,000,000 of dual consolidated losses by
AutoNation, which are attributable to entities within the ANC
Group. Given a corporate tax rate of 35%, this would result in a
tax liability of approximately $10,500,000 for AutoNation, as
well as interest charges.

In addition, since AutoNation maintains several relationships
with ANC including, among others, guaranteeing ANC's real estate
and vehicle leases and reimbursing obligations under bonds
securing payment of retrospective premiums for ANC's insurance
policies, Mr. Packel asserts that the Closing Agreement would
facilitate a successful reorganization, minimize liabilities
associated with Distribution and continue a positive working
relationship.

                         Committee Responds

Maribeth L. Minella, Esq., at Young Conaway Stargatt & Taylor
LLP in Wilmington, Delaware, tells the Court that the Statutory
Committee of Unsecured Creditors would support the Debtors'
motion only if:

A. The Debtors are fully protected by AutoNation's
   indemnification obligations,

B. Claims against the Debtors' estates are minimized and

C. The Debtors are given sufficient latitude in structuring
   asset sales and other dispositions for the maximum benefit of
   their creditors.

Ms. Minella states that in an effort to put in place the
safeguards relating to the relief sought in the Debtors' motion,
the Committee has been negotiating with AutoNation, in
consultation with the Debtors and certain other parties-in-
interest. These negotiations, she continues, are proceeding but
are not yet final and the Committee will maintain its objection
to the motion pending resolution of the issues being negotiated
with AutoNation.

                          Liberty Responds

Frederick B. Rosner, Esq., at Cozen O'Connor LLP in Wilmington,
Delaware, tells the Court Liberty Mutual Insurance Company
reserves the right to file a formal objection against the
Debtors' Motion or be heard at the hearing of the Motion if a
consensual agreement is not reached in connection with the
Debtors' negotiations with the Committee, AutoNation and certain
other parties-in-interest. (ANC Rental Bankruptcy News, Issue
No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)


APW LTD: Brings-In Quarles & Brady as Special Litigation Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gives its stamp of approval to APW Ltd. and Vero Electronics
Inc.'s bid to retain and employ the law firm of Quarles & Brady
LLP as special corporate and litigation counsel.

Quarles & Brady is currently representing the Debtors in
connection with many ongoing litigation matters, including
various class action security cases pending in the Federal
District Court for the Eastern District of Wisconsin.

The Debtors assure the Court that the services provided by
Quarles & Brady will be complimentary rather than duplicative of
the services provided by Weil, Gotshal & Manges LLP.

The services that Quarles & Brady will render to the Debtors
are:

     a. To advise the Debtors and assist Weil Gotshal in
        connection with the Debtors' sale of assets and
        implementation of bidding procedures, the evaluation of
        competing offers, and counseling the Debtors in
        connection with any corporate transactions;

     b. To advise the Debtors and assist Weil Gotshal, if
        necessary, in connection with the Debtors' post-petition
        financing and cash collateral arrangements and
        negotiating and drafting documents relating thereto;

     c. To advise the Debtors and assist Weil Gotshal in
        connection with the Debtors' disclosure obligations,
        including advising the Debtors and assisting Weil
        Gotshal with respect to continuing disclosure and
        reporting obligations, if any, under federal securities
        laws;

     d. To advise the Debtors and assist Weil Gotshal with
        respect to general corporate legal issues arising in the
        Debtors' ordinary course of business and advising on the
        Debtors' dealings with general corporate, transactional
        and securities matters, merger and acquisition matters,
        stock exchange related matters, financing and
        securitization matters, litigation matters, regulatory
        matters, insurance matters, real estate matters,
        immigration matters, tax matters, intellectual property
        matters and employee and employee benefit plan related
        matters;

     e. To attend meetings and participate in negotiations with
        respect to the foregoing matters;

     f. To represent the Debtors and, to the extent no
        divergence of interest exists, the directors and
        officers thereof, in connection with the Securities
        Litigation and any other securities or corporate
        litigation, to the extent such litigation involves the
        Debtors, or any litigation involving general corporate,
        transactional and securities matters, merger and
        acquisition matters, stock exchange related matters,
        financing and securitization matters, regulatory
        matters, insurance matters and employee and employee
        benefit plan related matters, to the extent such
        litigations are not stayed;

     g. To appear before this Court, any state, district or
        appellate courts, and the U.S. Trustee; and

     h. To perform all other necessary legal services and
        provide all other necessary legal advice to the Debtors.

Quarles & Brady received $750,000 from the Debtors as an advance
in respect of this engagement.  Quarles & Brady's hourly rates
are:

          partners and counsel      $225 to $355
          associates                $170 to $245
          paraprofessionals         $110 to $170

APW, a publicly-held, Bermuda company, operates as a holding
company whose principal assets are the shares of stock of its
worldwide operating subsidiaries. APW's operations consist
solely of providing financial, accounting and legal services to
its foreign and domestic direct and indirect subsidiaries. The
Company filed for chapter 11 protection on May 16, 2002 in the
U.S. Bankruptcy Court for the Southern District of New York.
Richard P. Krasnow, Esq. at Weil, Gotshal & Manges represents
the Debtors in their restructuring efforts. When the Company
fled for protection from its creditors, it listed $797,104,000
in total assets and $899,751,000 in total debts.


ACCUHEALTH INC: Trustee Wishes to Engage Oxman Tulis as Counsel
---------------------------------------------------------------
Mark S. Tulis, Chapter 7 Trustee for Accuhealth, Inc. and its
debtor-affiliates, wants to bring-in Oxman Tulis Kirkpatrick
Whyatt & Geiger LLP, Attorneys at Law as his attorneys to handle
all aspects of this case.

The Trustee tells the U.S. Bankruptcy Court for the Southern
District of New York that there are assets which may bring funds
into the estate for distribution to creditors.

The Trustee believes in the considerable experience of this firm
in similar matters and believes that the firm is well qualified
to represent him in this case.

The professional services that the firm will render are:

     a) to give advice to the Trustee with respect to its powers
        and duties in liquidation of debtor's business and
        specifically to make motions as is appropriate for the
        liquidation of the debtor's estate.

     b) to prepare on behalf of the Trustee necessary
        applications, answers, orders, reports and other
        motions, complaints, pleadings and documents.

     c) to appear before the Bankruptcy Judge and the United
        States Trustee in connection with any such applications.

     d) to perform legal services for the Trustee which may be
        necessary and appropriate.

Oxman Tulis states that they received no retainer in connection
with this proceeding. All compensation to Oxman Tulis, including
reimbursement of expenses, shall be determined by this Court
upon application for interim or final allowance of compensation.
Specific hourly rates are not disclosed in the application.

Before filing for chapter 11 protection, Accuhealth, Inc. were
engaged in the business of providing home health care services
in the New York metropolitan area. Gerard Sylvester Catalanello,
Esq., James J. Vincequerra, Esq. at Brown Raysman Millstein
Felder & Steiner and Martin A. Mooney, Esq. at Deily, Dautel &
Mooney, LLP represent the Debtors as they wind-up their
financial affairs.


ACME PACKAGING: Wants to Further Extend Exclusivity to July 15
--------------------------------------------------------------
Acme Metals Packaging Corporation, along with its debtor-
affiliates, asks the U.S. Bankruptcy Court for the District of
Delaware to extend its exclusive periods to file a chapter 11
plan and to solicit acceptances of that plan.  Acme Packaging
wants its Exclusive Plan Filing Period to run through July 15,
2002 and their solicitation period extended through September
16, 2002.

Given recent development, Acme Packaging has now determined that
it can exit chapter 11 more effectively if it promulgates its
own chapter 11 plan independently.

Acme Packaging relates that it was ready to file their plan and
disclosure statement on its current deadline but at the request
of the Bank Group and Pension Benefit Guaranty Corporation, wish
to extend its exclusive periods. Acme Packaging tells the Court
that this brief extension will afford the Bank Group and PBGC an
opportunity to complete their ongoing negotiations regarding
issues of value allocation under a plan of reorganization.

Acme Packaging relates that it re-solicited indications of
interest from prospective purchasers of its business and has
evaluated those indication in terms of value, feasibility, and
risk of non-consummation. The Debtor also re-solicited non-
binding term sheets from potential post-confirmation lenders,
who previously expressed an interest in lending to Acme
Packaging upon its emergence from bankruptcy protection.

Acme Packaging determines that reorganizing pursuant to
"unsecured debt-to-equity" based recapitalization plan would
provide the best possible recovery to its creditors. Acme
Packaging has chosen the lending institution that will most
likely serve as its exit financier, and is currently in the
process of working towards a fully committed letter of intent
with that bank.

Acme Metals, together with its debtor-affiliates, filed for
chapter 11 bankruptcy protection on September 28, 1998. Brendan
Linehan Shannon, Esq. and James L. Patton, Esq. at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts. When the company filed for protection
from its creditors, it listed assets of $813 million and
liabilities of $541 million.


ADELPHIA COMMS: Files Form 8-K Disclosing Related-Party Deals
-------------------------------------------------------------
Adelphia Communications Corporation (Nasdaq: ADLAE) has filed a
Form 8-K with the Securities and Exchange Commission, disclosing
certain related-party transactions.

A full-text copy of the filing is available for free at:

   http://ir-web.finsys.com/redirect_frames.asp?filename=0000895345%2D02%2D000323%2Etxt&filepath=%5C2002%5C05%5C24%5C&pdf=0

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

DebtTraders reports that Adelphia Communications' 10.250% bonds
due 2011 (ADEL11USN1) are quoted between the prices 75 and
77. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL11USN1


BMK INC: Court Approves Asset Sale for $70MM to Sun Capital Unit
----------------------------------------------------------------
BMK Inc., a leading distributor of general merchandise including
major categories such as toys, cosmetics and pet supplies to
many of the nation's top supermarkets and drugstores with
approximately $400 million a year in revenues, will be acquired
by an affiliate of Sun Capital Partners for nearly $70 million.

Sun Capital entered into a sale agreement to purchase BMK in
April, which was subject to the submission of competing bids.
An auction was conducted where, as a result of competitive
bidding, Sun's initial bid of $55 million was ultimately
increased by nearly $15 million.

BMK's investment banker, Matt Niemann of Houlihan Lokey Howard &
Zukin, commented, "The strength of BMK's business attracted
significant interest and resulted in a robust auction, thereby
maximizing value and recoveries for BMK's creditors."

The Sun transaction was approved Wednesday afternoon by U.S.
Bankruptcy Court Judge Alan Ahart.  The acquisition is expected
to close May 31st.

"BMK is now a well-financed operation with a strong balance
sheet," said Jason Neimark, Vice President of Sun Capital, based
in Boca Raton, Florida. "With our capital infusion and business
expertise, we are confident that BMK will be able to build upon
its position as an industry leader.  We look forward to working
closely with the existing management team to achieve our goals."

BMK Chief Executive Officer Richard Craig expressed gratitude to
suppliers, customers and employees for standing by the Company
through its reorganization process.

"We have enjoyed substantial support from our vendors, our
customers and our employees.  Their loyalty and dedication are
important to any Company at any time, but particularly to one
going through reorganization," Mr. Craig said. "We appreciate
them believing in the Company and our leadership, and with
their support, we are emerging as a better and financially
stronger Company."

"What we have achieved thus far is encouraging as we formulate
plans for the future," Mr. Craig said.  He added that the
Company expects to continue refining its operations to increase
efficiencies and to strengthen BMK's bottom line.

BMK had retained Houlihan Lokey Howard & Zukin Capital of Los
Angeles as its financial advisor; The Scotland Group Inc. of
Newport Beach, California, to assist in shaping its turnaround;
Peitzman, Glassman, Weg & Kempinsky LLP of Los Angeles as its
bankruptcy counsel; and Locke Liddell and Sapp LLP of Dallas as
its corporate counsel.  Kirkland and Ellis of Chicago and Los
Angeles was counsel for Sun.

BMK, with annual revenues of approximately $400 million, is the
nation's largest full-service distributor of general
merchandise, serving 44 states and most major grocery and drug
chains in the United States.  Its U.S. operations are comprised
of three divisions.  The Western operations do business
primarily as The Berton Company and Advantage Merchandising,
both of California, and Wasatch Service & Supply of Utah.  BMK's
Central U.S. operations, which also serve East Coast customers,
primarily conduct business as Nationmark Merchandising &
Distribution of Texas, Jacks Service Company of Oklahoma and
M.W. Kasch of Wisconsin.  The West and Central U.S. operations
focus on general merchandise.  BMK's Somody subsidiary in
southern Minnesota focuses on specialty products.  Nationwide,
the company has approximately 1,900 full-time and 500 part-time
employees.

Sun Capital Partners, Inc. is a leading private investment firm
focused on leveraged buyouts of market-leading companies that
can benefit from its in-house operating professionals and
experience.  Sun Capital invests in companies with market
leadership positions such as BMK.  Sun Capital has invested in
more than 30 companies during the past several years with
combined revenues in excess of $3 billion.  Investments have
included companies in the following industries: paper and
packaging, filmed entertainment, automotive after-market parts,
financial services, healthcare, media and communications,
outdoor advertising, building products, wireless communication,
industrial and decorative mirrors, computer and workstation
peripherals, and technology.  For more information about Sun
Capital Partners, visit http://www.suncappart.com


BELL CANADA: Falls Short of Nasdaq Continued Listing Standards
--------------------------------------------------------------
Bell Canada International Inc. announced that it had received a
NASDAQ staff determination on May 17, 2002 indicating that BCI
fails to comply with the Minimum Bid Price requirement for
continued listing set forth in Marketplace Rule 4450(b)(4), and
that its common shares are, therefore, subject to delisting from
the NASDAQ National Market.  BCI has requested a hearing before
a NASDAQ Listing Qualifications Panel to review the staff
determination.  The hearing request will stay the delisting of
BCI's common shares pending the Panel's decision. There can be
no assurance that the Panel will grant BCI's request for
continued listing.  The listing of BCI's common shares on the
Toronto Stock Exchange is unaffected.

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


BILL KNAPP'S: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Bill Knapp's Michigan, Inc.
        aka Bill Knapp's
        aka Bill Knapp's Battle Creek, Inc.
        aka Bill Knapp's Properties, Inc.
        aka Bill Knapp's Ohio, Inc.
        aka Bill Knapp's South Bend, Inc.
        110 Knapp Drive
        Battle Creek, Michigan 49015

Bankruptcy Case No.: 02-05918

Chapter 11 Petition Date: May 21, 2002

Court: Western District of Michigan (W. Michigan)

Judge: Jo Ann C. Stevenson

Debtors' Counsel: Stephen B. Grow, Esq.
                  Warner Norcross & Judd
                  900 Fifth Third Center
                  111 Lyon Street, NW
                  Grand Rapids, Michigan 49503
                  616-752-2000


CANADIAN IMPERIAL: Shareholders Re-Elect Board of Directors
-----------------------------------------------------------
Canadian Imperial Venture Corp. (TSX: CQV) held its Annual
General Meeting on May 22, 2002 at the Holiday Inn, St. John's,
Newfoundland. The following individuals were re-elected to the
Board of Directors:

    1.    Steven M. Millan, P.Geol., Chairman, Chief Executive
          Officer and Director

    2.    Gerard M. Edwards, MBA, Chief Financial Officer and
          Director

    3.    Kirby C. Mercer, BA, Vice President, Corporate
          Secretary and Director

    4.    Dr. Edward (Ted) Best, Ph.D., Director

    5.    Chesley Penney, Director

    6.    Jack Bolter, P.Geol., Director

    7.    Robert Smiley, BA, LL.B., Director

During the meeting, disinterested shareholders approved the
amendment to the Company's Incentive Share Option Plan as
proposed in the AGM information circular.

Further to the news release of May 9, 2002, the Company is
pleased to provide the following operations update:

As planned, equipment was mobilized to the site on May 18, 2002.
Following minor operational delays, production started on May
22, 2002 and oil and gas were flowed to surface. During
production a mobile obstruction was detected in the production
tubing. Our engineers believe that the obstruction is a rubber
seal lost in the well during a previous operation. The
Schlumberger coil tubing equipment remains on site awaiting the
arrival of the tools required to remove the obstruction. It is
anticipated that this operation will take place within the next
seven days.

In the near term, the Company will carry out a series of tests
with the objective of optimising the production from the well
and reducing operating costs. During this time production may be
intermittent. The Company considers these operations to be part
of the normal ongoing process of developing its field and will
only issue news releases for material events.

Canadian Imperial Venture Corp. (TSX: CQV) is an independent
Newfoundland-based energy company.

                         *   *   *

As previously reported (Troubled Company Reporter, May 9, 2002
edition), Canadian Imperial Venture's 70% threshold required for
approval of the debt restructure plan as announced on April 18,
2002 has been reached, therefore the agreement has been ratified
by the creditors.

Canadian Imperial Venture Corp. says that the response by its
creditors to its debt restructuring agreement has been positive.
On this, the first day of distribution of the agreement to
individual creditors for their consideration, creditors
representing 68% of the dollar amount outstanding have ratified
the agreement. In order for the agreement to become effective
creditors that are owed at least 70% by dollar amount of the
eligible claims must sign on as participating creditors. The
Company has until the closing date of the agreement to obtain
the remaining 2%. The proposed closing date under the
Agreement has been scheduled for April 30, 2002 unless extended
to no later than May 15, 2002. Upon reaching the necessary
threshold amount of 70% the Company will issue a further press
release.


CASTLE DENTAL: Continues Workout Talks Re Defaulted Debt Pacts
--------------------------------------------------------------
Castle Dental Centers (OTC Bulletin Board: CASL) reported
results for the first quarter ended March 31, 2002.

Net patient revenues were $25.5 million for the first quarter of
2002, $2.2 million or 8.1% less than revenues in the first
quarter of 2001.  For the first quarter of 2002, net patient
revenues from dental centers open more than one year decreased
by $0.6 million, or 2.3%, compared to the same period of the
prior year.  The Company also closed or consolidated nine
dental centers in the last year resulting in reduced revenues of
approximately $1.6 million in the first quarter of 2002.

The Company reported a net loss of $1.4 million for the first
quarter of 2002 compared to net loss of $0.5 million in the
prior year period. Operating results in the first quarter of
2002 were impacted by restructuring costs of $0.5 million, asset
impairment charge of $0.1 million related to the closures of one
dental center in Texas and three in Florida and reduced net
patient revenues.

The Company continues to be in default of debt agreements
totaling $63.7 million with its senior and subordinated
creditors.  The Company has been in negotiations with its senior
and subordinated lenders since early 2001 and has put forth a
plan to restructure its debt agreements and to improve operating
results.  Components of this plan include: (i) increased hiring
of new dentists and improving dentist retention; (ii) continuing
to monitor and close unprofitable and under-performing dental
centers; (iii) refurbishing and modernizing existing dental
centers within capital expenditure constraints; (iv) upgrading
dental office management personnel; and, (v) improving patient
services in order to increase patient retention rates. Although
no assurances can be given as to the ultimate success of the
negotiations to restructure its debt, management believes that
it will receive agreement from its senior and senior
subordinated creditors in the near future to restructure its
debt obligations.

Commenting on the first quarter 2002 results, Jim Usdan,
President and Chief Executive Officer, stated, "Castle Dental's
operating results were impacted by a decrease in net patient
revenues from dental centers open more than one year in the
Houston, San Antonio and Los Angeles markets. Additionally, we
continue to incur restructuring costs related to negotiations
with our senior and subordinated lenders to restructure the
debt."  Mr. Usdan continued, "We have made management changes,
closed or consolidated under-performing dental centers and have
focused on improving the quality of care for our patients and
the work environment for our employees.  We believe that these
changes together with the successful completion of our
negotiations with the senior and subordinated lenders will
provide the basis for improving the financial results of Castle
Dental."

Castle Dental Centers, Inc. develops, manages and operates
integrated dental networks through contractual affiliations with
general, orthodontic and multi-specialty dental practices in the
U.S.  The Company manages 85 dental centers with approximately
210 affiliated dentists in Texas, Florida, Tennessee and
California.


CENTERPULSE: Requests Final Decision Period Stretched to May 31
---------------------------------------------------------------
Centerpulse, the former Sulzer Medica, and the class plaintiffs
have asked District Court Judge Kathleen O'Malley to extend the
period for the company to reach a final decision on the
settlement agreement, and for acceptance of the opt-out rate,
until 5:00 p.m. EST on May 31, 2002.

As of May 22, the total of 132 opt-out cases breaks down as
follows: 32 patients who underwent revision surgery, 76 patients
who had no revision surgery and 7 patients whose status has yet
to be determined. Although the opt-out rate has been
significantly reduced thanks to intensive negotiations,
Centerpulse will be able to further reduce the opt-out rate
substantially if the extension is granted. Centerpulse's Board
today gave the Executive Committee the green light to pursue the
final negotiation phase. The company must be able to pinpoint
the financial influence of each opt out as closely as possible.
Among the opt-out cases that do not involve patients who
underwent revision surgery, there are 12 complex medical cases
that must be studied in detail.

"We want to be able to make our decision on as sound a basis as
possible. This requires that we must further reduce the opt-out
rate, as this will allow us to avoid the scenario of filing for
Chapter 11," stated Centerpulse CEO Stephan Rietiker. "Our main
goal remains the fair treatment of all affected patients."

The company develops, produces and distributes medical
technology implants and biological materials for orthopedic and
cardiovascular markets worldwide. The product array includes
artificial joints, dental implants, spinal implants and
instrumentation, trauma products, heart valves, synthetic blood
vessels and stents for vascular and non-vascular obstructions.
(Swiss Stock Market symbol: CEPN, New York Stock Exchange
symbol: CEP)


CHINOOK ENERGY: Selling Assets & Business Operations for $2.25MM
----------------------------------------------------------------
Chinook Energy Services Inc. (TSXV: CKE) has entered into an
agreement to sell substantially all of its assets, excluding the
Company's receivables and payables as of the closing date, and
business operations for cash proceeds of $2,250,000, $2,000,000
of which will be paid on closing and $250,000 of which will be
paid 30 days after closing upon confirmation that all assets
have been delivered, to a private non-destructive testing
company, who is at arms-length to the Company. Upon the closing
of the Transaction, Chinook will enter a 5-year Non-Competition
Agreement with the Purchaser restricting Chinook from operating
in a non-destructive testing field. Chinook will then change its
name, reconstitute its Board of Directors and will be designated
inactive by the TSX Venture Exchange. The Company will then have
18 months to pursue new business opportunities and complete a
transaction which will result in the Company once again meeting
the TSXV's minimum listing requirements.

Further, upon the closing of the Transaction, John Roth, the
current President, CEO and a Director of the Company will
immediately resign all positions with the Company, and Mr. Roth
will enter into an Employment Agreement with the Purchaser. Mr.
Roth is at arms-length to the Purchaser. Chinook will repurchase
for cancellation all of the Common Shares of the Company owned
by Mr. Roth, being 2,380,879 Common Shares, which shares
represent 42% of the issued and outstanding shares of Chinook.
For his Common Shares, Mr. Roth will receive cash consideration
equal to 42% of the net cash value of the Company as of the
Closing Date (which will be calculated at closing as the net
proceeds of the Transaction, plus receivables, less payables and
the payout of existing bank facilities, and less the costs
associated with the Transaction). Based on the unaudited interim
financial statements of the Company for the three months ending
March 31, 2002, 42% of the net cash value of the Company would
be approximately $505,000.00. The actual amount to be received
by Mr. Roth may vary depending on the actual net cash value of
the Company to be calculated on the Closing Date. Mr. Roth will
also deliver up for cancellation 29,833 common share purchase
warrants which he owns jointly with Lisa Roth, his spouse.

After the completion of the Transaction and the repurchase of
Mr. Roth's shares, Chinook will have 3,239,097 common shares
issued and outstanding, and management estimates the Company
will have a net cash value of approximately $690,000. The
estimated cash value of the Company is based on the Q1
Statements and the actual net cash value may vary at the closing
date. After the closing of the Transaction the Company will have
no other assets.

