TCR_Public/020530.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Thursday, May 30, 2002, Vol. 6, No. 106     

                          Headlines

ANC RENTAL: Court OKs Ops. Consolidation at Kansas City Airport
ADELPHIA COMM: Names L. Tow & S. Schneider to Board of Directors
AMERICAN AIRLINES: Commences Exchange Offer for $1.8B P-T Certs.
BEAR ISLAND: Violates Financial Covenants Under $120MM Bank Debt
BENECO: Court Set to Approve Asset Sale in Hearing this Week

BOOTS & COOTS: Initiates Restructuring & Cost Reduction Measures
BROADLEAF CAPITAL: Cuts Unresolved Judgment Payables by $2MM+
BURLINGTON INDUSTRIES: Court Fixes July 22 General Bar Date
CANADIAN IMPERIAL: Negotiates $3MM Private Placement Financing
CELEXX CORP: New Funds Needed to Meet Projected Working Capital

CHANCE INDUSTRIES: Emerges From Chapter 11 Bankruptcy Protection
COMMONWEALTH BIOTECH: Auditors Express Going Concern Opinion
CONDOR SYSTEMS: EDO Inks Agreement to Acquire Assets for $112MM+
CONSECO: Moody's Junks Debt Ratings & Voices Bankruptcy Worries
CONSECO: Gary Wendt Bunks Moody's Downgrade & Speculations

CONSOLIDATED FREIGHTWAYS: Names John Brincko to Lead Company
COVANTA ENERGY: Panel Concerned About Debtors' Multiple Lawyers
DIVA SYSTEMS: Files for Chapter 11 Reorganization in California
DIVA SYSTEMS: Reaches Pact to Sell Assets to Gemstar-TV Guide
ENRON: Upstream Seeks Separate ENA Creditors' Panel Appointment

ENRON CORP: Court Okays Proposed Wind Unit's Funds Allocation
EXIDE TECHNOLOGIES: Signs-Up PricewaterhouseCoopers as Auditors
FAIRPOINT: Clinches Debt-to-CLEC Unit Preferred Shares Swap
FANSTEEL INC: Gains Approval to Access $13 Million DIP Financing
FEDERAL-MOGUL: Wins Go-Signal to Assume Sr. Management Contracts

FLAG TELECOM: Brings-In Shearman & Sterling as Special Counsel
GADZOOX NETWORKS: Fails to Maintain Nasdaq Listing Standards
GENSCI REGENERATION: Ontario Regulator Halts Securities Trading
GLENOIT CORP: Has Until August 6 to Make Lease-Related Decisions
GLOBAL CROSSING: Signs-Up Ernst & Young for Advice Re Litigation

GLOBAL CROSSING: Committee Airs Confidence About Reorganization
HEARTLAND TECHNOLOGY: Expects SEC to Okay Delisting From AMEX
ICG: Court Okays Settlement with SBC Units on Wholesale Disputes
IT GROUP: Court Approves Contract & Lease Rejection Procedures
INTEGRATED HEALTH: Further Amends Officer Compensation Pacts

KENNAMETAL INC: Posts Prelim. Fiscal 2003 Results Expectations
KMART CORP: Taps Ballantine to Represent Independent Directors
LA PETITE ACADEMY: Obtains Waiver of Loan Covenant Violations
METROLOGIC INSTRUMENTS: Files Amended Annual Report on Form 10-K
MPOWER COMMS: Shrugs-Off Court of Appeals' Line Sharing Decision

NETIA: Shareholders' Meeting to Convene on June 18 in Warsaw
NEW WORLD RESTAURANT: OTCBB Strikes-Out Shares from Listing
NOBLE CHINA: Won't Make Payment on 9% Debentures due Tomorrow
OPTIO SOFTWARE: Taps Stratagem to Explore Strategic Alternatives
ORGANOGENESIS: Has Until June 4 Submit Acceptable Plan to AMEX

OWENS CORNING: Intends to Insure Future Representative Liability
PILLOWTEX CORPORATION: Resolves ARK CLO Lease Agreement Dispute
POLAROID: Court Okays Settlement with Prepetition & DIP Agents
RAILAMERICA: Closes Syndicated $475M Sr. Secured Loan Financing
SAFETY-KLEEN: Chemical Services Sale Hearing Set for June 13

SOFTNET SYSTEMS: Fails to Meet Nasdaq Listing Requirements
SYNSORB BIOTECH: Posts Improved First Quarter 2002 Results
TELIGENT: Wins Nod to Hire Paul Hastings as Employment Counsel
TRISTAR: Inter Parfums Unit Completes Asset Acquisition for $7MM
VECTOUR: Asks Court to Set August 1 as Administrative Bar Date

W.R. GRACE: Zonolite Claimants Livid about Debtor-Filed Claims
WHEELING-PITTSBURGH: Wants Exit Financing & to Pay RBC Dain Fees
WILLIAMS COMMS: Obtains Court Injunction Against Utilities
WILLIAMS COMPANIES: Fitch Bullish About Balance Sheet Plans
WILLIAMS: Says S&P Action "Disappointing, But Not Surprising"

XEROX CORP: Elects Lawrence Zimmerman as Sr. V-President & CFO    

* DebtTraders' Real-Time Bond Pricing

                          *********

ANC RENTAL: Court OKs Ops. Consolidation at Kansas City Airport
---------------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates sought and
obtained the Court's authorization to reject the Alamo
Concession Agreement and the Alamo Lease and the assumption of
the National Concession Agreement and the National Lease and
their assignment to ANC. Both agreements are for the Debtors'
operations at the Kansas City Airport.

The consolidation of the operations at this particular airport
is expected to save for the Debtors over $1,750,00 annually in
fixed facility costs and other operational costs. (ANC Rental
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ADELPHIA COMM: Names L. Tow & S. Schneider to Board of Directors
----------------------------------------------------------------
Adelphia Communications Corporation (Nasdaq: ADLAE) has offered
to appoint Leonard Tow and Scott Schneider to the Company's
Board of Directors and that Messrs. Tow and Schneider had agreed
to accept such appointments.  Dr. Tow, who, together with
certain family trusts, owns approximately 12% of Adelphia's
common stock, is Chairman and CEO of Citizens Communications.  
Mr. Schneider is Vice Chairman of Citizens Communications.

Newly appointed Chairman and interim Chief Executive Officer
Erland E. Kailbourne said, "The Special Committee of independent
directors is committed to addressing head-on, and resolving
quickly and thoroughly, all the issues facing this Company.  We
are committed to take every action necessary to preserve and
build on the many strengths of the Company on behalf of the
Company's banks, bondholders, shareholders and other
constituencies.  We look forward to working constructively with
Dr. Tow and Mr. Schneider to accomplish these objectives."

Dr. Tow said, "Scott Schneider and I are prepared to deal with
the serious challenges facing Adelphia.  As the largest
unaffiliated investor in Adelphia, my interests are clearly
aligned with those of all Adelphia banks, bondholders and
shareholders.  Additionally, Scott and I have extensive
experience in the cable industry and an in-depth knowledge of
many of Adelphia's assets.  We are committed to restoring
Adelphia's credibility and stabilizing the company financially
in order to protect the interests of all Adelphia's public and
private lenders and shareholders.  We look forward to working
constructively with the Special Committee to accomplish these
objectives."

Leonard Tow has been associated with Citizens Communications
since April 1989 as a Director.  In June 1990, he was elected
Chairman of the Board and Chief Executive Officer.  He was also
Chief Financial Officer from October 1991 through November 1997.  
He was a Director and Chief Executive Officer of Century
Communications Corp., a cable television company, from its
incorporation in 1973 and chairman of its Board of Directors
from October 1989 until October 1999.  Tow was also founder and
a Director of Centennial Cellular Corp.

Scott Schneider has been associated with Citizens since October
1999.  In February 2001, he was elected Vice Chairman of the
Board.  In July 2000, he was elected Director of Citizens.  He
is currently Vice Chairman of the Board and President of
Citizens and Chairman of Citizens Capital Ventures, a wholly
owned subsidiary of Citizens. Prior to joining Citizens, he was
a Director (from October 1994 to October 1999), Chief Financial
Officer (from December 1996 to October 1999), Senior Vice
President and Treasurer (from June 1991 to October 1999) of
Century Communications Corp.  He also served as a Director,
Chief Financial Officer, Senior Vice President and Treasurer of
Centennial Cellular from August 1991 to October 1999.

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

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1),
DebtTraders says, are quoted at a price of 73. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


AMERICAN AIRLINES: Commences Exchange Offer for $1.8B P-T Certs.
----------------------------------------------------------------
American Airlines, Inc. is offering to exchange $1,872,832,000
in Pass Through Certificates, Series 2001-2 for any and all
outstanding Pass Through Certificates, Series 2001-2.  The terms
of the new pass through certificates the Airline is issuing will
be substantially identical to the terms of the outstanding pass
through certificates, except that the new pass through
certificates are being registered under the Securities Act of
1933, as amended, and will not contain restrictions on transfer
or provisions relating to interest rate increases, and the new
pass through certificates will be available only in book-entry
form.

No public market currently exists for the pass through
certificates.

The exchange offer expires at 5:00 p.m., New York City time, on
a date yet to be announced by the Airline.

Pass Through                                                     
Interest        Final Expected
Certificates     Face Amount       Rate      Distribution Date
--------------   ------------    --------    -----------------
                                                                         
Class A-1.....   $322,404,000     6.978%     April 1, 2011
Class A-2.....    828,761,000     7.858      October 1, 2011
Class B.......    180,087,000     8.608      April 1, 2011
Class C.......    281,038,000     7.800      October 1, 2006
Class D.......    260,542,000     9.092      October 1, 2006

AMR Corporation's main subsidiary is American Airlines, the US's
#2 air carrier based on revenue passenger miles (behind UAL's
United Airlines). With a fleet of nearly 700 jetliners and hubs
in Chicago, Dallas/Fort Worth, Miami, and San Juan, Puerto Rico,
American Airlines serves about 170 destinations in the Americas,
Europe, and the Pacific Rim (some through code-sharing). The
carrier will expand by absorbing the assets of TWA, which AMR
has acquired. With British Airways, American Airlines leads the
Oneworld global marketing alliance. AMR's regional feeder
subsidiary, American Eagle, has been aggressive in rolling out
regional jet service.

As previously reported, Standard & Poor's is placing American
Airlines' BB-rated LA bonds and its certain low-B ratings on
CreditWatch Negative.


BEAR ISLAND: Violates Financial Covenants Under $120MM Bank Debt
----------------------------------------------------------------
Bear Island Paper Company LLC manufactures and is dependent on
one product, newsprint, which is used  in general printing and
the newspaper publishing industry and for advertising circulars.  
Accordingly, demand for newsprint fluctuates with the economy,
newspaper circulation and purchases of advertising lineage which
significantly impact the Company's selling price of newsprint
and,  therefore, its revenues and profitability.  In addition,
variation in the balance between supply and demand as a result
of global capacity additions  have an increasing impact on both
selling prices  and inventory levels in the North American
markets. Capacity is typically added in large blocks because of
the scale of new newsprint machines.  The Company is a wholly
owned subsidiary of Brant-Allen Industries, Inc., a Delaware
corporation.

Bear Island Paper Company LLC incurred net losses of $5,455,403
and $5,722,211 for the quarter ended March 31, 2002 and year
ended December 31, 2001, respectively, and had an accumulated
deficit of $29,449,221 at March 31, 2002.  Management also
anticipates a loss for the year ending December 31, 2002.  
Because of these recurring losses the Company continues to not
be in compliance with certain financial debt covenants under its
$120 million principal amount of bank debt. Management  believes
that the Company will be able to successfully manage through the
debt covenant situation,  although the Company's lenders could
accelerate the debt at any time during the period.  These  
matters raise substantial doubt about the Company's ability to
continue as a going concern.

At March 31, 2002, the Company had the ability to access
approximately $7.0 million of additional  capital equipment
financing through the use of certain leasing options.  The
Company also had  positive cash flows from operations during the
past three calendar years.  At March 31, 2002 there was no
unused borrowing capacity available under the Revolving Credit
Facility, as a result  of the Company's non-compliance with
several financial covenants under the Bank Credit Agreement.  
Based on current market conditions, management anticipates being
able to meet liquidity requirements for 2002; however, there
exists a range of reasonably possible outcomes, which could
significantly  impact their ability to achieve the
aforementioned.

Net sales decreased by $4.4 million, or 15.0%, to $24.9 million
in the first quarter of 2002, from $29.3 million in the first
quarter of 2001. This decrease was attributable to a 24.0%
decrease in the average net selling price of the Company's  
products and was offset in part by a 11.8% increase in sales
volumes to approximately 55,830 metric tons in the first quarter
of 2002, from approximately 49,950 tons in the first quarter of
2001. The Company's net selling price for newsprint decreased to
an average of $446 per ton in the first quarter of 2002 from an
average of $587 per ton in the first quarter of 2001.

The Company reported a net loss of $5.4 million in the first
quarter of 2002 compared to net loss of $10,000 in the first
quarter of 2001.


BENECO: Court Set to Approve Asset Sale in Hearing this Week
------------------------------------------------------------
The Daily Deal has reported that a hearing in the U.S.
Bankruptcy Court in Salt Lake City on the sale of bankrupt
Beneco Enterprises Inc. to Shaw Group Inc. was postponed last
May 24, but should be approved this week.  A Shaw spokeswoman
said the acquisition of the military and industrial construction
unit of bankrupt IT Group Inc., no longer faces any objections,
reported the online newspaper.  According to the Deal, Shaw
received approval from the U.S. Bankruptcy Court in Delaware
last month to acquire IT Group for $105 million in cash.  The
proposed acquisition of Beneco is part of that bid, but Beneco's
chapter 11 case is filed in Salt Lake City. (ABI World, May 28,
2002)


BOOTS & COOTS: Initiates Restructuring & Cost Reduction Measures
----------------------------------------------------------------
Boots & Coots International Well Control, Inc. (Amex: WEL), said
that, pursuant to an operational review conducted by its Board
of Directors and senior management, it will implement
restructuring and cost reduction initiatives with the goal of
positioning the Company to take advantage of opportunities in
its well control and risk management businesses and achieving
cost efficient, profitable operations.

In response to a significant decrease in downstream response and
restoration activities, the Company will immediately downsize
its Special Services Division, begin the process of selling the
division's non-strategic assets, and will refocus its efforts on
maximizing opportunities in its well control and risk management
divisions.  The Company will focus its resources on the project
management of downstream response activities through its HazTeam
program.  It is anticipated that these initiatives will result
in a $5 million positive impact to operating income on an
annualized basis.

Jerry Winchester, President and Chief Operating Officer, said,
"Our current model for downstream operations is working capital
intensive, and this market has not experienced the growth and
related profitability that we expected.  We intend to rededicate
both our capital and management resources to our core
competencies in well control and risk management and the growth
opportunities they provide.  These divisions are the proven
contributors to operating profits and value for our
shareholders.  These businesses continue to provide the
foundation for future growth through critical well response
services and more predictable 'non-event' revenues derived from
our proprietary programs such as WELLSURE(R) and SafeGuard.  As
discussed in our last conference call, our prevention segment
revenue, led by these programs, continues to grow with an
overall increase of 54% as compared to the 2001- quarter.  We
are currently reviewing sales, general and administrative
expenses and anticipate making an announcement on planned
reductions within the next two days."

Boots & Coots International Well Control, Inc., Houston, Texas,
is the global emergency response company that specializes,
through its Well Control unit, as an integrated, full-service,
emergency-response company with the in- house ability to provide
its expanded full-service prevention, response and restoration
capabilities to the global needs of the oil and gas and
petrochemical industries, including, but not limited to, oil and
gas well blowouts and well fires as well as providing a complete
menu of non-critical well control services.  Through its Special
Services unit, the Company continues to respond to marine oil
spills and emergencies, refinery, pipeline, manufacturing and
transportation emergencies, inclusive of hazardous material
handling.

                         *   *   *

As previously reported, Boots & Coots continues to experience
severe working capital constraints.  As of March 31, 2002, the
Company's current assets totaled approximately $8,717,000 and
current liabilities were $10,219,000, resulting in a net working
capital deficit of approximately $1,502,000 (compared to a
beginning year deficit of $159,000).  The Company's highly
liquid current assets, represented by cash of $773,000  and
receivables and restricted assets of $6,611,000 were
collectively $2,835,000 less than the  amount of current
liabilities at March 31, 2002 (compared to a beginning year
deficit of $1,423,000).  The Company is actively exploring new
sources of financing, including the establishment of new credit
facilities and the issuance of debt and/or equity securities.  
During April and May  2002, the Company entered into loan
participation agreements with certain parties under which it
borrowed an additional $1,000,000 under the Senior Secured Loan
Facility. The participation agreements have an initial maturity
of 90 days, which may be extended for an additional 90 days at
the Company's option.  The new borrowings are not sufficient to
meet the Company's current working capital requirements.  Absent
new near-term sources of financing or the generation of
significant operating income, the Company will not have
sufficient funds to meet its immediate obligations and will be
forced to dispose of additional assets or operations outside of
the normal course of business in order to satisfy its liquidity
requirements.


BROADLEAF CAPITAL: Cuts Unresolved Judgment Payables by $2MM+
-------------------------------------------------------------
Broadleaf Capital Partners, Inc. (OTCBB:BDLF) has successfully
negotiated a significant and final reduction of $2 million plus
dollars in several previously unresolved judgment payables. The
settlement structure represents a reduction to less than 10
cents on the dollar of the outstanding amounts and consists of
both cash payments, over a term period, and restricted stock.

Broadleaf Capital Partners' Interim President, Robert Braner,
stated, "Finalizing this transaction has been a critical part of
the Global workout strategy and restructuring, and is an
important milestone. It provides the Company with a significant
cost saving opportunity, the platform for a reduction in general
administrative costs, and greater flexibility to management, in
bringing forward financial resources and assets."

Braner continued, "Most importantly, the completion and
successful settlement of these outstanding liabilities is
expected to remove the major barriers that have prevented the
potential for a revitalization of the Company over the past 15
months. We now expect to be able to announce some specific
progress, with regard to new business operations for Broadleaf
Capital, in the coming days."

                         *   *   *

As reported in the May 17, 2002 edition of Troubled Company
Reporter, Broadleaf Capital Partners has an accumulated deficit
of $15,623,929 and $11,968,843 as of December 31, 2001 and 2000,
respectively. The Company incurred losses of $3,655,086 and
$8,616,328 for the years ended December 31, 2001 and 2000,
respectively. The Company also has certain debts that are in
default at December 31, 2001. The Company's stockholders'
deficit at December 31, 2001 and 2000 was $ 3,660,822 and
$790,039, respectively, and its current liabilities exceeded its
current assets by $4,003,229 and $1,683,089, respectively.

These factors create uncertainty about the Company's ability to
continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company
obtaining adequate capital to fund operating losses until it
becomes profitable. If the Company is unable to obtain adequate
capital it could be forced to cease operations.


BURLINGTON INDUSTRIES: Court Fixes July 22 General Bar Date
-----------------------------------------------------------
Judge Newsome authorizes Burlington Industries, Inc., and its
debtor-affiliates to establish their General Bar Date, by which
all entities must file proofs of claim in their chapter 11
cases, on July 22, 2002.

Burlington Industries' 7.250% bonds due 2005 (BRLG05USR1) are
trading at about 16, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BRLG05USR1
for real-time bond pricing.


CANADIAN IMPERIAL: Negotiates $3MM Private Placement Financing
--------------------------------------------------------------
Canadian Imperial Venture Corp. has negotiated a non-brokered
private placement of 10,000,000 units at a price of $0.30 each,
for a total of $3,000,000. Participants in the private placement
can choose one of the following two options or a combination of
the two:

    Option 1:   Flow Through Units

Each unit consists of one flow through common share in the
capital of the Company.

    Option 2:   Non-Flow Through Units

Each unit consists of one common share in the capital of the
Company and one-half of one non-transferable share purchase
warrant. One whole warrant will entitle the holder to buy an
additional share in the capital of the Company for a period of
two years at a price of $0.50 per share.

All securities issued under the private placement will be
subject to a twelve-month hold. However, the Company will use
its best efforts to file an Annual Information Form before
closing that would reduce the hold period on the private
placement to four months. The proceeds from the private
placement will be used to advance the development of the
Company's Garden Hill oil field. The private placement is
subject to regulatory acceptance.

Certain of the Directors will be participating in the private
placement. Their participation is being funded by the proceeds
from prearranged past sales of common shares of the Company
personally held by the directors.

As a result of last year's drilling program and recent flow and
pressure testing of Port au Port No. 1 at Garden Hill, the
Company's exploration consultant, Tectonics Inc. has made
further refinements of the geological model for the prospective
inversion fairway, which the Company now holds under Lease. This
model, while unique in itself, incorporates elements from the
giant, fracture controlled Albion-Scipio fields in Michigan,
karsting and multi-stage dolomolization as seen in the
Ellenberger Formation of West Texas and the hydrothermal
dolomite reservoir of the Ladyfern field of North-eastern
British Columbia. Based on these considerations, the prospective
inversion fairway, which includes Garden Hill South, has the
potential to contain hydrocarbons in the range of 200 to 400
million boe recoverable.

As part of its multi well drilling program for its Garden Hill
field, the Company has pre drilled and set conductors for Port
au Port No. 2 and No. 3. It has also engineered and built a
concrete pad to allow the Simmons No. 31 drill rig to skid over,
drill and/or work over Port au Port No. 1, No. 2 or No. 3. The
Company originally spudded Port au Port No. 2 on July 31, 2001
and it was drilled, cased and suspended at 500 meters. Simmons
Drilling will commence rigging up on June 4, 2002 for the re-
entry and drilling of Port au Port No. 2.

Port au Port No. 2 will be drilled to a target structurally
higher and approximately 300 meters NNE of Port au Port No. 1.
At this location, the Company anticipates improved reservoir
quality within the oil leg produced in Port au Port No. 1,
allowing for higher production rates estimated to be in the
range of 2000 - 8000 barrels of oil per day. Projected depth for
Port au Port No. 2 is 3,650 meters.

Canadian Imperial, as the Operator of the Garden Hill field,
holds a 50% working interest in the development. Under this
agreement, the Company's partners must contribute 50% of the
drilling and development costs in order to maintain their
working interest.

