TCR_Public/020529.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Wednesday, May 29, 2002, Vol. 6, No. 105     


ANC RENTAL: Court Allows Ops. Consolidation at Austin Airport
AT&T CANADA: Raises $85.5MM via Monetizing Interest Rate Swaps
ALARIS MEDICAL: Expects 9% Sales Growth for Full-Year 2002
ALBERTA HOTELS: TSX Delists Shares for Not Meeting Requirements
BURLINGTON: Worldwide Wants to Assume Autenreith Employment Pact

CIRTRAN CORP: Has $4.6M Working Capital Deficit at Mar. 31, 2002
CLASSIC COMMS: Hires Daniels & Assoc. as Cable Systems Broker
COLOR SPOT NURSERIES: Must Extend Credit Pact to Continue Ops.
COOKER REST.: No Solid Business Plan & No Reorganization Plan
COVANTA ENERGY: Court Approves Nevada Water Contract Rejection

CROWN CORK: Unit Launches $150MM Equity Initial Public Offering
DESA INT'L: S&P Withdraws D Rating over Lack of Info on Finances
DIXIE GROUP: S&P Knocks Corporate B Credit Rating Down a Notch
DOMINIX INC: Shares Delisted from OTC Due to Late 10-KSB Filing
DRESSER INC: S&P Affirms BB- Corporate Credit Rating

DYNASTY COMPONENTS: Will Apply for CCAA Protection Extension
ECHOSTAR COMMS: StarBrand Files Suit Seeking Restraining Order
ECOGEN INC: Fails to Meet Covenants Under Credit Agreement
ENRON CORP: Sherron Watkins Engages Philip Hilder as Counsel
ENRON: Tittle Plaintiffs Press to Collect $85 Million Judgment

EXIDE: Utilities Seek Security Deposits for Adequate Assurance
FAIRCHILD DORNIER: Gets Interim OK to Use Cash Management System
FEDERAL-MOGUL: Wins Nod to Implement Key Employee Retention Plan
FLAG TELECOM: Looks to Blackstone Group for Financial Advice
GENSCI REGENERATION: Delays Filing of 2001 Annual Fin'l Results

GLOBAL CROSSING: Taps Dovebid to Auction-Off De Minimis Assets
GLOBAL CROSSING: Preparing Company-Sponsored Restructuring Plan
GRAHAM PACKAGING: Unit Tenders $250M Shares in Public Offering
HOULIHAN'S RESTAURANTS: Receives Court Nod to Auction 9 Darryl's
ICG: Gets Go-Signal to File SBC Confidential Pact Under Seal

IT GROUP: Judge Walrath Allows Debtors to Sell De Minimis Assets
INTEGRATED HEALTH: Court Stretches Removal Period to September 3
ISLE OF CAPRI: Proposes to Issue 5.35M Shares in Public Offering
KMART CORP: Court Carves-Out 3 Utilities from Utility Order
KMART: DJM is Taking Bids for Real Estate Assets Until June 7

KMART CORP: U.S. Trustee Agrees to Appoint Equity Committee
MANITOWOC: S&P Rates $750MM Rule 415 Shelf Registration at BB
NORSKE SKOG: Moody's Rates Planned C$300M Credit Facility at Ba1
OWENS CORNING: Seeks Approval of Indian Unit's Restructuring
PACIFICARE HEALTH: Names Ho to Lead Consolidated Health Services

PILLOWTEX: Will Assume Lease Agreements with Summit as Amended
POLAROID: Retirees Seeks Severance Objection Deadline Extension
PROTECTION ONE: Will Continue to Acquire Unit's Debt Instruments
SAF T LOK INC: Files for Chapter 7 Liquidation in Pennsylvania
SAF T LOK INC: Voluntary Chapter 7 Case Summary

SNTL CORP: Court Fixes June 14 Bar Date for Proofs of Claims
SAFETY-KLEEN: Court to Consider Onyx's Motion at June 10 Hearing
STEWART ENTERPRISES: Inks Definitive Pact to Sell Ops. in Canada
TELEGLOBE HOLDINGS: US Units File for Chapter 11 Reorg. in DE
TELEGLOBE COMMS: Case Summary & 50 Largest Unsecured Creditors

TELEGLOBE HOLDINGS: Judge Walrath Signs TRO Against US Creditors
TRANSDIGM INC: S&P Rates $75MM Senior Subordinated Notes at B-
TRIMAS CORP: S&P Concerned About Thin Cash Flow Protection
TRUMP HOTELS: S&P Upgrades Corporate Credit Rating to CCC
TUCKAHOE CREDIT: S&P Cuts Rating on 2001-CTL1 Certs. to BB+

U.S. TECHNOLOGIES: Working Capital Deficit Reaches $9.6 Million
UNITED COs.: Move for Consumers' Class Certification Nixed
VANTAGEMED CORP: Names David Philipp as New Independent Director
W.R. GRACE: Court Approves Stipulation With National Union
WARNACO GROUP: Wins Approval to Conduct Store Closing Sales

WELLMAN: Selling Non-Core Polyester Filament Yarn Business
WESTERN WIRELESS: S&P Cuts Rating to B on Restrictive Bank Deals
WILLIAMS: Shareholders Say Restructuring Pact is "Superfluous"
WILLIAMS CONTROLS: March 31 Balance Sheet Upside-Down by $15MM
WORLDCOM: S&P Maintains Watch on Rating After MCI Stock Decision

* Meetings, Conferences and Seminars


ANC RENTAL: Court Allows Ops. Consolidation at Austin Airport
ANC Rental Corporation and its debtor-affiliates sought and
obtained Court permission to reject the National Concession
Agreement and National Lease. They will assume the Alamo
Concession Agreement and Alamo Lease and assign them to ANC.  
ANC will operate both trade names on a consolidated basis at the
Austin Airport.

The move is expected to give the Debtors a cost savings of up to
$1,527,000 annually in fixed facility costs and other
operational costs.

According to Mark J. Packel, Esq., at Blank Rome Comisky &
McCauley LLP in Wilmington, Delaware, National owes Austin City
$16,194 in pre-petition expenses, $42,140 in customer facility
charges that is to be paid to the trustee, $2,667 in staging
lane fees and $46,836 in post-petition expenses. Austin City
will draw upon the applicable Letters of Credit, which National
posted pursuant to the terms of its concession agreement and
lease, in the amount of pre-petition debt that does not relate
to CFCs or staging lane rental.

Mr. Packel adds that Austin City will also advise National
whether it intends to draw upon the Letter of Credit for
reimbursement of damages to the premises, if any, including
environmental clean-up, remediation claims. Austin City will
then release and return to National the Letter of Credit and any
amounts received by the City under the Letter of Credit in
excess of the Drawn Debt.

As to the Alamo Concession Agreement and Lease, Mr. Packel
submits that ANC will deliver to Austin City a Letter of Credit
equal to the amount required by the concession agreement and
lease. Austin City will draw upon the applicable letters of
credit in the amount of Alamo's pre-petition debt. (ANC Rental
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

AT&T CANADA: Raises $85.5MM via Monetizing Interest Rate Swaps
AT&T Canada Inc. (TSE: TEL.B and NASDAQ: ATTC), announced
another step in the implementation of its plan to ensure its
future as a strong competitor and a growing and profitable
company, raising $85.5 million through monetizing cross currency
interest rate swaps. The company could have raised additional
funds in this manner but chose not to at this time as it would
have been uneconomical to do so.

With the support of its lending syndicate, the Company has
amended its banking agreement to give it access to an additional
$200 million as follows: $85 million upon the delivery of a
business plan following the release of the CRTC "price cap"
decision that is approved by lenders representing two thirds
of the banking syndicate; and a further $115 million upon the
approval of each lender.

AT&T Canada reiterated that its business plan remains fully
funded through to the latter part of 2003.

AT&T Canada is the country's largest national competitive
broadband business services provider and competitive local
exchange carrier, and a leader in Internet and E-Business
Solutions. With over 18,700 route kilometers of local and long
haul broadband fiber optic network, world class data, Internet,
web hosting and e-business enabling capabilities, AT&T Canada
provides a full range of integrated communications products and
services to help Canadian businesses communicate locally,
nationally and globally. AT&T Canada Inc. is a public company
with its stock traded on the Toronto Stock Exchange under the
symbol TEL.B and on the NASDAQ National Market System under the
symbol ATTC. Visit AT&T Canada's Web site,
http://www.attcanada.comfor more information about the company.

At September 31, 2001, AT&T Canada had a total shareholders'
equity deficit of about $144 million.

AT&T Canada Inc.'s 10.750% bonds due 2007 (ATTC07CAR1),
DebtTraders says, are quoted at a price of 8. See
for real-time bond pricing.

ALARIS MEDICAL: Expects 9% Sales Growth for Full-Year 2002
At its annual meeting held in New York City on Wednesday, May
22, 2002, ALARIS Medical Inc. (AMEX:AMI) updated shareholders on
its Medication Safety Strategy and indicated that equity
research coverage of ALARIS would begin shortly.

Dave Schlotterbeck, president and CEO, told shareholders,
"Prospects are very bright for your company. With the launch of
the MEDLEY(TM) Medication Safety System and the Guardrails(TM)
Safety Software it contains, we believe we are in a position to
save patients' lives by helping to prevent medication errors at
the bedside. In doing this, we believe we will take market share
and grow sales over the next few years at least 10% per year.
With the leverage from the debt in our capital structure, this
should also mean a significant increase in earnings per share.
The speed of market penetration of our new safety product
platforms will determine the rate of increase of our earnings
per share."

The MEDLEY system is a modular medical device with a new safety-
enabling platform that incorporates the proprietary Guardrails
Safety Software. The Guardrails Safety Software resides inside
the infusion therapy device. This software will allow
institutions to program more than 1,000 safety limits and can be
tailored by the hospital's medical staff to meet specific
hospital needs, such as different patient types, different
disease states and different departments of the hospital. While
the Guardrails software allows hospitals to implement their
safety standards for patients with differing medication
requirements, it is the MEDLEY system that brings those
standards to the patient's bedside. The Guardrails product will
also be available later this year for approximately 50,000
additional ALARIS infusion instruments already in service.

Schlotterbeck also told shareholders that he anticipated Wall
Street equity analyst coverage shortly.

"We are rapidly becoming a meaningful equity story," he said,
"And I believe in a matter of days you will see a report on
ALARIS by the equity research department of a major, global
investment bank. I am very pleased to report this development."

On May 24, 2002, UBS Warburg analyst Sanjiv Arora initiated
equity coverage of ALARIS Medical Inc. with a "Strong Buy"
recommendation and a target price in the next 12 months of $8
per share.

Also at the annual meeting, Chief Financial Officer Bill Bopp
stated, "ALARIS reported a profit in the first quarter of 2002,
and we believe we will be profitable each remaining quarter of
this year."

He indicated ALARIS Medical reported first quarter earnings of
$.01 per share and that the company continues to project $.07 -
$.08 EPS for the full year 2002. Sales are expected to grow by
at least 9% compared with 2001.

ALARIS Medical Inc., through its wholly owned operating company,
ALARIS Medical Systems Inc., is a leading developer,
manufacturer and provider of integrated intravenous infusion
therapy and patient monitoring instruments and related
disposables, accessories and services. ALARIS Medical's primary
brands, ALARIS(R), IMED(R) and IVAC(R), are recognized
throughout the world. ALARIS Medical's products are distributed
in more than 120 countries worldwide. In addition to its San
Diego world headquarters and manufacturing facility, ALARIS
Medical also operates manufacturing facilities in Creedmoor,
N.C.; Basingstoke, U.K.; and Tijuana, Mexico. Additional
information on ALARIS Medical can be found at

ALARIS' balance sheet at December 31, 2001, showed a total
shareholders' equity deficit of about $46.7 million.

ALBERTA HOTELS: TSX Delists Shares for Not Meeting Requirements
Effective at the close of business May 23, 2002, the common
shares of Alberta Hotels & Resorts Inc.  were delisted from the
TSX Venture Exchange for failing to meet Exchange Listing
Requirements by failing to complete a qualifying transaction
within 18 months of listing.  The securities of the Company have
been suspended since March 4, 2002.

BURLINGTON: Worldwide Wants to Assume Autenreith Employment Pact
Burlington Worldwide, Inc. -- the Debtor -- asks for the Court's
authority to assume an Employment Agreement with Helmut-Richard
Autenreith, as the European sales and marketing manager for
their uniform, barrier fabrics and activewear operating segment.

Rebecca L. Booth, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, explains that the term of the Agreement is
for an indefinite period, which started January 17, 2000, and
may be terminated by either party under the German law.  Under
the Agreement, Mr. Autenreith receives:

    (i) employee benefits as required by German law; and

   (ii) an annual salary, paid each month, that is commensurate
        with his experience and salaries paid to similarly
        situated employees with similar responsibilities.

In addition, Ms. Booth states that Mr. Autenreith may be
entitled to a performance based bonus under the Debtor's Sales
Incentive Plan.

According to Ms. Booth, Mr. Autenreith is responsible for:

    (i) an approximately $10,000,000 business with operations
        throughout Europe;

   (ii) coordinating and overseeing eight different agents;

  (iii) maintaining the Debtor's major accounts in Europe;

   (iv) negotiating the purchase and sale of the Debtor's
        products throughout Europe; and

    (v) coordinating and negotiating the Debtor's participation
        in European trade shows and sales meetings.

Ms. Booth tells the Court that Mr. Autenreith has held the
position for approximately two years already and during this
time, Mr. Autenreith has gained significant institutional
knowledge of the Debtor, its business operations and its ongoing
needs.  "Mr. Autenreith has established numerous personal
relationships with customers and has developed an indispensable
skill-set necessary to conduct business across numerous foreign
countries," Ms. Booth adds.  Unless the Debtor assumes the
Agreement, Mr. Autenreith has indicated that he will seek
employment elsewhere.  Ms. Booth relates that Mr. Autenreith's
departure would require the Debtor to commit significant
resources to locating and training an adequate replacement.
Accordingly, the Debtor believes that the assumption of the
Agreement at this time is warranted. (Burlington Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,

CIRTRAN CORP: Has $4.6M Working Capital Deficit at Mar. 31, 2002
Cirtran Corporation provides a mixture of high and medium size
volume turnkey manufacturing services using surface mount
technology, ball-grid array assembly, pin-through-hole and
custom  injection molded cabling for leading electronics OEMs in
the communications, networking, peripherals, gaming, consumer
products, telecommunications, automotive, medical, and
semiconductor industries.  Company services include pre-
manufacturing, manufacturing and post-manufacturing services.
Through its subsidiary, Racore Technology Corporation, it
designs and manufactures Ethernet  technology products.  The
Company goal is to offer customers the significant competitive
advantages  that can be obtained from manufacture outsourcing,
such as access to advanced manufacturing  technologies,
shortened product time-to-market, reduced cost of production,
more effective asset utilization, improved inventory management,
and increased purchasing power.

                      Results of Operations

Net sales decreased marginally to $641,330 for the three-month
period ended March 31,2002 as  compared to $650,485 during the
same period in 2001.  This increase continues an upward trend
started in the fourth quarter of 2001, from lower quarterly
sales figures of $420,480 and $279,055 during the second and
third quarters of 2001, respectively.  Cost of sales decreased
by 23%, from $545,478 during the three-month period ended March
31, 2001 to $419,116 during the same period in 2002.  Gross
profit margin for the three-month period ended March 31, 2002
was 34.6%, up from 16.1% for the same period in 2001.  Cirtran
believes this improvement is a reflection of its efforts to
solicit higher margin business and improve inventory control

Cirtran's expenses are currently greater than its revenues.  The
Company has had a history of losses.  Net loss from operations
for the year ending December 31, 2001 was $933,084, and net loss
from operations for the three-month period ending March 31, 2002
was $298,394. Accumulated deficit was $13,080,492 at December
31, 2001 and $13,506,249 at March 31, 2002. Current liabilities
exceeded current assets by $7,832,259 as of December 31, 2001
and by $4,661,141 as of March 31, 2002.  The Company recorded
negative cash flows from operations for the year ended December
31, 2001 and the three-month period ended March 31, 2002 of
$288,724 and $677,205, respectively.

On March 31, 2002, Cirtran had $500 cash on hand, as compared to
$499 at December 31, 2001.  The  amount of checks written in
excess of cash in bank decreased from $159,964 at December 31,
2001 to $149,677 at March 31, 2002.

Since February of 2000, the Company has operated without a line
of credit.  Many of the Company's  vendors stopped credit sales
of components used by the Company to manufacture products and as
a result, the Company converted certain of its turnkey customers
to customers that provide consigned  components to the Company
for production.  These conditions raise substantial doubt about
the Company's bility to continue as a going concern.

In view of these matters, recoverability of a major portion of
the recorded asset amounts shown in the Company's consolidated
balance sheets is dependent upon continued operations of the
Company,  which in turn is dependent upon the Company's ability
to meet its financing requirements on a continuing basis, to
maintain or replace present financing, to acquire additional
capital from investors, and to succeed in its future operations.  

Abacus Ventures, Inc. purchased the Company's line of credit
from the lender. During the quarter ended March 31, 2002, the
Company has entered into an agreement whereby the Company has
exchanged  common stock, issued to certain principles of Abacus,
for a portion of the debt.  The Company's plans include working
with vendors to convert trade payables into long-term notes
payable and common stock and cure defaults with lenders through
forbearance agreements that the Company will be able to service.  
The Company intends to continue to pursue this type of debt
conversion going forward with other creditors. The Company has
initiated new credit arrangements for smaller dollar amounts
with  certain vendors and will pursue a new line of credit after
negotiations with certain vendors are complete.  If successful,
these plans may add significant equity to the Company. There is
no assurance that these transactions will occur.

CLASSIC COMMS: Hires Daniels & Assoc. as Cable Systems Broker
Classic Communications, Inc. and its debtor-affiliates ask for
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Daniels & Associates, LP as their Cable
Systems Broker.

The Debtors tell the Court that they chose Daniels as their
cable systems broker because of the firm's extensive expertise
and knowledge in the cable television industry. Daniels'
engagement with the Debtors will be limited to brokering the
small cable systems.  The Debtors assure the Court that the
administrative agent for the Debtors prepetition and
postpetition secured lenders supports the retention and
employment of Daniels.

The services that Daniels will render to the Debtors include:

     a) identifying, contacting, and eliminating interest from
        prospective purchasers regarding the acquisition by a
        third party of certain cable systems;

     b) preparing an informational brochure that describes the
        cable systems, the Debtors' assets, operations,
        management, financial condition, and other information;

     c) assisting, if requested by the Debtors, in negotiations
        with prospective purchasers.

Subject to Court approval, Daniels will receive compensation in
an amount equal to 5% of gross sale price for each completed
transaction. Daniels will also be reimbursed for all actual out-
of-pocket expenses incurred in connection with the services it
renders to the Debtors.

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

COLOR SPOT NURSERIES: Must Extend Credit Pact to Continue Ops.
Color Spot Nurseries Inc. is one of the largest wholesale
nurseries in the United States, based on annual revenue and
greenhouse square footage.  The Company sells a wide assortment
of high quality bedding plants, shrubs, potted flowering plants,
ground cover and Christmas trees as well as extensive
merchandising services primarily to leading home centers and
mass merchants. The Company's business is highly seasonal with a
peak selling season generally extending from March through June.

Net sales decreased $3.0 million, or 7.1%, to $39.1 million for
the three months ended March 31, 2002, from $42.1 million during
the three months ended March 30, 2001. This decrease is
primarily the result of softer retail sales reflecting the
general economic slowdown combined with unfavorable weather
patterns in the southwest and northern California regions,
product availability shortages in southern California and lower
sales to Atlantic and Midwest regions. Additionally, net sales
to the Company's largest customer represented 41.2% of the
Company's total net sales for the three months ended March
31,2002 down from 44.2% during the three months ended March 30,

Gross profit decreased approximately $0.2 million to $19.5
million for the three months ended March 31, 2002, from $19.6
million during the three months ended March 30, 2001. Gross
profit as a percentage of net sales increased to 49.8% for the
three months ended March 31, 2002, from 46.7% for the three
months ended March 30, 2001. The increase in gross profit as a
percentage of net sales was primarily the result of lower
utility and natural gas rates during the three months ended
March 31, 2002.

The Company's net income for the three months ended March 31,
2002 was $1,393 as compared to the net loss of $725 in the
comparable period ended March 30, 2001.

The Company funds its operations primarily from cash provided by
operating activities, if any, and through borrowings under its
revolving credit facility. The availability of a revolving
credit facility is critical to the Company's ability to continue
as a going concern. The Company's Credit Agreement contains
various covenant requirements that the Company must meet and the
lender has the ability to stop advancing funds to the Company in
the event of a material adverse change. The Company was in
compliance with its covenants at March 30, 2002 and the
Company's management currently believes that it will be in
compliance with all covenants for the next twelve months,
however no assurance can be given to this effect. If the Credit
Agreement, which expires on September 15, 2003, is not extended
or a replacement is not obtained, the Company will not be able
to continue in its present form, if at all.

COOKER REST.: No Solid Business Plan & No Reorganization Plan
Cooker Restaurant Corporation's recent losses and its Chapter 11
proceedings raise substantial doubt about the Company's ability
to continue as a going concern.  The Company's continuation as a
going concern is dependent upon its ability to generate
sufficient cash flows to meet obligations on a timely basis, to
comply with the terms and conditions of its debt agreements, to
obtain additional financing as may be required and profitably
operate its business. The Company may be unable to continue as a
going concern for a reasonable period of time.

Sales for the first quarter of fiscal 2002 decreased 39.8%, or
$14,878,000, to $22,510,000 compared to sales of $37,388,000 for
the first quarter of fiscal 2001. The decrease is due to a
decrease in the number of guests at the restaurants as well as a
decrease in the number of stores operating during the comparable
periods. At the end of the first quarter of 2002, the Company
operated 40 restaurants, compared to 64 at the end of the first
quarter of 2001. Same store sales were down 15.6% for the three
months ended March 31, 2002 from the three months ended April 1,
2001. To address the decrease in sales, the Company has
increased its staffing at its restaurants, revised its standard
national menu to a regional menu, changed key operations
executives and implemented other procedures to emphasize
customer service.

The Company's loss before the benefit for income taxes was
$1,124.  After applying the benefit for income taxes of $3,535 a
gain of $2,411 was shown for the three months ended March 31,

As of March 31, 2002, the Company had not filed a reorganization
plan with the Bankruptcy Court.  If management is unable to
implement a successful plan, the lenders, subject to the
Bankruptcy Court approval, could foreclose on the collateral
assets, which would have a material adverse effect on the
Company's financial condition, results of operations and
liquidity. These conditions raise substantial doubt about the
Company's ability to continue as a going concern for a
reasonable period of time.

COVANTA ENERGY: Court Approves Nevada Water Contract Rejection
Covanta Energy Corporation and its debtor-affiliates obtained
Court approval to reject an executory construction contract with
the Southern Nevada Water Authority which calls for the addition
of an ozone facility and two affiliated subcontracts.

                The Nevada Construction Contract

The Nevada Construction Contract calls for the addition of ozone
facilities to the Authority's existing Alfred Merritt Smith
Water Treatment Facility (the AMSWTF). The Nevada Construction
Contract requires the Contractor to (1) relocate utilities and
connections to existing facilities, (2) construct the ozone
contactor and appurtenant yard structures, (3) construct the
ozone building and install equipment, valves and instruments
provided by the Authority. This construction is to enhance the
water treatment system, explains Deborah M. Buell, Esq. at
Cleary Gottlieb.

While the Nevada Construction Contract called for the
construction to be completed in a timely and efficient manner,
there have been numerous delays, resulting in higher
construction costs for the Contractor. The Contractor has been
unable to recoup these costs and, therefore, stands to lose
approximately $4-5 million if the Nevada Construction Contract
is continued. Such a financial drain on the Debtors' current
cash flow negatively impacts the Debtors' ability to effectuate
a successful reorganization.

The Nevada Construction Contract is insured by Travelers
Insurance Company. Although Travelers may assert a claim against
the estate, the Contractor expects that Travelers will continue
performance of the Nevada Construction Contract. While rejection
of the Nevada Construction Contract will result in rejection
claims, the Debtors believe that the benefit of rejection
outweighs the burden of continuing to perform the Nevada
Construction Contract.

So, she continues, the Contractor has determined to reject the
Nevada Construction Contract because participation in this
contract has resulted in losses to the Contractor, with no
corresponding benefit received by the Contractor.

                      The Subcontracts

Additionally, the Debtors obtained authorization to reject two
subcontracts affiliated with the Nevada Construction Contract
effective as of the date of this Motion. The Debtors have
determined that rejection of the Subcontracts is necessary in
light of the rejection of the Nevada Construction Contract.

The Debtors want to reject a subcontract between the Contractor
and Scott Company of California, dated March 5, 1999. The Scott
Subcontract calls for the Scott Subcontractor to furnish and
install mechanical equipment and piping at the AMSWTF.

The second subcontract subject to rejection is between the
Contractor and Shasta Electric, Inc., dated March 16, 1999. The
Shasta Subcontract calls for the Shasta Subcontractor to furnish
and install all materials required to complete electrical and
instrumentation work at the AMSWTF.

While both subcontracts called for the required installation to
be completed by specific dates, there have been numerous delays,
resulting in higher construction costs for the Contractor. Such
a financial drain on the Debtors' current cash flow negatively
impacts the Debtors' ability to effectuate a successful
reorganization. (Covanta Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

CROWN CORK: Unit Launches $150MM Equity Initial Public Offering
DebtTraders reports Monday that Crown Cork & Seal announced the
proposed $150 million initial public offering of equity and $350
million of debt of its wholly owned subsidiary, Constar
International Inc. According to the report, the $500 million of
proceeds will go to Crown Cork & Seal.

DebtTraders analysts Daniel Fan and Blythe Berselli commented,
"While the $500 million provides liquidity to near term
bondholders, we are unclear on the extent of the affect on later
bondholders because CCK will continue to own an undisclosed
portion of the equity. Constar produced $67.8 million in EBITDA
in 2001. We are unsure of the multiple because CCK will continue
to own an undisclosed portion of the equity. The proceeds of the
equity will be paid to CCK."

In addition, Constar will issue to CCK a $350 million note
maturing in a year's time, the proceeds of which will be used to
repay the Note. "We believe that this is a delivering
transaction as the multiple is greater than CCK's overall
leverage," the DebtTraders analysts said.

The Crown Cork & Seal 7.125% Note due 2002 (CCK02USR1) is one of
DebtTraders' Actives, and are being quoted at a price of 97. See  
real-time bond pricing.

DESA INT'L: S&P Withdraws D Rating over Lack of Info on Finances
Standard & Poor's has withdrawn its ratings on Bowling Green,
Kentucky-based DESA International Inc. The ratings, which had
been lowered to 'D' following non-payment of interest due
December 15, 2001, were withdrawn due to lack of public
information regarding the company's financial condition.

DIXIE GROUP: S&P Knocks Corporate B Credit Rating Down a Notch
Standard & Poor's lowered its corporate credit rating for carpet
and rug manufacturer The Dixie Group Inc. to single-'B'-minus
from single-'B'.

The rating on the Calhoun, Georgia-based company was removed
from CreditWatch, where it was placed on October 12, 2000. The
outlook is developing. Total debt outstanding at March 30, 2002,
was about $167 million.

"The rating could be lowered further if the company is unable to
make its $50 million contingent payment to Fabrica International
Inc. in April 2003. Conversely, the ratings could be raised if
the company secures financing for the Fabrica payment and
continues its trend of improving operating results," stated
Standard & Poor's credit analyst Susan Ding.

The Dixie Group will need to secure additional financing to meet
its $50 million contingency payment related to the company's
purchase of Fabrica International Inc., due in April 2003.
Failure to meet the obligation could result in the return of the
business back to the original owners. For Dixie, the high-end
residential Fabrica business represents about 10% of 2001

Although Dixie's operating results improved because of
restructuring efforts undertaken in 2001, including sale of non-
core assets, and a significant reduction in work force, debt and
inventory levels, Standard & Poor's expects credit protection
measures will remain weak through 2002.

For the year ended December 30, 2001, EBITDA to interest
coverage was about 2.6 times and total debt to EBITDA was about
4.6x, down from well over 9x at the end of 2000. Although the
recently refinanced credit facility should be sufficient for
working capital purposes, availability is limited by a borrowing
base. The firm has about $22 million available under its credit
facility as of May 14, 2002.

DOMINIX INC: Shares Delisted from OTC Due to Late 10-KSB Filing
Dominix Corp. (OTC: DMNX) has been delisted from the OTC due to
the late filing of its most recent 10-KSB.

The company has now completed the filing of the 10-KSB and new
management is diligently working with the audit team to complete
the preparation and filing of the 10-QSB on or before June 15,
2002. In conjunction with preparation of the 10-QSB the company
has assembled the due diligence package required for the
submission of a 15c211 to the NASD, which will be filed
subsequent to the acceptance of the 10-QSB. Upon the completion
of these events the company expects to return to a fully
compliant trading and reporting status.

As of April 30, 2002 the original management group has resigned
and the new management team of the company has relocated its
corporate office to 150 Broadhollow Road - Suite 103, Melville,
NY 11747. The new management team currently consists of James W.
Zimbler as President and Andrew J. Schenker as Chairman. Both
gentlemen will also serve as directors of the company.