The completion of the Transaction is subject to a number of
conditions including:

    1. Chinook obtaining all required shareholder, and where
required, dis-interested shareholder, approval for the
Transaction and/or repurchase of the Roth shares. Dis-interested
shareholders are shareholders who have no direct interest in the
matter to be voted on;

    2. The Company completing an agreement with Mr. Roth to re-
purchase Mr. Roth's Shares;

    3. The Company receiving all required regulatory approvals
and consents for the Transaction and for the repurchase of Mr.
Roth's shares, including, but not limited to the acceptance of
the TSXV Exchange and the Alberta Securities Commission; and

    4. The Company receiving approval for the Transaction from
its Board of Directors. It is the intention of the management of
the Company to request the Board of Directors to strike an
independent committee to determine whether the Transaction is
fair and reasonable, and in the best interest of the Company and
its shareholders. The independent committee will be asked to
provide a recommendation to the full Board of Directors as to
whether or not the Board of Directors should recommend the
Transaction to the shareholders. The independent committee will
be entitled to seek the advice of an independent third
party financial advisor if it deems necessary in order to
complete its review and render its opinion.

Management feels that the Transaction is in the best interest of
the Company and its shareholders due to the fact that, on a go
forward basis, the business prospects of the Company operating
as a public company in a non-destructive testing field are
limited. Accordingly, management is of the view that a change in
the Company's business would provide shareholders a better
opportunity for appreciation of their investment. The items
considered by management in proceeding with negotiations to
enter into the Purchase Agreement included:

    1. The fact that the Company's revenues have fallen far
short of expectations in the last two fiscal years, which has
resulted in the Company experiencing a significant working
capital deficiency.

Management does not expect that there will be any significant
growth in the Company's revenues in the near future; and

    2. The Company's prospects for growth and increased revenue
would depend on the Company rectifying its working capital
deficiency by expanding its operations either through internal
growth or through acquisition.

In order to achieve these objectives, the Company requires
access to the capital markets to raise further funds. Based on
the current low trading price and the limited liquidity of the
Company's Common Shares, management believes raising funds
through capital markets at acceptable levels in the foreseeable
future is unlikely.

Based on the above, management felt it would be in the best
interest of the shareholders of the Company that the Company
divest itself of its non-destructive testing business and it
intends to acquire a business that will provide existing
shareholders with an opportunity for increased liquidity
and appreciation of their investment.

The Transaction is expected to close on or before August 1,
2002.

Chinook Energy Services Inc., based in Red Deer, Alberta,
specializes in non-destructive testing and examinations.
The Company provides a broad range of non-destructive testing
services to clients, in the oil and gas, utilities, petro-
chemical and manufacturing industries in Western and Northern
Canada.


CLASSIC COMMUNICATIONS: Has Until July 10 to Decide on Leases
-------------------------------------------------------------
Classic Communications, Inc. and its debtor-affiliates sought
and obtained approval from the U.S. Bankruptcy Court for the
District of Delaware to extend their lease decision period.
Judge Peter J. Walsh gives the Debtors until July 10, 2002 to
elect whether to assume, assume and assign, or reject unexpired
nonresidential real property leases.

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


CORAM HEALTHCARE: Trustee Needs More Time to Decide about Leases
----------------------------------------------------------------
Arlin M. Adams, the Chapter 11 Trustee of the bankruptcy estates
of Coram Healthcare Corp. and its debtor-affiliates seeks to
extend their time to decide on unexpired leases.

To facilitate the ongoing reorganization efforts and minimize
administrative expenses, the Trustee asks the U.S. Bankruptcy
Court for the District of Delaware to move the time period
within which the Trustee must elect to assume, assume and assign
or reject unexpired nonresidential real property leases through
August 27, 2002.

The Trustee tells the Court that he will require additional time
to review the opportunities to reorganize the estates of the
Debtors and the future of the businesses. Moreover, the
Trustee's limited involvement in these bankruptcy cases cannot
possibly afford him the opportunity to fairly assess the need
for the Unexpired Leases. The Trustee seeks the extension
without prejudice to the rights of any lessor to request that
such time period be shortened as to a particular lease and
without prejudice to the Trustee's right to request further
extensions.

Coram Healthcare, a provider of home infusion-therapy services
filed for Chapter 11 bankruptcy protection on August 8, 2000.
Goldman Sachs and Cerberus Partners each own about 30% of the
firm. Christopher James Lhuiler, Esq., at Pachulski Stang Ziehl
Young & Jones PC represents the Debtors in their restructuring
efforts.


COVANTA ENERGY: Signs-Up Loughlin Meghji as Business Advisors
-------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates obtained
Judge Blackshear's permission to retain Loughlin Meghji +
Company as their business adviser in the Chapter 11 cases,
pursuant to 11 U.S.C. Sec. 327(a).

                      *  *  *  *

As previously reported, LM will be:

       (a) assisting the Debtors in preparing, reviewing, and
           evaluating business and financial forecasts,
           including short-term cashflow projections;

       (b) advising and assisting the Debtors in negotiations
           with existing and potential new lenders;

       (c) assisting the Debtors with the implementation and
           management of non-core asset divestiture program;

       (d) assisting the Debtors with the refinancing and/or
           restructuring of debt obligations;

       (e) advising the Debtors in developing potential
           solutions for any financial and operational issues;

       (f) advising the Debtors in explaining and evaluating
           various business and financial restructuring
           alternatives;

       (g) such other, valuation, and/or financial advisory as
           may be mutually agreed upon by the Debtors and LM;

       (h) testifying in connection with court proceedings as
           reasonably requested by the Debtors; and

       (i) assisting the Debtors with implementation of an over-
           head reduction program.

LM's rates are:

        Principals         $550/hour
        Managing Directors $450/hour
        Directors          $350/hour
        Associates         $250/hour
        Paraprofessionals  $100/hour


LM will also charge the Debtors for its out-of-pocket expenses
incurred in connection with their services, including phone,
copier, mail and express mail charges, photocopying, travel
expenses, computerized research and the like.

LM, subject to Court approval, will also add a "Value Added
Adjustment" related to a qualitative assessment based on: the
complexity of the services provided, the quality of the advice,
the value added to the engagement of LM, and the current market
compensation for such services. (Covanta Bankruptcy News, Issue
No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


DIRECTRIX INC: Evaluating Options Including Bankruptcy Filing
-------------------------------------------------------------
On May 9, 2002, Playboy Entertainment Group, Inc. delivered
written notice to Directrix, Inc., that it was exercising its
right to terminate the Master Services Agreement between the
parties as a result of an outage in Directrix' provision of
network origination services which occurred on April 26, 2002.
Playboy also notified Directrix that as a result of the alleged
default under the Master Services Agreement, it was also
terminating the Sublease between the parties for a portion of
the facility located at 3030 Andrita Street, Los Angeles,
California. Playboy secured an alternate network origination
service provider who began providing services promptly following
delivery of the termination notice. Playboy has removed its
property, which consists of videotapes of its programming
content and certain technical equipment, from Directrix'
Northvale, New Jersey facility.

Directrix disputes Playboy's right to terminate the Master
Services Agreement and believes Playboy has acted in bad faith
and has irreparably damaged Directrix' business.

Directrix will pursue claims against Playboy and other parties
and is currently exploring its options which may include among
other things, filing a petition under the Bankruptcy Code.

Directrix provides playback and transponder services for adult
video content and can deliver programming by way of cable,
satellite, and the Internet. Directrix was spun off from Spice
Entertainment in 1999, following Spice's merger with Playboy. In
late 2001 the company announced an agreement to provide
commercial space and technical services to Playboy for a term of
15 years. As of September 30, 2001, the company reported a total
shareholders' equity deficit of $3 million.


DIVINE INC: Board Approves Proposed 1-For-25 Reverse Stock Split
----------------------------------------------------------------
divine, inc., (Nasdaq: DVIN), a leading provider of solutions
for the extended enterprise, said that divine's board of
directors has authorized a reverse stock split at a ratio of
one-for-twenty-five (1:25), and has set
May 29, 2002 as the date for the reverse stock split. divine is
taking this action in order to satisfy the Nasdaq minimum bid
price requirement. divine's stockholders, by a significant
majority, approved the reverse stock split during divine's
annual meeting of stockholders held on Tuesday, May 21, 2002.

"We have made significant progress in executing our business
plan during the past year, aggressively building out our
extended enterprise offerings through organic growth and
acquisitions while working diligently to eliminate excess costs
as we strive to reach profitability by the end of the year,"
said Andrew "Flip" Filipowski, chairman and chief executive
officer of divine.  "We continue to believe in the fundamental
strength of our business and the extended enterprise market
focus. In addition, divine meets all other requirements for
listing on The Nasdaq National Market. Although it is not
possible to predict future market conditions, we believe that
implementing a reverse stock split will result in a trading
price above the $1.00 per share minimum bid price requirement."

divine received a Nasdaq Staff Determination letter at the close
of business on May 16, 2002, indicating that divine's Class A
common stock currently does not comply with the $1.00 minimum
bid price requirement for continued listing on The Nasdaq
National Market set forth in Nasdaq Marketplace Rule 4450(a)(5),
and that divine's Class A common stock is therefore subject to
delisting from The Nasdaq National Market.

divine has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination.  A date
for this hearing has not yet been established.  divine has been
advised that Nasdaq will not take any action to delist divine's
Class A common stock pending the conclusion of that hearing.

Shares of divine will trade under the symbol "DVIND" for 20 days
after the reverse split goes into effect.

divine, inc., (Nasdaq: DVIN) is focused on extended enterprise
solutions. Through professional services, software services and
managed services, divine extends business systems beyond the
edge of the enterprise throughout the entire value chain,
including suppliers, partners and customers. Divine offers
single-point accountability for end-to-end solutions that
enhance profitability through increased revenue, productivity,
and customer loyalty. The company provides expertise in
collaboration, interaction, and knowledge solutions that
enlighten, empower and extend enterprise systems.

Founded in 1999, divine focuses on Global 5000 and high-growth
middle market firms, government agencies, and educational
institutions, and currently serves over 20,000 customers. For
more information, visit the company's Web site at
http://www.divine.com


EASYRIDERS: Paisano Acquires Assets for $12.3 Million at Auction
----------------------------------------------------------------
On May 2, 2002 an order was entered in the U.S. Bankruptcy Court
providing for the sale of substantially all of the assets of
Easyriders, Inc. and its wholly-owned subsidiary, Paisano
Publications, Inc. to a new entity formed by Joseph Teresi and
the compromise of claims by and among Mr. Teresi, Nomura Holding
America, Inc. and the Debtors. Mr. Teresi's new entity is
Paisano Publications, LLC, a Delaware limited liability company.
Pursuant to the order, the asset sale in question closed on the
same day, May 2, 2002.  Mr. Teresi is a major shareholder of
Easyriders, Inc., and is the former Chairman of the Board of
Easyriders. He is also the former Chairman and Chief Executive
Officer of Paisano Publications, Inc., having resigned from all
board and officer positions with the Debtors on April 19, 2002,
as previously reported.

The order of the Bankruptcy Court followed a hearing held on May
1, 2002, at which time the court permitted PPL and Vintage
Capital Group, an investment and venture capital firm based in
Los Angeles, California, to bid on the assets in a court-
administered auction. Previously Mr. Teresi had entered into an
agreement with the Debtors and Nomura to purchase the assets of
Debtors for the sum of $5,250,000, and Vintage had made an offer
to purchase the assets for $6 million. Such offers differed,
however, with respect to various non-monetary terms and
conditions. During the hearing, the parties agreed to modify
their offers to make them identical with respect to all non-
monetary terms and conditions, thus setting the stage for an
actual auction. At the conclusion of such auction, PPL emerged
as the successful bidder for the price of $12,300,000 in cash,
of which on closing the sum of $11,320,000 was paid to Nomura
and $980,000 was paid to the bankruptcy estates of the Debtors.
Pursuant to the PPL asset purchase, the Debtors were allowed to
keep 100% of the cash accumulated subsequent to the filing of
their Chapter 11 petitions on July 17, 2001, in the sum of
$1,500,000. In addition, Mr. Teresi paid an additional $75,000
to the bankruptcy estate of the Debtors in exchange for a
release of any and all claims against Mr. Teresi.

The debtors will now each pursue a liquidating plan of
reorganization, the purpose of which will be to administer all
claims and effect distributions of estate cash to creditors in
the appropriate order of priority, and in the amounts
adjudicated through the claims administration process. Upon
confirmation of the Easyriders, Inc. plan, all shares and equity
securities of the company are expected to be cancelled.

Easyriders is the lifestyle publisher with a born-to-be-wild
attitude. The firm's dozen special-interest magazines, published
through its Paisano Publications unit, cater to Harley-Davidson
enthusiasts and tattoo art fans; titles include Easyriders, V-
Twin, and Tattoo Savage. It also produces calendars and operates
more than 40 retail stores which sell various motorcycle-related
merchandise. Easyriders has hit a bumpy road of high debt that
has forced it to file for Chapter 11 in July 17, 2001. The
company sold its M & B Restaurants subsidiary, which operates
six El Paso restaurants in Arizona and Oklahoma, to former
chairman John Martin in 2000.


ELECTRIC LIGHTWAVE: ELI Acquisition Offers to Purchase Shares
-------------------------------------------------------------
Electric Lightwave, Inc. has filed a Tender Offer Statement with
the SEC relating to the offer by ELI Acquisition, Inc., a
Delaware corporation and a wholly-owned subsidiary of Citizens
Communications Company, a Delaware corporation, to purchase all
outstanding shares of Class A common stock, par value $0.01 per
share, of Electric Lightwave, Inc., a Delaware corporation, that
Citizens and its subsidiaries do not currently own, at a
purchase price of $0.70 per share net to the seller in cash,
without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 20,
2002, and in the related Letter of Transmittal.

Part of the swell of integrated communications providers,
Electric Lightwave's long-haul fiber-optic network rolls across
the western US. The CLEC (competitive local-exchange carrier)
provides local phone and long-distance voice service and
broadband data services to large and midsized businesses in
seven metropolitan markets. ELI also offers wholesale long-
distance and data services throughout the US to telecom carriers
over its network and leased transmission facilities. As of
September 30, 2001, the company posted a working capital deficit
of about $56 million and a total shareholders' equity deficit of
about $147 million.


EMAC OWNER TRUST: Fitch Cuts Certain Franchise Deal Ratings
-----------------------------------------------------------
Fitch Ratings downgrades EMAC Owner Trust 1998-1 class A-1, A-2
and IO to 'BBB' from 'A', class B to 'BB' from 'BBB', class C to
'B' from 'BB', class D to 'CCC' from 'B', class E to 'D' from
'CCC' and the participating interests to 'D' from 'C'. Further,
classes A, B, C and D will remain on Rating Watch Negative. The
downgrade is a result of continued poor performance of the pool
as the deal currently has approximately $100 million in impaired
assets. Of additional concern, is the over $10 million in
outstanding P&I advances which could, at the discretion of the
servicer, result in future liquidity issues for the trust.

Fitch downgrades EMAC Owner Trust 1999-1 class A-1, A-2 and IO
to 'BB' from 'A', class B to 'B' from 'BBB-', class C to 'CCC'
from 'BB-', class D to 'DDD' from 'B-', class E to 'C' from 'B-
', class F to 'D' from 'CC' and class G to 'D' from 'C'. The
downgrades are a result of the continued deterioration of the
credit quality of pool as well as ongoing missed interest
payments to certain classes. The pool currently has over $104
million in defaulted loans with additional loans expected to
default in the coming months. This deal also contains over $12
million in outstanding P&I advances which, when recouped by the
servicer, could impair the trusts cash flow. Classes A, B, C and
D remain on Rating Watch Negative.

Fitch downgrades EMAC Owner Trust 2000-1 classes A-1, A-2, and
IO to 'BB' from 'AAA', class B to 'B' from 'AA', class C to
'CCC' from 'A', class D to 'CC' from 'BBB', class E to 'C' from
'BB' and class F to 'C' from 'B'. The downgrade is based on
continued deterioration in the credit quality of the underlying
loans in the pool. With defaults as of the end of April at over
$121 million (30% of the pool), this transaction has experience
a significant level of impaired collateral at a very early stage
in its life cycle. Over $91.3 million of the defaulted balance
is represented by 4 large borrower relationships. Although many
of the defaulted loans are at various stages of the workout
process, Fitch anticipates substantial losses to occur.
Additionally, outstanding servicer advances (which represent a
senior lien to the trust) are at approximately $14.6 million.
All classes will remain on Rating Watch Negative.


EMAGIN: Stretches Maturity Date of Promissory Notes to May 31
-------------------------------------------------------------
eMagin Corporation and The Travelers Insurance Company entered
into an amendment agreement to extend the maturity date of the
Convertible Promissory Note dated August 20, 2001, issued under
the Note Purchase  Agreement entered into August 20, 2001
between eMagin and Travelers.  The amendment agreement extends
the maturity date of the Note from May 20, 2002 to May 31, 2002
and also deletes the mandatory conversion  provisions contained
in Section 4 of the Note. eMagin and Travelers are currently
engaging in discussions in respect of the restructuring of the
Note.  There can be no assurance that eMagin will be able to
arrange a restructuring of the Note on terms acceptable to
eMagin, if at all.

A leading developer of virtual imaging technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. These miniature, high-performance,
modules provide access to information-rich text, data, and video
which can facilitate the opening of new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging
applications.

A leading developer of virtual imaging technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. These miniature, high-performance,
modules provide access to information-rich text, data, and video
which can facilitate the opening of new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging
applications. On March 31, 2002, the company reported a total
shareholders' equity deficit of about $6 million.


ENGAGE INC: Continues Nasdaq Trading Pending Hearing Results
------------------------------------------------------------
Engage, Inc. (Nasdaq: ENGA), a leading provider of software
solutions and services for advertisers, marketers and
publishers, announced that on May 16, 2002, Engage received a
letter from Nasdaq stating that the Company had failed to comply
with the $1.00 minimum bid price required for continued listing
by Marketplace Rule 4450(a)(5) and that its common stock is
subject to delisting from the Nasdaq National Market. Engage has
also been informed by Nasdaq that it is not in compliance with
the minimum $10,000,000 stockholders' equity requirement set in
Marketplace Rule 4450 and that it has until June 14 to regain
compliance with this requirement.

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel and its common stock will continue to trade
on the Nasdaq National Market pending the outcome of the
hearing. A hearing date has not been set.

"We are taking action in an attempt to rectify this situation,
and remain focused on building our position in the Digital Asset
Management and Internet Advertising markets," said Christopher
Cuddy, president and CEO of Engage.

By written consent dated February 28, 2002, CMGI, the Company's
majority stockholder, authorized Engage's Board of Directors to
amend the Company's Certificate of Incorporation to effect
either a 1-for-5, 1-for-10 or 1-for-15 reverse stock split of
the issued and outstanding shares of Engage's common stock.
Accordingly, the Board of Directors may effect any one of the
approved reverse stock splits based on its determination of
which reverse stock split will result in the greatest
marketability and liquidity of the Company's common stock.

Engage, Inc. (Nasdaq: ENGA) is a leading provider of software
solutions and services for advertisers, marketers and
publishers. Engage's digital asset management and workflow
automation software enables the creation, production
and delivery of marketing and advertising content more quickly
and efficiently, increasing time-to-market advantages, boosting
productivity and ultimately driving higher ROI from marketing
programs and advertising campaigns. The company's Internet ad
management business platform powers the effective and efficient
design and delivery of online campaigns for web publishers who
are competing for advertising revenue in a rapidly evolving
medium. A majority-owned operating company of CMGI, Inc.
(Nasdaq: CMGI), Engage is headquartered in Andover,
Massachusetts, with European headquarters in London and offices
worldwide. For more information on Engage, please call 877-U
ENGAGE or visit http://www.engage.com


ENRON: Exco Balks At Milbank's Engagement as Committee Counsel
--------------------------------------------------------------
Exco Resources Inc. made its bid to the U.S, Bankruptcy Court
for the Southern District of New York that Milbank, Tweed,
Hadley & McCloy LLP, be disqualified to serve as counsel for the
Official Committee of Unsecured Creditors in the Chapter 11
cases of Enron Corporation and its debtor-affiliates.

Judge Gonzalez rejected Exco's arguments.

Michael P. Cooley, Esq., at Gardere Wynne Sewell LLP, in Dallas,
Texas, argued that Exco's motion to disqualify has merit on
three independent legal bases:

   (i) Milbank's retention as Committee counsel violates the
       Canons and disciplinary rules of the New York Code of
       Professional Responsibility;

  (ii) Milbank's failure to disclose substantial connections to
       and conflicts between itself and various Debtors,
       creditors and Committee members in the Chapter 11 cases;
       and

(iii) Milbank's failure to satisfy the "adverse interest" and
       "disinterested person" standards of Sections 101, 327,
       328 and 1103 of the Bankruptcy Code.

Mr. Cooley contends that each of these violations provides an
independent basis for the disqualification of Milbank or, at the
very least, the denial by the Court of all compensation related
to Milbank's services as counsel to the Committee.

On March 11, 2002, Milbank filed its Monthly Fee Statement for
Services Rendered and Expenses Incurred from December 12, 2001
to December 31, 2001, seeking payment by the Debtors of $579,906
in fees and expenses for services rendered to the Committee.
Four days later, Milbank filed its January Fee Statement,
seeking payment by the Debtors of $1,795,893 in fees and
expenses for services rendered to the Committee.  Exco objected
to both Fee Statements.

During the 90-day period prior to the Petition Date, Mr. Cooley
notes that Milbank received payment of professional fees from
the Debtors other than Enron Wind Corporation in the amount of
$449,949.  "Enron Wind paid an additional $829,991 in fees to
Milbank after the Petition Date, since Milbank represented Enron
Wind both before and after the Petition Date and these fees were
paid in two installments on December 27, 2001 and January 7,
2002," Mr. Cooley adds.

Mr. Cooley lists Milbank's specific violations of these
fundamental ethical requirements:

A. Milbank's failure to disclose significant conflicts and
   connections between itself and various Debtors, creditors,
   Committee members, investment bankers and other parties in
   interest in the Chapter 11 cases violates the strict
   requirements of Bankruptcy Rule 2014(a) and provides an
   independent basis for the disqualification of, and denial of
   compensation to, Milbank as counsel for the Committee.

   In connection with its work on the Osprey Trust transaction,
   Milbank's failures to disclose have included, but are not
   limited to:

   -- The fact that over $2 Billion was raised to fund
      questionable activities of ENRON through LJM1, LJM2 and
      the Raptor entities.

   -- The relationship between Osprey, LJM1, LJM2 and the
      Raptors.

   -- That Osprey and its relationship to and transactions with
      LJM1, LJM2 and the Raptors are the subject of numerous
      congressional, Justice Department and SEC investigations.

   -- That the transactions were criticized at length in the
      Powers Report.

   -- That Milbank concluded and included in the offering
      memorandum that the Osprey transaction could result in
      equitable subordination.

   -- That Citibank is being sued over this transaction in the
      class action lawsuit in Houston.

   -- That additional litigation is almost certain to occur in
      the future.

   -- The fact that Milbank's involvement in this highly
      criticized transaction may impact Milbank's ability to
      represent the creditors in this proceeding.

   -- Because of the widespread "taint" of the Osprey
      transactions, Milbank is also disqualified from being
      involved in anything related to LJM1, LJM2, or any of the
      "Raptor" transactions.

   Milbank failed to disclose several facts surrounding its
   prior representation of Citibank in connection with the
   credit-linked trust transactions including but not limited
   to:

   -- That these transactions could be and, in fact, have been
      attacked as sham loans.

   -- That the transactions involved the creation of $2.5
      billion in debt.

   -- That Milbank prepared the documents that are at the center
      of this major legal controversy.

   -- That Citibank is a defendant and that these transactions
      are being challenged in a class action lawsuit in Houston,
      Texas.

   -- The identities of the underwriters.

   -- That it represented Credit Lyonnais as one of the
      underwriters, and that Credit Lyonnais is a member of the
      Committee.

   -- That it represented UBS Warburg as an underwriter of $1
      billion of Credit-Linked Notes.

   -- That Enron was booking these transactions as revenue and
      disguising them on its books as commodity trades,
      resulting in material misstatements of Enron's true debt.