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

                         *   *   *

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

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


CELEXX CORP: New Funds Needed to Meet Projected Working Capital
---------------------------------------------------------------
CeleXx Corporation acquires, develops, integrates and manages
private businesses that produce, service, maintain or support
the information technology industry. Operations are organized
into two groups according to function: Performance Media, and
Special Applications. Corporate headquarters, located in Coral
Springs, Florida, provides certain essential services to its
operating companies and manages the synergies between the
operating units.

On January 14, 2002, the Estate of David R. Burke, Sr., a former
principal officer and shareholder of the Company, filed suit
against the Company, accelerating the payment of a Note due the
Estate for approximately $914,000, plus interest, legal fees and
associated costs. The Estate also sought foreclosure on all
Computer Marketplace, Inc. ("CMI ") common stock, which was
pledged as collateral for the Note, for sale by the Estate for
the purpose of satisfying the Company's obligations under the
Note. The Company did not have the ability to repay the Note
without a financing or a disposition of certain assets.

On January 18, 2002, the Company stipulated in open court to the
settlement and dismissal of litigation between the Estate and
the Company that was pending in the Federal District Court for
the State of Massachusetts. The litigation related to a Note due
the Estate from the purchase of CMI by the Company in April
2000.

On April 2, 2002, the Company closed the settlement of its
pending litigation with the Estate. Pursuant to the settlement,
the Estate became the owner of CeleXx's former wholly owned
subsidiary, CMI. The settlement provided to CeleXx a promissory
note for $42,000, relief of payment for the note due the Estate
for $914,000 and the surrender by the Estate of approximately 16
million shares of CeleXx common stock (approximately 28% of the
outstanding shares), which CeleXx intends to hold in treasury
until the shares are cancelled.

Revenues for the three months ended March 31, 2002 totaled
$250,888 compared with $545,765 during the same quarter of 2001,
representing a decrease of approximately $295,000 in revenues.
Revenues for the nine months ended March 31, 2002 was $
1,154,603 compared with $1,603,858 during the same quarter of
2001, resulting in a decrease of approximately $449,000 in
revenues. The reduction in reported revenues for the quarter and
for the nine month period are in great part due to the industry-
wide slowdown in demand in the United States for PC and related
information technology products and services resulting in
overall reduction of IT spending, which CeleXx believes was
exacerbated by the September 11th terrorist attack on the World
Trade Center in New York City and subsequent economic recession.
Revenues from the sale of e-Learning systems and web-based
training solutions also posted a decline when compared to the
same period in 2001, as a result of a loss in approximately 30%
of revenues from the Learning Management System business. This
decline reflects an industry-wide decline and can also be
attributed to the general economic slowdown and fall in demand
for IT products and services. The lack of a strong consolidated
financial position for the Company has also resulted in the loss
of several significant potential contracts by its e-Learning
division.

Including the results of discontinued operations, aggregate net
loss decreased $198,558 and increased $362,574, or -24%% and
+8%, to $624,702 and $4,770,376 for the quarter and nine-months
ended March 31, 2002; compared with $823,259 and $4,407,802, in
2001. The net loss per common share decreased from $0.03 for the
quarter ended March 31, 2001 to $0.01 in the quarter ended March
31 2002, resulting in an increase of $.02 per share. Net loss
per common share for the nine-months ended March 31, 2002 was
$0.09, representing a decrease of $0.09 over the nine-month
period ended March 31, 2001. The primary factors affecting the
aforementioned changes was the impairment write-off of
unamortized goodwill and intangible assets of $2,706,953,
estimated operating losses from the measurement date to the
anticipated disposal date of $165,000 from the recognition of
CMI operations as discontinued operations and, the effect on
loss per common share as the result of the Company issuing
additional shares of common stock primarily in the third and
fourth quarters of fiscal year ended June 30, 2001, principally
on the 14.7 million contingent shares issued pursuant to the
acquisitions of CMI and Pinneast.

CeleXx currently has no commitments for additional financing,
and cannot be sure that any additional financing would be
available in a timely manner, on acceptable terms, or at all.
Further, any additional equity financing could reduce ownership
of existing stockholders and any borrowed money could involve
restrictions on future capital raising activities and other
financial and operational matters. If unable to obtain
additional financing as needed, the Company could be required to
reduce operations or any anticipated expansion, which could hurt
financially. Consideration is also given to the sale of some of
the company's assets as a means of securing additional funds, if
the Company is unable to obtain financing from conventional
lenders.

Management of the Company believes that the Company will require
additional cash infusions to meet its projected working capital,
strategic acquisitions and other cash requirements in its
current fiscal year ending June 30, 2002 and management is
working closely with lenders, investment bankers and others to
meet these projected needs.  The report of the company's
independent public accountants on its financial statements for
the year ended June 30, 2001 states that CeleXx' recurring
operating losses, reduced working capital, and other factors
raise substantial doubt about its ability to continue as a going
concern. The Company's financial position at March 31, 2002
reflects a negative working capital of approximately $2.5
million. This working capital saturation will be improved with
the relief of payment for the note due the Estate for $914,000
as discussed above, however the Company continues to be under a
sever cash shortage. Current working capital requirements,
primarily from the Company's corporate headquarters, are not
adequate to meet its current requirements, without delving
further in the subsidiary's available cash funds and impairing
its continued operations. Substantial additional capital will be
needed in order to fund future operations.


CHANCE INDUSTRIES: Emerges From Chapter 11 Bankruptcy Protection
----------------------------------------------------------------
The Wichita Business Journal reports that the top executive of
Chance Industries says the amusement ride manufacturer is ready
to emerge from chapter 11 bankruptcy protection.  Through the
reorganization, a new company -- Chance Rides Manufacturing Inc.
-- has been formed which acquired all the assets of Chance
Industries and has taken on new business totaling more than $4
million, the online newspaper reported.  The company sought
bankruptcy protection in April 2001. (ABI World, May 28, 2002)


COMMONWEALTH BIOTECH: Auditors Express Going Concern Opinion
------------------------------------------------------------
Commonwealth Biotechnologies' revenues are derived principally
from providing macromolecular synthetic and analytical services
to researchers in the biotechnology industry or who are engaged
in life sciences research in government or academic labs
throughout the world. Development of innovative technologies for
biotechnology requires sophisticated laboratory techniques and
the Company provides these services to customers on a contract
basis. The Company's customers consist of private companies,
academic institutions and government agencies, all of which use
biological processes to develop products for health care,
agricultural, and other purposes.

Commonwealth Biotechnologies incurred losses totaling $96,024
during the quarter ended March 31, 2002 and has a history of
losses that have resulted in an accumulated deficit of
$8,334,210 at March 31, 2002. In addition, the Company has had
negative cash flows in three of the past five years. The years
in which the Company reached positive cash flows were years in
which equity offerings were completed. There is substantial
doubt about the Company's ability to continue as a going
concern.

Since 1997 and through 2002, the Company incurred recurring
operating losses due to increased operating costs without
corresponding increases in revenues. Through 2001, these
deficits were substantially funded through use of funds obtained
from a private placement and its Initial Public Offering. The
Company has also used proceeds from its offerings for capital
acquisitions, which were primarily funded through its issuance
of Industrial Revenue Development Bonds. At December 31, 2001,
the Company had used virtually all of the funds received in
connection with its offerings.

At the outset of 2002, the Company is in an uncertain cash
position. However, management believes that the Company has the
capacity to address the immediate needs for cash and liquidity
through an aggressive approach on a number of fronts. In 2001,
when confronted with potentially static revenues and declining
cash reserves, management reduced staffing through layoffs and
attrition and reduced or eliminated non-production related
expenditures. Fiscal practices have been strictly enforced which
restricted all material purchases to service on-going work only
and serve to minimize all material inventories.

There can be no assurance that any funds required during the
next twelve months or thereafter can be generated from
operations or that if such required funds are not internally
generated that funds will be available from external sources,
such as debt or equity financing or other potential sources. The
lack of adequate cash reserves resulting from the inability to
generate cash flow from operations or to raise capital from
external sources would force the Company to substantially
curtail or cease operations and would, therefore, have a
material adverse effect on its business. The Company is actively
exploring the viability of varying financial and strategic
transactions, which, if consummated, would address the Company's
need to improve its financial condition and/or its operations.

There can be no assurance, however, that any such required
funds, if presented, will be available on attractive terms or
that they will not have a significantly dilutive effect on the
Company's existing shareholders. The Company's independent
auditors have included a paragraph emphasizing "going concern"
in their report on the Company's 2001 financial statements.


CONDOR SYSTEMS: EDO Inks Agreement to Acquire Assets for $112MM+
----------------------------------------------------------------
Condor Systems Inc., a leading supplier of electronic
intelligence equipment to the military and private industry,
said that it is being acquired by EDO Corporation of New York.

Under terms of the proposal, EDO would acquire nearly all of
Condor's assets and businesses for approximately $112.3 million
in cash and assumed liabilities, including accounts payable,
obligations relating to employees and standby letters of credit.

"We believe this is a very positive development for our company
and we are very excited about partnering with an industry leader
like EDO," said Condor's President and CEO Kent Hutchinson.
"This will allow us to meet our obligations and continue serving
our customers which has been our goal all along."

Condor filed for Chapter 11 restructuring late last year. The
company was progressing well with its reorganization plan when
the EDO offer was presented, Hutchinson said.

The boards and senior management of both companies have approved
the proposed acquisition, which is still subject to Bankruptcy
Court approval. Current employees will be offered employment and
special incentives have been offered to retain Condor's key
technical and management staff through the transition, officials
said.

"Our cultures are highly compatible and our senior managers have
known and respected each other for many years," said EDO's
Chairman, President and CEO James M. Smith. "We are excited by
the potential of this proposed acquisition to significantly
improve EDO's ability to serve customers in the defense
intelligence communities around the world."

Condor, founded in 1980, is privately held and employs about 420
employees here and at its facilities in Simi Valley.

EDO is publicly traded (NYSE:EDO) with 2001 annual revenues of
$260 million and about 1,400 employees. The defense electronics
company supplies highly advanced electronic, electromechanical
and information systems and engineered materials to governments
and private industry customers worldwide.


CONSECO: Moody's Junks Debt Ratings & Voices Bankruptcy Worries
---------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of Conseco,
Inc. and certain affiliates.

Rating Action                               To            From

                         Conseco, Inc.

* old notes -- senior debt rating          Caa1            B2;

* prospective senior debt shelf rating   (P)Caa1          (P)B2,

* senior subordinated debt rating          Caa2            Caa1;

* senior subordinated debt shelf rating  (P)Caa2        (P)Caa1;

     Conseco Financing Trusts I, II, III, IV, V, VI, and VII

* preferred stock ratings                   Caa3           Caa2;

    Conseco Financing Trusts IV,V,VI, VII, VIII, IX, X and XII

* Prospective preferred stock shelf
  ratings                                 (P)Caa3       (P)Caa2;

                 Conseco Annuity Assurance Company

* insurance financial strength rating       Ba3            Ba2;

                 Bankers Life and Casualty Company

* insurance financial strength rating       Ba3            Ba2;

                 Conseco Variable Insurance Company

* insurance financial strength rating       Ba3            Ba2;

              Conseco Senior Health Insurance Company

* insurance financial strength rating       Ba3            Ba2;

                  Conseco Health Insurance Company

* insurance financial strength rating       Ba3            Ba2;

              Conseco Direct Life Insurance Company

* insurance financial strength rating       Ba3            Ba2;

                 Conseco Life Insurance Company

* insurance financial strength rating       Ba3            Ba2;

               Washington National Insurance Company

* insurance financial strength rating       Ba3            Ba2;

                       Conseco Finance Corp.

* senior debt rating                         Caa1           B2;

* Prospective senior debt shelf rating    (P)Caa1         (P)B2;

* senior subordinated debt rating           Caa2           Caa1;

* prospective senior subordinated debt
  shelf rating                            (P)Caa2       (P)Caa1;

                  GT Capital Trusts I, II, III, and IV

* preferred shelf ratings                 (P)Caa3       (P)Caa1.

At the same time Moody's also affirmed Conseco Finance's short-
term debt rating for commercial paper at Not Prime; and
Conseco's preferred stock and prospective preferred stock
ratings at Ca and (P) Ca, respectively.

Moody's, on March 18, 2002, indicated that a rating slide on the
old senior debt was likely the result of Conseco's planned
exchange offer. However, the company's present slower than
anticipated rate of generating cash and its continued weak
performance from its subsidiaries leads Moody's to believe that
a possible bankruptcy is the more pressing worry.

"The restructuring provides Conseco with modest added financial
flexibility. It is also noted that the uncertainty of the
company's cash sources is heightened by the fragile economic
environment," Moody's stated.

Conseco [NYSE: CNC], headquartered in Carmel, Indiana, USA, is a
specialized financial services holding company which, through
its subsidiaries, operates in two major lines of business,
insurance and fee based operations through its life and health
insurance companies, and finance operations primarily through
Conseco Finance. Conseco reported consolidated GAAP assets of
$61.5 billion and a shareholders' equity of $4.6 billion as of
March 31, 2002.

DebtTraders reports that Conseco Inc.'s 10.75% bonds due 2008
(CNC08USR1) are quoted at a price of 38. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC08USR1for  
real-time bond pricing.


CONSECO: Gary Wendt Bunks Moody's Downgrade & Speculations
----------------------------------------------------------
Conseco (NYSE:CNC) Chairman and CEO Gary Wendt released this
statement concerning this week's action by Moody's:

     "We take strong issue with the timing of and the language
used to support today's ratings action by Moody's.

     "The basis cited for today's action was information that is
between four and six weeks old.  And, to the extent the action
is based on reported first quarter earnings, it is based on
information that is now two months old.

     "Let me quickly set the record straight with respect to the
two issues raised by Moody's as the basis for their action.

     "First, Moody's states that our cash raising is "slower
than anticipated."  As we have made clear for the past several
months, the need to raise cash quickly was alleviated by the
amendments that we negotiated with our banks.  That new bank
agreement gave us much greater flexibility than we anticipated
at the beginning of this year.  

     "As we have said before, the bank agreement and the reduced
urgency for cash raising is highly beneficial to the company.  
We could have amassed a larger amount of cash by today, but we
might have paid dearly for the haste.  We do not need to rush,
and we have no intention of minimizing value for our
shareholders in order to meet artificial deadlines imposed by
observers with no stake in the outcome of the turnaround.

     "Our cash raising results are virtually unchanged since
reported 4 weeks ago.  All deals are on schedule.  In fact, one
has improved, and a new opportunity is also being discussed.  As
other analysts have reported, we believe 2002 is well in hand
and we are hard at work on 2003 and the permanent capital
structure of the company.  Thus, we are not spending our days
worrying about whether or not we will remain a going concern.

     "Second, Moody's states that our operating performance is
"continued weak."  To issue such a statement a month after an
earnings release and two months after the end of the reporting
period implies knowledge of interim performance that Moody's
does not have.  

     "As our previously stated earnings guidance indicates, we
expect operating performance to improve throughout the year.  It
is true that the hint of improvement in the economy will need to
bear fruit in order to meet those objectives, but we are
increasingly optimistic about that prospect.

     "Finally, while the Moody's statement goes to some length
to report the results of our bond exchange (which we released on
April 18), it fails to overtly say that the new bonds issued in
that exchange were not downgraded.

     "In sum, neither of the bases for the ratings downgrade are
causes for concern.  We continue to execute actions to improve
the long-term operations of the company.  And we continue to
work through the reduction of debt and the creation of a long-
term capital structure that have been, and remain, the focus of
this turnaround.

     "We regret having to take public issue with Moody's.  But,
the progress of this turnaround merits a balanced perspective."  


CONSOLIDATED FREIGHTWAYS: Names John Brincko to Lead Company
------------------------------------------------------------
Consolidated Freightways Corporation (CF)(Nasdaq:CFWY) announced
that, to ensure the successful completion of its strategic
restructuring, it has engaged a proven turnaround professional
to lead the company.

The Board of Directors has elected John P. Brincko, a respected
business turnaround specialist, as the company's new president
and chief executive officer.

The Board has been reviewing the company's restructuring
progress on an ongoing basis, with attention to improved
customer services, operational efficiency, revenue enhancement
and greater financial flexibility. The Board and Patrick Blake,
who has been president and CEO for the past two years, have
determined that CF's restructuring has reached the point at
which the company requires an experienced business turnaround
professional to carry the process forward to successful
completion. As Brincko begins the next phase of CF's
restructuring, Blake has elected to retire from the company and
the Board.

Brincko brings to CF a long and successful history in managing
turnaround situations, including Sun World International, Inc.,
Barney's New York, Mossimo, Inc., Globe Security and Stroud's.
With over 30 years of executive, financial and operational
management experience, he has served as president and chief
executive officer of many businesses, in numerous restructuring
situations.

Among the companies for which he has served as president and
chief executive officer are Knudsen Foods, Inc., Foremost
Dairies and CalComp Technology, Inc., a publicly traded
subsidiary of Lockheed Martin. Brincko owns and manages Brincko
Associates, Inc., an international management-consulting firm he
founded in 1979.

Chairman of the Board William Walsh commented: "Consolidated
Freightways has progressed in its restructuring efforts to a
point where the company will be well served by the turnaround
experience which John Brincko will provide the company. Pat
Blake developed the foundation of our restructuring agenda,
particularly in the areas of operations and financing. John
Brincko will now apply his special skills to bring the
restructuring to a successful conclusion and to position CF as a
strong competitor. John has an impressive track record of
helping large companies complete successful business turnarounds
and return to profitability. That is our goal.

"The Board of Directors thanks Pat Blake for 33 years of
outstanding, dedicated service to this company and for providing
CF with the foundation to continue the restructuring," Walsh
said.

Consolidated Freightways Corporation (Nasdaq:CFWY) is a $2.2
billion company comprised of national less-than-truckload
carrier Consolidated Freightways, third party logistics provider
Redwood Systems, Canadian Freightways LTD, Grupo Consolidated
Freightways in Mexico and CF AirFreight, an air freight
forwarder.

Consolidated Freightways is a transportation company primarily
providing LTL freight transportation throughout North America
using its system of 300 terminals and over 18,000 employees.

At March 31, 2002, Consolidated Freightways Corp. had a working
capital deficiency of about $20 million.


COVANTA ENERGY: Panel Concerned About Debtors' Multiple Lawyers
---------------------------------------------------------------
Michael J. Canning, Esq., Counsel to the Official Committee of
Unsecured Creditors at Arnold & Porter in New York, notes that
during the period from April 2, 2002 through April 8, 2002,
Covanta Energy Corporation and its debtor-affiliates filed
applications to employ or retain Cleary Gottlieb, Jenner &
Block, LeBoeuf Lamb, Hogan & Hartson, Kilpatrick Stockton, and
Nixon Peabody.

The Committee has reviewed the Professional Applications,
together with the Affidavit of Jeffrey R. Horowitz of Covanta
Energy Corporation in Support of First Day Motions and
Applications and in Compliance with Local Rule 1007-2.

Although Mr. Canning states the Committee is not "formally
objecting" to the Applications, the Committee tells Judge
Blackshear that it is concerned about the multiple retention of
Debtors' counsel and their intended representations. The
Committee is worried that there is a possibility of "duplication
and overlap of responsibilities."

In light of the large number of professionals being employed by
the Debtors, Mr. Canning asserts that it is "important that the
Debtors exercise prudent deployment of counsel in connection
with these Chapter 11 cases. They must ensure that redundant
efforts are not undertaken, and to that end the Committee
intends to be particularly vigilant in objecting to the charging
of fees and expenses by these professionals. . . ." (Covanta
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


DIVA SYSTEMS: Files for Chapter 11 Reorganization in California
---------------------------------------------------------------
Wednesday, DIVA Systems Corporation filed for reorganization
under Chapter 11 of the United States Bankruptcy Code in the
U.S. Bankruptcy Court for the Northern District of California,
and at the same time filed a voluntary, pre-negotiated plan of
reorganization which provides for a wholly-owned subsidiary of
Gemstar-TV Guide to acquire substantially all of DIVA's assets,
and for Gemstar-TV Guide to be a joint proponent of the plan.

Holders of more than a majority of DIVA's outstanding Notes have
agreed to support the plan of reorganization. On the Effective
Date of the plan, DIVA will receive shares of Gemstar-TV Guide
Common Stock for distribution to DIVA's creditors in accordance
with the terms of the plan of reorganization, and Gemstar-TV
Guide will own DIVA's technology and assets.

"This sale marks the end of a long and arduous journey to
reposition DIVA. We could not have accomplished our mission
without the strong and continuing support from our employees,
Board of Directors and strategic stakeholders. The sale also
represents a new beginning for the unique resources that make up
DIVA. Gemstar-TV Guide will leverage our innovative server-based
technology and expertise," said Henk Hanselaar, DIVA's president
and chief executive officer. "This technology marriage between
Gemstar-TV Guide and DIVA has the potential to significantly
change cable consumers' interactive TV experience."

DIVA anticipates that the Chapter 11 reorganization process DIVA
and Gemstar-TV Guide have embarked upon should take from 60 to
120 days to complete. Until the acquisition is completed, DIVA
will continue to operate its day-to-day business as the "debtor
in possession" under the Bankruptcy Code.

"DIVA intends to continue to work closely with its MSO
customers, AT&T Broadband, Charter Communications, and Insight
Communications, to provide quality video-on-demand (VOD)
products and services through the transition to Gemstar-TV
Guide," stated Hanselaar.

"The employees of DIVA, both past and present, have made DIVA
what it is today -- a tremendously creative and innovative
company that made significant contributions to the cable and
interactive TV industry. These employees created the foundation
for VOD and server-based technology as we know it today,"
concluded Hanselaar.

Since 1995, DIVA has been a leading video-on-demand solutions
provider to the cable television industry, with the industry's
most commercially deployed, operational VOD systems. DIVA's
advanced video-on-demand solutions provide consumers with
complete control over their viewing experience and, with VCR-
like capabilities, they can watch new releases, library films
and basic and premium cable programming, as well as children's
programming. DIVA's hardware and software products are
interoperable and based on industry standards, providing cable
operators with the most flexible VOD solution.