"The company is currently in a restructuring phase with emphasis
on reengineering the corporate infrastructure. We expect to
emerge from this work shortly, fully compliant, with a more
viable entity to entice a potential merger candidate", stated
Mr. Zimbler.

DRESSER INC: S&P Affirms BB- Corporate Credit Rating
Standard & Poor's affirmed its double-'B'-minus corporate credit
rating on Dresser, Inc. and at the same time revised its outlook
to stable from positive. Carrollton, Texas-based Dresser is a
leading manufacturer of energy infrastructure equipment with
about $1 billion in outstanding debt.

"The outlook has been revised to stable from positive to reflect
the unlikelihood that ratings will be raised in the near term,"
said Standard & Poor's credit analyst Daniel Volpi. "Standard &
Poor's previous outlook anticipated a higher level of debt
reduction than is probable given current business conditions,"
he added.

The stable outlook reflects expectations that Dresser will
continue to post healthy performance measures. Material debt
reduction is expected in the medium term as business conditions

The ratings on Dresser reflect the company's very strong
competitive business position, consistent profitability and cash
flow generation, and experienced management team. However, these
strengths are offset by high financial risk due to substantial
debt leverage incurred in its 2001 recapitalization, and the
uncertainty associated with the timing and magnitude of future
debt reduction.

Dresser operates primarily in three business segments: design
and manufacture of valves and actuators (40% of 2001 revenues);
supply and service of retail fuel measurement systems and
industrial natural gas measurement systems (37%); and design and
manufacture of rotary blowers and natural gas-fueled engines
used in natural gas compression and distributed power generation
(23%). The company estimates that about 85% of its revenues are
generated from energy infrastructure spending. Aftermarket
products and services accounted for roughly 25% of 2001

DYNASTY COMPONENTS: Will Apply for CCAA Protection Extension
Dynasty Components Inc. (TSE:DCI) expects to apply for a further
extension of its protection under the Companies' Creditors'
Arrangement Act in order to continue its restructuring process
and preserve value for stakeholders. While the Company will
continue to seek alternatives to a liquidation of its assets,
the prospects of any return being generated for shareholders is
becoming increasingly remote.

DCI has refocused its business strategy entirely on its wholly-
owned subsidiary, Parts Logistics Management Corp., which
continues to operate normally. Parts Logistics Management Corp.
provides web-based B2B e-procurement and fulfillment logistics
solutions. Focused almost exclusively on the Information
Technology industry, PLM provides logistics solutions to IT
outsourcing service providers, assisting them in managing the
procurement, delivery and tracking of IT parts, as well as parts
disposition and logistics management services to computer
original equipment manufacturers.

ECHOSTAR COMMS: StarBrand Files Suit Seeking Restraining Order
StarBand, America's leading consumer high-speed, two-way
satellite Internet provider, has filed a lawsuit against
EchoStar Communications with the United States District Court
for the Eastern District of Virginia.

In its suit, StarBand is seeking a restraining order and
injunction against EchoStar to transfer back StarBand's customer
base and cease operating as StarBand's billing agent. The suit
also requests the court to prohibit EchoStar from collecting
fees from StarBand customers. StarBand is seeking damages for
EchoStar's failure to pay millions of dollars rightfully owed

"We look forward to a quick resolution on this matter," said
StarBand President and Chief Marketing Officer David
Trachtenberg. "With an immediate transition of our customer
base, StarBand will be able to move forward growing our business
and continuing to serve customers with the kind of service and
support they've come to expect and deserve from us."

                   The EchoStar Lawsuit

In the suit filed Thursday, StarBand charges that EchoStar has
not forwarded any of the millions of dollars in fees it has
collected and is collecting as its billing agent. As a result of
EchoStar's continued delay of the customer base transition,
StarBand will be denied another month of service fees and has
requested injunctive relief and damages from EchoStar.

"The lawsuit against EchoStar is unfortunate but also
unavoidable," said Trachtenberg. "As a growing business, we
couldn't financially wait any longer to receive payments for the
services we provide."

StarBand delivers its two-way satellite Internet service through
professionally installed small antennas on roofs, walls or poles
of consumer homes for residential service or commercial
buildings for small office customers. The StarBand Model 360
high-speed satellite modem is connected to a customer's

When a customer accesses StarBand Internet service, the signal
travels over inside wiring to the rooftop antenna. The antenna
then relays the data signals to a satellite. The satellite sends
the signal to the StarBand Network Operations Center where it
gathers, aggregates and routes the signals to deliver data from
the Internet to the customer.

The StarBand antenna accommodates both StarBand high-speed
Internet service and satellite TV programming.

StarBand Communications Inc., headquartered in McLean, Virginia,
is America's first nationwide provider of two-way, always-on,
high-speed Internet access via satellite to residential

In February, 2002, StarBand introduced StarBand Small Office
service, a business-grade product for small business owners
wanting the affordable, always-on features of high-speed
satellite Internet access - virtually anywhere they run their

StarBand was recognized with the 'Most Innovative Internet
Service Provider' award sponsored by Interactive Week and the
Net Economy in September 2001 and awarded one of 21 finOvation
Awards for product excellence by readers and editors of Farm
Industry News in January 2002.

StarBand has exclusive rights to offer Gilat's two-way, high-
speed consumer Internet technology in the United States, Mexico
and Canada. Visit StarBand at StarBand  
is a trademark and service mark of StarBand Communications Inc.

                         *   *   *

EchoStar Communications dishes out a smorgasbord of
entertainment. The #2 US direct broadcast satellite (DBS) TV
provider (behind DIRECTV), the company operates the DISH
Network, providing programming to nearly 6.5 million subscribers
in the continental US. Subsidiaries develop DBS hardware such as
dishes and integrated receivers and deliver video, audio, and
data services. EchoStar has teamed up with Gilat Satellite
Networks (a partner with Microsoft) and Colorado startup
WildBlue to develop satellite-based two-way broadband Internet
access. As of March 31, 2002, EchoStar's balance sheet shows a
total shareholders' equity deficit of close to $863 million.

ECOGEN INC: Fails to Meet Covenants Under Credit Agreement
Ecogen Inc. is a biotechnology company specializing in the
development and marketing of environmentally compatible products
for the control of pests in agricultural and related markets.
The Company has not yet achieved profitable operations for any
of its fiscal years and there is no assurance that profitable
operations, if achieved, could be sustained on a continuing
basis. Further, the Company's future operations are dependent,
among other things, on the success of the Company's
commercialization efforts and market acceptance of the Company's

The Company has reported net losses allocable to common
stockholders of $2.5 million and $4.0 million for the six-month
periods ended April 30, 2001, and 2000, respectively. The loss
from inception in 1983 to April 30, 2001 amounted to $135.6
million. Further, the Company has a working capital deficit, a
stockholders' deficit and limited liquid resources. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.

Net product sales were $1.6 million and $3.5 million for the
first six months of fiscal 2001 and 2000, respectively,
representing a decrease of 54%. Sales of the Company's Bt
product line, representing 92% of Company's product sales in the
first six months of fiscal 2001, decreased 49%. Biofungicide
product sales, which represented 9% of product sales in fiscal
2001, decreased $.2 million from the year-ago period. Other
product sales, representing 9% of Company's product sales,
decreased $.2 million in the first half of fiscal 2001 when
compared to the comparable quarter in fiscal 2000. The decrease
in product sales were primarily the result of the Company's
limited ability to fund production and the purchase of finished
goods from Dow AgroSciences LLC. due to the Company's
limited liquid resources.

Contract research revenues increased $.2 million due to grants
funded in fiscal 2001.

Net loss allocable to common stockholders for the six months
ended April 30, 2001 were $2.5 million, compared to a net loss
allocable to common stockholders of $4.0 million for the same
period in fiscal 2000 substantially as a result of lower

The Company's continued operations will depend on its ability to
raise additional funds. The Company has financed its working
capital needs primarily through private and public offerings of
equity and debt securities, revenues from research and
development alliances and product sales. In addition, the
Company has a working capital line of credit, which originally
expired in August 2000 but was  extended to June 29, 2001, a
term loan of $1.5 million and promissory notes aggregating $1.0       
million that are due on June 23, 2002. However, in the event
that the Company receives net proceeds in excess of $50 thousand
from non-operating activity prior to June 23, 2002, the holders
of the term loan and the promissory notes may elect to require a
prepayment of the balance due on the loan and/or the notes. The
Company currently is not in compliance with the covenants of its
working capital line of credit. This line of credit had a
balance of $.2 million as of April 30, 2001 and a balance of $29
thousand at June 14, 2001. As a result of the Company's non-
compliance with the covenants, the working capital lender has
discontinued making loans and may, at its option, liquidate the       
collateral including inventory and accounts receivable.

ENRON CORP: Sherron Watkins Engages Philip Hilder as Counsel
Enron Corporation Vice President of Corporate Development,
Sherron S. Watkins, has retained the firm of Philip Hilder &
Associates PC as her counsel.  Ms. Watkins is relying on the
Court Order dated March 29, 2002.  The Order allowed the
retention and payment of separate counsel for other employees if
"there is reasonable basis for a belief by the employee or
officer in question that either Swidler would have a conflict of
interest in representing the individual or that Swidler could
not fully or adequately represent the individual's interests."

Swidler Berlin Shereff Friedman LLP is Special Employees'
Counsel employed by the Debtors.

Edgar A. Goldberg, Esq., at Philip H. Hilder & Associates PC, in
Houston, Texas, reiterates that Ms. Watkins' reluctance to use
the legal services of Swidler is because the firm has been privy
to all of the information from high-ranking employees.  These
high-ranking employees' information is in direct conflict with
other employees' information such as that from Ms. Watkins.  As
previously reported, Ms. Watkins is the whistle-blower of the
Enron scandal.  Mr. Goldberg reports that several of these high-
ranking employees have now been terminated, while others remain.
"Knowing the power and fearing the influence of these employees,
Ms. Watkins justifiably perceived that the Debtors and Swidler
would be unable to adequately protect her and be objective about
her testimony before Congress and other investigative
authorities," Mr. Goldberg says.

Mr. Goldberg tells the Court that massive amounts of time were
spent organizing data and preparing testimony for several
Congressional committees and other investigative authorities,
and protecting Ms. Watkins from undue harassment.  In addition,
Mr. Goldberg continues, Ms. Watkins and the Hilder law firm
expended large sums on administrative, travel and hotel expenses
necessary to further the Debtors' interests.  Mr. Goldberg also
points out that Mr. Hilder's hourly rates are less than the
Swidler firm's rates.  Accordingly, the Hilder firm claims a
substantially lesser amount for its legal representation than
what the Swidler firm would have charged.  However, Mr. Goldberg
says, the Hilder law firm and Ms. Watkins have not been
reimbursed for any expenses related to their work on behalf of
the Debtors.  The Hilder law firm seeks $224,396 for services
and $11,122 for necessary expenses, for a total invoice of

Mr. Goldberg argues that, "Section 503(b)(2) of the Bankruptcy
Code specifically allows attorney's fees as administrative
expenses afforded first priority [sic]."  Furthermore, Mr.
Goldberg asserts that Section 503(b)(1)(A) provides that, after
notice and hearing, administrative expense claims for actual and
necessary costs and expenses of preserving the estate will be
allowed.  In addition, Mr. Goldberg says, actual and necessary
expenses incurred by the creditors in making a substantial
contribution in a Chapter 11 case are accorded administrative
priority in distribution under Section 503(b)(3)(D).

Thus, Ms. Watkins asks the Court to grant her application for an
order authorizing the Debtors to retain Hilder & Associates
P.C., as her Special Counsel and/or pay for legal fees and

Philip H. Hilder, senior partner of the law firm Hilder &
Associates PC, assures Judge Gonzalez that all attorneys
associated with the firm are "disinterested persons" as that
term is defined in Section 101(14) of the Bankruptcy Code.  Mr.
Hilder adds that the firm does not hold nor represents any
interest adverse to the Debtors' estates on the matters for
which it is to be engaged.  Mr. Hilder explains that the firm is
engaged in the general practice of law specializing in white-
collar criminal defense, and the prosecution and recovery
related to business and insurance fraud.  The Hilder firm has
been representing Ms. Watkins from December 11, 2001 up to the

                         Debtors Respond

The Debtors inform Judge Gonzalez that they do not object to the
retention of Ms. Watkins' counsel.  However, the Debtors object
to Ms. Watkins' Application solely to the extent:

  -- it seeks the retention of Ms. Watkins' counsel other than,
     as required by the Swidler Order, pursuant to Sections
     327(e), 330, and 363(b)(1) of the Bankruptcy Code; and

  -- it seeks relief which is not consistent with the Orders of
     the Court regarding the compensation of professionals.

Richard L. Levine, Esq., at Weil, Gotshal & Manges LLP, in New
York, recounts that the Court entered an Administrative Order
Pursuant to Sections 105(a) and 331 of the Bankruptcy Code
Establishing Procedures for Interim Compensation and
Reimbursement of Expenses of Professionals.  It was supplemented
by the Court's April 26, 2002 Order Establishing Fee Committee,
Directing Preparation of Professional Budgets and Formatting for
Presentation of Billing Statements.  Mr. Levine explains that
the Interim Compensation Order establishes the procedures for
filing monthly fee statements and quarterly fee applications
while the Fee Orders govern the compensation of all
professionals in the Debtors' Chapter 11 cases.

Without taking any position on the reasonableness of the fees
billed by Ms. Watkins' counsel, the Debtors object to the manner
in which the Application proposes to compensate the counsel as
inconsistent with the Fee Orders.  This Order requires the
Debtors to promptly pay the counsel 100% of the amount billed.
In the event the Court grants the Application and approves the
retention of Ms. Watkins' counsel, the Debtors ask that the
counsel be required to conform to the requirements and
procedures established by the Fee Orders, as do other

Moreover, Mr. Levine relates that the Application also cites
Sections 503(b)(4) and 503(b)(3)(D) of the Bankruptcy Code in
support of an order requiring the immediate payment of the
entire amount Ms. Watkins's counsel has billed.  However, Mr.
Levine points out that such sections deal with compensation of
professionals who represent creditors of Debtors in making a
significant contribution to the debtors' estates.  "Although the
Debtors acknowledge that Ms. Watkins is an employee, the Debtors
have no specific knowledge regarding her status as a creditor,
and do not believe that compensation of her counsel under these
sections is appropriate," Mr. Levine explains.  The Debtors
contend that Ms. Watkins' counsel should be retained, if at all,
pursuant to Sections 327(e), 330, and 363(b)(1) of the
Bankruptcy Code and the Fee Orders. (Enron Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ENRON: Tittle Plaintiffs Press to Collect $85 Million Judgment
The Tittle Plaintiffs renew their request to collect on any
judgment in their litigation up to the $85,000,000 limited of
the applicable ERISA fiduciary liability insurance policies.

Eli Gottesdiener, Esq., in Washington D.C., reminds the Court
that the Tittle Plaintiffs are the putative class
representatives in litigation filed pre-petition in the Southern
District of Texas against Enron, top Enron executives, and
others, on behalf of thousands of current and former Enron
employees who were or are participants in Enron's employee
benefit plans and are members of that putative class or classes.

When the Court granted stay relief to the Kemper and Tittle
Plaintiffs to liquidate their ERISA claims in the pending
litigation in the Southern District of Texas, Mr. Gottesdiener
notes that the Court did not rule on the request with respect to
the fiduciary liability policies.

The Tittle Plaintiffs contend that resolution of the issue of
whether or not proceeds under insurance policies are property of
the estates, and the elimination of any uncertainty with respect
to the character of the proceeds available under the fiduciary
policies will greatly assist both Enron and the Plaintiffs in
dealing with the pending ERISA litigation.

                        Debtors Object

Enron maintains two Fiduciary and Employee Benefit Liability
Insurance Policies providing a total of $85,000,000 for covered
losses and defense costs and $10,000,000 exclusively for defense
costs.  The Policies provide entity coverage to Enron, as well
as coverage to the employee benefit programs of Enron's debtor
and non-debtor affiliates, and the programs' trustees, officers,
directors or employees, and any other natural person who was, is
now, or shall be acting as a fiduciary or performing
administration of any Enron employee benefits program.

Greg A. Danilow, Esq., at Weil, Gotshal & Manges LLP, in New
York, asserts that the Court should deny the Tittle Plaintiff's
renewed motion for these three reasons:

Ripeness:  The Benefits Plan Litigation is still in its early
           stages, and the Tittle Plaintiffs have not yet
           demonstrated their entitlement to any of the proceeds
           of the Insurance Policies.  Thus, their request to
           lift the stay to pursue the proceeds of those
           Policies is not yet ripe for adjudication.

Standing:  The Tittle Plaintiffs are not a party to the
           Insurance Policies, a named insured in the Policies,
           or one for whose benefit the Policies were intended.
           Therefore, the Tittle Plaintiffs lack standing to
           seek an interpretation of the Policies that they are
           entitled to recover the proceeds of the Policies from
           the defendants in the Benefits Plan Litigation.

Property of
the Estate: Because the Insurance Policies expressly provide
           liability coverage to Enron, the proceeds of the
           Policies are, in part, property of the Debtors'
           estates. The Debtors believe it is necessary to
           preserve the $85,000,000 provided by the Policies for
           the benefit of the Debtors in the defense or
           potential resolution of covered claims.

Against this backdrop, Mr. Danilow asserts it is clear that an
order lifting the automatic stay would serve no purpose because
the Tittle Plaintiffs have no entitlement to pursue the proceeds
of the Policies.  They should not be granted relief that could
be interpreted to suggest that they have a priority in obtaining
insurance proceeds ahead of any other claimants.  "In sum, there
is no "cause" to lift the automatic stay," Mr. Danilow insists.

          The Creditors' Committee Does Not Like It Either

The Official Committee of Unsecured Creditors complains that the
renewed motion "is an improper attempt on the part of the Tittle
Plaintiffs to end-run the administration of the Debtors' estates
to reserve for themselves proceeds from an insurance policy to
which they have no entitlement."

"And even if the Tittle Plaintiffs had standing to seek the
relief they request (which they do not), the Renewed Motion is
entirely premature," Luc A. Despins, Esq., at Milbank, Tweed,
Hadley & McCloy LLP, in New York, asserts.  Mr. Despins reports
that little progress has been made in the Tittle Action, which
has yet to be certified until at the end of this year.
Furthermore, Mr. Despins adds, fact discovery will not be
completed for over one year, expert discovery will not be
completed for more than 15 months, and a trial date has been set
for almost two years from now.

Since the Renewed Motion is clearly unjustified, the Committee
asks the Court to deny the relief requested. (Enron Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,

EXIDE: Utilities Seek Security Deposits for Adequate Assurance
American Electric Power, Detroit Edison Company, Metropolitan
Edison Company, a First Energy Company, Georgia Power Company,
TXU Gas and TXU Energy, Reliant Energy, Reliant Energy HLP and
Reliant Energy Entex, objects to Exide Technologies and its
debtor-affiliates' Utility Motion.

In consideration for negating the utility's bargaining power,
Thomas G. Whalen, Jr., Esq., at Stevens and Lee P.C. in
Wilmington, Delaware, relates that Section 366 provides that
utilities are to receive "adequate assurance of payment, in the
form of a deposit or other security" from the debtor for having
to assume the risk of providing the debtor with post-petition
service on an arrearage basis. The deposit or other security
"should bear a reasonable relationship to expected or
anticipated utility consumption by a debtor." In making such a
determination, it is appropriate for the Court to consider "the
length of time necessary for the utility to effect termination
once one billing cycle is missed." Based on the Debtors'
anticipated utility consumption in this case, the minimum period
of time the Debtors could receive service from the Utilities
before termination of service for non-payment of bills is
approximately 2 to 2 and 1/2 months. Accordingly, the Utilities
are seeking these deposits as adequate assurance:

Utility                  Pre-petition Debt   Deposit Required
-----------------------   ----------------   ----------------
American Electric Power   $         0          $ 193,217
Detroit Edison Company          6,000             18,000
First Energy                  343,278            562,230
Georgia Power Company         186,159            220,505
TXU Gas                        66,000            220,230
TXU Energy                  1,207,187            282,590

The Utilities are seeking post-petition security from the
Debtors because:

A. The Debtors, by their own admission, purportedly have
   liquidity solely as a result of their DIP Facility, not
   from the income from their operations, which puts in doubt
   their ability to pay their future bills if they continue to
   incur the losses that forced them to seek bankruptcy court

B. The Debtors have a significant amount of pre- and post-
   petition secured debt;

C. As of December 31, 2001, the Debtors' current liabilities
   exceeded their current assets ($922,552,000 in current assets
   and $1,402,541 in current liabilities) and their liabilities
   greatly exceeded their assets ($2 billion in assets, which
   included $434,772 in goodwill and $2.5 billion in
   liabilities); and

D. the uncertainty regarding the Debtors' future operations,
   especially the portion of the business that services the
   telecommunications industry.

In the Utility Motion, the Debtors seek a determination that the
Utilities are deemed to have adequate assurance of payment
through the Debtors' purported ability to pay future utility
bills and the grant of an administrative expense priority. Mr.
Whalen disputes whether the foregoing representations are true.
Moreover, the Utilities do not believe that the foregoing are
sufficient security to satisfy the requirements of Section 366
of the Bankruptcy Code.

With respect to an administrative expense priority alone serving
as adequate assurance of payment, Mr. Whalen contends that it is
in contravention of the protections afforded the Utilities in
Section 366 of the Bankruptcy Code. The plain language of
Section 366 of the Bankruptcy Code provides that adequate
assurance of payment is to be in the form of a deposit or other
security. There is no language in Section 366(b) that provides
that the timely payment of post-petition bills and the "grant"
of an administrative expense priority for a utility's post-
petition bills constitutes adequate assurance of payment, in the
form of a deposit or other security.

With respect to the term "deposit," Mr. Whalen points out that
it is clear that this language addresses a cash deposit, which
is the traditional form of security that utilities obtain from
their customers. Accordingly, if a debtor and utility are unable
to agree on a cash deposit as the applicable form of adequate
assurance of payment, the focus on what a debtor can provide as
adequate assurance of payment is directed to the undefined term
of "other security." Based on the ordinary and common
understanding of the term other security in the utility/customer
context, the Court has the discretion to award the Utilities, in
lieu of a deposit, a letter of credit, surety bond or require
the Debtor to pay its post-petition bills in advance or on an
expedited basis.

As the Utilities provide these Chapter 11 Debtors with an actual
and necessary post-petition service, Mr. Whalen submits that the
Utilities' unpaid post-petition bills are already entitled to be
treated as administrative expenses of the Debtors' estates
pursuant to Section 503 of the Bankruptcy Code. Therefore, in
order to avoid an unreasonable result, which renders the
language of Section 366 meaningless and superfluous, "adequate
assurance of payment in the form of a deposit or other security"
must mean more than the protections already available to the
Utilities under the Bankruptcy Code.

                      UGI Utilities Object

According to Elio Battista Jr., Esq., at Blank Rome Comisky &
McCauley LLP in Wilmington, Delaware, prior to the Chapter 11
filing, the Debtors defaulted under the terms of their agreement
with UGI by failing to pay $54,477.00 for pre-petition services.
While the Debtors purchased the majority of their gas usage from
a third party supplier, UGI affords the Debtors the distribution
pipelines to allow the gas to reach the Debtors' facilities and
is obligated under its utility tariff to provide the Debtors
with gas as needed beyond amounts purchased from third parties.
Accordingly, if the Debtors significantly under estimate their
gas requirements or if the supplier fails to deliver, UGI can
realize a huge "spike" in demand, leaving it exposed to non-
payment. Based upon the Debtors' historical usage of UGI's
products and services, UGI forecasts that the Debtors' average
monthly invoice will be approximately $50,000.00.

The Debtors propose to offer a mere administrative expense
priority when:

A. the proposed debtor-in-possession financing purports to waive
   Section 506(c) claims, thus handcuffing utilities such as UGI
   from recovering from secured creditors when UGI may have
   preserved the secured creditors' collateral;

B. the debtor-in-possession lender would be granted a super-
   priority claim over all other administrative creditors;

C. the debtor-in-possession lender has not agreed to carve-out
   its super-priority claim as to avoidance actions and is
   taking a lien on such actions;

D. the debtor-in-possession lender has not provided a carve-out
   for essential vendors such as UGI; and

E. UGI is not treated as a critical vendor under the Debtors'
   motion to pay certain pre-petition claims.

Mr. Battista contends that neither the Debtors or the debtor-in-
possession lender are willing to accept the risk involved in
this case. Rather, they have attempted to unfairly shift the
entire risk of loss in this case onto involuntarily lenders such
as UGI. Furthermore, the mere administrative expense priority
may come behind Chapter 7 administrative expenses if this case
were converted to one under Chapter 7. Accordingly, the
utilities, when specifically protected by Section 366, should
not be compelled to be involuntary lenders for the debtor while
having only an administrative expense priority.

Mr. Battista submits that the Court's finding in connection with
the Debtor's proposed interim post-petition financing precludes
the Debtors from subsequently taking the position that a mere
administrative expense priority is "adequate assurance" of
payment for utilities. The Interim Order entered on April 17,
2002, authorizing the Debtors to obtain post-petition financing,
contains a factual finding that "the Debtors are unable to
obtain interim or permanent financing . . . in the form of
unsecured credit or unsecured debt allowable under section
503(b)(1) of the Bankruptcy Code as an administrative expense."
The Interim Order also finds that "additional financing is
unavailable to the Debtors without their (a) granting to the
Post-Petition Lenders claims having priority over that of
administrative expenses of the kind specified in sections 503(b)
and 507(a) and (b) of the Bankruptcy Code." Given this Court's
factual finding that the Debtors cannot obtain financing on an
administrative expense basis, Mr. Battista believes that the
Debtors should not be able to take the contrary position that
such a priority is "adequate assurance" for utilities,
particularly when utilities have special protections afforded by
the Bankruptcy Code. To do so is disingenuous.

What the Debtors propose under the financing and utility orders
is to make the utilities involuntary post-petition lenders of
the Debtors and afford them less protection than permitted by
statute, while affording a voluntary lender a super-priority
administrative claim and a priming lien on substantially all of
the Debtors' assets. Mr. Battista claims that such a proposition
would turn the adequate assurance provision of 366 of the
Bankruptcy Code on its head. Accordingly, UGI requests that the
Debtors be compelled to provide adequate assurance of payment,
in the form of two months' security deposit ($100,000.00) or
posting of a letter of credit in the same amount issued by a
financial institution acceptable to UGI listing UGI as
beneficiary thereof.

In the normal course, and as a practical matter, Mr. Battista
states that at least one month will pass for a billing period to
occur, and there is an additional period of time for the Debtors
to pay the bill. Then, after a default, there is an additional
period for UGI to notify a customer like the Debtors that they
are in default. A court can properly consider the length of time
necessary to terminate service once the debtor defaults in a
monthly payment. UGI believes that a two-month deposit is the
minimum required to adequately assure itself of payment.

Mr. Battista explains that UGI principally provides pipeline
distribution services to the Debtors as the Debtors purchase the
majority of the gas they use from third parties. UGI, however,
is required to "make-up" any shortfall to the extent Debtors do
not purchase sufficient gas from third parties. Wide swings in
the Debtors' usage could subject UGI to additional penalties and
charges from its interstate pipeline suppliers. Accordingly, UGI
must have the ability to terminate service in accordance with
UGI's tariff filed with the state utility commission without
further order of the court upon any failure of gas supply to the
Debtors or the Debtors' inability to obtain gas from third
parties within 24 hours of such event.

                         AmeriGas Objects

AmeriGas objects to the relief requested in the Motion and
requests that AmeriGas be carved out of the requested relief
because it is not a "utility" within the meaning of Section 366
of the Code.

Elio Battista Jr., Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, tells the Court that the Debtors' Utility
Motion provides no evidence, and does not even allege, that
AmeriGas is a utility within the meaning of Section 366. Rather,
it merely adds AmeriGas to the voluminous list of potential
service providers on an exhibit to the Motion. Further, the
Debtors do not claim that AmeriGas is a monopoly in the area,
unlike a more traditional, state regulated utility company. Mr.
Battista adds that the Debtors do not claim they would encounter
difficulty purchasing natural gas products or finding a new
supplier from a company similar to AmeriGas. This would be
difficult to argue, in fact, since there are numerous entities
which could provide similar service.

AmeriGas recognizes that courts have sometimes defined the term
"utility" broadly to effectuate a key policy goal under Section
366: ensuring that power, water and light companies do not
coerce payment of prepetition debts by threatening to terminate
service.  Mr. Battista claims that this case does not implicate
that policy goal as AmeriGas has made no effort to coerce
payment of its prepetition debt and has not threatened to
terminate service. AmeriGas also acknowledges that, under the
broadest possible reading, Section 366 does not limit its scope
to public utilities, and can include private companies.

Mr. Battista points out that the Debtors have presented no
evidence to prove it would incur large and prohibitive expenses
if it were required to seek similar service from a company
comparable to AmeriGas. It can obtain comparable service from
any of a number of similar companies located nationwide. Absent
some strong evidentiary showing by the Debtors that AmeriGas is
a monopoly in this area or that the Debtors cannot obtain post-
petition service from another provider, AmeriGas should not be
considered a utility within the meaning of Section 366 of the
Bankruptcy Code.