   -- That Milbank had knowledge of theses facts but did not
      disclose them.

   -- That these transactions may be equitably subordinated in
      connection with these Chapter 11 cases.

   -- That Milbank could become a defendant in this litigation.

   -- That Milbank's representation of the Committee is at
      conflict with Milbank's own interests.

   -- Milbank's failure to disclose whether it will ultimately
      defend itself in connection with these transactions, which
      would interfere with creditors' attempts to equitably
      subordinate this debt.

   -- Milbank failed to disclose that the challenged commodities
      trade used in the Credit-Linked Trust Transactions could
      have created $2.5 Billion of improper liability at the ENA
      level and claims and litigation will also result on this
      issue with Milbank again being in the center of the
      controversy.

   -- That the Credit-Link Trust Transactions account for
      approximately 30% of the approximately $8.5 billion in
      liabilities listed by ENA on the petition date.

   -- Milbank failed to disclose until the Sixth Affidavit that
      it represented the credit-linked trusts long after this
      omission had been called to its attention.

   -- Milbank's Sixth Affidavit erroneously states that the
      Credit-Linked Trusts were not affiliates of Enron.

   -- Milbank's Sixth Affidavit erroneously states that Enron
      did not have voting power of its certificates in the
      Trusts.

   -- Milbank failed to disclose the certificates in certain
      Credit-Linked Trusts were owned by Citibank and Enron
      (including entities that were subsequently financially
      consolidated with Enron).

   -- Milbank failed to disclose the effect of Enron's
      restatement of its Financial Statements and the effect of
      the consolidation of various additional entities had on
      the ownership and voting rights of the certificates of the
      Credit-Linked Trusts.

   Milbank's failure to disclose the true facts surrounding the
   Mahonia transaction include, but are not limited to:

   -- That the transaction would be and is being attacked as a
      "sham loan."

   -- That a federal judge has stated the transaction appears to
      be a "sham loan."

   -- That JP Morgan Chase is a Defendant and that this
      transaction is being challenged in the class action
      lawsuit in Houston.

   -- That the transaction involves approximately $1 Billion.

   -- That Milbank prepared the documents that are the center of
      this major legal controversy.

   -- Enron was booking this transaction as revenue and
      disguising it as a commodity trade, resulting in a
      material misstatement of Enron's true debt.

   -- That Milbank had knowledge of these facts but did not
      disclose them.

   -- These transactions may be equitably subordinated in this
      Bankruptcy.

   -- That Milbank may become embroiled in the Houston
      litigation or the equitable subordination litigation.

   -- That the Mahonia transaction could have resulted in
      approximately $1 Billion of improper liability at the ENA
      level and that litigation will also result on this issue
      with Milbank again being at the center of the controversy.

   Ethical considerations:

   -- That Milbank is ethically bound to protect the confidence
      of its clients, several of whom are now defendants in
      various litigations.

   -- That Milbank cannot investigate or assist in the
      investigation of these transactions.

   -- To the contrary, Milbank must protect its clients
      confidences when investigated by others.

   -- Milbank's duty to its other clients limits the discloses
      it can make.

   Milbank's failure to disclose the true facts surrounding its
   relationship with Enron Wind include, but are not limited to:

   -- Milbank failed to disclose its representation of Enron
      Wind in connection with the sale of assets approved by the
      Court on December 27, 2001.

   -- Failed to disclose until the Sixth Affidavit that Milbank
      was receiving $600,000 from the sale proceeds of the Enron
      Wind sale which was approved by this Court.

   -- Failed to disclose that Milbank was simultaneously billing
      Enron's bankruptcy estate. In its Fee Statement, submitted
      to the Court on March 11, 2002, Milbank requested $35,000
      in fees from Enron's estate for work performed in
      connection with the December 27, 2001 sale of the Indian
      Mesa power projects to American Electric Power Company.

   -- Failed to disclose that Milbank was simultaneously billing
      the Enron estate and Enron Wind, then a non-debtor, in
      connection with the sale approval.

   -- Erroneously implied in the Sixth Affidavit that the
      disclosure of such payment was made in Court documents.

   -- Milbank failed to disclose its representation of JP Morgan
      Chase, Citibank, and UBS Warburg prior to the announcement
      of UBS Warburg as the winner of the auction for the ENA
      "trading book" of business on January 11, 2002.

   -- Failure to disclose the certificates in the Yosemite
      Trusts were owned by Citibank and Enron.

   -- That Enron had voting rights as a certificate holder.

   -- That Milbank represented an affiliate of Enron in this
      transaction (Milbank has erroneously said it did not).

   Milbank's failed to disclose the identity of its underwriter
   clients and the amounts involved in the Credit-Linked Trust
   Transactions.

   Milbank did not disclose until after the January 11, 2002
   auction of the ENA "trading book" that it had previously
   represented all three of the bidders who qualified for the
   auction - JP Morgan Chase, Citibank and UBS Warburg.
   Moreover, the First Affidavit supporting Milbank's retention
   as Committee counsel further failed to disclose that all
   three bidders (now members of the Committee) had participated
   in billions of dollars worth of questionable transactions
   involving ENA's trading book. Nevertheless, Milbank
   vigorously opposed requests by various parties for additional
   bidding and discovery, including the review of the trading
   book and the terms of the sale.

   Milbank failed to disclose that Citibank and JP Morgan Chase
   are defendants in a class action-suit in Houston on some of
   the very same transactions that are the subject of the
   Motion; that the other related suits have been filed; and
   that additional suits may be filed in the future.

   Milbank has failed to disclose that it represented Credit
   Lyonnais (a member of the Committee) and UBS Warburg as
   underwriters in the issuance of approximately $1 billion in
   Enron CLNs. Yet Credit Lyonnais and UBS Warburg were two of
   the underwriters in three of the Credit-Linked Trust
   Transactions: Enron Euro Credit Linked Notes Trust
   (200,000,000 pounds), Enron Sterling Credit Linked Notes
   Trust (125,000,000 pounds), and Enron Credit Linked Notes
   Trust II ($550,000,000).  These Credit-Linked Trust
   Transactions are coming under heavy scrutiny in these Chapter
   11 cases, making Milbank's representation of these clients
   who are also former investment bankers of the Debtors of
   particular significance.

   Mr. Cooley notes that the sheer magnitude of undisclosed
   connections and conflicts between Milbank and various other
   entities in these cases is "shocking."  Mr. Cooley observes
   that Milbank appears to disclose additional information
   regarding these matters only when its omission becomes
   apparent.  "This type of outright refusal to disclose
   relevant information, much less the more insidious omissions
   in Milbank's' prior disclosures, demands disqualification,"
   Mr. Cooley asserts.

B. The myriad conflicts of interest existing between Milbank and
   its clients, the Committee, violate the New York Code of
   Professional Responsibility and the disciplinary rules
   promulgated thereunder.  These provide an independent basis
   for the disqualification of, and denial of compensation for,
   Milbank as counsel for the Committee.

C. Milbank's extensive representation of certain Debtors,
   Committee members and investment bankers of the Debtors prior
   to, and in connection with, the Chapter 11 cases, create
   "adverse interests" that preclude Milbank's retention and
   compensation by the Committee pursuant to Sections 1103(b)
   and 327(a), made applicable to the retention of Committee
   counsel by Section 328(c). In particular, Milbank's
   representation of Citibank, JP Morgan Chase and other
   noteholders, certificate holders, trusts and investment
   bankers in 10 different so-called structured finance
   transactions (also known as "sham loans") totaling over
   $8,000,000,000 in Debtors' obligations create irreconcilable
   "adverse interests" and a conflicts of interest that compel
   Milbank's disqualification.

   These transactions are:

   Matter          Representing              Size of Transaction
   ------          ------------              -------------------
   Marlin          Underwriters of senior         $2,500,000,000
                   secured notes

   Osprey          Underwriters and purchasers    $2,600,000,000
                   of senior secured notes

   Enron Credit-   Underwriters and purchasers    $2,400,000,000
   Linked Notes    of notes & trust certificates

   Mahonia         Numerous notes                 $1,000,000,000

D. Milbank's extensive prior representation of investment
   bankers of the Debtors in at least three structured finance
   transactions over the last three years prevents Milbank from
   meeting the "disinterested person" standard under Sections
   101(14) and 328(c) and preclude Milbank's retention and
   compensation pursuant to Sections 1103(b) and 328(c), made
   applicable to the retention of Committee counsel by Section
   328(c).

E. The receipt by Milbank of certain preferential transfers
   create adverse interests which preclude Milbank's retention
   and compensation pursuant to Sections 1103(b) and 328(c),
   made applicable to the retention of Committee counsel by
   Section 328(c).

F. The implementation of firewalls and the retention by Milbank
   of conflicts counsel have proven ineffective and are
   incapable of curing Milbank's countless conflicts and adverse
   interests in these Chapter 11 cases.

   Mr. Cooley asserts that, "the sheer volume of Milbank's pre-
   petition representation of the various Debtors renders
   Milbank quite possibly the worst choice for Committee counsel
   and leave no doubt that Milbank is unfit to serve as counsel
   to the Committee in these Chapter 11 cases."

For these reasons, Exco asks the Court to either disqualify
Milbank from serving as counsel for the Committee or deny
further compensation to Milbank for fees and expenses incurred
in connection with such representation.

Exco also finds allies in the State of New Mexico, the State of
Arizona and the Independent Producers Group.  The Independent
Producers Group (a group consisting of 38 oil and gas producers)
joins Exco's motion only to the extent it seeks the
disqualification of Milbank.  The Group concurs with Exco's
observations as to:

   (a) Milbank's previous representation of Enron and many of
       its affiliates, even in the post-petition period, and

   (b) the failure of Milbank and the Committee to fulfill their
       obligations to the ENA unsecured creditors, usually
       appearing in opposition to the interests of the ENA
       unsecured creditors.

                         Other Responses

(1) Committee

By a unanimous vote, the Official Committee of Unsecured
Creditors endorses its continued representation by Milbank,
Tweed, Hadley & McCloy LLP.

Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey LLP, in
Cincinnati, Ohio, explains that the Committee selected Milbank
to represent its interests after determining that Milbank was
best suited to perform that task.  Mr. Lerner points out that
Courts generally respect a client's choice of counsel and
recognize that disqualification is a drastic measure.  Mr.
Lerner asserts that such respect is likewise warranted for the
Committee's choice of Milbank.

"Given the size of the Debtors and their 3,500 subsidiaries and
affiliates, the Committee could not reasonably have been
expected to find a national firm entirely free from conflicts
yet experienced in the myriad complex legal issues presented by
these Chapter 11 cases," Mr. Lerner says.  According to Mr.
Lerner, the Committee's decision to engage Milbank was made with
the express understanding that separate, similarly experienced
counsel would be retained to represent the Committee and its
interests in all matters for which Milbank would not be
representing the Committee due to actual or potential conflicts.

That's why, Mr. Lerner explains, the Committee selected Squire
Sanders to serve as conflicts counsel on all matters for which
Milbank could not represent the Committee.  In addition, Mr.
Lerner continues, Squire Sanders is engaged in managing the
division of responsibilities between Milbank and Squire Sanders.
"Squire Sanders actively monitors the Court's docket and reviews
the Debtors' transactions as part of its efforts to identify
matters upon which Milbank cannot represent the Committee," Mr.
Lerner adds.  Clearly, Mr. Lerner asserts, adequate measures
have been implemented to address conflicts properly.

The Committee understands that Milbank has disclosed all matters
that present actual or potential conflicts of interest in a
series of affidavits submitted by Stephen J. Blauner.
Accordingly, Mr. Lerner maintains that Milbank has not
represented the Committee in any matter identified in the
Affidavits and adverse to the Committee and its interests.  "Nor
has Milbank represented the Committee in any matter identified
by Milbank, Squire Sanders or the Committee as involving actual
or potential conflicts," Mr. Lerner adds.  The Committee
emphasizes that Squire Sanders represents them on all such
matters.

Now, Mr. Lerner notes, Exco Resources Inc. seeks to deprive the
Committee of Milbank's representation.  "None of Exco's
arguments is well founded, as each is premised on a fundamental
misunderstanding of the respective roles of Milbank and Squire
Sanders and a misapplication of law," Mr. Lerner argues.
Moreover, Mr. Lerner points out that to change legal counsel at
this junction would inflict substantial harm and prejudice to
the Committee, the unsecured creditors and the Debtors' estates.

Mr. Lerner informs Judge Gonzalez that the Committee had
directed Squire Sanders to conduct a thorough, independent and
objective assessment of Exco's arguments, which including
meeting with representative of Exco and Milbank of discuss their
positions. After learning the results of the independent
investigations, the Committee voted unanimously to oppose Exco's
motion.

Thus, the Committee asks the Court deny Exco's motion and
overrule Exco's objection to Milbank's fees.

(2) U.S. Trustee

According to Greg M. Zipes, Esq., the United States Trustee for
the Southern District of New York, Carolyn S. Schwartz, has been
in frequent communication with Milbank regarding its
qualifications under Section 1103 of the Bankruptcy Code since
she became aware of the Committee's decision to retain Milbank
as its counsel.

Mr. Zipes relates that the U.S. Trustee has encouraged Milbank
to disclose all possible connections to the Debtors and other
parties-in-interest in these cases, so that interested parties
would have the opportunity to review these connections and
object as appropriate.  "Milbank has done so conscientiously,"
Mr. Zipes asserts.

The U.S. Trustee agrees with Exco that Milbank should not be
involved in investigating the numerous pre-petition transactions
in which the firm was a participant.  Specifically, Exco asserts
that Milbank may have benefited from potential preferential
transfers.  "The U.S. Trustee submits that Milbank should escrow
some portion of the alleged preferential transfers or agree to a
larger hold-back pending a determination concerning any
preferential transfers," Mr. Zipes clarifies.

However, Mr. Zipes emphasizes that the U.S. Trustee is satisfied
that Squire Sanders & Dempsey, LLP, the Committee's conflicts
counsel, is aggressively reviewing these transactions, under the
close scrutiny of the Committee.  "The Court and the U.S.
Trustee would learn very quickly if certain members on the
Committee believed the investigation is not proceeding in an
expeditious manner," Mr. Zipes says.  In addition, Mr. Zipes
continues, an examiner will independently review these
transactions.

Thus, based upon the information currently before her, Ms.
Schwartz believes that Milbank's disqualification is not
appropriate.

(3) Florida State Board of Administration

According to Andrew Entwistle, Esq., at Entwistle & Cappucci
LLP, in New York, the Florida State Board of Administration
recognizes that Exco's Objections raise serious issues regarding
the propriety of Milbank's representation of the Committee in
these bankruptcy cases.

However, the Florida State Board believes that investigating the
matters raised in the Exco Objections falls squarely within the
powers and duties of the Enron Examiner.  Mr. Entwistle notes
that the Enron Examiner is charged with investigating and making
recommendations concerning the very type of pre-petition
avoidance actions and potential claims relating to Enron's off-
balance sheet transactions and special purpose entities that
Exco notes in its Objections.

For this reason, the Florida State Board objects to the
resolution of the Exco Objections on the limited factual record
currently before the Court.  Instead, the Florida State Board
asks the Court to:

   1. hold its consideration of the Exco Objections in abeyance
      until the Enron Examiner has conducted a full factual
      investigation; and

   2. instruct the Enron Examiner to investigate the allegations
      set forth in the Exco Objections as soon as practicable
      following the Court's appointment of the Enron Examiner.

(4) HLS Sureties

Hartford Fire Insurance Company, Lumbermens Mutual Casualty
Company, and Safeco Insurance Company of America neither support
nor object to Exco's motion at this time.

Between 1997 and 2000, the HLS Sureties, along with several
other surety companies, issued six separate advance payment
surety bonds in favor of Mahonia Limited or Mahonia Natural Gas
Limited, in amounts totaling approximately $2,000,000,000 -- at
the request of Enron and its affiliates.

Mark S. Gamell, Esq., at Torre, Lentz, Gamell, Gary & Rittmaster
LLP, in Jericho, New York, tells the Court that the Surety Bonds
were issued by different combinations of the Sureties and in
connection with six separate forward sale contracts for the
delivery of crude oil and natural gas over a three to five-year
period by Enron (as sellers) to Mahonia (as purchasers).  Mr.
Gamell relates that Milbank represented JP Morgan Chase Bank and
its predecessor, Chase Manhattan Bank, in the negotiation and
execution of some or all of the Forward Sale Contracts and the
Surety Bonds.  Shortly after the Petition Date, Mr. Gamell
recounts, JPMC filed a suit in the United States District Court
for the Southern District of New York against the Sureties
seeking to compel payment of approximately $1,000,000,000 under
the Surety Bonds.

According to Mr. Gamell, the HSL Sureties are deeply troubled
with Milbank's level of disclosure in addressing its involvement
in the Mahonia Transactions.  "Nowhere in any of the six
Supplemental Affidavits does Milbank provide any further
disclosure of its involvement in some or all of the transactions
giving rise to the JPMC Suit and explain how such involvement
does not create an adverse interest or effect its ability to
adequately and impartially represent the Committee," Mr. Gamell
observes.

The HLS Sureties recognize that Milbank is a highly capable firm
with significant experience in the bankruptcy field and the
resources to capably handle its responsibilities in matters such
as the representation of the Committee in these bankruptcy
cases. However, the HLS Sureties observe that Milbank's
relationship with JPMC and prior involvement in one or more
aspects of some or all of the Mahonia Transactions could
eventually lead to serious conflicts of interest in its
representation of the Committee on behalf of all unsecured
creditors in these cases.  Mr. Gamell points out that the
equitable subordination of all of the Mahonia related claims
held by JPMC, Milbank's former client, is a distinct possibility
based upon the outcome of the JPMC Suit. "Any equitable
subordination of almost $1,000,000,000 of claims to the claims
held by the other unsecured creditors in these estates could
have a significant benefit to such other unsecured creditors,"
Mr. Gamell says. Consequently, the HLS Sureties believe that the
Committee and the unsecured creditors will best be served if the
conflicts counsel appointed by this Court, Squire, Sanders &
Dempsey L.L.P. represents the Committee in all matters related
to JPMC and the Mahonia Transactions.

"At this juncture in the Bankruptcy Case and the JPMC Suit, the
HLS Sureties are unsure if Milbank's representation of JPMC in
the Mahonia Transactions creates an adverse interest or makes
Milbank an interested party pursuant to the Bankruptcy Code,
thus warranting its disqualification," Mr. Gamell says.  But as
discovery continues in the JPMC Suit, Mr. Gamell anticipates
that the Sureties might obtain more evidence or information that
reflects on Milbank's role in the Mahonia Transactions.  As a
result, the HLS Sureties want to reserve their rights to
challenge Milbank's continued representation of the Committee at
a later date.

Until such time as the role of Milbank in the Mahonia
Transactions can be fully ascertained, and whether this role
should preclude Milbank's representation of the Committee under
applicable law, Mr. Gamell contends that the representation of
the Committee in all matters related to JPMC and the JPMC Suit
by Squire Sanders should effectively eliminate even "the
appearance of professional impropriety," as mandated by the New
York Code of Professional Responsibility.

Therefore, the HLS Sureties suggest that the Court require
Squire Sanders to represent the Committee on all maters related
to the Mahonia Transactions and JPMC. (Enron Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900)


E.SPIRE: Has Until July 1, 2002 to Make Lease-Related Decisions
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, e.spire Communications and its debtor-affiliates
obtained an extension on their lease decision period.  The Court
gives the Debtors until July 1, 2002 to elect whether to assume,
assume and assign, or reject unexpired nonresidential real
property leases.

e.spire Communications, Inc. is a facilities-based integrated
communications provider, offering traditional local and long
distance internet access throughout the United States. The
Company filed for chapter 11 protection on March 22, 2001.
Domenic E. Pacitti, Esq., Maria Aprile Sawczuk, Esq. and Mark
Minuti at Saul Ewing LLP represents the Debtors in their
restructuring effort.


EVANSWOOD BETHZATHA: Sets Bondholders' Meeting on May 29 in MA
--------------------------------------------------------------
Due to the numerous events of default which have occurred,
Evanswood Bethzatha Corporation announces that its meeting with
the beneficial bond holders of the $15.2 million Massachusetts
Industrial Finance Agency First Mortgage Revenue Bonds
(Evanswood Bethzatha Corporation Project) Series 1994A and $8.7
million Massachussets Industrial Finance Agency First Mortgage
Revenue Bonds (Evanswood Bethzatha Corporation Project) Series
1996 will be held at the offices of Ropes & Gray, One
International Place, 26th Floor, Conference Room 36/02, Boston,
Massachusetts 02110 on Wednesday, May 29, 2002, commencing at
11:00 a.m., Eastern Time.  Bondholders or their representatives
can attend in person or participate telephonically by calling
(888) 238-1551. Participants should ask for the 'Evanswood
Conference' or the Ropes & Gray Conference'.

The purpose of the meeting is to consider & vote upon:

      (i) the proposed sale of substantially all of the real and
personal property and operating assets of the obligors Evanswood
Belh2atha Corporation ('EBC'), Evanswoos F-Tome Corporation
('EHC') and American Baptist Elder Ministries of Massachusetts
('ABEMM') to Senior Residential Care, Inc. or other affiliates
of Wingate Healthcare Inc., including the release of liens held
by State Street Bank and Trust Company, as Trustee, on the
assets to be sold,

     (ii) the related settlements with EBC, F1-IC, ABEMM, their
former officers and trustees, and American Baptist Homes of the
West, and

    (iii) certain other related matters.

It is anticipated that further information will be available
prior to or at the meeting.


EXCHANGE APPLICATIONS: Violates Nasdaq Min. Listing Requirements
----------------------------------------------------------------
Exchange Applications, Inc, doing business as Xchange, Inc.,
announced that on May 16, 2002 it received a letter from the
Nasdaq staff stating that the Company is not in compliance with
Nasdaq requirements relating to net tangible assets and
shareholders' equity as set forth in Nasdaq Marketplace Rules
4450(a)(3) and 4450(b)(1), and as a result the Company's common
stock is subject to delisting. The Company will file a plan of
compliance with Nasdaq and a request that it be given time to
implement this plan. The Company's stock will continue to trade
on The Nasdaq Stock Market while Nasdaq considers the request.

Xchange solutions enable large global companies to lower costs
and maximize profits by Capturing Value in Play through
continuous customer conversation across all channels. Xchange 8
features the depth and open architecture large companies require
to extract more value from their existing CRM investments by
synchronizing online and offline multi-channel customer
campaigns that are integrated with call centers and all other
customer touch-points in real-time. This smarter, analytic
approach to each customer interaction delivers strategic
customer insights and profits. For more information on Xchange
or to learn about its customer-focused software and services
solutions, visit its Web site at http://www.xchange.com


FEDERAL-MOGUL: Proposes Uniform Asimco Sale Bidding Procedures
--------------------------------------------------------------
In order to maximize the likelihood of competitive bidding that
will result in the highest and best offer, Federal-Mogul
Corporation and its debtor-affiliates required that Asimco
subject its proposal to competitive bidding procedures for which
the Debtors hereby ask for Court approval. The deadline for
submission of all bids, including Overbids, is June 17, 2002, if
the Sale Hearing occurs as scheduled on June 26, 2002.

The Debtors propose that any entity may submit an overbid, so
long as the Overbid:

A. is written,

B. is accompanied by evidence that the proposal constitutes a
   Qualifying Competing Proposal, and

C. is delivered to counsel for the Debtors, Asimco, and
   Unsecured Creditors' Representatives, the pre-petition
   lenders and the post-petition lenders.  It must be filed with
   the Bankruptcy Court no later than 10 days prior to the Sale
   Hearing.