The core of the DIVA VOD solution, the system software, provides
unparalleled ability to tailor and manage services in an effort
to maximize revenue per household. DIVA also offers system
integration, content management and network operations services,
all of which enhance cable operators' control and time to
market. DIVA's products are commercially deployed and
operational in 28 systems by large-scale operators such as AT&T
Broadband, Charter Communications and Insight Communications,
which together reach 44 percent of all U.S. digital cable
subscribers. Founded in June 1995, DIVA is a privately held
company and is headquartered in Redwood City, Calif. DIVA's
strategic investors include Charter Communications, NTL, OpenTV,
Starz Encore, Liberate and Motorola. DIVA is a registered
trademark of DIVA Systems Corporation.


DIVA SYSTEMS: Reaches Pact to Sell Assets to Gemstar-TV Guide
-------------------------------------------------------------
Gemstar-TV Guide International, Inc. (NASDAQ:GMST) has reached
an agreement with DIVA Systems Corporation whereby, as part of a
pre-packaged bankruptcy and subject to acceptance of the
Reorganization Plan, Gemstar-TV Guide will acquire substantially
all of the assets of DIVA, a leading provider of server-based
technology and software systems for cable television. In
connection with this transaction, DIVA Systems Corporation filed
a Chapter 11 Reorganization Plan with the Northern District of
California Bankruptcy Court. Pursuant to the Plan, Gemstar-TV
Guide will acquire the emerging assets. Gemstar-TV Guide also
currently plans to incorporate various aspects of the DIVA
technology with its various products and services including the
interactive program guide technology to expedite streaming video
and T-Commerce capabilities.

Furthermore, it is anticipated that as part of the recently
announced relationship between Gemstar-TV Guide and Thomson
multimedia (NYSE:TMS), Thomson will participate in finding ways
to integrate this software and technology into the planned
building out of an interactive television two-way response
network. Both Gemstar-TV Guide and Thomson are interested in the
DIVA two-way response technology as building blocks for
interactive television services.

"We believe the addition of DIVA's server-based technology to
our IPGs, for example, will accelerate our ability to deliver
full-motion advertising, movie trailers and other promotional
content to viewers through the IPG. Gemstar will continue to
focus on those technologies that add further interactivity and
utility to our IPGs. This will make the products more attractive
and useful to consumers, advertisers and to our MSO partners
alike," said Henry C. Yuen, Chairman and CEO of Gemstar-TV
Guide.

"We are extremely pleased that we are able to merge DIVA's
world-class technology and resources with the leader in
interactive television," said Henk Hanselaar, President and CEO
of DIVA. "Gemstar-TV Guide is the company best positioned to
assist our current cable customers with their ITV initiatives
while taking DIVA's technology and software vision even
further." Mr. Hanselaar added, "We will work closely with
customers of both DIVA and Gemstar-TV Guide to ensure a smooth
integration of technologies."

Gemstar-TV Guide International, Inc. is a leading global
technology and media company focused on consumer entertainment.
The Company has three major business sectors: the Technology and
Licensing Sector, which is responsible for developing, licensing
and protecting the Company's intellectual property and
technology -- the Company's technology includes the VCR Plus+(R)
system, interactive program guide products and services marketed
under the GUIDE Plus+(R) and TV Guide Interactive(SM) brands and
the electronic book [Gemstar eBook(TM)]; the Interactive
Platform Sector, which derives recurring income from
advertising, interactive services, content sales and e-commerce
on the Company's proprietary platforms, including IPG,
tvguide.com, eBook and skymall.com; and the Media and Services
Sector, which operates the TV Guide(R) magazines, TV Guide
Channel(SM), TVG Network(SM), and other television media
properties, provides programming and data services, sells
merchandise through the SkyMall(TM) catalog and operates a media
sales group that services all of the Company's media properties.

The IPG products are integrated into various devices, including
televisions, VCRs and set-top boxes (cable, satellite, telco,
Internet) and can display a multi-day television program guide
on the television screen from which the consumer can view,
select, tune to or record programs. The Gemstar eBook is a
reading device that can store tens of thousand of pages, and
permits a user to purchase and receive instant delivery of any
book, magazine or newspaper over a standard telephone line.

Over 100 million people in the U.S. use the Company's media
properties every week, and its products and services are
available in over 60 countries worldwide.

The Company's services, technology and intellectual property are
licensed to major technology, media and communication companies
in the consumer electronics, Internet, personal computer,
satellite, cable television and telco industries. Licensees and
customers include Adelphia, AOL Time Warner, AT&T, Cablevision,
Charter, Comcast, Cox, Matsushita, Microsoft, Mitsubishi,
Motorola, Philips, Shaw, Sony, Thomson Multimedia, Zenith and
others. The Company has more than 200 issued U.S. patents in the
general area of audio-visual technologies with over 5,000
claims, over 320 issued foreign patents, and continues to
actively pursue a worldwide intellectual property program and
currently has roughly 350 U.S. and 1,300 foreign patent
applications pending.

DIVA is the nation's leading video-on-demand solutions provider
to the cable television industry, with the industry's most
commercially deployed, operational VOD systems. DIVA's advanced
video-on-demand solutions provide consumers with complete
control over their viewing experience and, with VCR-like
capabilities, they can watch new releases, library films, and
basic and premium cable programming, as well as children's
programming. DIVA's hardware and software products are
interoperable and based on industry standards, providing cable
operators with the most flexible VOD solution. DIVA's new DVS
6000 combines completely off-the-shelf hardware with DIVA server
software, resulting in the industry's most compact, scalable and
reliable video streaming solution. The core of the DIVA software
solution, the DIVA System Manager (DSM), provides unparalleled
ability to tailor and manage services in an effort to maximize
revenue per household. DIVA also offers system integration,
content management and network operations services, all of which
enhance cable operators' time to market. DIVA's products are
commercially deployed and operational in 28 systems by large-
scale operators such as AT&T Broadband, Charter Communications
and Insight Communications, which together reach 44 percent of
all U.S. digital cable subscribers. Founded in June 1995, DIVA
is a privately held company and is headquartered in Redwood
City, Calif. DIVA's strategic investors include Charter
Communications, NTL, OpenTV, Starz Encore, Liberate and
Motorola. DIVA is a registered trademark of DIVA Systems
Corporation. More information can be found at
http://www.divatv.com


ENRON: Upstream Seeks Separate ENA Creditors' Panel Appointment
---------------------------------------------------------------
Upstream Energy Services asks the Court to direct the United
States Trustee to appoint a separate Official Creditors'
Committee for the creditors of Enron North America.  (Upstream
was agent for Texas Natural Gas Producers who supplied Texas
natural gas to Enron North America delivered during the month of
November). In the alternative, Upstream wants the Court to
require ENA to obtain a separate counsel to negotiate plan
issues with Enron and Enron's Official Creditors' Committee.

Barry A. Brown, Esq., at Houston, Texas, relates that Upstream
hates to further burden the Chapter 11 cases with additional
administrative expenses.  "However, the ENA creditors have been
and are being prejudiced by Enron and ENA having a single set of
attorneys and a single creditors' committee when it comes down
to preparation of a plan for ENA and obtaining repayment and
security of Enron's administrative debt to ENA," Mr. Brown
asserts.

Mr. Brown contends that there is good cause to appoint a
committee of creditors of ENA independent of the committee
representing creditors of other Enron entities.  "With whom,
representing only the best interests of the creditors of ENA's
estate, shall Enron through its counsel and Enron's creditors'
committee through its counsel negotiate Enron's plan provisions
for repayment of its administrative, post-petition debt to ENA?"
Mr. Brown asks.

For the same reason, Mr. Brown says, the Court should also order
ENA to obtain independent counsel in negotiating repayment by
Enron of Enron's massive debt to ENA.  Mr. Brown points out that
the interests of ENA as Debtor in Possession and of Enron as
Debtor in Possession are adverse.  According to Mr. Brown, ENA
is a Debtor in Possession, charged the collection of the
property of the estate in an expeditious manner and filing its
plan for repayment of its debts.

On the other hand, Mr. Brown notes, Enron is also a Debtor in
Possession.  "Its obligations in a reorganization context
include elements of maintaining prospective businesses and
husbanding its funds to that end," Mr. Brown explains.  
Accordingly, Mr. Brown emphasizes, Counsel for Enron and ENA as
debtors in possession must represent the interests of Enron and
ENA.  However, Mr. Brown observes that counsel for these two
debtors in possession have a conflict of interest brought about
by Enron's post petition taking of cash from ENA.  "Enron's
lawyers cannot zealously advocate the interests of ENA as a
post-petition administrative claimant to the bankruptcy estate
of Enron," Mr. Brown says.  Moreover, Mr. Brown doubts the
counsel could so divide their loyalty to maximize the time Enron
might obtain to repay ENA and ENA's efforts to realize on its
assets.  Besides, Mr. Brown notes, counsel attempting such dual
representation do not meet the tests of disinterest required of
retained professionals under Section 327(a) of the Bankruptcy
Code, as they are then representing an adverse interest.

                        ENA Responds

Enron North America asserts that Upstream Energy has provided
absolutely no evidence to substantiate its claim of conflict of
interest.  There is also no evidence to justify the appointment
of a separate ENA creditors' committee in the Chapter 11 cases.

Thus, ENA asks the Court to deny Upstream's motion. (Enron
Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ENRON CORP: Court Okays Proposed Wind Unit's Funds Allocation
-------------------------------------------------------------
Judge Gonzalez approves Enron Corporation and its debtor-
affiliates' proposed allocation of the purchase price of the
Enron Wind Business Sale.  The amount paid by the Buyer will be
allocated between the assets transferred by the U.S. Asset
Sellers and Specified Entities and the assets transferred by the
European Asset Sellers.

Summary of Allocation Alternatives:

                       Americas         Europe          Total
                       --------         ------          -----
2001 Revenue        $231,900,000    $371,800,000    $603,700,000
2001 Gross Margin     42,900,000      73,100,000     116,000,000
2001 EBITDA           17,400,000      33,700,000      51,100,000

2002 Revenue         379,000,000     556,000,000     935,100,000
2002 Gross Margin     62,100,000      95,200,000     157,300,000
2002 EBITDA           25,600,000      43,100,000      68,600,000

2003 Revenue         423,900,000     596,400,000   1,020,300,000
2003 Gross Margin    62,500,000      100,500,000     163,000,000
2003 EBITDA          26,400,000       45,400,000      71,800,000

Book Value           63,200,000      150,700,000     213,900,000

Purchase Price
Allocation         $121,100,000     $203,900,000    $325,000,000
                  =============    =============   =============
(Enron Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


EXIDE TECHNOLOGIES: Signs-Up PricewaterhouseCoopers as Auditors
---------------------------------------------------------------
Exide Technologies and its debtor-affiliates seek to employ and
retain PricewaterhouseCoopers pursuant to Section 327(a) of the
Bankruptcy Code to perform accounting, auditing and tax advisory
services for the Debtors in these Chapter 11 Cases.

According to Kathleen Marshall DePhillips, Esq., at Pachulski
Stang Ziehl Young & Jones P.C. in Wilmington, Delaware, PwC has
a wealth of experience in providing accounting, auditing and tax
advisory services in chapter 11 cases and enjoys an excellent
reputation for services it has rendered in large and complex
chapter 11 cases on behalf of debtors and creditors throughout
the United States. The services of PwC are necessary to enable
the Debtors to maximize the value of their estates. The Debtors
believe that PwC is well qualified and able to represent the
Debtors in a cost-effective, efficient, and timely manner.

Ms. DePhillips relates that PwC was engaged prepetition to
provide accounting, auditing and tax advisory services.  Since
then, PwC has gained an intimate knowledge of the Debtors'
operations and financial reporting, as well as an understanding
of the businesses' needs and goals.  Were the Court to deny PwC
retention in the Chapter 11 Cases, Ms. DePhillips argues, the
Debtors would be forced to engage a different firm to assist
with all accounting, auditing and tax advisory services.  This
transition period would result in additional costs and expenses,
which would be borne by the Debtors and their estates, in order
to enable the new firm to reach the level of familiarity
previously achieved by PwC in the Debtors' businesses.
Accordingly, the Debtors wish to retain PwC to perform
accounting and restructuring consulting services during the
Chapter 11 Cases.

PwC Partner John Kiely assures the Court that the firm has no
connection with the Debtors' creditors, equity security holders,
other parties-in-interest or their respective attorneys that
would cause PwC not to be a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.  However,
PwC has provided and likely will continue to provide services
unrelated to the Debtors' case for the various entities,
including:

A. Professionals: The Blackstone Group L.P., Kirkland & Ellis,
   Credit Suisse First Boston, Salomon Smith Barney, Goldman
   Sachs, Lehman Bros., William M. Mercer Inc., Reed Smith Shaw
   & McClay, Morrison & Foerster LLP, and McKinsey & Co.;

B. Committee Members: Bank of New York, HSBC Bank USA, and Offit
   Bank;

C. Secured Creditors: Credit Suisse First Boston, AG Capital
   Funding Partners, Aimco CDO 2000, Alliance Cap Fund, Alliance
   Investments Ltd., Allstate Life Insurance Co., Amara-1
   Finance Ltd., Archimedes Funding Ltd., Banco Popolare Di
   Bergamo, Bank of Montreal, Bank of Scotland, Bank One NA,
   Bank Polska Kasa Opieki SA, BNP Paribas, Bear Sterns
   Investment, BHF-Bank Akltiengesellschaft, Captiva Finance
   Ltd., CIC-Credit Industiel, Citicorp USA Inc., Comerica Bank,
   Constantinus Eaton Vance, Credit Agricole Indosuez, CSFB
   International, Cypress Tree Investments, Dai-Ichi Kangyo Bank
   Ltd., Dresdner Bank AG, Eaton Vance, First Dominion Funding,
   First Union National Bank, Fleet National Bank, Fortis Bank
   N.V., Franklin Ltd., GE Capital, General Motors, Investkredit
   Bank AG, JH Whitney Cash Flow Fund, Lehman Bros., Morgan
   Stanley, Oasis Fund, Octagon Investment Partners, Orix
   Finance Corp., Paribas Funding, Pilgrim Trust, Post Balanced
   Fund, Putnam Trust, Salomon Bros., Scotiabank PLC, Societe
   Generale, SP Offshore Ltd., Strong Bond Fund, Sumitomo
   Banking Co. Ltd., Textron Financial Corp., Three Rivers
   Funding Corp., Toronto Dominion Bank, and UBS AG;

D. Unsecured Creditors: Bank of New York, Doe Run Co., Praxair
   Distribution Inc., Enron, EDS Corp., JD Edwards Co., and Arch
   Chemicals Corp.;

E. Significant Lessors: Anixter Inc., GE Capital Corp., Finova
   Capital Corp., Heller Financial, Senstar Finance Co.,
   National City Leasing Corp., Fifth Third Leasing Co., Bank of
   Tokyo-Mitsubishi, Mellon Leasing, PHH/D.L. Peterson Trust, GE
   Capital Fleet Services, Ryder Truck Rental Inc., Excel Bank
   N.A., and Wells Fargo Equipment Lease;

F. Significant Shareholders: Loomis Sayles & Co. L.P., and
   Dimensional Fund Advisors;

G. Bondholders: Bank of New York, Bankers Trust Co., Bear-Sterns
   Securities Corp., Bank of America Securities LLC, Boston Safe
   Deposit & Trust Co., Brown Bros. Harriman & Co., Citibank
   N.A., Credit Suisse First Boston, Goldman Sachs & Co., J.P.
   Morgan Chase Bank, Morgan Stanley & Co., Northern Trust Co.,
   PNC Bank, State Street Bank & Trust Co., Union Bank of
   California, Ameritrade Inc., Bear Sterns Securities Corp.,
   Charles Schwab & Co., Deutsche Bank Securities Inc., A.G.
   Edwards & Sons Inc., Fleet National Bank, Legg Mason Wood
   Walker, Merill Lynch, National Financial Services Corp.,
   Prudential Securities, Salomon Smith Barney, UBS Paine
   Webber, and Wachovia Bank; and

H. Indenture Trustee: Bank of New York and Deutsche Bank;

In addition, to the best of Mr. Kiely's knowledge and based upon
the results of the relationship search described above, PwC
neither holds nor represents an interest adverse to the Debtors.
PwC will conduct an ongoing review of its files to ensure that
no conflicts or other disqualifying circumstances exist or
arise. If any new facts or relationships are discovered, PwC
will supplement its disclosure to the Court.

Mr. Keily states that PwC will provide accounting, auditing, and
tax advisory services as PwC and the Debtors shall deem
appropriate and feasible in order to advise the Debtors in the
course of the Chapter 11 Cases, including, but not limited to,
the following:

A. audits of the financial statements of the Debtors as may be
   required from time to time, and advice and assistance in the
   preparation and filing of financial statements and disclosure
   documents required by the Securities and Exchange Commission
   including Forms 10-K as required by applicable law or as
   requested by the Debtors;

B. audits of any benefit plans as may be required by the
   Department of Labor or the Employee Retirement Income
   Security Act, as amended;

C. review of the unaudited quarterly financial statements of the
   Debtors as required by applicable law or as requested by the
   Debtors;

D. review of and assistance in the preparation and filing of any
   tax returns;

E. performance of other related accounting services for the
   Debtors as may be necessary or desirable;

F. review of and assistance in the preparation and filing of
   bankruptcy-related schedules and documents like the Statement
   of Financial Affairs (SOFA) and Statement of Assets and
   Liabilities (SOAL) schedules;

G. advice and assistance regarding tax planning issues,
   including calculating net operating loss carry forwards and
   the tax consequences of any proposed plans of reorganization,
   and assistance in the preparation of any Internal Revenue
   Service (IRS) ruling requests regarding the future tax
   consequences of alternative reorganization structures;

H. assistance regarding existing and future IRS examinations;
   and

I. any and all other tax assistance as may be requested from
   time to time.

PwC, at the Debtors' request, may provide additional accounting,
auditing, and tax advisory services deemed appropriate and
necessary to the benefit of the estates.

PwC will seek payment for compensation on an hourly basis, plus
reimbursement of actual and necessary expenses incurred. PwC's
customary hourly rates as charged to both bankruptcy and
non-bankruptcy matters of this type by the professionals
assigned to this engagement are:

       Partners                             $595-665 per hour
       Managers/Directors                   $325-590 per hour
       Associates/Senior Associates         $170-380 per hour
       Administration/Paraprofessionals     $ 95-100 per hour

PwC has agreed to an annual audit fee of $2,363,000, consisting
of:

    US audit fees (excluding quarterly reviews)    $ 1,095,000
    US quarterly review fees                           140,000
    Foreign audit fees                               1,128,000
                                                   -----------
    Total audit fees (including quarterly reviews) $ 2,363,000

This base fee is subject to:

A. appropriate cooperation from the Company's personnel,
   including timely preparation of necessary schedules,

B. timely responses to inquiries, and

C. timely communication of all significant accounting and
   financial reporting matters.

When and if for any reason the Company is unable to provide
these schedules, information and assistance, PwC and the Debtors
will mutually revise the fee to reflect additional services
required, if any, to complete the audit. (Exide Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


FAIRPOINT: Clinches Debt-to-CLEC Unit Preferred Shares Swap
-----------------------------------------------------------
Standard & Poor's said that FairPoint Communications Inc.'s
(B+/Negative/--) agreement with lenders to convert about $122
million in a bank credit facility of FairPoint Communications
Solutions Corp., a CLEC subsidiary of FairPoint, into $93.9
million of FairPoint preferred stock redeemable in 2011 and
$27.9 million in new term loans to Solutions due in 2007 has no
impact on the company's credit rating or outlook. By selling a
substantial portion of Solution's assets in late 2001 and
reaching this agreement with lenders, FairPoint has effectively
limited its future financial exposure to Solutions.

Standard & Poor's rating on FairPoint already excludes the
financial impact of Solutions, based on management's commitment
to limit cash support for Solutions.


FANSTEEL INC: Gains Approval to Access $13 Million DIP Financing
----------------------------------------------------------------
Fansteel Inc. (OTC Bulletin Board: FNST) said that, in order to
facilitate its continuing operations without interruption, it
has secured the approval of the U.S. District Court for the
District of Delaware to a $13.1 million debtor-in-possession
credit facility from Congress Financial.  As a consequence, the
previously announced credit facility with HBD Industries and the
agreement regarding the sale of receivables to the CIT
Group/Commercial Services Inc. have been terminated.  In
addition, while Fansteel continues to explore the potential for
the sale of one or more businesses, Fansteel no longer believes
that the sale of such businesses may be necessary for the
continued funding of its operations.

On January 15, 2002, Fansteel Inc. and its U.S. subsidiaries
filed voluntary petitions for reorganization under Chapter 11 of
the United States Bankruptcy Code.  The filings were made in the
United States Bankruptcy Court in Wilmington, Delaware.  The
cases have been assigned to the Honorable Judge Joseph J.
Farnan, Jr.  Judge Farnan granted a withdrawal of the reference
of the cases from the Bankruptcy Court to the United States
District Court for the District of Delaware and the cases are
being jointly administered under Case Number 02-44.

  
FEDERAL-MOGUL: Wins Go-Signal to Assume Sr. Management Contracts
----------------------------------------------------------------
Judge Newsome approves the terms and conditions of Federal-Mogul
Corporation and its debtor-affiliates' Modified Employee
Retention Plan and authorizes the Debtors to make payments as
appropriate under the Modified Employee Retention Plan without
further order of the Court.  The Debtors' assumption of pre-
petition employment contracts with Messrs. Frank Macher, Charles
McClure and Joseph Felicelli, respectively, is approved and
authorized, provided that:

a. the employment contracts of Messrs. Macher and McClure that
   are being assumed are modified as set forth in the amendments
   set forth in the agreements, respectively;

b. the severance provisions of the employment contract with Mr.
   Felicelli must be modified as set forth in the severance
   agreement with Mr. Felicelli;

c. any dispute regarding what constitutes "Good Reason" (as that
   term is defined in the employment contracts of Messrs. Macher
   and McClure) will be determined by this Court; and,

d. no severance payments will be made to either Mr. Macher or
   Mr. McClure pursuant to their respective employment contracts
   without this Court's prior approval; (Federal-Mogul
   Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)

Federal-Mogul Corporation's 8.80% bonds due 2007 (FEDMOG6),
DebtTraders reports, are trading at about 21. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FEDMOG6for  
real-time bond pricing.


