TCR_Public/020603.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, June 3, 2002, Vol. 6, No. 108     


360NETWORKS: Seeks 3rd Exclusivity Extension Until August 26
ADELPHIA COMMUNICATIONS: Nasdaq Delists Today & Triggers Default
ALGOMA STEEL: Issues Revised 1st Quarter Report To Shareholders
ARTHUR ANDERSEN: Eight Partners Join Navigant Consulting
AT&T CANADA: Lashes At CRTC Ruling As Unfair to Local Services

AKORN, INC.: Reports $26.1MM Working Capital Deficit at March 31
AMERICAN CLASSIC: Wants to Extend Exclusivity through July 30
ANALYTICAL SOFTWARE: Violates TSX Exchange Listing Requirements
AREMISSOFT: Chapter 11 Plan Confirmation Hearing Set For June 28
BERRY PLASTICS: S&P Maintains Watch on B+ Corp. Credit Rating

BETHLEHEM STEEL: Court Approves Amendment to PwC Retention Deal
BIRMINGHAM STEEL: Signs $615 Million Asset Sale Pact With Nucor
BURLINGTON: Court Okays Yantek as Executory Contract Consultant
BURLINGTON: Wins Final Nod For Upholstery Fabrics Business Sale
COMPLETEL: Voluntarily Delists Ordinary Shares From Nasdaq

COMTREX SYSTEMS: Fails to Comply with Nasdaq Listing Criteria
COSERV TELECOM: Secures $7.8 Million DIP Financing From CFC
COVANTA: Court Issues Interim Approval to Hire Arnold & Porter
ECOGEN: Certis USA Enters Pact to Acquire Bt Biopesticide Assets
ENRON: Employee Committee Hires Crossroads as Financial Advisor

ENRON: Gains Court Nod to Pay Pre-Petition Headquarters Taxes
EXIDE TECH: Gets Court Okay to Hire Kirkland & Ellis as Counsel
FARMLAND INDUSTRIES: Files for Chapter 11 Reorg. in Kansas City
FARMLAND INDUSTRIES: Voluntary Chapter 11 Case Summary
FEDERAL-MOGUL: Wishes to Employ Garden City as Claims Agent

FORMICA: Committee Taps Dewey Ballantine as Bankruptcy Counsel
GALEY & LORD: Seeks Court Nod to Tap Garden City as Claims Agent
GRAHAM PACKAGING: S&P Places B Credit Rating on Watch Positive
ICH CORPORATION: Secures Okay to Sign-Up BSI as Claims Agent
INTERMET CORPORATION: S&P Assigns BB- Corporate Credit Rating

INT'L FIBERCOM: Looks to PricewaterhouseCoopers for Fin'l Advice
INTERVOICE-BRITE: Completes 3 Debt Restructuring Transactions
IRON AGE: S&P Junks Rating Due to Weaker Operating Performance
KAISER ALUMINUM: Retirees' Committee Retains Brobeck as Counsel
KELLSTROM: Committee Wants Jefferies to Render Financial Advice

KMART: Myrick Construction Seeks Stay Relief to Enforce Liens
KMART CORP: Offering Free BlueLight Internet Access To Shoppers
LANTRONIX: Fails To Comply With Nasdaq Listing Requirements
METALS USA: U.S. Trustee Alters Unsecured Committee Membership
NATIONAL STEEL: Signs-Up Ernst & Young as Consultants

NATIONSRENT INC: Taps Ritchie Bros. as Equipment Appraisers
OSE USA: Says Cash Balances Ample to Meet Working Capital Needs
OWENS CORNING: Seeks Approval of Settlement Pact with Bank Group
PHYCOR INC: Exclusive Period Remains Intact through July 30
PSINET INC: Wants to Sell TX Assets for 11MM+ at Public Auction

QWEST COMMS: Expresses Disappointment over Moody's Downgrade
RESIDENTIAL ACCREDIT: Fitch Places 2 Bonds on Rating Watch Neg.
SAFETY-KLEEN: Clean Harbors Completes Due Diligence Process
SECURITY ASSET: Pursuing Debt Financing to Maintain Operations
SIMMONS: S&P Raises Corp. Credit & Secured Debt Ratings to BB-

SMARTSERV: Asks For Review Of Nasdaq Delisting Determination
TELEGLOBE: Seeking Authority to Pay Critical Vendors' Claims
TIMCO AVIATION: March 31 Balance Sheet Upside-Down by $82 Mill.
UNITED DEFENSE: Fitch Affirms Senior Secured Facilities at BB
WASH DEPOT: Plan Confirmation Hearing Scheduled for July 31

WEBLINK WIRELESS: Ability to Continue Operations Still Uncertain
WHEELING-PITTSBURGH: Tatum's Retention Not to Prejudice Others
WHISPERING OAKS: Working Capital Deficit Tops $693K at Dec. 31
WKI HOLDING: Files for Chapter 11 Reorganization in Illinois
WKI HOLDING: Case Summary & 50 Largest Unsecured Creditors

* BOND PRICING: For the week of June 3 - 7, 2002


360NETWORKS: Seeks 3rd Exclusivity Extension Until August 26
For a third time -- 360networks inc. and its debtor-affiliates
seek an extension of their exclusive periods to:

   (i) file a plan of reorganization through
       August 26, 2002; and

  (ii) solicit acceptances of that plan through
       October 28, 2002.

Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
says that the sheer size and complexity of these cases warrant
an extension for the Debtors, reminding the Court that these
cases include 23 Debtors, over $1,200,000,000 in pre-petition
bank facilities, and thousands of creditors owed hundreds of
millions of dollars.  "The cases are further complicated by
cross-border issues involving the Canadian Debtors," Mr. Lipkin
adds.  The facts and circumstances of these cases demonstrate
that the requested extensions are appropriate and necessary to
afford the debtors sufficient time to evaluate strategic and
financial alternatives and negotiate distributions to creditors
and parties in interest.

The Debtors' initial 120 day exclusive period was dominated by
their transition to Chapter 11 while the Debtors' first
Exclusive Period extension was largely devoted to their ongoing
efforts to develop and fine tune their business plan, explore
third party interest, renegotiate key third party relationships
and dispose of non-core assets.  The second Exclusive Period
extension has been devoted to similar matters as well as in
developing a detailed plan term sheet that would form the basis
of a reorganization plan.

Accordingly, Mr. Lipkin reports that the Debtors have made a
substantial progress in laying a foundation for confirmation of
a plan.  Nevertheless, substantial work remains to be done,
including full evaluation of all claims filed in these cases,
obtaining another extension for use of cash collateral and
completion of the negotiation of a plan of reorganization.

Termination of the Debtors' Exclusive Periods would adversely
affect the Debtors' business operations and the progress of
these cases.  Mr. Lipkin states that if this Court were to deny
the request for an extension, any party in interest then would
be free to propose a plan of reorganization.  Hence, a chaotic
environment would develop with no central focus.  "An extension
of exclusivity would enable the Debtors to harmonize the diverse
and competing interests that exist and attempt to resolve
conflicts in a reasonable manner," Mr. Lipkin says.

Judge Gropper will convene a hearing on the Debtors' request on
June 4, 2002 and the Debtors' exclusive period is extended
through the conclusion of that hearing. (360 Bankruptcy News,
Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

ADELPHIA COMMUNICATIONS: Nasdaq Delists Today & Triggers Default
The Nasdaq Stock Market, Inc. announced that it will delist the
securities of Adelphia Communications Corporation (Nasdaq:
ADLAE) based upon its failure to timely file its periodic
reports with the Securities and Exchange Commission as required
by Nasdaq rules and based upon public interest concerns.

The delisting will be effective upon the open of business on
Monday, June 3, 2002, in order to provide for an orderly
transition of index components in the Nasdaq 100 Index.

The Nasdaq's delisting action triggers an event of default under
certain of Adelphia's public bond indentures.  Adelphia now
faces the obligation to buy-back some $1.4 billion of its bonds.  
Adelphia is already in technical default on $7 billion of bank
debt for failing to timely deliver audited financial statements,
and the banks are doling-out short-term waivers.  

Late Friday, talks with Charter Communications, Inc., broke
down.  Charter was reportedly offering $2,700 per subscriber for
Adelphia's California cable operations and Adelphia wants $3,600
per subscriber.  

ALGOMA STEEL: Issues Revised 1st Quarter Report To Shareholders
Algoma Steel Inc. (TSE:AGA.) reissued its First Quarter Report
to Shareholders for the period ended March 31, 2002. The
reissuance is necessary to comply with certain regulatory
requirements to include comparative financial statements,
excepting the statement of financial position, for periods prior
to the Company's restructuring on January 29, 2002 and
application of fresh start accounting at January 31, 2002.
Results for the two-month post-restructuring period ended March
31, 2002 are unchanged. This report includes results for January
2002 and certain comparative financial information for the first
quarter of 2001.

The reissued First Quarter Report to Shareholders will be
available on SEDAR and will be mailed to shareholders along with
the Second Quarter Report.

      2002 First Quarter Report To Shareholders (Unaudited)
            for the period ended March 31, 2002


The first quarter results for 2002 are being reissued with
certain comparative financial statements pursuant to regulatory
requirements. The financial results for the two-month period
ended March 31, 2002 are unchanged, but results for January,
2002 are being disclosed.

The implementation of the restructuring plan on January 29, 2002
and related "fresh start accounting" resulted in a number of
adjustments to the opening balance sheet of the restructured
Company. Algoma is now positioned with a much improved capital
structure resulting in lower interest and depreciation costs.
The restructuring also resulted in reduced operating costs due
mainly to lower wage and benefit costs. These factors
contributed to positive operating income of $3.0 million for the
two-month post-reorganization period ended March 31. A net loss
of $4.4 million was incurred during these two months. The
outlook for steel markets for the next six months is positive
and is expected to result in improving financial results.

            Management's Discussion And Analysis


The Company completed its restructuring on January 29, 2002 and
has presented its financial results on the basis of "fresh start
accounting" which requires assets and liabilities to be
comprehensively revalued. The financial position of the Company
at December 31, 2001 has not been exhibited because it is not
considered comparable due to the significant changes resulting
from the restructuring. The opening balance sheet as of January
31 includes various adjustments to reflect the reorganization
transactions and the fresh start accounting. The reorganization
adjustments reflect the new capital structure from the
restructuring process. In applying the principles of fresh start
accounting, the Company has restated all assets and liabilities
at estimated fair values. The net result of these adjustments
was that Algoma recorded $300 million of shareholders' equity at
January 31, 2002.

Comparative financial statements, excepting the statement of
financial position, for periods prior to January 31, 2002 have
been presented pursuant to regulatory requirements. In reviewing
the comparative financial statements, readers are reminded that
they do not reflect the effects of the financial reorganization
or the application of fresh start accounting. Financial
statements for 2001 have been restated to reflect the
retroactive application of the change in accounting policy in
respect of foreign currency translation as outlined in note 1.

               Financial and Operating Results

The net loss for the two-month post-restructuring period was
$4.4 million. A net loss of $30.5 million was incurred in the
first quarter of 2002 compared with a loss of $136.7 million in
2001. The January, 2002 results include a $6.8 million loss on
the disposal of the joint venture interest in the Tilden Mine
and $3.3 million in reorganization expenses. The
reclassification of the First Mortgage Notes as a current
liability in March, 2001 resulted in $36.7 million of
unamortized original issue discount and issue costs being
charged to income as reorganization expenses.

Operating income for the two-month post-restructuring period was
$3.0 million. The loss from operations was $7.5 million in the
quarter, an improvement of $45.5 million over the $53.0 million
loss reported in 2001. An improvement in selling prices and
lower unit costs resulted in inventory valuation adjustments
which improved earnings by approximately $6 million in the two-
month post-restructuring period.

Operating costs declined significantly from 2001 due mainly to
favourable inventory adjustments, lower natural gas prices and
the effect of restructuring savings (particularly lower wage and
benefit levels). Raw steel production was 591,000 tons in the
quarter compared with 496,000 tons in 2001 and shipments
increased to 544,000 tons from 490,000 tons in the previous

Revenue was $241.9 million for the quarter with average selling
prices of $445 per ton compared with revenue of $227.5 and
average selling prices of $464 per ton in 2001. A price increase
of $30 per ton was implemented on hot rolled sheet products in
February, 2002.

Financial expense for the quarter of $12.3 million was
significantly lower than the restated $46.5 million in 2001 due
mainly to a foreign exchange gain of $1.4 million compared with
an exchange loss of $25.3 million in 2001 and reduced interest
expense on the lower levels of long-term debt in the post-
restructuring period.


Cash flow from operations before the effects of changes in
operating working capital improved to negative $8.3 million in
the quarter compared with negative $54.0 million in 2001 due to
the improvement in operating results. There was a $32.7 million
reduction in operating working capital, with $11.6 million
resulting from the disposal of the Tilden joint venture interest
and the remaining $21.1 million due primarily to reduced
inventory levels. Capital expenditures were $3.2 million
compared to $7.1 million in 2001. In addition, $50 million in
proceeds from the new term loan contributed to a decrease in
bank indebtedness of $71.2 million in the quarter. Unused
availability at March 31 was $83 million.

The restructuring provided the Company with new arrangements
with the banking syndicate which expire on December 30, 2003.
The Company has a revolving credit facility with availability
limited to the lesser of $180 million and a borrowing base
determined by the levels of accounts receivable and inventories,
a federal loan guarantee, less certain reserves. The arrangement
also provides the Company with a $50 million term loan to be
repaid in $10 million quarterly installments commencing in
September, 2002 and ending in September, 2003. A detailed
description of the banking arrangements is included in note 2.


The global safeguard investigation in the United States against
imports of many steel products (under Section 201 of the Trade
Act of 1974) has been concluded. President Bush announced a
range of remedies including varying rates of tariffs and quotas.
All steel products from Canada have been excluded from the
current remedies. In response to the Section 201 action by the
U.S., other jurisdictions such as the European Union and Mexico
have implemented similar safeguard actions.

The Canadian industry is concerned that restrictions on the
global importation of steel into the U.S. will cause diversion
of that steel to Canada. In response to these concerns, the
government of Canada, under international agreements and
Canadian law, has commenced a safeguard investigation into the
importation of steel into Canada, similar to that completed by
the U.S. government. A public hearing before the Canadian
International Trade Tribunal (CITT) will commence on June 10,
2002 with an injury determination due by July 4. On August 19,
the CITT will issue their reasons for any determination and any
recommendations regarding remedy.

An anti-dumping order covering imports of certain hot rolled
carbon steel plate originating in or exported from Mexico, the
People's Republic of China, the Republic of South Africa and the
Russian Federation is due to expire in late October, 2002. The
CITT has initiated an expiry review to determine whether the
order should be renewed. This process may not be concluded until
late in the year.


Current strong order intake levels are expected to continue
through the second quarter. Price increases of $30 per ton have
been announced for each of April, May and June for hot rolled
sheet with further increases of $40 per ton for each of July and
August. Similar price increases have been announced for cold
rolled sheet, while increases of $130 per ton have been
announced for carbon plate products during the same period.

There are several projected cost increases with the most
significant being higher natural gas prices. The cost of scrap
and power is also projected to increase.

The benefits from higher selling prices are expected to exceed
the cost increases for natural gas, scrap and power resulting in
improved financial results for the second quarter.

                    Financial reorganization

On April 23, 2001, Algoma Steel Inc. obtained protection under
the Companies' Creditors Arrangement Act ("CCAA") in the Ontario
Superior Court of Justice. The Court subsequently granted
extensions of the CCAA protection until January 31, 2002. This
allowed the Corporation to continue operating its business as it
negotiated a restructuring plan with its stakeholders by
preventing legal action being brought against the Corporation
and by staying substantially all unsecured and under-secured
claims as of the Filing Date. Additional financing was obtained
providing for continuing operations through the anticipated
restructuring period.