                       Entergy Objects

Entergy Mississippi, Inc., Entergy Arkansas, Inc., and Entergy
Gulf States, Inc., object to the Debtors' Utility Motion.  They
object because the Debtors seek a determination that Entergy is
"deemed to have adequate assurance of payment" when no such
adequate assurance has been provided to Entergy. The relief,
including the proposed procedure for determining adequate
assurance, is inappropriate and contrary to the express
provisions of 11 U.S.C. Section 366(b).

According to Richard W. Riley, Esq., at Duane Morris LLP in
Wilmington, Delaware, prior to the Petition Date, the Debtors
were not always current on the payment of invoices to Entergy
and did not always pay the bills due and owing to Entergy in a
timely manner. As of the Petition Date, the Debtors owed Entergy
at least $320,000. Entergy does not currently hold any deposit
or other security from which it may offset it pre-petition loss,
and the Debtors continue to consume as much as $460,000 worth of
electricity on a monthly basis.

Mr. Riley contends that the Debtors' pre-petition payment
history cannot provide, or help to provide, adequate assurance
of future payment in this case. On the contrary, it was
Entergy's analysis of the Debtors' payment history and the
significant pre-petition balance owed to it by the Debtors that
caused Entergy to demand adequate assurance of payment in the
form of a 2-month deposit.

Entergy further submits that the Debtors' post-petition
financing facility cannot provide, or help to provide, adequate
assurance of future payment in this case for the simple reason
that the Debtors' much larger pre-petition financing facility
could not, and did not, enable the Debtors to pay Entergy's pre-
petition invoices in full. Mr. Riley notes that throughout the
Debtors' numerous first day pleadings in this case, they
disclosed that prior to the Petition Date, they had access to
more than $700 million of secured credit, approximately $700
million more in unsecured credit (excluding the $149 million of
ordinary course trade payables) and an additional $200 million
of working capital financed through a securitization facility.
Despite its access to nearly $1.75 billion of financing prior to
the Petition Date, the Debtors could not remain current on its
utility payments to Entergy. In light of the foregoing, access
to $200 to $250 million in post-petition financing (especially
when coupled with the continuance of the same general market
conditions which contributed to the Debtors' filing) is not
evidence of the Debtors' ability or commitment to pay their
post-petition obligations as and when they become due, and does
not provide Entergy with adequate assurance that its post-
petition invoices can or will be paid.

Mr. Riley points out that the first day pleadings filed by the
Debtors' in this case also appear to establish that all of the
Debtors' assets are fully encumbered under their pre-petition
and post-petition secured credit facilities by nearly
$1,000,000,000 worth of debt, and that the payment of this debt
will enjoy priority over the payment of all administrative
expense claims in this case, except for the carve-out for the
fees and expenses of Bankruptcy Court Clerk, the United States
Trustee, and certain professional employed in the case. While
the first day pleadings assert that the assets of the Debtors
and their non-debtor subsidiaries and affiliates have a book
value of $2,100,000,000, the bankruptcy docket of this court and
the dockets of bankruptcy courts across the country are riddled
with examples of administratively insolvent bankruptcy estates
where the book value of the debtors' assets did not nearly
approach the actual fair market value of those assets. This is
especially true in cases where the debtors, like the Debtors in
this case, engaged in aggressive expansion through acquisitions
prior to the filing of their bankruptcy petitions.

Mr. Riley notes that the Debtors have already conceded that even
the book value of their assets are exceeded by their
liabilities. Moreover, the Debtors have provided no information
in the Utility Motion or otherwise to suggest that there is now,
or at any time will be, unencumbered assets from which
administrative claims can or will be paid. Absent a clear
demonstration of the current fair market value of the Debtors'
assets in this case, adequate assurance in the form of an
administrative expense claim amounts to nothing more than a
claim in a bankruptcy case and is clearly inadequate under
Section 366(b).

Even if the Debtors could provide sufficient evidence that
administrative expense claims in this case will be paid in full
and in a timely manner, Entergy submits that the Debtors' offer
of an administrative expense claim as adequate assurance of
payment is inadequate as a matter of law. Mr. Riley informs the
Court that Entergy has requested that the Debtors provide
adequate assurance of future payment in the form of a deposit in
an amount approximating two months worth of utility services
provided to the Debtors, or $927,580. Without this kind of
deposit, Entergy will be subject to an unreasonable risk of non-
payment for the utility services provided to the Debtors after
the Petition Date.

Mr. Riley submits that the billing procedures of, and state
utility regulations applicable to, Entergy bear this risk out
and justify its request for a deposit in this case. If the
Debtors decide not to make any more payments on an Entergy
account, approximately 60 days usage will be unpaid before
termination can be accomplished. As a result, Entergy is at all
times exposed to a loss for the non-payment of invoices
equivalent to two months worth of service on the Debtors'

In light of this potential exposure, Mr. Riley believes that a
two month deposit should adequately assure Entergy that it will
be paid for the Debtor's future use of utility services. It
requests the Court to determine that such a deposit is
appropriate under Section 366(b) and, to require the Debtors to
immediately post this a deposit with Entergy. Any deposit or
other security less than this amount will be inadequate and will
expose Entergy to an unreasonable risk of loss.

Mr. Riley claims that the procedure outlined by the Debtors in
the Utility Motion for determining adequate assurance of payment
to utilities is contrary to the express provisions of Section
366(b). It also inappropriately shift the burden of affirmative
action from the Debtors to the utilities as it impermissibly:

A. allows the Debtors to determine initially what security
    constitutes adequate assurance of payment (or, more
    accurately, that such adequate assurance is not necessary),

B. requires the utility companies to supply, within 30 days, the
    Debtors with payment history information which the Debtors
    undoubtedly already have,

C. prohibits utility companies from altering, refusing or
    discontinuing service pending an undefined and open-ended
    proposal and negotiation process, and

D. enables the Debtors, and only the Debtors, to schedule a
    hearing if an agreement on adequate assurance of payment
    cannot be reached.

Contrary to Section 366(b) itself, Mr. Riley argues that the
procedure proposed by the Debtors provides no incentive for the
Debtors to provide the utility companies with the adequate
assurance of payment required by Section 366(b), or to otherwise
negotiate a reasonable settlement. In this regard, Entergy notes
that, other than receiving a fax copy of the bridge order
entered by this Court on the Utility Motion, Entergy has
received no response or other communication from Debtors'
counsel in this case regarding its April 16, 2002 deposit
request letter, despite Entergy's stated willingness to discuss
other appropriate means by which adequate assurance of payment
may be provided to it. (Exide Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

FAIRCHILD DORNIER: Gets Interim OK to Use Cash Management System
Pending a final hearing, the U.S. Bankruptcy Court for the
Eastern District of Virginia gives its interim approval to
Dornier Aviation, Inc. and Fairchild Dornier Corporation, to use
their current cash management system in their day to day
business operation.

The Debtors tell that Court that their cash management system
provides a well-established mechanism for the collection,
concentration, management and disbursement of funds.

The Debtors believe that they cannot achieve successful
reorganization, as well as the preservation of their business as
going concerns if the cash management procedures are materially

The Debtors have utilized the cash management system for the
past several years. The system enables the Debtors to:

     a) control and monitor funds,

     b) invest idle cash,

     c) ensure cash availability and

     d) reduce administrative expenses by facilitating the      
        movement of funds and the development of timely and
        accurate account balance and presentment information.

Before filing for chapter 11 protection, the Debtors engaged in
intercompany financial transactions with their nondebtor related
companies in the ordinary course of their respective businesses.
Given the Debtors' organizational and financial structure, it
would be difficult and unduly burdensome for them to establish
an entirely new system of accounts and a new cash management and
disbursement system, the Debtors add.

Fairchild Dornier Corporation's involuntary chapter 7 case was
converted to voluntary chapter 11 proceeding under the U.S.
Bankruptcy Code on May 20, 2002.  Dylan G. Trache, Esq. at Wiley
Rein & Fielding LLP and Thomas P. Gorman at Tyler, Bartl, Gorman
& Ramsdell, PLC represent the Debtor in its restructuring

FEDERAL-MOGUL: Wins Nod to Implement Key Employee Retention Plan
In order to maintain the managerial consistency that is crucial
to achieving quality and profitability in a highly complex
manufacturing and sales operation, Federal-Mogul Corporation and
its debtor-affiliates sought and obtained an order from the
Court approving an employee retention plan for their key

As pointed out in the Debtors' motion, the Employee Retention
Plan will serve to reduce key employee turnover, which would
otherwise cause significant cost to the Debtors. Prior to the
bankruptcy filing, the average cost to the Debtors of hiring a
non-senior level key employee was approximately $7,000, which
would likely to increase significantly now that the Debtors are
operating under chapter 11. Additionally, if an executive search
firm is used, the charge is typically 30% of the employees'
first-year cash compensation payout and with nearly 500 key
employees, the cost of replacing a large number of these
employees would be significant. Additionally, if new employees
are hired at rates that exceed the current pay structure, then
the Debtors will likely have to adjust their entire pay
structure upward to ensure compensation equity in the Debtors'
workforce, which would be very costly to the Debtors.

In order to address the problems related to key employee
turnover, the Debtors undertook significant analysis of similar
firms in the industry and of the ability of the Debtors to fund
a viable retention plan with minimal impact on liquidity.  The
Debtors first considered the retention plans implemented by
other similar manufacturing companies that had recently filed
under chapter 11.  Based on this benchmarking analysis, the
Debtors created a retention plan that incorporates the most
effective components of the retention plans denoted above.  An
evaluation of the Plan by Arthur Andersen resulted in a
conclusion that the value of the Employee Retention Plan to
employees was well within the range of values of retention plans
that have been approved in other chapter 11 cases of similar

The proposed Employee Retention Plan represents one component of
the Debtors' overall employee benefits package that the Debtors
propose to implement during these chapter 11 cases.  The
Employee Retention Plan itself provides for stay bonus payments
that reward employees who decide to remain employed by the
Debtors for a specified period of time and which aligns the
interests of the key employees with those of the creditors to
ensure that the value of the Debtors' estates is maximized. The
Employee Retention Plan is applicable to approximately 455 key
employees and provides for Stay Bonuses equal to 15% to 100% of
the employee's base salary depending upon each employee's level
in the organization and relative impact of the bankruptcy filing
on the particular employee's job duties. The Stay Bonuses are
paid annually to those key employees that remain employed as of
the applicable payment date and estimated to cost about
$23,000,000 for 2002 and $2,700,000 for 2003.

The specific content and details of the proposed Employee
Retention Plan are proprietary and confidential. Additional
details of the Employee Retention Plan will be provided to the
U.S. Trustee, any official committees appointed in these cases,
and any other parties in interest. However, such disclosure will
be made only upon the signing of a confidentiality agreement
regarding the same.

In addition to the Employee Retention Plan, the Debtors intend
to maintain post-petition the same incentive compensation plans
that existed prior to bankruptcy. The plans were instituted by
the Debtors' boards of directors in the exercise of their
business judgment after consultation with outside compensation
consultants. In general, the plans include both short-term and
long-term compensation components that were created to align the
employees' personal financial interests with those of the
shareholders. (Federal-Mogul Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

Federal-Mogul Corporation's 8.80% bonds due 2007 (FEDMOG6) are
trading at about 21, says DebtTraders. See  
real-time bond pricing.

FLAG TELECOM: Looks to Blackstone Group for Financial Advice
FLAG Telecom Holdings Limited and its debtor-affiliates move the
Court to employ Blackstone Group L.P. as financial advisor, nunc
pro tunc to April 12, 2002.

Kees van Ophem, Secretary General and Counsel of FLAG Telecom
Holdings Ltd., says Blackstone has a wealth of experience in
providing financial advisory services in reorganization
proceedings.  Blackstone has advised on restructurings involving
Alliance Entertainment Corp., Bidermann Industries USA, CellNet
Data Systems Inc., Criimi Mae Inc., Harnischfeger Industries
Inc., R.H. Macy & Co. Inc., Safelite Glass Corp., Teligent Inc.
and Vencor Inc.

Since February 22, 2002, Blackstone has rendered financial
advisory services to the Debtors in connection with their
restructuring efforts.  That makes Blackstone familiar with
the Debtors' operations.  Mr. van Ophem says the Debtors believe
that Blackstone is well qualified and able to represent the
Debtors in a cost-effective, efficient and timely manner.

Timothy R. Coleman, Senior Managing Director of Blackstone,
leads the team of professionals that will work on FLAG's

                       Scope of Services

Specifically, Blackstone will:

     (a) Assist in the evaluation of the Debtors' businesses and

     (b) Assist in the development of the Debtors' long-term
         business plan and related financial projections;

     (c) Assist in the development of financial data and
         presentations to the Debtors' Board of Directors,
         various creditors and other third parties;

     (d) Analyze the Debtors' financial liquidity and evaluate
         alternatives to improve such liquidity;

     (e) Analyze various restructuring scenarios and the
         potential impact of these scenarios on the value of the
         Debtors and the recoveries of those stakeholders
         impacted by a Restructuring;

     (f) Provide advice with regard to restructuring or
         refinancing the Debtors' Obligations;

     (g) Evaluate the Debtors' debt capacity and alternative
         capital structures;

     (h) Participate in negotiations among the Debtors and their
         creditors, suppliers, lessors and other interested
         parties regarding a Transaction or a Restructuring;

     (i) Value securities offered by the Debtors in connection
         with a Restructuring;

     (j) Advise the Debtors and negotiate with lenders with
         respect to potential waivers or amendments of various
         credit facilities;

     (k) Provide testimony in these Chapter 11 cases concerning
         any of the subjects encompassed by the other financial
         advisory services;

     (l) Assist the Debtors in reviewing marketing materials in
         conjunction with a possible Transaction;

     (m) Assist in arranging debtor-in-possession financing for
         the Debtors, as requested;

     (n) Assist the Debtors in reviewing the terms, conditions
         and impact of any proposed Transaction;

     (o) Assist the Debtors in capital raising from third-party
         investors, as requested;

     (p) Attend meetings with the Debtors and other parties to a
         Restructuring as reasonably requested by the Debtors;

     (q) Provide such other advisory services as are customarily
         provided in connection with the analysis and
         negotiation of a Restructuring or a Transaction, as
         requested and mutually agreed.

At the request of the Debtors, Blackstone may provide additional
services deemed appropriate or necessary to the benefit of the
Debtors' estate.


Mr. Coleman says that Blackstone is a "disinterested person" as
that term is defined in the Bankruptcy Code.  Blackstone and its
members and employees:

   (a) are not creditors, equity security holders or insiders of
       the Debtors;

   (b) are not, and were not, investment bankers for any
       outstanding security of the Debtors;

   (c) have not been, within three years before the date of the
       filing of the Debtors' Chapter 11 petitions, (i)
       investment bankers for a security of the Debtors, or (ii)
       attorneys for such investment bankers in connection with
       the offer, sale, or issuance of a security of the
       Debtors; and

   (d) have not been, within two years before the date of filing
       of the Debtors' Chapter 11 petitions, directors,
       officers, or employees of the Debtors or of any
       investment banker as specified in subparagraphs (b) or

Out of an abundance of caution, Mr. Coleman disclosed that:

   (a) An affiliate of American International Group is
       identified as a party-in-interest. AIG is also a provider
       of director and officer insurance to certain of the
       Debtors.  AIG owns a 7% passive, non-voting limited
       partnership interest in Blackstone and its affiliated
       companies. In addition, AIG has agreed to invest an
       estimated $1.2 billion as a limited partner in future
       private equity, real estate, and other funds that
       Blackstone sponsors.

   (b) Blackstone has a large and diverse financial advisory and
       principal investment practice. Accordingly, Blackstone
       and certain of its members and employees may have in the
       past represented, may currently represent, and likely in
       the future will represent, in matters wholly unrelated to
       the Debtors' cases, entities that are parties in interest
       or otherwise connected to the Debtors. The Debtors'
       counsel has supplied Blackstone with a list of entities
       to be reviewed for conflicts, which has been reviewed by
       Blackstone's compliance personnel. Those personnel have
       determined that eleven financial institutions or
       telecommunications-related companies identified on such
       list appear on Blackstone's restricted list. (Mr. Coleman
       says their names have not been revealed to him.)
       Companies are put on Blackstone's restricted list if
       Blackstone has, or expects shortly to acquire,
       confidential information relating to such company, which
       it may receive for a variety of reasons. Blackstone may
       be precluded by duties of confidentiality from disclosing
       such relationships publicly.  Moreover, internal
       confidentiality procedures may preclude the disclosure of
       those names to professionals not involved with those
       companies. Blackstone is presently investigating in
       greater detail the confidentiality restrictions to which
       it is subject concerning those companies. Blackstone will
       provide as much disclosure as is permissible and will
       discuss with the U.S. Trustee any limitation on
       disclosure. However, as of the date of this Declaration,
       to the best of my knowledge, Blackstone has not
       represented, does not represent, and will not represent
       any entity's interest in the Chapter 11 Cases nor does it
       believe that any relationship it may have with any other
       entities will interfere with or impair Blackstone's
       representation of the Debtors in the Chapter 11 Cases.

   (c) Affiliates of Blackstone serve as general partners for
       and manage a number of investment vehicles, or Blackstone
       Funds. The investors in the Blackstone Funds are
       principally unrelated third parties but also include
       affiliates of Blackstone and various of its officers and
       employees, including employees working on the Debtors'
       Chapter 11 Cases. In addition, certain of the
       employees, including employees working on the Debtors'
       Chapter 11 Cases, are limited partners in the Blackstone
       Funds. In their capacity as limited partners, these
       employees have personal investments in the Blackstone
       Funds, but no control over investment decisions or over
       business decisions made at the Blackstone Funds. Among
       other things, the Blackstone Funds are (a) active direct
       investors in a number of portfolio companies (including,
       in the case of one such fund, companies in the
       telecommunications sector), (b) active investors in
       various real estate investments and (c) passive investors
       in other funds, or Investment Funds, managed by a number
       of non-traditional money managers, all of which are
       similar to investments in mutual funds. As would be the
       case with respect to a mutual fund investment, neither
       Blackstone, its affiliates, the Blackstone Funds nor the
       employees have any control over the investments made by
       the Investment Funds in which the Blackstone Funds are
       invested, including nvestment purchases, investment
       divestitures and the timing of such activities.
       Blackstone maintains a strict separation between its
       employees assigned to the Debtors' Chapter 11 Cases and
       the employees assigned to the Blackstone Funds. To avoid
       any appearance of impropriety, where the Blackstone Funds
       may receive information about the Investment Funds'
       investing in companies in which Blackstone advising,
       Blackstone maintains internal procedures designed
       to preclude the dissemination of this information to the
       employees who are providing the advisory services. No
       employee working on FLAG's Chapter 11 Cases receives
       information concerning the individual investments of
       Investment Funds in which the Blackstone Funds are
       invested. Likewise, in accordance with U.S. securities
       law, no confidential information concerning
       the Debtors is permitted to be communicated to the
       employees working for the Blackstone Funds. It's possible
       that companies owned, in whole or in part, by the
       Blackstone Funds or which may have had discussions
       regarding a possible investment or transaction in
       connection with the Blackstone Funds may have a
       relationship with the Debtors or otherwise appear on the
       list of entities attached as exhibits to the Declaration.
       These relationships are unrelated to the financial
       advisory services Blackstone intends to provide in the
       Chapter 11 Cases. Blackstone maintains that these
       relationships are subject to the internal confidentiality
       procedures outlined immediately above and thus have no
       meaningful bearing on Blackstone's ability to advise the

   (d) Blackstone has been retained to advise Global Crossing
       Ltd. and its affiliates that are Debtors in chapter 11
       cases commenced in January 2002 in the Southern District
       of New York. Global Crossing is a contract counter-party
       and competitor of the Debtors. Blackstone maintains
       internal procedures designed to preclude the
       dissemination of confidential information about the
       Debtors to the Employees who are providing advisory
       services to Global Crossing, and vice versa. No Employee
       working on the Debtors' Chapter 11 Cases currently works
       on the Global Crossing engagement or receives
       confidential information concerning Global Crossing.
       Likewise, no Employee working on the Global Crossing
       engagement currently works on the Debtors' Chapter
       11 cases and no confidential information concerning the
       Debtors is permitted to be communicated to the Employees
       working for Global Crossing.

   (e) Verizon Communications Inc. is a significant shareholder
       of the Debtors. An employee of Verizon is a director of
       the Debtors. Verizon is party to a joint venture with one
       of the Blackstone Funds in a telecommunications company
       in Argentina. To the best of my knowledge, such joint
       venture is not a competitor of the Debtors. Blackstone
       does not believe that the Blackstone Fund's involvement
       in this joint venture will adversely affect the Debtors.

   (f) Blackstone has been retained by Williams Communications
       Group Inc. and certain affiliates that are Debtors in
       Chapter 11 cases commenced on April 22, 2002 in the U.S.
       Bankruptcy Court for the Southern District of New York.
       The Debtors and WCG are competitors in a de minimis
       portion of their business, namely the Atlantic undersea
       cable routes.  (Both Michael Hoffman and Mr. Coleman
       represent WCG.)  However, given the limited competition
       between the Debtors and WCG, Blackstone does not believe
       that such relationships will impair or affect
       Blackstone's representation of the Debtors in their
       Chapter 11 Cases. In addition, Blackstone will take
       reasonable care in ensuring that confidential information
       of the Debtors is not shared with WCG, and vice versa.

Mr. Coleman says Blackstone will periodically review its files
during the pendency of the Debtors' Chapter 11 cases to ensure
that no conflicts or other disqualifying circumstances exist or
arise. If any new relevant facts or relationships are discovered
or arise, Blackstone will use reasonable efforts to identify
such further developments and will promptly file a supplemental

                       Terms of Retention

The Debtors have agreed to pay Blackstone:

  (a) a $225,000 monthly advisory fee, commencing on June 23,

  (b) a Transaction Fee, equal to 0.75%
      multiplied by the total face/accreted value of any
      Obligations (less the total amount of gross proceeds of a
      financing in which Blackstone is entitled to receive a
      Capital Raising Fee if the proceeds were used in
      connection with restructuring Obligations) of the Company
      that is restructured, refinanced, repaid, acquired,
      assumed, satisfied, modified or amended, payable in cash
      promptly upon consummation of a Restructuring or a
      Transaction. These will not be included in the calculation
      of total Obligations:

      (1) the Company's guarantee to Alcatel if Alcatel's trade
          claim related to the FLAG North Asian Loop project is
          already included (in whole or in part) in the
          calculation of total Obligations or is paid or is
          otherwise satisfied, released or discharged in full
          or, to the relevant extent, in released or discharged
          in full or, to the relevant extent, in part;

      (2) any pre-petition trade claims in the aggregate of a
          creditor incurred in the ordinary course of business
          in an amount less than $10,000,000 that is paid in
          full with cash; and

      (3) any guarantee obligations of any of the Company
          entities should not be included if the primary
          obligation (in whole or in part) is already included
          in the calculation of the total Obligations.

      In no event, however, will the Transaction Fee be less
      than $7,000,000 if the Transaction Fee results from a
      Transaction and the Transaction is in relation to a
      transaction or series of transactions for (i) all or
      substantially all of the Debtors and its material
      subsidiaries or (ii) all or substantially all of the
      assets of the Debtors and its material subsidiaries.
      Notwithstanding anything to the contrary above, the
      payment of the Transaction Fee will be subject to the
      following limitations: (i) once a Transaction Fee is paid
      by the Company with regard to any indebtedness of the
      Company, no subsequent Transaction Fee will be payable
      with regard to such indebtedness; and (ii) no Transaction
      Fee will be payable with regard to indebtedness of the
      Company which is restructured, refinanced, acquired,
      assumed, satisfied, modified or amended in proceedings for
      liquidation of the Company unless that liquidation follows
      the sale or merger of any material part of the businesses
      or assets of the Company.

  (c) a DIP financing fee of 0.5% of the total facility size of
      any DIP financing provided by third party institutions,
      other than Barclays Bank plc and Westdeutsche Landesbank
      Girozetrale, and arranged by Blackstone, payable on
      approval of the DIP facility by final order of this Court
      (or a relevant court in a foreign jurisdiction) no longer
      subject to appeal, rehearing, reconsideration or petition
      for certiorari;

  (d) a capital raising fee of 4.0% of the gross cash proceeds
      received by the Company in connection with any transaction
      or series of transactions (excluding Transactions as
      defined in [b] above) whereby, directly or indirectly a
      third party or third parties provide financing for
      (including debt or equity capital, but exclusive of the
      DIP financing described in [c] above) the Debtors and/or
      their subsidiaries or affiliates, or any of their
      businesses or assets or any joint venture, incubator,
      operating company, collective investment or similar
      vehicle in which the Debtors or any of their subsidiaries
      or affiliates is a general partner, sponsor, investment
      manager or otherwise a material participant.  This is
      including, without limitation, through a sale or exchange
      of capital stock, options or assets, a merger,
      consolidation, re-capitalization or reorganization, the
      formation of a minority investment or partnership, or any
      similar transaction; and

  (e) reimbursement of all necessary and reasonable out-of-
      pocket expenses incurred during this engagement,
      including, but not limited to, travel and lodging, direct
      identifiable data processing and communication charges,
      courier services, working meals, reasonable fees and
      expenses of Blackstone's counsel and other necessary
      expenditures, payable upon rendition of invoices setting
      forth in reasonable detail the nature and amount of such
      expenses.  This is provided, however, that in the absence
      of the Debtors' prior written consent, which must not be
      unreasonably withheld, the Debtors will not be required
      to reimburse Blackstone for (i) the fees and expenses of
      its counsel in excess of $25,000 in the aggregate or (ii)
      any out-of-pocket expenses incurred by Blackstone in
      performing its engagement hereunder, including those of
      its counsel, in excess of $75,000 per calendar month.  In
      connection with this the Debtors will maintain a $50,000
      expense advance for which Blackstone will account upon
      termination of the engagement.

Blackstone has performed professional services for the Debtors
since February 22, 2002. It has received $1,510,000 in fees,
consisting of $900,000 Monthly Fees and $610,000 Transaction
Fees, for its services through the period ending June 22, 2002.

Before the Chapter 11 filing, Blackstone also received $147,127
in expense reimbursements and a $50,000 expense advance. (Flag
Telecom Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

GENSCI REGENERATION: Delays Filing of 2001 Annual Fin'l Results
Further to news announced May 22, 2002, GenSci Regeneration
Sciences Inc. (TSE: GNS) confirms that its comparative financial
statements for the fiscal year ended December 31, 2001 were not
filed on or before May 20, 2002, being 140 days after the end of
the Company's last fiscal year, and advises that there will be a
delay in the filing of its interim financial statements for the
period ended March 31, 2002 on or prior to May 30, 2002, which
is 60 days after the end of the Company's last fiscal quarter,
all as required by applicable securities laws in the
jurisdictions in which the Company is a reporting issuer.

The Company further confirms that its Annual Information Form
and Management's Discussion and Analysis were not filed on or
before May 20, 2002, being 140 days after the end of the
Company's last fiscal year, as required by Ontario Securities
Commission Rule 51-501. The Company is issuing this news release
further to the requirements of OSC Policy 57-603. As previously
announced, the commencement of the audit was delayed pending
receipt of the required approval by the United States Bankruptcy
Court for the Company's engagement of its auditors, which
approval was not granted until May 9, 2002. The audit is
currently proceeding and the Company anticipates that the annual
and interim financial statements and its AIF and MD&A will be
prepared and filed on or before June 17, 2002. If the Company
fails to file its annual financial statements, AIF and MD&A by
July 20, 2002 or its interim financial statements by July 30,
2002, a cease trade order may be imposed by the applicable
securities commissions requiring that all trading in securities
of the Company cease for such period specified in the order. The
Company understands that during the period of time that the
annual and interim financial statements remain outstanding, the
insiders of the Company will be subject to an OSC cease trade
order, prohibiting such insiders from trading securities of the

The Company continues to operate with the protection of Chapter
11 of the U.S. Bankruptcy Code. As the Company is required to
file future reports with the Office of the U.S. Trustee, it will
file the same information with the applicable securities

The Company intends to satisfy the provisions of the alternate
information guidelines of OSC Policy 57-603 for so long as it
remains in default of the financial statement filing
requirements of applicable securities laws.

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. For more information about the company, visit

GLOBAL CROSSING: Taps Dovebid to Auction-Off De Minimis Assets
Global Crossing Ltd. and its debtor-affiliates request authority
to retain Dovebid, Inc. as an auctioneer for selling certain
tangible de minimis assets of the Debtors pursuant to the
Agreement for the Provision of Asset Disposition Services with

Paul M. Basta, Esq., at Weil Gotshal & Manges LLP in New York,
New York, relates that Dovebid, a Delaware corporation with
offices in Foster City, California, is in the business of
auctioning business assets throughout the world. It is
particularly well-suited to provide the type of auction services
required by the Debtors. Dovebid has specialized auction
experience in the communications industry and has conducted
several auctions of high speed Internet, data transmission, and
other communications equipment possessed by the Debtors. Dovebid
has been retained in Chapter 11 cases in this and other
districts including In re Teligent Inc., et al., case no. 01-
12974 (SMB) (Bankr. S.D.N.Y. 2001); In re Broadband Office,
Inc., case no. 01-1720 (Bankr. D. Del. 2001); In re Webvan
Group, Inc., et al., case no. 01-2404 (JJF) (Bankr. D. Del.
2001); In re At Home Corp., et al., case no. 01-32495 (TC)
(Bankr. N.D.Cal. 2001); In re GST Telecom Inc., et al., case no.
00-1982 (GMS) (Bankr. D. Del. 2000).