FLAG TELECOM: Brings-In Shearman & Sterling as Special Counsel
--------------------------------------------------------------
FLAG Telecom Holdings Limited and its debtor-affiliates seek
authority to employ Shearman & Sterling as special counsel as of
April 26, 2002, for the special purpose of:

   (a) representing the Debtors and their directors and officers
       who are indemnified by the Debtors in connection with
       class action litigation filed against the Debtors, and

   (b) advising the Debtors and their directors and officers
       with respect to executive employee benefit matters
       (including retention and severance programs and
       policies), and in all ancillary matters.

Kees van Ophem, Secretary General and Counsel of FLAG Telecom
Holdings Ltd., says the Debtors selected Shearman because the
Firm has extensive experience in the services being sought and
its engagement will be in the best interest of the Debtors and
their estates and creditors.

Shearman has represented debtors, creditors' committees,
institutional lenders, creditors and various other parties in
interest in bankruptcy cases including, among others, MPower
Holding Corp., Winstar Communications Inc., Pathmark Stores
Inc., Crown Vantage Inc., Long John Silver's Restaurants Inc.,
Iridium World Communications Ltd., Owens Corning, ICO Global
Communications, Discovery Zone, Alexander's Inc., ICG
Communications Inc., Rickel Home Centers Inc., Seaman Furniture
Co. Inc., Dow Corning Corp., Barney's Inc., First Capital
Holdings Corp., Prime Motor Inns Limited Partnership,
Olympia & York Realty Corp., The Caldor Corp., Bradlees Inc.,
R.H. Macy & Co. Inc., Sharon Steel Corp., Southmark Corp.,
Laventhal and Horwath, Ames Department Stores Inc., and The
Circle K Corp.

Shearman employs more than 1,000 attorneys in 18 cities and has
a large and diversified legal practice.

                         Disinterestedness

Douglas P. Bartner, Esq., a Shearman member, says the Firm does
not represent or hold any interest adverse to the Debtors or
their estates.  The Firm, its members, counsels and associates:

  (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 (3) years before the date of
      the filing of the Debtors' chapter 11 petitions, (i)
      investment bankers for a security of the Debtors, or (ii)
      an attorney for such an investment banker in connection
      with the offer, sale, or issuance of a security of the
      Debtor;

  (d) are not and were not, within two years before the date
      of the filing of the Debtors' Chapter 11 petitions, a
      director, officer, or employee of the Debtors or of any
      investment banker as specified in subparagraph (b) or (c);
      and

  (e) do not have an interest materially adverse to the interest
      of the Debtors' estates or any class of creditors or
      equity security holders, by reason of any direct or
      indirect relationship to, connection with, or interest in,
      the Debtors or an investment banker as specified in
      subparagraph (b) or (c), or for any other reason.

Mr. Bartner says Shearman has either represented or currently
represents these entities in matters unrelated to the Debtors'
Chapter 11 cases:

    (1) Global TeleSystems Inc.
    (2) K.I.N. (Thailand) Company Ltd., an affiliate of
        TelecomAsia Corporation Public Company Ltd.
    (3) Winstar Communications Inc.
    (4) UBS Warburg LLC
    (5) Deustche Bank/DB Securities
    (6)  Alcatel Submarine Networks
    (7)  Alcatel Italia S.P.A.
    (8)  France Telecom FCR
    (9)  Barclays Bank plc
    (10) IBJ Schroder Bank & Trust Company
    (11) Eaton Vance Management Inc.
    (12) Offit Hall Capital Management
    (13) China Telecom Hong Kong Ltd.
    (14) Vanguard Group Inc.
    (15) China Netcom Corporation Ltd.
    (16) Marubeni Corporation
    (17) Trust Company of the West
    (18) Pimco Advisors L.P.
    (19) AIG Global Investment Group.

                        Compensation

Mr. Bartner says Shearman charges for its services its customary
hourly rates and its customary reimbursements:

    Partners                $500 to $700 per hour
    Counsel and Associates  $195 to $495 per hour
    Paralegals and Clerks   $90 to $190

The Firm is customarily reimbursed for all expenses, including
travel costs, telecommunications, express mail, messenger
service, photocopying costs, document processing, temporary
employment of additional staff, overtime meals, Lexis and
Westlaw expenses, court fees and transcript costs. (Flag Telecom
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GADZOOX NETWORKS: Fails to Maintain Nasdaq Listing Standards
------------------------------------------------------------
Gadzoox Networks, Inc., (Nasdaq: ZOOX), a global supplier of
innovative Storage Area Network products, has received
notification from The Nasdaq Stock Market that it is out of
compliance with the minimum bid price requirement of $1.00 per
share set forth in Marketplace Rule 4450(a)(5).  Therefore, the
Company's securities are subject to delisting from The Nasdaq
National Market.  The Company has requested a hearing with
Nasdaq, and the stock will remain listed on The Nasdaq National
Market at least until the date of the hearing, which has not yet
been determined.  There can be no assurance the Nasdaq Listing
Qualifications Panel will grant the company's request for
continued listing after the hearing.

Since 1996 Gadzoox Networks has led the industry in market
"firsts" and continues to drive the Storage Area Network edge
market with innovative Fibre Channel switching technology.  The
company has consistently delivered a time to market advantage to
major OEM customers enabling them to create clear business value
for their customer base.  Gadzoox Networks is a voting member of
the Storage Networking Industry Association (SNIA), with
corporate headquarters located in San Jose, California.  For
more information about Gadzoox Networks' products and technology
advancements in the SAN industry, visit the company's Web site
at http://www.gadzoox.com


GENSCI REGENERATION: Ontario Regulator Halts Securities Trading
---------------------------------------------------------------
The Ontario Securities Commission issued a Temporary Cease
Trading Order on May 28, 2002 against GenSci Regeneration
Sciences Inc., for the company's failure to make statutory
filings. The hearing will take place on June 10, 2002 at 4:00
p.m.

                IN THE MATTER OF THE SECURITIES ACT
            R.S.O. 1990, c. S.5, AS AMENDED (the "Act")

                            - and -

                       IN THE MATTER OF

      JAMES S. TROTMAN, DOUGLASS C. WATSON, PETER B. LUDLUM,
ROBERT BECHARD, FRANK CLARK, DARRELL ELLIOTT, DAN W. KOLLIN, R.     
                 IAN LENNOX AND CLIFFORD A. NORDAL

                         TEMPORARY ORDER
                          (Section 127)

    WHEREAS it appears to the Ontario Securities Commission
that:

    1. GenSci Regeneration Sciences Inc. is incorporated under
the laws of Canada and is a reporting issuer in the Province of
Ontario.

    2. Each of James S. Trotman, Douglass C. Watson, Peter B.
Ludlum, Robert Bechard, Frank Clark, Darrell Elliott, Dan W.
Kollin, R. Ian Lennox and Clifford A. Nordal is, or was, at some
time since the end of the period covered by the last financial
statements filed by GenSci in accordance with the Act, a
director, officer or insider of GenSci and during that time had,
or may have had access to material undisclosed   information
with respect to GenSci.

    3. GenSci failed to file annual financial statements for its
financial year ended December 31, 2001 on or before May 21,
2002, contrary to subsection 78(1) of the Securities Act.

    4. As of the date of this order, GenSci has not filed its
Financial Statements.

    5. By virtue of his/her/its relationship, each Respondent
has had, or may have had access to information regarding the
affairs of GenSci that has not been generally disclosed.

    AND WHEREAS the Commission is of the opinion that is in the
public interest to make this order;

    AND WHEREAS the Commission is of the opinion that the length
of time required to conclude a hearing could be prejudicial to
the public interest;

    IT IS ORDERED pursuant to paragraph 2 of subsection 127(1)
and subsection 127(5) of the Act that:

    A. all trading, whether direct or indirect, by the
Respondents in the securities of GenSci shall cease until two
full business days following the receipt by the Commission of
all filings GenSci is required to make pursuant to Ontario
securities law; and

    B. this order shall take effect immediately and shall expire
on the fifteenth day after its making unless extended by the
Commission.

       DATED at Toronto, this 28th day of May, 2002.

       (signed)
          "John Hughes"
       ----------------------------------
       Manager, Corporate Finance Branch

                              *    *    *

As previously reported in the May 29, 2002 edition of Troubled
Company Reporter, GenSci Regeneration Sciences Inc. (TSE: GNS)
confirmed 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 advised that there would 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 confirmed 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. 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.

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
commissions.


GLENOIT CORP: Has Until August 6 to Make Lease-Related Decisions
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Glenoit Corporation and its debtor-affiliates obtained
an extension of their lease decision period.  The Court afforded
the Debtors until August 6, 2002 to elect whether to assume,
assume and assign or reject unexpired nonresidential real
property leases.

Headquartered in New York City, Glenoit Corporation is a
domestic manufacturer of small rugs, knit pile fabrics and an
importer and manufacturer of home products such as quilts,
comforters, shams, shower curtains, table linens, pillows and
pillowcases with operations in North Carolina, Ohio, California
and Canada. The Company filed for Chapter 11 protection on
August 8, 2000. Joel A. Waite, Esq. at Young, Conaway, Stargatt
& Taylor represents the Debtors in their restructuring efforts.


GLOBAL CROSSING: Signs-Up Ernst & Young for Advice Re Litigation
----------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates seek to employ
and retain Ernst and Young LLP to assist Debevoise & Plimpton in
its representation of the Debtors and certain current and former
officers and directors of the Debtors.  The representation will
be in connection with governmental investigations and inquiries
conducted by the Securities and Exchange Commission, the
Department of Justice and in connection any other similar or
related investigations or inquiries.  This representation will
also be in connection  with other related civil and shareholder
litigation which has been or may be initiated against the
Debtors or Officers and Directors.

Mitchell C. Sussis, Corporate Secretary of the Debtors, tells
the Court that they are familiar with the professional standing
and reputation of E&Y LLP. The Debtors understand that E&Y LLP
has a wealth of experience in providing various accounting and
other advisory services and enjoys an excellent reputation for
services it has rendered in connection with complex litigation
matters throughout the United States.

Pursuant to the terms and conditions set forth in the agreements
between Global Crossing and E&Y LLP and Debevoise, Mr. Sussis
relates that E&Y LLP was engaged, effective as of February 26,
2002 and subject to the ultimate approval of this Court, to
assist Debevoise in its representation of the Debtors and the
Officers and Directors. Since this time, E&Y LLP has developed a
great deal of institutional knowledge regarding the Debtors'
practices and records. Such experience and knowledge will be
valuable to the Debtors in its efforts to defend against various
litigation matters.

Mr. Sussis contends that the services of E&Y LLP are deemed
necessary to enable the Debtors to maximize the value of their
estates. Further, E&Y LLP is well qualified and able to
represent the Debtors in a cost-effective, efficient and timely
manner.

According to Mr. Sussis, E&Y LLP will provide any appropriate
and feasible advisory services to Debevoise in its capacity as
counsel to the Debtors and Officers and Directors in the
Proceedings. E&Y LLP's work will be performed at the sole
direction of Debevoise and will be solely and exclusively for
the purpose of assisting Debevoise in its representation of the
Debtors and Officers and Directors in the Proceedings. As such,
E&Y LLP's work will be of fundamental importance in the
formation of mental impressions and legal theories by Debevoise,
which will be used in counseling the Debtors and the Officers
and Directors and in the representation of the Debtors and the
Officers and Directors in the Proceedings. E&Y LLP's duties
under this retention will include the following:

A. Assist Debevoise in the identification, organization,
   production and presentation of the documents, data and other
   information currently requested in the Proceedings. This may
   include using electronic discovery techniques to review the
   information systems of the Debtors for documents, emails, and
   other records and information, including taking possession of
   the images of the servers and PC hard drives to search emails
   and files for messages and documents relevant to issues in
   the Proceedings. E&Y LLP will assist in the organization and
   production of the information so identified and captured.

B. Assist Debevoise in its analysis of the facts and
   circumstances related to the transactions that are the
   subject of the Proceedings.

C. Assist Debevoise in its analysis of the Debtors' accounting
   and other business processes in connection with Debevoise's
   representation of the Debtors and the Officers and Directors
   in the Proceedings.

Joseph R. Rosenbaum, a Partner of the firm of Ernst & Young LLP,
assures the Court that based on the results of a search it has
no connection with the Debtors, their creditors or other parties
in interest in this case.  It does not hold any interest adverse
to the Debtors' estates; and it believes it is a "disinterested
person" as defined within Section 101(14) of the Bankruptcy
Code. E&Y, however, currently represents several parties in
interests in matters unrelated to these cases including:

A. Indenture Trustee: Chase Manhattan Bank;

B. Claimants: 360 Communications Company, Bellsouth Corporation,
   Compusa Inc., Goodrich Associates, Great Bay Distributors,
   360 Inc., Itsa Intercontinental Telecomunicaciones, Network
   Associates Inc., Qwest Communication International Inc.,
   Southern California Edison, T2 Systems, Talk2 Technology,
   Timothy Callahan Investments, Verizon Communications,

C. Other Creditors: Credit Suisse First Boston, and Wachovia
   Corporation;

D. Secured Creditors: ABN Amro Trust Company, American Express,
   Associates Capital Corp. of Canada, Bancboston Ventures Inc.,
   Bank America Canada, Bank Nova Scotia, Bank Of Hawaii, Bank
   Of Montreal, Bank Of Scotland, Bank Of Tokyo-Mitsubishi Ltd.,
   Bank One Corporation, Barclays, Bennett Investment Counsel
   Inc., Centre Pacific, CIBC Opennhiemer Funds, Citicorp North
   America Inc., City National Bank Of Charleston, Credit
   Agricole Indosuez, Credit Lyonnais Global Partners Inc.,
   Credit Suisse Asset Management, Credit Suisse First Boston,
   Dai-Ichi Life International Inc., Deutsche Bank, Dresdner
   Kleinwort Wasserstein, Equitable Holding Corp., First Union,
   Fleet Bankboston, Fuji Capital Markets Corp., GE Capital,
   Goldman Sachs & Co., Hypovereinsbank, Indosuez Technology
   Fund, ING America Life Corporation, Invesco, KBC Financial
   Products Inc., Merrill Lynch & Co. Inc., Mitsubishi Trust &
   Banking Corp., Monument Advisors LLC, Morgan Stanley Dean
   Witter, Royal Bank Of Canada, Scotiabank De Puerto Rico,
   Scudder Investments, Stein Roe Farnham, Inc., Taipeibank,
   TCW, Textron Inc., Toronto Dominion, Inc., UBS Warburg, and
   Van Kampen Asset Management Company Inc.;

D. Strategic Partners: Cisco Systems Inc., EMC Corporation,
   Juniper Networks Inc., Sonus Networks Inc., Swift Energy
   Company Inc., and Nortel Networks;

E. Vendors: Alcatel, Anixter International Inc., Avaya, Beloit
   Box Board Co. Inc., CB Richard Ellis, Cisco System, Corning
   Incorporated, DHV BV, Dow Corning Corporation, Dynamic
   Solutions, Equant, Fluor Corporation, Fresh Direct Llc, Fresh
   Mark Inc., Fresh Western Marketing Inc., Freshpoint
   Incorporated, GTS Energy Inc., Insignia Financial Group,
   Inc., Kajima Development Corp., Knoll Inc., Louis Dreyfus
   Natural Gas Corp., Mastec, Inc., New Media Merchants, Inc.,
   Nortel, Owens Corning Inc., Pacific Century Cyberworks, Qwest
   Communication International Inc., Siemens Corporation, Sonus
   Networks Inc, Suter & Suter Inc, and Telia International
   Carrier; and

F. Professionals: Brown Rudnick Freed & Gesmer PC Inc.,
   Proskauer Rose LLP, and The Blackstone Group L.P.

E&Y LLP will conduct an ongoing review of its files to ensure
that no conflicts or other disqualifying circumstances exist or
arise. If any new facts or circumstances are discovered, E&Y LLP
will supplement its disclosure to the Court.

The customary hourly rates, subject to periodic adjustments,
charged by E&Y LLP's personnel anticipated to be assigned to
this case are as follows:

       Partners/Principals                      $500-625
       Senior Managers/Managers                 $350-500
       Associates/Senior Associates             $175-325
       Administration/Paraprofessionals         $ 85-150

E&Y LLP may, from time to time, find it necessary to use the
services of specialists in varied practice groups within E&Y LLP
in the course of this engagement. In the event that specialized
services are called for, Mr. Rosenbaum informs the Court that
the rates charged may be higher than those listed above. (Global
Crossing Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GLOBAL CROSSING: Committee Airs Confidence About Reorganization
---------------------------------------------------------------
Global Crossing's Official Creditors' Committee says that the
recent end of stalking horse negotiations with Hutchison Whampoa
and Singapore Technologies Telemedia reflects improving
prospects for a successful reorganization of Global Crossing.

Committee counsel, Edward Weisfelner of Brown Rudnick Berlack
Israels LLP, noted that: "Circumstances have changed
substantially since Global Crossing entered into a letter of
intent with Hutchison and STT back in January, 2002. Global
Crossing management is successfully implementing an operating
plan aimed at dramatically reducing costs and maximizing the
long-term value of the company's global network. Since the
initial chapter 11 filing, we've seen the development of a
robust auction process that is attracting considerable interest
from prospective purchasers and investors. These factors,
together with the viability of a stand-alone restructuring
option that, in our view, would permit Global to emerge from
these proceedings with its core global network intact, and owned
by its creditors, significantly diminished the need for a
stalking horse bidder."

Weisfelner further noted that, "The Committee respects the
serious effort made by Hutchison/STT to reach agreement on
definitive stalking horse documentation, and would welcome their
continued participation in the auction process. Nevertheless, as
we have said previously on many occasions, the economics of the
Hutchison/STT offer were simply inadequate. The diminished need
for a stalking horse, combined with the inadequacy of the bid,
made it extremely difficult for creditors to get comfortable
with conferring stalking horse status, and the substantial
break-up fees that entails, on the Hutchison/STT bid."

Russell Belinsky, Senior Managing Director of Chanin Capital
Partners, the Committee's financial advisors, commented that,
"The auction process set in motion in March, 2002 was designed
with flexibility so as to enable creditors to explore multiple
options, including a stand-alone plan. At this point, all of the
numbers strongly suggest that creditors may maximize their
recoveries by selling non-core assets, retaining the company's
global network, and recapitalizing. Looking ahead, the stand-
alone plan is an option receiving serious consideration against
which any proposals for a sale of the entire company will have
to be measured."

The Official Creditors' Committee, comprised of bondholders and
trade creditors, represents unsecured creditors of Global
Crossing.

Global Crossing Holdings Ltd.'s 9.625% bonds due 2008 (GBLX3),
DebtTraders reports, are trading at about 2. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX3for  
real-time bond pricing.


HEARTLAND TECHNOLOGY: Expects SEC to Okay Delisting From AMEX
-------------------------------------------------------------
Heartland Technology, Inc. (Amex: HTI) said that the American
Stock Exchange has applied with the Securities and Exchange
Commission to strike its common stock from listing and
registration on the exchange, effective with the opening of the
trading session on June 4, 2002.  The company expects that the
SEC will grant the application and that its common stock will be
cease being listed and traded on the American Stock Exchange at
that time.

The company acknowledged that it has not, for some time, met
various guidelines for continued listing on the exchange.  These
include shareholders' equity, losses from continuing operations
and net losses, the price of the company's common shares, market
value, public float and the company's inability to produce a
viable plan to cure those deficiencies.  Heartland Technology
also recently reported that it is not currently generating
enough cash from operations to pay fixed costs.  The company
said it was in discussions with its creditors to see if it can
reach agreements to restructure its debt.  The company also said
it has been seeking to sell or merge various assets and
subsidiaries as well as the entire company in order to create
value.  However, the company is likely to be dissolved or
liquidated.


ICG: Court Okays Settlement with SBC Units on Wholesale Disputes
----------------------------------------------------------------
Judge Peter Walsh gave his stamp of approval to the Confidential
Settlement Agreement and Mutual Release by and among ICG
Communications, Inc., its debtor-affiliates and SBC Affiliates.
However, Judge Walsh only approved settlement as to the disputes
regarding the "wholesale" goods purchases.

As previously reported, the Debtors explained that they
purchased both "wholesale" and "retail" goods and services from
the SBC Affiliates, which are essential to the Debtors continued
operations and effective reorganization.

The Debtors and the SBC Affiliates are involved in several
billing disputes, which are presently pending before Judge
Walsh.  These Disputes arise in connection with both the
"wholesale" and the "retail" goods and services.  The Disputes
relate to goods and services provided by one or more of the SBC
Affiliates to one or more of the Debtors and involve questions,
inter alia, about (1) double billing, (2) rate overcharges, (3)
improper installation fees, (4) retroactive rate increases and
(5) improper charges for disconnected or non-existent accounts.
The Disputes also relate to services provided by the Debtors to
one or more of the SBC Affiliates and involve questions, inter
alia, about billing for (1) excess local minutes of use, (2)
excess intraLATA toll minutes of use, (3) tandem transport rate
elements, (4) tandem switching rate elements and (5) late
payment charges on Debtors bills to the SBC Affiliates for Ohio,
California and Texas traffic.

The Disputes relate to almost 1,000 separate accounts, at least
seven interconnection agreements, a resale agreement and retail
services in eleven separate states.  After reviewing the various
motions and responses referenced at the beginning of this
article that have been filed in the Disputes, the Debtors
conclude that the Disputes became a contested matter before this
Court as a result of the Motions and the Debtors' objections.