Any "Qualifying Competing Proposal" must:

A. provide for a total purchase price that is not less than
   $26,150,000, all of which is payable in cash at the Closing;

B. contain other terms and conditions that are at least as
   favorable to the Debtors' estates as those set forth in the
   Definitive Agreement with Asimco.  This would include such
   items as the purchase price adjustments for working capital,
   excluded assets, assumed liabilities, the timing of the
   closing, the need for a transition services agreement, and
   the closing not being conditioned upon obtaining financing;

C. contain a mark-up of the Definitive Agreement showing any
   proposed changes therefrom if such Definitive Agreement is
   lodged with the Bankruptcy Court at least 15 days before the
   Sale Hearing;

D. be made by an entity or entities providing evidence that they
   are financially qualified to consummate the Competing
   Proposal on a timely basis; and,

E. be accompanied by a deposit of $250,000 in immediately
   available funds, to be held by Debtors' counsel in an
   interest bearing account pending the outcome of the Sale
   Hearing.  This deposit plus any accrued interest will not be
   considered the property of Debtors' estates and will be
   either applied to the purchase price if the bidder is the
   successful bidder pursuant to the order of the Bankruptcy
   Court at the Sale Hearing or refunded to the bidder if such
   bidder is not the Successful Bidder.

Within three Court Days prior to the Sale Hearing, the Debtors
must file recommendations regarding any Overbids received with
the Bankruptcy Court.  The recommendations will address, inter
alia, the aggregate consideration offered, the bidder's ability
to timely close the sale transaction, and an analysis of which
offer is most favorable to the Debtors' estates.  Any other
party in interest, including the Unsecured Creditors'
Representatives and the lenders, will also be permitted to file
recommendations. The Debtors must deliver copies of the
recommendations to Asimco and to all entities that have made an
Overbid, the Unsecured Creditors' Representatives, the pre-
petition lenders, and the post-petition lenders.  A copy of the
Definitive Agreement must be lodged with the Bankruptcy Court
prior to the Sale Hearing, and the Debtors will promptly deliver
notice of the lodging of the Definitive Agreement on all
entities that have made an Overbid.

If there are one or more Overbids, Asimco will be permitted to
make a counter-bid at or before the Sale Hearing.  This counter-
bid must be an increase of at least $100,000 over the highest
Overbid, payable in cash at the closing.  Any entity that has
made an Overbid will thereafter be permitted to make one or more
counter-bids.  This is provided that each counter-bid provides
for a purchase price consideration that is $100,000 greater than
the highest previous counter-bid, and, the entire increase in
the purchase price consideration must be in cash payable at the
closing.  Asimco's counter-bids must take into account the
effect of the $325,000 breakup fee.  At the Sale Hearing, the
Debtors, the Unsecured Creditors' Representatives, the pre-
petition lenders, and the post-petition lenders, and other
interested parties may make recommendations to the Court
concerning the bids.

In the event the Bankruptcy Court approves a bid by a party
other than Asimco, the parties will present recommendations at
the hearing in which the Bankruptcy Court grants approval.  The
Court will establish procedures and deadlines governing the
execution of the sale agreement, obtain an order approving the
sale agreement, and the prompt closing of the sale transaction.
The sale transaction must occur no later than 10 days after the
Sale Hearing.  If Asimco elects, there will be provision for a
"backup" sale agreement between the Debtors and Asimco.  This
provision would be used should the non-Asimco bid or the sale
agreement not be approved by the Bankruptcy Court, or if the
resultant sale transaction is not consummated, within reasonable
time periods.

James E. O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, submits that the proposed bidding
procedures are in the best interest of the Debtors, its
creditors and estates, as they are designed to strike a balance
between inviting competing bids and enabling the Debtors to
close a sale within a reasonable time frame.  The bidding
procedures are fair, reasonable, and necessary to promote the
highest and best sale price, without imposing undue obstacles to
the competitive bid process, and will encourage bidding and
increase the likelihood that the Debtors will receive the best
offer for the North American Camshaft Group operating assets.

Mr. O'Neill explains that pre-approval of the bidding procedures
will provide interested parties with notice of the specific
bidding procedures authorized by this Court, including the
minimum bid requirement and the opportunity to competitively bid
for the assets.  The pre-approval of the rules of the proposed
sale will ensure fair comparability between competing bids.  In
addition, by permitting all entities previously solicited to
continue doing their due diligence and to make Qualifying
Competing Proposals and Overbids, the bidding procedures create
a sale process that should maximize the value of the assets to
the estate and its creditors.

Mr. O'Neill submits that the minimum initial overbidding
increment of $450,000, consisting of the breakup fee of $325,000
plus an initial bid increment of $125,000, is also reasonable
and in the best interest of the Debtors, their estates and
creditors. Overbid requirements are normally established
relative to the value of the assets at issue.  The value of the
NA Camshaft Group operating assets, according to Asimco's offer,
is approximately $25,700,000.  Thus, the $450,000 initial
overbid increment represents approximately 1.7% of Asimco's
offer.

Mr. O'Neill cites that Courts in the bankruptcy context
frequently approve overbid requirements at a higher percent
relative to the value of the assets.  In re Integrated
Resources, Inc., -- $15 million bidding increments approved on
$565 million offer (3%); and In re Apex Oil, -- 5% overbid.  The
initial $425,000 overbidding increment followed by $100,000
counter-bidding increments set forth in the Letter of Intent
falls within the acceptable range for these requirements.
Accordingly, the Bidding Procedures satisfy the business
judgment test, as they will encourage bidding, are fair and
reasonable, and will bring the most value to the estates.

This Motion is scheduled to be heard on May 29, 2002 to consider
these bidding procedures and any objections that may be
interposed.

                      U.S. Trustee Objects

Frank J. Perch, III, Esq., in Wilmington, Delaware, avers that
the bid procedures that create an uneven playing field by
requiring competing bidders to make a deposit but permit Asimco
to speculate until after the auction is over.  The proposed
bidding procedures require competing bidders to submit a deposit
with their bids.  However, Asimco is not required to enter into
a Definitive Agreement, and therefore is not required to submit
a deposit, until the moment prior to the Sale Hearing.

Mr. Perch claims that Asimco has only executed a letter of
intent as of this time.  In particular, it appears that Asimco
has not yet executed a Definitive Agreement and as a result has
not yet paid a deposit (which it is not obligated under the
Letter of Intent to do until the execution of a Definitive
Agreement). Indeed, this Motion is premature under the terms of
the Letter of Intent, which provides that the seller will move
for approval of bidding procedures "[a]fter execution of the
Definitive Agreement." (Federal-Mogul Bankruptcy News, Issue No.
17; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Federal-Mogul Corporation's 8.800%
bonds due 2007 (FEDMOG6) are quoted between 21 and 23. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FEDMOG6for
real-time bond pricing.


FRIEDE GOLDMAN: T. Jay Collins Elected as Board Chairman
--------------------------------------------------------
T. Jay Collins has been elected to serve as Chairman of the
Board for Friede Goldman Halter, Inc. (OTCBB: FGHLQ), replacing
J. L. Holloway who recently resigned. Mr. Collins, President,
Chief Operating Officer and a Director of Oceaneering
International, Inc., has served as a Director on Friede
Goldman's Board since 1997 and presently serves as Chairman of
the Restructuring Committee.

In accepting the chairmanship, Mr. Collins stated, "The
Reorganization Committee and the Board of Directors of Friede
Goldman are working diligently with the Creditors Committee to
maximize the value of the estate for both the secured and
unsecured creditors. We will continue to contract and execute
new jobs while pursuing appropriate reorganization options with
the help of loyal employees, customers and suppliers."

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


GS INDUSTRIES: Closes Sale of IGM Business to Scaw Metals
---------------------------------------------------------
GS Industries, Inc. announced the closing of the sale of its
International Grinding Media business to Scaw Metals through
Anglo South American Investments Limited.

The proceeds totaled $105 million and will be used to pay off
its DIP financing and to provide funds for future recoveries to
its creditors. With the closing of this transaction, GS
Industries has completely paid down its entire DIP financing.

Mark Essig, Chief Executive Officer of GS Industries, commented
"This sale represents a significant event in our continuing
effort to complete our restructuring. We have now closed on the
sale of two businesses, our mill liner foundries and our
International Grinding Media operations, and we are in the
process of selling Georgetown Steel. Our objective has been to
maximize the recovery to our creditors and this sale is a major
step towards that goal."

Headquartered in Charlotte, GS Industries has been reorganizing
under Chapter 11 bankruptcy protection since February 2001.


GENSCI: Delayed Audit Triggers Late Filing of Financial Reports
---------------------------------------------------------------
GenSci Regeneration Sciences Inc. (TSE: GNS) announced a delay
beyond the May 21, 2002 deadline for filing its annual report
and financial statements for the year ending December 31, 2001.
The postponement is due to a delay in the commencement of the
Company's year-end audit.  In order to reorganize, the Company
is operating under Chapter 11 protection of the U.S. Bankruptcy
Code. Under Chapter 11 procedures the Court must approve the
employment of all attorneys and auditors working on behalf of
the Company.  The Company's auditors were approved on May 9,
2002.  The Company's results for the year ending December 31,
2001 will be announced and financial statements filed
immediately upon completion of the audit.  First quarter 2002
results, due May 30, 2002, will also be delayed, for the same
reasons.

GenSci Regeneration Sciences Inc. has established itself as a
leader in the rapidly growing orthobiologics market, providing
surgeons with biologically based products for bone repair and
regeneration.  Its products can either replace or augment
traditional autograft surgical procedures.  This permits less
invasive procedures, reduces hospital stays, and improves
patient recovery.  Through its subsidiaries, the Company
designs, manufactures and markets biotechnology-based surgical
products for orthopedics, neurosurgery and oral maxillofacial
surgery.


GLOBAL CROSSING: Seeks Approval of Employee Retention Program
-------------------------------------------------------------
Global Crossing Ltd. and its debtor-affiliates seek authority to
establish an employee retention program to ensure that certain
key employees continue to provide essential management and other
necessary services during the Debtors' Chapter 11 cases.
Approval of the Retention Program is essential to the Debtors'
ongoing operations and reorganization efforts.

Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP in New
York, New York, relates that in response to economic issues
surrounding the telecommunications industry and the concerns of
creditors and other parties in interest, the Debtors have
revised their business strategy to focus on serving existing
customers rather than growth. The revised business plan will
have the effect of significantly reducing the amount of cash
expenditures by the Debtors over the next several months. A
large portion of these savings will result from a reduction in
the Global Crossing work force. Since the Commencement Date,
Global Crossing has terminated approximately 971 employees and
plans to terminate 813 more. An additional 757 employees have
taken advantage of Global Crossing's voluntary retirement plan.

According to Mr. Walsh, these terminations, as well as the
uncertainty that normally exists for a Chapter 11 company, are
adversely affecting the ability of the Debtors to retain key
employees, particularly those in management positions and those
at the corporate level. In many cases, the Debtors are asking
key employees to shoulder greater responsibilities and devote
portions of their time to the restructuring process as well as
running the business. The Debtors cannot afford to lose the
special knowledge, experience, and skills of these individuals
while they restructure their operations and balance sheet.

Accordingly, the Debtors propose to establish a program that
provides financial incentives above and beyond the Debtors'
existing performance based bonus programs to employees who
remain actively employed by the Debtors. The Debtors believe
that the Retention Program described below will enable them to
keep a large portion of those key employees.

Mr. Walsh informs the Court that the proposed Retention Plan
would provide approximately $10,000,000 of payments over time to
approximately 300 employees who have been identified as key to
the Debtors' business or restructuring efforts. The Retention
Plan also would provide a discretionary pool of $5,000,000 to be
used, on an exceptional basis, to retain employees who have not
been previously identified as key employees, but who, in the
discretion of the Debtors' chief executive officer, are or
become essential to the Debtors' reorganization efforts. Half of
the discretionary pool ($2,500,000) would be available
immediately; the other half would be available with the consent
of the statutory committee of unsecured creditors appointed in
the Debtors' chapter 11 cases.

The identified key employees consist of 9 executive vice
presidents (Tier I Employees), 15 senior vice presidents or high
level vice presidents (Tier II Employees), 27 vice presidents
(Tier III Employees), and 253 other critical employees (Tier IV
Employees).

Under the Retention Plan, Mr. Walsh explains that each Tier I
Employee would be entitled to an aggregate retention bonus of
37.5% to 50% of his or her salary. Each Tier II Employee or Tier
III Employee would receive 27.5% or 22.5% of their respective
salaries. Finally, each Tier IV Employee would receive between
5.0% and 20.0% of his or her salary as a retention bonus. In
general, employees added to the program under the discretionary
pool would be subject to the same individual payment limits,
depending on which tier they belong in. However, the Debtors'
chief executive officer may award up to twice the amounts
specified above in exceptional circumstances.

The retention amounts would be paid in four equal portions on
the following dates:

A. the date the Court approves the Motion;

B. July 1, 2002;

C. October 1, 2002; and

D. the earlier to occur of the filing of a Chapter 11 plan of
   reorganization or the sale of all or substantially all of the
   assets of the Debtors.

Mr. Walsh submits that an individual will be entitled to receive
a payment if he or she is employed on a scheduled retention
payment date. In addition, an individual whose employment has
been terminated for reasons other than cause will be entitled to
receive the next scheduled retention payment.

Mr. Walsh admits that a company that is financially distressed
or undergoing a significant restructuring has few means to
positively affect an employee's "employment proposition," that
mix of tangibles (compensation and benefits) and intangibles
(employer's prospects, career path, work content, work
relationships, work/life balance) that constitute a particular
employee's assessment of whether he or she wishes to remain
employed at a particular company. Many times a company that is
financially distressed cannot effectively deal with many of the
intangible elements of the employment proposition. Its most
effective (and in some cases only) method to positively
influence the employment proposition is through compensation
guarantees.

According to an analysis prepared by Arthur Andersen's Human
Capital Group, the following has had an adverse effect on the
"employment proposition" at Global Crossing:

A. Employment insecurity - Many employees fear there is an
   increased risk of job loss, especially in light of the
   Chapter 11 filings, coupled with the recent workforce
   reduction initiatives.

B. Perceived loss of internal opportunity - The Chapter 11
   bankruptcy process may lead employees to conclude that there
   will be few promotions or new job opportunities within Global
   Crossing.

C. Stressful work environment - Employees expect they will have
   to work harder and in a more stressful environment now that
   Global Crossing is in bankruptcy.

D. Perceived loss of professional reputation - The stigma of
   working for a financially troubled company generally leads to
   higher rates of turnover. Some managers may feel that their
   professional reputation would be better served by working for
   a more financially stable organization.

E. Sharp reduction in actual pay - Without the effective use of
   stock options and with no annual bonus having been paid in
   recent years, overall actual compensation for key employees
   has been drastically reduced. Indeed, an analysis conducted
   by AA indicates that, even with the implementation of the
   Retention Program, Global Crossing's top key employees will
   be paid significantly less than market.

Based on the foregoing, Andersen has advised Global Crossing
that the implementation of a retention program is critical to
the Debtors' reorganization efforts.

The Debtors have determined that the costs associated with
adoption of the Retention Program, which will not exceed
$15,000,000, are more than justified by the benefits that are
expected to be realized.  These will boost morale and discourage
resignations among the Debtors' key employees. Mr. Walsh assures
the Court that Andersen has reviewed and compared the Retention
Program to competitive practice, particularly programs
implemented by other companies that have adopted restructuring
compensation programs and that have filed under Chapter 11. This
included an analysis comparing the Retention Program with the
retention plans of seven other telecommunications companies that
have filed under Chapter 11. Based upon these analyses, the
Retention Program falls well within the range of programs
adopted by other companies, including telecommunications
companies, who have sought to restructure under Chapter 11.

Since the Retention Program is needed to retain key employees,
who are in turn necessary for the preservation of the Debtors'
estates, Mr. Walsh believes that the payment rights of key
employees under the Retention Program are "actual, necessary
costs and expenses of preserving the [Debtors'] estate[s]," and
should be accorded administrative expense priority under Section
503(b)(1)(a) of the Bankruptcy Code to the extent that they
become due under the Retention Program.

                      Ohio Teachers Object

The Public Employees Retirement System of Ohio and State
Teachers Retirement System of Ohio objects to the motion of the
Debtors for an order approving and authorizing the establishment
of a retention program for key employees. Ohio is filing this
objection to the bonuses on behalf of the many Global Crossing
investors who lost over $50 billion at the same time Global
Crossing insiders manipulated the Company's financial results
and sold over $1 billion in Global Crossing stock.

According to Mark D. Silverschotz, at Anderson Kill & Ollick
P.C. in New York, New York, Global Crossing and certain of its
officers and directors stand accused of participating in one of
the most far reaching frauds in history. As demand slowed in the
once booming telecom industry, Global Crossing turned to deceit
and financial manipulation to hide its declining fortunes. While
this was going on, Global Crossing directors and officers reaped
over a billion dollars of profits as the result of insider
trading in Global Crossing stock. Some of these same individuals
apparently now ask this Court to award them $10 to $15 million
in retention bonuses for their continued services. Manifesting
their shame, they make this application anonymously. Ohio
objects to the Motion because:

A. the Debtors' fail to identify any of the potential recipients
   of the proposed bonus;

B. there is a strong probability that the bonus recipients will
   include individuals who are defendants in the pending
   securities class actions and/or non-defendant officers who
   have benefited from their sales of Global Crossing stock
   during a period when Global Crossing was misleading the
   investing public; and

C. the timing of the bonuses provides that three-quarters of all
   the payments will take place within the next five and one-
   half months and thus, offers little incentive for employees
   to stay past October 2, 2002.

Mr. Silverschotz points out that in the Motion, the Debtors have
failed to identify the approximately 300 employees of the
Debtors who will be eligible for the proposed retention bonuses.
Ohio objects to the Motion because it cannot identify whether
the recipients of the proposed bonuses include individuals who
are defendants in the pending securities lawsuits who may have
engaged in insider sales during the Period or other officers of
the Debtors whom Ohio believes profited illegally from stock
sales that occurred during the time when the Debtors were
misleading the public about their financial position. It is
unclear from the Motion why the Debtors have chosen to keep the
identities of the employees who would be the beneficiaries of
the relief requested in this motion secret.

To permit employees who may have either participated in the
fraud or reaped benefits in the millions of dollars from the
Debtors and/or the investing public (or both) to obtain
additional millions of dollars in benefits merely to remain with
the Debtors through October 2, 2002, serves no purpose other
than to further reward those individuals who may have
contributed to the current situation. At a minimum, Mr.
Silverschotz believes that the Motion should not be approved
until the Debtors identify which employees will receive a bonus
in order to permit interested parties to object to the receipt
of bonuses by those employees who may have either participated
in the fraud or profited from insider trading. Further, to the
extent that the Debtors are unwilling to identify the proposed
recipients of the retention bonuses, Ohio opposes the Motion in
its entirety to ensure that persons who may have engaged in
fraud and/or illegal insider trading are not paid with monies
that could be used to reimburse claimants such as Ohio who have
lost billions of dollars.

Ohio also objects to the Motion because the timing of the
proposed retention payments offers little incentive for the
bonus recipients to remain with the Debtors past October 2,
2002. Mr. Silverschotz notes that 75% of the payments will be
made on or before October 2nd, and there is no provision for
employees who terminate their employment as of October 3rd to
repay any bonus payments they have received. Accordingly, the
benefits to be obtained from the program are minimal in
comparison to the cost of the program to the Debtors and,
ultimately, to entities such as Ohio who have substantial claims
against the Debtors.

Clearly, Mr. Silverschotz submits that the Motion was not
brought for the benefit of the Debtors' creditors, shareholders
and non-key employees, who suffered billions of dollars of
losses at the hands of Global Crossing, as a consequence of the
improper and illegal acts of some or all of the very Global
Crossing employees who now may receive bonuses under the program
proposed by the Debtors. By definition, payments made to these
employees reduces Global Crossing's resources and will make it
more difficult for claimants such as Ohio to fully recover their
losses in the event that the securities class action and other
lawsuits are successful.

Mr. Silverschotz tells the Court that the Debtors have failed to
carry their burden to demonstrate why the relief sought should
be permitted by this Court. On the contrary, the granting of the
relief requested would be severely detrimental to the interests
of Ohio, Global Crossing's other creditors, equity holders and
employees and would provide little or no legitimate benefit to
the Debtors themselves. Most importantly, the relief sought has
the potential to further enrich those individuals who have
created the instant situation and who may have substantially
benefited from the fraud that was perpetrated. Accordingly, the
relief requested in the Motion should be denied in its entirety.
(Global Crossing Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HALO: Inks Definitive Pact to Sell Upshot to Equity Marketing
-------------------------------------------------------------
HALO Industries, Inc. [OTC: HMLOQ], a promotional products
industry leader, announced the signing of a definitive agreement
to sell UPSHOT, a marketing agency, to Equity Marketing, Inc.
[Nasdaq: EMAK] pending approval from the U.S. Bankruptcy Court
in Chicago, Illinois. Equity Marketing, Inc. is a leading
marketing services company based in Los Angeles.A A Terms of the
transaction were not disclosed.

"This divestiture represents another important step for HALO,"
said Marc S. Simon HALO's president and chief executive officer.
"With our restructuring largely completed, the closing of this
transaction will allow us to turn our attention to the terms of
HALO's emergence from Chapter 11."

Acquired by HALO in 1998, UPSHOT is a marketing agency
specializing in promotion, event, collaborative, direct and
environmental marketing and has offices in Chicago, Illinois and
Richmond, Virginia. UPSHOT is a wholly owned subsidiary of HALO
and operates under the name of Promotional Marketing, L.L.C.
Promotional Marketing, L.L.C. also owns UPSHOT Integrated, Inc.,
an Ontario company, that is not being sold as part of this
planned transaction.

UPSHOT -- http://www.upshot.net-- is a marketing agency
specializing in promotion, event, collaborative, direct and
environmental marketing for clients such as The Coca-Cola
Company, Discover Financial Services, Disney Vacation Club, Ford
Motor Company, Hallmark Cards, Inc., Morgan Stanley, Procter &
Gamble and J.E. Seagram & Sons.

HALO Industries, Inc. (OTC: HMLOQ), based in Deerfield, IL with
offices worldwide, is a promotional products leader.

Equity Marketing, Inc. is a leading global marketing services
company based in Los Angeles, with offices in London, Paris, New
York, and Hong Kong. The Company designs and produces custom
promotional programs that build sales and brand value for
retailers, restaurant chains and consumer goods companies such
as Burger King Corporation, Cadbury, The Coca-Cola Company,
CVS/pharmacy, Kellogg's, Procter & Gamble and others. The
company complements its core promotions business by developing
and marketing distinctive consumer products, based on trademarks
it owns or classic licensed properties, which are sold through
specialty and mass-market retailers. More information about
Equity Marketing is available on the company's Web site at
http://www.equity-marketing.com


HEALTHGATE DATA: Commences Trading on OTCBB Effective May 24
------------------------------------------------------------
HealthGate Data Corp., (OTCBB: HGAT), a market-leading provider
and electronic publisher of healthcare information for health-
related organizations, announced that its common stock moved to
the OTC Bulletin Board (OTCBB) effective with its delisting from
the Nasdaq National Market with the open of business May 24,
2002. HealthGate's stock had not maintained a minimum bid price
of $1.00 and a minimum market value of publicly held shares of
$5.0 million as required by Nasdaq Marketplace Rules 4450(a)(5)
and 4450(a)(2) for continued listing.

Current bid and ask quotes on HealthGate's common stock, which
will continue to use the ticker symbol "HGAT" will be available
at the OTCBB's Web site http://www.otcbb.comand most financial
portals, such as that provided at http://finance.yahoo.com
HealthGate plans to continue to make all its filings with the
Securities and Exchange Commission as required for continued
listing on the OTCBB.

William Reece, CEO of HealthGate stated, "Although we are
disappointed in not being able to remain on the Nasdaq National
Market, we believe that the OTCBB's dissemination of real-time
quotes and other information make the over the counter market a
viable, fair market for our stock. Regardless of where investors
go to trade or get quotes on HealthGate's stock, HealthGate
remains steadfast in its commitment to deliver quality
healthcare content and services to its customers."

HealthGate Data Corp. (OTCBB: HGAT) is a market-leading provider
and electronic publisher of healthcare information. HealthGate
offers customers the most comprehensive content repository of
healthcare information, unrivaled in its breadth and depth of
content. HealthGate's authoritative content is used by more than
600 hospitals in the U.S. to provide the capability to drive
down costs through more in the U.S. to provide the capability to
drive down costs through more effective research and treatment,
regulatory compliance, and clinician and patient education. The
company's multi-dimensional XML-based content can be delivered
electronically across virtually any technology and tightly
integrated into a variety of applications used by its customers.