Mr. Basta points out that Dovebid can also offer the Debtors the
benefits of its storage facilities for certain of their De
minimis Assets after the Debtors vacate premises but before a
prospective sale. This storage option provides the Debtors with
added flexibility to reject burdensome leases by alleviating
concern for the future of the De Minimis Assets on the premises.

Mr. Basta contends that the services of Dovebid as auctioneer
are necessary to enable the Debtors to maximize the value of
their assets for the benefit of the Debtors' estate, creditors,
and all parties in interest. The services to be rendered by
Dovebid are not intended to be duplicative in any manner with
the services to be performed by any other party retained by the
Debtors. Dovebid has stated its desire and willingness to act in
these cases and render the necessary professional services as
auctioneer to the Debtors. Dovebid is well qualified to execute
the duties of auctioneer, and the Debtors know of no reason why
Dovebid should not be retained.

Kirk Dove, President of Auction Services of Dovebid Inc.,
assures the Court that the firm does not hold or represent any
interest adverse to the Debtors' estates and is a "disinterested
person" as defined under Section 101(14) of the Bankruptcy Code.
However, the firm represents several parties-in-interests in
matters unrelated to these cases including @Home, AT&T, Chase
Manhattan Bank, IBM, JP Morgan, Softbank, The Carlyle Group,
Yahoo! Inc., The Blackstone Group L.P., Arthur Andersen, KPMG,
Freshfields Bruckhaus Deringer, Cisco Systems Inc., Juniper
Networks Inc., Nortel Networks, Exodus Communications, Hitachi
Telecom (USA) Inc., Lucent Technologies, Qwest Communications
Corp., 360networks Inc., BellSouth Telecommunications Inc.,
CompUSA Inc., Ericsson UK, MCI WorldCom Network Services Inc.,
Uni-tel, ABN Amro Bank N.V., Apollo Advisors, Bain Capital Inc.,
Bank of America, Bank of Montreal, Bank of Nova Scotia, Bank
One, Barclays, Chase Manhattan Bank, CIBC Oppenheimer, Citibank,
Credit Suisse First Boston, Deutsche Bank, First Union, Fleet
Bank Boston, General Electric Capital Corp., Industrial Bank of
Japan, JP Morgan Chase, Key Bank, Merill Lynch, Morgan Stanley
Dean Witter, Sumitomo Trust & Banking Co., Textron Financial
Corp., Wachovia Bank, Alcatel, Corning Inc., Lucent
Technologies, and Siemens.

Mr. Dove informs the Court that as compensation for rendering
auction services to the Debtors, DoveBid will charge a buyer's
premium with respect to all sales. The Buyer's Premium may be up
to 13% of the sales price of each De Minimis Asset sold.  The
premium will be collected by DoveBid directly from each
successful Purchaser of the asset, in addition to the sales
price for such asset. For example, if the sales price of an
asset is $1,000, Dovebid may collect up to $1,130 from the
Purchaser with $130 representing the Buyer's Premium. A discount
from the Buyer's Premium equal to 3% of the sales price will
apply to Purchasers who pay in the form of cash, cashier's
check, company check (with bank letter of guarantee) or wire
transfer (unless such bid is over the Internet in a Webcast
Auction, in which case the discount shall be equal to 1% of the

Mr. Dove adds that DoveBid has also agreed to remit to the
Debtors, as a rebate, a portion of the sum collected as Buyer's
Premium. The Rebate is likely to equal 30% of the Buyer's
Premium, excluding any surcharge collected with respect to
credit card or internet purchases. For example, if the sales
price of an asset is $1,000 with the Buyer's Premium adding an
additional $130 to the price for a total sales price of $1,130,
the Debtors will receive 30% of $130 (minus the applicable
surcharge collected with respect to credit card or Internet
purchases) as the Rebate.

Mr. Miller submits that that the Plan of Sale will include a
maximum sales expense estimate, which will not exceed 8% of the
proceeds of the sale, excluding the buyer's premium and any
taxes. Sales expenses will be reimbursed only from the proceeds
of the sale and will not be reimbursed if no sale is
consummated. The Agreement expressly caps Dovebid's expenses at
8% of the sale proceeds such that the Debtors will not be liable
for expenses that exceed that percentage.

Mr. Dove avers that DoveBid will be reimbursed from the
remaining proceeds for all actual, reasonable, pre-agreed out of
pocket expenses it advances for (i) advertising and direct
marketing; (ii) travel and lodging; (iii) webcast expenses; (iv)
miscellaneous; (v) rigging, transport, and storage; and (vi)
labor. Expenses (i) through (iii) will not exceed 3% of the
proceeds realized from the sale of the assets minus the Buyer's
Premium and any taxes.  Expenses (iv) through (vi) will not
exceed $50,000 per $1,000,000 in Gross Proceeds realized from
the sale of assets. These expenses, along with the Buyer's
Premium and any taxes will be deducted from the total proceeds
of the sale before those proceeds are fully turned over to the
Debtors, which must occur within 30 calendar days of the sale.
Expenses are only payable out of Gross Proceeds, and the Debtors
are not obligated to reimburse Dovebid for any expenses that
exceed the Gross Proceeds.

Thirty days after the sale of an asset, and pursuant to Rule
6004-1(f) of the Local Rules of Bankruptcy Procedures of the
Southern District of New York, DoveBid will file a settlement
report with the Court.  This will set forth any compensation and
expenses received by Dovebid in connection with any sales held
pursuant to the Sales Procedures. Dovebid will serve separate
copies of the Settlement Report, by facsimile, on the Debtors,
the US Trustee, the attorneys for the Committee, the JPLs and
their attorneys, and the attorneys for the pre-petition lenders.
Each of the parties have until 4:00 p.m. Eastern Time on the
fifth business day after the service of the Settlement Report to
file a written objection to the compensation and expense
reimbursements received by Dovebid.  The objection must be filed
with the Court and served on the Debtors and Dovebid. After the
filing of an objection, the Court may schedule a hearing.

The Debtors are aware that the Buyer's Premium to be paid to
Dovebid exceeds the commissions set forth in Rule 6005-1(b)(1)
of the Local Bankruptcy Rules. The Debtors submit, however, that
sufficient cause exists to depart from the compensation
standards provided in Local Bankruptcy Rule 6005-1(b)(1). Mr.
Dove points out that Dovebid will be providing the Debtors a
unique service for which they are the most qualified to provide.
Dovebid has previously conducted auctions for the sale of
telecommunications equipment, office equipment, office furniture
and fixtures and has extensive experience with assets
substantially similar to the De Minimis Assets.

According to Mr. Dove, Dovebid was selected by the Debtors in an
arms-length, competitive bidding process over the course of
several weeks. Ultimately, Dovebid presented a superior offer to
the Debtors. Many of the terms of the Disposition Services
Agreement, including the Guaranteed Minimum, the Debtors' Put
Right, and the Rebate, were equivalent to or exceeded those
offered by other bidders. Moreover, Dovebid has significant
experience in similar sales, which in the Debtors' judgment,
made Dovebid the best-qualified to conduct the sales of its De
Minimis Assets. Therefore, the Debtors concluded that Dovebid's
proposal represented the best opportunity for the Debtors to
maximize recovery through the sale of De Minimis Assets for the
benefit of its estates and creditors. (Global Crossing
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

GLOBAL CROSSING: Preparing Company-Sponsored Restructuring Plan
Global Crossing is preparing a company-sponsored restructuring
plan as an alternative to bids it anticipates receiving from
independent investors next month.

John Legere, chief executive of Global Crossing stated, "Our
proven ability to meet the financial and operating targets in
the business plan we presented to the creditors' committee has
given Global Crossing restructuring alternatives that were not
available to us when we approached a Chapter 11 filing.  We
believe that it is now entirely feasible to fund a restructuring
plan through asset sales and through a smaller equity investment
than originally anticipated."

Mr. Legere continued, "Global Crossing continues to meet its
targets.  We have successfully and aggressively managed cash,
reduced costs, and improved margins and have done so without
compromising quality or service.  An overwhelming majority of
our customer base remains loyal, and our employees have kept
their spirits high.  That, coupled with intensifying investor
interest in the assets we have identified for possible
disposition -- Global Marine, the UK national business and the
conferencing division -- we believe bolsters the view of our
creditors that the value of the company is greater than the
original offer made by Hutchison Whampoa Ltd. and Singapore
Technologies Telemedia Pte. Ltd.  The new business plan we have
implemented creates significantly greater enterprise value than
our constituents may have previously realized."

A company-sponsored plan is one of several possible alternatives
being considered by Global Crossing, which continues to work
cooperatively with the creditors' committee, banks and potential
investors as the restructuring process moves forward in order to
maximize value.

                      Turnaround Proceeding

"We are persuaded, particularly given the leading indicators of
a turn-around that began last October and that continues on
target, that our plan will deliver significant value to our
creditors, customers, and employees," Mr. Legere said.  "We said
we would aggressively restructure costs and manage cash without
compromising customer service or network performance -- and we
did it.  As the global telecommunications industry continues to
struggle with an uncertain economy, temporary but significant
slowdown in growth of demand, significant debt, and the
imperative to restructure operating and capital costs -- we are
moving forward and keeping our commitments."

"We hit the mark on every major metric," Mr. Legere continued.  
"This includes controlling our cash -- which continues to
fluctuate very little as we move into our fifth month of the
restructuring process -- and we delivered revenue, reduced costs
dramatically, served customers, worked with our suppliers, and
kept employee morale high."

Earlier this month, Global Crossing announced that it had hit
the key first quarter targets contained in the business plan
presented to the creditors.  For continuing operations in the
first quarter of 2002, Global Crossing said in an announcement
earlier this month that it expects to report consolidated
revenue of approximately $788 million, including service revenue
of approximately $754 million.  Excluding Asia Global Crossing
and reflecting certain eliminations and adjustments, these
amounts were approximately $768 million for revenue and $736
million for service revenue.  Figures are for continuing
operations and exclude Global Marine.

In addition, Global Crossing has clearly demonstrated strong
cash management controls during the case period, evidenced by
the small change in its cash in bank balances since filing on
January 28, 2002.  Upon entering Bankruptcy, Global Crossing's
bank accounts contained approximately $965 million.  This amount
had only decreased to $919 million at the end of March and only
another $6 million during April to an April 30 cash in bank
amount of $913 million.  All of these amounts exclude the cash
held in Asia Global Crossing bank accounts.  Excluding the
discontinued operations of Global Marine the January 28, March
31 and April 30 cash in bank amounts would be $871 million, $854
million and $856 million, respectively.

Cost reductions already implemented include:

     -- Voluntary and involuntary layoffs which, in aggregate,
resulted in a total current headcount of 5,000 compared to over
13,500 at the beginning of 2001;

     -- Office consolidations estimated to save Global Crossing
over $100 million in 2002; 217 offices are expected close by
year-end, effecting ongoing annualized savings of approximately
$121 million;


     -- Numerous cutbacks on travel, non-core systems,
administrative expenses, and other miscellaneous expenses.

These initiatives are expected to enable Global Crossing
(excluding Asia Global Crossing) to cut operating expenses by 42
percent to approximately $900 million in 2002, as compared to
$1,550 million reported in 2001.  Global Crossing forecasts the
annual run-rate for operating expense to come in at
approximately $720 million by the end of 2002.

Capital expense, again excluding Asia Global Crossing, is
forecast to run under $200 million this year, versus $3.2
billion spent in 2001, primarily because the global backbone
network construction has been completed.

               Interest In Non-Core Business Lines
                By Potential Investors Intensifies

Over the last several months, Global Crossing has been actively
marketing certain non-core businesses including Global Marine
Systems, the conferencing division and the national network in
the United Kingdom.  Sale of these assets would maximize cash
without diminishing the value of Global Crossing's core business
-- providing high quality voice and data services to more than
200 of the world's top business cities.

With a customer base that includes over 60% of the Fortune 100
companies, the conferencing unit is a leader in its market.  
Efforts to re-establish this division as an independent
operating unit are already well underway, making the business
fundamentally more flexible and efficient, as well as a more
attractive prospect for either strategic or financial buyers.  
The conferencing division offers a portfolio of state-of-the-art
conferencing services including video, audio, and Web

Global Crossing continues to work with parties who have
expressed interest in the UK national network services business
Global Crossing acquired from Racal Telecom in 1999.  The UK
network, which includes approximately 8,000 route kilometers of
fiber and reaches more than 2,000 cities and towns, delivers
managed data services to government and commercial customers.  
Global Crossing would retain all core UK assets essential to its
strategy as a global data communications service provider.

Detailed due diligence with potential investors who have
expressed interest in Global Marine Systems division also
continues.  Global Marine is one of the largest companies in the
world providing submarine fiber optic cable installation and
maintenance service to many global telecommunications companies,
including Global Crossing.

                      Customer-Base Expands;
                 Network Performance Records Set

Mr. Legere went on to explain that customers have been very
supportive, despite the uncertainty Global Crossing has faced.  
"At the end of the day," Mr. Legere noted, "this is a service
business -- a people business -- and when customers see our team
driving forward with a tremendous desire to win and to serve
them, they stick with us."

As announced earlier this month Global Crossing in 2002 has

     -- Announced a number of new customers including network
service agreements with Agnostic Media, Club Med,
Washingtonpost-Newsweek Interactive, Jabil Circuit, NBC News
Channel, DANTE, and Nextel Argentina;

     -- Signed renewal contracts during the first quarter with
key global customers including Techtel, Radiant, OPEX and CNBC

     -- Signed 475 new contracts and renewals;

     -- Maintained its customer base, with retention levels
better than anticipated in the business plan provided to

     -- Logged a record 4 billion voice minutes per month, with
900 million running over its Voice over IP network, largely
considered the most extensive and robust commercial VoIP network
in the world;

     -- Helped a customer set the world's "land speed record"
for IP performance as measured by Internet2, a consortium of
over 190 universities working in partnership with industry and
government to develop and deploy advanced network applications
and technologies.

"When the economy rebounds and the demand for high capacity data
networks revives, we believe Global Crossing will be
extraordinarily well-positioned to compete and, in fact, lead in
this next important era in our industry.  While the economy has
softened, and demand growth has slowed, the promise of high-
speed global data networks has not gone away," Mr. Legere said.  
"While we are approaching the future and our forecasts
pragmatically, we are as passionate about our business, our
network and the value we bring to customers as we ever were.  We
believe investors recognize this and are excited about
participating in this next chapter of industry growth."


"We've got a company that is transforming itself rapidly into a
lean, viable competitor that sets new standards for cost-
effective, high quality operation," Mr. Legere said.  "We've got
world-class employees, and we've got an unmatched network.  
These are powerful inducements for the potential investors we're
working with."

All bids to invest in Global Crossing are currently due by June
20.  If there are multiple bids, an auction is scheduled for
July 8.  The court is scheduled to approve the winning bid on
July 11.

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.  
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.  Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.

On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda.

Please visit http://www.globalcrossing.comor  
http://www.asiaglobalcrossing.comfor more information about  
Global Crossing and Asia Global Crossing.

Global Crossing Holdings Ltd.'s 9.625% bonds due 2008 (GBLX3),
DebtTraders says, are quoted at a price of 2. See  
real-time bond pricing.

GRAHAM PACKAGING: Unit Tenders $250M Shares in Public Offering
Graham Packaging Company, L.P., a worldwide leader in the
design, manufacture, and sale of customized blow- molded plastic
containers, announced that its wholly-owned subsidiary, GPC
Capital Corp. II, has filed a registration statement with the
Securities and Exchange Commission for an initial public
offering of common stock in a proposed aggregate maximum
offering amount of $250,000,000.

In addition, the underwriters will be granted an option to
purchase an aggregate of $37,500,000 of additional shares of
common stock to cover overallotments, if any.  All of the shares
will be primary shares sold by the issuer.  The offering is part
of a refinancing plan designed to reduce the amount and extend
the maturities of Graham Packaging's long-term debt, reduce
interest expense and improve financial flexibility.  Graham
Packaging expects to use net proceeds from the offering plus
proceeds from new indebtedness to repurchase and refinance
certain of its existing indebtedness.  The offering will be lead
managed by Deutsche Bank Securities Inc.

Graham Packaging Holdings Company is currently 85% owned by
affiliates of The Blackstone Group, certain members of
management and an institutional investor and 15% owned by
members of the Graham family.

Immediately prior to the offering, Graham Packaging will effect
an internal reorganization in which the issuer, GPC Capital
Corp. II, a Delaware corporation and a wholly-owned subsidiary
of Graham Packaging Holdings Company, will change its name to
Graham Packaging Company Inc. and exchange newly issued shares
of its common stock for all of the partnership interests of its
existing parent, Graham Packaging Holdings Company, a
Pennsylvania limited partnership.  Upon the exchange, Graham
Packaging Holdings Company will liquidate and all of its assets
will be transferred to Graham Packaging Company Inc.

Graham Packaging is a worldwide leader in the design,
manufacture and sale of customized blow-molded plastic
containers for the branded food and beverage, household and
personal care, and automotive lubricants markets with 55 plants
throughout North America, Europe and Latin America.

HOULIHAN'S RESTAURANTS: Receives Court Nod to Auction 9 Darryl's
Judge Arthur B. Federman of the U.S. Bankruptcy Court in Kansas
City, Missouri, on Thursday authorized auction procedures for
Houlihan's Restaurants Inc. for the company's proposed sale of
nine restaurants, according to a court order obtained by Dow
Jones Newswires. The order scheduled a July 9 auction and
hearing to approve the sale of nine Darryl's restaurants.  The
order set a July 3 deadline for initial competing bids;
objections to the sale may be filed through July 5.  Separately,
Judge Federman on Wednesday signed an order approving an
extension of the periods in which only Houlihan's may file a
reorganization plan and solicit the plan's acceptance.

According to the newswire, Florida-based Renaissance Restaurants
Inc. has offered to purchase the Houlihan's-owned Darryl's
locations for $5.5 million. Kansas City-based Houlihan's sought
chapter 11 bankruptcy protection on January 23. As of November
25, 2001, Houlihan's Restaurants reported total consolidated
assets of about $105.2 million and liabilities of about $115.7
million. (ABI World, May 27, 2002)

ICG: Gets Go-Signal to File SBC Confidential Pact Under Seal
Judge Walsh, under the authority of 11 U.S.C. Sec. 107(b) and
Rule 9018 of the Federal Rules of Bankruptcy Procedure, entered
an Order authorizing ICG Communications, Inc., and its debtor-
affiliates to file under seal the Confidential Settlement
Agreement and Mutual Release and directing that the Protected
Agreement remain confidential, protected under seal and not be
made available to anyone other than the Court, the United States
Trustee, the Official Committee of Unsecured Creditors, the
Debtors, and the SBC Affiliates.

After protracted and difficult negotiations, the Debtors and the
SBC Affiliates have reached a settlement with respect to the
"wholesale" portion of the Disputes embodied in several Motions
and responses.  The Parties have memorialized the terms of the
settlement of the "wholesale" Disputes in a confidential
writing, the Protected Agreement.

As a condition to the Protected Agreement, the Parties have
agreed that the terms of the Protected Agreement are and shall
remain confidential.

Thus, the Debtors obtained Court order (1) authorizing the
Debtor to file the Protected Agreement under seal, and (2)
directing that such document shall remain under seal and
confidential and should be made available only to the Court and
to specified parties and their respective counsel: (a) the
United States Trustee, (b) the Official Committee of Unsecured
Creditors; (c) the Debtors; and (d) the SBC Affiliates, and such
document shall not be made available to any other party.

DebtTraders reports that ICG Services Inc.'s 13.50% bonds due
2005 (ICG5) (with ICG Communications, Inc. as underlying issuer)
are quoted at a price of 4.5. For real-time bond pricing, see

IT GROUP: Judge Walrath Allows Debtors to Sell De Minimis Assets
Judge Walrath permits The IT Group, Inc., and its debtor-
affiliates to sell assets of de minimis value, provided that the
sale transaction does not involve an insider, the total sale
price for all the transactions in the aggregate does not exceed
$15,000,000 aggregate cap.  If it does, the Debtors are directed
to seek Court approval. In addition, the Debtors cannot attempt
to sell personal property under "true" equipment leases without
complying with Bankruptcy Code Section 365. (IT Group Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,

INTEGRATED HEALTH: Court Stretches Removal Period to September 3
At Integrated Health Services, Inc.'s behest, the Court granted,
pursuant to Bankruptcy Rule 9006(b), an eighth extension of the
period within which the debtors may file notices of removal of
related proceedings under Bankrutpcy Rule 9027(a) to and
including September 3, 2002.

The Debtors explain that due to the size, complexity and pace of
these Chapter 11 cases, they have not had a full opportunity to
investigate their involvement in actions pending in the courts
of various states and federal districts (the Pre-Petition
Actions). This is because their personnel and management has
been focused primarily on stabilizing the business,
administering the bankruptcy proceeding and developing a
business plan for progress in the reorganization process. As a
result, the Debtors and their professionals have not fully
reviewed all of the Pre-Petition Actions to determine if any
should be removed pursuant to Bankruptcy Rule 9027(a) and needs
more time to do so.

The Debtors submit that the extension is in the best interests
of the Debtors, their estates and their creditors because it
will afford them an opportunity to make more fully informed
decisions concerning the removal of each Pre-Petition Action but
will not prejudice their adversaries because any party to a Pre-
Petition Action that is removed may seek to have it remanded to
the state court pursuant to 28 U.S.C. Sec. 1452(b). (Integrated
Health Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

ISLE OF CAPRI: Proposes to Issue 5.35M Shares in Public Offering
Isle of Capri Casinos, Inc. (Nasdaq: ISLE), has filed a
registration statement with the Securities and Exchange
Commission for a proposed offering of 5,350,000 shares of its
common stock.  Of these shares, 4,000,000 will be offered by
Isle of Capri and 1,350,000 will be offered by certain
stockholders, consisting of Bernard Goldstein, Isle of Capri's
Chairman and Chief Executive Officer, and certain members of his
family and affiliated entities.  In addition, Isle of Capri has
granted the underwriters an option to purchase up to an
additional 802,500 shares of its common stock to cover over-

Isle of Capri intends to use the proceeds from the offering to
repay existing indebtedness under the revolving credit facility
of its senior credit facility and for general corporate and
working capital purposes, consisting primarily of funding a
portion of its capital expenditure programs for its casino
properties in Biloxi, Mississippi, and Bossier City, Louisiana.  
Isle of Capri will not receive any proceeds from the sale of the
shares of common stock being offered by Mr. Goldstein and the
members of his family and affiliated entities.

Merrill Lynch & Co. is serving as sole book-running manager.  
CIBC World Markets and Deutsche Bank Securities are serving as
co-lead managers.

When available, copies of the written prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, may be obtained from Merrill Lynch & Co., 4 World
Financial Center, New York, New York 10080, (212) 449-1000.

A registration statement relating to these securities has been
filed with the Securities and Exchange Commission, but has not
yet become effective. These securities may not be sold, nor may
offers to buy these securities be accepted, prior to the time
the registration statement becomes effective. This communication
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in
any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state.

Isle of Capri owns and operates 15 riverboat, dockside and land-
based casinos at 14 locations, including Biloxi, Vicksburg,
Tunica, Lula and Natchez, Mississippi; Bossier City and Lake
Charles (two riverboats), Louisiana; Black Hawk, Colorado;
Bettendorf, Davenport and Marquette, Iowa; Kansas City and
Boonville, Missouri; and Las Vegas, Nevada.  The Company also
operates Pompano Park Harness Racing Track in Pompano Beach,

As reported in the March 26, 2002 edition of Troubled Company
Reporter, Standard & Poor's assigned a single-B rating to Isle
of Capri's $200 million senior subordinated notes. S&P gave the
ratings to reflect the company's diverse portfolio of casino
assets, relatively steady operating performance, lower than
expected capital spending levels, and improving credit measures.
These factors are partly offset by competitive market
conditions, the company's aggressive growth strategy, and its
high debt levels.

KMART CORP: Court Carves-Out 3 Utilities from Utility Order
In three separate agreed orders, Judge Sonderby rules that:

  1) The Utility Order does not govern the terms provided by:

     (a) Grayson Rural Electric Cooperative Corporation -- a
         utility company that provides utility services to Kmart      
         Corporation's store number 7229 at C.W. Stevens
         Boulevard in Grayson, Kentucky;

     (b) Ohio Valley Gas Corporation -- a utility company that
         provides utility services to the Debtors' store number
         9187 at 2500 North Park Road in Connersville, Indiana;

     (c) Jackson Electric Membership Corporation -- a utility
         company that provides utility services to the Debtors'
         store number 4916 at 889 Dawsonville Highway in
         Gainesville, Georgia.

  2) Specifically, the terms of post-petition services are
     governed by the applicable rules, regulations, tariffs,
     statutes, laws, ordinances, and customary billing
     procedures governing utilities in:

       -- the State of Kentucky for Grayson,
       -- the State of Indiana for Ohio Valley, and
       -- the State of Georgia for Jackson Electric;

  3) The Court directs the Utilities to continue to provide
     utility services to the Debtors and to invoice the Debtors
     for such services in the same manner as was customary
     before the Petition Date.  The Debtors must pay the full,
     undisputed amounts of the Utilities' post-petition invoices
     on or before the due dates set forth in the invoices
     provided.  If the Debtors fail to do so, the Court allows
     the Utilities to avail itself of its remedies as provided
     under the Regulations;

  4) By May 7, 2002, the Debtors must pay a post-petition
     security deposit in the amount of:

       -- $5,250 to Grayson,
       -- $6,000 to Ohio Valley, and
       -- $45,000 to Jackson Electric,

     through check or wire transfer.  The Security Deposit must
     bear interest and must be returned to the Debtors after:

       -- six months by Ohio Valley, and
       -- 12 months by Jackson Electric,

     less any amounts due for unpaid Utility Invoices for post-
     petition services;

  5) If there is a default by the Debtors with respect to:

       -- payment of the Security Deposit, or
       -- payment of charges for post-petition utility services,

     as to which there is not a good-faith dispute, which
     Default is not cured within the period provided for the in
     the Regulations after written notice from the Utilities to
     the Debtors, then the Utilities may terminate post-petition
     utility services to the Debtors in accordance with the
     Regulations and without further order of the Court; and

  6) Any undisputed charge for post-petition utility services
     provided by the Utilities to the Debtors constitutes an
     administrative expense in accordance with Sections
     503(b)(1)(A) and 507(a)(1) of the Bankruptcy Code. (Kmart B
     Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
     Service, Inc., 609/392-0900)   

KMART: DJM is Taking Bids for Real Estate Assets Until June 7
                      Kmart Corporation
                     Real Estate Auction
               283 Prime Properties - 41 States

                    Long Term Leases and
                 Purchase Options Available

              Bids due on or before June 7, 2002

        (Properties may be withdrawn prior to auction.)

    Sale Subject to Chapter 11 Bankruptcy Court Approval.
   Bid procedures and all due diligence information readily

              Please contact: 631.752.1100
        James Avallone (x224) Ed Zimmer    (x222)
        Thomas Laczay  (x225) Joe DiMitrio (x227)

For investors and developers please call Andrew Graiser (x229)

             The Leaders in Real Estate Disposition
                    DJM Asset Management, LLC

     Visit our Web site at http://www.djmasset.comand call:
                  631.752.1100   fax 631.752.1231
      445 Broad Hollow Road, Suite 417, Melville, NY 11747

                        Retail Advisors

KMART CORP: U.S. Trustee Agrees to Appoint Equity Committee
The United States Trustee's Office agreed to appoint an equity
committee to represent the interests of shareholders during
Kmart's bankruptcy proceedings.

The request for the formation of an equity committee was made
jointly by the Chicago law firm of Goldberg, Kohn, Bell, Black,
Rosenbloom & Moritz, Ltd. and the New York firm of Traub,
Bonacquist & Fox, on behalf of Ronald Burkle, a significant
investor in Kmart. Saybrook Capital, LLC, a Santa Monica,
California company, is acting as financial advisor on behalf of
Mr. Burkle in connection with Kmart equity committee request.

"Kmart shareholders will now have a formal voice in Kmart's
Chapter 11 proceedings and have a right to representation by
third party professionals," says Randall L. Klein, principal
with Goldberg, Kohn.

"Kmart shareholders, regardless of the size of their holdings
are welcome to seek a position on the committee," says Klein. A
formation meeting will be held Friday, June 14 at a time and
location (in Chicago) to be determined. The number of committee
members likely will be between 7 and 11, but the formal number
has not been decided. Shareholders who wish to serve on the
Kmart equity committee should contact Randall Klein of Goldberg,
Kohn at (312) 201-3974 ( or the
United States Trustee's Office, attention Kathryn Gleason at
(312) 886-3327.