On October 24, 2001, the Corporation filed an initial Plan of
Arrangement and Reorganization with the Court. A second and
third amended and restated Plan of Arrangement and
Reorganization were filed on November 8, 2001 and December 10,
2001, respectively. The third amended and restated Plan of
Arrangement and Reorganization was voted upon and approved by
each Class of Affected Creditors on December 10 and December 17,
2001 and on December 19, 2001, the Court issued a Final Order
sanctioning the Plan. The Corporation subsequently emerged from
CCAA protection and the Plan was implemented on January 29,
2002. The significant provisions of the Plan are as follows:

   -- the cancellation of all currently outstanding common
shares and employee voting shares for no consideration and the
issuance of new common shares as set out below;

   -- the settlement of the First Mortgage Notes (U.S. $349.4
million) and related interest obligation (U.S. $47 million) in
exchange for U.S. $125 million of 11% Notes maturing in 2009,
U.S. $62.5 million of 1% convertible Notes maturing in 2030 and
15 million new common shares;

   -- a cash payment of $0.8 million and 1 million new common
shares in satisfaction of all claims of the unsecured creditors;

   -- options for 4 million new common shares issued to
employees for nominal consideration and new collective
bargaining agreements which include wage and benefit reductions,
reduced vacation, pension benefit changes and manning
reductions. The pension obligations were restructured through
the new collective bargaining agreements and an arrangement with
the Superintendent of the Financial Services Commission of

   -- new financing facilities and a $50 million loan guarantee
provided by the Government of Canada; and

   -- a new Board of Directors comprised of 7 nominees of the
holders of the First Mortgage Notes and 3 nominees of the United
Steelworkers of America.

Algoma Steel Inc., based in Sault Ste. Marie, Ontario, is
Canada's third largest integrated steel producer. Revenues are
derived primarily from the manufacture and sale of rolled steel
products, including hot and cold rolled sheet and plate.

DebtTraders reports that Algoma Steel Inc.'s 12.375% bonds due
2005 (ALGC05CAR1) are quoted between 25 and 30. See
for real-time bond pricing.

ARTHUR ANDERSEN: Eight Partners Join Navigant Consulting
Navigant Consulting, Inc. (NYSE: NCI) announced that it has
acquired the practices of eight partners, together with 82 other
client service professionals, from Arthur Andersen LLP.

"The current consulting environment represents a unique
opportunity to build an outstanding specialty consulting firm,
and we are extremely pleased to have a strong group of Andersen
professionals joining us," stated William M. Goodyear, Chairman
and Chief Executive Officer of Navigant Consulting. "These teams
fit directly within a core competency of our organization,
enhance practice areas we feel are strategically important to
our expansion plans, and confirm the attractive nature of our
platform for growth."

The teams joining Navigant Consulting come from five different
Andersen practice areas, and will primarily integrate into the
Company's Financial & Claims business unit, Peterson Consulting.  
The Financial Analytics practice, led by Tim Hart along with
Mike Maloney, David Moes, Tony Creamer and Steve Stanton, will
join current litigation support practices in Washington, D.C.,
Chicago and Philadelphia.  Dan Williams, formerly the Central
and West Region Managing Partner for Andersen's Corporate
Finance practice, will be based in Chicago and will lead a team
of professionals in launching a national restructuring practice.  
Tom Mulhare will be joining the Princeton, N.J. office to
enhance the insurance, reinsurance and claims practice.  In
Nashville, Irene Torino, with a team of 12 client service
professionals, will be joining to expand Navigant Consulting's
healthcare practice, and in Los Angeles, Larry Oliva, formerly
the Andersen partner in charge of its energy consulting group's
Power Transmission consulting practice, will be joining to fill
a key role in Navigant Consulting's Electric Generation and
Transmission consulting practice.

"The Andersen practices we are acquiring represent some of the
leading experts in their respective fields, and their skill sets
are an exceptionally strong complement to our existing
practices," stated Doug Reichert, Executive Managing Director of
Navigant Consulting's Financial & Claims practice.  "We are
excited about the experience the Andersen professionals bring to
our practice, and we are looking forward to expanding our reach
into new markets."

"All of these Andersen teams have a record of high performance
and strong profitability," stated Ben W. Perks, Executive Vice
President and Chief Financial Officer.  "Once integrated, we
anticipate these practices will have a strong impact on our
revenue and EBITDA generation."

The transaction was effective as of May 24, 2002.  Further terms
were not announced.

Navigant Consulting, Inc. --
-- is a specialized consulting firm providing services to
Fortune 500 companies, government agencies, law firms, and
regulated and network industries.  The Company is comprised of
two business units - Financial & Claims and Energy & Water.  The
Financial & Claims practice, consisting of Peterson Consulting
and PENTA Advisory Services, provides consultation to clients
facing the challenges of dispute, litigation, bankruptcy,
regulation and change in analyzing complex accounting, finance,
economic, operations and information management issues. The
Energy & Water practice provides consulting services to the
energy and electric, gas, and water utility industries, focusing
on M&A/divestiture financial advisory services, reliability
regulatory and optimization reviews, electric generation and
transmission assessments, including energy market assessments,
and energy regulatory-related litigation support.  "Navigant" is
a service mark of Navigant International, Inc.  Navigant
Consulting, Inc. (NCI) is not affiliated, associated, or in any
way connected with Navigant International, Inc. and NCI's use of
"Navigant" is made under license from Navigant International,

AT&T CANADA: Lashes At CRTC Ruling As Unfair to Local Services
AT&T Canada Inc. (NASDAQ:ATTC),(TSE: TEL.B), Canada's largest
facilities-based competitor, issued the following statement by
Vice Chairman & CEO John McLennan in response to the ruling
by the CRTC:

"[Thurs]day's CRTC ruling fails to achieve the Federal
government's stated policy goal of a competitive telecom
industry. The regulator appears to have fundamentally misjudged
the reality of the current state of competition in the Canadian
telecom industry. This is a disappointing decision for
competition. It is a disappointing decision for consumers and
customers who would benefit from a more competitive environment
in local service. And it is a disappointing decision for AT&T
Canada, which is doing everything in its power to help establish
a strong competitive position for itself and its customers.

"From a business perspective, this ruling represents a marginal   
improvement over the status quo as it fails to adequately
address the insurmountable cost advantage enjoyed by the former
monopolies over new entrant competitors. By failing to achieve a
level playing field, the CRTC's decision preserves an
inequitable marketplace that denies Canadian telecom customers
the full benefits of true competition.

"Accordingly, we are reviewing the decision in detail and will
explore all options available to us with respect to this
decision, including a possible appeal. After undertaking a
thorough evaluation of the ruling, as it now stands, we will
determine its impact on our business plan.

"As previously indicated, we will then assess our capital
structure to ensure that it provides the necessary liquidity and
flexibility for AT&T Canada to grow as a profitable and
effective competitor. We expect to update all of our
stakeholders on the results of this review by the time of our
Annual General Meeting on June 18th."

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

DebtTraders reports that AT&T Canada Inc.'s 10.750% bonds due
2007 (ATTC07CAR1) are trading between 8 and 12. See
for some real-time bond pricing.

AKORN, INC.: Reports $26.1MM Working Capital Deficit at March 31
Akorn, Inc. operates in three separate segments: the ophthalmic
segment manufactures, markets and distributes diagnostic and
therapeutic pharmaceuticals and surgical instruments and related
supplies; the injectable segment manufactures, markets and
distributes injectable pharmaceuticals, primarily in niche
markets; and the contract services segment provides
manufacturing services to unaffiliated companies in
the ophthalmic and injectable markets.

Akorn, Inc.'s consolidated net sales increased 124% in the
quarter ended March 31, 2002 compared to the same period in 2001
due to fact that the net sales for the first quarter 2001 were
negatively impacted by several non-recurring charges related to
chargebacks, rebates and returned goods. The allowance for
chargebacks, rebates and returned goods are recorded as
reductions to gross sales in computing net sales. Excluding
these non-recurring charges, consolidated net sales for the
first quarter of 2002 decreased by $1,193,000, or 8.1%. This
decrease is mainly concentrated in the injectable line of
business as anticipated due to abnormally high injectable sales
in the first quarter of 2001 due to a product shortage, which
did not reoccur in the first quarter of 2002. Ophthalmic segment
sales increased primarily due to the non-recurring charges noted
above as well as strong angiography and ointment product sales.
Contract Services sales decreased by 11.4% due mainly to
customer inventory issues as the Company has not lost any major
customer's business.

Consolidated gross margin was $6,499,000, or 47.8%, for the 2002
first quarter as compared to a gross margin loss of $5,783,000
in the same period a year ago. Excluding the non-recurring
charges discussed above, the first quarter 2001 gross margin was
$4,457,000, or 30.1%. The significant improvement in gross
margin in the first quarter of 2002 was driven by the Company's
continued focus on manufacturing costs, operational efficiencies
as well as a shift in product mix to higher gross margin
products in the angiography and ointment product lines.

The Company reported a net income of $191,000 for the three
months ended March 31, 2002, compared to a net loss of
$12,977,000 for the comparable prior year quarter. Excluding the
non-recurring charges discussed above, the net loss for the
first quarter of 2001 would have been $1,276.

Working capital at March 31, 2002 was a deficit $26.1 million
compared to a deficit $26.7 million at December 31, 2001.
Working capital is negative primarily due to the $44.8 million
in long-term debt that is due within twelve months of the
balance sheet reporting date of March 31, 2002. Future working
capital needs will be highly dependent upon the Company's
ability to control expenses and manage its accounts receivables.
Management believes that existing cash and cash flow from
operations will be sufficient to meet the cash
needs of the business for the immediate future, but that
additional financing will be needed to refund the current bank
debt. If available funds and cash generated from operations are
insufficient to meet immediate liquidity requirements, further
financing and/or reductions of existing operations will be
required. There are no guaranties that such financing will be
available or available on acceptable terms. Further, such
additional financing may require the granting of rights,
preferences or privileges senior to those rights of the common
stock and existing stockholders may experience substantial
dilution of their ownership interests. The Company will need to
refinance or extend the maturity of the bank credit agreement as
it does not anticipate sufficient cash to make the June 30, 2002
scheduled payment.

For the quarter ended March 31, 2002, the Company provided
$389,000 in cash from operations to finance its working capital
requirements, primarily from a decrease in accounts receivable
balances. Investing activities, which primarily relate to
purchase of equipment and in progress construction, required
$974,000 in cash. Investment activities provided $138,000 in
cash, primarily due to the exercise of stock options.

Akorn, Inc.'s ophthalmic unit produces anesthetic and diagnostic
products, as well as antibiotics, steroids, glaucoma treatments,
and surgical and eye care products. Its injectable unit makes
generic drugs and anesthetics for arthritis and pain management.
Akorn provides contract manufacturing services to other drug and
biotech firms; it also markets its own ophthalmic and injectable
products, which are sold to physicians, optometrists,
wholesalers, retailers, and pharmacies.

AMERICAN CLASSIC: Wants to Extend Exclusivity through July 30
American Classic Voyages Co. is seeking approval from the U.S.
Bankruptcy Court in Delaware for a 90-day extension of the
company's exclusive right to file a plan and lobby creditors for
support, reported Dow Jones.  The company said it wants until
July 30 to file a reorganization plan and up to September 28 to
get creditor approval.  A hearing on the extension is scheduled
for June 21 with objections due on June 17. (ABI World, May 30,

ANALYTICAL SOFTWARE: Violates TSX Exchange Listing Requirements
Effective at the close of business May 31, 2002, the common
shares of Analytical Software, Inc. ("AYL") were delisted from
TSX Venture Exchange for failing to maintain Exchange Listing
Requirements.  The securities of the Company have been suspended
in excess of twelve months.

AREMISSOFT: Chapter 11 Plan Confirmation Hearing Set For June 28
AremisSoft Corporation announced that the U.S. District Court
for the District of New Jersey approved the disclosure statement
in connection with its previously announced Plan of

The disclosure statement was approved without objection, and
AremisSoft may now begin soliciting acceptances for its proposed
Plan of Reorganization. The confirmation hearing on the Plan of
Reorganization is scheduled for June 28, 2002.

AremisSoft also announced that the official equity committee and
the representatives of the plaintiff class in the pending class-
action litigation have expressed strong support for the Plan of

Under the Plan of Reorganization, AremisSoft's shareholders at
June 27, 2002 will receive 39.5% of the stock of SoftBrands,
Inc., AremisSoft's wholly-owned operating subsidiary, and
members of the plaintiff class will receive 60.5% of the stock
of SoftBrands. The plaintiff class will also receive all of the
interests in a liquidating trust being formed to pursue
litigation claims on behalf of AremisSoft and to liquidate other
non-operating assets of AremisSoft. SoftBrands will be entitled
to 10% of the net proceeds from the liquidating trust.

George Ellis, CEO of SoftBrands, indicated that, "We are pleased
that this important step in the reorganization has been
completed and that the confirmation date has been scheduled. We
look forward to being able to operate SoftBrands as an
independent entity and to generate value for our shareholders
through what we believe is a solid business with a bright

BERRY PLASTICS: S&P Maintains Watch on B+ Corp. Credit Rating
Standard & Poor's said that its single-'B'-plus corporate credit
rating on Berry Plastics Corp. remains on CreditWatch with
developing implications following the announcement that First
Atlantic Capital, JPMorgan Partners, and Aetna Life Insurance
Co. signed a definitive agreement to sell Berry to GS Capital
Partners 2000 L.P. for $837.5 million, including repayment of
existing indebtedness. Developing means ratings could be raised,
lowered, or affirmed.

At the same time, the single-'B'-plus corporate credit rating on
Berry's parent company, BPC Holding Corp., remains on
CreditWatch with developing implications. Evansville Ind.-based
Berry is a leading manufacturer and supplier of rigid thin-wall
open top containers, plastic injection molded aerosol overcaps,
closures, drinking cups, and housewares. The company had
outstanding debt of about $493 million as at March 31, 2002.

GS Capital Partners is a private equity investment fund managed
by Goldman, Sachs & Co. The transaction, subject to customary
closing conditions, is expected to close in the third quarter of

"Although no details of the forthcoming transaction have been
disclosed, a strengthened financial profile could result in
higher ratings. Conversely, initiatives that would deteriorate
the firm's financial profile could result in a downgrade," said
Standard & Poor's analyst Liley Mehta.

Standard & Poor's will meet with management to resolve the
CreditWatch as more information is made available. In assessing
the impact on the ratings, Standard & Poor's will examine the
implications for the financial profile, and review the company's
business and financial strategies.

BETHLEHEM STEEL: Court Approves Amendment to PwC Retention Deal
Pursuant to Section 327(a) of the Bankruptcy Code and Bankruptcy
Rule 2014(a), Bethlehem Steel Corporation and its debtor-
affiliates seek the Court's authority to amend the terms of the
Retention Agreement with PricewaterhouseCoopers LLP as auditors,
tax advisors, bankruptcy and reorganization consultants.