Since 1999, HealthGate has become an integral part of operations
in approximately 12 percent of all hospitals in the United
States. Some of the most respected healthcare institutions in
the world, including Brigham and Women's Hospital, Swedish
Medical Center, and HCA now utilize the data provided by
HealthGate. The company's content repository is supported by a
flexible, multi-dimensional technology infrastructure designed
to enable HealthGate to rapidly develop products and services
for customers as well as additional markets such as
pharmaceutical companies and payors (insurance companies,
governments, and self-insured organizations).


ICG: Creditors Will Control Reorganized Debtors' Board
------------------------------------------------------
Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom
gives notice that, in accordance with Section 5.7 of the Second
Amended Joint Plan of Reorganization of ICG Communications,
Inc., the members of the initial Board of Directors for
Reorganized ICG are:

           Name                              Appointed by
           ----                              ------------
     Randall E. Curran                          Debtors

Background:  Randall E. Curran was named Chief Executive Officer
in September 2000 .  Prior to his position at the Company, Mr.
Curran most recently served as Chairman, President and Chief
Executive Officer of Thermadyne Holdings Corporation. Mr. Curran
also served as vice president of Finance for Clarke Industries,
a division of Cooper Industries. Mr. Curran received a Bachelor
of Arts in Economics from DePaul University and a Master of
Business Administration from Loyola University Chicago.

Robert C. Davenport            Cerberus Capital Management, L.P.

Background:  Robert C. Davenport is currently a Managing
Director of Cerberus Capital Management, L.P. Mr. Davenport
joined Cerberus from Vestar Capital partners, a middle-market
leveraged buyout firm, where he was a principal until 1995. At
Vestar, he was responsible for identifying, analyzing and
executing leveraged buyout opportunities. Mr. Davenport also
worked in the M&A group at Drexel Burnham and spent
two years investing a small pool of capital in special
situations in the equity, high yield, and derivatives markets.
Mr. Davenport is a graduate of the University of California.

Bruce Forsyth                 Cerberus Capital Management, L.P.

Background:  Bruce Forsyth is a founding member of REO
Consulting Group , L.L.C. , advising technology investment
companies regarding strategic and tactical business planning ,
market assessment, and restructuring/turnaround situations.
Prior to co-founding REO, Mr. Forsyth spent 20 years in the
communications industry serving in executive level positions for
OnTera Broadband, Inc., Davel Communications, Intermedia
Communications and Frontier Communications.

Mark A. Neporent              Cerberus Capital Management, L.P.

Background:  Mark A. Neporent is the Chief Operating Officer and
Managing Director of Cerberus Capital Management, L.P. Mr.
Neporent joined Cerberus in 1998 from Schulte Roth & Zabel LL P,
a New York City-based law firm where he was a partner in the
firm's Business Reorganization and Finance Group. He is a
graduate of Lehigh University and a graduate of Syracuse
University College of Law.

Seth P. Plattus                Cerberus Capital Management, L.P.

Background:  Seth P. Plattus is currently a Managing Director at
Cerberus Capital Management, L.P. where he has worked since
1994. Prior to his work at Cerberus, Mr. Plattus spent four
years at The Blackstone Grou p L.P. Mr. Plattus also worked for
four years as an attorney at Skadden, Arps, Slate, Meagher &
Flom. He is a graduate of Cornell University and a graduate of
the University of Pennsylvania Law School.

Jill Thoerle                   Cerberus Capital Management, L.P.

Background:  Jill Thoerle is a founding member of REO Consulting
Group , L.L.C., advising technology investment companies
regarding strategic and tactical business planning , market
assessment, and restructuring/turnaround situations. Prior to
co-founding REO, Ms. Thoerle served as President and Chief
Executive Officer of OnTera Broadband, Inc.  Ms. Thoerle has
held executive positions with AT&T, Teleport Communications
Group, Inc., MCI Communications, Inc., and Deloitte & Touche
Management Consulting.

Joseph R. Thornton           W.R. Huff Asset Management Co., LLC

Background:  Joseph Thornton, 40, is counsel to W.R. Huff Asset
Management Co., LLC, and has worked with the firm for more than
ten years. Mr. Thornton received a BA degree (Economics), and JD
and MBA degrees from the University of North Carolina at Chapel
Hill. Mr. Thornton has served on the Boards of Directors of
e.spire Communications and Uniflex, Inc. and as an observer to
the Board of Price Communications. Mr. Thornton is a Chartered
Financial Analyst.

William J. Connors           W.R. Huff Asset Management Co., LLC

Background:  William Connors is a Portfolio Manager for W.R.
Huff Asset Management Co., LLC and the Chief Investment Officer
of WRH Partners Global Securities, LP. He has worked with the
Huff group since 1992. Mr. Connors received his undergraduate
degree in Applied Mathematics from Drew University and his MBA
from Columbia University. Mr. Connors is a Chartered Financial
Analyst.

Thomas Doster, IV                         Creditors Committee

Background:  Thomas Doster is an Executive Director at Morgan
Stanley, and has worked with the company since 1996. Prior to
joining Morgan Stanley, Mr. Doster served as a distressed
analyst at Goldman Sachs. Mr. Doster received his undergraduate
degree from Cornell University. (ICG Communications Bankruptcy
News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


IT GROUP: Wants to Stretch Plan Filing Exclusivity to August 14
---------------------------------------------------------------
The IT Group, Inc. and its debtor-affiliates ask the Court to
extend the exclusive periods during which they may file and
solicit acceptances of a chapter 11 plan. The Debtors ask for an
extension of their time to propose and file a plan through and
including August 14, 2002 and that the time within they can
solicit creditors' acceptance of that plan be extended through
October 14, 2002.

According to Marion M. Quirk, Esq., at Skadden Arps Slate
Meagher & Flom LLP in Wilmington, Delaware, an extension of the
Debtors' Exclusive Periods will facilitate the Debtors'
restructuring efforts by allowing the Debtors to formulate
consensual plan to fairly and efficiently treat the Debtors'
creditors. Meanwhile, terminating the Exclusive Periods could
result in a competing plan or plans being filed by an entity or
group of entities, which favors their own interests. The
requested time will afford the Debtors an opportunity to work
with creditor constituencies toward the common goal of
consensual plan of reorganization.

Mr. Quirk informs the Court that, in the approximately three
months since the petition date, the Debtors primary focus has
been the stabilization of their business operations and the
marketing, auction and sale of substantially all of those
operations within the competitive processes of Chapter 11. The
Debtors cases are both large and complex. These successful
efforts have culminated in the approval and consummation of the
sale of substantially all of the Debtors' assets to The Shaw
Group. The Debtors have also responded to the operational and
administrative demands of these cases and have worked diligently
to advance the reorganization process and facilitate
negotiations concerning key issues in the cases. The Debtors
filed their Schedules and Statements in these cases last month
and are working diligently to comply with the US Trustee's
monthly reporting requirements.

The motion will be heard on May 24, 2002.  By application of
Local Bankruptcy Rule 9006-2, the plan filing deadline is
extended through the conclusion of that hearing. (IT Group
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


IMPSAT FIBER: Nasdaq Delists Shares Effective May 24, 2002
----------------------------------------------------------
IMPSAT Fiber Networks, Inc. (NASDAQ: IMPT), a leading provider
of integrated telecommunications services in Latin America, has
received notice from NASDAQ concerning the delisting of the
Company's common stock.

Impsat's shares was delisted from the Nasdaq Stock Market,
effective May 24, 2002, due to the Company's failure to meet
Nasdaq's maintenance requirement for continued listing of its
common stock with respect to minimum bid price and minimum
market value of public float. Impsat is currently focusing its
efforts on implementing a plan to restructure its financial
obligations and balance sheet and, accordingly has determined
not to appeal Nasdaq's decision. The Company expects that its
common stock will be immediately eligible to trade on Nasdaq's
OTC Bulletin Board.

As a result of the primary market's delisting, the certificates
of deposit quoted in the Buenos Aires Stock Exchange and the
common stock quoted in Latibex, the Latin American Equities
Market of the Madrid Stock Exchange, are also expected to be de-
listed.

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

In compliance with Marketplace Rule 4310 (C)(13), Impsat informs
that it did not pay its annual listing fee.

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


JONES MEDIA: KPMG Replaces Andersen as Independent Accountants
--------------------------------------------------------------
On May 8, 2002, Arthur Andersen LLP was dismissed as the
independent accountant for Jones Media Network, Ltd. effective
upon completion of its work regarding the Company's financial
statements for the quarter ended March 31, 2002, and KPMG LLP
was appointed as the new independent accountant for the Company
to replace Andersen for the year ending December 31, 2002. The
decision to dismiss Andersen and to appoint KPMG was recommended
by the Audit Committee of the Board of Directors and was
approved by the Board of Directors at its meeting on May 8,
2002.

Jones Media is one of the leading independent providers of radio
programming, serving some 3,200 affiliate stations with news,
talk, and music programs and advertising sales services. Its
shows include The Crook & Chase Country CountDown and The
McLaughlin Radio Hour. On TV, Jones Media owns video music cable
network Great American Country, which reaches nearly 13 million
subscribers. It also runs infomercial channel Product
Information Network (a joint venture with Cox Communications.)
The company reported a total shareholders' equity deficit of
about $38 million as of March 31, 2002.


KNOWLEDGE HOUSE: Defaults on Filing Annual Financial Statements
---------------------------------------------------------------
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.


LTV: PNC Bank Tapped as Retirees' Health Plan Principal Trustee
---------------------------------------------------------------
Americana Financial Services, Inc., the outreach and service
center for The Steel Worker Benefits Plan and Trust, said that
PNC Bank, NA, headquartered in Pittsburgh, PA, has agreed to
provide trustee and custodial services for The Steel Worker
Benefits VEBA Trust. Steel Worker Benefits Plus is the Voluntary
Employee Beneficiary Association Health and Welfare Plan
arranged by and for LTV retirees and former employees with the
assistance of Americana Financial.

For post-65 Medicare eligible retirees, this plan fills the gaps
in Medicare, and is as low as $93.00 per month. An optional
Generic-only Prescription drug plan is available for $32.50 per
month. Members may participate beginning May 1, 2002 and the
open enrollment period for the plan extends through June 30,
2002. For those pre-age 65, the plan is available for as little
as $212 per month for an individual and $489 per month for a
family.

According to Arlene Yocum, Executive Vice President of PNC
Advisors, a subsidiary of The PNC Financial Services Group,
Inc., "As principal trustee to the Steel Worker Benefits Plus
VEBA Trust, we are pleased to provide professional trustee and
custodial services to enable retirees and former employees of
LTV Steel to have access to healthcare benefits and related
services."

The PNC Financial Services Group, Inc., is one of the nation's
largest diversified financial services organizations, providing
regional community banking, corporate banking, real estate
finance, asset-backed lending, wealth management, asset
management and global fund services.

According to Samuel H. Fleet, President and CEO of
Americana/NEBCO, the addition of PNC as principal trustee
further demonstrates the commitment to excellence and
professional service sought by the Steel Worker Benefits Plus
Plan. "PNC is well known throughout the country, both in
business and personal financing settings. With PNC as principal
trustee, LTV retirees and former employees can feel secure that
their plan maintains an institutional trustee and custodian and
that assets are prudently managed. We are pleased to partner
with PNC and look forward to a long-term relationship," said
Fleet.

Plan members can access their benefits and a health information
resource center online at http://www.MemberNetUSA.net/steel To
service the former employees of LTV a dedicated, toll free
number has been established at: 800-717-7895.

Due to LTV's recent bankruptcy, the majority of its retirees and
laid off employees have been left with limited health plan
options, therefore, Americana will also administer other health
and life benefits recently terminated by LTV, including Dental,
Life (including a Senior Life Plan) and a Critical Illness Plan.

DebtTraders reports that LTV Corporation's 11.750% bonds due
2009 (LTV2) are quoted between 0.5 and 1.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LTV2for some
real-time bond pricing.


MARTIN INDUSTRIES: Accountants Express Going Concern Doubt
----------------------------------------------------------
As a result of the $15.9 million net loss incurred by Martin
Industries, Inc. during fiscal 2001, and the fact that there can
be no assurance that any new credit arrangement will be
finalized or further extensions granted beyond the current
extension, the Company received a going concern qualification
from its independent public accountants in connection with its
audited financial statements for the year ended December 31,
2001.

Net sales in the 13-week period ended March 30, 2002 decreased
to $7.1 million from $7.2 million in the 13-week period ended
March 31, 2001, a decrease of $100,000, or 1.4%.

Gross sales of home heating products increased to $6,967,000 in
the first quarter of 2002 from $6,911,000 in the first quarter
2001, an increase of $56,000, or .8%. Home heating products
sales remained relatively stable despite difficult economic
conditions that caused housing starts and improvements to
falter.

Gross sales of other products decreased $197,000, or 50.9%, in
the first quarter of 2002 to $190,000 as compared to $387,000 in
the first quarter of 2001. The decrease in sales is primarily
due to a reduction in OEM business.

                       Gross Profit (Loss)

Gross profit in the first quarter of 2002 was $271,000 as
compared to a gross loss of $509,000 in the first quarter of
2001, an increase of $780,000. Gross margin, defined as gross
sales less production costs, increased slightly to $2,669,000 in
the first quarter of 2002 from $2,638,000 in the first quarter
of 2001.

The gross margin on sales of home heating products in the first
quarter of 2002 was $2.5 million, or 35.7% of home heating
sales. The gross margin on home heating products in the first
quarter of 2001 was $2.4 million, or 34.8% of home heating
sales. The slight increase in gross margin percentage was
primarily the result of the increase in gross sales of higher
margin wood burning fireplaces and unvented fireboxes.

The gross margin on sales of other products in the first quarter
of 2002 was $133,000, or 70% of other sales. The gross margin on
sales of other products in the first quarter of 2001 was
$215,000, or 55.6% of other products sales. The increase in
gross margin percentage in the other segment was
primarily the result of a price increase in home heating
replacement parts in August 2001.

The financial statements for the year ended December 31, 2001
were prepared on a going concern basis. As shown in the
financial statements, as presented in the Company's Annual
Report on Form 10-K, as filed with the Securities and Exchange
Commission on April 1, 2002, during the year ended December 31,
2001, the Company incurred a net loss of $15.9 million. The
Company has experienced significant losses during the previous
four years, and these losses could continue during 2002. Such
losses have resulted in the Company having negative net worth of
$101,000 at March 30, 2002. The Company's continuation as a
going concern is dependent upon its ability to obtain
replacement permanent financing from alternate sources. In
addition, the Company must be able to generate sufficient cash
flow to meet its obligations on a timely basis, must be able to
comply with the terms of its existing credit line, and, if
replaced, with the terms of its replacement financing, and
ultimately must be able to return to profitable operations.

Martin Industries finances interim working capital requirements
with its bank line of credit with its principal lender. Interest
on the line of credit is payable monthly at a rate of 2% in
excess of the lender's prime rate. As of March 30, 2002, a
maximum of $7.5 million was available to the Company under its
line of credit, with the actual amount available under the line
of credit being based on the value from time to time of certain
assets (i.e., the borrowing base) securing the line of credit.
The line of credit is secured by the receivables, equipment and
inventory of the Company. As of March 30, 2002, the outstanding
balance was $5.9 million with $43,000 available.

The line of credit with the principal lender has been extended
to July 1, 2002. The Company is currently not in compliance with
certain debt covenants under its amended credit agreement with
its principal lender. The Company did obtain a waiver of these
covenants through March 31, 2002.

Martin Industries designs, manufactures and sells high-end, pre-
engineered gas and wood-burning fireplaces, decorative gas
logs,fireplace inserts and gas heaters and appliances for
commercialand residential new construction and renovation
markets, and do-it-yourself utility trailer kits known as NuWay.


MEDMIRA INC: Closes $3.25 Million Private Placement Financing
-------------------------------------------------------------
MedMira Inc. announced that it had completed a private placement
financing originally announced in a press release dated May 14,
2002. As announced, the private placement involved the issuance
of 2,500,000 common shares at $1.30 per share and warrants to
purchase 1,250,000 common shares for a one year period at a
purchase price of $2.00 per share. The private placement was
concluded directly by MedMira in reliance upon applicable
securities exemptions. The 2,500,000 common shares issued are
subject to a four-month hold period.

"MedMira is poised to capture short-term profitability and long
term success," said Stephen Sham, Chairman and CEO of MedMira.
"The results of this financing will allow MedMira to disburse
outstanding accounts and provide additional funds to scale up
manufacturing in anticipation of the market demand associated
with the upcoming pre-market approval by the FDA for sales
of our Reveal(TM) Rapid HIV Test in the United States." In
addition, MedMira intends to utilize the proceeds of the private
placement to enhance new developments, marketing and general
corporate purposes.

MedMira is a publicly traded (TSX Venture Exchange:MIR-X), ISO
9001 registered Canadian medical biotechnology company that
develops, manufactures and markets qualitative, in vitro
diagnostic tests for the detection of antibodies to certain
diseases, such as HIV, in human serum, plasma or whole blood.
MedMira's diagnostic test technology is designed to provide a
quick portable, safe and cost-effective alternative to
conventional laboratory testing. The latest development of
MedMira's rapid testing platform includes a rapid detection test
for the protective vaccinia antibodies produced in the human
body in response to smallpox vaccination (For more information,
see "New Developments" at www.medmira.com). In addition to
seeking FDA approval for its Rapid HIV Test, MedMira is actively
seeking worldwide approvals for its complete product line.

                         *    *    *

As previously reported, MedMira Inc. has completed arrangements
first announced on December 3, 2001 for a loan facility of $1.4
million from a group of individuals, including the Chairman
and CEO, Stephen Sham, and director Dr. Michael Giuffre.

The terms of the loan facility provide for interest to be paid
at an annual rate of 8%. The loans have a minimum term of 6
months, and are repayable as soon as funds shall be available
and before the Company will pay other creditors other than trade
creditors in the ordinary course of business. The Company has
agreed to pay the lenders either a bonus in the form of common
shares equivalent to 20% of the principal amount of the loan
or a warrant to purchase common shares equivalent to 40% of the
principal of the loan at a 20% discount to market price. In the
aggregate, this means that the company has sought approval from
the CDNX to issue up to 153,329 common shares as a share bonus
and warrants to purchase 60,000 common shares. The number of
shares to be issued and the exercise price for the warrants were
calculated in accordance with the requirements of the CDNX at
prices that reflect the fact that the funds were advanced over
an approximate 3 month period.


METROCALL INC: Executes Pacts with Creditors for Restructuring
--------------------------------------------------------------
Metrocall, Inc., (OTC Bulletin Board:MCLLQ), one of the nation's
largest wireless data and messaging companies, executed
agreements with its primary creditor constituencies, namely the
senior secured lenders of Metrocall's $133 million credit
facility and a group of Metrocall's unsecured public noteholders
representing in excess of two-thirds of the total $627 million
of principal outstanding.

The agreements establish the terms and conditions of a pre-
negotiated plan of reorganization soon to be proposed and
implemented through a chapter 11 filing under the United States
Bankruptcy Code.

William L. Collins III, Metrocall's Chairman and Chief Executive
Officer, commented that, "these agreements represent the
collective efforts of Metrocall and its primary creditor
constituencies over the past year to develop a consensual plan
for the company's corporate restructuring intended to maximize
the return to stakeholders. The company believes that its
achieving consensus on a pre-negotiated plan will be a key
element of its ability to now implement its plan of
reorganization within a short period of time and in an efficient
manner."

Metrocall's pre-negotiated plan will involve a corporate
restructuring and a recapitalization of the company's existing
debt that will include the establishment of a primary holding
company, the consolidation of Metrocall's four existing and
wholly-owned operating subsidiaries into single operating
entity, and the transfer of Metrocall's intellectual property
and FCC licenses into a single wholly-owned license subsidiary.

Metrocall believes that this corporate restructuring will help
the company to further benefit from the resulting operational
efficiencies.

In accordance with the pre-negotiated plan, Metrocall's $133
million of existing senior secured debt will be exchanged for

     (i) a $60 million secured term note to be issued by the
reorganized operating entity,

    (ii) $20 million of paid-in-kind notes to be issued by the
reorganized holding company,

   (iii) preferred stock to be issued from the reorganized
holding company with a $53 million liquidation preference and

    (iv) 42% of the new common stock of the reorganized holding
company (subject to dilution of up to 7% for options provided to
employees under a new stock option plan to be implemented post-
restructure).

Metrocall further expects that its general unsecured creditors,
including the holders of its unsecured public notes, will be
exchanged for a pro rata share of (i) preferred stock of the
reorganized holding company with a $5 million liquidation
preference and (ii) 58% of the new common stock to be issued
(also subject to dilution of up to 7% for the aforementioned
stock option plan to be implemented).

Pursuant to the plan, ninety-five percent of the total voting
rights shall be with the preferred stock until such stock is
fully redeemed. Metrocall's plan also provides that general
unsecured creditors of its wholly owned subsidiaries will
receive payment of 100% of the principal amount of their claims
upon confirmation of the proposed plan of reorganization.

Metrocall believes that the agreements with its senior secured
lenders and unsecured public noteholders will enable Metrocall
to commence its chapter 11 cases in early June 2002.

Metrocall intends to move as quickly as possible to effect its
restructure and to achieve confirmation of its plan prior to
October 31, 2002 and the company expects that its nationwide
business operations will continue to operate without
interruption or disruption during its reorganization process.

Metrocall's agreement for its pre-negotiated plan is further
evidence of Metrocall's continued and proactive efforts to
better align its business to stem the negative trends
experienced within the industry over the last several years.

In addition to Metrocall's on-going cost saving initiatives (in
the first quarter of 2002 Metrocall reduced operating expenses
by $15.4 million as compared to the first quarter of 2001 which,
on an annual basis represents a reduction of over $60.0
million), Metrocall's reorganization will permit the company to
substantially deleverage itself and will provide a viable
capital structure in light of declining traditional revenues and
competitive pressures.

Metrocall, therefore, believes that these changes are essential
for the company's long-term viability. Additionally, Metrocall's
current operations are generating sufficient cash flows such
that no debtor-in-possession financing will be needed to
maintain operations or to provide the cash distributions
necessary to implement the proposed plan upon emergence from
chapter 11.

Metrocall, Inc. headquartered in Alexandria, Virginia, is one of
the largest wireless data and messaging companies in the United
States providing both products and services to nearly five
million business and individual subscribers. Metrocall was
founded in 1965 and currently employs approximately 2,300 people
nationwide.

The company currently offers two-way interactive messaging,
wireless e-mail and Internet connectivity, cellular and digital
PCS phones, as well as one-way messaging services. Metrocall
operates on many nationwide, regional and local networks and can
supply a wide variety of customizable Internet-based information
content services.

Also, Metrocall offers totally integrated resource management
systems and communications solutions for business and campus
environments. Metrocall's wireless networks operate in the top
1,000 markets across the nation and the company has offices in
more than thirty states. For more information on Metrocall
please visit its Web site and on-line store at
http://www.Metrocall.comor call 800-800-2337.

DebtTraders reports that Metrocall Inc.'s 10.375% bonds due 2007
(MCALL2) are quoted between 4 and 6. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=MCALL2for


NII HOLDINGS: Commences Chapter 11 Reorganization in Delaware
-------------------------------------------------------------
NII Holdings, Inc., previously known as Nextel International,
has reached an agreement in principle with its main creditors,
Motorola Credit Corporation, Nextel Communications and a
consortium of bondholders for a restructuring of its outstanding
debt.  The contemplated restructuring would reduce the Company's
total indebtedness by about 80%, from its current level of $2.7
billion to less than $500 million.

The agreement in principle contemplates new capital of $190
million, $140 million of which will be in the form of a rights
offering of new senior secured notes and warrants to
bondholders.  A consortium of NII bondholders will backstop at
least $75 million, with Nextel Communications backstopping
up to $65 million of the rights offering to NII bondholders.
Nextel Communications has also agreed to provide $50 million of
additional funding in return for a cross border spectrum sharing
arrangement.  The agreement also incorporates a deferral of the
principal payments associated with the secured indebtedness owed
to Motorola Credit Corporation.