                     The Settlement Agreement

On or about March 29, 2002, the Parties executed the Agreement
in connection with, among other things, the resolution of the
"wholesale" portion of the Disputes.  The Settlement, in part,
provides:

       (a) that it relates only to the "wholesale" disputes, and
not to the "retail" disputes;

       (b) for certain releases of and by the Parties as to each
other, including releases by the Debtors and their estates of
causes of action under chapter 5 of the Bankruptcy Code;

       (c) for certain payments by the Parties and reduction of
claims the Parties hold or may hold against each other;

       (d) for the assumption of:

             (i) that certain Release and Settlement Agreement
Regarding ICG-Terminated Traffic Through May 31, 2003 dated June
6, 2000;

             (ii) the SBC-ICG Reciprocal Compensation Memorandum
of Understanding dated June 6, 2000; (iii) those certain
Amendments (Superseding Certain Compensation, Interconnection
and Trunking Provisions) To Interconnection Agreement with the
appropriate SBC Affiliate for each of Arkansas, California,
Connecticut, Indiana, Illinois, Kansas, Michigan, Missouri,
Ohio, Oklahoma, Nevada, Texas and Wisconsin; and

             (iv) the Rate Schedules attached to these
Amendments;

             (e) that there are no cure amounts owed by the
Debtors in connection with the assumption of the Reciprocal
Compensation Agreements;

             (f) for the assumption of all other contracts
between the Debtors and the applicable SBC Affiliates for
"wholesale" services, including the Interconnection Agreements
and all applicable state and federal tariffs for the states of
Arkansas, California, Indiana, Illinois, Kansas, Michigan,
Missouri, Oklahoma, Nevada, Texas and Wisconsin;

             (g) that the requirements of Section 365 of the
Bankruptcy Code relating to the assumption of the Contracts will
be satisfied by:

                   (i) the payment by the Debtors to the SBC
Affiliates of the sum specified in the Agreement;

                   (ii) an award to the SBC Affiliates of an
Allowed General Unsecured Claim against the Holdings Debtors (as
those terms are defined in the Second Amended Plan) in the
amount of $7,212,241.62, which shall not be subject to objection
by any party in interest or subject to reconsideration; and

                  (iii) timely payment by the Debtors of all
amounts due for the period from February 1, 2002 to the date
that Judge Walsh's order on this motion becomes final and non-
appealable in accordance with the terms of the Interconnection
Agreements and all applicable state and federal tariffs,
provided that any disputes will be resolved by agreement of the
Parties within thirty days of the Effective Date after which
time either of the Parties may seek resolution from the
Bankruptcy Court;

             (h) that the SBC Affiliates shall withdraw the
proofs of claim filed in relation to their "wholesale" claims;

             (i) that the Setoff Motion and the Response are
withdrawn and that any right of recoupment and/or any right of
set-off that the SBC Affiliates may have with respect to any of
the Debtors or their respective estates shall survive and be
preserved even after confirmation of any plan or reorganization
despite any discharge that might be granted to the Debtors under
Section 1141 of the Bankruptcy Code and any effect given to that
discharge under Section 524 of the Bankruptcy Code;

             (j) that the SBC Affiliates have not waived any
rights that the SBC Affiliates may have with respect to any of
the Debtors to terminate the provision of services to any of the
Debtors or to terminate any Interconnection Agreement or any
other agreement with any of the Debtors for failure to make any
future payments due pursuant to the terms of any Interconnection
Agreement, any other applicable agreement or the terms of any
applicable state of federal tariff;

             (k) that the Ameritech Motion is withdrawn, and
that, within 10 days of the Effective Date of Release, Ameritech
Ohio and ICG Telecom Group, or its successor in interest shall
execute that certain Interconnection Agreement under Sections
251 and 252 of the Telecommunications Act of 1996, by and
between The Ohio Bell Telephone Company (d/b/a Ameritech Ohio)
an Ohio corporation, with principal offices at 45 Erieview
Plaza, Cleveland, OH 44114 and ICG Telecom Group, a Colorado
corporation, with offices at 161 Inverness Dr., Englewood, CO
80112, a conformed but unsigned copy of which was filed with the
Public Utility Commission of Ohio on May 14, 2001;

             (l) that, within 10 days of execution of the New
Interconnection Agreement, a fully executed copy of the New
Interconnection Agreement will be jointly filed with the PUCO,
specifying that the effective date of the New Interconnection
Agreement shall be forty-five business days after the Effective
Date of Release (as defined in the Agreement); and

             (m) that other than with respect to the Reciprocal
Compensation Agreements, the Settlement does not constitute an
assumption or rejection of any other agreement between the
Debtors and The Southern New England Telephone Company or any of
its direct or indirect subsidiaries, including, but not limited
to, any Interconnection Agreement between the Debtors and The
Southern New England Telephone Company and all applicable state
and federal tariffs for the State of Connecticut. (ICG
Communications Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


IT GROUP: Court Approves Contract & Lease Rejection Procedures
--------------------------------------------------------------
Judge Walrath approves The IT Group, Inc., and its debtor-
affiliates' proposed uniform procedures in rejecting executory
contracts and leases subject to these modifications:

A. Aside from the Affected Parties the Notice Parties, the
   Debtors must also serve rejection notices, as appropriate,
   the counsel of the affected parties -- to the extent that
   such counsel filed a notice of appearance in these cases --
   and the surety or their counsel of any bonded contract sought
   to be rejected;

B. the Affected Parties and the Notice Parties must have seven
   business days following receipt of the Rejection Notice to
   file and serve an objection by facsimile to the proposed
   rejection upon counsel for the Debtors;

C. With regards to Lease Rejection, within seven business days
   of service of the Notice:

   a. with respect to leases of real property, the Debtors must
      complete the removal of any equipment or other
      personal

      property that is not included in such Real Property Lease
      from the premises if so required under the Real Property
      Lease and that the landlord requests in writing be
      removed, and will return the premises to the landlord;
      and,

   b. with respect to leases of personal property, the Debtors
      will make the personal property available for
      repossession by the Affected Party at the Affected Party's
      expense;

D. If no timely objection is made, the contract or lease will be
   effectively rejected on the 10th business day following
   service of the Rejection Notice;

E. Within two business days after serving the rejection notice,
   as appropriate, the Debtors must file a notice of having
   given notice; and,

F. The non-debtor party to the rejected contract or the landlord
   of a rejected lease must file a proof of claim against the
   Debtors for rejection damages on or before the later of the
   applicable bar date for filing the claims that may be
   subsequently established by the Court, or 30 days after the
   effective date of rejection.

                         *   *   *

As previously reported, The IT Group, Inc., and its debtor-
affiliates proposed uniform procedures intended to streamline
the rejection of these executory contracts and unexpired leases:

A. the Debtors will serve an irrevocable notice of rejection of
    the contract or lease by facsimile to the Affected Parties
    and the Notice Parties;

B. the Affected Parties and the Notice Parties shall have 3
    business days following receipt of the Rejection Notice to
    file and serve an objection by facsimile to the proposed
    rejection upon counsel for the Debtors;

C. With regards to Lease Rejection, within 5 business days of
    service of the Notice:

    a. with respect to leases of real property, the Debtors
          shall complete the removal of any equipment or other
          personal property that is not included in such Real
          Property Lease from the premises if so required under
          the Real Property Lease and that the landlord requests
          in writing be removed, and shall return such premises
          to the landlord; and,

    b. with respect to leases of personal property, the
          Debtors shall make available such personal property
          for repossession by the Affected Party at such
          Affected Party's expense;

D. if a timely objection is filed, the Debtors shall be required
    to obtain approval of the decision to reject at the next
    scheduled omnibus hearing and shall retain the burden of
    proof in establishing the merits of the rejection decision;

E. if the above conditions have been met and no timely objection
    made in accordance with the foregoing, the contract or
    lease shall be deemed to be effectively rejected on the 5th
    business day  following service of the Rejection Notice;
    and,

F. if a timely objection has been made, the effective date of
    rejection shall be the date ordered by the Court. (IT Group
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


INTEGRATED HEALTH: Further Amends Officer Compensation Pacts
------------------------------------------------------------
The Integrated Health Services, Inc. Debtors seek the Court's
authority, pursuant to section 363 of the Bankruptcy Code, for a
Second Amendment of their restructuring services agreements
with:

     * Joseph A. Bondi,
     * Guy Sansone and
     * William Johnsen

to reflect two changes:

     (1) emergence of Rotech from chapter 11 and

     (2) a more realistic anticipated confirmation date for the
         purpose of calculating incentive bonus,

based upon the current posture of this restructuring.

(1) Reduced Commitment by and Compensation for Mr. Bondi

    As Rotech has emerged from bankruptcy, the remaining Debtors
    operate two business segments: (i) the Long-Term Care
    division which operates skilled nursing and subacute care
    facilities; (ii) the Symphony division, which provides
    contract rehabilitation and other contract services. The
    home respiratory and durable medical equipment services
    division goes with Reorganized Rotech. With operations in
    the remaining two business segments instead of the previous
    three, the Debtors do not necessitate the full-time
    attention of Joseph A. Bondi.

    Accordingly, the Second Amendment provides that while Bondi
    will continue to serve as Chief Executive Officer of the
    Debtors and have supervisory responsibility over the other
    Officers.  He will no longer be devoting his efforts to the
    Debtors on a full-time basis, effective as of April 1, 2002
    and correspondingly, effective as of April 1, 2002, the
    monthly compensation referred to in Paragraph 2(a) of the
    Agreement will be reduced from $275,000 to $225,000.

(2) Target Confirmation Date for Remaining Debtors Pushed
    Forward  

    In addition, as a result of the commitment of resources and
    time needed to file and confirm the Rotech Plan, it was
    apparent some time ago that the confirmation of a plan or
    plans of reorganization for the remaining Debtors prior to
    January 31, 2002, was not realistic. Accordingly, the
    Debtors and the Officers have determined that the terms of
    the Officers' incentive compensation should be modified to
    reflect the current expectations of the Debtors and the
    Creditors' Committee concerning the timing of the emergence
    of the remaining Debtors from these Chapter 11 proceedings.

    To address this issue the Second Amendment provides as
    follows: "The Plan Bonus shall be $500,000 if a [plan of
    reorganization] that has the support of the Official
    Committee of Unsecured Creditors of the Debtor is filed
    prior to September 30, 2002 and shall be reduced commencing
    September 30, 2002 at a rate of $83,333 per month, pro rated
    on a daily basis, with no Plan Bonus payable if the [plan of
    reorganization] is first filed subsequent to March 30,
    2003."

The Debtors believe that the modifications to the Agreement set
forth in the Second Amendment are necessary and appropriate to
reflect the change in responsibility of Bondi, as well as to
provide the Officers with meaningful incentive compensation in
connection with the Plan Bonus.

The Debtors submit that the Creditors' Committee has been
integrally involved in negotiating the terms of the Second
Amendment and supports the relief requested. (Integrated Health
Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


KENNAMETAL INC: Posts Prelim. Fiscal 2003 Results Expectations
--------------------------------------------------------------
Kennametal Inc. (NYSE: KMT) released preliminary expectations
for fiscal 2003 performance, including the impact of the
acquisition of the Widia Group in Europe and India from Milacron
Inc. (NYSE: MZ), which is expected to close by July 1, 2002.  
The company also reaffirmed its outlook for the fourth quarter
of fiscal 2002, ending June 30, 2002.

                         Fiscal 2003 Outlook
                      $ in millions, except EPS

                          Pre-Widia            Including Widia *
                          ---------            -----------------
    Sales Growth         Plus 5% to 7%           Plus 19% to 23%

    EBITDA               $210 to $240            $230 to $260

    Diluted EPS          $2.25 to $2.55          $2.10 to $2.40

    EPS Growth          Plus 15% to 30%          Plus 10% to 25%

    Free Operating
      Cash Flow          $100 to $150            $100 to $150

*  Assumes issuance of approximately 10% additional shares

EBITDA = Income before income taxes and minority interest plus
interest expense, depreciation and amortization

This preliminary fiscal 2003 outlook is based on the assumption
that the United States economy will lead the European recovery
by one to two quarters, and that the United States recovery will
not firmly take hold until the December 2002 quarter.

Kennametal President and Chief Executive Officer, Markos I.
Tambakeras, remarked, "Over the last three years, Kennametal has
been earning the right to grow.  We have focused our culture on
performance and accountability, strengthened the balance sheet
and institutionalized the discipline of strong cash flow
generation.  Through restructuring and the Kennametal Lean
Enterprise we have substantially reduced our cost structure and
revitalized our product development process to provide our
world-class sales force the tools to gain market share through
the continuous improvement of our customers' competitiveness.  
As we look forward to fiscal 2003, we are eager to further
benefit from the results of these efforts.  We anticipate
accelerating earnings growth as the actions of the last three
years leverage the strengthening economy.  Concurrently, we will
be aggressively implementing our plan to integrate Widia, and
realize the expected benefits of the acquisition."

As previously announced, sales for the fourth quarter of fiscal
2002 are expected to decline 5 to 10 percent year-over-year, but
increase mid-single digits sequentially from the third quarter.  
Diluted earnings per share are anticipated to be between $0.62
and $0.72, excluding special charges, up 17 to 36 percent versus
the third quarter.  For fiscal 2002, EBITDA is expected to be
between $195 million and $205 million, and free operating cash
flow is still expected to be between $100 million and $125
million.

Kennametal Inc. aspires to be the premier tooling solutions
supplier in the world with operational excellence throughout the
value chain and best-in- class manufacturing and technology.  
Kennametal strives to deliver superior shareowner value through
top-tier financial performance.  The company provides customers
a broad range of technologically advanced tools, tooling systems
and engineering services aimed at improving customers'
manufacturing competitiveness.  With approximately 12,000
employees worldwide, the company's fiscal 2001 annual sales were
$1.8 billion, with a third coming from sales outside the United
States.  Kennametal is a five-time winner of the GM "Supplier of
the Year" award and is represented in more than 60 countries.
Kennametal operations in Europe are headquartered in Furth,
Germany. Kennametal Asia Pacific operations are headquartered in
Singapore.  For more information, visit the company's Web site
at http://www.kennametal.com  

                         *    *    *

As reported in the May 28, 2002 edition of Troubled Company
Reporter, Kennametal Inc. (NYSE: KMT) announced its intention to
launch an underwritten public offering of 3,000,000 shares of
Common Stock and an underwritten public offering of $300 million
of Senior Unsecured Notes due in 2012.

The offerings are consistent with the company's previously
announced plans to fund the acquisition of the Widia Group as
part of a comprehensive refinancing of its capital structure,
which is also expected to include a new, three-year revolving
credit facility.  The company believes these financing
arrangements are consistent with its commitment to investment
grade ratings.

Standard & Poor's rates the company's Corporate Credit Rating
BBB.  Its senior unsecured debt is rated Ba1 by Moody's, and
BBB- by Fitch.


KMART CORP: Taps Ballantine to Represent Independent Directors
--------------------------------------------------------------
Kmart Corporation and its 37 debtor-affiliates seek the Court's
authority to employ and retain the firm of Dewey Ballantine LLP,
effective as of March 12, 2002, to represent the independent
members of Kmart's Board of Directors.

According to John Wm. Butler, Jr., Esq., at Skadden, Arps,
Slate, Meagher & Flom, in Chicago, Illinois, Dewey Ballantine
has worked for the independent directors of Kmart in the past.  
Thus, Dewey Ballantine is familiar with the Debtors' businesses
and operations.  Specifically, Mr. Butler relates that Dewey
Ballantine provided legal advice and assistance to the
independent members of Kmart's Board of Directors during 1994
and 1995 when Kmart was undergoing a strategic review of its
operations and the Board determined to terminate the Chief
Executive Officer and to hire from outside Kmart a new Chief
Executive Officer.  "Dewey Ballantine again provided legal
counsel to the independent members of Kmart's Board of Directors
in 2000 when Kmart's then Chief Executive Officer retired and a
new Chief Executive Officer was hired from outside Kmart," Mr.
Butler adds.

Aside from its familiarity with Kmart's business operations, Mr.
Butler tells the Court that the Debtors selected Dewey
Ballantine as special counsel because of the firm's considerable
experience and expertise in and knowledge of the field of
creditors' rights and business reorganizations under Chapter 11
of the Bankruptcy Code.  Mr. Butler adds that Dewey Ballantine
also has expertise and experience in other pertinent legal
areas, including litigation, tax, corporate and securities law,
which will likely be relevant to its role as Special Counsel to
the Independent Directors Group of the Debtors.  The firm has
over 500 attorneys.

Mr. Butler assures the Court that Dewey Ballantine's employment
will enhance, not duplicate, the employment of the Debtors'
general bankruptcy counsel (Skadden, Arps, Slate, Meagher & Flom
LLP) and other professionals retained by the Debtors to perform
specific tasks that are unrelated to the work to be performed by
Dewey Ballantine.

The Independent Directors Group is concerned that that there may
be instances where its interests will diverge from those of
Kmart, like in any litigation claims against the Kmart
directors.

Dewey Ballantine is expected to:

  (a) review development in these Chapter 11 cases and advise
      the Independent Directors' Group in connection with these
      Chapter 11 cases;

  (b) provide legal advice to the Independent Directors Group in
      support of the Independent Directors Group's ongoing
      responsibilities with respect to the Debtors' operations,
      including attendance at meetings of the Kmart Board of
      Directors, its committees and other third parties;

  (c) represent and provide these services as are requested by
      the Independent Directors Group, and where no conflict of
      interest exists and it is efficient to do so, represent
      and provide these services as are requested by the non-
      independent directors and officers of Kmart, in connection
      with litigation, based upon both pre-petition and post-
      petition claims, brought against the Independent Directors
      Group, or by Kmart shareholders, creditors, and others;

  (d) appear before the Bankruptcy Court, any district or
      appellate courts, and the United States Trustee on behalf
      of the Independent Directors Group with these matters; and

  (e) provide the full range of legal services and advice
      normally associated these matters.

In return for the services, Stuart Hirshfield, Esq., at Dewey
Ballantine LLP, relates that the firm will charge discounted
hourly rates for services performed in these cases:

           $395 - 595    members
            204 - 395    counsel and associates
            102 - 170    paraprofessionals

Mr. Hirshfield advises the Court that these rates are subject to
increases in accordance with the firm's usual and customary
billing practices.  "These rates are set at a level designed to
fairly compensate Dewey Ballantine for the work of its attorneys
and paraprofessionals and to cover fixed and routine overhead
expenses," Mr. Hirshfield explains.  In addition, Mr. Hirshfield
relates that these hourly rates do not include charges for non-
legal personnel, including word processing, clerical,
proofreading and secretarial staff.  According to Mr.
Hirshfield, it is Dewey Ballantine's policy to charge its
clients for all other services provided and for related
disbursements and expenses incurred.  These disbursements and
expenses include, among other things, charges for telephone and
telecopy services, photocopying, travel and subsistence,
document production, word processing and secretarial services,
postage and delivery, computerized research, litigation support,
electronic and other data storage and retrieval, filing fees and
the like.

The firm intends to seek compensation and reimbursement of
necessary and reasonable out-of-pocket expenses in accordance
with the applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, the United States Trustee Guidelines, the
Local Bankruptcy Rules, and the Interim Compensation Order.

"To the best of my knowledge, Dewey Ballantine, its partners,
counsel and associates do not hold or represent any interest
adverse to the Debtors, their creditors, or any other party in
interest in these Chapter 11 cases, their respective attorneys
and investment advisors, the United States Trustee and its
employees, with respect to the matters on which the firm is to
be employed," Mr. Hirshfield assures the Court.

Dewey Ballantine discloses that it has represented, currently
represents, or may in the future represent certain members of
the Official Committee of Unsecured Creditors of Kmart
(including Buena Vista Home Video and Pepsico) and the Financial
Institutions Committee (including JP Morgan Chase, Bank of New
York, First Union National Bank and Credit Suisse First Boston)
in various matters unrelated to these Chapter 11 cases.

In addition, Dewey Ballantine represents certain affiliates of
Verizon Capital Corporation including NCC Fox Company, NCC
Neptune Company, NCC Horizon Company and NCC Key Company in
connection with these Chapter 11 cases.  These entities are
Owner Participants with respect to 18 leases between Wilmington
Trust Company, the Owner Trustee, as landlord, and the Debtors,
as tenants.  However, Mr. Hirshfield asserts, none of these
representations would be adverse to the Debtors or their estates
as to the matters for which the firm is to be employed.
Furthermore, Mr. Hirshfield informs Judge Sonderby that Dewey
Ballantine will establish and effectively implement a "Fire
Wall" and other appropriate policies and procedures, designed to
isolate the activities of the firm for which it is to be  
retained as Special Counsel from its activities with respect to
the Verizon affiliates during these Chapter 11 cases. (Kmart
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


LA PETITE ACADEMY: Obtains Waiver of Loan Covenant Violations
-------------------------------------------------------------
La Petite Academy, Inc., founded in 1968, is the largest
privately held and one of the leading for-profit preschool
educational providers in the United States. La Petite Academy,
Inc. provides center-based educational services and childcare to
children between the ages of six weeks and 12 years.

La Petite has two wholly owned subsidiaries, LPA Services, Inc.,
a third party administrator for La Petite insurance claims, and
Bright Start, Inc., an operator of preschools in various states.

La Petite is owned by LPA Holding Corp. On March 17, 1998, LPA
Investment LLC (LPA), a Delaware limited liability company owned
by an affiliate of J.P. Morgan Partners, formerly Chase Capital
Partners, and by an entity controlled by Robert E. King, a
director of La Petite and LPA Holding, entered into an Agreement
and Plan of Merger pursuant to which a wholly owned subsidiary
of LPA was merged into LPA Holding. The Recapitalization was
completed May 11, 1998.

After giving effect to investments on November 15, 2001 and
December 21, 2001, LPA beneficially owns approximately 92.5% of
the common stock of LPA Holding on a fully diluted basis. An
affiliate of JPMP owns a majority of the economic interests of
LPA and an entity controlled by Robert E. King owns a majority
of the voting interests of LPA.

As of April 6, 2002, the Company operated 720 Academies
including 653 residential Academies, 35 employer-based Academies
and 32 Montessori schools located in 36 states and the District
of Columbia. For the 40 weeks ended April 6, 2002, the Company
had an average attendance of approximately 73,900 full and part-
time children.

At April 6, 2002, the Company was not in compliance with certain
of the financial covenants contained in the Credit Agreement for
the quarterly period ended April 6, 2002. On May 20, 2002, the
Company obtained a limited waiver of non-compliance with those
financial covenants for such quarter from the requisite lenders
under the Credit Agreement. The limited waiver provides that the
lenders will not exercise their rights and remedies under the
Credit Agreement with respect to such financial covenant non-
compliance during the period through August 15, 2002. The
Company also expects that it will not be able to comply with
certain of the financial covenants contained in the Credit
Agreement for the fourth quarter of fiscal 2002. The Company    
expects to continue discussions with the lenders under the
Credit Agreement (a) to obtain a permanent waiver of the
financial covenant non-compliance for the quarterly period
ending April 6, 2002 and (b) to amend its financial covenants,
commencing with the quarterly period ending on June 29, 2002,
based on the Company's current operating conditions and
projections. There can be no assurance that the Company will be
able to obtain such permanent waiver and/or amendment to the
Credit Agreement. The failure to do so would have a material
adverse effect on the Company.