Harvey R. Miller, Esq., at Weil, Gotshal & Manges, LLP, in New
York, informs the Court that the Debtors wish to amend the
services PwC will render to the Debtors, to include:

   (a) Audit of Schedule II: Valuation and Qualifying Accounts
       and Reserves, including in Bethlehem's 2002 Annual Report
       on Form 10-K;

   (b) Debt compliance letter required by the General Electric
       Capital Corporation Revolving Credit and Guaranty

   (c) Audit of compensation and medical payments included in
       Form LS-513, Report of Payments, for the purpose of
       complying with the Longshore and Harbor Workers'
       Compensation Act;

   (d) Audit of the Debtors' profit sharing calculation as
       required by the 1999 Bethlehem/USWA agreement;

   (e) Audits the employee benefit plans for 2001:

       -- The Savings Plan for Salaried Employees of Bethlehem
          Steel Corporation and Subsidiary Companies,

       -- 401(k) Retirement Savings Plan of Bethlehem Steel
          Corporation and Subsidiary Companies,

       -- Bethlehem Steel Corporation Employee Stock Ownership

       -- Bethlehem Steel Corporation Special Profit Sharing

       -- Bethlehem Steel Corporation Special Profit Sharing

       -- The Pension Plan of Bethlehem Steel Corporation and
          Subsidiary Companies,

       -- Bethlehem Supplemental Unemployment Benefit Plan,

       -- Bethlehem Railroads Supplemental Unemployment Benefit

       -- Bethlehem Supplemental Unemployment Benefit Plan
          (short plan year),

       -- Bethlehem Railroads Supplemental Unemployment Benefit
          Plan (short plan year),

       -- The Social Insurance Plan of Bethlehem Steel
          Corporation and Subsidiary Companies, and

       -- Supplemental Unemployment Benefit Plan for Employees
          of Lukens, Inc. (hourly); and

   (e) from time to time, upon the Debtors' request, consulting
       services with respect to bankruptcy issues related to
       credit claims, voidable transactions, vendor relations,
       analysis of the business, operations and financial plans,
       and other bankruptcy and reorganization consulting as may
       be necessary.

As compensation for the services, the Debtors will pay PwC a
fixed fee of $925,000 to be paid on:

             Date                  Amount
             ----                  ------
             May 31, 2002         $185,700
             June 30, 2002          77,700
             July 31, 2002         105,000
             August 31, 2002        85,000
             September 30, 2002     85,000
             October 31, 2002      148,500
             November 30, 2002      75,000
             December 31, 2002      20,000
             January 31, 2003      143,100

Mr. Miller adds that PwC will also be reimbursed for its
reasonable out-of-pocket expenses.

                       *      *      *

Judge Lifland approves the amendment to the Debtors' Retention
Agreement with PricewaterhouseCoopers LLC.
PriceWaterhouseCoopers will be entitled to seek periodic interim
basis payment of 100% for professional services rendered in
connection with the Fixed Fee Services and 80% for professional
services rendered in connection with the Reorganization Services
as well as reimbursement for its reasonable expenses. (Bethlehem
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

DebtTraders reports that Bethlehem Steel Corporation's 10.375%
bonds due 2003 (BS03USR1) are quoted between the prices 10 and     
13.5. For real-time bond pricing, see

BIRMINGHAM STEEL: Signs $615 Million Asset Sale Pact With Nucor
Birmingham Steel Corporation (OTC BB:BIRS) announced it has
signed a definitive agreement to sell substantially all of its
assets to Nucor Corporation for $615 million. Previously, in a
press release on May 24, the Company disclosed it would make a
pre-arranged filing pursuant to the reorganization provisions of
Chapter 11 of the U.S. Bankruptcy Code in order to effect the
sale to Nucor. The Company also announced today that its secured
lenders have signed binding agreements to support the sale to
Nucor, and that Bank of America, N.A., as agent for the
Company's bank group, has committed to provide $40 million of
post-petition debtor in possession financing through closing of
the transaction. Subject to the approval of the Delaware
bankruptcy court, the agreements reached with secured lenders
also provide for prompt and uninterrupted payments of all pre-
petition payables to scrap suppliers, utility providers, freight
carriers and other suppliers of essential goods and services.

John D. Correnti, Chairman and Chief Executive Officer of
Birmingham Steel, commented, "We are pleased to have completed
definitive documentation with Nucor and our secured lenders. We
believe the Nucor transaction provides the best value for our
stakeholders, which include lenders, shareholders, customers,
suppliers and employees. We believe the Birmingham Steel
operations and workforce will be tremendous additions to the
Nucor organization."

Correnti continued, "With the support of our secured lenders, we
expect to continue operations in the normal course while we work
to close the sale to Nucor." Correnti said closing of the
transaction will take place upon receipt of approvals from the
bankruptcy court and necessary regulatory agencies. The Company
said the closing was expected to occur late in calendar 2002.

The Company noted that the $615 million purchase price is less
than the full amount of the Company's secured debt. The Company
said the secured lender group has agreed to distribute a portion
of the proceeds from the transaction to unsecured creditors and
$15 million, or approximately $0.47 per share, to shareholders.
The assets to be acquired by Nucor include Birmingham Steel's
four operating mills in Birmingham, Alabama; Kankakee, Illinois;
Seattle, Washington; and its 85%-owned BSE facility in Jackson,
Mississippi. The transaction also includes the corporate
headquarters in Birmingham, Alabama; the idled melt shop in
Memphis, Tennessee; the assets of Port Everglades Steel
Corporation; the assets of the Klean Steel division; Birmingham
Steel's interest in Richmond Steel Recycling Limited; and
accounts receivable and inventory related to the acquired

Correnti concluded, "Our directors, management and employees
will work diligently to support efforts to complete the
transaction as soon as possible. We will also focus on
supporting the needs of our customers and suppliers until the
transaction closes."

Birmingham Steel operates in the mini-mill sector of the steel
industry and conducts operations at facilities located across
the United States. The common stock of Birmingham Steel is
traded on the over the counter bulletin board under the symbol

BURLINGTON: Court Okays Yantek as Executory Contract Consultant
The Court approves Burlington Industries, Inc.'s and its debtor-
affiliates' application to retain Yantek Consulting Group Inc.
as their Executory Contract Consultants, nunc pro tunc to March
19, 2002.

As previously reported, the Debtors asked to retain and employ
Yantek Consulting Group Inc. as their executory contract and
unexpired lease consultants in the Chapter 11 cases.

Specifically, the Debtors need Yantek's assistance in:

   (a) designing an executory contract database;

   (b) educating operational parties of Burlington;

   (c) collecting data;

   (d) assuming or rejecting priority contracts;

   (e) linking scheduled and claimed items to specific executory

   (f) reconciling cure payments and sending cure notices;

   (g) negotiating settlements with various creditors relating
       to executory contracts and leases;

   (h) analyzing and re-characterizing lease agreements; and

   (i) providing such other and further services as the Debtors
       may request in these cases.

The Debtors need Yantek to:

   -- determine the appropriate treatment of numerous Contracts
      in these cases,

   -- minimize claims arising from the assumption and rejection
      of certain Contracts, and

   -- renegotiate certain of the Contracts on terms favorable to
      the Debtors.

In return, Yantek intends to:

   (1) charge for its professional services on an hourly basis
       in accordance with its ordinary and customary hourly
       rates in effect on the date services are rendered, and

       Yantek's current hourly rates are: $160 for services
       provided by Frank Yantek, and a maximum of $160 for
       services provided by all other professionals employed by

   (2) seek reimbursement of actual and necessary out-of-pocket
       expenses. (Burlington Bankruptcy News, Issue No. 13;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)   

BURLINGTON: Wins Final Nod For Upholstery Fabrics Business Sale
As a part of the final reorganization activities of the
Burlington House Division, Burlington Industries, Inc. (OTC
Bulletin Board: BRLG) received Court approval to sell its
residential upholstery fabric business to Tietex International

Under the terms of the agreement, Tietex will purchase the
Sheffield facility in Rocky Mount, North Carolina as an on-going
operation and lease a portion of the company's weave capacity at
the Williamsburg facility in Matkins, North Carolina.  
Burlington will continue to operate the majority of the capacity
at Williamsburg. Tietex expects to employ the majority of the
employees at Sheffield and those associated with upholstery
production at Williamsburg.  The terms of the agreement also
include inventories, intellectual properties and a license to
use the Burlington House(R) name for upholstery fabrics.  The
sale is expected to close on June 28, 2002.

"This is a very positive outcome for both Burlington and
Tietex," said George W. Henderson, III, Chairman and Chief
Executive Officer.  "Tietex is a strong and growing market
leader and we are confident in their ability to grow this
business and represent the Burlington House name in the market.
We are pleased that many of our upholstery employees will have
continued employment with Tietex. We also look forward to our
continued relationship with Tietex as we coordinate operations
at Williamsburg and serve as a supply partner for Sheffield."

Going forward, the Burlington House division will supply fabrics
for mattress coverings, bedding and window products and high-
performance commercial fabrics for hospitality and corporate

Burlington Industries, Inc. is one of the world's largest and
most diversified manufacturer and marketer of softgoods for
apparel and interior furnishings.  Burlington Industries filed
voluntary petitions for Chapter 11 under the U.S. Bankruptcy
Code on November 15, 2001.

Tietex International Ltd. is a leading manufacturer of
engineered fabrics for different industrial and commercial
applications, home furnishings, decorative applications and
specialty products.  Tietex is a privately held corporation
headquartered in Spartanburg, SC with operations in the United
States, Mexico, Australia and Thailand.

DebtTraders report that Burlington Industries's 7.250% bond due
2027 (BRLG27USR1) are quoted at prices between 16 and 17.5.
for real-time bond pricing.

COMPLETEL: Voluntarily Delists Ordinary Shares From Nasdaq
Completel announced it would voluntarily delist its Ordinary
Shares from the Nasdaq National Market, effective at the start
of trading on Friday, May 31, 2002.  Completel reached this
decision primarily as a result of the small number of record
holders of the Ordinary Shares in the United States, the low
trading volume of the Ordinary Shares on Nasdaq as compared to
Euronext Paris, and the relatively high costs of continuing to
be a reporting company under the U.S. securities laws.  
Completel intends to maintain its listing on Euronext Paris.

Currently, Completel's Ordinary Shares trade on Nasdaq in the
form of Ordinary Shares of New York Registry.  Following the
delisting date, Completel anticipates that there will be little
or no public market for its New York Shares.  Moreover, as soon
as practicable after the delisting, and in any event in
connection with its previously announced recapitalization,
Completel intends to terminate its status as a reporting company
under US securities laws.  The Company, however, intends to
continue to make public quarterly and annual financial
statements and related information.

Under the terms of the New York Shares, holders are entitled to
convert their New York Shares into Ordinary Shares of Dutch
Registry, the form in which trades in Completel's Ordinary
Shares are settled on the French market. This conversion may be
effected by presenting a written request for such exchange and
surrendering the certificates representing the New York Shares
at the offices of JPMorgan Chase Bank. As a courtesy to holders
of Completel's New York Shares, the exchange fee for exchanging
New York Shares into Ordinary Shares will be paid by Completel.

Additional information regarding the exchange of New York Shares
for Dutch Shares can be obtained by contacting JPMorgan Chase
Bank at 1-781-575-4328 or visiting their ADR market website at

Completel is a facilities-based provider of fiber optic local
access telecommunications and Internet services to business end-
users, carriers and ISPs with activities predominantly located
in France.

COMTREX SYSTEMS: Fails to Comply with Nasdaq Listing Criteria
Comtrex Systems Corporation (Nasdaq: COMX) reported receipt of a
Nasdaq Staff Determination letter on May 23, 2002, notifying the
Company that it fails to comply with Marketplace Rule
4310(C)(7), the requirement to maintain a minimum market value
of publicly held shares of $1,000,000.  As a result, the
Company's common stock will be delisted from the Nasdaq SmallCap
Market at the opening of business on May 31, 2002.

Jeffrey C. Rice, Comtrex President and CEO, stated "While the
total number of outstanding shares of Comtrex common stock is
1,417,120, only approximately 804,000 shares are considered by
Nasdaq as being publicly held.  The Board of Directors of the
Company has determined that, since the common stock of the
Company has failed to satisfy not only Marketplace Rule
4310(C)(7), but also failed to regain compliance with such
requirement during a subsequent ninety (90) calendar day period
under Marketplace Rule 4310(C)(8)(B), there is insufficient
basis to support a successful appeal of the Nasdaq Staff
delisting determination.  We remain extremely confident in the
future business prospects for the Company, particularly in light
of the forthcoming release of our next generation Windows point-
of-sale product series, designed to work in conjunction with our
Odyssey BackOffice Suite.  We are anxious to begin the
implementation of our sales and marketing plans for these world-
class products."

The Company also announced that it will seek to continue trading
in its common stock in over-the-counter markets.  The Company's
common stock will, however, then be subject to the risk that it
could become characterized as a low-priced or "penny stock,"
which characterization could have a material adverse effect on
the market liquidity and price of the Company's common stock.  
However, no assurances can be given that the Company's common
stock will be traded on any other exchange or in any other
market at any time in the future.  If the Company's common stock
does not trade on any exchange or in any other market in the
future, then stockholders of the Company may lose all or a
portion of their investment in the Company.

Comtrex Systems Corporation is a software developer, systems
integrator and designer of point-of-sale (POS) electronic
information systems for the restaurant and quickservice food
industry.  Company information can be obtained through the
worldwide web by visiting

COSERV TELECOM: Secures $7.8 Million DIP Financing From CFC
CoServ Telecom Holdings, L.P. announced that a Debtor-in-
Possession (DIP) financing commitment for $7.8 million has been
secured from the National Rural Utilities Cooperative Finance
Corporation that will fund its telephone and cable businesses
into next year.

The telephone and cable businesses of CoServ filed for Chapter
11 reorganization protection on November 30, 2001 while a buyer
for these businesses was sought. On February 25, the company
announced an agreement to negotiate a restructure of the
telephone and cable companies, and the new financing agreement
is the result of that negotiation process.

"The DIP financing provides the resources for our operational
needs as we emerge from the reorganization process and move
forward serving our customers," said Jim Chism, Division
President of CoServ Communications. "This financing is therefore
an important part of providing our telephone and cable customers
with continued high levels of service. Additionally, we continue
to evaluate potential purchasers for these businesses, and we
remain optimistic that we will complete in the near future our
search for a buyer that meets our high standards of customer

For nearly 65 years, CoServ Electric has provided dependable,
affordable, electric power to thousands of homes. In 1998,
CoServ Electric expanded both its service area and its service
offerings to include a broad range of services, including
telephone and cable. Further information on CoServ Electric is
accessible at http://www.coserv.comand information on its  
telephone and cable companies can be found at   

COVANTA: Court Issues Interim Approval to Hire Arnold & Porter
The Official Committee of Unsecured Creditors of the Chapter 11
cases of Covanta Energy Corporation and its debtor-affiliates
asks the Court to allow them to retain Arnold & Porter as its
attorneys, nunc pro tunc to April 8, 2002.

Brad Tirpak, Chairman of the Official Committee of Unsecured
Creditors, tells Judge Blackshear that Arnold & Porter has
considerable experience and expertise in the debtor-creditor
matters, particularly Chapter 11 bankruptcy cases.  Arnold &
Porter has also represented committees and other parties in a
variety of Chapter 11 cases, including complex cases.  Thus, the
Committee believes, the retention of Arnold & Porter is in the
best interest of the Debtors' unsecured creditors.

Michael J. Canning, Esq., a partner at Arnold & Porter, in New
York, reports that as attorneys, Arnold & Porter will render:

   (a) legal advice to the Committee with respect to its powers
       and duties;

   (b) legal advice to the Committee regarding the
       administration of the Debtors' estates;

   (c) legal advice concerning the Committee's investigation of
       the acts, conduct, assets and liabilities, and financial
       condition of the Debtors;

   (d) legal advice relating to transactions in the energy
       industry, tax, securities and corporate law issues that
       may arise in connection with these bankruptcy cases;

   (e) legal advice concerning the operation of the Debtors'
       businesses and the desirability and profitability of
       continuing and/or modifying such businesses;

   (f) legal advice to the Committee with respect to all matters
       relating to any proposed disposition of assets or any
       plan of reorganization, including negotiation of a plan
       and possible formulation and proposal of a plan;

   (g) assistance to the Committee in its negotiations with the
       Debtors and other creditors concerning any matter in this
       case, including the terms of any proposed plan;

   (h) assistance to the Committee in making reports to
       creditors regarding the progress of the cases;

   (i) legal advice to the Committee with respect to
       applications for relief sought by the Debtors and other

   (j) appearance on behalf of the Committee to support the
       Committee's position on various matters in the bankruptcy
       cases and any contested matters or adversary proceedings
       filed therein, including the preparation of all necessary
       applications, motions, answers, complaints, orders,
       reports and other legal papers and participation in
       discovery and other litigation activity where necessary
       or appropriate to protect the interests of unsecured

   (k) legal advice regarding any possible merger, acquisition
       or other transaction involving the Debtors;

   (l) coordination with the other professionals retained by the
       Committee with respect to those matters that require
       legal and economic, business, market or other related
       expertise; and

   (m) performance of all other appropriate legal services for
       the Committee.