"We are pleased to see that both our creditors and other
stakeholders realize the value proposition of NII and its
operating subsidiaries throughout Latin America," said Steve
Shindler, CEO of NII. "Over the past several years we have grown
from no customers to over 1 million subscribers currently
generating the best wireless financial metrics in Latin
America."

NII also announced that it filed today for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in Delaware.  None of
NII's foreign subsidiaries have filed for Chapter 11
reorganization.  NII's foreign subsidiaries will continue
operating in the ordinary course of business during the Chapter
11 process, providing wireless communication services to
existing and new customers.

The restructuring plan is expected to provide for conversion of
all unsecured claims into equity of reorganized NII, with the
majority of equity being owned by the new noteholders.  All
current equity interests in NII will be extinguished and Nextel
Communications will no longer own a majority interest in NII.

"Our collective team of 3,500 employees have built this business
with their talent, energy and experience for long-term success.
The agreement reached with our creditors is a critical step in
recapitalizing our business and ensuring that we can continue
executing on our plans focusing on creating value for our
customers, employees and financial sponsors."  Shindler
continued, "Our objective is to move through this reorganization
process as quickly as possible without disruption to our
operations or inconvenience to our subscribers.  We remain
committed to providing the highest quality service to our
customers, who depend on reliable mobile communications in
their business."

NII Holdings, Inc., formerly known as Nextel International, is a
substantially wholly owned subsidiary of Nextel Communications
(Nasdaq: NXTL).  NII has operations in Mexico, Brazil, Peru,
Argentina, Chile and the Philippines. NII offers a fully
integrated wireless communications tool with digital cellular,
text/numeric paging, wireless Internet access and Nextel Direct
Connect(R), a digital two-way radio feature. Visit the Web site
at http://www.nextelinternational.com


NII HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: NII Holdings, Inc.
             10700 Parkridge Boulevard, Suite 600
             Reston, VA 20191
             fka Nextel International, Inc.
             fka McCaw International, Inc.

Bankruptcy Case No.: 02-11505

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
NII Holdings (Delaware), Inc.              02-11506

Type of Business: The Debtor, long with its wholly-owned non-
                  debtor subsidiaries, provides wireless
                  communication services targeted at meeting
                  the needs of business customers in selected
                  international markets, including, inter alia,
                  Mexico, Brazil, Argentina and Peru.

Chapter 11 Petition Date: May 24, 2002

Court: District of Delaware (Delaware)

Debtors' Counsel: Daniel J. DeFranceschi, Esq.
                  Michael Joseph Merchant, Esq.
                  Paul Noble Heath, Esq.
                  Richards, Layton & Finger
                  One Rodney Square, P.O. Box 551
                  Wilmington, Delaware 19899
                  302 658-6541
                  Fax : 302-651-7701

Total Assets: $1,244,420,000

Total Debts: $3,266,570,000

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Bank of New York           13% Senior Redeemable  $950,000,000
North La Salle Street,     Discount Notes Due
Suite 1020                April 15, 2007
Chicago, Illinois 60602
312-827-8547
Fax: 312-827-8524

Bank of New York           12.125$ Senior Serial  $730,000,000
Dan Donovan                Redeemable Notes Due
North La Salle Street      April 15, 2008
Suite 1020
Chicago, Illinois
312-827-8547
Fax: 312-827-8524

Bank of New York           12.75$ Senior Serial   $650,000,000
Dan Donovan                Redeemable Discount
North La Salle Street      Notes Due August 1, 2010
Suite 1020
Chicago, Illinois
312-827-8547
Fax: 312-827-8524

Bank of Boston             Unsecured Deficiency    $17,689,242
Marcelo Costa              Claim on Secured
317 Ella Grasso Turnpike   Financing Handset Facility
Windsor Locks, CT 06096
617-434-1766
Fax: 617-434-0911

Cordillera Communications  Obligation Related      $10,000,000
Corp.                     to Asset Acquisition
Karl Meier
1528 Wazee Street, Suite 200
Denver, Colorado 80202
303-526-4224
Fax: 303-405-0465

LHS Sema                   Trade Debt               $1,122,679
Jacci Kelley
6 Concourse Parkway,
Suite 2700
Atlanta, Georgia 30328
678-258-1663
Fax: 678-258-1432

Openwave Systems           Trade Debt                 $389,502
Farrel Freeman
1400 Seaport Boulevard
Redwood City, California 94063
650-480-7826
Fax: 650-480-2579

MACH                       Trade Debt                 $147,590

Motorola Israel            Trade Debt                  $97,000

Bowne                      Trade Debt                  $90,583

Jones, Day, Reavis & Pogue  Professional Services      $50,000

Ernst & Young              Trade Debt                  $20,000

Wireless Services Corp.    Trade Debt                  $18,750

CMCS                       Trade Debt                  $14,000

Rockwell Solutions, Inc.   Trade Debt                  $12,900

Helix Communications       Trade Debt                   $9,000

Hewlett Packard            Trade Debt                   $6,666

AT&T                       Trade Debt                   $6,629

Sweet Basil (Sakuta)       Trade Debt                   $4,200

CDW Computer Centers       Trade Debt                   $2,321


NATIONAL AIRLINES: U.S. Trustee Seeks Reduction of Dresdner Fees
----------------------------------------------------------------
The U.S. Trustee for the District of Nevada objects to the
Fourth and Final Fee Application of Dresdner, Kleinwort,
Wasserstein, Inc., serving as Financial Advisor to National
Airlines, Inc., for compensation for professional services
rendered and for reimbursement of expenses from December 20,
2001 through March 6, 2002.

Following the terrorist attacks of September 11, 2002, airline
companies suffered enormous losses, where Congress enacted the
Air Carrier Loan Guarantee Program to help eligible carriers
through the crisis.  The Trustee explains that the most likely
means of obtaining debtor financing was through that guarantee
program, and that JPMorgan was better able to facilitate the
financing than Dresdner Kleinwort.

The Trustee determines that Dresdner Kleinwort is not performing
all of the tasks outlined in the employment contract and wants
the Court to deny the application or reduce the fee to the
actual value of services rendered.

Dresdner Kleinwort states that it has already received
$1,126,483. The present application seeks approval and payment
of:

     i) $2,129,032 for fees and reimbursement of $64,455 for
        expenses for the "Final Compensation Period";

    ii) final approval of compensation for professional services
        rendered after confirmation of the plan; and

   iii) payment of the remaining balance $ 1,067,004 for
        services and expenses for the Fourth Compensation
        Period.

The fees ultimately approved must correspond to the actual tasks
performed, results achieved, and their value to the estate.  In
this case, the Trustee asserts that there is insufficient
showing that compensation in the amount sought by Dresdner
Kleinwort is appropriate.

Dresdner Kleinwort's effective blended hourly rate is $1,474 for
the fourth application period and $635 for their entire period
of their involvement in the case.  If the total $4 million
capped fee is awarded as they requested, the effective blended
hourly rate would be $1,193 based upon the 3,352 hours worked.
The Trustee asserts that compensation at this level for the work
performed is not appropriate.

The Trustee illustrates what he believes would be appropriate
compensation for Dresdner Kleinwort's work through March 6,
2002. Assuming that the suggested blended rates are appropriate
and further assuming no challenge due to duplication of effort,
the true value of the work performed through March 6, 2002 would
be $1,096,080 with a total blended hourly rate of $327 rather
than the fees requested by the applicant.

National Airlines currently serves Chicago Midway, Chicago
O'Hare, Dallas/Ft. Worth, Los Angeles, Miami, Newark, New York
JFK, Philadelphia and San Francisco with nonstop flights to and
from its Las Vegas hub.


NEXELL THERAPEUTICS: Fails to Maintain Nasdaq Listing Standards
---------------------------------------------------------------
Nexell Therapeutics Inc. (Nasdaq:NEXL) announced the receipt of
a letter from Nasdaq notifying the Company that its common stock
had failed to maintain a minimum bid price of $1.00 over the
last thirty consecutive trading days, as required by The Nasdaq
National Market Marketplace Rules. The letter states that the
Company will have until August 19, 2002 to regain compliance or
written notification will be given that the Company's securities
will be delisted. The Company has the right to appeal such a
decision. The Company believes it unlikely that it will be able
to regain compliance with these listing requirements. Moreover,
in light of the Company's previously announced determination to
wind down operations, it is likely that Nasdaq will suspend or
terminate trading of the Company's common stock and publicly-
traded warrants.

Located in Irvine, California, Nexell Therapeutics Inc.
(Nasdaq:NEXL) is a biotechnology company that is focused on the
modification or enhancement of human immune function and blood
cell formation utilizing adult hematopoietic (blood-forming)
stem cells and other specially prepared cell populations. Nexell
is developing proprietary cell-based therapies that address
major unmet medical needs, including treatments for genetic
blood disorders, autoimmune diseases, and cancer.


OWENS CORNING: Seeks Removal Period Extension to Feb. 21, 2003
--------------------------------------------------------------
Owens Corning and its debtor-affiliates move the Court to extend
to February 21, 2003 the deadline within which they must remove
actions pending before the courts throughout the United States.

Norman L. Pernick, Esq., at Saul Ewing LLP in Wilmington,
Delaware, urges the Court to grant the relief requested because
at this stage in their Chapter 11 cases, the Debtors have not
had the opportunity to evaluate and determine which actions, if
any, they must remove.  This is because the Debtors' management
and counsel are devoting substantial time to numerous
bankruptcy-related matters, including administering the Chapter
11 cases and managing the Debtors' day-to-day business
operations as well.

Attesting to the deep involvement of Debtors' management and
counsel in matters related to the bankruptcy proceedings, Mr.
Pernick cites these accomplishments since the Petition Date:

A) The Debtors' management have focused on stabilizing the
   Debtors' businesses and responding to the many time-consuming
   demands that accompany the commencement and management of a
   Chapter 11 case, including responding to inquiries from
   vendors, taxing authorities, utilities, landlords, customers,
   professionals, the Committees, the Futures Representative,
   the Bank Group and other parties-in-interest.

B) The Debtors have entered into a Standstill and Waiver
   Agreement, approved by the Court on or about June 19, 2001,
   with respect to the adversary complaint and accompanying
   request for injunctive relief filed at the outset of these
   cases against 47 banks and their assignees and participants.
   The Debtors continue to negotiate with the three banks which
   are not parties to this agreement.

C) In accordance with Stipulation And Order Regarding Resolution
   of Inter-Creditor Issues, the Debtors have devoted and
   continue to devote substantial effort towards the assembly of
   documents and other information relating to certain inter-
   creditor issues and have established an information and
   document depository with respect to this data.  The
   Participating Parties, who have access to the information and
   document depository, are reviewing and analyzing the
   information in an attempt to resolve the inter-creditor
   issues.

D) The Debtors have sought and obtained Court approval under
   Section 363(b) of the Bankruptcy Code for various special
   business transactions.

E) The Debtors have amended their schedules of assets and
   liabilities, in connection with their filing of a motion for
   the establishment of a Bar Date for the filing of non-
   asbestos claims against the Debtors.

F) The Debtors have sought and obtained Court approval of an
   April 15, 2002 Bar Date for the filing of non-asbestos
   claims.

G) The Debtors have sought and obtained Court approval under
   Section 365 of the Bankruptcy Code to reject various unneeded
   executory contracts.

H) The Debtors have sought and obtained Court approval under
   Section 365 of the Bankruptcy Code to assume, and assume as
   modified, certain executory contracts.

I) The Debtors have engaged in an ongoing review of their
   remaining executory contracts and unexpired leases to
   determine whether the rejection or assumption and assignment
   of their executory contracts is in the best interests of
   their respective estates.

J) The Debtors have begun an analysis of the asbestos claims
   asserted against them and the most efficient and effective
   way of addressing tort claims in the context of a
   Reorganization Plan.

K) The Debtors have identified various pre-petition, mutual
   obligations with certain vendors/creditors that are subject
   to the setoff provisions of Section 553 of the Bankruptcy
   Code, and have begun to negotiate and resolve them.

L) The Debtors have developed a procedure for the evaluation and
   processing of the various claims which are expected to be
   asserted against the Debtors' estates.

M) The Debtors have begun to discuss a preliminary strategy for
   the development of a Reorganization Plan.

N) The Debtors have continued to comply with the various
   administrative requirements imposed upon Chapter 11 debtors,
   including the timely filing of monthly operating reports.

Against this backdrop, Mr. Pernick says, the Debtors have not
had sufficient time to analyze each of the actions and to
determine which, if any, should be removed to the Bankruptcy
Court pursuant to Section 9027(a) of the Bankruptcy Code.

Mr. Pernick submits that an extension of the deadline to remove
actions is necessary in order to permit the Debtors' management
and their professionals to continue to focus on the
administration of the Chapter 11 cases. The requested extension
is to give the Debtors sufficient opportunity to evaluate the
actions and determine whether removal of any of them is
appropriate.

Mr. Pernick assures that none of the Debtors' adversaries will
be prejudiced by the requested extension because each of the
actions is stayed by operation of Section 362(a) of the
Bankruptcy Code. The requested extension will also not prejudice
the rights of parties in the actions since, in the event that
the Debtors seek to remove any of the individual actions, a
party to that action may seek to have it remanded thereafter.

Hearing on the motion will be on June 20, 2002. (Owens Corning
Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

DebtTraders reports that Owens Corning's 7.700% bonds due 2008
(OWENC4) are quoted between 41.75 and 43. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=OWENC4for
real-time bond pricing.


PACIFICARE: Fitch Ups Bank & Senior Secured Debt Ratings to BB
--------------------------------------------------------------
Fitch Ratings has upgraded PacifiCare Health System, Inc.'s
(PacifiCare) existing bank and senior secured debt ratings to
'BB' from 'BB-'. Concurrently, Fitch upgraded PacifiCare's
senior unsecured debt rating to 'BB-' from 'B+'. The Rating
Outlook is Stable. The rating action affects approximately $860
million of debt outstanding.

The rating action reflects the significant improvement in
PacifiCare's capital structure following the successful sale of
$500 million 10.75% senior notes due June 2009, the reduction in
outstanding bank debt, and the extension in the maturity of the
company's remaining bank debt. The sale of the notes settled on
May 21, 2002 at 99.389 to yield proceeds of $497 million.

The company used $370 million of the proceeds to reduce
outstanding bank debt, which satisfied the conditional
requirement in its bank agreement to extend the maturity of its
existing facility by two years, to January 3, 2005. In addition,
PacifiCare used $85 million of proceeds to fund a restricted
cash collateral account which the senior credit agreement
allowed to be used to repurchase or retire the $85 million of 7%
senior notes due September 2003.

Prior to this week's debt issuance, PacifiCare had $643 million
of debt outstanding under its senior credit facility, consisting
of a $589 million term loan and $54 million under the $141
million revolving credit line. The extension on the bank debt
was conditioned upon PacifiCare reducing the existing facility
by $250 million prior to Jan. 2, 2003. The facility had been
reduced by $44 million before this transaction.

Fitch estimates that PacifiCare's pro forma financial leverage
is approximately 40%, and is expected to drop to approximately
38% at year end 2002.

PacifiCare's ratings continue to reflect the large exposure to
the troubled Medicare+Choice market and operational challenges
associated with the Company's movement away from capitated
contracting and the shift towards shared-risk reimbursement
arrangements. The ratings also consider the company's well-
established competitive position in several major markets and
positive steps taken over the past one to two years to
strengthen the management team. Fitch anticipates improved
operating performance in 2002 driven by improved commercial
pricing discipline and operational improvements made over the
past year.

PacifiCare Health Systems, Inc.

--10.75% Senior Unsec Notes due 2009 Upgraded To 'BB-'/Stable;

--7.0% Senior Secured Notes due 2003 Upgraded To 'BB'/Stable;

--Bank Loan rating Upgraded To 'BB'/Stable;

--Long-term rating Upgraded To 'BB'/Stable.


P-COM INC: Requests Hearing to Appeal Nasdaq Staff Determination
----------------------------------------------------------------
P-Com, Inc. (Nasdaq:PCOM), a worldwide provider of wireless
telecom products and services, it received a Nasdaq Staff
Determination on May 16, 2002 indicating that the Company is not
in compliance with the minimum $1 bid price requirements for
continued listing in Nasdaq Marketplace Rule 4450(a)(5). As a
result, P-Com's securities are subject to delisting from
The Nasdaq National Market.

The company, which publicly disclosed the possibility of a
delisting notice earlier in the year, has requested a hearing
before a Nasdaq Listing Qualifications Panel to appeal the Staff
Determination.

To strengthen the company and maintain listing on Nasdaq, P-Com
has undertaken a series of financial restructuring initiatives
that includes approval of a 1 for 5 reverse split of its common
stock, which shareholders approved on April 26, 2002. P-Com
believes the execution of the reverse share split will enable
the company to comply with the minimum bid price rule, which
should allow it to avoid delisting of its common stock. P-Com's
other restructuring initiatives include previously announced
initiatives to extend the maturity date of $29.3 million in
convertible notes, raise additional capital and secure a line of
credit. These initiatives are designed to improve the company's
market valuation and financial strength.

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


PENTACON INC: Anixter Agrees to Acquire Assets for $121 Million
---------------------------------------------------------------
Anixter International Inc. (NYSE: AXE), the largest global
distributor and logistics services provider of wire, cable and
connectors, has executed a definitive agreement to acquire the
operations and assets of Pentacon, Inc. (OTC Bulletin Board:
PTAC).  Anixter has agreed to pay $121 million, subject to
certain potential purchase price adjustments, for the operations
and assets and to assume the trade obligations, active employees
and active facility leases of Pentacon.

Pentacon will sell the operations to Anixter as part of a plan
of reorganization filed in the United States Bankruptcy court
for the Southern District of Texas.

The purchase of the Pentacon operations and assets are
conditioned upon a number of factors, including approval by the
Bankruptcy Court and anti-trust clearance.

Pentacon is an industry leader in the provision of advanced
inventory management services for fasteners and small parts
including procurement, just-in-time delivery, quality assurance
testing, kitting, and e-commerce and electronic data interchange
to a broad spectrum of industrial and aerospace customers.  For
the full-year 2001, Pentacon had revenues of $259.4 million and
some of its top customers include Boeing, Bombardier, Cummins,
and Harley Davidson.

Commenting on the proposed acquisition, Robert W. Grubbs,
President and CEO of Anixter International, said, "Pentacon's
business model, position as a value-added distributor and brand
name, Fortune 500 customer base are perfect complements to our
current integrated supply and specialty wire and cable OEM
businesses.  This acquisition allows us to broaden our product
offering and presents the opportunity for enhanced organic
growth of both Anixter and Pentacon, all while maintaining our
focus on bringing increased value to our suppliers and
customers.  We also believe there are long-term cross selling
opportunities as a result of this acquisition."

"The various operations that comprise Pentacon have each had
long and successful operating track records.  The operating
performance, however, has been overshadowed by the high amount
of leverage and high cost of capital that was incurred in
building Pentacon.  We believe that by removing the costs and
uncertainty associated with the capital structure, the Pentacon
operations will be able to grow and be a full participant in the
emerging economic recovery," continued Grubbs.

Grubbs concluded, "The proposed transaction is an excellent way
for Anixter to use its distribution know-how to effectively
deploy the significant amounts of free cash flow that has been
generated over the past few quarters. We intend to pay for the
acquisition through a combination of current cash balances and
added working capital borrowings.  The acquisition is expected
to be accretive to earnings immediately upon completion of the
transaction."

Anixter International is the largest global distributor and
logistics services provider of wire, cable and connectors for
use in data, voice, electrical and electronic applications.  The
company adds value to the distribution process by providing its
customers access to 1) the largest technical sales force in the
industry, 2) more than 92,000 products and over $450 million in
inventory, 3) 103 warehouses with more than 4 million square
feet of space, and 4) locations in 175 cities in 40 countries.
Founded in 1957 and headquartered near Chicago, Anixter trades
on The New York Stock Exchange under the symbol AXE.

Additional information about Pentacon is available on the
Internet at http://www.pentacon.com

Additional information about Anixter is available on the
Internet at http://www.anixter.com


PENTACON INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Pentacon, Inc.
             10375 Richmond Avenue
             Suite 700
             Houston, Texas 77042
             713-860-1000

Bankruptcy Case No.: 02-21108

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     JIT Holdings, Inc.                         02-21102
     Pentacon Properties, L.P.                  02-21103
     Pentacon Delaware, Inc.                    02-21104
     Pentacon International Sales, Inc.         02-21105
     Pentacon USA, L.P.                         02-21106
     Pentacon Industrial Group, Inc.            02-21110
     Pentacon Aerospace Group, Inc.             02-21112

Type of Business: Pentacon, Inc. and its subsidiaries are
                  distributors of Class C Components and
                  provide inventory management services to
                  equipment manufacturers in the industrial and
                  aerospace industries.

Chapter 11 Petition Date: May 23, 2002

Court: Southern District of Texas (Corpus Christi)

Judge: Richard S. Schmidt

Debtors' Counsel: Blaine F. Bates, Esq.
                  Haynes & Boone
                  1000 Louisiana Street
                  Suite 4300
                  Houston, Texas 77002
                  713-547-2100

Total Assets: $163,184,000

Total Debts: $152,642,000

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Bennett Management Corp    Notes                   $35,000,000
Attn: Jim Bennett
2 Stamford Plaza, Suite 1501
Stanford, CT 06901

HY I Investments, LLC      Notes                   $25,000,000
C/O Equity Group
Attn: Nils Larsen
Two North Riverside Plaza
Suite 600
Chicago, Illinois 60606

Arbiter Partners, LP       Notes                    $1,000,000
c/o Cadogan Management LLC
414 East 75th Street
3rd Floor
New York, New York 10021

DTC #997                   Notes                    $1,000,000
Highland Capital Mgmt
Prospect Street High Income Port
Sara Evans
13455 Noel Road
Suite 3300
Dallas, Texas 75240

QSPV Limited-Queensgate    Notes                    $1,000,000
House
Pam Capital Fndg LP Collateral
Attn: Margaret Aquart
P. O. Box 1093 GT
South Church Street
Grand Cayman, Cayman Islands

Greenlight Capital         Notes                      $824,000
Qualified L
C/O Greenlight Capital Inc.
420 Lexington Ave., Suite 1740
New York, NY 10170

Citco Fund Services        Notes                      $823,000
Corporate Centre West Bay Rd
P.O. Box 31106

CY HY Fd Pldg Fbo          Notes                      $650,000
Citicorp NA
Secs Pledged To Citibank
Auditing Dept/Marie Gabriel
Credit Suisse Asset Mgmt
466 Lexington Ave. 13th Floor
New York, NY 10017-3140

Nicholas Degel            Notes                       $450,000
P & F Retirement Sys, Detroit
908 City County Building
Detroit, MI 48226

Yveline Herfield          Notes                       $400,000
Investment FDS Dept &
Global Cus
Banque Internationale A
Luxembo
69 Route D'Esch
L-2953 Luxembourg

Greenlight Capital L.P.  Notes                        $353,000
420 Lexington Ave.
Suite 1740
New York, NY 10170

Credit Suisse Asset      Notes                        $300,000
Management
Attn: Kevin Keady
466 Lexington Avenue
New York, NY 10017

Carroll Quelland Trust   Notes                        $100,000

Nevada Star Quest Inc.   Notes                         $75,000

Marital Fund Under       Notes                         $55,000
The G Christian
Kronberg Trust

Zemel Family Trust       Notes                         $50,000

Cliff Litherland         Notes                         $50,000

Barbara Ann Granet       Notes                         $25,000
Southwest Securities Inc.
As Ira Rollover Custodian

Dr. Carl B. Roundtree    Notes                         $25,000

Sondra R. Colombo        Notes                         $10,000

DDJ Capital

Alliance Capital


PERSONNEL GROUP: Wins Support to Proceed with Rebranding
--------------------------------------------------------
Personnel Group of America, Inc. (NYSE:PGA), a leading
information technology and professional staffing services
company, said that the Company's shareholders had approved all
of management's proposals at its 2002 annual shareholders
meeting, including the reelection of James C. Hunt, PGA
President and Chief Financial Officer, as a director for a term
expiring in 2005, and a charter amendment that will change the
Company's name to Venturi Partners, Inc.