     --  Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd.
is a 70-attorney commercial law firm located in Chicago with
principal concentrations in business litigation, commercial
finance, creditors' rights and bankruptcy, corporate, federal
and state taxation, intellectual property, Internet and e-
commerce, labor and employment, and real estate.

     --  Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd.
is the sole Chicago member of Meritas -- the world's largest and
most comprehensive association of locally based, midsized law
firms with member firms in 125 U.S. cities and 70 countries.

DebtTraders reports that KMart Corp.'s 9.875% bonds due 2008
(KMART18), an issue in default, are trading at about 45. See  
real-time bond pricing.

MANITOWOC: S&P Rates $750MM Rule 415 Shelf Registration at BB
Standard & Poor's assigned its preliminary double-'B' unsecured
debt rating to Manitowoc Co. Inc.'s $750 million universal Rule
415 shelf registration and placed the rating on CreditWatch with
negative implications. The Manitowoc, Wisc.-based company plans
to use the proceeds from the sale of securities to refinance
debt, for acquisitions, capital expenditures, and for working

On March 19, 2002, Standard & Poor's placed its double-'B'
corporate credit rating on Manitowoc, a provider of cranes, food
service equipment, and marine services, on CreditWatch with
negative implications following the company's announcement of
its proposed acquisition of Grove Worlwide, a leading
manufacturer of mobile hydraulic and truck mounted cranes.

Although the transaction will broaden Manitowoc's crane product
lines and provide some synergy opportunities, it also will lead
to elevated financial leverage and increased exposure to the
highly cyclical and challenging crane business, resulting in
heightened financial risk. In addition, the integration of
Grove, which has had operational problems in the past, could
prove to be difficult.

"The company's increased debt levels during the current
challenging economic environment raises Standard & Poor's
concerns about the company's ability to restore its financial
profile over the near to intermediate term in a manner
consistent with the current ratings," said Standard & Poor's
analyst John R. Sico.

Standard & Poor's will meet with management to discuss the
implications of the proposed acquisition on the company's
business and financial profile. If it appears the company's
credit protection measures will remain below appropriate levels
for the current ratings over the near to intermediate term, the
ratings could be lowered.

NORSKE SKOG: Moody's Rates Planned C$300M Credit Facility at Ba1
Moody's Investors Service took several rating actions on Norske
Skog Canada.
                       Rating Actions:

              Norske Skog Canada Finance Limited
      Proposed $C300 million Revolving credit facility; Ba1

             Norske Skog Canada Finance Limited

            Existing Bank Debt; to Ba1 from Baa3

                  Norske Skog Canada Limited
            Senior Implied Rating; to Ba2 from Ba1     
                 Norske Skog Canada Limited    

               Global Senior Unsecured Notes; Ba2   
    Guaranteed Global Bonds (formerly Paper Papers Inc.); Ba2
                     Issuer Rating; Ba2

The ratings slide reflect the weak near term outlook for the
company's core business of newsprint, pulp and coated papers,
and low expected cash flow until the end of 2002. The ratings
also reflect the company's narrow product focus in a commodity
industry with volatile pricing; its moderate size in relation to
its competitors; and its lack of geographic diversification.

Outlook for the ratings is stable.

Norske Skog Canada, is a producer of newprint, groundwood
papers, and market pulp. Its headquarters is in Vancouver,
British Columbia.

OWENS CORNING: Seeks Approval of Indian Unit's Restructuring
With the goal of restructuring a valuable company, Debtor Owens
Corning moves the Court to:

A) Authorize and approve an Omnibus Agreement that the Debtors,
   through IPM Inc., and Owens Corning India Limited (OC India),
   entered into with AIG Investors (consisting of Archway
   Investments Limited, IL&FS Trust Company Limited, as Trustee
   of AIG Indian Sectoral Equity Trust), Mahindra & Mahindra
   Ltd., The Bank of Nova Scotia in Mumbai (BNS Mumbai) and the
   Senior Lenders including the International Finance
   Corporation, The Bank of Nova Scotia Asia Limited (BNS Asia)
   and the Export-Import Bank of India;

B) Authorize the consummation of the transactions and the
   execution of the agreements contemplated in the Omnibus
   Agreement including assumption of certain designated
   executory contracts, as amended and restated; and

C) Grant BNS Mumbai an allowed, pre-petition general unsecured
   claim against the Debtor in the amount of $19,493,177, which
   is conditioned upon the closing of the Omnibus Agreement.

OC India was organized under the laws of India in 1995 for the
purpose of manufacturing, marketing, distributing and selling of
advanced glass, fiber glass, composite materials and building
materials. It owns and operates a manufacturing facility in
Taloja, Maharashtra, India. The Debtor, through its non-debtor
subsidiary IPM, currently holds a 50% common equity interest
(minus one share) in OC India. The remaining ownership of the
company currently is: Mahindra & Mahindra -- 26%; Archway --
12%; IF&LS Trust -- 12% (less one share) and two initial
subscribers who hold one share each.

J. Kate Stickles, Esq., at Saul Ewing LLP in Wilmington,
Delaware, tells the Court that while the long-term outlook for
OC India is positive, beginning in mid-2000, the company's
financial condition has been negatively impacted by lower
worldwide prices of the products that it produces. This factor,
coupled with a disastrous flood in 1998 that stalled production
at the plant for several months, resulted in OC India being
unable to service its current debt repayment schedule, and
necessitated the need to restructure its financial and capital
structure in order to preserve it as a viable going concern and
prevent it from being forced into liquidation proceedings in

Ms. Stickles submits that substantial benefits will be gained by
the Debtors from its proposed restructuring of OC India since
the company is a low-cost, state-of-the-art production facility
situated in a strategic location for cost-effective service to
the Asia Pacific region. It is also designed to permit efficient
expansion of capacity, as and when needed. It is also believed
to become a key source of product in the Debtor's over-all
enterprise and its worldwide manufacturing and export business,
as well a source of significant upside value for the Debtor's
estate, in the future. With the proposed restructuring, the
Debtor will be able to obtain a greater ownership interest in a
financially solidified OC India.

OC India currently has two outstanding credit facilities, each
of which is secured by mortgages or security interests in
substantially all of its assets:

A) Term Loan Facility: In March 1997, pursuant to three separate
   loan agreements, BNS Asia, IFC and EXIM extended three
   separate term loan facilities to OC India of up to
   $60,000,000 in the aggregate. The Term Loan Facility is
   secured by an Indenture of Mortgage dated as of July 10, 1997
   covering certain of OC India's assets. To date, approximately
   $57,000,000 is due and owing with respect to the Term Loan
   Facility. The Debtor is not a party to the Term Loan
   Facility, and did not guarantee any of the obligations under
   the Term Loan Facility.

B) 2000 Letter Agreement: On May 26, 2000, pursuant to a Letter
   Agreement, BNS Mumbai agreed to lend OC India 900 million
   Indian rupees which is approximately equal to $20,000,000.
   The Rupee Loan Facility is secured by an Indenture of
   Mortgage and is subordinated in right of payment to the Term
   Loan Facility, and the mortgage and security interests of BNS
   are junior to those of the Senior Lenders. The Debtor is a
   guarantor with respect to the Rupee Loan Facility. To date,
   the entire principal amount under the 2000 Letter Agreement
   remains outstanding.

The Debtor, meanwhile, is currently a party to numerous
contracts with OC India, pursuant to which the Debtor provides
OC India with certain services with OC India providing certain
goods to the Debtor. These agreements are collectively referred
to as Ancillary Agreements and consist of the Technology License
Agreement, Type 30 Technology License Agreement, Trademark and
Trade Name License Agreement, Alloy Services Agreement and
Offtake Contract.

In addition to the Ancillary Agreements, the Debtor is also a
party to Shareholder Agreements with M&M and the AIG Investors.
These Agreements set forth the rights and responsibilities of
each of those parties in relation to their status as partners
and shareholders in OC India and confirmed the Debtor's
obligations under the Ancillary Agreements.

Ms. Stickles submits that since mid-2001, the Debtor and IPM
have been engaged in discussions with OC India, the AIG
Investors, M&M, the Senior Lenders and BNS Mumbai to develop a
consensual plan to restructure OC India's capital structure,
restore the company's financial and operational viability and
preserve equity value for the Debtors through IPM. Following a
series of meetings held in India, Amsterdam, Hong Kong and
London the parties came up with the key terms of a restructuring
and settlement, which can be summarized as follows:

A) The Debtors have agreed to assume, in an amended and restated
   form, the Ancillary Agreements including the Technology
   License Agreement, Type 30 Technology License Agreement,
   Alloy Services Agreement, Trademark and Trade Name License
   Agreement and Offtake Contract. The parties agree to move
   the termination dates through June 30, 2010.

B) The Debtors have committed to take up to 32,000 tons of OC
   India products per annum.

C) OC India has agreed to pay the Debtors and Mahindra &
   Mahindra certain accrued royalties and fees totaling
   $3,300,000 and $800,000, respectively. The $3,300,000 owed to
   the Debtor will be paid in two equal installments, with the
   first due at closing. A portion of these accrued fees
   ($1,500,000 from OC and $500,000 from Mahindra & Mahindra)
   will be used at closing by the Debtor and Mahindra & Mahindra
   to subscribe to a capital call from OC India as a result of
   which IPM will increase its common equity shareholding in OC
   India from 50% to 60%. The proceeds from this capital call
   will be used to pay BNS Mumbai the Rupee equivalent of
   $2,000,000 million in cash on the Closing Date.

D) The Senior Lenders have agreed to extend their current debt
   maturities through June 15, 2009, reduce the interest rate on
   the Term Loan Facility and defer a portion for two years. In
   addition, the Senior Lenders have agreed to allow OC India to
   retain a portion of Excess Cash Flow for working capital

E) In exchange for an allowed claim against the Debtor's estate
   on account of the BNS Guarantee in the amount of $19,493,177
   and payment of $2,000,000 million in cash from the capital
   call, BNS Mumbai has agreed to convert the Rupee Loan
   Facility into secured convertible debentures, which if not
   redeemed in full by June 30, 2010, will be converted, on a
   mandatory basis, into 15% of the common equity of OC India on
   a fully diluted basis. OC will no longer guarantee OC India's
   obligations to BNS Mumbai.

F) Mahindra & Mahindra and the AIG Investors have agreed to
   reduce their common equity ownership to 21.5% and 18.5%
   respectively, in order to allow IPM's equity interest in OC
   India to increase from approximately 50% to 60%.

To give effect to OC India's restructuring, the parties have
also entered into an Omnibus Agreement. The Omnibus Agreement
provides that by the Closing Date, the parties will have agreed
upon and accomplished, among other things:

A) The entry of a Final Order authorizing and approving the BNS
   Mumbai a Guarantee Claim in an amount of $19,493,177.

B) The execution and delivery by the Parties of all the
   Transaction Documents and the Releases (both as defined in
   the Omnibus Agreement), in form and substance satisfactory to     
   all Parties.

C) Receipt by BNS Mumbai of the sum of $2,000,000, in Rupee

D) Receipt of proof reasonably satisfactory to each of the
   Parties that all conditions precedent to the closing of the
   BNS Restructuring Agreement and the BNS Letter Agreement have
   been met, and that the BNS Restructuring Agreement and the
   BNS Letter Agreement have closed.

E) Receipt of proof reasonably satisfactory to the Shareholders
   that the common equity shareholding of OC India has been
   adjusted and that all necessary Indian governmental approvals
   have been obtained to these adjustment.

F) Receipt of proof reasonably satisfactory to OC India
   shareholders including AIG Investors, M&M, IPM and OC that
   the conditions precedent set forth in the Amended and
   Restated AIG Investors Agreement have been fulfilled.

G) Approval of the Amended OC India Articles by a special
   resolution of the shareholders, filing of such Amended OCIL
   Articles with the Registrar of Companies in India, and the
   Parties' receipt of proof reasonably satisfactory to the
   Parties that such filing has taken place.

H) Receipt of proof reasonably satisfactory to the Senior
   Lenders that the conditions precedent set forth in the
   Amended Senior Agreements have been fulfilled.

Ms. Stickles tells the Court that the Omnibus Agreement also
provides that no agreements or related documents executed prior
to the Closing Date will become effective until all of the
conditions precedent have been met. If the said conditions have
not been fulfilled by July 31, 2002 (or at a further date agreed
on by the Parties), the Omnibus Agreement will terminate, the
BNS Mumbai Guaranteed Claim will not be deemed allowed and the
settlement and restructuring of OC India will not be effective.

In conjunction with the Omnibus Agreement the Debtor also seeks
to assume and assign the Ancillary Agreements and their amended
versions. The Debtor also seeks to assume the amended versions
of the Mahindra & Mahindra Shareholders Agreement as well as the
Investors Agreement.

Ms. Stickles informs the Court that part of OC India's
restructuring is the amending of the company's Loan Agreements
with its Senior Lenders. The key terms of the amendments to the
Senior Lender Loan Agreements include, among others:

A) The interest rate on the Term Loan Facility from December 15,
   2001 through December 15, 2003 is to be reduced from LIBOR
   plus 2% to LIBOR plus 1.5%.

B) After December 15, 2003, interest rate will be LIBOR plus 2%
   but may be reduced to LIBOR plus 1.75% upon OC India's
   repayment of $6,250,000 in principal, and to LIBOR plus 1.5%
   upon OC India's repayment of $12,500,000 in principal.

C) Interest and principal due on the Term Loan Facility will be
   capitalized for two years, so that OC India may establish a
   $3,000,000 working capital reserve.

D) Payments under the Term Loan Facility will be divided into
   fixed payments (paid semi-annually) and variable payments
   (paid annually), with a higher variable percentage in the
   earlier years so that there will be more cash on hand in the
   initial stages of the venture.

E) The Debtor will receive payments of $3,300,000 of accrued
   royalties under the Technology License and Type 30 Technology
   License Agreements in two installments, the first of which is
   due on the Closing Date and the second of which is due in
   December 2003.

F) Current royalties due to the Debtor under the Technology
   License and Type 30(R)Technology License Agreements will be
   paid annually after the fixed payments but before the
   variable payments are made under such Facility.

G) OC India will be allowed $500,000 per year in capital
   expenditures, with unexpended amounts to be carried over into
   the next year.

The Rupee Loan Facility, on the other hand, will also be amended
with OC India and BNS Mumbai entering into a Rupee Restructuring
Agreement and related BNS Mumbai Letter Agreement to be approved
by the Indian Government. This will provide a one-time
settlement of the Rupee Facility. In settlement of the amounts
owed pursuant to the Rupee Facility the parties have agreed

A) Upon the Closing Date, as defined in the Omnibus Agreement,
   OC India will pay BNS Mumbai a one-time cash payment (in
   rupees) that is the equivalent of US $2,000,000 million in
   full satisfaction of any claims held by BNS Mumbai relating
   to or arising out of the Rupee Loan Facility.

B) The Debtor will seek allowance of BNS Mumbai's guarantee
   claim by a Final order of this Court, in the amount of
   $19,493,177. The Debtor will waive any rights of subrogation
   against OC India on account of this claim.

C) OC India will issue at par to BNS Mumbai Secured Redeemable
   Convertible Debentures (SCDs) in a face amount equal to the
   remaining amount outstanding under the Rupee Facility after
   the aforementioned cash payment and allowance of the BNS
   Mumbai claim. The SCDs will be redeemable by OC India on June
   30, 2010 pursuant to the terms of the BNS Restructuring
   Agreement. SCDs not redeemed prior to the Redemption Date
   shall be converted into equity shares of OC India such that
   BNS Mumbai's equity ownership in the joint venture will not
   exceed 15% of the shares outstanding as of the Closing Date.
   Certain terms providing for early redemption of the SCDs
   apply if OC India completes an initial public offering prior
   to the Redemption Date.

Ms. Stickles urges the Court to grant the relief requested
because the proposed restructuring is seen to significantly
improve the pricing for the Debtor's purchase of products from
OC India, as well as the payment to the Debtor of past-due
royalties of approximately $3,300,000 and ongoing royalty
payments of 4% of OC India's sales, plus certain other payments
such as distribution margins, technology service fees and
bushing manufacturing fees. The proposed restructuring will also
eliminate the risk of litigation arising from OC India's
financial condition. (Owens Corning Bankruptcy News, Issue No.
32; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

PACIFICARE HEALTH: Names Ho to Lead Consolidated Health Services
PacifiCare Health Systems Inc. (Nasdaq:PHSY), named Sam Ho,
M.D., senior vice president and chief medical officer, effective

He replaces Michael Kaufman, M.D., J.D., who left the company to
pursue other interests. In addition, McKinley has been promoted
to senior vice president, network management, to head a
consolidated network management department.

Ho will be responsible for developing and implementing
strategies to improve the quality and cost-effectiveness of
health-care services throughout the company. He will report to
Brad Bowlus, executive vice president of PacifiCare Health
Systems and president and chief executive officer of the
company's health plans division.

"Sam's extensive experience in improving clinical and service
outcomes, developing innovative consumer health programs and
fostering close working relationships with physicians and
purchasers position PacifiCare to better meet the needs of
today's and tomorrow's health services marketplace," said

"Sam has spearheaded our distinctive quality initiatives, such
as our QUALITY INDEX(R) profile of medical groups, and led the
way in PacifiCare's achieving 'excellent' accreditation status,
the highest level of distinction, by the National Committee for
Quality Assurance (NCQA) in five states."

Ho said, "My goal as chief medical officer is to continue
PacifiCare's success as a leader in quality and comprehensive
medical management so that we may better service our members."

Ho joined PacifiCare of California in 1994. Throughout his
tenure he has developed and implemented innovative quality
initiatives that resulted in substantial improvement in
population health outcomes and exemplary achievement of
systemwide NCQA accreditation.

Prior to joining PacifiCare, Ho served as senior vice president,
health services at Woodland Hills, Calif.-based Health Net Inc.
He has also served as deputy director of health, medical
director and county health officer for the San Francisco
Department of Public Health.

He has held faculty appointments at both the Schools of Medicine
and Nursing at the University of California, San Francisco. He
has held positions as the chairman of the California Medical
Association and California Nurses' Association's Joint Practice

The Honolulu native received his bachelor's degree in sociology
from Northwestern University in 1972 with Phi Beta Kappa honors,
and his medical degree from Tufts University School of Medicine
in 1976. Ho completed his residency in family practice at the
University of California, San Francisco.

PacifiCare also announced that McKinley has been promoted to
vice president of network management. He previously served as
president of PacifiCare of California's Northern California
operations. As senior vice president, network management,
McKinley will oversee the newly consolidated network management
department, which includes network architecture, provider
contracting, network operations and contracting standards. He
also will report to Bowlus.

McKinley brings extensive relationship experience and a proven
background in hospital and physician management, including chief
operating officer for ReadyScript Corp., president and CEO for
IntensiCare Corp. and vice president of Business Development for
Talbert Medical Management Corp.

Prior to PacifiCare's acquisition of FHP International Corp., he
served various executive and management roles at FHP including
vice president of provider services and network development,
associate regional vice president of IPA Management and
associate vice president of medical center operations.

McKinley received his bachelor's degree in business
administration from the University of Southern California and
his master's degree in business administration from Pepperdine

"Pete's years of health-care management experience and his
success in leading our Northern California operations will be a
tremendous asset for our newly consolidated network management
department," said Bowlus.

"His experience at Talbert Medical Management and executive
management positions with FHP better strengthen PacifiCare's
network management strategy. I look forward to working with Sam
and Pete to further our success with our quality initiatives and
enhance our relationships with doctors, medical groups and
hospitals to improve the quality of care for our members."

Ho's and McKinley's promotions are part of the company's overall
effort to consolidate core functions between the company's
corporate office and its California health plan.

"As we continue our strategy of transitioning to a health and
consumer services company, it is imperative that we operate on a
more integrated basis," said Howard G. Phanstiel, president and
CEO of PacifiCare Health Systems. "We have spent considerable
time and energy developing an experienced team of executives and
managers dedicated to PacifiCare's strategy and growth."

PacifiCare Health Systems is one of the nation's largest health
and consumer services companies with approximately $11 billion
in annual revenues. Primary operations include health insurance
products for employer groups and Medicare beneficiaries in eight
states and Guam, serving approximately 3.4 million members.

Other specialty products and operations include pharmacy and
medical management, behavioral health services, life and health
insurance and dental and vision services. More information on
PacifiCare Health Systems can be obtained at
http://www.pacificare.comor by calling 877/PHS-STOCK (877/747-

                         *    *   *

As previously reported (Troubled Company Reporter, May 27, 2002
Edition), Fitch Ratings upgraded PacifiCare Health System,
Inc.'s 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.

               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.

PILLOWTEX: Will Assume Lease Agreements with Summit as Amended
Pillowtex Corporation, its debtor-affiliates, and Summit
Commercial Leasing Corporation have negotiated a restructuring
of the Lease Agreements that materially reduces the amount of
lease payments owed to Summit.

In a Court-approved stipulation, both parties agree that:

  (i) the Debtors will assume the Lease Agreements as modified
      by the Amendment, and the Debtors will enter into an
      Amendment Agreement and execute any documents necessary in
      connection with this stipulation and the amendment

(ii) Summit has an allowed unsecured claim of $2,837,980
      regarding a reduction of the lease obligations under
      the Lease Agreements without any further action or Court

(iii) the Debtors will reimburse or pay Summit for any pre-
      petition or post-petition taxes, plus any interest,
      penalties or other charges that are owed or payable
      regarding the Production Equipment within ten business
      days of receipt of any written request by Summit;

(iv) the Lease Agreements will be combined into and considered
      as one lease agreement under the Amendment Agreement.
      This will not be severable for any reason, and the
      Debtors will be deemed to have waived any right partially
      to assume or reject less than the entire Lease in the
      event of a subsequent bankruptcy;

  (v) if the Debtors fail, after proper notice under the Lease,
      to cure any default under the Lease within any applicable
      cure period:

      (a) the automatic stay will be automatically modified to
          permit Summit to exercise any rights or remedies it
          may have with respect to the Lease or Production
          equipment without further motion or order from this
          Court; and

      (b) all amounts outstanding under the Amendment Agreement
          or the Lease will become immediately due and owing.

(vi) Summit and its successors and assigns will be deemed to
      have released and discharged the Debtors and its
      affiliates from all rental payment obligations under the
      Lease Agreements that were due and payable and the Debtors
      will be deemed to have released and discharged Summit and
      its affiliates from all claims, actions, damages,
      obligations and liabilities relating to the Lease
      Agreements that arose prior to the execution of the
      Amendment Agreement. (Pillowtex Bankruptcy News, Issue No.
      28; Bankruptcy Creditors' Service, Inc., 609/392-0900)    

POLAROID: Retirees Seeks Severance Objection Deadline Extension
The Official Committee of Retirees of Polaroid Corporation
ask the Court to extend until June 27, 2002 the time for the
Debtors' employees to respond to the Debtors' offer of Post-
petition Transition Benefits Program.

Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in
Wilmington, Delaware, relates that under the Program Eligible
Employees, the employees may elect to receive four weeks base
salary pay and continued participation in the Debtors' medical
plans in exchange for releasing the Debtors from all claims
arising from employment with the Debtors or termination of
employment. Since December 9, 2001, the employees had until
February 2, 2002 to respond to the offer. With the request of
the Retirees' Committee, the Debtors twice extended the deadline
up to May 14, 2002.

Relevant to the program, Mr. Cousins says, the employees need
additional time to decide whether to accept the program or not
due to the pending Retirees' Motion to serve as authorized
representative of the Polaroid Health Plan.

Mr. Cousins explains that the Motion has been continued due to
the pending settlement with the Debtors. Until the Settlement is
materialized, Mr. Cousin adds, the Retirees' Committee is not in
the position to be able to assess the merits of the claims the
Program Eligible Employees may have against the Debtors.

Mr. Cousin notes that, pursuant to Delaware Local Rule 9006-2,
the objection deadline should be automatically extended until
the Court rules on this motion on June 12, 2002. (Polaroid
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

PROTECTION ONE: Will Continue to Acquire Unit's Debt Instruments
Protection One (NYSE: POI), one of the nation's leading
providers of monitored security services, announced that, after
the sale of previously acquired debt instruments of its
affiliate, Western Resources, the company has $165 million
outstanding under its senior unsecured credit facility with its
parent lender, Westar Industries, and approximately $595 million
of total debt outstanding.

In addition, at Protection One's annual meeting Thursday last
week, Richard Ginsburg, President and Chief Executive Officer of
Protection One, announced that the company expected to continue
to acquire Western's debt and equity securities depending on
market conditions. "We believe the fundamental value in Western
Resources represents an investment opportunity for Protection
One," said Ginsburg. "We acquire Western's common stock, debt,
and preferred securities when we think those instruments
represent a better value than our own common stock or debt
instruments. We also can deliver these securities in payment of
amounts owed to Western Resources."

Protection One's present holdings of Western Resources
instruments include 250,000 shares of common stock, 30,568
shares of its preferred stock, and $22.4 million of debt

Protection One's Board announced in the said meeting that it may
purchase up to $50 million of Western Resources common and
preferred stock directly from the company at prices based on the
average closing price over the 20 trading days preceding each
purchase. Protection One may also acquire additional Western
shares in open market transactions, or from its affiliate,
Westar Industries. The Board also authorized the company to
purchase up to $50 million of Western's debt securities.

Protection One may, from time to time, continue to repurchase
its publicly traded debt, which is trading at a discount, as
well as purchase shares of its common stock, depending on market
conditions and other factors the company deems appropriate.

Protection One, one of the leading commercial and residential
monitored security services companies in the United States and a
leading security provider to the multifamily housing market
through Network Multifamily, serves more than one million
customers in North America. Protection One is also a proud
sponsor of the Protection One 400, a multi-year NASCAR Winston
Cup Series Race at Kansas Speedway. For more information on
Protection One, go to

                            *   *   *

As previously reported (Troubled Company Reporter, May 2, 2002
Edition), Standard & Poor's lowered its corporate credit and
senior unsecured debt ratings on Protection One Alarm  
Monitoring Inc. to single-'B' from single-'B'-plus and its
subordinated note ratings to triple-'C'-plus from single-'B'-
minus. According to S&P, the company's operating performance
continues to deteriorate, thus, weakening its credit protection
measures. In addition, the ratings on Protection One, S&P says,
take into consideration a highly leveraged financial profile and
the management challenge of improving subpar operating

SAF T LOK INC: Files for Chapter 7 Liquidation in Pennsylvania
Saf T Lok Inc., a handgun safety locks maker, disclosed in a
press release on May 23 that it has filed for chapter 7
bankruptcy protection with the U.S. Bankruptcy Court for Western
District of Pennsylvania, Dow Jones reported.  In its 10-Q
filing on Monday, May 20 with the Securities and Exchange
Commission, the Sharon, Pennsylvania-based company listed total
assets of $225,066 as of March 31, including just $142 in cash,
while liabilities totaled about $1.4 million. (ABI World, May
24, 2002)

SAF T LOK INC: Voluntary Chapter 7 Case Summary
Debtor: Saf T Lok, Inc.
        32 West State Street
        Sharon, Pennsylvania 16146

Bankruptcy Case No.: 02-11154

Type of Business: Saf-T-Lok makes mechanical combination locks
                  for handguns to prevent their accidental or
                  unauthorized use.Through distributors, its
                  products are sold to law enforcement
                  agencies, retailers, and wholesalers. The
                  firm also protects vehicles from the wrong
                  hands with The Club anti-theft device.

Chapter 7 Petition Date: May 22, 2002

Court: Western District of Pennsylvania (Erie)

Judge: Warren W. Bentz

Debtor's Counsel: Richard Jay Parks, Esq.
                  MacDonald, Illig, Jones & Britton
                  100 State Street, Suite 700
                  Erie, Pennsylvania 16507

Total Assets: $225,066

Total Debts: $1,420,927

SNTL CORP: Court Fixes June 14 Bar Date for Proofs of Claims

IN RE:                           :   CASE NO. SV 00-14099 GM
CORPORATION, SN INSURANCE        :     SV 00-14101-GM
INSURANCE BROKERAGE, INC.,       :     SV 02-14236-GM
             DEBTORS.            :     CHAPTER 11 CASES


BAR DATE: June 14, 2002

     PLEASE TAKE NOTICE the United States Bankruptcy Court for
the Central District of California has fixed a General Bar Date
requiring all entities that hold or wish to assert claims
against or interest in INFONET MANAGEMENT SYSTEMS, INC, and/or
PACIFIC INFONET BROKERAGE, INC., debtors in bankruptcy cases
pending in the Bankruptcy Court, which arose or which are deemed
to have arisen prior to the commencement of the Debtors chapter
I1 cases on May 8, 2002, and which claims or interests are based
on the Debtors' primary, secondary, direct, indirect, secured,
unsecured contingent, or guaranty liability or otherwise, to
file proofs of claims or interest with the Clerk of the Court
(which must be received) on or before 4:00 p.m. (Pacific Time),
on June 14, 2002. If such proofs of claims or interest are not
filed on or before this deadline, you may be forever barred from
filing such claims or interest against the Debtors' estates, and
from being treated as creditors or Interest holders for the
purposes of voting and sharing in any distribution. Failure of a
creditor to timely file a proof of claim or interest on or
before the deadline may result in disallowance of the claim or
subordination under the terms of a plan of reorganization
without further notice or hearing, unless the creditor files a
motion to allow a late filed claim on the basis that the failure
to file was the result of excusable neglect. 11 U.S.C. Sec.
502(6)(9); F.R.B.P. 9006(6)(1). Creditors may wish to consult an
attorney to protect their rights.