In exchange of the services to be rendered, Arnold and Porter
will bill the Debtors based on the firm's hourly rates:

      Partners and of Counsels          $355 - 650
      Associates                         195 - 375
      Paraprofessionals                   40 - 130

Arnold & Porter will also seek for a reimbursement of out-of-
pocket expenses to include, but not limited to, long distance
telephone charges, postage, overnight delivery charges, telecopy
charges, messenger and courier charges, computerized legal
research charges, mileage and travel expenses and court costs
and disbursements.

Mr. Canning assures the Court that Arnold & Porter will not be
employed by any other entity having an adverse interest to the
Debtors in connection with the Chapter 11 cases.

Mr. Canning says that Arnold & Porter, nor any of its partners
or associates have any connection with the Committee, the
Debtors in the Chapter 11 cases, their creditors, any other
party-in-interest, their attorneys and accountants, the United
States Trustee, or any person employed in the office of the
United States Trustee, except:

   (a) for Mark Stumpf, a partner of the firm, who has held
       stock in Broad Street Resources, Inc. since January 14,
       1994.  Mr. Stumpf will be actively involved in the
       Committee's representation, however, he will not trade
       his shares in Broad Street throughout the course of
       Arnold & Porter's engagement as counsel to the Committee;

   (b) representations to certain Pre-petition Lenders in
       various matters that are unrelated to the Debtors'
       bankruptcy cases, which includes:

       -- ABN AMRO Bank N.V., for which Arnold & Porter has an
          advance waiver that does not permit it to sue ABN;

       -- Bank of America, N.A., for which Arnold & Porter has
          obtained a waiver specific to its representation of
          the Committee;

       -- Credit Suisse First Boston, Arnold & Porter
          recently represented;

       -- the Industrial Bank of Japan, for which Arnold &
          Porter has an advance waiver; and

       -- SunTrust Bank, for which Arnold & Porter has obtained
          a waiver specific to its representation of the
          Committee that does not permit it to sue SunTrust Bank

   (c) representation with the 30 largest unsecured creditors in
       various matters, again all of which are completely
       unrelated to the Debtors or to this bankruptcy case,
       including Citibank N.A. and Dravo Lime Company;

   (d) previously represented Broad Street, one of the 30
       largest unsecured creditors, in various matters related
       to the Debtors prior to the commencement of these
       bankruptcy proceedings;

   (e) represents certain professionals in various matters all
       of which are completely unrelated to the Debtors or to
       this bankruptcy case, for which Arnold & Porter's annual
       billings in connection with each such representation are
       less than 0.6% of its annual gross fee income. Those
       professionals that we have been able to identify thus far
       include: Arthur Andersen, LeBoeuf, Lamb Greene & McRae,
       Deloitte & Touche, Hogan & Hartson and Ernst & Young;

   (f) Arnold & Porter represents certain potential Parties-in-
       Interest in various matters all of which are completely
       unrelated to the Debtors or to this bankruptcy case, for
       which Arnold & Porter's annual billings in connection
       with each such representation constitute less than 0.5%
       of its annual gross fee income. Those that we have been
       able to identify thus far include: Wells Fargo; Alfa Alfa
       S.A., Kendall Corporation, American Insurance Group and
       Bristol-Myers Squibb Company; and

   (g) Arnold & Porter represents certain potential Parties-in-
       Interest in various matters all of which are completely
       unrelated to the Debtors or to this bankruptcy case, for
       which Arnold & Porter's annual billings in connection
       with each such representation are in excess of 1% of its
       annual gross fee income. These are substantial clients
       for Arnold & Porter. In an abundance of caution, Arnold &
       Porter has obtained a waiver from each such Party-in-
       Interest. Those that we have been able to identify thus
       far include:

       -- General Electric Company, for which Arnold & Porter
          has obtained a waiver specific to its representation
          of the Committee that does not permit Arnold & Porter
          to sue General Electric;

       -- Phillip Morris Capital Corporation, for which Arnold
          & Porter has obtained a waiver specific to its
          representation of the Committee that does not permit
          Arnold & Porter to sue PM.

In accordance with Section 504 of the Code, Mr. Canning says,
Arnold & Porter has not entered into and will not enter into any
agreements to share compensation for services rendered and
reimbursement of expenses with any other person. Moreover, Mr.
Canning adds, Arnold & Porter has made no undisclosed agreement
for compensation with any entity and will apply to the Court for
compensation of services rendered and reimbursement of actual
and necessary expenses consistent with the requirements of the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and
the Local Rules of the Court.

                          *     *     *

Judge Blackshear issues an interim order approving Arnold &
Porter's retention.  The interim order shall become final if no
objection is filed by June 5, 2002. (Covanta Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

ECOGEN: Certis USA Enters Pact to Acquire Bt Biopesticide Assets
Certis USA, LLC, a subsidiary of Mitsui & Co., Ltd., entered
into an agreement to purchase certain assets of the Bt
biopesticide and insecticidal nematode businesses owned by
Ecogen, Inc. of Langhorne, PA. Certis USA, one of the world's
leading producers of biological pesticides, will add CryMax(R),
Lepinox(R), Condor(R) and other Bt biological insecticides to
its Integrated Pest Management (IPM) product line. Under a
business transition arrangement between Certis USA and Ecogen,
Certis USA will immediately begin manufacturing and selling
certain of the Ecogen Bt products. Certis USA expects volume
quantities of the products will be available to the growers of
high-value crops as soon as July.

In addition to the biological insecticides, Certis USA will also
purchase Ecogen's rights in Bt strain libraries for use for
microbial applications, and its related product registrations,
trademarks, patents or licenses and certain fixed assets.
Dennis Banasiak, president and CEO of Certis USA, said, "Certis
USA will be purchasing some of the most potent strains of
Bacillus thuringiensis (Bt). We'll apply our formulation know-
how to these strains and be able to offer growers an ever-
expanding product line of improved Bt products in the near

Bt bioinsecticides are the most widely used biological
pesticides. Bt products are characteristically low in risk to
humans, animals and the environment, yet they are highly lethal
to Lepidopteran (caterpillar) pests, the primary insect threat
to crop production. Certis USA was established by Mitsui in
April 2001. Its products were previously sold under the name of
Thermo Trilogy Corporation. Mitsui & Co., Japan's largest
trading company, markets and distributes crop protection
products and services directly and through its Certis marketing
subsidiaries in Europe, Japan, Africa and the U.S. Global crop
protection sales exceed $400 million annually.

Headquartered in Columbia, MD, Certis USA manufactures
environmentally friendly crop protection products for vegetable,
tree fruit, nut, grape, citrus and mushroom crops grown both
conventionally and organically. Certis USA product brands
include: Agree(R), Deliver(R), Javelin(R), Teknar(R) and
Thuricide(R) bioinsecticides; Azatin(R) and Neemix(R) botanical
insect growth regulators; Trilogy(R) botanical
fungicide/miticide; BioVector(R) insecticidal nematode, and
GemStar(R) and Spod-X(R) insecticidal virus products.

Ecogen Inc. is a biotechnology company specializing in the
development and marketing of environmentally compatible products
for the control of pests in agricultural and related markets.
                           *   *   *

As reported in the May 29, 2002 issue of the Troubled Company
Reporter, Ecogen Inc. has not yet achieved profitable operations
for any of its fiscal years and there is no assurance that
profitable operations, if achieved, could be sustained on a
continuing basis. Further, the Company's future operations are
dependent, among other things, on the success of the Company's
commercialization efforts and market acceptance of the Company's

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

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

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

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

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

ENRON: Employee Committee Hires Crossroads as Financial Advisor
The Official Employment-Related Issues Committee of the Chapter
11 cases of Enron Corporation and its debtor-affiliates seeks
the Court's authority to retain and employ Crossroads LLC, nunc
pro tunc to April 18, 2002, as their financial advisors.

Michael P. Moran, Co-Chair of the Employee Committee, relates of
all the financial advisors they interviewed, Crossroads has the
experience and knowledge to best advise the Employee Committee
on the bankruptcy and employee issues likely to arise in these
Chapter 11 cases.

Dennis I. Simon, Managing Principal of Crossroads, further tells
the Court that their firm has worked for a number of creditors'
committees in significant reorganizations under chapter 11 of
the Bankruptcy Code.  Mr. Simon relates that Crossroads has
advised official creditors' committees in numerous Chapter 11
cases throughout the country including: Learnout & Hauspie
Speech Products N.V. (Dictaphone Corporation), Delaware;
Medpartners Provider Network, Inc., California; Einstein/Noah
Bagel Corp., Arizona; At Home Corporation (Excite @ Home),
California; PSINET Consulting Solutions Holdings, Inc., New
York; Edwards Theatres Circuit, Inc., California; etc.

Mr. Simon asserts that Crossroads has the expertise and
experience that will enable the Employee Committee to function
immediately and effectively.

The professional services Crossroads will render are:

   a. Analyzing and developing potential areas and opportunities
      of recovery for the Employee Committee and the Employee
      Committee's various employee constituencies;

   b. Assisting in the proper, fair and acceptable value
      recovery process available for the Employee Committee's
      various employee constituencies;

   c. Advising the Employee Committee on certain proposed asset
      sales and divestitures that effect the various employee

   d. Assisting in negotiations;

   e. Investigating claims;

   f. Preparing litigation support and expert witness testimony,
      all in accordance with direction from the Employee
      Committee or its counsel;

   g. Attending the meetings of the Employee Committee to
      receive and communicate information concerning the
      interests of the Employee Committee in these cases;

   h. Conferring with the Debtors' management and counsel and
      the Official Committee of Unsecured Creditors and various
      employee groups regarding severance and other related

   i. Reviewing the Debtors' activities and motions and third
      party filings and advising the Employee Committee as to
      the ramifications regarding employee-related activities
      and motions;

   j. Conferring with third party fiduciaries and governmental
      entities regarding employee-related issues;

   k. Reviewing benefit plans and the Debtors' oversight and
      compliance; and

   l. Performing such other financial advice for the Employee
      Committee as may be necessary or proper in these

Crossroads intends to apply to the Court for payment of
compensation and reimbursement of expenses in accordance with
the applicable provisions of the Bankruptcy Code, the Bankruptcy
Rules, the guidelines promulgated by the office of the U.S.
Trustee and the local rules and orders of the Court, and
pursuant to any additional procedures that may be or have been
established by the Court in these cases.

According to Mr. Moran, Crossroads will be compensated at its
standard hourly rates for certain professionals and discounted
rates for other of its professionals, which rates are based on
the professionals' level of experience.  At present, Mr. Moran
says, the hourly rates range from $550 for certain principals to
$100 for certain analysts.  "These hourly rates are subject to
periodic firm-wide adjustments in the ordinary course of
Crossroads' business, but will not be adjusted prior to January
1, 2003," Mr. Moran explains.

Specifically, the Crossroads professionals who will be working
with the Employee Committee and their hourly rates are:

         Principals: Ruth E. Ford
                     Lawrence D. Morriss, Jr.
                     Dennis I. Simon
                     Joel M. Simon

        Contractors: DeFrain, Mayer, a division of Palmer & Cay
                     Roland G. Simpson

   Principals, Managing Directors & Directors   $300 - $550
   Senior Consultants, Consultants & Actuaries  $175 - $350
   Associates & Accountants                     $100 - $150
   Financial & Actuarial Analysts               $100 - $150
   Administrators                                $90

Mr. Simon also relates that it is the firm's policy to charge
its clients for all disbursements and expenses incurred in the
rendition of services. These disbursements and expenses include,
among other things, long distance telephone and outgoing
facsimile charges, photocopying, travel, business meals,
computerized research, messengers, couriers, postage, witness
fees and other fees related to trials and hearings, which are
charged at cost or based on formulas that approximate actual
cost where the actual cost is not readily ascertainable.

According to Mr. Simon, the members and associates of Crossroads
do not have any connection with the Debtors, its creditors, or
any other party in interest, their respective attorneys and
accountants.  But, Mr. Simon says, Crossroads is currently
working on some unrelated matters for some parties in interest.  
Mr. Simon assures Judge Gonzalez that Crossroads do not
represent any other entity having an adverse interest in
connection with these cases. However, Mr. Simon admits that the
firm is unable to state with certainty whether one of its
clients or an affiliated entity holds a claim or is a party in
interest in these Chapter 11 cases.  "If Crossroads discovers
any information that is contrary to these disclosures, the firm
will immediately provide such information to the Court, the U.S.
Trustee, the Fee examiner, the Employee Committee and its legal
counsel, and the Creditors' Committee," Mr. Simon says. (Enron
Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

ENRON: Gains Court Nod to Pay Pre-Petition Headquarters Taxes
Enron Corporation and its debtor-affiliates sought and obtained
the Court's authority to pay the Year 2001 property taxes --
$3,862,132 -- assessed against its corporate headquarters at
1400 Smith Street in Houston, Texas.

JPMorgan Chase, as agent for a syndicate of lenders (which
includes JPMorgan Chase), is a lender in connection with that
certain Land and Facilities Lease Agreement, dated as of April
8, 1997, between Brazos Office Holdings, L.P. and Enron Leasing
Partners, L.P.  Subsequent to the execution of the Lease, Enron
Leasing entered into a sublease with Enron Corporation, which
subsequently assigned its interest in the Lease to Enron
Property & Services Corp.  According to Brian S. Rosen, Esq., at
Weil, Gotshal & Manges LLP, in New York, Enron and Enron
Property are Debtors in these Chapter 11 cases, but not Enron
Leasing.  The property subject to the Lease is the Debtors'
corporate headquarters.

Mr. Rosen relates that Section 3.02(b) of the Lease provides
that the Lease is to be characterized for all purposes of
Federal, state, and local law as a financing transaction and not
a lease. "JPMC has taken the position that the Lease contains
adequate provisions to permit JPMC to exercise non-judicial
remedies including non-judicial foreclosure of Enron Leasing's
interest in the Property, including termination of the Lease,"
Mr. Rosen tells the Court.  However, Enron, Enron Property, and
Enron Leasing dispute this position and have asserted that
JPMC's remedies as a lender are limited to those permitted to be
exercised by a mortgagor of real property, which include
judicial foreclosure of Brazos' interest in the Property and, if
properly drafted, non-judicial foreclosure, but not termination
of the leases.  Moreover, Mr. Rosen continues, although the
Lease grants JPMC a security interest, Enron, Enron Property and
Enron Leasing assert that the Lease does not contain provisions
adequate to grant JPMC the power to conduct a non-judicial
foreclosure sale.

Year 2001 property taxes assessed against the Property total
approximately $3,862,132.  The taxes were payable without
penalty or interest until January 31, 2002, and accrues interest
until satisfied in full.

Mr. Rosen points out that the claims of the various taxing
authorities in respect of unpaid property taxes are secured by
the Property.  "The statutory liens in respect of such claims
are senior to any contractual lien," Mr. Rosen notes.  Under the
Lease, Mr. Rosen says, Enron Leasing, Enron and Enron Property
are obligated to pay the property taxes.

In light of the uncertainties of litigation over the positions
advanced by JPMC, Enron Leasing, Enron, and Enron Property, Mr.
Rosen informs Judge Gonzalez that the Parties have been
negotiating the terms of a Standstill Agreement that would
include forbearance agreement from JPMC in exchange for certain
payments by the Debtors.