Commenting on the annual meeting results, PGA Chief Executive
Officer Larry Enterline said, "Although we remain cautious about
general market conditions, we have seen evidence of an improving
economy in many of our markets recently and are hopeful that our
rebranding campaign will coincide with a broader recovery. As a
result, we're delighted that the shareholders approved
management's recommendation on the name change and appreciate
their ongoing support. The IT Division brand transition to
Venturi Technology Partners is essentially complete; the
Commercial Staffing Division transition to Venturi Staffing
Partners is well underway. The ongoing response to the Venturi
brand from our customers and employees is very satisfying. Our
expectation is to file the charter amendment changing the
corporate name in the second half of this year.

"At the annual meeting, we stated that we are pleased with the
purchase by the CSFB group of an interest in our senior credit
facility," Enterline continued. "Over the last two years, it has
been very difficult to find lenders willing to finance the
staffing services industry, and we view the introduction of a
new lender as a positive development from that perspective.
Moreover, the CSFB group's purchase of our senior debt is
consistent, in our opinion, with the intention they stated in
their Schedule 13D to discuss deleveraging strategies with us.
As we've said before, with our senior credit facility extensions
in place, PGA now has the time to evaluate a full range of
alternatives and select the path we believe most beneficial to
the Company. And with that flexibility, we would not expect to
pursue any deleveraging strategies, whether with the CSFB group
or otherwise, that did not appropriately balance the
improvements in PGA's balance sheet and long-term prospects
expected from any specific strategy with our current
shareholders' ownership interest. We will work closely with
our advisor, UBS Warburg, to examine any alternatives presented
to us by the CSFB group or otherwise."

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.


PLASTIC SURGERY: Fails to Comply with AMEX Listing Standards
------------------------------------------------------------
The Plastic Surgery Company (Amex: PSU), which owns and/or
operates the only national chain of cosmetic surgery and
cosmetic laser centers, has received a notice from the staff of
the American Stock Exchange indicating that the Company no
longer complies with the Exchange's continued listing standards
due to the Chapter 11 bankruptcy filing under the U.S.
Bankruptcy Code and a lack of definitive disclosure and/or
information which would enable the Exchange to determine that
the Company's common stock is not without value, or whether its
financial condition is not impaired.


PRANDIUM INC: Taking Stand-Alone Plan to Confirmation June 14
-------------------------------------------------------------
Prandium, Inc. (OTC Bulletin Board: PDIMQ), received an
unsolicited proposal from privately held Austin Grills, Inc. to
purchase Prandium's assets and reorganize its outstanding notes
and equity.  Prandium, and its wholly-owned subsidiary, FRI-MRD
Corporation, are currently debtors in a chapter 11 case pending
in the United States Bankruptcy Court in Santa Ana, California,
and the court has scheduled the hearing to consider confirmation
of Prandium's "prepackaged" reorganization plan on June 14,
2002.

Consistent with their fiduciary duties, Prandium's board of
directors will meet to consider Austin Grills' proposal with
their financial and legal advisors.  However, Prandium noted
that authorized representatives of the holders of a majority of
FRI-MRD's 15% Senior Discount Notes and 14% Senior Secured
Discount Notes and of an informal group who hold a majority of
Prandium's 9-3/4% Senior Notes have each indicated that they are
opposed to the new proposal and wish to proceed with Prandium's
pending reorganization plan.  Austin Grills' proposal cannot be
confirmed without the consent of the authorized representative
of the FRI-MRD noteholders and it is unlikely that any plan of
reorganization for Prandium and FRI-MRD, other than the plan
currently before the bankruptcy court, would be confirmed
without such consent.

The Company continues to conduct business as usual with its
customers, employees and suppliers and maintain its existing
cash management systems through its non-debtor subsidiaries.
Consistent with the reorganization plan, the Company's trade
creditors and employees continue to be paid in full, in the
ordinary course of business.

Prandium owns and operates a portfolio of over 170 full-service
and fast-casual restaurants including Chi-Chi's, Koo Koo Roo,
and Hamburger Hamlet.  Prandium, Inc. is headquartered in
Irvine, California.  To contact the company call (949) 863-8500,
or link to http://www.prandium.com


PROVIDIAN FINANCIAL: Fitch Lowers Rating on Senior Debt to B
------------------------------------------------------------
Fitch Ratings has lowered the senior debt rating of Providian
Financial Corp. to 'B' from 'B+' and senior debt rating of
Providian National Bank to 'B+' from 'BB-.' The ratings remain
on Rating Watch Negative where they were placed on December 20,
2001.

Fitch's downgrade of Providian's ratings primarily reflects
heightened concerns regarding performance of the Providian
Gateway Master Trust (PGMT), where excess spread levels have
fallen over the past few months. The decline in excess spread
has been driven by a sharp rise in net chargeoffs of these
assets. The increase in loss rates reflects weakness in the
economy that began in 2001, limitations in growth, but it is
also indicative of the high-risk nature of Providian's customer
base, a high percentage of which would be considered subprime
under bank regulatory definitions.

Given the revolving nature of the securitization structure,
Fitch is increasingly concerned that an early amortization could
occur should excess spread levels continue their downward
trajectory due to increasing losses. The PGMT must maintain
minimum excess spread of at least 0.0%, on a rolling three month
average, in order to avoid an early amortization event. At
present, Fitch estimates there is approximately $10.25 billion
of investor certificates outstanding in the PGMT. The PGMT is
currently trapping cash in the trust to fund spread accounts.
Although the company is attempting to address performance issues
in the PGMT, continued deterioration of excess spread would
cause further downgrades of the company's ratings.

Fitch recognizes the progress Providian has made to improve its
financial condition through targeted asset sales. To date,
Providian has sold its higher quality Providian Master Trust and
U.K. credit card portfolio, which have alleviated near-term
liquidity concerns. In addition, the company has sold its
Argentina banking operation to a local investor group and should
no longer be impacted by events in that country. Although the
company's banking subsidiaries maintain significant amounts of
cash and marketable securities, $6 billion at April 30, 2002,
Fitch believes the potential calls on liquidity due to
deteriorating performance in the PGMT, offset the benefit of the
added liquidity position.

Providian continues to market its portfolio of 'High Risk'
receivables through a structured transaction led by Goldman
Sachs and Salomon Smith Barney. To the extent such a transaction
is ultimately executed, as currently structured, the liquidity
position at the regulated banks would be improved. Absent a
successful sale of the proposed securitization, ratings could be
affected further, as this portfolio performance would continue
to be a drain on the company's performance and would also
continue to distract management's attention away from its
turnaround efforts, including the origination of better-quality
assets going forward. Fitch notes, however, that under the
company's regulatory agreement, Providian's banking subsidiaries
are not required to sell this portfolio. Ultimately, Providian's
banking subsidiaries must achieve 10% total risk based capital
ratio with application of subprime guidance

     Ratings lowered and remaining on Rating Watch Negative:

                    Providian Financial Corp.

               --Senior debt to 'B' from 'B+';

                    Providian Capital I

               --Trust preferred to 'CCC' from 'CCC+'.

                    Providian National Bank

               --Long-term deposits to 'BB-' from 'BB';

               --Senior debt to 'B+' from 'BB-';

               --Subordinated debt to 'B-' from 'B';

               --Individual to 'D/E' from 'D'.

      Ratings affirmed and remaining on Rating Watch Negative:

                    Providian Financial Corp.

               --Short-term 'B';

               --Individual 'D/E'.

                    Providian National Bank

               --Short-term deposits 'B'.


QUALMARK CORPORATION: Sells OVS 2.5 Chamber to Continental ISAD
---------------------------------------------------------------
QualMark Corporation (OTCBB:QMRK) a world leader in designing,
manufacturing and marketing HALT (Highly Accelerated Life
Testing) and HASS (Highly Accelerated Stress Screening) systems,
announced that through its exclusive partnership with Weiss
Technik, the first six figure sale of an OmniAxial Vibration
System (OVS) 2.5 chamber was sold to Continental ISAD who is
among the top ten automotive suppliers in the world. Continental
ISAD employs over 64,000 employees located in 36 countries and
is a manufacturer of components, modules and automotive systems.

"As our relationship with our partner Weiss Technik matures we
can expect to penetrate more and more of the market in Germany
and Austria," said Charles D. Johnston, President and CEO of
QualMark. Johnston added: "Companies in the automotive related
industries are currently focusing on product quality and cost
savings. Automotive Manufacturers who utilize HALT can look
forward to significant savings and increase in sales due to
resolving issues concerning product reliability, returns, and
customer satisfaction. This also reinforces the growing evidence
that automakers are using QualMark HALT technology as a best
practices vehicle that translates to recognized quality
and trouble free operation."

Johnston continued: "On another note, QualMark's goal is to
continue to leverage its business opportunities. As I stated in
our conference call the U.S. capital expenditure market has not
improved, however we will continue to leverage our offshore
opportunities. We are working diligently to build value for our
shareholders and I believe are applying the proper resources
to accomplish that goal. Although we have experienced recent
disappointment with our delisting from Nasdaq SmallCap, we will
set the goal to focus on internal growth of the Company and
growth through strategic acquisitions."

Continental ISAD is a globally operating automotive supplier
that develops and manufactures in the chassis system, tire and
industrial product sectors. Continental establishes
international standards and help automakers fulfill promises
they've made with respect to their products. The Corporation
employs over 64,000 employees and posted sales of EUR 11.2
Billion in 2001.

QualMark Corporation, headquartered in Denver, Colorado, is a
leader in designing, marketing, and manufacturing accelerated
life-testing systems providing America's largest corporations
with products that improve product reliability and allow them to
get to market faster. The Company has installed more than 450 of
its proprietary testing systems in 18 countries and operates
four of its own testing and consulting facilities in Denver,
Colorado, Santa Clara, California, Hopkinton, Massachusetts, and
Huntington Beach, California. In Detroit Michigan, the Company
has a strategic alliance with a large testing facility. QualMark
has also formed international ARTC alliances in Ireland, the
Netherlands, Italy, France and Sweden. The Company also offers
engineering services and products that complement the core
technologies of QualMark and other test equipment providers.


RAZORFISH: Sets Annual Shareholders' Meeting for July 11, 2002
--------------------------------------------------------------
The Annual Meeting of Stockholders of Razorfish, Inc., a
Delaware corporation, will be held at the offices of Morrison &
Foerster LLP, 1290 Avenue of the Americas, 40th Floor, New York,
New York 10104, on Thursday, July 11, 2002, at 11:00 a.m.,
Eastern Time, for the following purposes:

       1. ELECTION OF DIRECTORS.  To elect four members of the
Board of Directors to serve until the 2003 Annual Meeting of
Stockholders or until their successors are elected and
qualified;

       2. AMENDMENT TO CERTIFICATE OF INCORPORATION.  To approve
an amendment to the Company's Certificate of Incorporation, as
amended, to effect a reverse stock split of all of the
outstanding shares of Class A common stock, at a ratio between
one-to-ten and one-to-thirty to be determined at the discretion
of the Board of Directors;

       3. TO ADOPT THE 2002 STOCK INCENTIVE PLAN; and

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

The Board of Directors has fixed the close of business on May
21, 2002 as the record date for determining the stockholders
entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.

Founded in 1995, Razorfish is a digital solutions provider that
helps leading companies generate competitive value by leveraging
the power of digital technology. From strategy and design to
system integration, Razorfish provides clients with
opportunities to increase their return on investment, enhance
productivity, and maximize the value of their relationships with
customers, employees, and partners. As of December 31, 2001, the
company reported a working capital deficit of about $6 million
and a total shareholders equity deficit of about $8 million.


SL INDUSTRIES: Lenders Waive Events of Default Under Credit Pact
----------------------------------------------------------------
Sl Industries, Inc. (NYSE:SL; PHLX:SL) announced that revenue
for the first quarter ended March 31, 2002 was $32,947,000,
compared to $37,582,000 for the first quarter last year.

Net loss from continuing operations was $689,000 compared to net
income of $511,000 for the same period in 2001.

The loss for the period ended March 31, 2002 included $1,825,000
for special charges ($1,631,000 of change-in-control payments
and $194,000 of proxy costs), $225,000 for restructuring charges
and an increase to the Company's environmental reserve of
$500,000 ($1,514,000 net of taxes).

These charges had a $0.26 negative effect on net income for the
period. The Company had net income from continuing operations of
$825,000 excluding the above charges for the current quarter.

The Company reported net new orders of $33,310,000 in the first
quarter of 2002, compared to net new orders of $39,614,000 in
the first quarter of 2001. Backlog at March 31, 2002 was $55.9
million, as compared to $61 million a year earlier.

Commenting on the results, Warren Lichtenstein, Chairman and
Chief Executive Officer of SL Industries, said, "The operating
results demonstrate that the Company has turned the corner in
its restructuring plan. Without including the special charges,
earnings from continuing operations before interest, taxes,
depreciation and amortization ("EBITDA") for the quarter ended
March 31, 2002 was $1,887,000, an increase of $1,957,000 from
the fourth quarter of 2001. EBITDA was $3,136,000 for the first
quarter of 2001.

"Unfortunately, as previously forecasted, the special charges
incurred as a result of the contested election of directors in
January caused the Company to miss the net income financial
covenant under its Revolving Credit Facility for the first
quarter of 2002. The Company and its lenders have reached an
agreement to waive current events of default and to otherwise
amend the Revolving Credit Facility so that the Company will be
in full compliance with all covenants and conditions."

Lichtenstein further stated, "There have been other encouraging
developments as well. On April 16, the New York Stock Exchange
agreed to continue listing SL Industries in connection with its
acceptance of the Company's business plan and the Company's
meeting the stated objectives under the business plan over the
next 18 months. Additionally, the Company has accepted an offer
to sell its unoccupied industrial facility in Auburn, New York
for $250,000 in cash. This sale will provide cash benefits to
the Company in the form of the purchase price and tax
deductions."

Lichtenstein concluded, "While we are never satisfied to report
a loss to our shareholders, the Board of Directors is encouraged
by the performance of the Company and is excited about its
prospects. SL Industries is in its best financial condition of
the past two years. Over the past 12 months it has reduced its
indebtedness by approximately $15 million, and expected cash
flows this year should further reduce the Company's debt and
other liabilities. More importantly, managers and employees
throughout the organization are moving forward on corporate and
divisional initiatives designed to further increase shareholder
value. I note that each non-employee member of the Board of
Directors has elected to receive his director's fee in stock
options instead of cash. This action will save the Company some
cash payments, but it is particularly significant as a real
vote of confidence by the Board members in the Company's
personnel and future results.

"We are making progress on a number of corporate strategies. The
Company's investment bankers, Credit Suisse First Boston, should
start distributing confidential offering memoranda to
prospective purchasers. I look forward to reporting to the
shareholders on the progress of the sales process and the
execution of the Company's strategy in the months ahead."

SL Industries, Inc. designs, manufactures and markets Power and
Data Quality equipment and systems for industrial, medical,
aerospace and consumer applications. For more information about
SL Industries, Inc. and its products, please visit the Company's
Web site at http://www.slpdq.com


SAVVIS COMMS: Will Apply for Listing on Nasdaq SmallCap Market
--------------------------------------------------------------
SAVVIS Communications (NASDAQ:SVVS) said it will apply for
listing on the Nasdaq Small-Cap Issues Market. SAVVIS will
retain its ticker symbol of SVVS.

"SAVVIS is financially strong and growing by winning new
customers and providing superior service to our current customer
base of over 1,500 companies," said David Frear, chief financial
officer and executive vice president of SAVVIS. "We are moving
our stock to the Nasdaq Small-Cap Issues Market to comply with
Nasdaq's Marketplace Rules while continuing to offer investors
the opportunity to participate in our growth."

If the transfer to the Small-Cap Issues Market is approved,
SAVVIS will have until August 13, 2002 to demonstrate compliance
with Nasdaq's $1.00 minimum bid requirement.

SAVVIS will then be eligible for an additional 180-day grace
period to demonstrate compliance provided that it meets
additional Nasdaq listing criteria for the Small-Cap Issues
Market(1), which SAVVIS currently meets.

On May 17, 2002 SAVVIS received notice from the Listing
Qualifications Department of the Nasdaq Stock Market that its
stock is subject to delisting based on the failure of SAVVIS'
common stock to maintain the minimum bid price as required under
Nasdaq rules.

As previously reported, SAVVIS is seeking approval by its
stockholders of a reverse stock split at its annual meeting of
stockholders to be held on June 7, 2002.

Frear continued, "SAVVIS does not intend to implement a reverse
split at this time. Our company remains focused on delivering
strong financial results, acquiring new customers, and leading
the industry in customer service."

SAVVIS Communications Corp. (NASDAQ:SVVS) is a global network
service provider that delivers IP VPNs (virtual private
networks), managed hosting and Internet services to medium-sized
enterprises and the financial services market. The mid-market,
which is underserved by traditional data communications
carriers, is the fastest growing segment of the IP VPN market.

In the demanding financial services industry, SAVVIS is a
leading provider of high-performance networking services.
SAVVIS' Financial Xchange(SM), a private IP VPN service
platform, connects more than 4,700 financial institutions to
financial applications and data worldwide.

Financial Xchange(SM) is also one of the largest carriers of
Financial Information eXchange protocol traffic in the United
States and has partnerships with many FIX application and
services providers.

Known as The Network that Powers Wall Street(SM), SAVVIS
delivers the reliability, performance, and security of
traditional private networks, as well as the scalability and
flexibility of the Internet, often at a price less than both.

As a result, enterprises can connect their offices, partners,
and remote employees over an affordable private IP network and
can also integrate SAVVIS' managed hosting services as well. The
editors of Network Magazine named SAVVIS' IP VPNs Product of the
Year for 2001. SAVVIS beat out well-known VPN providers such as
AT&T (NYSE:T), WorldCom (NASDAQ:WCOM), Sprint (NYSE:FON) and
Genuity (NASDAQ:GENU).

SAVVIS was ranked the eighth fastest-growing technology company
in North America on the 2001 Deloitte & Touche Technology Fast
500, which ranks companies based on five-year percentage revenue
growth from 1996 - 2000. For more information about SAVVIS and
its Intelligent IP Networking(SM), visit: http://www.savvis.net


SCAN-OPTICS: Convening Annual Meeting on June 6, 2002 in Conn.
--------------------------------------------------------------
The Annual Meeting of Stockholders of Scan-Optics, Inc. will be
held at the Company's offices at 169 Progress Drive, Manchester,
Connecticut, on Thursday, June 6, 2002 at 1:30 p.m. (EDT) to
consider and take action on the following items:

     1.   To elect three directors to serve until the Annual
Meeting of Stockholders in 2005;

     2.   To approve the Scan-Optics, Inc. 2002 Incentive and
Non-Qualified Stock Option Plan;

     3.   To appoint independent auditors for the fiscal year
ending December 31, 2002; and

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

Only holders of common stock at the close of business on April
30, 2002 are entitled to notice of and to vote at the meeting or
any adjournment thereof.

Scan-Optics, Inc., with headquarters in Manchester, Connecticut,
is recognized internationally as an innovator and solution
provider in the information management and imaging business. It
designs, manufactures and services products and systems for
character recognition, image processing and display, data
capture, and data entry. Scan-Optics systems and software are
marketed worldwide to commercial and government customers
directly and through distributors.

                        *  *  *  *

As previously reported in the January 11, 2002 issue of the
Troubled Company Reporter, Scan-Optics, Inc. (OTC BB: SOCR), a
leader in Information Capture and Customer Service Solutions for
Government, Insurance, Order, Proxy, Test Scoring and other
paper-intensive businesses, announced that the Company has
completed a debt restructuring agreement with Patriarch Partners
LLC (Patriarch) of New York effective December 31, 2001.

The restructuring includes the following terms:

      -- The maturity date of the Company's Loan Agreement with
Patriarch will extend through December 31, 2004.

      -- Patriarch's commitment under the Company's existing
revolving line of credit was increased from $10 million to
$10.75 million until June 30, 2002, at which point the
commitment amount will return to $10 million. All revolving
loans will continue to accrue interest at a rate of prime plus
2%.

      -- The Company's existing term loan was reduced from $8.5
million to $2 million and will continue to accrue interest at a
rate of prime plus 2%. No principal payments will be required on
the $2 million remaining term loan until maturity on December
31, 2004.

      -- The Company issued to Patriarch shares of preferred
stock as well as warrants to purchase common stock in exchange
for forgiveness of the remaining $6.5 million balance of the
term loan.

      -- The warrants represent the right to purchase up to
4,975,000 shares of common stock of the Company, or
approximately 33% of the currently outstanding shares, including
shares reserved for stock options. The Company may repurchase
the warrants once the term loan and revolving loan are satisfied
and the Company redeems the preferred stock. The repurchase
price of the warrants is $2.7 million plus accrued interest
calculated at prime plus 2%. In addition, if the warrants are
repurchased in 2002, 10% of the Company's common stock will
transfer to Patriarch. This amount increases to 15% in 2003 and
30% in 2004. The warrants are not exercisable until after
December 31, 2004, except upon certain events of default.

      -- The preferred stock is subject to mandatory redemption
for $3.8 million plus interest at prime plus 2% on December 31,
2004. The preferred stock is non-voting except upon exercise of
the warrants.

In discussing this agreement, Michael J. Villano, Chief
Financial Officer of Scan-Optics, stated, "We are pleased to
have completed the debt restructuring with Patriarch Partners.
Extending the maturity date to December 31, 2004 provides Scan-
Optics with the capital structure to support the business going
forward."


SCIENT INC: Request Hearing on Nasdaq Listing Determination
-----------------------------------------------------------
Scient, Inc. (Nasdaq: SCNT) received a Nasdaq Staff
Determination notice on May 16, 2002, as anticipated, indicating
that the Company failed to comply with the minimum bid price
requirement for continued listing as set forth in Marketplace
Rule 4450 (b)(5). Scient has requested a hearing before the
Nasdaq Listings Qualification Panel to appeal the Staff
Determination.  During the appeal process, Scient will continue
to be listed. There can be no assurance the Panel will grant the
Company's request for continued listing after the hearing.

On May 29, 2002, Scient will conduct its annual stockholders
meeting during which its stockholders will vote upon whether to
approve a reverse stock split of the Company's common stock in a
ratio of either 1-for-10, 1-for-15, or 1-for-20, as will be
determined by Scient's Board of Directors upon the advice of
independent financial advisors. The Company believes that its
stockholders will approve the reverse stock split, whereupon the
Board will meet to approve the appropriate ratio. When approved,
the Company intends to implement the reverse split as soon as
practicable. Once implemented, the Company anticipates that its
common stock will meet the minimum bid price per share of $1.00
for a minimum of 10 consecutive trading days, pursuant to
Marketplace Rule 4450(a)(5).

Scient is a leading consulting and professional services company
focused on transforming clients' businesses through the creation
of multi-channel experiences that strengthen connections among
people, businesses and communities. Scient's industry-focused
teams of strategists, user experience experts, designers and
engineers have together delivered thousands of projects for some
of the world's largest and most respected companies, helping
them to realize cost efficiencies, generate revenue and
strengthen customer relationships. Founded in 1996, Scient is
headquartered in New York with offices in London and key regions
throughout the United States. For more information, please go to
http://www.scient.comor call (212) 500-4900.


SYNSORB BIOTECH: Fails to Comply with Nasdaq Minimum Bid Price
--------------------------------------------------------------
SYNSORB Biotech Inc. (Nasdaq: SYBB) announces that it received a
NASDAQ Staff Determination on May 16, 2002 indicating that
SYNSORB fails to comply with the minimum bid price requirements
for continued listing set forth in the NASDAQ market place rules
and its common shares are, therefore, subject to delisting from
the NASDAQ national market. SYNSORB has requested a hearing
before a NASDAQ Listing Qualifications Panel to review the Staff
Determination. There can be no assurance the Panel will grant
SYNSORB's request for continued listing.