     An original and two copies of each Proof of Claim or Proof
of Interest shall be filed with the Clerk of the Bankruptcy
Court either by mail or in person addressed to:

                United States Bankruptcy Court
         San Fernando Valley Division, In Take Section
                    21041 Burbank Boulevard
                Woodland Hills, California 91367

Copies of each Proof of Claim or Proof of Interest shall be  
served on counsel for the Debtors:

                   Brad R. Godshall, Esq.
          Pachulski, Slang, Ziehl, Young Jones PC.
          10100 Santa Monica Boulevard, Suite 1100
                Los Angeles, California 90067

      In order to assist in the review and reconciliation of any
proof of claim, claims should include copies of any invoices,
statements or other documents evidencing the amounts or basis of
the claim.

SAFETY-KLEEN: Court to Consider Onyx's Motion at June 10 Hearing
Onyx asked Judge Walsh to consider its motion for a 60-day delay
of the sale process of Safety-Kleen Corp.'s Chemical Services
Division on an expedited basis.  Judge Walsh schedules the Onyx
Objection for a hearing on June 10, 2002, at 11:00 a.m. in

                         *   *   *

As reported yesterday, Onyx North America Corporation,
represented by Steven R. Barthm Esq., of the Milwaukee office of
Foley & Lardner, and by David A. Workman, Esq., and David B.
Goroff, Esq., of the Washington DC office of Foley & Lardner,
objects to Safety-Kleen's sale of the Chemical Services Division
to Clean Harbors, Inc.  Onyx says it is "forced to make this
objection and seek an immediate hearing because it has been
denied the opportunity to perform the due diligence necessary to
submit what may likely be a superior bid" by the acts and
omissions of the Debtors.

                  Onyx Requests a 60-Day Delay

Onyx urges a delay of the bid deadline, auction and sale for 60
days. The purpose of the delay is to afford Onyx the opportunity
to adequately and fairly evaluate the Chemical Services Division
business and complete its due diligence.  Onyx tells Judge Walsh
this delay may result in its submission of a "significantly
higher bid" for these assets.

George K. Farr, Onyx's Chief Financial Officer, describes Onyx's
business as the delivery of fully-integrated environmental
solutions to virtually all industrial, commercial, municipal and
residential sectors throughout North America.  Onyx's business
includes the collection, recovery (sorting and recycling) and
treatment of municipal, commercial and industrial waste.  Onyx
provides a broad range of related services, such as urban,
commercial and industrial cleaning and recovery and treatment of
land at abandoned industrial sites.  Onyx's parent corporation,
Vivendi Environment (Paris Euronext: VIE and NYSE: VE), is the
third largest provider of waste management services in the

On April 8, 2002, Mr. Farr relates, Onyx submitted to the
Debtors a written preliminary, non-binding expression of
interest with respect to potentially acquiring the Chemical
Services Division business in compliance with the Bidding Order,
and Onyx was designated a "Qualified Bidder" as a result.  Mr.
Farr believes that Onyx, besides Clean Harbors, is the only
other Qualified Bidder.

Onyx provides Judge Walsh with handfuls of exhibits in support
of its arguments for delay and to demonstrate Safety-Kleen's
lack of cooperation.  Because Onyx has signed a confidentiality
agreement with the Debtors in connection with this sale, and
because those exhibits contain confidential, proprietary and
non-public information about both Onyx and Safety-Kleen, those
documents are provided to the Court under seal and are not
publicly available. (Safety-Kleen Bankruptcy News, Issue No. 36;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    

STEWART ENTERPRISES: Inks Definitive Pact to Sell Ops. in Canada
Stewart Enterprises Inc. (BB/Stable/--) announced that it has
signed a definitive agreement to sell its operations in Canada.
Standard & Poor's said that the sale was expected, as it is part
of the company's ongoing strategy to sell all of its
international operations, and use the proceeds to reduce debt.
Therefore, the rating and outlook are not affected by this
announcement. Although Stewart has been successful to date in
its efforts to sell these assets, the company remains challenged
to continue improving its operating performance in a relatively
weak death care market, which has limited revenue growth.

TELEGLOBE HOLDINGS: US Units File for Chapter 11 Reorg. in DE
Teleglobe Inc.'s U.S. subsidiaries have filed voluntary
petitions for reorganization under chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court in

This step was taken in order to provide protection for the U.S.
subsidiaries similar to that previously obtained for Teleglobe
companies through their previous filings in Canada and the U.K.
In addition, Teleglobe continues to evaluate whether a
reorganization of its other foreign subsidiaries is appropriate.

"Teleglobe is moving forward with its reorganization strategy,
which is based on our renewed focus on our core voice and
related data operations," said John Brunette, Teleglobe's CEO.
"[Tues]day's filing is another step in that process, through
which we intend to continue to provide a high level of service
to our customers."

TELEGLOBE COMMS: Case Summary & 50 Largest Unsecured Creditors
Lead Debtor: Teleglobe Communications Corporation
             11480 Commernce Park Drive
             Reston, Virginia 20191
             dba BCE Teleglobe
             dba BCE Teleglobe

Bankruptcy Case No.: 02-11518

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
Teleglobe USA Inc.                         02-11519
Optel Telecommunications, Inc.             02-11520
Teleglobe Holdings (U.S.) Corporation      02-11521
Teleglobe Marine (U.S.) Inc.               02-11522
Teleglobe Holding Corp.                    02-11523
Teleglobe Telecom Corporation              02-11524
Teleglobe Investment Corp.                 02-11525
Teleglobe Luxembourg LLC                   02-11526
Teleglobe Puerto Rico Inc.                 02-11527
Teleglobe Submarine Inc.                   02-11528

Type of Business:

Chapter 11 Petition Date: May 28, 2002

Court: District of Delaware (Delaware)

Judge: Mary F. Walrath

Debtors' Counsel: Mark D. Collins, Esq.
                  Patrick Michael Leathem, Esq.
                  Daniel J. DeFranceschi, Esq.
                  Richards Layton & Finger, PA
                  PO Box 551
                  Wilmington, Delaware 19899-0551
                  302 651-7531
                  Fax : 302-651-7701

Estimated Assets: More than $100 Million

Estimated Debts: More than $100 Million

Debtor's 50 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Bank of New York          Public Debt       $1,000,000,000
Attn: Marie Trimboli        Securities
101 Barclay Street - 21 W  
New York, NY 10286       
Tel: (212) 815-2500
Fax: (212)608-0419

Bank of Montreal          Bank credit facility   $750,000,000
Attn: Diane MaeGougan
Facility B Arranger
One First Canadian Place
23" Place  
Toronto, Ontario M5X LAI
Tel: (416) 359-5001 or 867-5001
Fax: (416)867-7191

Bank of Montreal         Bank credit facility    $500,000,000
AI Diane MacGougan       
Facility A Arranger  
One First Canadian Place
23rd Place
Toronto, Ontario M5X lAl
Tel: (416) 359-5001 or 867-5001
Fax: (416) 867-7191

Compushare Canada         Public Debt Securities  $125,000,000
04/07/93 Indenture
1800 McGill College
Attn: Pierre Philippon
Montreal, Quebec H3A 3K9

Compushare Canada         Public Debt Securities  $125,000,000
11/06/92 Indenture
1800 McGill College
Attn: Pierre Philippon
Montreal, Quebec H3A 3K9
Compushare Canada         Public Debt Securities  $100,000,000
10/23/96 Indenture
1800 McGill College
Attn: Pierre Philippon
Montreal, Quebec H3A 3K9

Morgan Stanley Senior   Bank Credit Facility    $25,000,000
Funding, Inc.
Attn: James Morgan
1633 Broadway
New York, NY 10019
Tel: (212) 761-4000
Fax: (212) 761-0086

John Hancock Mutual Life       Loan      $23,932,312
Assurance Company
Attn: Bond & Corporate Finance
Department T-57
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Tel: (617) 572-6000
Fax: (617) 572-1606

Steve Smith       Trade Debt     $20,000,000
2101 Lakeway Boulevard
Austin, Texas 78734

(with a copy to:
Christopher K. Dee
Vice President
Citibank, NA
425 Park Avenue
New York, NY 10022-3591
Tel: (212) 753-5880
Fax: (212) 753-8660)

Flag Atlantic Limited    Trade Debt     $15,574,917
The Emporium Building
69 Front Street-4th floor
Hamilton HM 12 Bermuda
Tel: (441)296-0909
Fax: (441 296-0938

(with a copy to:
FLAG Telecom Limited
103 Mount Street-3rd Floor
London  W1Y 5HE
United Kingdom
Tel: 44-20-7317-0800
Fax: 44-20-7317-0808)

Williams Communications LLC Trade Debt          $11,134,000
One Williams Center
Tulsa, OK 74172
Attn: General Counsel
Tel: (918) 547-6000
Fax: (918) 573-3005

Attn: Contract Administration
Fax: (918)574-6042

Sun Life Assurance Company Loan                  $8,529,535
of Canada
Attn: Investment Department/Private
Placements, SC #1303
One Sun Life Executive Park
Wellesley Hi115, MA 02181
Tel: (781) 237-6030
Fax: (781) 446-2392

Broadwing Communications Trade Debt  8,015,000
Attn: General Counsel
1122 Capital of Texas Highway
Austin, TX 78746
Tel: (512) 328-1112
Fax: (512) 328-7902

The Penn Mutual Life   Loan 7,107,946
Insurance Company
Attn: Barbara B. Henderson
Independence Square
530 Walnut Street
Philadelphia, PA 19172
Tel: (215) 956-8000
Fax: (215) 956-7750

Keyport Life Insurance     Loan                 $7,107,946
c/o Stein Roe & Farmham Inc.
Attn: Private Placements
One South Wacker Drive
Chicago, IL 60606
Tel: (312) 368-5680
Fax: (312) 368-7750

APCN2                       Trade                   $7,048,679
c/o Worldcom
Attn: Peter J. MacDonald
Two International Drive
Rye Brook, New York 10573

SAT3-WASC-SAFE      Trade Debt         $6,200,286
c/o Telkom South Africa
Attn: Wouter Myburgh
P.0. Box 57237
Arcadia, 0007
South Africa

Qwest Communications Corp.  Trade Debt           $3,547,161
Attn: General Counsel
1801 California
Suite 3800
Denver, CO 80202
Tel: (303) 992-1400
Fax: (303) 295-6973

Pan-American Life Insurance   Loan                  $2,843,178
Attn: Lisa N. Haudot
Pan American Life Center  
601 Poydras Street  
28th Floor
New Orleans, LA 70130
Tel: (504) 566-3911
Fax: (504) 566-3736

China-US                      Trade Debt            $2,153,734
c/o Sprint
Attn: Pat Livecchi
Sprint Campus
6330 Sprint Parkway
Mailstop: KSOPHA0416-4A464
Overland Park, KS 66251
Tel: (913) 762-2886
Fax: (913) 523-9805

Sprint Communications       Trade Debt               $2,134,745   
Company LP
Attn: John Dupree
460 Herndon Parkway
Herndon, Virginia 20170
Tel: (703) 742-2000

Maya-1                     Trade Debt               $2,008,419
Attn: Chief Executive
340 Mount Kemble Avenue
Room N100
Morristown, New Jersey 07960

National Life Insurance     Loan                    $1,540,611
Attn: Private Placements
One National Life Drive   
Montpelier, VT 05604
Tel: (800) 732-8939
Fax: (802) 229-3743

MFS Telecom                 Trade Debt              $1,538,623
Attn: General Counsel
500 Clinton Center Drive
Clinton, MS 39056
Tel: (601) 460-5600
Fax: (601) 460-8350

MCI Worldcom               Trade Debt               $1,486,767
Attn: General Counsel
500 Clinton Center Drive
Clinton, MS 39056
Tel: (601) 460-5600
Fax: (601) 460-8350

Americas-2                  Trade Debt              $1,280,750
c/o US Sprint
Attn: Bob Anwander
6330 Sprint Parkway
Mailstop: KSOPHA 0416-4A268
Overland Park, KS 66251
Tel: (913) 624-6000
Fax: (913) 523-9805

Recourse Technologies      Trade Debt                $1,280,750   
Attn: General Counsel
700 Bay Road
Redwood City, California 94063
Tel: (650) 568-0590

Cisco Systems, Inc.        Trade Debt               $1,174,352        
Attn: Chief Financial Officer
170 West Tasman Drive
San Jose, California 95134
Tel: (408) 526-4000
Fax: (408) 526-4100

Japan-US                   Trade Debt               $1,174,352
Attn: Randy Still
2104 Stonehaven Drive
Colleyville, Texas 76034

Cap Gemini Ernst & Young   Trade Debt                 $949,764
Canada Inc.   
Attn: General Counsel
Ernst & Young Tower
1222 Bay Street
Toronto-Dominion Center
Toronto, Ontario M5K 1J5
Tel: (416) 943-2400
Fax: (416) 943-2735

(with a copy to:
Cap Ernst & Young US LLC
1114 Avenue of the Americas 29th
New York, NY 10036-7792
Tel: (212) 944-6464
Fax: (212) 944-8624

Alcatel USA                Trade Debt                 $640,101
Attn: General Counsel
15036 Conference Center Drive
Chantilly, Virginia 20151
Tel: (703) 679-3600
Fax: (703) 679-3650

Accenture                   Trade Debt                $500,000
Attn: Jon Harrington
100 Campus Drive
Floorham Park, NJ 07932
Tel: (416) 641-5947
Fax: (416) 641-5090

ADC Telecommunications     Trade Debt                 $445,255
Sales, Inc.
Attn: General Counsel
12501 Whitewater Drive
Minnetonka, MN 55343
Tel: (612) 938-8080
Fax: (612) 946-3250                  Trade Debt                 $419,389
Attn: General Counsel
11442 Orchard lane
Suite 200
Reston, Virginia 20190
Tel: (703) 326-0606
Fax: (703) 935-0081

Advanced Business Systems,   Trade Debt               $419,389
311 East Intendencia Street
Pensacola, FL 32501
Tel: (404) 915-6690

Nortel Networks Limited    Trade Debt                 $394,835
Attn: VP and Deputy General
8200 Dixie Road
Suite 100
Brampton, Ontario L6T 5P6
Tel: (905) 863-0000
Fax: (905) 863-8408

Universal Access            Trade Debt                $385,306
Attn: General Counsel
233 South Wacker Drive
Suite 600
Chicago, Illinois 60606
Tel: (312) 660-5000
Fax: (312) 660-1264

Marconi Communications     Trade Debt                 $384,818
Attn: Legal Department
1000 Marconi Drive
Warrendale, PA 15086
Tel: (724) 742-4444
Fax: (724) 742-7654

Ciena Communications       Trade Debt                 $382,337
Attn: General Counsel
1201 Winterson Road
Linthicum, MD 21090-2205
Tel: (410) 865-8500
Fax: (410) 694-5750

Cygent                     Trade Debt                 $371,465
201 Third Street
2nd Floor
San Francisco, CA 94103
Tel: (415) 913-3000
Fax: (415) 913-3001

GTE Telecom, Inc.          Trade Debt                 $371,465   
Attn: General Counsel
201 North Franklin Street
Suite 2400
Tampa, FL 33602
Fax: (813) 209-9620

Bell Atlantic Global       Trade Debt                 $334,676
Networks, Inc.
Attn: Bell Atlantic General
1320 North Courthouse Road
Arlington, VA 22201
Tel: (703) 974-3000

(with a copy to:
Bell Atlantic Network Services, Inc.
Legal Deprtment
1320 North Courthouse Road
8th Floor
Arlington, Virginia 22201

MetaSolv Software, Inc.     Trade Debt                $326,125
Attn: General Counsel
5560 Tennyson Parkway
Plano, Texas 75024
Tel: (972) 403-8300
Fax: (972) 403-8333

Bell South                 Trade Debt                 $282,339
Bell South Long Distance Inc.
Attn: Senior Director, Carrier
32 Perimeter Center East
Atlanta, Georgia 30346-1905
Tel: (770) 392-1090
Fax: (770) 352-3181

Banyan Telecommunications  Trade Debt                 $280,000
5th Floor, Benpress Building
Exchange Road, Cor. Meralco
Ortigas Center
Pasig City, Metro Manila 1600
Tel: 31-40-247-2741

Vitria Technology          Trade Debt                 $273,388
Attn: General Counsel
945 Stewart Drive
Sunnyvale, California 94086
Tel: (408) 212-2700
Fax: (408) 212-2720

PANAM Cable                Trade Debt                 $272,224
c/o Worldcom
Attn: Martin Mascola
380 Madison Avenue
8th Floor
New York, NY 10017
Tel: (212) 478-6237
Fax: (212) 478-6201

Opnet Technologies, Inc.   Trade Debt                 $264,508
Attn: General Counsel
7255 Woodmont Avenue
Bethesda, MD 20814
Tel: (240) 497-3000
Fax: (240) 497-3001

MED-1 Submarine Cables     Trade Debt                 $255,043
Attn: Mr. Amos Lasker
38 Ben Gurion Street
Ramat Gan
Israel, 52180
Tel: (972) 9-771-3054
Fax: (972) 3-753-2640

IUSACELL                   Trade Debt                 $239,709

TELEGLOBE HOLDINGS: Judge Walrath Signs TRO Against US Creditors
Pending determination of the propriety of a preliminary
injunction, the Honorable Judge Mary F. Walrath of the U.S.
Bankruptcy Court for the District of Delaware, signed a
temporary Restraining Order sought by Ernst & Young Inc., the
appointed Monitor of Teleglobe Holdings and its debtor-
affiliates in their CCAA proceedings.

The Court rules that all persons and creditors are enjoined and
restrained from:

     1) commencing or continuing any action or proceeding
        against the Foreign Debtors in the United States;

     2) commencing or continuing any action or proceeding
        including any action, proceeding, or act to:

         i) seize or otherwise obtain possession of or exercise
            control over such property, or

        ii) create, perfect or enforce any lien, setoff,
            judgment, attachment, restraint, assessment or
            order, or collect, assess or recover any claim
            against such property; and

     3) relinquishing or disposing of any property of the
        Foreign Debtors or the proceeds of such property, except
        to the Foreign Debtors.

The Court also grants the prohibition, sought by Ernst & Young,
against third parties to contracts with the Foreign Debtors
discontinuing, terminating, or otherwise altering the supply of
goods and services under such contracts.

The Court finds that granting the relief will best assure the
economical and expeditious administration of the Foreign
Proceedings, consistent with the relevant factor set forth in
Section 304(c) of the Bankruptcy Code.

The TRO, however, does explicitly permit the Foreign Debtors to
pay the valid claims of employees for wages and compensation and
exercise certain setoff and related rights.

On May 15, 2002, Teleglobe Holdings and its debtor-affiliates
filed applications for the commencement of reorganization
proceedings pursuant to the Companies' Creditors Arrangement Act
in the Canadian Court and under 11 USC Section 304 Petition in
the U.S. Bankruptcy Court for the District of Delaware.  Matthew
G. Zaleski, III, Esq. at Campbell & Levine, LLC represents Ernst
& Young Inc. as Foreign Representative of the Debtors.

TRANSDIGM INC: S&P Rates $75MM Senior Subordinated Notes at B-
Standard & Poor's assigned its single-'B'-minus rating to
TransDigm Inc.'s new $75 million 10 3/8% senior subordinated
notes due 2008, which are an add-on to the company's existing
senior subordinated notes. The proceeds will be used to repay
borrowings under the company's existing credit facility.
At the same time, Standard & Poor's affirmed its single-'B'-plus
long-term corporate credit rating on Richmond Heights, Ohio-
based TransDigm, a well-established provider of highly
engineered aircraft components. Total outstanding debt at
December 29, 2001, was about $413 million. The outlook is

"The ratings for TransDigm reflect a relatively modest scale of
operations (2001 revenues about $200 million), cyclical and
competitive pressures in the aerospace industry, and a highly
leveraged balance sheet, but incorporate the firm's leading
positions in niche markets and very strong profit margins," said
Standard & Poor's credit analyst Christopher DeNicolo.

TransDigm is a well-established supplier of highly engineered
aircraft components for use on nearly all commercial and
military airplanes. The company has expanded its product
offering through several acquisitions, including the mid-2001
major purchase of Champion Aviation, the world's largest
manufacturer of igniters for turbine engines, and spark plugs
and oil filters for piston engines.

Following the events of September 11, 2001, intermediate-term
business prospects for commercial aerospace (about 80% of
TransDigm's fiscal 2001 revenues) deteriorated significantly in
terms of orders for new planes (one-third of the company's
commercial aerospace revenues) and the related aftermarket
demand for products and services (two-thirds). In response, the
firm has reduced its employment level by about 20%.

TransDigm's other operations have mixed outlooks, with regional
and business jets less adversely affected (compared with large
jetliners) and the military business (20%-25% of revenues)
having potential for modest strengthening. The company's
consolidated results should be partly cushioned by successful
new product development, the proprietary nature of almost 90% of
its components, 70%-75% of business derived from sole-source
contracts, and a growing installed product base, leading to a
recurring aftermarket revenue stream.

TransDigm's operating profit margins are very solid, in the mid-
30% area, indicating not only efficient operations, but also a
substantial portion of high-margin spare parts sales (over 50%
of the total). Still, the absolute level of net earnings is
small. The capital structure is highly leveraged, with debt of
about $413 million and negative book equity. Cash flow is
expected to recover somewhat in fiscal 2002, although credit
protection measures will remain weak, with a committed credit
facility providing limited availability.

TransDigm's leading market niches and cost-cutting actions may
not fully offset a prolonged decline in commercial aerospace
demand and a fairly heavy debt burden, which could lead to lower
credit quality.

TRIMAS CORP: S&P Concerned About Thin Cash Flow Protection
Standard & Poor's assigned its double-'B'-minus corporate credit
rating to Bloomfield Hills, Michigan-based TriMas Corp., a
manufacturer of a diverse line of commercial and industrial

At the same time, Standard & Poor's assigned its double-'B'-
minus secured bank loan rating to TriMas' proposed $500 million
senior secured credit facilities due in 2009. Additionally,
Standard & Poor's assigned its single-'B' subordinated debt
rating to the company's proposed offering of $250 million in
senior subordinated notes due in 2012. The outlook is positive.

"The speculative grade ratings on TriMas reflect its leading
positions in niche markets, offset by the highly competitive and
cyclical nature of certain of its businesses, high debt
leverage, and thin cash flow protection," said Standard & Poor's
analyst John R. Sico.

Metaldyne Corp. (BB-/Watch Pos/--) will be selling 66% of its
common equity in TriMas to Heartland Industrial Partners LP, and
will retain 34% interest. TriMas will operate as a privately
held independent company.

The company has undergone a rationalization of its manufacturing
facilities and implemented headcount reductions that has led to
about $29 million in potential annual cost savings, about half
of which has been realized. The company is expected to continue
to pursue cost savings and capitalize on new product
development. It is also expected to pursue niche acquisitions on
an opportunistic basis.

The rating may be raised over the intermediate term as TriMas'
businesses grow and its cyclically dependent businesses benefit
from a recovering economy. During this period, the company is
expected to reduce its leverage and any acquisitions would be
expected to be funded in a credit neutral manner.

TRUMP HOTELS: S&P Upgrades Corporate Credit Rating to CCC
Standard & Poor's withdrew its single-'B'-minus corporate credit
rating for Trump Casino Holdings LLC following management's
decision to withdraw its planned private placement of $470
million in mortgage notes backed by the assets of Trump Marina
Casino Resort in Atlantic City, New Jersey, and the company's
riverboat casino in Gary, Indiana. TCH was to be formed for the
purposes of issuing these notes, and for the time being, will
not be established following the decision to withdraw the

At the same time, Standard & Poor's raised its corporate credit
rating for Trump Hotels & Casino Resorts Holdings, L.P. (THCR)
to triple-'C' from double-'C' due to the company's continued
payment of interest (as required under its 15.5% senior notes
due 2005) and positive operating momentum at the Indiana
riverboat whose cash flow primarily services this obligation.
Atlantic City, New Jersey-based THCR is the parent company of
Trump Atlantic City Associates (TAC), Trump Castle Associates,
and Trump Indiana. The outlook for THCR is developing reflecting
the desire to refinance these notes and other subsidiary debt,
and the uncertain prospects for success.

"Although the THCR notes do not mature until 2005, a favorable
refinancing could result in an upgrade or an early repayment of
these notes," said Standard & Poor's analyst Craig Parmelee.
Conversely, the inability to refinance about $300 million in
unrated Trump Castle Associates notes could put additional
pressure on the parent company ratings.

Concurrently, Standard & Poor's raised its corporate credit
rating for TAC to triple-'C' from double-'C' reflecting its
timely payment of interest on May 1, 2002 (as required under its
first mortgage notes) and the expectation that the company will
continue to meet debt service obligations given improved
operating performance by TAC's two properties, Trump Taj Mahal
and Trump Plaza. The outlook for TAC is developing reflecting
the affiliate relationship to Trump Castle Associates which has
a material amount of debt maturing in 2003. If management
successfully refinances this debt prior to April 2003, it is
expected to improve the financial flexibility for the
consolidated group of Trump companies.

TUCKAHOE CREDIT: S&P Cuts Rating on 2001-CTL1 Certs. to BB+
Standard & Poor's lowered its rating on Tuckahoe Credit Lease
Trust 2001-CTL1's credit lease-backed pass through certificates
series 2001-CTL1 to double-'B'-plus from triple-'B'-minus. The
ratings remain on CreditWatch with negative implications, where
they were placed on April 22, 2002.

The rating action reflects the lowering of Qwest Communications
International Inc.'s corporate credit rating to double-'B'-plus
from triple-'B'-minus on May 22, 2002. Qwest's rating remains on
CreditWatch with negative implications, where it was placed on
April 19, 2002. The credit lease-backed certificates' rating is
dependent on the rating of Qwest.

The credit lease-backed certificates are collateralized by a
first mortgage and assignment of lease encumbering a condominium
interest in a two-story industrial building in Yonkers, New
York. The entire property is leased to Qwest Communications
Corp. (QCC), a wholly owned subsidiary of Qwest, on a triple net
basis, with QCC responsible for all operating and maintenance

            Rating Lowered And Remain On Creditwatch

             Tuckahoe Credit Lease Trust 2001-CTL1
     Credit lease-backed pass through certs series 2001-CTL1

     To                                         From
     BB+/Watch Neg                         BBB-/Watch Neg

U.S. TECHNOLOGIES: Working Capital Deficit Reaches $9.6 Million
U S Technologies Inc. develops technology and emerging growth
companies. USXX identifies companies with high growth potential
to optimize their performance by deploying operational
assistance, capital support, and industry expertise.
Additionally, the Company performs electronic manufacturing and
furniture assembly services through its wholly-owned subsidiary
UST Industries.

In April 2000, the Company acquired E2Enet, Inc., formerly a
privately held technology services company. In March 2001, the
Company acquired, Inc. which was engaged in seed stage
funding to technology related start-ups. E2E and Yazam made
early stage investments in development stage technology
business. Subsequent to the acquisitions of E2E and Yazam, the
Company's focus is developing and operating a network of
technology and related companies. The Company builds and
develops Associated Companies by providing them with operational
assistance, capital support, industry expertise and other
business services.

The Company has historically been able to raise capital through
private equity placements and debt financings. During 2001, it
raised $1.2 million in private equity placements and $1.5
million in debt financing. In the quarter ended March 31, 2002,
the Company raised an additional $0.9 million in private equity
placements. It plans to fund operations through additional
equity placements, new debt financings and the possible sale of
certain equity interests in its associated companies.

The Company has entered into transactions with respect to
certain shares of the Series F Preferred Stock modifying their
respective rights. Subsequent to September 30, 2002, certain
former Yazam shareholders have the right to put their shares of
Series F Preferred Stock to the Company for a minimum amount of
approximately $5,384,000. Additionally, the Company still owes
certain former shareholders of Yazam approximately $1,236,000
cash in consideration for their Yazam stock.

Sales of the Company's electronics and furniture manufacturing
operations for the quarter ended March 31, 2002 were
approximately $333,000 resulting in a decrease of 44.8 %
compared to the comparable quarter of 2001. The uncertain
economic environment has negatively impacted the majority of the
Company's customers which, in turn, has resulted in a decrease
in orders and backlog for the Company.

During the quarter ended March 31, 2002, the Company experienced
negative operating cash flows of approximately $588,000. The
primary operating uses of cash during 2002 were to fund net
losses of $1,883,000, net of significant non-cash items such as
losses from impairment of assets of $867,000. Net cash used in
2002 operating activities was favorably impacted by increases in
accounts payable and accrued expenses of approximately $370,000.
During the quarter ended March 31, 2001, the Company experienced
positive operating cash flows of approximately $4.5 million. The
primary operating uses of cash were to fund net losses of
$804,000. Net cash provided by operating activities in 2001
was favorably impacted by an increase of $5.6 million in cash
that was due to be paid to Yazam stockholder pursuant to the
acquisition of Yazam in March 2001 that was not paid until
subsequent to March 31, 2001.