Pending finalization of the Standstill Agreement, the Debtors
sought authority to pay the 2001 property taxes against the
Property in exchange for JPMC not sending a notice of intent to
commence non-judicial foreclosure that would have asserted the
Property could be subject to non-judicial foreclosure as early
as April 2, 2002, and that would have compelled the Debtors to
commence litigation of this issue. (Enron Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900)

EXIDE TECH: Gets Court Okay to Hire Kirkland & Ellis as Counsel
Exide Technologies and its debtor-affiliates obtained court
approval to employ and retain the law firm of Kirkland & Ellis
in Chicago, Illinois, as their lead counsel to file prosecute
these Chapter 11 Cases and all related matters, effective as of
the Petition Date.

The Debtors will look to Kirkland & Ellis to, among other

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

B. attend meetings and negotiate with representatives of
   creditors and other parties in interest;

C. take all necessary action to protect and preserve the
   Debtors' estates, including the prosecution of actions on the
   Debtors' behalf, the defense of any action commenced against
   the Debtors, and objections to claims filed against the

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

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

F. represent the Debtors in connection with obtaining post-
   petition loans;

G. advise the Debtors in connection with any potential sale of

H. appear before this Court, any appellate courts, and the
   United States Trustee and protect the interests of the
   Debtors' estates before these Courts and the United States

I. advise the Debtors regarding the maximization of value of the
   estates for their creditors; and

J. perform all other necessary legal services and provide all
   other necessary legal advice to the Debtors in connection
   with the Chapter 11 Cases.

K&E will bill for services on an hourly basis, and expect
reimbursement of actual, necessary expenses and other charges
that the Firm incurs. Information on K&E's professionals' hourly
rates was not provided. (Exide Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

FARMLAND INDUSTRIES: Files for Chapter 11 Reorg. in Kansas City
Spurred by continued adverse market conditions in the nitrogen
fertilizer business and recent increases in cash demands,
Farmland Industries, Inc., has filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Farmland will maintain its current business operations while it
continues ongoing efforts to reposition the company to support
its core businesses. Meanwhile, the company plans to continue to
grow its successful foods businesses; pursue the sale of non-
strategic assets; further reduce debt; and seek additional ways
to cut costs. The company will reduce its workforce as it
reorganizes and repositions assets.

Farmland President and CEO Bob Terry said, "This was a difficult
decision for us. Our farmer-owned roots run deep, making
Farmland a company with an independent streak and a strong work
ethic. We fought to pull ourselves through this time of tight
liquidity. Regrettably, we were unable to overcome one
significant challenge-aggressive early redemption demands from
our subordinated debt holders. This activity drained our cash
liquidity and was expected to continue indefinitely. Our banks
were hesitant to continue lending in the face of ongoing
redemption payments to subordinate

Farmland has secured a debtor-in-possession financing facility
from a group of leading financial institutions led by Deutsche
Bank. This financing will be used to supplement the company's
existing cash flow during the reorganization process and ensures
post-petition payment of payroll and benefits, payments to
vendors and producers, as well as other normal operating costs.

Terry said Farmland will continue business operations, including
buying hogs from its producer-owners and supplying Farmland
Foods retail and foodservice customers with high-quality,
wholesome meat products.

Farmland's Refrigerated Foods businesses have reported strong
performance, with earnings in the first half of fiscal 2002 more
than double the same period last year, while its fertilizer
business has continued to struggle.

"We are processing and selling more branded meat products than
ever before, as Farmland Foods continues to make gains in both
market share and earnings. Consumers will continue to see
Farmlandr branded products in their grocer's meat case and on
restaurant menus. We value their support in choosing the
Farmland brand today more than ever," Terry added.

While Farmland reduced its debt by more than $500 million in the
last 18 months, a high debt-to-equity ratio incurred in a period
of expansion in the 1990s has been difficult to overcome.
Continued losses in the company's Crop Production businesses,
coupled with planned maintenance on its Coffeyville, Kansas,
refinery, significantly hampered cash flow through the spring
season, leading the company to state in its quarterly filing
with the Securities and Exchange Commission that seeking
protection from creditors was an option if conditions did not
improve. This led to increased cash demands, including demands
for early redemptions of subordinated debt, which the company
was unable to satisfy.

Farmland's subordinated debt program, a steady source of
financing for the company since 1948, currently provides $570
million in debt financing to the company. The bonds are held by
approximately 20,000 individuals who purchased the securities
through licensed dealers. Because the company currently is
unable to sell new subordinated debt, the early redemption
activity greatly aggravated Farmland's liquidity issues.

Farmland Industries holds an ownership position in several
business entities that are not included in this action because
their operations and financing are handled separately. They
include: Farmland National Beef Packing Company L.P., the
nation's fourth largest beef packer; Agriliance, a fertilizer
marketing joint venture with CHS Cooperatives and Land O'Lakes;
Land O'Lakes Farmland Feed, an animal feed joint venture with
Land O'Lakes. ADM-Farmland, a grain marketing company formed one
year ago, is also a separate company not included in this

Terry said Farmland's strong brand equity and leadership in the
meat business, coupled with its $2 billion asset base and the
support of 600,000 farmer-owners, are strengths that will help
ensure Farmland emerges as a stronger company.

"Farmland has overcome a number of obstacles in our 73-year
history. This step will enable us to meet today's challenges as
well, as we structure a long-term strategy that addresses our
financial obligations and sets the course for a stronger
Farmland," Terry said.

Farmland has also named company veteran Steve Rhodes as
Executive Vice President and Chief Financial Officer. Rhodes,
48, has been with Farmland and the cooperative system since
1979, most recently serving as Farmland Industries Vice
President and Controller. Rhodes earned a bachelor's degree
in accounting from Northwest Missouri State University,
Maryville, Missouri, and a master's degree in business
administration from Rockhurst College, Kansas City, Missouri
Rhodes replaces John F. Berardi who has left the company.

The company filed its voluntary petition in the U.S. Bankruptcy
Court in the Western District of Missouri, located in Kansas
City, Missouri.

Farmland Industries, Inc., Kansas City, Missouri, -- is a diversified farmer-owned  
cooperative with an asset base of more than $2 billion. Focused
on meeting the needs of its local cooperative- and farmer-
owners, Farmland and its joint venture partners supply local
cooperatives with agricultural inputs, such as crop nutrients,
crop protection products, and animal feeds. As part of its farm-
to-table mission, Farmland adds value to its farmer- owners'
grain and livestock by processing and marketing
high-quality grain, pork, beef, and catfish products throughout
the United States and around the world.

FARMLAND INDUSTRIES: Voluntary Chapter 11 Case Summary
Lead Debtor: Farmland Industries, Inc.
             12200 N. Ambassador Drive
             Kansas City, Missouri 64163
             800-822-8263 ext 5053
             dba Livestock Services Division
             dba Farmland Livestock Services
             dba Honor Pet Products Co.
             dba Premier Farmtech
             dba Marco Polo Salame Company
             dba Souza's Sausage Company

Bankruptcy Case No.: 02-50557

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Farmland Foods, Inc.                       02-50561
     Farmland Transportation, Inc.              02-50564
     Farmland Pipe Line Company                 02-50565
     SFA, Inc.                                  02-50562

Type of Business: Farmland Industries, Inc., a Kansas
                  corporation headquartered in Kansas City,
                  Missouri, is organized and operated as a
                  cooperative system of agricultural and food
                  related businesses. Farmland, in conjunction
                  with the other debtor subsidiaries and
                  others, as well as through joint venture
                  relationships, manufactures and markets
                  fertilizer, operates a petroleum refinery,
                  and operates an integrated food and food
                  processing business. Farmland, in conjunction
                  with the other debtor subsidiaries, also
                  engages in the wholesale and retail farm
                  supply business and transportation brokerage

Chapter 11 Petition Date: May 31, 2002

Court: Western District of Missouri (St. Joseph)

Judge: Jerry W. Venters

Debtors' Counsel: Laurence M. Frazen, Esq.
                  Bryan Cave LLP
                  1200 Main St, Suite 3500
                  Kansas City, Missouri 64105
                  Fax : 816-374-3300

Total Assets: $2.7 Billion

Total Debts: $1.9 Billion

FEDERAL-MOGUL: Wishes to Employ Garden City as Claims Agent
Federal-Mogul Corporation ask the Court to approve their
appointment of The Garden City Group, Inc. to perform claims and
noticing functions as the official claims agent of the Clerk of
Court with respect to the Debtors' Chapter 11 cases.  By
employing Garden City Group, the Clerk's Office is thereby
relieved of the administrative burden of processing the claims
that will be filed.

David M. Sherbin, Vice President and Deputy General Counsel and
Secretary of Federal-Mogul Corporation, foresees that hundreds
of thousands of claimants and other parties-in-interest involved
in the Debtors' Chapter 11 cases may impose heavy administrative
and other burdens on this Court and the Clerk's Office. This may
be especially true in light of the burden already imposed upon
the Clerk's Office by the large number of cases pending in the
District of Delaware.  The most effective and efficient manner
by which to facilitate the process of receiving, docketing,
photocopying, and transmitting proofs of claim in these cases is
to engage Garden City Group, an independent third party, to act
as a claims agent of the Court.  Mr. Sherbin accords that the
Court is empowered to utilize outside agents and facilities for
these purposes, provided that the cost of such services are paid
by the Debtors' estates.  Furthermore, the appointment of a
Claims agent is customary in Chapter 11 cases of this magnitude
and is contemplated by the local rules of this Court.

As described in the Bankruptcy Administration Agreement and
subject to court approval, the Claims Agent will provide these

a. provide notice of any and all bar dates established by the

b. maintain copies of all proofs of claim and proofs of interest
   filed in these cases;

c. maintain an official claims register in these cases by
   docketing all proofs of claim and proofs of interest in a
   claims database that includes the following information:

   1. the name and address of the claimant or interest holder
      and any agent thereof, if the proof of claim or proof of
      interest was filed by an agent;

   2. the date the proof of claim or proof of interest was
      received by Garden City Group and, if applicable, the

   3. the claim number assigned to the proof of claim or

   4. the asserted amount and classification of the claim; and,

   5. the applicable Debtors against which the claim or interest
      is asserted;

d. implement necessary security measures to ensure the
   completeness and integrity of the claims registers;

e. transmit to the Clerk's Office a copy of the claims registers
   on a weekly basis unless requested by the Clerk's Office on a
   more or less frequent basis;

f. maintain an up-to-date mailing list of all entities that have
   filed proofs of claim and proofs of interest in these cases
   and make the list available upon request to the Clerk's
   Office or at the expense of any party in interest;

g. provide access to the public for examination of copies of the
   proofs of claim or proofs of interest filed in these cases
   without charge during regular business hours;

h. record all transfers of claims and provide notice of such
   transfers to the extent required by Bankruptcy Rule 3001(e);

i. promptly comply with such further condition and requirements
   as the Clerk's Office or the Court may at any time prescribe;

j. provide such other claims processing and related
   administrative services as may be required from time to time
   by the Debtors; and,

k. assist the Debtors, among other things, the reconciliation of
   claims and technical support in connection with the

Mr. Sherbin indicates that the Debtors agree to compensate
Garden City Group for its services in accordance with the terms
of their Bankruptcy Administration Agreement with a 10% discount
on Garden City Group's standard hourly rates. The firm's current
hourly rates are:

        Professionals                   Hourly Rates
-------------------------------------   ------------
Supervisor                              $88.50
Quality Assurance                       $72.00-112.50
Senior Supervisor/Bankruptcy paralegal  $112.50
Senior Project Manager                  $135
Systems Management                      $148.50-202.50
Senior VP Systems & Managing Director   $225

                U.S. Trustee Sees Too Many Hats

Frank J. Perch, III, Esq., in Wilmington, Delaware, argues that
Garden City Group's simultaneous adversarial and ministerial
duties create a conflict.  The U.S. Trustee is not aware of any
case in which a professional acting as a consultant for one
party in a case on any issue, let alone claims related issues,
has simultaneously acted as the impartial claims agent.  The
U.S. Trustee submits that acting in such dual capacities
constitutes an actual conflict as well as creating an appearance
of impropriety.  Creditors may question the integrity of the
system if a party appointed to assist the court in performing
ministerial functions is also the hired hand of the creditors'
adversary, the debtor.  Therefore, at most, only one of the
Applications can be approved.  Garden City Group can act as
consultant or as claims agent, but not both.

Mr. Perch reminds the Court that that a claims agent provides
assistance to the Court by performing functions that would
otherwise need to be performed by the Clerk of the Court.  The
Clerk is, of course, a non-adversarial and impartial party.  The
Clerk does not take sides in favor of one party or the other in
any contested matter.  The function of docketing proofs of claim
and maintaining a database of filed claims is a ministerial one.
A claims agent makes no value judgments regarding the validity
of any claim or the adequacy of documentation submitted in
support of a claim.  Indeed, a claims agent does not even make a
value judgment as to the timeliness of a claim.  Claims received
after a filing deadline are docketed, not thrown away.  The
debtor is the party that seeks an order disallowing the late

On the other hand, Mr. Perch continues, a noticing consultant is
rendering professional advice to one party (in this case, the
debtor) on how to design a bar date notification program.  This
is a contested matter in many cases and particularly in mass
tort cases.  Creditors typically want broader and more detailed
notice than debtors propose to give.  These disputes are
sometimes resolved by negotiation, but sometimes they are
litigated.  Even if they are negotiated, Garden City Group will
be acting on behalf of the Debtors adversely to the
representatives of the creditors for whose claims Garden City
Group is supposed to be the impartial repository.

Mr. Perch contends that Debtors have already retained a noticing
agent, the R.R. Donnelley & Sons Co.  Although Debtors aver that
Garden City Group, acting as claims agent, and Donnelley will
avoid duplicating their services, the U.S. Trustee does not
understand how that is reasonably possible.  Donnelley has
already been providing noticing services since the beginning of
the case.  Therefore, Donnelley must already be using and
maintaining a database of creditors.  Garden City Group proposes
to create its own database.  Thus, it appears that the debtor
will be paying for two databases instead of one.  Even if Garden
City Group and Donnelley seek to combine or share their
databases, the costs of the combination and communication
process are extra costs that would not be incurred if one party
handled both tasks.  Further, any discrepancies between the
databases may create issues as to the adequacy of notice.  The
Debtors' allegation that there will be no duplication does not
satisfy their burden to explain why two parties should be
retained to perform the work of one. (Federal-Mogul Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,

FORMICA: Committee Taps Dewey Ballantine as Bankruptcy Counsel
The Official Committee of Unsecured Creditors appointed in
Formica Corp.'s chapter 11 cases sought and obtained permission
from the U.S. Bankruptcy Court for the Southern District of New
York to retain and employ Dewey Ballantine LLP as counsel.

Dewey Ballantine will:

     a) assist, advise and represent the Committee with respect
        to the administration of these cases, as well as issues
        arising from or impacting the Debtors, the Creditors or
        these chapter 11 cases;

     b) provide all necessary legal advice with respect to the
        Committee's powers and duties;

     c) assist the Committee in maximizing the value of the
        Debtors' assets for the benefit of all creditors;

     d) pursue confirmation of a plan of reorganization;

     e) investigate, as the Committee deems appropriate, among
        other things, the assets, liabilities, financial
        condition and operations of the Debtors;

     f) commence and prosecute necessary and appropriate
        actions/proceedings on behalf of the Committee that may
        be relevant to these cases;

     g) review, analyze or prepare, on behalf of the Committee,
        all necessary applications, motions, answers, orders,
        reports, schedules and other legal papers;

     h) communicate with the Committee's constituents and others
        as the Committee may consider desirable in furtherance
        of its responsibilities;

     i) appear in Court to represent the interest of the

     j) confer with professional advisors retained by the
        Committee so as to more properly advise the Committee;

     k) advise the Committee with respect to local practices and
        procedures as well as the rules of the Southern District
        of New York; and

     l) perform all other legal services for the Committee that
        are appropriate and necessary in these chapter 11 cases.