Operating revenue increased $0.5 million, or 0.5%, for the
twelve weeks ended April 6, 2002 from the same period last year.
This revenue increase is a result of a $2.3 million increase at
established academies, a $1.0 million increase at new academies,
offset by a reduction in revenue from closed academies of $2.6
million and a $0.2 million decrease in other revenue. The
revenue increase is principally due to a 7.3% increase in the
average weekly FTE tuition rate offset by a decline in the FTE
attendance of 6.2%. The increase in the average weekly FTE
tuition rate was principally due to selective price increases
that were put into place in September 2001 based on geographic
market conditions and class capacity utilization. The decrease
in FTE attendance was due to a 3.9% decline at La Petite's
established schools (schools which were open prior to the 2000
year) and a 97.1% decline at closed schools, offset by a 30.4%
increase at new schools.

In the twelve week period ended April 6, 2002, the Company had
operating income of $4.8 million, a decrease from last year of
$2.8 million, or 36.8%.  The net income, (after restatement of
its financials), for the twelve weeks ended April 6, 2002, was
$928, as compared to the net loss, (after restatement), of
$3,568 in the comparable twelve weeks of 2001.


METROLOGIC INSTRUMENTS: Files Amended Annual Report on Form 10-K
----------------------------------------------------------------
Metrologic Instruments, Inc. (NASDAQ: MTLGE, formerly MTLG), a
leading manufacturer of sophisticated imaging systems using
laser, holographic, camera and vision-based technologies, high-
speed automated data capture solutions and bar code scanners has
filed an amended Annual Report on Form 10-K with the Securities
and Exchange Commission.

As announced on May 16, 2002, Metrologic and its bank consortium
made up of PNC Bank, Fleet Bank, and Sovereign Bank, signed a
binding term sheet after reaching an agreement with respect to
the terms of an amendment and waiver to its current credit
agreement. Once executed, the amendment will waive all existing
defaults and withdraw any notice of default. The term of the
amendment will be through May 31, 2003, and will allow
Metrologic to reclassify certain of its bank debt from short-
term liabilities to long-term liabilities.

While the term sheet required that the definitive amendment be
executed by May 23, 2002, however the banks and its legal
counsel are in the final stages of resolving certain details.

As a result of this delay, Metrologic today filed an amended
Form 10-K with the SEC to attempt to ensure that the current
bank delay does not result in the delisting of Metrologic's
shares from the NASDAQ National Market. As the amendment to the
credit agreement has not yet been completed, the amended Annual
Report on Form 10-K includes a report from Metrologic's
independent auditors that contains qualified language that
addresses Metrologic's ability to continue as a going concern.
The reason for the going concern qualification is because the
waivers of default and withdrawal by the banks of a notice of
default have not yet occurred due to the delay.

Once the amendment is completed and executed, Metrologic expects
to file another amendment to its Annual Report on Form 10-K
together with an unqualified audit opinion from Ernst & Young
LLP, its independent auditors, eliminating the qualified
language. Metrologic and its banks expect to sign the definitive
amendment as soon as practicable. While management believes that
it will be successful in completing and executing the amendment,
there can be no assurance that any amendment will be executed.

Metrologic designs, manufactures and markets bar code scanning
and high-speed automated data capture systems solutions using
laser, holographic, camera and vision-based technologies.
Metrologic offers expertise in 1D and 2D bar code reading,
portable data collection, optical character recognition, image
lift, and parcel dimensioning and singulation detection for
customers in retail, commercial, manufacturing, transportation
and logistics, and postal and parcel delivery industries. In
addition to its extensive line of bar code scanning and vision
system equipment, the company also provides laser beam delivery
and control systems to semi-conductor and fiber optic
manufacturers, as well as a variety of highly sophisticated
optical systems. Metrologic products are sold in more than 100
countries worldwide through Metrologic's sales, service and
distribution offices located in North and South America, Europe
and Asia.


MPOWER COMMS: Shrugs-Off Court of Appeals' Line Sharing Decision
----------------------------------------------------------------
Mpower Communications Corp., (OTC Bulletin Board: MPWRQ), a
provider of broadband high-speed Internet access and telephone
services to business customers, stated that it is unaffected by
Friday's action by the U.S. Court of Appeals remanding the FCC's
"line sharing" rules.

Mpower has provided DSL and voice services to business customers
using a facilities-based business model since 1996. As such, the
company owns and operates its own switches and collocation
facilities and is not a reseller.

"We have never utilized line sharing in our DSL deployment and
have never been in favor of the UNE-P reselling approach," said
Rolla P. Huff, Mpower Communications Chief Executive Officer.
"The control, flexibility and underlying economics of our
facilities-based strategy has allowed us to be a viable
competitor and a high-quality service provider."

"We hope that the FCC will not be strong-armed by the incumbent
carriers and will continue to look for opportunities to foster
competition, especially between competitive providers such as
Mpower and the incumbent carriers," added Huff.

Mpower Communications (OTC Bulletin Board: MPWRQ) is a
facilities-based broadband communications provider offering a
full range of data, telephony, Internet access and Web hosting
services for small and medium-size business customers.  Further
information about the company can be found at
http://www.mpowercom.com  

Mpower, currently operating as a debtor-in-possession, filed for
Chapter 11 reorganization on April 8, 2002 in the U.S.
Bankruptcy Court for the District of Delaware.


NETIA: Shareholders' Meeting to Convene on June 18 in Warsaw
------------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIAQ, WSE: NET), Poland's largest
alternative provider of fixed-line telecommunications services,
will hold an Ordinary Shareholders' Meeting in Warsaw on June
18, 2002, to approve the Management Board's report and financial
statements for the 2001 financial year, appoint an expert
auditor to examine the financial statements for the 2002
financial year, approve the remuneration granted in 2001 and
later to members of the Supervisory Board and re-adopt certain
shareholders' resolutions from the March 12, 2002 Extraordinary
General Shareholders' Meeting.

Netia is proposing to re-adopt the resolutions regarding the
issuance of series "H" shares, previously adopted by the
Extraordinary General Shareholders' Meeting on March 12, 2002 in
connection with the Company's ongoing restructuring. Pursuant to
Polish law, a resolution increasing the Company's share capital
may not be filed with the registry court later than six months
after its adoption. The re-adoption therefore extends the time
during which the share capital increase can be registered.
Arrangement proceedings in connection with Netia's restructuring
were opened in Poland on May 15, 2002.

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


NEW WORLD RESTAURANT: OTCBB Strikes-Out Shares from Listing
-----------------------------------------------------------
New World Restaurant Group, Inc. (Nasdaq: NWCI) said that its
common stock has been removed from the eligible list on the OTC
Bulletin Board for failure to timely file periodic reports under
the Securities Exchange Act of 1934, including its Form 10-K for
its fiscal year ended January 1, 2002.

The company will pursue reinstatement on the OTC Bulletin Board
once it is current in its periodic reports.  The common stock is
currently trading in the pink sheets.  Further information
regarding trading of securities on the "Pink Sheets" is
available on the web at http://www.pinksheets.com  

New World is a leading company in the "fast/quick casual"
sandwich industry.  The Company operates stores primarily under
the Einstein Bros and Noah's New York Bagels brands and
primarily franchises stores under the Manhattan Bagel and
Chesapeake Bagel Bakery brands.  As of May 14, 2002, the
Company's retail system consisted of 468 company-owned stores
and 293 franchised and licensed stores in 34 states.  The
Company also operates three dough production facilities and one
coffee roasting plant.


NOBLE CHINA: Won't Make Payment on 9% Debentures due Tomorrow
-------------------------------------------------------------
Noble China Inc. reported a net loss of $1,286,000 in the three
months ended March 31, 2002 compared to a net loss of $1,317,000
in the three months ended March 31, 2001 as reported on a
comparable accounting basis. Noble China changed from a
proportionate consolidation basis of accounting for its joint
venture in China to a cost basis of accounting effective January
1, 2002.

No dividend distribution was declared in the Noble Brewery joint
venture for the three months ended March 31, 2002 or in the
three months ended March 31, 2001. The last dividend
distribution declared was for 1999 joint venture earnings; the
final remittance of the 1999 dividend was received in January
2002. While we expect that dividend distributions may be
declared payable later in this fiscal period from earnings in
fiscal 2000, because of the diminished operating performance of
the Noble Brewery joint venture in 2001 and the resultant
working capital demands, dividend declarations are expected to
be modest at best. Further, as a result of a Court Order the
Company remains restricted in its ability to remit dividends to
Canada until a claim that is before the Courts in China is
settled or the Court Order is lifted. The Company is in the
process of appealing to have the Court Order lifted.

The administrative expenses of maintaining the corporate entity
and its public company service needs totaled $548,000 in the
three months ended March 31, 2002 compared to $629,000 in the
comparable three months last year. Personnel costs have been
notably reduced but have been largely offset by increased legal,
financial and audit fees as the Company has suffered from
distracting litigation and has initiated efforts necessary to
avert default as a result of the serious liquidity situation.
There are no new developments to report on either the China
Coast Property Development Ltd. lawsuit in China or the India
Breweries Inc. lawsuit in Canada.

The Company continues to face serious liquidity concerns in
ongoing funding for its corporate operations and interest on its
9% Convertible Subordinated Debentures. The Company will not be
able to pay the interest due on the Debentures on May 31, 2002.

Accordingly the Company will call a meeting of Debentureholders
tentatively scheduled for the first week of July 2002 to seek
approval of the Debentureholders (A) for certain amendments to
the Debentures and the Trust Indenture relating thereto which
would a) reduce the conversion price of the Debentures from
$7.75 to $0.51 per common share, b) provide that interest on the
Debentures (including the interest due to be paid on May 31,
2002) shall accrue and not be payable until maturity, redemption
or acceleration, c) provide that upon any conversion of the
Debentures, converting Debentureholders shall not be entitled to
receive any accrued interest, d) grant to the Debentureholders a
security interest in certain property of the Company, e)
prohibit the Company from granting a security interest in
certain other property of the Company, and f) effect certain
other amendments to the Debentures and the Trust Indenture, (B)
to sanction the failure of the Company to pay interest due on
May 31, 2002, and to waive certain related defaults under the
Trust Indenture, and (C) to authorize the Trustee under the
Trust Indenture to enter into an amended and restated Trust
Indenture to give effect to the foregoing.

These matters will require the approval of Debentureholders
holding not less than 66-2/3% of the principal amount of
Debentures represented at the meeting in person or by proxy. In
addition, under the rules of The Toronto Stock Exchange, the
shareholders of the Company must approve by a simple majority
the proposed amendment to the conversion price. A shareholders
meeting will be called for the same day.

If either shareholder or Debentureholder approval cannot be
obtained, the Company will be forced to consider alternative
courses of action as the Company anticipates that it may then be
in default of its obligations under the Debentures, and that
accordingly, the Debentureholders could then be in a position to
enforce their rights upon default in accordance with the
provisions of the Debentures. Should the Trustee or the
Debentureholders enforce their rights arising upon default,
Pabst Brewing Company may be in a position to terminate the
Pabst licence.

The Company has no source of income but for dividends from its
joint venture in China and there appears to be little likelihood
of dividends from China in the foreseeable future; therefore
whether or not the Debentureholders and shareholders give the
required approvals, the Company will be unable to carry on much
longer as a going concern unless it is able to attract a
strategic investor or potential acquirer, or find other sources
of capital, before it exhausts its now very limited financial
resources.


OPTIO SOFTWARE: Taps Stratagem to Explore Strategic Alternatives
----------------------------------------------------------------
Optio(R) Software, Inc. (Nasdaq NM: OPTO), a leading provider of
software that captures, transforms and delivers information and
data to allow automated processes, announced financial results
for its fiscal first quarter ended April 30, 2002 and the hiring
of an investment bank to explore strategies to enhance
shareholder value.

                       First Quarter Results

Total revenues for the fiscal first quarter of 2003 totaled $6.8
million compared to $7.5 million for the fiscal fourth quarter
of 2002 and $7.0 million for the same period last year, down
3.4%. License revenues in the first quarter were $2.7 million
compared to $2.7 million for the fourth quarter and $2.8 million
for the prior year's first quarter, a 4.3% decrease. Services
and maintenance revenues in the first quarter declined 13.2% to
$4.1 million from $4.8 million in the fourth quarter and
declined 2.8% from $4.2 million in the first quarter last year.

Total gross margin for the first quarter was 63.9%, which
represented a 27% improvement over the prior year's 50.2% gross
margin.

Net loss for the first quarter of fiscal year 2003 improved
significantly over the first quarter of fiscal year 2002. Net
loss for the first quarter of 2003 was $2.3 million, including a
$34,000 loss from discontinued operations, compared to a $6.6
million net loss in the first quarter of 2002 including a $1.9
million loss from discontinued operations and a $200,000 write-
down of an investment. Excluding one-time charges in both
periods, the pro forma net loss was reduced by 47% on $241,000
less revenues. Net losses in the fourth quarter of 2002 were
$4.5 million, including a $428,000 loss from discontinued
operations and a $2.0 million write-down of an investment.

Pro forma net loss for the first quarter of 2003 was $2.3
million, compared with a $1.2 million pro forma net loss for the
fourth quarter of 2002 and compared with a $4.3 million pro
forma net loss for the first quarter of 2002.

Cash used in operations was $781,000 in the first quarter.
Optio's cash decreased from $5.4 million as of January 31, 2002
to $4.8 million as of April 30, 2002. The company had no
advances on its $5 million line of credit at April 30, 2002.

The company's day's sales outstanding (DSOs) decreased to 57
days in the current quarter compared with 66 days in the prior
quarter. Other than approximately $350,000 of capital lease
obligations, the company remains substantially debt free.

                    Hiring of Investment Bank

Optio also announced that it has retained the San Francisco
investment banking firm of Stratagem Partnering Inc. to
explore strategies to enhance shareholder value. "By hiring
Stratagem, an investment banking firm dedicated to the software
and internet markets, we are expressing our belief that our
current market price does not reflect the true value of Optio
and its strong position in the Distributed Output Management
market," said Warren Neuburger, president and CEO of Optio.

"While the cost controls of corporations surrounding IT spending
are certainly impacting us, there are several items that cause
us to be optimistic about the future," said Neuburger. "For
instance, our first quarter license revenue, an indicator of
future performance, was flat versus the prior quarter and down
only marginally from the prior year, indicating a stabilization
of this key revenue source. While below our goals, this
continues to be better performance than many comparable
companies we see in the market. Should the general economic
recovery take a stronger hold, we would expect technology
spending to increase and our software sales to improve. As a
result of our increased investments in research and development,
we are entering an active new product release cycle over the
coming quarters, which we also believe will benefit our product
license revenue."

"In spite of the stringent cost controls surrounding new IT
spending, we have been successful in establishing numerous seed
accounts with our recently-introduced LT package," added Harvey
A. Wagner, CFO of Optio. "As the economy improves, our
experience indicates that many of our customers will expand
their installations and upgrade to our more advanced offerings.
For the first quarter, we also had our highest software
maintenance renewal revenues to date. In addition to benefiting
our recurring revenue, we believe this is a significant
statement from our customers regarding the importance of our
solutions in their environments."

"During the first quarter, we continued to tightly manage the
company's costs, capital expenditures, and employment levels
resulting in improved gross margins and a reduction in operating
expenses of 15% from the prior years first quarter after one
time expenses included in last years numbers. A continued focus
on cash flow and on lowering days sales outstanding (DSOs)
enabled us to retain a healthy cash position at the end of the
quarter," continued Wagner, "We believe that we are well
positioned for long-term leadership as the economy improves."

                    Business Outlook

Based on the continued weakness of the economic climate and the
delays of orders experienced in the first quarter, coupled with
slower revenue growth of our larger partners, we are withdrawing
our previous guidance.

Optio Software, Inc. provides infrastructure software that
enables organizations to communicate and connect with their key
constituents, both inside and outside the organization. Optio's
software improves the quality of an organization's
communications with customers, suppliers, partners and employees
by capturing information from critical data sources and
applications, customizing that information for the specific
needs of those varied audiences, and delivering and exchanging
that information over a global network of digital destinations
and formats. Optio has more than 4,600 customers with a strong
vertical market presence in the manufacturing, healthcare,
retail, distribution and financial industries. For more
information contact Optio Software - Phone: (770) 576-3500, Fax:
(770) 576-3699, E-Mail: info@optiosoftware.com, Corporate
Headquarters: 3015 Windward Plaza, Windward Fairways II,
Alpharetta, GA 30005, Web Site: http://www.optiosoftware.com  

Stratagem Partnering, Inc. is a San Francisco-based investment
bank that specializes in strategic partnering for software and
Internet firms. Over the 14 years of its history, Stratagem and
its senior team have served companies in approximately 100
engagements spanning key software and Internet market sectors.
Stratagem Partnering, Inc., One Sansome St., Suite 1900, San
Francisco, CA 94104, Phone: (415) 951-4617; Web Site:
http://www.stratagem.com  


ORGANOGENESIS: Has Until June 4 Submit Acceptable Plan to AMEX
--------------------------------------------------------------
Organogenesis Inc. (AMEX:ORG) said that the American Stock
Exchange will continue to list the Company's shares, if an
acceptable plan to regain compliance with AMEX's listing
requirements is submitted by June 4, 2002. The Company was
notified on April 26, 2002 that it was not in compliance with
certain AMEX listing rules.

If the AMEX accepts the plan the company will have until
September 2003 to resolve the areas of non-compliance, and if
successful, the AMEX will continue the Company's listing
indefinitely. The AMEX will monitor the progress of the plan,
and could seek to delist the Company if it fails to make
consistent progress with the terms of the approved plan.

Steven Bernitz, President and Chief Executive Officer of
Organogenesis, stated, "We are pleased that the American Stock
Exchange has granted us this time to meet their listing
requirements. Organogenesis intends to take all necessary and
required steps to maintain its listing on the AMEX, and we are
confident that our current strategies will satisfy AMEX's need
for a concrete plan of action and will allow us to meet their
listing requirements in the prescribed time frame."

Organogenesis Inc. -- http://www.organogenesis.com-- was the  
first company to develop and gain FDA approval for a mass-
produced product containing living human cells. The Company's
lead product, Apligraf(R) living skin substitute, is FDA
approved for the treatment of diabetic foot ulcers and venous
leg ulcers; Novartis Pharma AG has global Apligraf marketing
rights. Organogenesis is also developing a novel family of
bioengineered surgical products based on its FortaFlex(TM)
technology. Two of these products -- FortaPerm(TM) and
FortaGen(TM) -- are already FDA-cleared for marketing and are
being sold by the Company's own sales and marketing team.
Additionally, the Company has a broad development and marketing
agreement with Biomet, Inc. for orthopedic and periodontal
surgery products. The Organogenesis pipeline also includes
VITRIX(TM) living dermal replacement, FortaFill(TM) soft tissue
augmentation and Revitix(TM) regenerative skin complex. The
Company is actively seeking third party funding for several of
its long-term research programs, including a coronary vascular
graft, a liver assist device and a pancreatic islet cell
transplantation program.


OWENS CORNING: Intends to Insure Future Representative Liability
----------------------------------------------------------------
Owens Corning and its debtor-affiliates move the Court to
authorize them to enter into an agreement with Kemper Indemnity
Insurance Company to provide liability insurance for James J.
McMonagle, the Legal Representative for Future Claimants, and
pay the associated premiums. The Debtors, in addition, also seek
authority to renew the Insurance Agreement during the pendency
of the Chapter 11 cases, without further application, so long as
the insurance premium does not increase by more than 10%
annually.

The Insurance Agreement specifically provides:

A) Required payment of an annual premium totaling $115,500,
   inclusive of taxes;

B) $15,000,000 of aggregate coverage with a $10,000 per claim
   deductible; and

C) Coverage solely for liability arising during the performance
   of James McMonagle's duties as Future's Representative.

Norman L. Pernick, Esq., at Saul Ewing LLP in Wilmington,
Delaware, tells the Court the Debtors want to provide Mr.
McMonagle with liability insurance due to his unique role in the
Debtors' cases. The nature and extent of the liability to which
the Futures Representative may be subject to is uncertain as
Section 524(g) of the Bankruptcy Code was enacted only less than
six years ago. The few futures representatives that have been
appointed have been appointed to cases that have yet to reach
confirmation. Nonetheless, Mr. McMonagle needs insurance because
unlike the other professionals that have been retained in these
cases, Mr. McMonagle does not benefit from a corporate shield,
which deflects personal direct liability arising from
participation in the Debtors' cases.

Given that, Mr. Pernick submits that the entry into the
Insurance Agreement is in the best interest of the Debtors'
estates and their creditors and is an exercise of valid business
judgment. (Owens Corning Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PILLOWTEX CORPORATION: Resolves ARK CLO Lease Agreement Dispute
---------------------------------------------------------------
In a Court-approved stipulation, Pillowtex Corporation and ARK
CLO agreed that:

  (i) the Debtors agree to waive any right to seek and recover
      post-petition payments made to ARK CLO regarding the
      Lease Agreement;

(ii) ARK CLO agrees to waive any right to seek payment of any
      administrative claim regarding the Lease Agreement;

(iii) ARK CLO agrees that its claim regarding the Lease
      Agreement will be limited to an unsecured claim for no
      more than $1,500,000;

(iv) the agreements are expressly conditioned upon:

      (a) ARK CLO's acceptance of Exit Term Loan Notes regarding
          its Designated Post Petition Loans and execution of
          the related documents; and

      (b) the Plan becoming effective, including the Exit Term
          Loan Notes being issued regarding its Designated
          Post-Petition Loans and ARK CLO's acceptance of Exit
          Term Loan Notes regarding its Designated Post
          Petition Loans.