The annual financial report for the fiscal year ended December
31, 2001 was prepared on a going concern basis that contemplates
the realization of assets and the settlement of liabilities and
commitments in the normal course of business. However, U S
Technologies incurred a net loss from continuing operations of
$10.8 million for the year ended December 31, 2001 and as of
that date had a working capital deficit of approximately $10.5
million and an accumulated deficit of $67.0 million.
Additionally, in the quarter ended March 31, 2002 the Company
incurred a net loss of approximately $1.9 million, had a working
capital deficit of approximately $9.6 million, and an
accumulated deficit of $68.9 million. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.

UNITED COs.: Move for Consumers' Class Certification Nixed
The Honorable Judge Mary Walrath of the U.S. Bankruptcy Court
for the District of Delaware denied a motion for class
certification of a proof of claim filed by Phyllis Golson El
against United Companies Financial Corporation.

Phyllis Golson El filed a class proof of claim asserting a claim
of $8,000,000 based on consumer claims under the federal Equal
Credit Opportunity Act and sought certification of a class of
all persons in the Commonwealth of Pennsylvania who, from
February 2, 1996, through March 1, 1999, were extended credit by
the Debtors, had an escrow for home repairs or improvements
established in connection with the loan and whose principal loan
amount exceeded the amount quoted in the home improvement work
order by 20% or more.

In this case, the Claimant asserts that the common issues of
fact are that the Debtors had a uniform practice of accepting
requests for financing made by consumers indirectly through home
improvement contractors and then offering only a larger,
consolidation loan, without giving consumers written notice, as
required under ECOA, of the counteroffer and the reasons for
denying the initial request.

However, the Court agrees with the Debtors' assertion that class
certification should be denied since individual questions of
fact predominate over common questions.  The Court concludes
that class certification in this case is inappropriate.

First, the Court finds out that ECOA allows a counteroffer
either oral or in writing. The individualized interaction
between the class members and the Debtors, whether written or
oral, is inappropriate.

Second, the Court concludes that a class claim in this
bankruptcy proceeding is not a superior method.  The Claimant
alleges that this case is straightforward and would present no
manageability issues. The Court disagrees. The Court believes
that this case has so many individualized issues that
adjudication of the claims of 1,503 class members in one
proceeding will create insurmountable manageability issues. The
Court has to schedule countless mini-trials to determine whether
there is liability under ECOA with respect to each class member.

United Companies Financial Corporation and its debtor-affiliates
filed for chapter 11 protection on March 1, 1999. All of the
Debtors' assets were sold and a Liquidating Chapter 11 Plan was
confirmed on October 31, 2000.

VANTAGEMED CORP: Names David Philipp as New Independent Director
VantageMed Corporation (Nasdaq:VMDCE) announced the appointment
of David M. Philipp to the Company's Board of Directors. Mr.
Philipp replaces Joel M. Harris, who resigned as a member of the
Company's Board of Directors on May 13, 2002. Mr. Philipp will
stand for election at the Company's annual meeting of
shareholders to be held on June 19, 2002. If elected, he will
serve on the Board's Audit Committee.

Mr. Philipp has more than 15 years of financial management
experience in several industries, including technology,
financial services and retail. He is currently the Chief
Financial Officer for Mother Lode Holding Company. Mother Lode
Holding Company is a real estate information and mortgage
services company with national holdings in title insurance
agency, title insurance underwriting, real estate exchange
compliance, and post-close mortgage processing. Prior to joining
Mother Lode, Mr. Philipp provided financial management and
investment banking services to emerging technology companies and
was the Chief Financial Officer of a supply-chain technology
company from 1999 to 2001. From 1992 to 1999, Philipp served as
Executive Vice President, CFO and Secretary of First Financial
Bancorp (FLLC), a publicly held bank holding company
headquartered in Central California. He has been a member of the
Board of Directors of First Financial Bancorp since 1999 and is
currently the Vice-Chairman of the Audit Committee and the
Compensation Committee. He is a Certified Public Accountant and
holds a B.S. degree in Business Administration from California
State University, Sacramento.

VantageMed is a provider of healthcare information systems and
services distributed to over 11,000 customer sites through a
national network of regional offices. Our suite of software
products and services automates administrative, financial,
clinical and management functions for physicians, dentists, and
other healthcare providers and provider organizations.

                         *   *   *

As previously reported, VantageMed Corporation (Nasdaq:VMDCE)
has filed a request for a hearing before the Nasdaq Listing
Qualifications Panel to appeal the Nasdaq's delisting
determination as related to the notice the Company received on
April 16, 2002 from Nasdaq. Pursuant to Nasdaq rule, pending the
outcome of this hearing VantageMed's securities will not be
delisted at the opening of business on April 24, 2002 as
previously announced, but rather will continue to be listed on
Nasdaq under the ticker symbol, VMDCE. There can be no assurance
that the Nasdaq Listing Qualifications Panel hearing
VantageMed's appeal will grant our request for continued

W.R. GRACE: Court Approves Stipulation With National Union
W. R. Grace & Co.-Conn. brings a complaint verified by Jay
Hughes, Senior Litigation Counsel for Grace-Conn., asking Judge
Fitzgerald for an injunction to prevent a payment by National
Union Fire Insurance Company of Pittsburgh, Pennsylvania, under
a surety bond.  That bond was issued in favor of the law firm of
Reaud Morgan & Quinn under a Confidential Settlement Agreement
for Texas Cases entered into by Grace-Conn. and RM&Q.  Grace
also wants the Court to compel National Union, as surety, to
reduce the amount of the letters of credit it holds as security
for the bonds.  Additional true targets of the adversary
proceeding are the beneficiaries of the Confidential Settlement
Agreement in Texas and Alabama.

David W. Carickhoff, Esq., an attorney for Grace-Conn., tells
Judge Fitzgerald that Grace asks she:

       (1) enjoin National Union as issuer of two surety bonds
from paying to the law firm of RM&Q the 2002 installment payment
described in the Confidential Settlement Agreement for Texas
Cases entered into by Grace-Conn. and RM&Q;

       (2) declare that National Union and Grace-Conn. do not
have an obligation to pay the 2002 installment described in the
Texas Protocol to RM&Q;

       (3) declare that if National Union does pay to RM&Q the
2002 installment described in the Texas Protocol, such payment
did not result from Grace-Conn's obligation under the Texas
Protocol, and National Union cannot draw upon (i) the letter of
credit obtained by Grace-Conn. as partial collateral for the
indemnity obligations of Grace-Conn. with respect to the bonds
in excess of its contractual amount; or (ii) any other unrelated
letter of credit obtained by Grace-Conn. or its affiliates under
the Texas Protocol;

       (4) declare that the contractual amount of the Letter of
Credit is $5,639,830; and

       (5) enjoin National Union from drawing upon (i) the
Letter of Credit in excess of its contractual amount; or (ii)
any other unrelated letter of credit obtained by Grace-Conn. or
its affiliates for the benefit of National Union and used by
National Union to pay, or obtain reimbursement for payment of
the 2002 installment under the Texas Protocol.

                  The Texas and Alabama Protocols:
                  Not Really Settlement Agreements

In an effort to alleviate the financial burdens associated with
litigating asbestos claims, counsel for Grace would often
negotiate settlement procedures with plaintiffs' counsel. In the
course of their negotiations, Grace and plaintiffs' counsel
generally would agree, not to actual settlements of particular
claims, but to so-called "protocols" for resolving the
particular law firm's claims.  In September, 2000, RM&Q and
Grace negotiated the Texas Protocol. In August, 2000, RM&Q,
Environmental Litigation Group, P.C. and Grace negotiated the
terms of a document entitled a "Confidential Settlement
Agreement for Alabama Cases".

Although styled as "settlement agreements," the plain language
of the Protocols show that they were merely non-binding
frameworks in which RM&Q (and, in the case of the Alabama
Protocol, ELG) and Grace agreed to work together to try to
resolve asbestos claims - in other words: agreements to agree.

The Protocols specify that, if certain conditions are met, Grace
will pay settlement installments to RM&Q or ELG in periodic
"installments."  In particular, the Protocols provided
frameworks in which to resolve the asbestos claims of certain
"eligible" RM&Q and ELG clients.  According to the Texas
Protocol, for example, a claimant:

       "(i) who, as of May 19, 2000, is a plaintiff in a pending
lawsuit in any court (state or federal) in any jurisdiction
wherein any claim is being asserted against W. R. Grace for
monetary damages for any asbestos-related disease, injury or

       (ii) who is represented by RM&Q;

       (iii) who is not already a party to or otherwise subject
to a prior settlement with W. R. Grace; and (iv) whose case
against W. R. Grace had not been tried to verdict as of May 19,

is "eligible" -- though not required -- to participate.

The terms of the Protocols make clear that Grace is not obliged
to pay any RM&Q or ELG claimant (or RM&Q or ELG on behalf of any
claimant) unless and until Grace receives at least this
documentation (referred to as "Qualifying Materials") from
eligible claimants:

      "(i) competent medical evidence that the Settling
Plaintiff . . . has or had an asbestos-related disease or injury
. . . ;

       (ii) a standard release prepared by RM&Q and executed by
the Settling Plaintiff . . . ;

       [and (iii)] "Exposure Evidence" in the form of... a work
history sheet for each Settling Plaintiff showing that such
plaintiff worked for some period of time at . . . plants at
which W. R. Grace agrees that its asbestos-containing products
were used".

RM&Q has not submitted sufficient Qualifying Materials from
eligible claimants to trigger the 2002 payment obligation on the
part of Grace under the Texas Protocol.  The Texas Protocol
provides that "[t]he settlement installments . . . shall be
payable on the designated payment dates only if RM&Q has
submitted Qualifying Materials to W.R. Grace no later than 60
days prior to such payment date from Settling Plaintiffs whose
settlement amount equals or exceeds the amount of installment
due on such payment date." The January 15, 2002 installment
amount is $3,470,280.  RM&Q has not fulfilled this condition.

Grace has specifically communicated to RM&Q the deficiencies in
its submissions. In particular, thousands of the submitted
claimants were not "eligible" because they "were subject to a
prior settlement with W.R. Grace."  Consequently, under contract
law, Grace is not obligated to pay RM&Q clients the 2002
installment payment described in the Texas Protocol.

Under the terms of the two Protocols, Grace caused National
Union to issue two surety bonds numbered as security for certain
of the installment payments under the protocol by Grace to RM&Q
and ELG claimants under the Protocols.  Grace's obligations to
indemnify National Union for any payments made under the Bonds
were partially collateralized by the Letter of Credit issued by
Bank of America, N.A. for the benefit of National Union, which
is currently in the amount of approximately $5.6 million.  
Although National Union issued two separate bonds to cover the
Texas and Alabama Protocols, both bonds were partially
collateralized by the one Letter of Credit. By the nature of the
surety relationship, National Union is jointly and severally
liable with Grace-Conn. as principal obligor and not required to
make any payments as to which Grace-Conn. is not legally

Grace notified National Union on January 18, 2001 and again on
January 31, 2001, that the Letter of Credit securing the payment
of the Bonds should be reduced from approximately $10.4 million
to approximately $5.6 million.  Grace says that National Union's
then (and current) liability had been reduced to approximately
$28.2 million (from approximately $52.2 million) after the 2001
installment of $24 million was paid by the Grace-Conn. in
accordance with the Protocols.

As of the date of the filing of this Complaint, National Union
has not executed the amendment to the Letter of Credit reducing
its principal amount.  Although National Union has refused to
execute the amendment, Grace believes that a reduction of the
principal amount of the collateral has occurred automatically by
the terms of the October 13, 2000 letter agreement and that
National Union has no right to draw more than the approximately
$5.6 million amount under the Letter of Credit.

Moreover, National Union has stated to Grace that, in the event
the Letter of Credit issued specifically as security for the
Bonds is insufficient to satisfy National Union's exposure under
the Bonds, National Union may draw upon certain other unrelated
letters of credit issued by Grace's lenders for the benefit of
National Union in unrelated matters.  For these reasons, and to
prevent immediate and irreparable harm to Grace-Conn., the
instant suit is begun.

          National Union Answers and Asserts Counterclaims

National Union, answering through William P. Bowden, Esq., at
Ashby & Geddes as local counsel, and Michael S. Davis, Esq., of
the New York firm of Zeichner Ellman & Krause as lead counsel,
agrees with most of the facts described by Grace-Conn.  But
National Union raises as affirmative defenses to the requested
injunctive relief that the letters of credit referenced by
Grace-Conn in its complaint are independent contractual
obligations which are not property of the Debtor's bankruptcy
estate. Proceeds of these letters of credit are likewise not
property of the bankruptcy estate.  Further, National Union says
Grace-Conn. has not stated facts entitling it to the requested
relief. Therefore, Judge Fitzgerald lacks subject matter
jurisdiction in this proceeding.

National Union agrees with the other factual showings in Grace's
Complaint regarding the nature of the Protocols and the absence
of any obligation by Grace to pay if the conditions in the
Protocols are not met.  National Union says that partial
payments under the Protocols are not permitted.  Either the
entire amount of the installment must be satisfied in full by
submission of Qualifying Materials, or the installment is not
required to be paid.

National Union doesn't believe that RM&Q has submitted
sufficient materials to support the 2003 payment as well as the
current year's payment under either the Texas or the Alabama
Protocols. By the nature of the surety relationship, National
Union is not obligated to make payments which its principal,
Grace-Conn., is not required to make.

                   National Union Says There's
                No Obligation to Reduce Security

National Union admits that it has been provided with a letter of
credit in the amount of $10,439,830 as security for the surety
bonds, and holds a second letter of credit in the amount of $6
million arising from another transaction.  In October, Grace and
National Union entered into a letter agreement which Grace now
asserts imposes certain limits on the security for the bonds.  
In that same month, Grace and National Union entered into a
Continuing Agreement of Indemnity where the parties agreed that:

    [I]f Surety shall be required or shall deem it necessary
    to set up a reserve in any amount to cover any claim,
    demand, liability, expense, suit, order, judgment or
    adjudication under or on any bond or bonds or for any other
    reason whatsoever to immediately upon demand deposit with
    Surety an amount of money sufficient to cover such reserve
    and any increase thereof, at any time, in payment or
    compromise of any liability, claims, demands, judgment,
    damages, fees and disbursements or other expenses. . . ."

Grace's position is that in the October letter, National Union
agreed to limit the letter of credit security for the bonds to
20% of its exposure, and to reduce the security as and when
exposures were reduced.  This contention is, however,
inconsistent with the later Reserve Demand Clause.

The actual intention and meaning of the October letter and the
Continuing Indemnity, when read together, is that, so long as no
draw on the bonds is reasonably expected (meaning no "reserve"
is anticipated), the 20% limit concerning letter of credit
security may apply.  But once the draw becomes reasonably
expected, full cash security would be provided and the letter of
credit or any other cash or letter of credit held by National
Union may be retained or drawn as may be required or permitted
by the Reserve Demand Clause.

National Union urges Judge Fitzgerald to issue a declaratory
judgment that the Reserve Demand Clause supersedes the October
letter, that no obligation exists on the part of National Union
to reduce its letter of credit security, and that National Union
may draw on the letter of credit, or any other letter of credit
provided by Grace that National Union may hold, to fund the
obligations of Grace arising under the bonds, as provided for in
the Reserve Demand Clause.

         Another Counterclaim: $30M Setoff Against Bonds

National Union and Grace entered into an agreement in November
1995 by which National Union and other companies related to
National Union agreed to pay, upon terms and conditions
specified in the 1995 agreement, as much as $417,557,428 to
Grace to reimburse Grace for certain payments Grace might
thereafter make to asbestos claimants.

Of that amount, $143,750,000 was to be paid by National Union.
At this time, more than $30,000,000 of National Union's
obligation under this agreement has not fallen due and these
funds have not been paid to Grace.

National Union therefore asserts a right of setoff to the extent
of the $30 million not paid as the related debts arose prior to
the Petition Date.  National Union tells Judge Fitzgerald she
should modify the stay to permit National Union to make this
setoff against any of National Union's obligations under the
surety bonds.

                   The Next Counterclaim:
      National Union Subrogates Against Grace's Insurers

National Union reminds Judge Fitzgerald that a surety that pays
the obligation of a principal to the obligee obtains all the
rights of both the principal and the obligee with respect to the
obligation paid.  Accordingly, a surety has the right to recover
from the principal and to equitably subrogate to the principal's
rights with respect to any rights or property of any kind
related to the bonded transaction.

National Union believes that Grace has "millions of dollars" of
insurance coverage in addition to the National Union coverage
which is available for setoff.  These policies are available to
pay the same obligations as are payable under the bonds.  As
surety, National Union is entitled to the benefit of such
insurance directly from the insurers as soon as the insurer
becomes obligated to pay the insurance obligation.

National Union asks Judge Fitzgerald to issue an affirmative
injunction requiring Grace to take all steps reasonably or
necessary to assert claims against its insurance carriers and to
assign the resulting proceeds to National Union in order to
reimburse National Union for any payments it might make or
expenses it might incur under the bonds.  In the alternative,
Judge Fitzgerald should modify the stay so that National Union
can take all necessary steps itself.

              National Union is Fully Secured and
                 Entitled to Fees and Costs

Under the Continuing Indemnity, Grace is obligated to reimburse
National Union for all its attorney's fees and other costs which
arise in connection with the bonds.  By virtue of the letters of
credit it holds, and its rights arising from the insurance
coverages, National Union is fully secured for all of Grace's
obligations arising from the bonds.  Judge Fitzgerald is asked
to declare that National Union is fully secured, and that
National Union may utilize that security to satisfy Grace's
obligations under the bonds.

                     Joinder Against RM&Q

Since RM&Q has not submitted, and cannot submit, sufficient
Qualifying Materials for eligible claimants under the terms of
the Texas Protocol, neither National Union nor Grace has any
obligation to pay RM&Q the2002 or the 2003 payment under the
Texas and the Alabama Protocols - and National Union joins RM&Q
so Judge Fitzgerald can issue judgment to that effect.  National
Union also wants a "fair and reasonable opportunity to examine"
the Qualifying Materials if and when such are submitted, at
least equal to the opportunity afforded to Grace under the

National Union also claims that any document submitted or
prepared by RM&Q or ELG, or any act by either, after the
Petition Date which is or was intended to form an agreement to
collect on the Protocols was a violation of the automatic stay
and is void. National Union does not explain how this squares
with its claim that the bonds are not property of the bankruptcy

                  National Union's Relief

In summing up, Ricardo Palacio of the firm of Ashby & Geddes, on
behalf of National Union, asks Judge Fitzgerald to:

       (1) Dismiss any claim against National Union with respect
to the letters of credit;

       (2) Declare that neither Grace nor National Union have
any obligation to pay to RM&Q the 2002 payment;

       (3) Declare that nothing prevents National Union from
drawing upon the letter of credit or upon any other letter of
credit it holds;

       (4) Modify the stay to permit National Union to setoff
against the bond obligation;

       (5) Compel Grace to take all reasonable and necessary
steps to assert claims against its insurance carriers and assign
the resulting proceeds to National Union, or modify the stay to
permit National Union to do this directly;

       (6) Declare that National Union is fully secured and
entitled to collect its attorney's fees and costs;

       (7) Declare that neither Grace nor National Union have
any obligation to pay RM&Q the 2003 payment; and

       (8) Declare that National Union has no obligation to pay
unless Grace is legally obligated to do so, and provide an
inspection period for the Qualified Materials.

                  RM&Q Answers and Counterclaims

Reaud Morgan & Quinn, and Environmental Litigation Group, Inc.,
which have featured prominently in the pleadings by Grace-Conn
and National Union, represented by Kathleen M. Miller with
SMITH, KATZENSTEIN & FURLOW LLP of Wilmington, appear and answer
the counterclaims by National Union.

The Third Party Counter-Plaintiffs are law firms who represent
thousands of individuals who filed asbestos-related bodily-
injury and wrongful-death claims against Grace and others in
various courts.  In August, 2000, RM&Q, ELG and Grace entered
into a settlement agreement which set in motion the compromise
and resolution of thousands of pending suits handled by RM&Q and
ELG. The terms and conditions of the comprehensive settlement
agreement are set forth in a fully integrated document entitled
"Confidential Settlement Agreement for Alabama Cases."

                 The Alabama Settlement Agreement

The Alabama Settlement Agreement provides for Grace to pay RM&Q
and ELG, in trust for the settling plaintiffs, the total sum of
$59,960,150.00 payable as therein provided in paragraph 5 of the
Settlement Agreement. The amount payable by Grace is referred to
as the "Settlement Funds." RM&Q, ELG and Grace agreed that the
disease values set forth in the Settlement Agreements
constituted a fair and reasonable basis on which to settle the
claims of each Settling Plaintiff.

The Settlement Agreement further provides that the total amount
of the Settlement Funds shall be reduced to the extent any
plaintiff on a list of present and prospective claimants to the

       (i) rejects the settlement;

       (ii) declines to submit an executed release; and

       (iii) declines to submit what is referred to as the "
Qualifying Materials."

The list consists of a total original global base of 8,249
claimants. The Qualifying Materials are defined in paragraph 6
of the Settlement Agreement, and they consist essentially of
medical evidence confirming the asbestos-related disease or
injury, an approved form of release and exposure evidence in the
form of a work history sheet verifying where the individuals
worked at an agreed exposure plant.

The Alabama Settlement Agreement provides for a total original
global base of 8,249 claimants. RM&Q and ELG have to date
submitted Qualifying Materials for 8,232 claimants. Of the 8,232
submitted claims, 85 were submitted after the Petition Date.  Of
the total original global base of 8,249 claimants, RM&Q and ELG
have not yet submitted Qualifying Materials on behalf of 17
clients, one of whom is no longer a client. The primary reason
for nonsubmittal of Qualifying Materials at this point by these
individuals is that the original client has died and some
controversy or delay has arisen in the probate process.

Ms Miller politely declines to adopt National Union's [and
Grace's] characterization of the Confidential Settlement
Agreement for Texas Cases as the "Texas Protocol." The Third-
Party Defendants will refer to the document as the "Texas
Settlement Agreement." Likewise, the Third Party Defendants
decline to adopt Grace's and National Union's characterization
of the Confidential Settlement Agreement for Alabama Cases as
the "Alabama Protocol," referring to the document as the
"Alabama Settlement Agreement."  The Third-party Defendants
vehemently deny that the Settlement Agreements are nonbonding
"agreements to agree," although they admit that the Settlement
Agreements established a mechanism for settling hundreds of
asbestos claims.

               The Texas Settlement Agreement

The Texas Settlement Agreement provides for Grace to pay RM&Q,
in trust for the settling plaintiffs, the total sum of
$$21,610,376.00 payable as provided in the Settlement Agreement.
The amount payable by Grace is referred to as the "Settlement
Funds." RM&Q and Grace agreed that the disease values set forth
in the Settlement Agreements constituted a fair and reasonable
basis on which to settle the claims of each Settling Plaintiff.

The Settlement Agreement further provides that the total amount
of the Settlement Funds shall be reduced to the extent any

       (i) rejects the settlement;

       (ii) declines to submit an executed release; and

       (iii) declines to submit the " Qualifying Materials."
RM&Q submit a list which consists of a total original global
base of 1,907 claimants.

                  The 2002 Payment is Due!

A substantial portion of the 2002 installment is due. RM&Q
admits that the amount due is less than the potential
$3,470,280.00, however an amount in excess of $2.0 million is
owed by Grace, thus owed by National Union.  RM&Q also admits
that Grace has communicated to RM&Q the deficiencies in its
submissions. Specifically, RM&Q acknowledges that of the
original glob al base of 1,907 claimants, 423 claimants were
rejected by Grace. Of the remaining 1,484 claimants, 1,396 were
submitted prior to April 2, 2001. The amount owed for the 1,396
pre-bankruptcy submitted claims, less monies already paid by
Grace, is $1,843,875.00. Of the 88 claims which were not
returned to Grace prior to April 2, 2001, at least 30 were
submitted more than 60 days prior to the 2002 installment date.
These 30 claims have a value of $245,895.50.

RM&Q further acknowledges that 22 claims having a value of
$275,193.00 were not submitted timely enough for participation
in the 2002 installment; however such submissions are clearly
timely with respect to the upcoming 2003 payment date. RM&Q has
yet to submit the remaining 368 claims as of March 26, 2002.
These claims have a value of $533,164.50.

RM&Q thus contends that it is owed approximately $2 million.

               National Union Has Unclean Hands

National Union should not be allowed to take any equitable
relief of Third-Party Defendants.  He who seeks equity must do
equity under the "clean hands" rule -- nullus commodum capere
potest de injuria sua propria -- The Third-Party Defendants say,
charging that National Union has "unclean hands" -- although the
Third-Party Defendants don't provide any details.  The Third-
Party Defendants also contend that National Union's third-party
claims are barred by the doctrines of estoppel, promissory
estoppel and equitable estoppel.

             Breach of Alabama Settlement Agreement

National Union's failure and refusal to pay the installments due
on 2002 are unjustified breaches of the Settlement Agreement
Bonds. National Union has failed and refused to perform an act
that it expressly promised to do, namely fund the payments due
Third-Party Defendants as provided by the Settlement Agreements.
Grace and National failed to fulfill their obligations to Third-
Party Defendants without legal justification or excuse.

In particular, Grace has failed to pay the 2002 installment due
under the Alabama Settlement Agreement in the amount of
$9,729,720.00. RM&Q and ELG have submitted sufficient Qualifying
Materials to qualify for the 2002 installments. Pursuant to the
Alabama Settlement Agreement, RM&Q and ELG were required simply
to have submitted 60 days prior to the payment date Qualifying
Materials for a number of claimants equal to the payment due.
RM&Q and ELG have submitted a total of 8,232 claims. Prior to
the Petition Date, which is more than sixty days prior to the
date on which the 2002 installment was due, RM&Q and ELG
submitted 8,147 of the 8,232 claims (representing $59,187,450 in
total settlements). Of the $59,960,150 due under the Alabama
Settlement Agreement, only $39,174,780 has been paid to date.
The $9,729,720 installment due on January 15, 2002 is clearly
past due.

Grace's failure to fund the 2002 installment immediately
triggered National Union's obligation under the Settlement Bond
to stand good for making the payment to RM&Q and ELG for the
benefit of the Settling Plaintiffs they represent. National
Union's breach has caused RM&Q and ELG to sustain injury and
damages in an amount not less than $9,729,720.

               Breach of the Alabama 2003 Payment
              And Request for Declaratory Judgment

The only condition with respect to the January 15, 2003
installment is set forth in paragraph 5 of the Alabama
Settlement Agreement. Pursuant to paragraph 7 of the Alabama
Settlement Agreement, RM&Q and ELG have until October 31, 2002
to advise Grace of any opt-outs.  Under paragraph 5 of the
Alabama Settlement Agreement, the total amount of the settlement
($59,960,140.00) is to be reduced by any opt-outs and the amount
of the reduction is to be taken from the January 15, 2003
installment. Paragraph 5 of the Alabama Settlement Agreement
calls for payment of the "Balance Due" on January 15, 2003. The
purpose for the parties using the term "Balance Due" rather than
a fixed amount was because the parties could not be certain
precisely which claimants might opt-out or not submit Qualifying
Materials within the time frames allowed.

Since the three installments preceding January 15, 2003 total
$48,904,500.00, the "Balance Due" would be $11,055,650.00 minus
opt-outs. Even if Judge Fitzgerald were to accept National
Union's contention that no filings should be allowed after the
Petition Date, a position which RM&Q and ELG reject, the
"Balance Due" for the January 15, 2003 installment would still
be $10,685,862.00 (that is, $11,055,650.00 minus the total
amount of the claimed disallowable 102 claims.

RM&Q& and ELG seek a declaration from this Court that National
Union is obligated to pay under the Alabama Settlement Bond the
sum of at least $10,685,862 on January 15, 2003 in the event
Grace fails to make such payment.  RM&Q and ELG further seek a
declaration from this Court that the automatic stay of creditor
action does not stay or render void any submissions of
Qualifying Materials after the Petition Date to the extent such
filings are in accordance with the time frames established by
the Alabama Settlement Agreement such that the "Balance Due" to
be payable by Grace or National Union would be increased
accordingly above the $10,685,862 up to a total of

Because of Grace's and National Union's breaches of the Alabama
Settlement Agreement and Settlement Agreement Bond, RM&Q and ELG
are entitled to recover reasonable attorneys' fees necessary to
prosecute this action.

                      Breach of the Texas
                     Settlement Agreement

Grace and National failed to fulfill their obligations to RM&Q
without legal justification or excuse. In particular, Grace has
failed to pay any portion of the January 15, 2002 installment
due under the Texas Settlement Agreement. RM&Q has submitted
sufficient Qualifying Materials sufficient to qualify for
disbursement of at least $2,089,770.50 of the potential of
$3,470,280.00 due under the Texas Settlement Agreement as of
January 15, 2002. Pursuant to paragraph 7 of the Texas
Settlement Agreement, RM&Q was required simply to have submitted
60 days prior to the payment date of January 15, 2002,
Qualifying Materials for a number of claimants at least equal to
the payment due in order to be entitled to the entire

RM&Q does not contend that it is entitled to the entire payment
due of $3,470,280.00. RM&Q does contend that it is entitled to a
partial payment as referenced above.  Grace's failure to fund
the payments due RM&Q under the Texas Settlement Agreement
triggered National Union's obligation under the Settlement Bond
to stand good for making payment to RM&Q for the benefit of the
Settling Plaintiffs they represent. National Union's breach has
caused RM&Q, on behalf of their clients, to sustain injury and
damages in an amount not less than $2,089,770.50.