Dewey Ballantine will seek compensation from the Debtors'
estates at its regular hourly rates:

          Members                    $485 to $720 per hour
          Counsel and associates     $260 to $505 per hour
          Paraprofessionals          $140 to $225 per hour

Formica, together with its debtor and non-debtor-affiliates is a
preeminent worldwide manufacturer and marketer of decorative
surfacing materials. The company filed for chapter 11 protection
on March 5, 2002. Alan B. Miller, Esq. and Stephen Karotkin,
Esq. at Weil, Gotshal & Manges LLP represent the Debtors in
their restructuring efforts. As of September 30, 2001, the
Company reported a consolidated assets of $858.8 million and
liabilities of $816.5 million.

DebtTraders reorts that Formica Corp.'s 10.875% bonds due 2009
(FORMICA1) are traded between 18.5 and 22.5 . See  
some real-time bond pricing.

GALEY & LORD: Seeks Court Nod to Tap Garden City as Claims Agent
Galey & Lord, Inc. and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the Southern District of New
York to employ The Garden City Group, Inc. as their claims

As claims Agent, Garden City will:

     a) if requested, handle the docketing of claims filed with
        the Court and/or coordinate the receipt of filed claims;

     b) prepare a register of claims;

     c) provide assistance, as requested, to compare the
        schedules of liabilities and the claims register and      
        reconcile discrepancies;

     d) prepare periodic updates of the register of claims to
        reflect claim amendments, stipulations, and rulings;

     e) prepare any exhibits to objections to claims, as

     f) testify at hearings on claims objections regarding
        administrative matters, as required; and

     g) respond to creditors' non-legal questions about their
        claims or the claims process.

Garden City is aware that the Debtors have already retained the
Altman Group as their noticing and balloting agent. The Debtors
assure the Court that Garden City will work efficiently and
effectively with Altman to avoid task duplication.

The Consulting and General Project Management fees to be charged
by Garden City are:

     Project Supervisor               $95 per hour
     Senior Project Manager           $125 per hour
     Senior VP Systems and
       Managing Director              $250 per hour

G&L, a leading global manufacturer of textiles for sportswear,
including cotton casuals, denim, and corduroy, and is a major
international manufacturer of workwear fabrics, filed for
chapter 11 protection on February 19, 2002 together with its
affiliates. When the Company filed for protection from its
creditors, it listed $694,362,000 in total assets and
$715,093,000 in total debts.

GRAHAM PACKAGING: S&P Places B Credit Rating on Watch Positive
Standard & Poor's placed its single-'B' corporate credit ratings
on Graham Packaging Holdings Co., its 100%-owned operating
subsidiary, Graham Packaging Co., and related entities on
CreditWatch with positive implications following the company's
filing for an initial public offering of common stock. York,
Pennsylvania-based Graham is a leading manufacturer of
customized, blow-molded plastic containers. Debt outstanding as
at March 31, 2002, was about $1.08 billion.

"The CreditWatch placement reflects the potential for a modest
upgrade if the stock offering is successfully completed because
Graham has stated that expected net proceeds of around $200
million will be used to repay debt. In addition to the expected
improvement to credit protection measures, the proposed debt
refinancing will significantly extend Graham's debt maturities
and improve liquidity," said Standard & Poor's credit analyst
Liley Mehta.

Under its proposed debt refinancing, Graham plans to issue $100
million senior subordinated notes due 2008, $550 million term
loans due 2009 and a $150 million revolving credit facility due
2007, which will be fully available at closing of the
transaction. Proceeds will be used to repay existing bank debt
and $155 million in outstanding senior discount notes.

Pro forma for the proposed plan, key credit measures are
expected to improve. Coverage ratios are also expected to
benefit from a combination of continuing EBITDA growth (driven
by continued conversion to rigid plastic packaging in the food
and beverage segments, and the benefits of European
restructuring actions), and following the IPO, lower debt-
servicing costs.

Standard & Poor's will resolve the CreditWatch listings prior to
the closing of the transaction expected in the second half of
2002, following further discussions with management, and review
of additional information.

ICH CORPORATION: Secures Okay to Sign-Up BSI as Claims Agent
By order of the U.S. Bankruptcy Court for the Southern District
of New York, ICH Corporation and its debtor-affiliates obtained
authority to hire Bankruptcy Services LLC as official claims and
noticing agent of the Court.

As Claims and Noticing Agent, BSI will:

     A. provide notice, subject to review and approval of the
        Clerk of the Court, to all parties in interest of the
        commencement of these chapter 11 cases and provide
        Certificate of Mailing;

     B. provide notice, subject to review and approval of the
        Clerk of the Court, to all creditors of the

          i) first meeting of creditors pursuant to section 341
             of the Bankruptcy Code;

         ii) of the bar date to be established in these chapter
             11 cases pursuant to Bankruptcy Rule 3003(c) (3);

        iii) the existence and amount of their respective
             claims, as established by the Debtors' records; and
         iv) provide appropriate Certificates of Service;

     C. assist with the preparation of the Debtors' schedules of
        liabilities as required by Federal Rule of Bankruptcy
        Procedure ("Bankruptcy Rule") 1007(a);

     D. coordinate receipt of all claims received by the Clerk's
        Office and provide copies of claims register on a
        frequency basis as determined by the Court;

     E. provide secure storage for all proofs of claim;

     F. ensure that the claims register shall specify for each
        claim docketed
     G. facilitate the claims resolution process including

          i) matching scheduled liabilities to filed claims;
         ii) identifying duplicative or amended claims;

        iii) categorizing claims into plan classes; and

         iv) coding claims and preparing exhibits for omnibus
             claims motions.

     H. provide balloting services, including, among other
        things, solicitation, calculation of votes and
        distribution as required in furtherance of confirmation
        of a plan of reorganization, including establishment of
        a toll free number for questions if needed;

     I. upon confirmation of a plan of reorganization,
        calculation of disbursement amounts, development of
        customized disbursement reports and processing of
        payment to allowed claim holders.

BSI will also comply with any further conditions and
requirements as the Clerk's Office may prescribe and provide
other administrative services that the Debtors may request.

The Debtors agree to compensate BSI with its customary hourly
rates, which are:

          Kathy Gerber                $195 per hour
          Senior consultants          $175 per hour
          Programmer                  $125 - $150 per hour
          Associate                   $125 per hour
          Data Entry/Clerical         $40 - 60 per hour

ICH Corporation, a Delaware holding corporation, which operates
Arby's restaurants, located primarily in Michigan, Texas,
Pennsylvania, New Jersey, Florida and Connecticut. The Company
filed for chapter 11 protection on February 05, 2002. Peter D.
Wolfson, Esq. at Sonnenschein Nath & Rosenthal represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed debts and assets of
over $50 million.

INTERMET CORPORATION: S&P Assigns BB- Corporate Credit Rating
Standard & Poor's assigned its double-'B'-minus corporate credit
rating to Troy, Michigan-based Intermet Corp., the largest
independent automotive casting company in North America.
In addition, Standard & Poor's assigned its double-'B'-minus
rating to the company's $300 million senior secured bank
facility due 2004, and a single-'B'-plus rating to the company's
$175 million senior unsecured notes due 2009. The outlook is
stable. Proceeds from the debt offering are expected to be used
to pay down bank debt.

"The ratings reflect the company's leading niche business
positions within the highly fragmented and cyclical automotive
casting market, combined with a somewhat aggressive financial
profile," said Standard & Poor's analyst Eric Ballantine.

Intermet provides both original equipment manufacturers and Tier
1 suppliers with specialized castings. In addition, the company
provides a wide range of capabilities including design,
engineering, and product evaluation. Intermet's product breadth,
technology, and good customer relationships are considered
competitive advantages. However, Intermet's limited geographic
diversity and heavy customer concentration are business risks.

Intermet has a somewhat aggressive financial profile, total debt
to EBITDA in the 3.7 times and EBITDA to interest coverage of
about 3.0x. The company continues to focus on improving its cost
structure through workforce reductions and operating efficiency
improvements. Intermet is expected to produce a fair amount of
free cash flow, which will most likely be used for debt
reduction. Nevertheless, over time, debt-financed acquisitions
may occur. Intermet's liquidity is modest with about $60 million
in available capacity under its $300 million credit facility.

Highly cyclical end markets, a relatively aggressive financial
profile, and the potential for debt-financed acquisitions limits
ratings upside. Leading niche market positions, an improving
cost structure, and modest cash generation limit downside
ratings risk.

INT'L FIBERCOM: Looks to PricewaterhouseCoopers for Fin'l Advice
International Fibercom, Inc. and its affiliated debtors sought
and obtained permission to hire PricewaterhouseCoopers to
perform certain financial advisory and accounting services from
the U.S. Bankruptcy Court for the District of Arizona.

PricewaterhouseCoopers will:

     i) assist the Debtors in preparing cash collateral budgets,
        projections and feasibility analyses, and participating
        in all related meetings;

    ii) assist the Debtors in preparing financial information
        and reports reasonably required by lenders and any
        creditors' committees, and participating in all related

   iii) assist the Debtors in the preparation of financial
        information for distribution to creditors and other      
        parties in interest, including cash receipts and
        disbursements analysis, legal entity financial
        statements, and analysis of various asset and liability

    iv) assist the Debtors in analyzing creditor claims by
        type and entity;

     v) assist in the formulation of any Chapter 11 plan
        proposed by any of the Debtors, including feasibility
        and liquidation analysis necessary to support disclosure
        statement approval and confirmation of such plan(s);

    vi) litigation consultation services and expert witness
        testimony as requested by the Debtors;

   vii) advice regarding corporate issues related to

  viii) assist the Debtors in preparing all reports and filings
        as required by the Court or the Office of the United
        States Trustee, including any monthly operating reports,
        Schedules of Assets and Liabilities, and Statements of
        Financial Affairs and Executory Contracts of the

    ix) participation in meetings focused on coordinating the
        various professionals and resources necessary to the
        Debtors' restructuring efforts; and

     x) any other financial advisory services that may be
        required by the Debtors.

PricewaterhouseCoopers' customary hourly rates for Phoenix
personnel are:

          Partners           $370 per hour
          Directors          $295 per hour
          Managers           $275 per hour
          Senior Associates  $215 per hour
          Associates         $170 per hour

In the event that personnel from PricewaterhouseCoopers'
national practice are required to be involved at the Debtors'
request, the national rates are:

          Partners                     $500-$595
          Managers/Directors           $350-$495
          Associates/Senior Associates $175-$325

International Fibercom, Inc. resells used, refurbished
communications equipment, including fiber-optic cables. The
Company filed for chapter 11 protection on February 13, 2002.
Robert J. Miller, Esq. at Bryan Cave, LLP represents the Debtors
in their restructuring efforts.

INTERVOICE-BRITE: Completes 3 Debt Restructuring Transactions
InterVoice-Brite (Nasdaq: INTV) announced three concurrent
financing transactions resulting in a significant restructuring
of its total indebtedness.  "I'm pleased with these
transactions," said David Brandenburg, the Company's Chairman
and CEO. "We believe we will have a capital structure which will
allow us the flexibility and access to working capital we need
to achieve our objectives."

First, the Company has entered into a three year mortgage on its
Dallas facilities for $14 million.  Interest is payable monthly
under the mortgage and will be computed at the greater of the
prime interest rate plus 2 percent or 10.5 percent.  The entire
principal amount is payable at the end of the mortgage term.

Second, the Company has agreed to issue $10 million in
convertible notes in a private placement.  The notes have a term
of 13 months and carry a coupon rate of 6 percent, and payment
of principal and interest under the notes commence September 1,
2002.  The Company, at its option, may meet its payment
obligations in either cash or common stock, provided certain
conditions are met.  The Company has the right under certain
circumstances to make voluntary prepayments of any portion or
all of the outstanding principal under the notes.  The investors
have the right at any time to convert the notes into shares of
the Company's common stock at a conversion price of 200 percent
over the volume weighted average price of the Company's common
stock at closing. Also, as part of the placement, the investors
will receive warrants with a term of three years to purchase
621,303 shares of the Company's common stock at a price per
share of $4.0238.

Third, the Company has agreed to use the proceeds from the
mortgage and convertible notes to extinguish its $22.5 million
term loan and to pay down a portion of its borrowings under its
revolving credit facility, reducing its bank debt to
approximately $6 million.  The Company's lender group has agreed
to waive a breach of a financial covenant by the Company under
its credit agreement with the lender group and has agreed to
continue to provide the Company with a $12 million revolving
credit line, against which the Company has drawn the earlier
discussed $6 million.  The amount at any point in time the
Company may borrow under the revolving credit line will be
determined by a borrowing base based on the Company's U.S.
receivables plus the Company's U.S. raw materials inventory.

In addition to these three financing transactions, the Company
believes it will close and fund the sale of its Wichita, Kansas
facility as soon as May 31, 2002, the proceeds of which will be
used to further reduce the Company's bank debt.

Rob Graham, the Company's CFO, stated, "We are pleased to have
put financing concerns to rest.  We can now focus on improving
our core business. We appreciate the efforts of everyone

InterVoice-Brite is a leading global provider of voice-enabled
information solutions, collaboration and e-business applications
and outsourcing services for enterprises and network service
providers.  The Company operates in two global divisions, each
focusing on a separate marketplace.  iVB Network Solutions
provides prepaid services, voicemail, unified messaging, short
messaging services (SMS), service platforms and speech-enabled
applications for network operators marketed under the OmviaT
product name.  iVB Enterprise Solutions' OneVoicer product
family offers speech-enabled IVRs, multimedia portals,
interactive alerts and wireless application gateways that enable
enterprises to provide valued information to partners, customers
and employees.  Both divisions also provide their products and
services on an outsourcing basis as an Application Service
Provider.  For more information, visit http://www.intervoice-  

IRON AGE: S&P Junks Rating Due to Weaker Operating Performance
Standard & Poor's lowered its corporate credit ratings on safety
shoe distributor Iron Age Holdings Inc. and its subsidiary Iron
Age Corp. to triple-'C'-plus from single-'B'-minus based on the
company's continued deterioration in operating performance, high
debt service burden, and constrained liquidity. The outlook is
negative. Pittsburgh, Pennsylvania-based Iron Age has total debt
outstanding of about $137 million.

"Operating results came under significant pressure in recent
quarters due to declining demand for Iron Age's safety shoes,
stemming from plant closings and employee layoffs, overall
weakness in the U.S economy, and increased competitive pressure
from nationally branded shoe products," Standard & Poor's credit
analyst Ana Lai said. "Sales declined 11% to $105.5 million
while EBITDA slipped 32% to $13 million for the year ended
January 2002. We expect operating conditions to remain difficult
due to the uncertain economic outlook."

Standard & Poor's said Iron Age's poor operating performance,
coupled with high debt levels, resulted in extremely weak credit
protection measures, with total debt to EBITDA of about 10.0
times and EBITDA interest coverage of about 1.0x for the year
ended Jan. 26, 2002. Financial flexibility is very limited, with
about $10 million available under its $20 million revolving
credit facility. The rating agency said liquidity will remain
constrained because of the company's relatively high debt
service burden, comprised of about $8.5 million in cash interest
expense and quarterly amortization of about $1.6 million under
its acquisition term loan.

Standard & Poor's said ratings could be lowered if operational
pressures further reduce the company's already constrained

KAISER ALUMINUM: Retirees' Committee Retains Brobeck as Counsel
The Official Committee of Retired Employees in the Chapter 11
cases of Kaiser Aluminum Corporation and its debtor-affiliates
asks the Court to approve its employment and retention of
Brobeck, Phleger & Harrison LLP as their primary counsel, nunc
pro tunc to February 28, 2002.