      If either of the two conditions do not occur, then all
      agreements will be considered null and void, and all
      parties' rights in respect of claims or defenses relating
      to the Lease Agreements and payments are preserved.
      (Pillowtex Bankruptcy News, Issue No. 28; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)    


POLAROID: Court Okays Settlement with Prepetition & DIP Agents
--------------------------------------------------------------
Through a Stipulation, Judge Walsh approves the settlement
Polaroid Corporation and its debtor-affiliates with the Pre-
petition and DIP Agents, with the Parties agreeing to these
terms:

    (a) On or before May 9, 2002, the Debtors must make an
        adequate protection payment of $20,000,000 from funds
        held by the Debtors to the Pre-Petition Agent for the
        benefit of the Pre-petition Secured Lenders;

    (b) Commencing on May 30, 2002, the Debtors will, on the
        30th day of each month, make an adequate protection
        payment of $1,500,000 from funds held by the Debtors to
        the Pre-petition Agent so long as no Event of Default
        have occurred and continuing;

    (c) If an adequate protection payment becomes due at a time
        that an Event of Default under the DIP Credit Agreement
        has occurred and is continuing, no such payment will be
        made unless and until the Event of Default has been
        cured or waived;

    (d) the Pre-petition Secured Lenders reserve their rights
        to:

        (1) assert claims for the payment of additional interest
            calculated at any other applicable rate of interest,
            or on any other basis provided or in the Existing
            Agreement, and

        (2) request further or different adequate protection,
            and the Debtors and each party in interest in these
            cases reserves each of their respective rights to
            object to any such assertion or request;

    (e) Nothing is this Stipulation will be construed as an
        admission, determination or as evidence that the:

        (1) value of the Pre-petition Secured Lenders'
            collateral position has either increased, decreased
            or stayed the same, since the Petition Date or at
            any other time; or

        (2) Pre-petition Secured Lenders are at risk of
            suffering diminution in their collateral position;
            or

        (3) Pre-petition Secured Lenders' existing collateral,
            including the Adequate Protection Obligations is
            insufficient to adequately protect the interests of
            the Pre-petition Secured Lenders;

    (f) The determination of whether each payment referenced and
        authorized herein is applied to interest or principal
        outstanding under the Existing Agreements is reserved
        for a later date and each party in interest in these
        cases reserves its respective rights with respect to
        future determination. (Polaroid Bankruptcy News, Issue
        No. 17; Bankruptcy Creditors' Service, Inc., 609/392-
        0900)


RAILAMERICA: Closes Syndicated $475M Sr. Secured Loan Financing
---------------------------------------------------------------
RailAmerica, Inc. (NYSE: RRA), the world's largest short line
and regional railroad operator, has successfully completed a
syndicated $475 million senior secured loan financing.  UBS
Warburg and Morgan Stanley served as joint lead arrangers for
this facility.  A total of 73 banks and other financial
institutions participated in the financing, which consists of a
six-year $100 million revolving credit facility and a seven-year
$375 million term loan.  Initially, the financing enables
RailAmerica to reduce the rate on its senior debt by 75 basis
points, to restructure its interest rate hedge, and to take
advantage of the prevailing historically low interest rates.  
The Company expects that these actions will result in a
reduction of its interest expense by approximately $8 million
over the next 12 months.

The proceeds of the financing will be used to prepay the
Company's existing senior indebtedness and the associated
interest rate swap obligation, fund acquisitions, and for
general corporate purposes.  The $100 million revolving credit
will be available to the Company for acquisitions, working
capital, and other corporate needs.

"This financing, which was supported enthusiastically by the
financial institutions, was oversubscribed by a factor of four.  
We consider this to be a ringing endorsement of our Company's
historical operating performance as well as our current business
plan and our improved financial condition," said Gary O. Marino,
Chairman, President and Chief Executive Officer of RailAmerica.  
"These credit facilities give RailAmerica access to a
significant source of funding and demonstrate the Company's
ability to successfully access the financial markets.  It
substantially increases our liquidity to more than $150 million
of cash and unused availability, and greatly strengthens our
financial position by reducing required principal amortization,
lowering our interest costs, and increasing our unused
availability, all of which will allow us to aggressively pursue
additional accretive acquisitions that we believe are available
in the marketplace."

UBS Warburg LLC and Morgan Stanley Senior Funding, Inc. also
served as joint bookrunners.  Morgan Stanley Senior Funding,
Inc. acted as syndication agent, Credit Lyonnais served as
documentation agent, and Bank of Nova Scotia served as
collateral agent.  UBS AG Stamford Branch is acting as the
administrative agent for the facilities.

RailAmerica, Inc. -- http://www.railamerica.com-- the world's  
largest short line and regional railroad operator, owns 50 short
line and regional railroads operating approximately 13,000 route
miles in the United States, Canada, Australia, Chile, and
Argentina.  In North America, the Company's railroads operate in
27 states and six Canadian provinces.  Internationally, the
Company operates an additional 4,300 route miles under track
access arrangements in Australia and Argentina.  In October
2001, RailAmerica was ranked 85th on Forbes magazine's list of
the 200 Best Small Companies in America; in July 2001, the
Company was named to the Russell 2000(R) Index.

As previously reported, Standard & Poor's assigned a BB rating
to RailAmerica Inc.'s proposed $475 million Sr. Secured Credit
Facilities.


SAFETY-KLEEN: Chemical Services Sale Hearing Set for June 13
------------------------------------------------------------
Safety-Kleen Corp.'s Chemical Services Division Sale Hearing and
consideration of Clean Harbors Transaction, subject to higher
and better bids, is scheduled for June 13, 2002, at 3:30 p.m.
before Judge Walsh in Wilmington. (Safety-Kleen Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900)    


SOFTNET SYSTEMS: Fails to Meet Nasdaq Listing Requirements
----------------------------------------------------------
SoftNet Systems, Inc. (Nasdaq:SOFN), said it received a letter
from the NASD called a Nasdaq Staff Determination. Because the
Company's operating subsidiary, Intelligent Communications,
Inc., ceased operations, the Staff letter takes the position
that the Company does not have ongoing business operations and
therefore does not meet the requirements for continued listing
set forth in Marketplace Rules 4300 and 4330. As a result, the
Nasdaq Staff Determination states that the Company's securities
are subject to delisting from The Nasdaq National Market. The
Company is today requesting a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination, and the
Nasdaq Staff has indicated that a delisting of the Company's
securities will be stayed pending outcome of the hearing. There
can be no assurance that the Panel will grant the Company's
request for continued listing.

As previously announced, the Company is continuing actively to
pursue strategic transactions with other companies.

For more information about the Company, please visit
http://www.softnet.com


SYNSORB BIOTECH: Posts Improved First Quarter 2002 Results
----------------------------------------------------------
SYNSORB Biotech Inc. (NASDAQ:SYBBD)(TSE:SYB) reported its
financial results for three months ended March 31, 2002. All
dollar values herein are Canadian.

During the first quarter of 2002, SYNSORB:

     --  Sold 1,530,800 Oncolytics shares for net proceeds of
$5,482,880

     --  Repaid all outstanding debt

     --  Restructured its Board of Directors and management

     --  Further reduced staff levels

     --  Listed its manufacturing facility for sale

     --  Commenced the process of gaining approval to distribute
no less than 4,000,000 Oncolytics shares to SYNSORB
shareholders.

Subsequent to the end of the quarter, SYNSORB relocated its
operations to its manufacturing facility to further reduce
expenditures. At its annual meeting of shareholders held after
the end of the quarter, a new Board of Directors was elected and
the Company gained approval to distribute 4,000,000 of its
Oncolytics shares to SYNSORB shareholders. The Company retained
725,000 free-trading Oncolytics shares as a potential source of
liquidity. An eight for one consolidation of SYNSORB shares was
also approved at the meeting.

"During the first quarter of 2002, SYNSORB achieved many goals
that can facilitate the Company moving forward with its
restructuring," said Jim Silye, President and Chief Executive
Officer of SYNSORB. "With no outstanding debt, full ownership of
the manufacturing facility, and liquidity from the retained
Oncolytics shares, SYNSORB's Board can continue our efforts to
realize value from the redundant assets in the Company,
including our significant tax pools."

Financial Results:

In the first quarter of 2002, SYNSORB recorded net income of
$3,518,000, compared to a net loss of $4,068,000 for the first
quarter 2001. The income was experienced as a result of the gain
on the sale of investment in Oncolytics, which closed in the
first quarter.

The Company reported $107,000 in milestone payments and $25,000
in interest income in the first quarter, compared to interest
income of $225,000 during the same period in 2001. Lowered
interest income was as a result of significantly decreased cash
balances through the period.

The Company's total expenses for the first quarter ended March
31, 2002 were $377,000 compared to $3,990,000 for the first
quarter in 2001. The Company's first quarter operating expenses
were $191,000, compared to $1,381,000 for the same period in
2001.

At March 31, 2002 SYNSORB's cash balance was $2,320,000 compared
to $5,841,000 at December 31, 2001.

Shares of SYNSORB Biotech Inc. trade on the Toronto Stock
Exchange in Canada (symbol "SYB") and on Nasdaq in the United
States (ticker "SYBBD").

                              *   *   *

As previously reported (May 27, 2002 edition of Troubled Company
Reporter), SYNSORB Biotech Inc. (Nasdaq: SYBB) received a
NASDAQ Staff Determination on May 16, 2002 indicating that
SYNSORB fails to comply with the minimum bid price requirements
for continued listing set forth in the NASDAQ market place rules
and its common shares are, therefore, subject to delisting from
the NASDAQ national market. SYNSORB has requested a hearing
before a NASDAQ Listing Qualifications Panel to review the Staff
Determination. There can be no assurance the Panel will grant
SYNSORB's request for continued listing.


TELIGENT: Wins Nod to Hire Paul Hastings as Employment Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gives its stamp of approval to Teligent, Inc. and its debtor-
affiliates to retain and employ Paul, Hastings, Janofsky &
Walker LLP as Special Employment Counsel.

Paul Hastings has represented the Debtors with respect to a wide
range of employment law matters, including providing advice with
respect to employment policies and practices, and litigation of
employment law cases including discrimination, non-competes,
sales commissions disputes and other matters, since 1997.

Paul Hastings will not serve as bankruptcy and reorganization
counsel to the Debtors.  The Debtors anticipates that additional
representations will necessarily involve both Paul Hastings and
the Debtors' bankruptcy counsel, the Debtors believe that the
services of Paul Hastings will be complementary rather than
duplicative of the services to be performed by their bankruptcy
counsel.

Paul Hastings assures the Court that it will conduct an ongoing
review of its files to ensure that no conflicts or other
disqualifying circumstances exist or arise, in connection with
this engagement. If any new facts or relationships are
discovered, Paul Hastings will supplement its disclosure to the
Court.

The hourly rates charged by Paul Hastings in its Washington,
D.C. office are:

     partners                          $400 - $525 per hour
     associates and staff attorneys    $240 - $350 per hour
     legal assistants                  $110 - $195 per hour

Teligent, Inc., a provider of broadband communication services
offering business customers local, long distance, high-speed
data and dedicated Internet services over its digital SmartWave
local networks in major markets throughout the United States,
filed for chapter 11 protection on May 21, 2001. James H.M.
Sprayregen, Esq., Matthew N. Kleiman, Esq. and Lena Mandel, Esq.
at Kirkland & Ellis represent the Debtors in their restructuring
effort. When the Company filed for protection from its
creditors, it listed $1,209,476,000 in assets and $1,649,403,000
debts.


TRISTAR: Inter Parfums Unit Completes Asset Acquisition for $7MM
----------------------------------------------------------------
Inter Parfums, Inc. (NASDAQ National Market: IPAR) announced
that its wholly-owned subsidiary, Jean Philippe Fragrances, LLC,
has completed the purchase of certain mass market fragrance
brands, intellectual property and trademarks of Tristar
Corporation for $3.2 million and Tristar inventory for $3.7
million.

Tuesday's closing follows on the court approved bid by Jean
Philippe Fragrances and Fragrance Impressions Corporation, a
newly formed company owned by the Tristar's pre-Chapter 11
management and certain Tristar creditors. In connection with the
aforementioned transaction, Fragrance Impressions Corporation
purchased most of the remaining assets of Tristar and has
assumed certain Tristar debt. Jean Philippe Fragrances has
agreed to utilize Fragrance Impressions' manufacturing
facilities to produce goods under the newly acquired Tristar
brands. Tristar and Fragrances Impressions have entered into a
non-competition agreement with Jean Philippe Fragrances relating
to alternative designer fragrances and certain mass market
cosmetics.

Commenting, Jean Madar, Chairman & CEO of Inter Parfums, Inc.,
stated, "This acquisition and related agreements benefit our
mass market business on many fronts. We now have greater market
share; the additional brands open new retail accounts for us,
and of course, we are adding sales volume. At the same time, we
have turned an ADF competitor into a manufacturing partner, who
like us, benefits from the growth and continued success of our
newly acquired brands. As previously reported, we believe that
sales under the new brands will approximate $15 million over the
next 12 months."

Inter Parfums, Inc. develops, manufactures and distributes
prestige perfumes such as Burberry, S.T. Dupont, Paul Smith,
Christian Lacroix, Celine and FUBU, as well as mass market
fragrances, cosmetics and personal care products in over 100
countries worldwide.


VECTOUR: Asks Court to Set August 1 as Administrative Bar Date
--------------------------------------------------------------
VecTour Inc. and its debtor-affiliates request the U.S.
Bankruptcy Court for the District of Delaware to establish
August 1, 2002 as the deadline for all Entities to file requests
for payment from the Debtors for claims entitled to an
administrative expense -- or be forever barred from asserting
that claim.

The Administrative Expense Claims Bar Date apply to each and
every claim that is allegedly entitled to a distribution that
first arose during the period from the Petition Date through
July 15, 2002, excluding:

     a. any Administrative Expense Claim previously allowed by
        order of the Court;

     b. any Administrative Expense Claim for which a Request has
        already been properly filed with the Court; and

     c. any Administrative Expense Claim arising under Secs.
        327, 330 and 331 of the Bankruptcy Code for allowance
        and/or reimbursement of expenses of a professional
        employed in this case by the Debtors or the Official
        Committee of Unsecured Creditors or claims for
        reimbursement of expenses for Committee members.

The Debtors propose to serve the notice by first class U.S. Mail
on or before June 25, 2002.  The Administrative Expense Claim
Bar Date Notice states, among other things, that Requests must
be filed with the Court and served upon counsel for the Debtors,
counsel to the Bank Group and counsel for the Committee on or
before 4:00 p.m. on August 1, 2002.

The Debtors point out that establishing August 1, 2002 as the
Administrative Expense Claims Bar Date in this case will provide
creditors with ample time after the date of the mailing of the
Notice within which to file and serve a Request.


W.R. GRACE: Zonolite Claimants Livid about Debtor-Filed Claims
--------------------------------------------------------------
Having previously acknowledged that lifting the stay and removal
of actual pending Zonolite cases would facilitate its
reorganization, W. R. Grace & Co. unexpectedly disclosed at the
April Omnibus Hearing that, several days earlier, it had filed,
without notice to the creditors involved, proofs of claim in the
name of selected creditors.  Grace indicated that it intended to
initiate a contested claims process with respect to those
claimants.  In response to the Debtors' Proposed Order Setting
the Schedule for Zonolite Attic Insulation liability, each of
Burke D. Jackowich of the Spokane firm of Lukins & Annis PS,
William D.  Sulliva n of the  Wilmington firm of Elzufon Austin
Reardon Tarlov & Mondell PA, Elizabeth J. Cabraser, Fabrice N.
Vincent and John Low-Beer of the San Francisco firm of Lieff
Cabraser Heimann & Bernstein LLP, Thomas M. Sobol and Matthew L.
Tuccillo of the Boston firm of Lieff Cabraser Heimann and
Bernstein LLP, Edward J. Westbrook and Robert M. Turkewitz of
the South Carolina firm of Ness Motley Loadholt Richardson &
Poole, and Allan M. McGarvey of the Minnesota firm of McGarvey
Heberling Sullivan & McGarvey PC, counsel for the Claimants for
whom W.R. Grace filed individual proofs of claims, announce
their opposition to Grace's actions, and ask that Judge
Fitzgerald strike the proofs of claim.

The individual claimants would be saddled with the impossibly
expensive burdens of litigating a single issue of Grace's
choosing, disconnected from the actual state laws or issues
governing those creditors' claims. Further, Grace proposed that
the individuals selected by Grace would litigate the global
Zonolite issue as defined by Grace, in their individual names
only, creating for Grace a "heads I win, tails you lose"
situation.

An unfavorable outcome from Grace would establish liability for
only a few claims, while a favorable outcome could functionally
bar the claims of millions of creditors.  Having previously
announced to the Court that it was "drawing a line in the sand"
as to any class treatment of Zonolite creditors, Grace has
attempted to single-handedly decertify a previously certified
state class to whom two of the selected claimants owe fiduciary
duties - Marco Barband and Ralph Busch. Grace has simply
declared in its own filing that the claimants are only appearing
individually. The course Grace has proposed is as perilous as it
is unprecedented.

                Grace Invites Judge Fitzgerald Onto
           A Slippery Slope Into a Constitutional Morass

Judge Fitzgerald has made clear that evaluating Grace's
potential liability to Zonolite claimants is an important
initial step in Grace's reorganization. The question now before
the Court is selecting an appropriate and trustworthy procedural
mechanism for bringing Grace's Zonolite liabilities into focus
without trampling the Claimants' due process rights to notice
and fair procedure. Grace's proposal does neither. The Debtor,
with no occasion to warrant its conduct, has "perched this Court
on the brink of a slippery slope falling straight into a morass
of Constitutional and procedural concerns," Mr. Jackowich tells
Judge Fitzgerald. The Debtors' latest invention would permit
Grace to choose its plaintiffs and choose the issue that
plaintiffs would litigate, divorce those plaintiffs from the
class of Zonolite creditors they have been appointed to
represent, and impose on those individual creditors impossibly
large financial burden intrinsic to litigating the issue Grace
has defined. Any defendant would certainly enjoy such a system
of justice.  However, that is simply not the system envisioned
by either the Constitution or the Bankruptcy Code. Ratification
of such a proposal would surely divert Grace's bankruptcy from
the important task of timely compensating Grace's asbestos
victims, and reroute it into appellate practice involving issues
of due process.

              Lift the Stay or Remove to Bankruptcy Court

As the ZAI claimants have consistently maintained, the proper
procedure to adjudicate actual Zonolite claims or limited issues
presented by those claims is to lift the stay. This would allow
suits to go forward either in their present jurisdictions, or
upon removal and consolidation, before Judge Fitzgerald.  All of
the procedural mechanisms for determining the liabilities of the
Debtor are available in the courts, creating no need to bend and
break the Bankruptcy Rules to fabricate an unprecedented
procedure to hear these issues.   The Claimants request that the
Court strike the Debtors' Proofs of Claims and deny the Debtors
order.

Aside from Grace's unprecedented and unworkable procedural
device, its statement of the issues to be determined in this
hearing as whether 'ZAI presently poses an unreasonable risk of
harm to the occupants of the home..." is neither factually nor
legally correct. This is not a personal injury case. The factual
issues, succinctly framed, are whether ZAI contains asbestos, a
known toxic substance, whether there are avenues of exposure to
homeowners, and whether homeowners are reasonable in taking
steps to avoid this exposure. Due to the Debtor's misstatement
of these issues, the Claimants present arguments regarding
"facts" of Zonolite Insulation which repeat those allegations
made in other pleadings and lawsuits.  In essence, the Claimants
argue that Grace's manufacturing and marketing of Zonolite Attic
Insulation occurred with its full knowledge that the insulation
contained asbestos and was hazardous.  Further, the Claimants
argue that the presence of Grace's Zonolite Attic Insulation
provides for risk of exposure to homeowners and others to
asbestos.

          Letting Grace Pick the Litigant and the Issue
           Offends the Bankruptcy Code and Due Process

Returning to the issues in this Motion, the Claimants argue that
allowing Grace to file individual proofs of claims is
procedurally and constitutionally impermissible.  Grace purports
to file proofs of claim in the name of creditors of Grace's
selection, despite those creditors having ample time within
which to timely file claims on their own behalf.  Having done
so, Grace now demands that the creditor selected by Grace be
charged with the responsibility and burdens of investigating and
litigating in their own name, but functionally on behalf of
millions of creditors nationwide, a single issue of Grace's
creation, without regard for the actual state laws governing
those creditors' claims or the range of liability issues
potentially determinative of those claims.  Such a process is
not authorized by the Bankruptcy Code and offends basic notions
of due process.

The Bankruptcy Code gives creditors the right to file a proof of
claim.  The "exceptional" power of a debtor to file a proof of
claim on behalf of a creditor is narrowly prescribed: "If a
creditor does not timely file a proof of such creditor's claim,
the debtor or the trustee may file a proof of such claim."

The express language of the Bankruptcy Code manifests the
legislature's intent to limit a debtor's right to file a proof
of claim to situations where the creditor has failed to timely
exercise its own substantial right afforded by the Code and the
debtor desires to protect itself against claims that are not
themselves dischargeable, or arguably not dischargeable, in
bankruptcy.  In In re Ginger, 48 B.R. 1000 (D.C. 1985), where
section 501 was employed to file a dischargeable claim for
strategic reasons, that claim was disallowed as inconsistent
with the legislative objectives of the Code.  In the present
case, Grace seeks to abuse the bankruptcy process by
strategically segregating out for litigation dischargeable
claims of its own choosing.  "Moreover, in the case of two
creditors, by slight of comment contained in their filing,
purport to isolate two Court appointed class representatives
from the class of creditors to whom they owe duties to
represent.  This strategic effort is violative of 501(c) and the
statute's intent."  Mr. Jackowich comments that it is no
surprise that this is without precedent. He urges Judge
Fitzgerald to decline Grace's invitation to assume the risks of
rewriting the Code by striking Grace's proofs of claim.

                  What About Costs & Fees for
                        The Plaintiffs?