The Texas Settlement Agreement provides for a total original
global base of 1,907 possible claimants. RM&Q has to date
submitted Qualifying Materials for 1,448 claimants. Of the 1,448
submitted claims, 52 were submitted after the Petition Date.

Of the total original global base of 1,907 claimants, RM&Q has
not yet submitted Qualifying Materials on behalf of 36 claimants
and 423 claimants were rejected by Grace.

                Declaratory Judgment Re 2003 Payment

The only condition with respect to the January 15, 2003
installment is set forth in paragraph 5 of the Texas Settlement
Agreement. Pursuant to paragraph 7 of the Texas Settlement
Agreement, RM&Q has until October 31, 2002 to advise Grace of
any opt-outs. Under paragraph 5 of the Texas Settlement
Agreement, the total amount of the settlement ($21,610,376.00)
is to be reduced by any opt-outs and the amount of the reduction
is to be taken from the January 15, 2003 installment.

Paragraph 5 of the Texas Settlement Agreement calls for payment
of the "Balance Due" on January 15, 2003. The purpose for the
parties using the term "Balance Due" rather than a fixed amount
was because the parties could not be certain precisely which
claimants might opt-out or not submit Qualifying Materials
within the time frames allowed.

RM&Q seeks a declaration from Judge Fitzgerald that National
Union is obligated to pay under the Texas Settlement Agreement
Bond the sum of at least $275,193.00 on January 15, 2003 in the
event Grace fails to make such payment. Such amount equates to
the 22 claimants who failed to submit Qualifying Materials in
time to participate in the January 2002 disbursement, but which
are entitled to disbursements on January 15, 2003.

RM&Q also seeks a declaration that of the remaining 36 claimants
who have yet to submit Qualifying Materials, primarily due to
probate issues that have yet to be resolved, they also shall be
entitled to participate in the January 15, 2003 disbursement in
the event they ultimately are timely with their respective

RM&Q further seeks a declaration from this Court that the
automatic stay does not stay or render void any submissions of
Qualifying Materials after April 2, 2001 to the extent such
filings are in accordance with the time frames established by
the Texas Settlement Agreement such that the "Balance Due" to be
payable by Grace or National Union would be increased

Because of Grace's and National Union's breaches of the Texas
Settlement Agreement and Settlement Agreement Bond, RM&Q is
entitled to recover reasonable attorneys' fees necessary to
prosecute this action.

In sum, RM&Q and ELG ask Judge Fitzgerald to give them:

       (1) Judgment against National Union for $9,729,720 in
connection with the Alabama Settlement Agreement;

       (2) Judgment against National Union for $2,089,770.50 in
connection with the Texas Settlement Agreement;

       (3) Pre-judgment and post-judgment interest on the entire
award as provided by law;

       (4) Reasonable and necessary attorneys' fees and expenses
incurred in the prosecution of this suit;

       (5) Declaratory judgments; and

       (6) Costs of suit.


Seeming to recognize that the injunctive portion of this
complicated suit could better be resolved, each of Grace-Conn.,
National Union, RM&Q and ELG present Judge Fitzgerald with a no
doubt welcome stipulation in this adversary proceeding.  The
parties agree that National Union is permanently enjoined from
paying the January 15, 2002, Texas installment to RM&Q.  
However, National Union is to pay the January 15, 2002 Alabama
installment to RM&Q and ELG under the terms of the Alabama
Agreement within 5 days of Judge Fitzgerald's approval of this
Stipulation.  Grace-Conn. agrees that National Union is
permitted to draw upon the letter of credit to make this Alabama
payment.  Nothing in this Stipulation, however, waives or
settles any claims the parties have or may make in connection
with any other payments for 2003.

Perhaps relieved to have one less dispute in this case, Judge
Fitzgerald promptly inks her approval of this Stipulation. (W.R.
Grace Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

WARNACO GROUP: Wins Approval to Conduct Store Closing Sales
The Warnaco Group, Inc., and its debtor-affiliates obtained
Court authority to sell the inventory and fixtures and to
conduct store closing sales at Warner's, Olga and Warnaco outlet

    Store No.   Location                   Lessor
    ---------   ------------------------   -------------------
      012       6415 Labeaux Ave., NE      Albertville Factory
                Albertville, MN            Outlets, LLC

      015       5000 Willows Road,         Viejas Spring Village
                Alpine, CA                 Outlet Center

      017       6000 Bandini Road,         Debtor-owned store
                Commerce, CA

      019       250 Prime Outlets Blvd.    The Prime Outlets at
                Barceloneta, PR            Puerto Rico

      032       8825 Market Place Dr.,     The Prime Outlets
                Brich Run, MI

      064       368 Fashion Way,           The Prime Outlets
                Burlington, WA

      180       10801 Corkscrew Road       Mimomar Properties
                Estero, FL

      196       13000 Folsom Bldv.,        Natoma Station
                Folsom, CA                 Associates

      206       2601 S. McKenzie St.,      Charter Oak Partners
                Foley, AL

      212       46 Maine Street,           John & Susan Saunders
                Freeport, ME

      326       5000 Katy Mills Circle,    Katy Mills Limited
                Katy, TX                   Partnership

      366       7400 S. Las Vegas Blvd.,   Belz Factory Outlet
                Las Vegas, NV              World (Mall II)

      431       815 Lighthouse Place       Chelsea GCA Realty
                Michigan City, IN          Partnership, LP

      481       4628 Factory Stores Blvd., Charter Oak Partners
                Myrthle Beach, SC

      492       44 Settlers Green,         Settler's Green OVP
                North Conway, NH

      502       8200 Vineland Ave.,        Chelsea GCA Realty
                Orlando, FL                Partnership, LP

      532       2200 Petaluma Blvd.        Chelsea GCA Realty
                Petaluma, CA               Partnership, LP

      560       1770 West Main St.,        Tanger Properties
                Riverhead, NY              Limited Partnership

      570       13118 US Highway 61        CFS Development, LLC
                Robnsonville, MS

      581       2700 State Road,           New Plan Realty Trust
                St. Augustine, FL

      635       1645 Parkway,              Tanger Properties
                Sevierville, TN            Limited Partnership

      638       227 M Blue River Parkway   Silverthorne Factory
                Silverthorne, CO           Stores, LLC

      680       5000 Arizona Mills Circle  Katy Mills Limited
                Tempe, AZ                  Partnership

      690       2839 Pacific Coast Hway    Seely Company
                Torrance, CA

      810       1001 Arney Road,           Craig Realty
                Woodburn, OR

The Court also approved the sale without complying with any
applicable state and local statues, rules or ordinances
governing store closing, liquidation or "going-out-of-business"
sales, and notwithstanding any provisions in the leases of the
Stores restricting the Debtors' ability to conduct such sales.
(Warnaco Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  

WELLMAN: Selling Non-Core Polyester Filament Yarn Business
Standard & Poor's said that Wellman Inc.'s (BB+/Stable/--)
announcement that it has agreed to the sale of its polyester
filament yarn business to Cedar Creek Fibers LLC (unrated) has
no effect on its rating or outlook on Wellman. As part of its
ongoing strategic review, Wellman recently stated its intention
to sell its polyester filament yarn business, which represents a
small portion of the company's total manufacturing capacity, and
reclassified the business as a discontinued operation for
financial reporting purposes. Standard & Poor's ratings
anticipate that polyester business conditions will improve
during the current year and that Wellman will take steps
necessary over the near term to improve its debt maturity

WESTERN WIRELESS: S&P Cuts Rating to B on Restrictive Bank Deals
Standard & Poor's lowered its corporate credit rating on Western
Wireless Corp. to single-'B' from double-'B'-minus based on
concerns that the company does not have significant cushion
against further missteps in execution under a more restrictive
bank covenant. Standard & Poor's is also concerned about the
longer-term impact of network expansion by major carriers on the
company's financial profile.

The rating remained on CreditWatch with negative implications.
Bellvue, Washington-based Western Wireless remained on
CreditWatch negative because of the increased potential for the
company to violate the total bank loan leverage covenant in the
near term.

"In the second quarter of 2002, the company's total domestic
debt to operating cash flow covenant tightened to 7.0 times from
7.5x," Standard & Poor's credit analyst Michael Tsao said.
"Because Western Wireless recently experienced two sequential
quarters of disappointing performance with respect to churn,
lower average revenue per unit, and EBITDA, mainly due to the
late introduction of competitive service plans and lower roaming
rates, we believe the company may find it challenging to meet
the stricter total leverage covenant if it is unable to show
immediate and sustainable improvement in operations."

Standard & Poor's said that, based on its projections, even a
small degree of execution misstep in each of the remaining
quarters in 2002 could cause Western Wireless to risk violating
the total leverage covenant. With coverage and leverage
covenants becoming more restrictive in 2003, the company has to
maintain solid execution not only this year but beyond.

Standard & Poor's said that, in the longer term, it is concerned
that Western Wireless and other rural wireless carriers may
experience pressure on roaming revenues, which generally
comprise a substantial portion of their revenues. This could
occur if national wireless carriers decide to lift their
constraint on capital expenditures and expand their networks in
rural markets.

The ratings on Western Wireless are based on its domestic
operations only and exclude the financial impact of its
international subsidiary, Western Wireless International Holding
Co.  Standard & Poor's does not impute credit support from
Western Wireless to WWI because of the expectation of only
limited cash support for WWI and because credit facilities to
various WWI subsidiaries are non-recourse to Western Wireless.
Total cash support for WWI is expected to be about $100 million
in 2002, with $50 million already downstreamed.

WILLIAMS: Shareholders Say Restructuring Pact is "Superfluous"
A consortium of Objecting Shareholders, consisting of
approximately 4,400 individual and institutional shareholders
who collectively hold approximately 60,000,000 shares of the
issued and outstanding common stock of Williams Communications
Group, Inc., and its debtor-affiliates, oppose the Motion to
assume restructuring agreement. They oppose it because
assumption serves no purpose, provides absolutely no benefit to
the bankruptcy estate, and as such can not be adjudged to be in
the best interest of the estate.

Michael S. Etkins, Esq., at Lowenstein Sandler P.C. in New York,
New York, contends that the assumption of the agreement is
superfluous and unnecessary.  He indicates that by the time that
this Motion is heard on May 30, 2002, the Debtors will have
likely already filed the Plan described in the Restructuring
Agreement. Assumption of the Restructuring Agreement is not
required, and the Court should carefully scrutinize the reason
why Debtors are requesting such extraordinary relief at this
stage in the case where the transactions reflected in the
Restructuring Agreement will and, indeed, must be the subject of
a plan of reorganization. Indeed, denial of the requested
assumption will have no adverse affect upon the Restructuring
Agreement as assumption under Section 365 is not a condition of
the effectiveness of that agreement.

Mr. Etkins tells the Court that it is clear that the Debtors'
management, certain creditors of the Debtors and TWC, are intent
on a course of action to quickly confirm the Plan, which will
wipe out the existing equity in WCG and limit any potential
opposition or roadblocks to such confirmation. The Court should
therefore be reluctant to issue any order the obvious intention
of which is to somehow pre-clear the requirements of Bankruptcy
Code Section 1129 regarding the confirmation of the Debtors'
Plan, or Section 1125 regarding proper and adequate disclosure
of facts to be included in a disclosure statement to be
disseminated to all parties in the case. The Shareholders
suspect that the Debtors, and the other parties to the
Restructuring Agreement, are attempting to effectuate the
assumption in order to obtain a form of pre-approval of the Plan
terms set forth in the Restructuring Agreement. The Debtors
should not be allowed to substitute their Motion for the
disclosure requirements of Section 1125 of the Bankruptcy Code,
or the confirmation requirements of Section 1129.

The Debtors make a bold statement in the Motion that they are
not presenting any novel issues of law. Given the potential
impact of this Motion and the suspect nature of the relief
requested therein, Mr. Etkins argues that such statement is
obviously untrue. While the Debtors have cited to authority
which generally applies to the approval of assumption of typical
executory contracts such as leases and other routine executory
agreements, none of the authority cited applies to the specific
and novel situation presented herein. Indeed, the Shareholders
were unable to locate any case law which supports the unique
request by the Debtors to seek the Court's blessing of a pre-
petition lock-up agreement, without the safeguards of the plan
confirmation process. The Debtors attempt to avoid the
requirement to support their request with a memorandum of law
obscures the fact that no such authority exists.

In fact, Mr. Etkins notes that case law points to the opposite
conclusion that the relief requested by the Debtors is not
available or appropriate. Further, the Debtors have presented no
evidence, in the form of affidavits, certifications or
otherwise, which would lead the Court to a finding that the
assumption of this agreement is in the best interest of the
estate. The Shareholders request that the Court deny the Motion
based upon the Debtors' failure to support the request therein
with a memorandum of law as required by Local Bankruptcy Rule
9013-1, or alternatively, require the Debtors to present a
detailed memorandum of law, with accompanying certifications,
which support their specific request to gain approval of the
assumption of a pre-petition lock-up agreement.

If the Debtors are not, contrary to the Shareholders suspicions,
seeking ratification of the plan terms to which they have bound
themselves, Mr. Etkins believes that the Court must inquire as
to the exact purpose of the Motion. If, indeed, the Debtors are
seeking any form of approval of the terms of the Restructuring
Agreement, such relief must be denied absent the Debtors
satisfying all requirements of the Bankruptcy Code relative to
disclosure, solicitation and confirmation of a plan of
reorganization. The need for such protections, while required in
all cases, is especially important in the case at hand where the
Debtors, and the consenting creditor groups are seeking to
eliminate any interest of the existing equity holders without a
court determination of the "going concern" value of the Debtors.

Substantively, the Shareholders believe that the Plan outlined
in the Restructuring Agreement is not confirmable, and will
vehemently oppose confirmation. However, Mr. Etkins submits that
they can only do so if, at this point, this Court orders the
formation of an the Equity Committee under Section 1102 of the
Code. The Shareholders have grave concerns about the observation
of fiduciary duties by the management of the Debtors, who are
the proponents of this Motion, and the proponents of a Plan,
which will eliminate the existing equity and significantly
benefit management. Shareholders were not asked to be nor were
they involved in any of the pre-petition negotiations with the
Debtors and their creditors. Based upon the Debtors' own
figures, with which Shareholders do not agree and expressly
reserves the right to investigate and challenge at a later
period in connection with further proceedings in this case, WCG
has negative net worth of approximately $1,160,000,000. Of the
liabilities listed by the Debtors, however approximately
$2,300,000,000 represents claims of TWC, its former owner. The
Shareholders are informed and believe that there are substantial
bases upon which the claims of TWC should be challenged through
equitable subordination or otherwise.

Mr. Etkins stresses that there is no benefit to the estate by
the assumption of the Restructuring Agreement. The Debtors
should have but failed to present the Court with a detailed
analysis of what the benefits and burdens of the Restructuring
Agreement were, and what the impact of denial of the Motion will
be on the estate. The Court should not permit the assumption of
a contract, which presents a risk of loss disproportionate to
the prospect for profit.

In reviewing the Debtors' business judgment behind moving for
the approval of the Restructuring Agreement, Mr. Etkins states
that the Court must question what benefit such agreement
provides to the entire bankruptcy estate, which is comprised not
only of the creditors, but of the equity shareholders as well
and what administrative liabilities such as assumption may
unnecessarily create. The simple answer to that question is that
there is no benefit. The Debtors are not precluded from filing a
plan of reorganization, which is consistent with the terms of
the Restructuring Agreement, and in fact will presumptively have
filed such the Plan prior to the hearing on this Motion. Indeed,
the Debtors state that their only obligation under the
Restructuring Agreement is to file and prosecute a plan
consistent with the terms of the Restructuring Agreement. If
this is truly the case, then there is no need for the Motion to
be granted, as the Debtor will have filed the Plan prior to the
hearing on this Motion.

Mr. Etkins asserts that the bankruptcy estate only stands to
lose from the assumption of this agreement. The effect of the
assumption will be to convert any potential claims arising out
of a post-petition breach of the Restructuring Agreement from
general unsecured claims to administrative priority claims.
While it is unclear what those claims may be, and who may assert
them, there is simply no justification for the estate to be
exposed to the risk of such claims on an administrative basis.
If the Debtors' management deems it prudent to do so, it may
file and pursue the Plan set forth in the Restructuring
Agreement, and there is no need to have the agreement approved
at this time, which would saddle the estate with unknown
administrative claims in the event of a breach.

Furthermore, in a case like this, Mr. Etkins adds, a Chapter 11
trustee or an examiner may be appropriate.  The assumption of
the Restructuring Agreement could presumptively bind the
subsequently appointed trustee as to the terms of any plan he or
she may be able to propose. The Shareholders respectfully submit
that this would be an unjust result, and for this reason alone,
the Motion should be denied.

According to Mr. Etkins, the Shareholders are concerned that the
consolidated pre-petition litigation against the Debtors and its
management for various securities violations currently pending
in the United States District Court for the Northern District of
Oklahoma (Tulsa Division), are effectively settled vis-a-vis the
Restructuring Agreement. The Shareholders are potential
beneficial participants in this litigation. The Debtors should
not be able to achieve the de facto approval of this compromise
by way of the assumption of the Restructuring Agreement, as such
approval requires that the Debtors follow the procedural
mandates of Federal Bankruptcy Rule 9019, including notice to
all creditors, and the presentment of evidence as to why the
proposed settlement is reasonable, and in the best interest of
the estate, taking into account such factors as the probability
of success in litigation; the difficulties of collection; the
complexity of the litigation and attendant expense and delay;
and the interest of creditors. The Debtors have failed to follow
the procedural requirements and to provide such evidence.
Therefore, the Court should not issue any order, which could be
construed to constitute the approval of the compromise set forth
in the Restructuring Agreement.

Mr. Etkins claims that the equity security holders of WCG from
around the country have expressed unprecedented interest in this
bankruptcy case and the potential impact on their interests. The
pre-petition lock-up agreement among the major constituencies in
this case, other than the shareholders, is of particular
concern. Shareholders, in general, are attempting to take an
active and constructive role in this case, as evidenced by their
numerous requests of the OUST for appointment of an Equity
Committee and the participation of many of them in this
Objection. Unfortunately, as previously stated, the OUST has
decided not to appoint an Equity Committee.

Mr. Etkins maintains that the Debtors, the Banks and the Note-
holders have, over a period of several months, negotiated an
agreement that will dramatically change the Debtors and will
completely wipe out the interests of all current shareholders of
WCG.  The Objecting Shareholders understand the Debtor's and
Creditors' Committee's opposition to formation of an Equity
Committee.  The Objecting Shareholders cannot help but wonder,
however, whether these objections are the result of a desire to
defeat any chance of meaningful investigation and analysis and
potential opposition to ultimate confirmation of the lock-up
agreement's pre-petition scheme.  Hopefully, when this Court is
asked to rule on this matter, it will view the situation
similarly to the Shareholders and order the appointment of an
Equity Committee.

Mr. Etkins tells the Court that respect for the Bankruptcy
process and the appearance and actual existence of fairness
demand meaningful participation by shareholders in this case to
the same degree as creditors. While the shareholders can resist
this particular motion, they cannot resist the efforts of the
Debtor and the Creditors Committee and their financial advisors
to force a plan down the throats of equity holders without
giving them an opportunity to provide an effective
counterbalance. The Objecting Shareholders hope this Court will
see that, under the circumstances, an Equity Committee must be
appointed in this case.

Based upon the foregoing, the Objecting Shareholders request
that the Court deny the Debtors' Motion to approve the
assumption of the Restructuring Agreement. To the extent,
however, that the Court is inclined to grant the Motion, the
Shareholders urge the Court:

A. to modify the proposed order presented by the Debtors to
   provide that the granting of the Motion will not in any way
   alter or alleviate the requirements for disclosure and
   solicitation of the acceptance of a plan or the requirements
   for confirmation; and

B. not include in any order any findings that would in any way
   be binding upon any party with respect to any requirements of
   confirmation, including but not limited to any findings that
   the plan has been proposed in good faith.

Finally, the Shareholders request that any order provide that
the granting of the Motion does not constitute the approval of
the terms of any compromise contained therein. (Williams
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

WILLIAMS CONTROLS: March 31 Balance Sheet Upside-Down by $15MM
Williams Controls, Inc. reports that for the three months ended
March 31, 2002, the company's total net sales decreased
$2,182,000 to $12,848,000 in the second quarter of fiscal 2002
from $15,030,000 in the second quarter of fiscal 2001.  
Excluding the sales in the second fiscal quarter of 2001 of the
PPT subsidiary, which was shut down in the second quarter of
fiscal 2001, and the sales of the GeoFocus  subsidiary, which
was sold in the third quarter of fiscal 2001, net sales
decreased $152, or 1.2%.

Net sales in the Vehicle Components segment decreased $1,761,000
to $12,696,000 in the second quarter of fiscal 2002 over the
second quarter of fiscal 2001 while the Electrical Components
and GPS business segment experienced a decrease in sales of
$421,000 to $152,000 in the second quarter of fiscal 2002.

Excluding the sales volumes of PPT in the second quarter of
fiscal 2002, Vehicle Component segment sales increased $65, or
0.5%. Increased sales in the Portland division more than offset
sales  reductions in the Company's natural gas conversion kit
subsidiary, NESC. Excluding the sales volumes of GeoFocus in the
second quarter of fiscal 2001, Electrical Components and GPS
segment sales decreased $217, or 58.8%.  In the Electrical
Components and GPS segment, decreased sales resulted from
phasing out a number of its traditional electrical component
products in the second half of fiscal 2001.  The Company is
committed to the development and production of sensors and
sensor  related products, however, sales from this segment may
be significantly lower during fiscal 2002 as a result of the
phase out of the traditional electrical component products in
fiscal 2001.

Gross margins were $3,490,000 or 27.2% of net sales, in the
second quarter of 2002, compared to $2,823,000 or 18.8% of net
sales, in the comparable fiscal 2001 period. Included  in the
gross  margin  for the  second  quarter  of  fiscal  2001 was a
negative gross margin of $620,000 related to PPT.

Excluding PPT, gross margins increased $47,000 in the second
quarter of fiscal 2002 over the second  quarter of fiscal 2001.  
As a percent of net sales, the gross margin of 27.2% of sales in
the second  fiscal quarter of 2002 was higher than the 26.1% of
sales, excluding PPT, in fiscal 2001.

Operating expenses were $2,691,000 for the three months ended
March 31, 2002 compared to $3,723,000  excluding the Loss on
Impairment of investment in Ajay for the fiscal 2002 period and
the Loss on Impairment of assets at Proactive for the comparable
fiscal 2001 period.  Excluding the operating  expenses related
to PPT and Geofocus and the Proactive impairment loss, operating
expenses for the three months ended March 31, 2001 were
$2,847,000.  The lower operating expenses in fiscal 2002 were
the result of cost containment efforts.

The Company had previously accounted for its investment in Ajay
using the equity method of accounting. As a result of various
changes within both the Company and Ajay, the Company feels it
no longer has influence over the operations of Ajay and
accordingly has changed to the cost method of accounting for
investment in and note receivable from Ajay.  Accordingly, in
accordance with the Company's accounting policy for the
impairment of long lived assets, the Company has evaluated the  
realization of its investment in and note receivable from Ajay.
Based on the Company's current  assessment and collection
efforts against Ajay and Mr. Itin's guarantee, the Company
believes the  investment in and note receivable from Ajay have
been impaired and accordingly an impairment loss for the entire
carrying value of $3,565,000 has been provided in the second
quarter of fiscal 2002.  

In July 1999, the Company purchased the ProActive Pedals
division of Active Tools Manufacturing Co., Inc.  ProActive is a
designer and developer of patented  adjustable food pedal
systems and modular  pedal systems.   The acquisition was
accounted for using the purchase method of accounting and
resulted in $1,820,000 being allocated to developed technology,
$1,439,000 to a patent and patent license agreement acquired and
$2,162,000 to goodwill, representing the excess of the purchase
price over the fair value of the assets acquired and liabilities
assumed.  At March 31, 2001, the carrying value of the goodwill
and intangible assets of ProActive was $4,366,000.

ProActive's sales volumes of adjustable and modular foot pedal
systems are limited to one contract that ProActive has with a
third party. Additionally, as a result of the Company's overall
capital  constraints, the Company did not possess the financial
resources to further develop additional sales volumes or to
achieve the sales volumes originally projected for ProActive.

As a result of the above factors, management performed an
analysis to measure the impairment of the long-lived assets of
ProActive in accordance with SFAS 121 as of March 31, 2001.  
Based on management's analysis it was concluded that the
undiscounted value of the projected cash flows of ProActive's
current business was less than the carrying value of the assets
of ProActive as of March 31, 2001. As a result of this
conclusion, the Company recorded an impairment charge related to
ProActive's remaining carrying value of the goodwill and
intangible assets, totaling $4,366,000.

Interest expense decreased $435,000 to $632,000 in the second
quarter of fiscal 2002 from $1,067,000 in the second quarter of
fiscal 2001. Lower interest on reduced debt levels and lower
interest rates were  partially offset by increased costs of
amortization of the Secured Subordinated Debenture warrant  

The effective income tax rate was 0.00% for the quarters ended
March 31, 2002 and 2001.  The Company is in a net operating loss
carryforward position and is providing a 100% valuation
allowance on all  deferred tax assets due to going concern

Net loss allocable to common shareholders declined to $3,676,000
in the quarter ended March 31, 2002 compared to $6,919,000 in
the comparative prior year period primarily due to losses
included in the second quarter of fiscal 2001 that were not
incurred in the second quarter of fiscal 2002.  These losses
included losses on impartment of assets at Proactive and other
operating losses attributable to PPT and GeoFocus in fiscal

                         *   *   *

Williams Controls is open to communication, but it's really into
control. The company's biggest business is making electronic
throttles, exhaust brakes, and pneumatic controls for trucks and
other heavy equipment. Other operations include microcircuits,
cable assemblies (Aptek Williams), and global positioning
systems (GeoFocus -- which Williams Controls is selling). The
company also makes plastic parts (Premier Plastic Technologies,
which is being sold) and compressed natural gas conversion kits
for cars (NESC Williams). Major customers include Freightliner,
Navistar, and Volvo.

At March 31, 2002, Williams Controls recorded a total
shareholders' equity deficit of about $15 million.

WORLDCOM: S&P Maintains Watch on Rating After MCI Stock Decision
Standard & Poor's said that its double-'B' corporate credit
rating on global communications provider WorldCom Inc. remains
on CreditWatch with negative implications following the
company's announcement that it will eliminate the MCI Group
tracking stock as of July 12, 2002, and the related dividend.
Clinton, Missouri-based WorldCom had about $30 billion total
debt outstanding as of March 31, 2002.

"The elimination of the dividend will result in annual savings
of $284 million, which will bolster near-term liquidity,"
Standard & Poor's credit analyst Rosemarie Kalinowski said.
"However, WorldCom will need to negotiate a longer-term credit
facility or other source of funds to assuage our concerns
regarding liquidity needs beyond the intermediate term."

WorldCom has indicated that positive negotiations are continuing
with lenders on implementing an approximately $5 billion secured
credit facility with maturity in 2005 or 2006. The negotiations
are anticipated to be completed by the end of June 2002.
Standard & Poor's said the potential positive credit effect of
such a longer-term facility will depend on the terms of that
agreement. In particular, if financial covenants of such a
facility effectively and materially constrain drawdowns, then
the additional liquidity gained from such a new facility would
be limited.

Standard & Poor's said that, despite the recent resolution of
the accounts receivable securitization issue and assuming that a
new bank facility is put into place on favorable terms, a
material degradation in operating cash flow would jeopardize
WorldCom's financial condition. The rating agency said that,
though new management may be able to craft a strategic approach
that more effectively positions WorldCom to leverage its strong
network assets and capabilities, the challenges are formidable--
a continuing weak economic environment and margin pressure in
residential long distance, and the emergence of the Bell
companies as competitors for enterprise customers.

In resolving the CreditWatch listing, Standard & Poor's said it
would examine a number of issues, including bank arrangements,
potential asset sales, and a strategy to address a more intense
competitive environment. Standard & Poor's is also concerned
that WorldCom's financial problems may impinge on its ability to
attract and retain customers. WorldCom has noted that its
discussions with key accounts indicate only some nervousness on
the part of those customers; nevertheless, if empirical evidence
in the coming weeks and months indicate material customer
defections, a downgrade would be likely.

Ultimately, resolution of the CreditWatch hinges on assessing
the prospects that WorldCom can maintain a credit profile
consistent with a corporate credit rating in the double-'B'
rating category. If WorldCom obtains a secured credit facility,
the unsecured debt could be notched below the corporate credit

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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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
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available at your local bookstore or through Go to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
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S U B S C R I P T I O N   I N F O R M A T I O N

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

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

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