Specifically, Brobeck will render:

A. research, analysis, and advice to the Retirees' Committee
   relative to the February 8, 2002 letter from James E.
   McAuliffee, Jr. vice President of Corporate & Fabricated
   Products Human Resources for Kaiser Aluminum & Chemical
   Corporation, to the "Kaiser Aluminum Retiree/ Surviving
   Spouse" and all attachments contained in the letter;

B. research, analysis, and advice to the Retirees' Committee
   relative to the March 27, 2002 letter from Kaiser Aluminum &
   Chemical Corporation as Plan Administrator to "Salaried
   Retiree/ Surviving Spouse and covered spouse/dependents, if
   any"  and all attachments contained in the letter; and,

C. any and all services authorized by the Court.

The Chairman for the Retirees' Committee, John E. Daniel,
informs the Court that the committee chose Brobeck as its
counsel because of the firm's considerable experience and
knowledge in the field of bankruptcy.  Brobeck has particular
experience representing committees of retired employees in
Chapter 11 cases.  In addition, Brobeck has experience with
issues relating specifically to retirement benefits.  Moreover,
the retention of Brobeck is geographically desirable because
Frederick D. Holden, Jr., the attorney who will be primarily
responsible for representing the Retirees' Committee in these
cases, works out of the San Francisco office of Brobeck.  
Accordingly, Mr. Daniel believes that Brobeck is well qualified
to represent them in these cases in an efficient and timely

Mr. Daniel proposes that Brobeck will be paid its customary
hourly rates for services rendered that are in effect from time
to time.  The committee also intends to reimburse Brobeck of its
actual and necessary expenses.  The attorneys presently
anticipated to be the persons primarily involved in representing
the committee and their current standard hourly rates are:

         Attorney                    Position           Rate
   ------------------------    --------------------    ------
   Frederick D. Holden, Jr.      bankruptcy partner     $470
   Barbara P. Pletcher           benefits partner        470
   Jennifer S. Yount           bankruptcy associate      325

Frederick D. Holden, Jr., Esq., a member of the firm Brobeck,
Phleger & Harrison LLP, understands that, pursuant to an April
18, 2002 budget submitted by Brobeck to the Court, the Retirees'
Committee and its counsel are subject to a $95,000 fee cap --
unless the Court increases that limit.

Additionally, Mr. Holden ascertains that the firm and its
professionals have no connection with the Debtors or with their
major creditors and with other parties-in-interest to these
cases. Brobeck represents no adverse interest to the Retirees'
Committee in the matters in which it is to be engaged. (Kaiser
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

KELLSTROM: Committee Wants Jefferies to Render Financial Advice
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases involving Kellstrom Industries, Inc., asks
permission from the U.S. Bankruptcy Court from District of
Delaware to retain Jefferies & Company, Inc. as its financial
advisor, effective as of March 15, 2002.

The Committee asserts that the services of a financial advisor
are necessary and appropriate to enable it to evaluate the
complex financial and economic issues raised by the Debtors'
reorganization proceedings and to effectively fulfill its
statutory duties.  The Committee selected Jefferies because of
its expertise in providing financial advisory services to
debtors and creditors in bankrupt and distressed situations.

It is expected that Jefferies' services will include assisting,
advising and representing the Committee in these matters:

     a. become familiar, to the extent Jefferies deems
        appropriate, with and analyze the business, operations,
        properties, financial condition and prospects of the

     b. advise the Committee on the current state of the
        "restructuring market";

     c. assist and advise the Committee in developing a general
        strategy for accomplishing a Restructuring;

     d. assist and advise the Committee in implementing a plan
        of Restructuring with the Debtors;

     e. assist and advise the Committee on developing a strategy
        with respect to recapitalization possibilities for the

     f. assist and advise the Committee in evaluating and
        analyzing a Restructuring including the value of the
        securities, if any, that may be issued under any
        Restructuring plan;

     g. assist the Committee and counsel in identifying
        potential financing sources for a recapitalization, and

     h. render such other financial advisory services as may
        from time to time be agreed upon by the Committee and

Pursuant to an Engagement Letter, Jefferies is entitled to a
$100,000 monthly fee for a period of not less than 4 months. In
the event the Debtors consummate a Restructuring of the
outstanding indebtedness during the term of the engagement, the
Debtors will pay Jefferies a Success Fee in an amount mutually
agreeable between the Company, the Committee and Jefferies equal
to the sum of;

     i) 2.5% of the Total Consideration received by the
        unsecured creditors in any Restructuring in an amount
        less than or equal to $5,000,000 received by the
        unsecured creditors in any Restructuring, plus;

    ii) 5% of the Total Consideration in an amount greater than
        $5,000,000 and less than or equal to $10,000,000, plus;

   iii) 10% of the Total Consideration in an amount greater than
        $10,000,000 received by the unsecured creditors in any

The Committee has been advised by Jefferies that it is not the
general practice of investment banking firms to keep detailed
time records similar to those customarily kept by attorneys.  
The Committee seeks to waive the information requirements
imposed by Del. Bankr. LR 2016-2 as it relates to Jefferies.  

Kellstrom Industries, Inc., a leader in the aviation inventory
management industry filed for chapter 11 protection on February
20, 2002. Domenic E. Pacitti, Esq. at Saul Ewing LLP represents
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed $371,249,106
in total assets and $402,400,477 in total debts.

KMART: Myrick Construction Seeks Stay Relief to Enforce Liens
Myrick Construction Inc. and Central Carolina Air Conditioning
Company seek relief from the automatic stay to enforce their
lien rights on certain parcels of real property comprising the
Kmart Distribution Center No. 8288.  The Property is located at
300 Penry Road in Greensboro, North Carolina.

John S. Delnero, Esq., at Bell, Boyd & Lloyd, in Chicago,
Illinois, tells the Court that Myrick furnished materials, labor
and equipment necessary to complete all site work (including
curbs and gutters, asphalt paving, storm drainage, keystone
walls, site lighting, concrete dolly pads, landscaping and
seeding) at the Property within the period of May 7 to December
21, 2001.  Mr. Delnero asserts that Kmart owes Myrick at least

According to Mr. Delnero, Central Carolina also furnished
materials, labor and equipment necessary:

   (1) to complete numerous repairs to existing equipment
       (including repairs to the remaining exhaust fans, the
       motorized intake louvers, the Air Rotation Units, the
       systems listed in the Battery/Maintenance area and the
       systems listed in the storage area);

   (2) to install a new 4-ton gaspack on the roof, and

   (3) to rezone the breakroom.

All these work was done by Central Carolina from the period of
September 11, 2001 to November 26, 2001.  Mr. Delnero contends
that Kmart is indebted to Central Carolina in a sum not less
than $59,000.

Mr. Delnero informs Judge Sonderby that the North Carolina
General Statutes provide for mechanics', laborers' and
materialmen's liens secured by an interest in real property:

   "Any person who performs or furnishes labor or professional
   design or surveying services or furnishes materials or
   furnishes rental equipment pursuant to a contract, either
   express or implied, with owner of the real property for the
   making of an improvement shall, upon complying with the
   provisions of this Article, have a lien on the real property
   to secure payment of all debts owing for labor done or
   professional design or surveying services or material
   furnished or equipment rented pursuant to the contract."

So in accordance with the North Carolina General Statutes, the
Claimants filed claims of lien within 120 days of the last day
upon which labor or materials were furnished.  To enforce their
respective liens, Mr. Delnero explains that the Claimants must
commence civil actions no later than 180 days after the last
furnishing of labor or materials at the Property.

Mr. Delnero clarifies that the Claimants only seek to name the
Debtors as a necessary party in a certain mechanic's lien
foreclosure proceeding to be filed against non-debtor third
parties.  "If the relief is granted, Claimants will not require
any of the Debtors to answer or otherwise appear in the
foreclosure proceeding," Mr. Delnero says.  Claimants will
enforce their claims through the claims process established by
the Court.

                        Debtors Object

There is no reason to lift the automatic stay, Mark A.
McDermott, Esq., at Skadden, Arps, Slate, Meagher & Flom, in
Chicago, Illinois, argues.  Mr. McDermott asserts that the
Claimants are adequately protected and their security interest
is not in jeopardy.

Mr. McDermott emphasizes that the automatic stay applies only to
actions against the Debtors.  "The Claimants are free to file a
lien enforcement action against non-debtor third parties without
leave of this Court," Mr. McDermott says.

Furthermore, Mr. McDermott notes, the Claimants do not allege
nor cite to any authority to the effect that the Debtors are
necessary and indispensable parties to the lien enforcement
proceeding, without whom the proceeding cannot go forward.  "If
the Claimants are concerned that the Debtors' participation in
discovery related to a lien enforcement proceeding against non-
debtor third parties will be necessary, these discovery requests
are not stayed by Section 362(a)(1) of the Bankruptcy Code," Mr.
McDermott asserts.

In addition, Mr. McDermott explains that the Claimants are
adequately protected by Section 108(c) of the Bankruptcy Code
because "if applicable non-bankruptcy law...fixes a period for
commencing or continuing a civil action in a court other than a
bankruptcy court on a claim against the debtor...then the period
does not expire until the later of:

   (1) the end of the period . . . or

   (2) 30 days after notice of the termination or expiration of
       the stay under Section 62." (Kmart Bankruptcy News, Issue
       No. 23; Bankruptcy Creditors' Service, Inc., 609/392-

KMART CORP: Offering Free BlueLight Internet Access To Shoppers
--------------------------------------------------------------- and Kmart are thanking loyal on- and offline
shoppers for their continued support with a special Internet
access deal.  BlueLight Unlimited Internet Service, the lowest-
priced major Internet service in the country, is offering one
month of free online access to new subscribers who sign up for
the service during Kmart's Customer Appreciation Days.  The
offer, which is available on from May  
31 - June 8th, is one of the many special savings and events
planned by Kmart's more than 220,000 associates nationwide as
their way of saying "thank you" to shoppers for standing by the
retailer during its current restructuring.

BlueLight Unlimited is the lowest-priced major Internet service
in the country at $8.95 a month for unlimited access.  The
service recently added additional email storage space (10 MB)
and a POP3 email-forwarding system for customers free of charge.  
The enhancements to BlueLight Unlimited come at a time when many
Internet services have begun cutting back or charging for added
features.  BlueLight Unlimited also continues to add dial-up
numbers to its coverage area -- more than 6,500 nationwide --
boasting more than twice as many dial-up numbers as AOL.  
BlueLight Unlimited answers at least 80% of all customer calls
in one minute or less and resolves more than 90% of customer
problems in the first call.

"BlueLight Unlimited Internet offers the value and service that
Kmart customers demand and deserve," said Richard Blunck, CEO of and SVP of Kmart Corporation.  "Both Kmart and have made some exciting improvements over the past
few months.  The Customer Appreciation Days and our free month
of Internet service are our way of saying 'thank you' to on- and
offline shoppers who continue to make us their discount retailer
of choice."

Full details on BlueLight Unlimited's one-free-month promotion
can be found online at  Kmart Customer  
Appreciation Days are June 1 through June 8.  During this
celebration, Kmart will unveil special deals on some of its most
popular merchandise, both in the stores and online, along with a
variety of promotional events and celebrity appearances In
addition, customers will be treated to cleaner, less-cluttered
stores, following a massive chain-wide "spring cleaning."

Based in San Francisco, is a wholly owned
subsidiary of Kmart Corporation. represents Kmart
on the Internet through the online shopping site,
featuring nationally recognized products at unprecedented
values.  The BlueLight Unlimited Internet Service is the lowest-
priced major ISP in the U.S. today.  For more information, visit

LANTRONIX: Fails To Comply With Nasdaq Listing Requirements
Lantronix, Inc. (Nasdaq: LTRXE) announced that, based on the
results of the voluntary internal review by the company's audit
committee, assisted by Ernst & Young, the company has determined
that it will amend certain of its previously issued financial
reports.  The restatement is currently expected to result in net
revenue reductions of less than 15 percent for both fiscal 2001
and 2002.  The company also currently anticipates that it will
record a charge of approximately $1.0 to $2.0 million for the
third quarter of fiscal 2002, principally for excess and
obsolete inventory, which will reduce the third- quarter
earnings announced on May 1, 2002.  The company anticipates
filing amendments to its previously issued financial reports
with the Securities and Exchange Commission after discussion
with the SEC.

The Lantronix Board of Directors announced the appointment of
Marc Nussbaum as interim chief executive officer and president,
succeeding Fred Thiel, who will assume the role of chief
technology and strategy officer.  The company also announced
that Thiel and Bernhard Bruscha have resigned from the Board of
Directors.  H.K. Desai, a current member of the company's Board
of Directors, was elected chairman.

"Marc Nussbaum has more than twenty years experience in the
computer industry.  Marc served as senior vice president and
chief technical officer for Western Digital for seventeen years
where he helped build the LSI controller board and drive
business to $4.0 billion in revenue," Chairman Desai stated.  
"Our focus is to complete the internal review and necessary
filings that will enable us to move on and pursue Lantronix's
objective of being the premier provider of networking

"I believe that this transition is in the best interest of the
company and its stockholders," said Thiel.  "I continue to
firmly believe and remain committed to Lantronix's vision of
delivering the best products and solutions that enable network
connectivity for our customers now and in the future.  I look
forward to working with Marc and the rest of the management team
to help define and contribute towards Lantronix's long-term

Lantronix also announced that it received notification from
Nasdaq on May 23, 2002 that it does not meet the filing
requirements for continued listing on the Nasdaq National Market
and is therefore subject to delisting. Lantronix has requested a
hearing before a Nasdaq listing qualifications panel to review
the Staff Determination.  There can be no assurance the Panel
will grant the company's request for continued listing.  The
notice from NASDAQ was sent as a result of the company's current
non-compliance with Marketplace Rule 4310(C)(14), which requires
timely filing of the company's quarterly report on Form 10-Q.  
The company intends to file its quarterly report promptly upon
the completion of the internal review.

Lantronix also announced that it has signed a new intellectual
property agreement with Gordian Corporation, Lantronix's long-
time provider of product designs and engineering services.  The
agreement gives Lantonix joint ownership of the Gordian
intellectual property that is embodied in the products Gordian
has designed for Lantronix since 1989.  The agreement provides
that Lantronix will be able to use the intellectual property to
support, maintain and enhance its products.  The agreement
extinguishes Lantronix's obligations to pay royalties for each
unit of a Gordian-designed product that it sells.

Lantronix will pay Gordian $6.0 million to acquire an interest
in the Gordian intellectual property, which will be paid in
three installments.  The company paid $3.0 million concurrent
with the signing of the agreement and is obligated to pay $2.0
million on July 1, 2002 and $1.0 million on July 1, 2003.  
Lantronix will also purchase $1.5 million for engineering and
support services from Gordian over the next 18 months.

Lantronix, Inc. (Nasdaq: LTRXE) is a provider of hardware and
software solutions ranging from systems that allow users to
remotely manage network infrastructure equipment to technologies
that network-enable devices and appliances.  Lantronix was
established in 1989, and its worldwide headquarters are in
Irvine, Calif.  For more information, visit the company on the
Internet at

LODGENET ENTERTAINMENT: S&P Rates $225MM Rule 415 Shelf at B-
Standard & Poor's assigned its preliminary single-'B' senior
unsecured and preliminary single-'B'-minus subordinated ratings
to LodgeNet Entertainment Corp.'s $225 million Rule 415 shelf
registration. A preferred stock issue would be rated at the time
of drawdown, based on its terms.