Mr. Jackowich then lists a number of practical and due process
issues he says are raised by the Debtors' suggested procedures,
such as the fact that the Plaintiffs' costs and attorneys fees
for this proposed hearing will likely be extensive and will
certainly far outstrip any recovery for the individual.  At the
same time, the Debtor has spent hundreds of thousands of dollars
from the estate on attorneys' fees and experts to prepare for
just such a hearing.  There is simply no possible way that an
individual Plaintiff can be burdened with the cost of such a
hearing, and neither the Court nor the Debtor has proposed an
equitable solution to this dilemma.  Allowing the  Debtor to
force these individuals to bear such a burden raises substantial
substantive and procedural due process issues that would have to
be addressed before any hearing could be commenced.

              Grace Is Trying to Break Up The Class

The Debtor has filed a proof of claim for Marco Barbanti as an
individual.  However, Mr. Barbanti is the class representative
for a duly certified class in Washington State.  A previously
certified class constitutes a single claimant.  Here the Debtor
seeks to break apart that class by naming the representative
individually.  This is clearly impermissible.  As the Claimants
have maintained throughout this proceeding, they would be
willing to file a class proof of claim for the Washington class
and proceed on a class basis to try the Debtors' liabilities.
However, the Debtor simply cannot remove Mr. Barbanti from the
class on its own accord.

It is clear that Grace's proposed Order is premature under the
Bankruptcy Code and raises a quagmire of procedural and
constitutional issues that Judge Fitzgerald would have to
address before even hearing evidence on the Debtors'
liabilities. Finally, the Debtors' proposal is inequitable and
unjust as it has spent so much money to litigate this action,
and there is not a foreseeable recovery for the Claimants.  For
these reasons, Judge Fitzgerald should strike the Debtors'
proofs of claim and deny the Debtors' proposed Order.

                     Judge Fitzgerald Wants
                  Copies of the Proofs of Claim

Judge Fitzgerald orders that the Debtors produce in chambers
copies of all of the proofs of claim that the Debtors have
purportedly filed on behalf of the Zonolite plaintiffs, along
with a copy of the transcript of the April hearing at which this
disclosure occurred. (W.R. Grace Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WHEELING-PITTSBURGH: Wants Exit Financing & to Pay RBC Dain Fees
----------------------------------------------------------------
Pittsburgh-Canfield Corporation, Wheeling-Pittsburgh Steel
Corporation, and the related and subsidiary Debtors, represented
by Michael E. Wiles and Richard F. Hahn of the New York firm of
DEBEVOISE & PLIMPTON as lead counsel, and by James M. Lawniczak
and Scott N. Opincar of the Cleveland firm of CALFEE, HALTER &
GRISWOLD LLP as local counsel, ask Judge William Bodoh for entry
of an Order authorizing Wheeling-Pittsburgh Steel Corporation:

      (i) to execute, and perform under, RBC Dain Rauscher
Inc.'s proposal for the arrangement of exit financing, and

       (ii) to pay certain fees, costs and expenses in that
connection.

               Emergency Steel Loan Guarantee Act

In 1999, Congress enacted the Emergency Steel Loan Guarantee Act
in response to the crisis in the United States steel industry
precipitated by a record increase in foreign steel imports.  
Recognizing that the crisis had deprived most steel companies of
access to adequate financing from conventional sources, the ESLA
established the Emergency Steel Loan Guarantee Board and charged
it with providing loan guarantees to qualified steel companies.

Since the initiation of these cases, the Debtors have explored
various avenues for the restructuring of their businesses and
their obligations to their creditors.  The Debtors believe that
these efforts will reach fruition during the next few months and
they hope to file a plan of reorganization with this Court.  The
Debtors anticipate that financing structured pursuant to the
Emergency Steel Loan Guarantee Program will be an integral part
of any such plan of reorganization.

                  RBC Dain Rauscher Inc. Proposal

In an effort to obtain exit financing, the Debtors have
approached eight banks and lending institutions identified by
the Debtor or major creditors as potential sources of financing.  
The Debtors have met with all of these potential lenders and
provided many of them with extensive due diligence material
concerning the Debtors, their businesses and their financial
condition.  To date, the Debtors have received proposals from
two institutions with respect to the structuring and syndication
of a new senior secured credit agreement pursuant to the ESLGP.  
Over the past several weeks, the Debtors have reviewed each of
these proposals and discussed their terms  with various parties
in interest.  As a result of these discussions, the Debtors have
selected a proposal submitted by RBC Dain Rauscher Inc. to act
as arranger in connection with an exit financing facility.

                     The Proposed Financing Terms

By this Motion, the Debtors seek approval to execute, and
perform under, the RBC Dain proposal letter.  The Debtors have
retained RBC Dain to act as arranger in connection with the
Financing, subject to the approval and authorization of this
Court.  The Debtors include a preliminary summary of the terms
of the proposed Financing (actual terms to be subject to
negotiation and agreement among the Debtors, administrators of
the ESLGP and the various lenders party to the Financing):

       (a)  Facilities.  The Term Sheet provides for a
combination of a:

            (i) a revolving credit line of up to $200 million,

           (ii) Tranche A Term Loans of up to $212.5 million,
                and

          (iii) Tranche B  Term Loans of up to $37.5 million.

       (b)  Term.  Subject to amortization, the Term Loans would
be due on the 10th anniversary of the closing date.

       (c)  Interest.  The Tranche A Term Loans would bear
interest at a rate of LIBOR plus 200 basis points.  The Tranche
B Term Loans would bear interest at a rate of LIBOR plus 400
basis points.

       (d)  Collateral.  Subject to the agreement of the ESLGB
and the participating lenders, the Term Loans would be secured
by:

             (i) a first priority perfected security interest in
all fixed assets of WPSC, and

             (ii) a second priority perfected interest (subject
only to the security interest in respect of the revolving credit
facility) in all inventory and receivables of WPSC.

       (e)  Guarantees.  The Tranche A Term Loans would be
guaranteed by the ESLGB and, to the extent permitted by the
ESLGB, the Tranche B Term Loans would be guaranteed by agencies
of the States of West Virginia and Ohio or certain vendors.

       (f)  Closing Conditions.  The Term Sheet contemplates
that completion of the Financing would be subject to
satisfaction of various conditions including, among others, RBC
Dain's acceptance into the ESLGP, procurement of additional
Financing guarantees to the extent permitted by the ESLGB,
receipt of an acceptable market feasibility study with respect
to the Debtors' business plan and completion of legal,
managerial and financial due diligence.

       (g)  Fees.  The Letter provides that WPSC will pay:

             (i) an Arrangement Fee of 2% of the principal
amount of all Term Loans payable upon funding of the Financing,

             (ii) a monthly fee of $50,000 during the
structuring and syndication of the Financing, and

             (iii) selling expenses (such as sales commissions
and syndication fees) incurred in connection with the funding of
the Term Loans and agreed to in writing by WPSC.

             (iv) The Term Sheet submitted by the Debtors shows
syndication fees of 0.50% to 2.5% depending on the credit
characteristics of the tranche and market conditions.

                    RBC Dain's Fees and Expenses

In addition, RBC Dain will be entitled to reimbursement for all
out-of-pocket expenses and disbursements, including, without
limitation, travel and lodging expenses and charges for data
processing, communications, research, courier services, and the
reasonable fees and expenses of RBC Dain's outside legal counsel
and RBC Dain's technical consultant Metal Strategies Inc. and,
with the approval of WPSC, such accountants and other experts as
RBC Dain may engage in connection with the Financing.

The Letter also provides that RBC Dain is to receive a retainer
in the amount of $50,000 in respect of fees and expenses of its
legal counsel following approval of the Letter by Judge Bodoh.  
Upon completion or termination of the retention, RBC Dain will
repay to WPSC the amount of such retainer provided that all of
the fees and disbursements of RBC Dain's legal counsel have been
previously and promptly paid.

                      RBC Dain's Services

If Judge Bodoh grants the Order sought by this Motion, RBC Dain
will use its reasonable best efforts to arrange the Financing on
terms reasonably acceptable to WPSC but will not be committed
with respect thereto.  RBC Dain will provide such specific
services for the Debtors as RBC Dain and the Debtors shall deem
appropriate in connection with the Financing, including:

       (a)  Assistance with the development of an appropriate
structure for the proposed Financing;

       (b)  Filing an application to the ESLGB requesting a
guarantee under the ESLGP as contemplated by the Financing;

       (c)  Filing applications with the State of Ohio and the
State of West Virginia as contemplated for the portion of the
Financing not guaranteed by the ESLGB;

       (d)  Assistance with the preparation of an investor
presentation designed to introduce prospective financing sources
to WPSC and the proposed Financing;

       (e)  Identification and contacting of potential financing
sources and organization of the subsequent review process by
potentially interested parties;

       (f)  Coordination of due diligence and such other
meetings as necessary with lawyers, accountants, lenders and
rating agencies; and

       (g)  Assisting in the preparation of and negotiation of
the definitive documentation required in respect of the
Financing.

Section 105(a) of the Bankruptcy Code provides that .[t]he court
may issue any order. that is necessary or appropriate to carry
out the provisions of this title..  The Debtors submit to Judge
Bodoh that the relief requested herein will enable them to
emerge from bankruptcy protection and is consequently necessary
and appropriate to further the rehabilitative goals of the
Bankruptcy Code.

Section 363(b) of the Bankruptcy Code provides that a debtor
after notice and a hearing, may use, other than in the ordinary
course, property of the estate..  In this Circuit, the Debtors.
use of assets outside the ordinary course of business should be
approved by the Court if the Debtors can demonstrate a sound
business justification for the proposed transaction.  The
Debtors submit that the proposed use of the estates. funds to
pay the fees, costs and expenses associated with the Letter is
supported by the requisite reasonable exercise of the Debtors.
business judgment.  Exit financing is necessary to the Debtors'
successful reorganization and the Debtors will only be able to
obtain exit financing if they agree to pay such costs and
expenses. Moreover the terms of the Letter are reasonable and
customary for transactions of this nature. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


WILLIAMS COMMS: Obtains Court Injunction Against Utilities
----------------------------------------------------------
Williams Communications Group, Inc., and its debtor-affiliates
obtained Court order prohibiting Utility Providers from
altering, refusing, or discontinuing utility services to, or
discriminating against, the Debtors solely because of the
commencement of the Debtors' Chapter 11 cases or their
nonpayment of amounts owed for services rendered before the
Petition Date. As proposed, the Utility Order:

A. determines that the Utility Providers are deemed to have been
   furnished with adequate assurance of payment for future
   utility services during the pendency of the Debtors' Chapter
   11 cases, and may not alter, refuse, or discontinue service
   to the Debtors;

B. prohibits the Utility Providers from requiring the Debtors to
   make any post-petition deposits (or other forms of security)
   as a condition of receiving post-petition service; and

C. prohibits the Utility Providers from drawing upon any
   existing cash security deposit, surety bond, or other form of
   security to apply to pre-petition claims; provided, however,
   that entry of the Utilities Order is without prejudice to the
   right of the Utility Providers to seek additional adequate
   assurances from the Debtors or the Court pursuant to the
   Determination Procedures.

Although the Debtors have made every attempt to identify all
Utility Providers, certain Utility Providers may not be included
on the Utility Providers Services List. Accordingly, the Court
directs that Utility Providers not listed on the Utility
Providers Service List, be subject to the terms of the Utility
Order, including the Determination Procedures, following service
of the Utility Order on any such Additional Utility Provider.

The Debtors proposed the following procedures by which a Utility
Provider may request additional assurance of payment from the
Debtors:

A. Within 10 business days after the entry of the Utility Order,
   the Debtors will mail a copy of the Utility Order to the
   Utility Providers identified on the Utility Providers Service
   List. In addition, the Debtors will mail a copy of the
   Utility Order to each Additional Utility Provider as soon as
   practicable after such provider is identified by the Debtors.

B. A Utility Provider that wishes to seek additional assurance
   of payment from the Debtors will be required to make a
   written request for such additional assurance within 30 days
   after service of the Utility Order on such provider and
   address the Request to:

  a. the Debtors, WILLIAMS COMMUNICATIONS GROUP, INC., One
     Technology Center, Tulsa, Oklahoma 74103 (Attn: Mr. Richard
     Martin);

  b. counsel to the Debtors, JONES, DAY, REAVIS & POGUE, 222
     East 41st Street, New York, New York 10017 (Attn: Erica M.
     Ryland, Esq.); and

  c. counsel to the Agent for the Debtors' prepetition secured
     lenders, CLIFFORD CHANCE ROGERS & WELLS, 200 Park Ave, New
     York, New York 10166 (Attn: Margot B. Schonholtz, Esq.).

C. Without further order of the Court, the Debtors may enter
   into agreements granting Utility Providers any additional
   assurance of future payment that the Debtors, in their sole
   discretion, determine is reasonable.

D. If a Utility Provider timely files a Request the Debtors
   believe is unreasonable, then, after good faith negotiations
   by the parties, the Debtors will:

   a. file a motion seeking a determination of adequate
      assurance with respect to the Request; and

    b. schedule a hearing before the Court on the Determination
       Motion that is at least 20 days after the filing of the
       Determination Motion.

E. Any Utility Provider that does not timely submit a Request
   will be deemed to have adequate assurance of payment under
   Section 366 of the Bankruptcy Code for the pendency of the
   Debtors' Chapter 11 cases.

F. If a Determination Motion is filed or a Determination Hearing
   is scheduled, the Utility Provider seeking additional
   assurance of payment will be deemed to have adequate
   assurance of payment for future utility services under
   Section 366 of the Bankruptcy Code, without the need for
   payment of additional deposits or other security, until the
   Court enters an order in connection with such Determination
   Motion or Determination Hearing. (Williams Bankruptcy News,
   Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
   0900)


WILLIAMS COMPANIES: Fitch Bullish About Balance Sheet Plans
-----------------------------------------------------------
Fitch Ratings views The Williams Companies, Inc.'s announcement
of plans to strengthen its balance sheet through additional
asset sales and common equity issuance as a positive
development. Fitch rates WMB's senior unsecured notes and
debentures 'BBB' and its commercial paper 'F2'. The Rating
Outlook is Negative.

Fitch believes that Tuesday's announcement underscores WMB's
commitment to credit quality improvement. Specifics of the plan
include the issuance of $1 billion to $1.5 billion of common
equity in the near-term, up to $3 billion of asset sales,
further operating expense reductions, and a pledge to maintain
base-level capital spending levels in line with operating cash
flow. If successfully implemented, these initiatives could lead
to a material improvement in key quantitative credit protection
measures and debt leverage by 2003. Fitch notes that WMB's
strategy does entail an above average degree of execution risk
particularly given the volatile capital market environment
currently plaguing the energy sector as well as a potentially
distressed asset sale market.

WMB's current ratings are supported by the predictable cash flow
contribution from its regulated interstate natural gas pipeline
segment (approximately 40% of adjusted 2001 EBITDA) and the core
competencies of its integrated Energy Services segment which
owns and operates a portfolio of traditional asset-based energy
businesses. Energy marketing and trading activities continue to
expanded at a rapid pace both in terms of profit contribution
and transaction volume. However, given WMB's emphasis on long-
term structured transactions including tolling contracts and
full requirements deals, continued success in this area hinges
upon WMB's ongoing ability to lay-off risk in less liquid long
dated power markets as well as manage ongoing counterparty
credit and commodity market risks.

The Rating Outlook for WMB remains Negative pending the
successful renegotiation of WMB's 364-day revolving credit
facility maturing in July 2002 and achievement of year-end 2002
debt leverage targets. In addition, the Outlook reflects some
uncertainty over the ultimate impact on WMB of the recent
bankruptcy filing of Williams Communications Group (WCG), WMB's
former telecommunications subsidiary. While significant progress
has been made toward resolving WCG financial exposure issues,
WMB is a party to numerous shareholder class action suits
related to the WCG spin-off. Fitch is unable, at this time, to
accurately quantify any potential economic impact that may
result from these or any other lawsuits which may potentially
emanate from the WCG bankruptcy. In addition, the time horizon
is uncertain. Fitch will continue to closely monitor the
situation.


WILLIAMS: Says S&P Action "Disappointing, But Not Surprising"
-------------------------------------------------------------
Williams (NYSE: WMB) said it is disappointed in but not
surprised by credit-rating agency Standard & Poor's downgrade of
the company's credit rating but reiterated that successfully
executing a plan it announced earlier Tuesday should help
resolve lingering credit-quality issues.  Williams also noted
that its credit quality is still investment grade at Standard &
Poor's.

The new rating is BBB- with a negative outlook.

In a release Tuesday, Standard & Poor's said the plan is subject
to substantial execution risk, but added that "the risks are
somewhat offset by the fact that management has stated its
commitment to stabilizing the existing ratings.  Management has
proven to be very proactive in enhancing the company's liquidity
position during a time of duress, following the market turmoil
caused by the Enron Corp. bankruptcy.  This proactive response
is expected to continue as management reduces leverage over the
next year."

Steve Malcolm, Williams' president, chairman and CEO, said, "As
I discussed earlier [Tues]day, we are determined to put the
industry's issues of credit quality and financial strength
behind us and get on with our business. Standard & Poor's
indicates that it sees some risk in the implementation of our
plan, so its action [Tues]day was not unexpected.  However, we
are confident that we can prove up the strategy we have
announced.  By delivering a total of about $8 billion in
financial improvements during the next 12 months, including the
improvements we have made to date, Williams fully expects to
remain an investment-grade company."

In Tuesday's announcement, Williams said it plans during the
next 12 months to:

     --  Issue $1 billion to $1.5 billion in common equity.  
That amount could be reduced in the event of transactions that
boost cash flows.

     --  Sell an additional $1.5 billion to $3 billion in
assets.

     --  Continue to focus on monetization of the significant
hedged cash-flow positions in marketing and trading contracts.

     --  Reduce annual costs by $100 million, double the
previous goal.

     --  Fund base-level capital expenditures, including all
mandatory, efficiency and highest-priority growth needs, with
cash flow from operations.  Fund additional growth opportunities
with an appropriate mix follow-on equity and debt.

     --  Use all net proceeds from sales of assets and initial
equity to pay down debt or increase liquidity.

Also, Williams will continue to evaluate the level of its
common-stock dividend.  And, the company has formed an internal
team within its energy marketing and trading business that is
dedicated to evaluating potential joint venture or other
alternative structural solutions to enhance that unit's risk-
mitigation tools.

So far this year, Williams has sold $1.1 billion in publicly
traded equity-linked securities; completed transactions covering
approximately $1.7 billion in assets; issued $1.5 billion in
bonds and reduced planned capital spending by nearly $2 billion.  
The company has eliminated nearly all of the so-called triggers
from its major on- and off-balance-sheet financial structures,
including the successful resolution of more than $2 billion in
liabilities related to its former telecommunications subsidiary.  
The remaining triggers have a maximum exposure of less than
$190 million and will mature next year.

"Williams has taken and continues to take quick decisive action
to improve our financial strength," Malcolm said.  "Clearly we
believe that fully executing on our plan should put us very
solidly in the investment-grade category and allow our business
to achieve its long-term growth potential."

Williams moves, manages and markets a variety of energy
products, including natural gas, liquid hydrocarbons, petroleum
and electricity.  Our operations span the energy value chain
from wellhead to burner tip.  Based in Tulsa, Okla., Williams
and its 12,000 worldwide employees contributed $45 million in
2001 to support the environment, health and human services, the
arts, and education in its communities.  Williams information is
available at http://www.williams.com


XEROX CORP: Elects Lawrence Zimmerman as Sr. V-President & CFO    
--------------------------------------------------------------
Xerox Corporation (NYSE: XRX) announced the election of Lawrence
A. Zimmerman to senior vice president and chief financial
officer, effective June 1. Zimmerman is retired from
International Business Machines Corporation, where he held
senior finance positions including corporate controller during
IBM's transition years in the early 1990s and the head of
finance for the multibillion dollar IBM server and technology
division.

"Larry has a proven track record as an effective financial
executive with balanced experience in global operations,
strategic planning, accounting, and internal controls," said
Anne M. Mulcahy, Xerox chairman and chief executive officer.
"His financial acumen, extensive knowledge of today's technology
and services industry and demonstrated success in managing
worldwide fiscal planning and processes are impressive assets
that complement the strengths of Xerox's new management team."

Zimmerman, 59, retired in 1998 after a 31-year career with IBM.
In addition to serving as the senior finance executive for the
server division from 1996-1998, Zimmerman was vice president of
finance for IBM's multibillion dollar Europe, Middle East and
Africa operations, headquartered in Paris, from 1994 -1996, and
corporate controller from 1991-1994. After retiring from IBM,
Zimmerman served for one year as executive vice president and
chief financial officer of System Software Associates, Inc.

"Xerox's efforts in the past year to successfully restore its
financial health are evidence of precise execution and an
uncompromising resolve to move the business forward," said
Zimmerman. "As CFO, I intend to build on this solid foundation
by continuing the progress made in strengthening liquidity,
tightening internal controls and ensuring competitive costs
while driving Xerox's return to sustained profitability. This
opportunity fulfills a personal career objective - to lead the
global finance organization of a company with a strong heritage,
a powerful brand and a promising future."

Zimmerman is a graduate of New York University where he earned a
bachelor of science degree in finance. He also holds a master's
degree in business administration from Adelphi University.

DebtTraders reports that Xerox Corporation's 9.75% bonds due
2009 (XEROX9A) are quoted at a price of 91.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=XEROX9Afor  
real-time bond pricing.


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

    Issuer           Coupon   Maturity  Bid - Ask  Weekly change
    ------           ------   --------  ---------  -------------
Crown Cork & Seal     7.125%  due 2002  95.5 - 97.5      +0.5
Federal-Mogul         7.5%    due 2004    22 - 24        +2
Finova Group          7.5%    due 2009    35 - 36        0
Freeport-McMoran      7.5%    due 2006    89 - 91        0
Global Crossing Hldgs 9.5%    due 2009   1.5 - 2.5       0
Globalstar            11.375% due 2004   6.5 - 8.5       -0.5
Lucent Technologies   6.45%   due 2029    63 - 65        0
Polaroid Corporation  6.75%   due 2002     1 - 3         0
Terra Industries      10.5%   due 2005    85 - 88        -1
Westpoint Stevens     7.875%  due 2005    58 - 60        -5
Xerox Corporation     8.0%    due 2027    49 - 51        0

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

                          *********

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

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

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

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

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

                          *********

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

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

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

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

The TCR subscription rate is $625 for 6 months delivered via e-
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are $25 each.  For subscription information, contact Christopher
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                     *** End of Transmission ***