SYNSORB Biotech Inc. is a publicly traded company listed on both
the Toronto Stock Exchange (symbol SYB) and on Nasdaq National
Markets (ticker SYBB).


TACT: Fails to Comply with Nasdaq Continued Listing Requirements
----------------------------------------------------------------
TACT (Nasdaq:TACX) received a Nasdaq Staff Determination notice
indicating that the Company is not in compliance with the
minimum bid price and market value of public float requirements
for continued listing of its shares and, therefore, is subject
to delisting from the Nasdaq National Market.

The Company has requested a hearing before a Nasdaq Listing
Qualification Panel to review the Staff Determination. The panel
will determine if the Company's shares will continue trading on
the Nasdaq National Market or transition to the Nasdaq Small Cap
Market or the Nasdaq Bulletin Board System. There can be no
assurance the panel will grant the Company's request for
continued listing.

TACT (Nasdaq:TACX) is an end-to-end IT Services and e-Services
provider to Fortune 1000 companies and other large
organizations. TACT provides its clients with modernization
services, which include the e-Valuation of systems that should
be replaced and rewritten, enhanced, converted or Web Enabled.
Replacement systems are written or re-written as Web Based
utilizing state of the art leading tools such as Java and Visual
Studio.


TNK INTERNATIONAL: Fitch Affirms B+ Senior Unsecured Rating
-----------------------------------------------------------
Fitch Ratings has affirmed the senior unsecured rating of TNK
International Ltd. at 'B+'. In addition, Fitch withdraws the
ratings of the proposed fixed-rate loan participation notes to
be issued by OAO Tyumen Oil Company, a subsidiary of TNK,
following the group's announcement that the notes programme will
be withdrawn.

The cancellation follows the withdrawal of the audit opinion on
TNK's 2001 accounts by the group's auditors
PricewaterhouseCoopers, given PwC's retrospective decision to
apply acquisition cost rather than historic cost valuation for
certain of the group's assets. Fitch does not currently regard
the withdrawal of this audit opinion as a cause for wider
concern. The only risks generated by the withdrawn audit opinion
are; 1) the impact of a technical restatement may lead to a
breach of financial ratio covenants, which Fitch understands
from discussions with the company and its auditor is considered
unlikely, and, 2) the risk that the restatement may delay the
terming-out of TNK's short-term debt burden.

Neither PwC nor TNK has currently provided an estimate of the
dollar-value net effect of this restatement. PwC have confirmed
in writing, however, that the 'effect of this amendment will be
a reduction in the cost of oil and gas properties and
shareholder's equity of TNK International Ltd.'. PwC have
further confirmed that 'the adjustments will not impact cash
flow from operations or negatively impact income before minority
interests', and that 'the amendment is the result of a technical
adjustment. It is not a consequence of, for instance, a revenue
recognition issue or an off-balance sheet transaction. There is
no question of any intentional misstatement of the financial
statements".

In its analysis, Fitch typically gives high priority to cash
flow generation, in preference to purely balance sheet based
credit metrics. The group's financial obligations, however, do
contain a number of minimum net worth calculations, laid out in
Fitch's research report dated March 2002. A ratio limiting debt
to 50% of net worth had previously been renegotiated upwards to
the standard ratio for lending facilities of net debt to 150% of
net worth. This would have equalled a 'cap' of c. US$6 billion
under the originally audited accounts, and compares to net debt
of US$ 2.5 billion at year-end 2001. The covenant included
within the bond of 75% may have come under pressure as a
consequence of the restatement, though Fitch expects that this
will be renegotiated for future issues.

Fitch does not regard the covenanted ratios with relation to net
worth as of particular significance in absolute terms (their
value typically lying in restricting the incursion of additional
debt from the date of their inception), and does not regard the
ratios currently applicable as a limiting metric for the current
ratings of TNK. Should there be a breach of this covenant, this
would require waivers to avoid an event of default under those
facilities, and would reduce the ability of the company to
proceed with the terming out of debt under the proposed bond
issue. Fitch understands from the auditors, however, that the
scale of the restatement is unlikely to provoke a breach of the
relevant ratio-based covenant. Fitch will therefore examine the
restatement, once it has been computed by the auditors, to
assess the potential impact on covenant-related financial ratios
and will comment further at that time. Should the restatement
lead, against expectations, to a breach of financial ratio
covenants, which remains without waiver from the relevant
lending institutions, Fitch anticipates that the ratings would
be placed on Rating Watch pending a resolution.


VECTOUR: Obtains Extension Until August 12 to Decide on Leases
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Vectour, Inc. and its debtor-affiliates obtained an
extension on their lease decision period. Judge John C. Akard
gives the Debtors until August 12, 2002 to elect whether to
assume, assume and assign or reject unexpired nonresidential
real property leases. The order is entered without prejudice to
the Debtors' right to seek additional extension on their lease
decision period.

VecTour, Inc. is a leading nationwide provider of ground
transportation for sightseeing, tour, transit, specialized
transportation, entertainers on tour, airport transportation and
charter services. The Company filed for chapter 11 protection on
October 16, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. David B. Stratton, Esq. and David M. Fournier, Esq.
at Pepper Hamilton LLP represent the Debtors in their
restructuring effort.


VIADOR INC: Total Shareholders' Equity Deficit Narrows to $159K
---------------------------------------------------------------
Viador Inc.(TM) (OTC Bulletin Board: VIAD), announced financial
results for its first quarter ended March 31, 2002.  In the
first quarter of fiscal 2002, Viador reported revenue of $1.4
million, compared to $1.4 million reported in the fourth quarter
of 2001 and $3.6 million reported for the first quarter of
fiscal 2001.

GAAP net income was $1.2 million for the first quarter of 2002
compared to a $0.3 million net income in the fourth quarter of
2001 and a net loss of $6.8 million in the first quarter of
2001.  Pro forma net loss, which excludes unusual or non-
recurring events or transactions, amortization of stock-based
compensation, goodwill amortization, the reversal of various
accruals, extraordinary gain on extinguishment of debt,
restructuring expense, and impairment loss was $0.1 million for
the first quarter of 2002 compared to a pro forma net loss of
$0.5 million for the fourth quarter of 2001 and a pro forma net
loss of $6.5 million for the first quarter of 2001.

GAAP diluted earnings per share for the first quarter of 2002
were $0.04 based on 33.1 million weighted average shares.  This
compares with a net income per share of $0.01 for the fourth
quarter of 2002, based on 33.1 million weighted average shares,
and a loss per share of $0.38 for the first quarter of 2001,
based on 18.2 million weighted average shares.

Excluding the unusual or non-recurring events or transactions,
amortization of stock-based compensation, goodwill amortization,
the reversal of various accounting accruals, restructuring
expense, and impairment loss totaling zero in the current
period, Viador's pro forma operating loss was $0.1 million in
the first quarter of 2002, compared to $0.4 million in the
fourth quarter of 2001 and $6.6 million in the first quarter of
2001.

The Company's president, Stan Wang, said, "In the first quarter,
we continued to balance costs and revenues. Importantly, we were
able to successfully settle obligations due to creditors and
exit the quarter with a much cleaner balance sheet and better
liquidity. We secured additional funding for the company. We're
prepared both for the current economic climate and for the
opportunities to come," said Stan Wang, company President and
CEO.

Viador Inc. also reported an upside-down March 31, 2002 balance
sheet, showing a total shareholders' equity deficit of $259,000.
Additionally, at the same date, the company reported a working
capital deficit of about $1 million.

Viador Inc. combines proven experience, technology and
partnerships to deliver self-service portals for leading
businesses and organizations worldwide. The Viador E-Portal
facilitates enterprise-wide productivity gains, including
increased revenue from new e-services, improved partner
communications, better customer relationships and retention, and
streamlined, paperless information distribution at lower cost.
Over 350 leading companies have chosen Viador for their self-
service portal needs.

Viador is headquartered in Sunnyvale, California. For more
information, call 408-735-5956 or visit the Viador Web site at
http://www.viador.com


VIALINK: Shareholders' Meeting to Convene on June 4, 2002
---------------------------------------------------------
The Annual Meeting of Stockholders of The viaLink Company, a
Delaware corporation, will be held at the Oxford Room of the
University Club, 13350 Dallas Parkway, Suite 4000, Dallas, Texas
75240, on June 4, 2002 at 2:00 P.M. (Central Daylight Savings
Time), for the following purposes:

     1.   To elect two (2) Class III directors to serve until
our 2005 annual meeting of stockholders, or until their
respective successors are duly elected and qualified;

     2.   To amend the Articles of Incorporation in order to
increase the authorized common stock of The viaLink Company
150,000,000 shares, from the current 150 million to 300 million
shares;

     3.   To ratify the appointment of KPMG LLP as independent
auditors for the company for the fiscal year ending December 31,
2002; and

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

Only stockholders of record at the close of business on April 5,
2002, are entitled to notice of and to vote at the Annual
Meeting.

The viaLink Company (Nasdaq: VLNK) is the leading provider of
data synchronization and advanced e-commerce services to the
retail food industry. The viaLink Partner Package is a suite of
services that use synchronized data to give trading partners
visibility into product movement through the supply chain and
enable collaborative business processes. The company reported a
total shareholders' equity deficit of about $3 million as of
March 31, 2002.


VIATEL INC: Delaware Court Confirms Plan of Reorganization
----------------------------------------------------------
Viatel, Inc. (OTC: VYTLQ), the builder-operator-owner of a
state-of-the-art pan-European network, said that the United
States Bankruptcy Court for the District of Delaware signed an
order confirming its Plan of Reorganization, which was filed on
28 February 2002. The Bankruptcy Court approval follows last
week's overwhelming acceptance of the Plan by approximately 97%
in principle amount of the unsecured creditors of Viatel, Inc.
and its United States subsidiaries. Pursuant to the Plan, the
unsecured creditors will receive, on a pro rata basis, a total
of 10,560,000 common shares of Viatel Holding (Bermuda) Limited,
a new holding company created to effectuate the restructuring
transaction.

As a result of the reorganization, Viatel will emerge from
bankruptcy debt free and will implement fresh start accounting,
the rules of which will require Viatel to revalue its assets and
liabilities to current fair value and reestablish stockholders'
equity at the reorganization value determined in connection with
the Plan.

It is expected that the Plan will be consummated by the end of
May.

Viatel -- http://www.viatel.com-- is the builder-operator-owner
of a state-of-the-art pan-European fibre-optic network and a
provider of clear channel broadband, IP transit and transport,
and virtual private networks to corporations, communications
carriers, Internet service providers and other wholesale
customers, and end-user business customers.

DebtTraders reports that Viatel Inc.'s 11.500% bonds due 2009
(VIATEL2) are quoted between 0.5 and 1. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=VIATEL2for
more real-time bond pricing.


W.R. GRACE: Amends PricewaterhouseCoopers' Engagement Terms
-----------------------------------------------------------
W. R. Grace & Co. and its debtor-affiliates present an amended
application to employ PricewaterhouseCoopers as the auditors and
tax consultants for these estates, nunc pro tunc to January 10,
2002.

In the January 2002 Application, the Debtors asked for authority
to employ PwC, but also asked that Judge Fitzgerald approve the
payment of certain fees and expenses to PwC incurred "in the
ordinary course" of the Debtors' business.  The Debtors say they
sought this relief, as opposed to an ordinary application to
employ, because of a potential conflict of interest relating to
the liquidation of one of the Debtors' foreign subsidiaries.
Specifically, in 1998 Grace-Conn. agreed to indemnify Colin
Graham Bird and Anthony Victor Lomas, both partners in PwC,
against claims brought against them in connection with the
voluntary liquidation of Chasmbridge Limited, a United Kingdom
subsidiary of Grace-Conn.  The US Trustee objected to this
Application.

Negotiations between PwC and the Debtors have been ongoing to
resolve that conflict.  Recently, PwC agreed to waive any and
all claims for indemnity against the Debtors related to the
Chasmbridge liquidation.  Therefore, the Debtors now seek to
retain PwC as auditors and tax consultants and to withdraw
without prejudice their prior request to retain PwC as ordinary
course professionals.  The Debtors believe - hope - that this
amendment will resolve the Trustee's concerns.  Otherwise, the
Amended Application restates the prior Application.

                         *   *   *

As previously reported, the Debtors asked Judge Judith
Fitzgerald for her approval and authorization to employ and
compensate PricewaterhouseCoopers LLP as their independent
auditors and accountants.

Since the Petition Date, PwC has been actively involved aiding
the Debtors with the administration of their estates, including
aiding the Debtors' compliance with their reporting requirements
under the United States securities laws, the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure and the Local
Bankruptcy Rules of this Court. As examples of PwC's
contributions, the Debtor cites to Judge Fitzgerald's attention

      (1) review by PwC of the Debtors' interim consolidated
financial statements filed in connection with the Debtors' Forms
10-Q;

      (2) audit of the Debtors' employee benefit plans;

      (3) preparation of the creditor matrix used to notify each
potential party-in-interest of the commencement of these Chapter
11 cases;

      (4) aiding in the mailing of the notice of commencement
of, and the temporary restraining order issued in, these Chapter
11 cases;

      (5) aiding in the Debtors' organization and preparation of
their initial monthly operating reports; and

      (6) preparation of the Debtors' voluminous Schedules of
Assets and Liabilities and Statements of Financial Affairs.

                  Conflict Without Resolution

The Debtors explain that PwC performed this work prior to being
retained by the Debtors due to a potential conflict of interest
relating to PwC's overseas representation of one of the Debtors'
foreign subsidiaries. Although negotiations between PwC and the
Debtors have been ongoing to resolve this potential conflict, an
acceptable resolution to both parties has not been found.

                   The Proposed Resolution

Therefore, the Debtors and PwC have agreed that PwC will not
perform any additional bankruptcy related services during these
Chapter 11 cases, but will remain engaged as the Debtors' long
standing, ordinary course, independent accountants and auditors.

Due to the Debtors' and PwC's diligent work to resolve this
potential conflict, each party believed a workable resolution
would expeditiously be reached. Therefore, in an effort to
protect the Debtors' estates from potential damage, and because
the parties were actively pursuing a resolution, PwC continued
to work and provide the Debtors' estates with significant value
by aiding the Debtors' compliance with their reporting
requirements under the Securities Laws, the Bankruptcy Code, the
Bankruptcy Rules and the Local Rules. Further, PwC's substantial
experience working as the Debtors' independent accountants and
auditors since 1906, nearly 100 years, has been invaluable
throughout these Chapter 11 cases, as well as with respect to
the Debtors' compliance with the securities laws and various tax
planning and compliance matters. The Debtors anticipate that
PwC's retention in these Chapter 11 cases with respect to such
accounting and audit matters will also continue to be important
in the future as the Debtors require the services of independent
accountants and auditors in the ordinary course of their
businesses. Therefore, the Debtors are filing this application
requesting (i) that PwC be reimbursed for its postpetition fees
and expenses incurred to date as a substantial contribution to
the Debtors' estates and (ii) that the Court approve PwC's
retention in the ordinary course as the Debtors' independent
accountants and auditors.

                          Compensation

The Debtors sought authority to compensate PwC for its
substantial contribution to the Debtors' estates of:

      (A) $574,743 related to PwC's bankruptcy related services;

      (B) $324,OO0 related to PwC's audit services;

      (C) $200,000 for PwC's tax services for the period from
          the Petition Date through the date of the Application;
          and

      (D) $39,893.54 for PwC's actual, and necessary expenses
          incurred while rendering such services during the Fee
          Period.

The Debtors also sought authority to employ and retain PwC in
the ordinary course of business as independent accountants and
auditors during these Chapter 11 cases.

                     Scope of Services

PwC will provide such accounting, audit, tax and other business
services as PwC and the Debtors shall deem appropriate and
feasible in order to advise the Debtors in the course of these
Chapter 11 Cases, including:

A. Accounting and Auditing Services.

B. Tax Services.

PwC, at the request of the Debtors, also may render additional
general business consulting and other related accounting and
support deemed appropriate and necessary by the Debtors. PwC
will not, however, provide any bankruptcy or business recovery
services to the Debtors during these Chapter 11 cases. The
accounting and business services enumerated above are necessary
to enable the Debtors to comply with the Securities Laws. The
Debtors believe that PwC's accounting, audit, tax and related
services will not duplicate the services that, subject to this
Court entering or having entered appropriate orders, other
professionals may provide to the Debtors during these Chapter 11
cases. PwC will use reasonable efforts to coordinate with the
Debtors' other retained professionals to avoid the unnecessary
duplication of services.

                      Terms of Retention

PwC has agreed to represent the Debtors pursuant to a fixed fee
arrangement.  PwC's fees in connection with this engagement will
be based upon the estimated time that PWC will necessarily spend
in providing its accounting, audit, tax and business services to
the Debtors.

A.  The Audit Fixed Fee.

The fixed fee for the audit of the Debtors' financial statements
is $700,000, which was reviewed with the Audit Committee of the
Debtors' Board of Directors, and approved in July of 2001. In
addition, PwC audits certain benefit plans sponsored by the
Debtors. The fixed fees associated with such audits, in the
aggregate, are $100,000, but the Debtors are reimbursed for such
fees by the specific benefit plan trust.

B.  The Tax Compliance Fixed Fee.

PwC had also agreed to provide the Debtors with tax compliance
services for a fixed fee of $25,000 per month under an agreement
which expired in October of 2001. These compliance services
included assistance with any reviews of the Debtors' tax return
instituted by the Internal Revenue Service. Although the
Debtors' management now performs most tax compliance matters in-
house, the Debtors may request that PwC perform certain tax
compliance matters in the future. In the event the Debtors
request PwC perform any tax related services, it is anticipated
by the parties that such services would be performed upon terms
similar to those set forth in the October, 2001 agreement, or
upon such other terms as the parties may agree. These fees are
adjusted from time to time.

C.  Expenses.

In addition to the fees outlined above, PwC will bill the
Debtors for reasonable expenses which are likely to include long
distance telephone charges, hand delivery and other delivery
charges, travel expenses, computerized research, transcription
costs, and third-party photocopying charges.

As a professional employed by the Debtors in the ordinary
course, PwC will not seek compensation and reimbursement of
expenses in accordance with the Bankruptcy Code.

PwC will, however, maintain reasonably detailed records of its
fees and any actual and necessary costs and expenses incurred in
connection with the aforementioned services. (W.R. Grace
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WARNACO: Court Sets June 24 Bar Date for Prologis Trust Claims
--------------------------------------------------------------
Since 1995, Calvin Klein Jeanswear Company, one of the Debtors,
and Floor Ready Apparel Company LLC, are parties to a
Distribution Agreement, wherein Floor provides CK Jeans with
merchandise processing and distribution services, including
facilities, material handling equipment, labor security,
management and operating supplies.

In conjunction with its responsibilities under the Agreement,
Floor leased a property in 1000 New Country Road, Secaucus, New
Jersey from Security Capital, which is now known as ProLogis
Trust. In turn, Designer Holdings, Ltd, another Debtor,
guaranteed Floor's payment and performance obligations on the
Lease. To date, ProLogis has not made any demand for payment
from the Debtors so it did not receive any Bar Date Notice from
the Debtors.

Accordingly, Warnaco Group, Inc. and its debtor-affiliates
request and obtained the Court approval to give ProLogis until
June 24, 2002 to file its Proofs of Claim at the Court. (Warnaco
Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WILLIAMS COMMS: Lays-Out Proposed Chapter 11 Reorganization Plan
----------------------------------------------------------------
Without material deviation from the Restructuring Agreement,
Williams Communications Group, Inc. and its debtor-affiliates
present their Plan of Reorganization to the Bankruptcy
Court.

The Plan is designed to accomplish a comprehensive restructuring
of WCG's balance sheet, by discharging approximately
$5,000,000,000 in unsecured claims against WCG (comprised
primarily of claims arising from the Senior Redeemable Notes,
the unsecured claims of The Williams Companies (TWC), and claims
arising from the Senior Reset Note). In exchange, the Plan
provides those creditors with stock in a new company to be
created by the Plan (New WCG), as well as interests in a trust
formed under the Plan to liquidate and distribute to creditors
certain residual assets of WCG. The ownership of Williams
Communications LLC -- including an indirect ownership of the WCG
Network -- will be transferred to New WCG under the Plan.

The absolute priority rule embodied in the Bankruptcy Code
requires that creditors be paid in full under a Chapter 11 plan
before shareholders or other holders of equity interests can
recover any value. In light of the fact that the stock of New
WCG being distributed to creditors under the Plan is worth less
than the value of the creditors' claims, the creditors are not
being paid in full under the Plan. Accordingly, the Bankruptcy
Code prohibits any distribution to shareholders or other holders
of WCG Equity Interests under the Plan.

In addition, the Plan reflects an agreement that has been
reached between the Company and the secured lenders to Williams
LLC to implement, on the Effective Date of the Plan, an out-of-
court restructuring of Williams LLC's indebtedness to the
Lenders under a certain Amended and Restated Credit Agreement,
dated as of September 8, 1999. If the Plan is confirmed,
Williams LLC will prepay $250,000,000 of its indebtedness to the
Lenders, and the Lenders will amend and restate the Williams LLC
Credit Agreement to cure all prior defaults and reset
appropriate covenants so that they are in line with the
Company's projected performance. After the prepayment of
$250,000,000 on the Effective Date, and taking into
consideration a $200,000,000 prepayment made by Williams LLC
under the Credit Agreement upon entering into an amendment to
the Credit Agreement with certain of the Lenders on April 22,
2002, Williams LLC's indebtedness to the Lenders will be reduced
from $975,000,000 to $525,000,000.

This agreement with the Lenders is embodied in a Restructuring
Agreement dated as of April 19, 2002 between the Debtors, over
90% of the Lenders, and the holders of approximately $875
million of Senior Redeemable Notes. Pursuant to the
Restructuring Agreement, those creditors have agreed to vote to
accept the Plan, subject to certain conditions.

Prior to the commencement of the Chapter 11 Cases, WCG also
reached an agreement with TWC dated as of February 23, 2002
concerning a restructuring of the Company's obligations to TWC.
Pursuant to the Plan Support Agreement, TWC has agreed to vote
to accept the Plan, subject to certain conditions.

These transactions will occur or be deemed to have occurred on
the Effective Date of the Plan:

A. all existing Equity Interests in WCG will be cancelled.
   WCG's existing certificate of incorporation will be amended
   and restated to authorize the issuance of a single share of
   capital stock and limit WCG's corporate actions to the
   winding-up of its affairs.  This is including the
   prosecution of Causes of Action or other liquidation of the
   Debtors' assets other than the equity interests in WCL;

B. New WCG will be incorporated under the laws of the State of
   Nevada and authorized, pursuant to the New Charter and New
   Bylaws, to issue the New WCG Common Stock;

C. New WCG will issue the New WCG Common Stock to WCG in
   exchange for WCG's transfer of the equity interests in
   Williams LLC to New WCG,

D. a trust will be created and settled by WCG with the Residual
   Share and the New WCG Common Stock and

E. the Residual Trustee will distribute to each holder of an
   Allowed Class 4, 5, 6 or 7 Claim the holder's Pro Rata Share
   of the New WCG Common Stock and Available Proceeds from
   Residual Assets. (Williams Bankruptcy News, Issue No. 4;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)


* BOND PRICING: For the week of May 27 - May 31, 2002
------------------------------------------------------
Following are indicated prices for selected issues:

Amresco 9 7/8 '05              23 - 25(f)
AES 9 1/2 '09                  77 - 79
AMR 9 '12                      96 - 97
Asia Pulp & Paper 11 3/4 '05   25 - 26(f)
Bethlehem Steel 10 3/8 '03     11 - 12(f)
Enron 9 5/8 '03                11 - 12(f)
Global Crossing 9 1/8 '04       2 -  3(f)
Level III 9 1/8 '04            46 - 48
Kmart 9 3/8 '06                50 - 52(f)
NWA 8.70 '07                   90 - 92
Owens Corning 7 1/2 '05        40 - 41(f)
Revlon 8 5/8 '08               44 - 46
Trump AC 11 1/4 '07            75 - 77
USG 9 1/4 '01                  80 - 82(f)
Westpoint Stevens 7 3/4 '05    55 - 57
Xerox 7.15 '04                 94 - 95

                          *********


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

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