In addition, the single-'B'-plus corporate credit rating was
affirmed. The outlook remains stable. Sioux Falls, San Diego-
based LodgeNet is one of two dominant providers of interactive
television to the lodging industry in the U.S. and Canada. The
company had a total of $332 million in debt as of March 31,

"LodgeNet generated higher revenue and EBITDA in the first
quarter of 2002 despite a 3.0% drop in occupancy rates which
contributed to a 3.5% decline in average revenue per room," said
Standard & Poor's analyst Steve Wilkinson. He added, "This
reflects the company's growing room base and cost control
measures. Profit growth will remain constrained by lower
occupancy rates which will further weigh on the company's
negative discretionary cash flow." The company is expected to
continue to modestly increase both its room base and industry-
leading U.S. market share as a result of its contracts with
Hilton Hotels Corp. and Starwood Hotels & Resorts Worldwide Inc.

Drawdowns may be in the form of common or preferred equity or
senior or subordinated debt. The preliminary ratings assume that
any drawdowns of debt will be used for refinancing, and will not
impair LodgeNet's current credit profile.

Ratings stability depends on the company's ability to modestly
improve its credit statistics to comply with tightening
financial covenants.

METALS USA: U.S. Trustee Alters Unsecured Committee Membership
CFSB Global Opportunities Advisers LLC, Zurich Scudder
Investments, Inc., and TXI Caparral Steel tendered their
resignation from the Joint Committee of Unsecured Bondholders
and Creditors in the Bankruptcy cases of Metals USA, Inc. and
its debtor-affiliates. The Office of the United States Trustee
appoints Merrill Lynch Corporate Bond High Income Fund, Deutsche
Investment Management Americas Inc. and Alcoa to replace them.

The nine current Committee members are:

   A. The Bank of New York
      Corporate Trust - Default Administration
      Indentured Trustee for the 8 5/8% Senior
      Subordinated Notes Due 2008
      Attn: Gary Bush, Vice-President
      New York, NY 10001
      Phone: (212) 896-7260   Fax: (212) 328-7302

   B. Merrill Lynch Corporate Bond High Income Fund
      Attn: Mike Brown
      Plainsboro, New Jersey 08536
      Phone: (609)282-3001   Fax: (609) 282-2940

   C. ING-Ghent Asset Management LLC
      Attn: Robert Farnham
      New York, NY 10169
      Phone: (212) 309-5973   Fax: (212) 309-6514

   D. Deutsche Investment Management Americas Inc.
      Attn: James Capezzuto
      New York, NY 10154
      Phone: (212) 336-1673   Fax: (212) 223-3127

   E. Triton Partners LLC
      Attn: Daniel Arbess
      New York, NY 10017
      Phone: (201) 792-2175   Fax: (212) 792-2174

   F. Nucor
      Attn: Jim Frias
      Charlotte, NC 28211
      Phone: (704) 365-1321   Fax: (704) 362-4208

   G. National Steel Corporation
      Attn: Brian C. Brown
      Mishawaka, IN 46545
      Phone: (219) 273-7418   Fax: (219) 273-7493

   H. Alcoa Inc.
      Attn: Michael J. Fry
      Norcross, GA 30092
      Phone: (770) 582-7302   Fax: (770) 582-7325

   I. AK Steel Corporation
      Attn: J. N. (Sonny) Bach
      Middletown, OH 45043
      Phone: (513) 425-2741   Fax: (513) 425-5958
(Metals USA Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

NATIONAL STEEL: Signs-Up Ernst & Young as Consultants
National Steel Corporation and its debtor-affiliates seek the
Court's authority to employ and retain Ernst & Young LLP as
their Audit, Tax and Human Resources Advisors, nunc pro tunc to
the Petition Date.

David A. Missner, Esq., at Piper Rudnick, in Chicago, Illinois,
explains that the Debtors chose E&Y LLP because they believe the
firm is uniquely qualified for the task.  E&Y LLP is a firm of
independent public accountants and is one of the five largest
accounting, auditing, and tax consulting firms in the United
States.  E&Y LLP also has significant experience providing human
resource advisory services to debtors and creditors during the
course of Chapter 11 cases.

The professionals at E&Y LLP with primary responsibility for
rendering services to the Debtors include:

   For Audit:

        James A. Pease     Partner
        Timothy R. Cash    Partner
        Kevin K. Kilmara   Senior Manager
        Jon J. McCoy       Manager

   For Tax:

        Mitch Stauffer     Partner
        Dan Carsaro        Partner
        Rich Liebman       Partner
        Marie Powell       Tax Consulting Manager

   For Human Resources:

        Donald Kalfen      Partner

Mr. Missner adds that other professionals at E&Y LLP may render
services to the Debtors, on an as-needed basis.  Furthermore,
Mr. Missner continues, the Debtors may terminate the Engagement
Letters at any time while E&Y LLP may terminate the Audit
Engagement Letters at any time and may terminate the HR
Engagement Letter on 10 days prior written notice.  Mr. Missner
relates that the provision of the Audit Engagement Letters
concerning "alternative dispute resolution" and the provisions
in the HR Engagement Letter concerning "Other Issues" shall
remain in effect regardless of any termination of the Engagement

E&Y LLP has agreed to perform these services:

(1) Audit Services

    -- audit and report on the financial statements of the
       Company for the year ending December 31, 2002;

    -- review of each of the Company's unaudited quarterly
       financial statements before the Company files its Form
       10-Q; and

    -- audit and report on the financial statements and
       supplemental schedules of the Company's 20 benefit plans
       for the year ended December 31, 2001, which are to be
       included in the Plans' Form 5500 filings with the
       Department of Labor's Pension and Welfare Benefits

(2) Tax Services

    -- assist and advise the Company in its bankruptcy
       restructuring objective and post-bankruptcy operations by
       determining the tax effects of alternative restructuring
       and operating plans, including, as needed, research and
       analysis of Internal Revenue Code sections, treasury
       regulations, case law and other relevant tax authority
       which could be applied to business valuation and
       restructuring models;

    -- analyze the availability, limitations, preservation and
       maximization of tax attributes, like net operating losses
       and alternative minimum tax credits, minimize tax costs
       in connection with stock or asset sales, if any, assist
       with tax issues arising in the ordinary course of
       business while in bankruptcy, like the ongoing assistance
       with a federal IRS examination and related issues raised
       by the IRS agent and the mitigation of officer liability
       issues, and, as needed, research and analyze federal and
       state income and franchise tax issues arising during the
       bankruptcy period;

    -- assist with settling tax claims against the Company and
       obtaining refunds of reduced claims previously paid by
       the Company for various taxes, including, but not limited
       to, federal and state income, franchise, payroll, sales
       and use, property, excise an business license;

    -- assist in assessing the validity of tax claims, including
       working with bankruptcy counsel to reclassify tax claims
       as non-priority;

    -- analyze legal and other professional fees incurred during
       the bankruptcy period for purposes of determining future
       deductibility of the costs;

    -- documenting, as appropriate or necessary, of tax
       analysis, opinions, recommendations, conclusions and
       correspondence for any proposed restructuring
       alternative, bankruptcy tax issue or other tax matter;

    -- additional tax consulting services requested by the

(3) Human Resources Services

    -- assist in developing a business case for enhancements to
       the Company's compensation and benefits programs;

    -- assist in the design and development of cash retention
       compensation programs;

    -- assist in analyzing the financial affect of proposed
       retention compensation programs and revisions, if any, to
       existing compensation and benefit programs;

    -- assist in evaluating the adequacy of existing executive
       employment contracts and provide suggested revisions;

    -- assist in evaluating adequacy of existing
       change-in-control arrangements and provide suggested

    -- assist in benchmarking existing and proposed compensation
       and benefit programs;

    -- advise the Company with respect to tax and accounting
       issues relative to newly designed or modified
       compensation, benefit and HR programs;

    -- prepare summary and other materials regarding the
       programs, contracts and arrangements for presentation to
       the Company's board of directors and any committee and,
       if requested by the Company, present the materials at a
       meeting or meetings of the board of directors and any
       committee; and

    -- perform other services as may be requested in writing
       from time to time by the Company or its counsel and
       agreed to by E&Y LLP.

Mr. Missner assures the Court that the services rendered by E&Y
LLP will neither overlap nor duplicate the services rendered by
any other professionals employed by the Debtors in these Chapter
11 cases.  "E&Y LLP will coordinate its services, as
appropriate, with the services of other professionals retained
in these cases in order to avoid unnecessary duplication of
effort," Mr. Missner says.

Under the terms of an Engagement Letter, National Steel will pay

(A) Audit Service

    -- E&Y LLP will receive $900,000 (including expenses) for
       the completion of the Company's consolidated audit for
       the year ending December 31, 2002, payable in six
       installments of $150,000 beginning in June 2002 and
       ending in February 2003;

    -- E&Y LLP will receive $55,000 (including expenses) for
       each quarterly review (March 31, 2002, June 30, 2002 and
       September 30, 2002); and

    -- E&Y LLP will receive $194,000 (including expenses) for
       the audits of the Company's 20 benefit plans for the year
       ended December 31, 2002 payable in two installments of
       $97,000 in June 2002 and August 2002.

(B) Tax Services

    -- E&Y LLP's fees for tax-related services will be based on
       actual time incurred at these hourly rates:

       Partners and Principals      $475-700
       Senior Manager                330-545
       Manager                       300-440
       Senior                        180-320
       Staff                         165-225

    -- E&Y LLP will be reimbursed for actual expenses related to
       tax services; and

    -- E&Y LLP will be reimbursed for fees (including any time
       or reasonable expenses of legal counsel) for time spend
       considering or responding to discovery requests or
       participating as a witness or otherwise in any legal,
       regulatory, or other proceeding as a result of our
       performance of the tax services.

(C) Human Resources Services

    -- E&Y LLP's fees for human resources-related services will
       be based on actual time incurred at these hourly rates:

       Partners and Principals      $475-650
       Senior Manager                390-460
       Manager                       325-400
       Senior                        200-320
       Staff                         165-195

    -- E&Y LLP will be reimbursed for reasonable documented
       out-of-pocket expenses incurred in connection with
       providing the human resources services including, but not
       limited to, travel costs, lodging, meals, research, and
       overnight mail and courier service; and

    -- In the event E&Y LLP is requested or authorized by the
       Company or is required by government regulation, subpoena
       or other legal process to produce our documents or its
       personnel as witnesses with respect to the human
       resources services provided to the Company, the Company
       will, so long as E&Y LLP is not a party to the proceeding
       in which information is sought, reimburse E&Y LLP for its
       professional time and expenses, as well as the reasonable
       documented fees and expenses of its counsel, incurred in
       responding to the requests.

The Debtors believe these Fee Structures are both fair and
reasonable under the standards in Section 328(a) in light of the
types of services being provided. Accordingly, the Debtors ask
the Court to approve the proposed compensation arrangement.

Mr. Missner relates that E&Y LLP will file interim and final
applications for allowance of its fees and expenses in respect
of its services.

Donald G. Kalfen, a partner at Ernst & Young LLP, tells the
Court that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code and as required by
Section 327(a) of the Bankruptcy Code.  Mr. Kalfen emphasizes
that E&Y LLP does not represent any interest adverse to the
Debtors and will not represent any entity other than the Debtors
in connection with these Chapter 11 cases.  "Since the Debtors
have many creditors and other parties-in-interest, E&Y LLP may
have rendered in the past, and may render presently, or may
render in the future, accounting, tax and consulting services to
certain of these parties-in-interest," Mr. Kalfen admits.  But
Mr. Kalfen asserts that the firm will not accept any engagement
that would require the firm to represent an interest materially
adverse to the Debtors in any way relating to the matters in
connection with which E&Y LLP is to be engaged in these Chapter
11 cases.

"Despite the efforts exerted to identify and disclose E&Y LLP's
connections, the firm is unable to state with certainty that
every client representation or connection is disclosed to the
Court," Mr. Kalfen says.  Thus, E&Y LLP promises to file
supplemental affidavits with the Court if it discovers
additional information that requires disclosure. (National Steel
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

NATIONSRENT INC: Taps Ritchie Bros. as Equipment Appraisers
NationsRent Inc. and its debtor-affiliates ask the Court to
authorize their employment and retention of Ritchie Bros.
Auctioneers (America) Inc., as equipment appraisers in these
Chapter 11 cases in accordance with an engagement letter dated
as of April 19, 2002.  The Debtors are reviewing all of their
equipment leases and Ritchie Bros. will assist in determining
the fair market value of the Leased Equipment.  In particular,
Ritchie Bros. will:

a. assist the Debtors select an appropriate sample population of
   its Leased Equipment in preparation of an appraisal of the

b. assist the Debtors review the selected sample of Leased
   Equipment to ensure that the sample satisfies certain
c. conduct an appraisal of the selected Leased Equipment by
   undertaking, among other things, the following activities:

   1. physically inspecting the selected equipment;

   2. recording and verifying pertinent information, including
      the equipment's year, make, model, identification number
      and condition;

   3. taking photographs of the equipment; and,

   4. assigning an estimated fair market value to the equipment;

d. assist the Debtors to extrapolate the values of Leased
   Equipment that was not inspected from the values attributed
   to the same type of inspected Leased Equipment;

e. assist the Debtors in identifying the residual values for
   each class of Leased Equipment for both a one-year or three-
   year horizon; and,

f. assist the Debtors develop a report summarizing the appraisal

The Debtors anticipate that Ritchie Bros. will complete these
appraisals within the next 45 days or so.

Rebecca L. Booth, Esq., at Richards, Layton & Finger P.A. in
Wilmington, Delaware, contends that Ritchie Bros. are
particularly well-suited to serve as the Debtors' equipment
appraisers because of its significant experience in the
appraisal of transportation, construction, agricultural, mining,
pipeline and forestry equipment and has conducted tens of
thousands of appraisals for all types of companies.  During
2001, Ritchie Bros. completed over 3,200 appraisals representing
a total appraised value in excess of $4,000,000,000.  In
addition, Ritchie Bros. is an industry leader in the appraisal
of equipment with an excellent reputation for the appraisal
services that it has rendered to its clients. Ritchie Bros. is
also familiar with the Debtors' businesses.  Prior to the
petition date, Ms. Booth relates that Ritchie Bros. assisted the
Debtors with selling certain equipment at public auction and, as
a result, its professionals have worked closely with the
Debtors' staff and have become well acquainted with the Debtors'
affairs. Accordingly, Ritchie Bros. has developed relevant
experiences and expertise that will assist it in providing
effective and efficient services in these Chapter 11 cases.

Subject to the Court's approval and pursuant to the terms and
conditions of the Engagement Letter, Ritchie Bros. intends to
charge for its professional services rendered to the Debtors in
these Chapter 11 cases based on this Fee Structure:

a. the Debtors will pay Ritchie Bros. an initial $30,000

b. upon completion of 75% of the field work and before
   completion of administrative work and delivery of a final
   report, Ritchie Bros. will receive a second $30,000 retainer;

c. Ritchie Bros. intends to charge $2,000 per field appraisal
   day per man plus reasonable expenses for its professional
   services provided to the Debtors and upon completion and
   delivery of a final report regarding the appraisal, Ritchie
   Bros. intends to seek allowance and payment of its
   professional fees and related expenses.  Ritchie Bros. will
   apply the Retainers in satisfaction of the first $60,000 of
   its allowed professional fees and related expenses;

d. Ritchie Bros. estimates that the total cost to complete the
   services required will be approximately $95,000.  To the
   extent authorized by the Debtors, Ritchie Bros. intends to
   charge $2,000 per field appraisal day per man plus reasonable
   expenses for any additional services in excess of the fee and
   expense cap.  Pursuant to the Engagement Letter, the fee and
   expense cap for professional services rendered cannot exceed
   $110,000 without the prior written consent of the Debtors;

e. to the extent the Debtors request Ritchie Bros. to perform
   additional services beyond that which is contemplated by the
   initial engagement, Ritchie Bros. will charge the Debtors on
   a basis comparable to the Fee Structure; provided, however,
   the Debtors will not provide Ritchie Bros. with any
   additional retainers.

Ms. Booth claims that the Fee Structure is fair and reasonable
as it appropriately reflects the nature of the services to be
provided by Ritchie Bros. and the fee structures typically
utilized by equipment appraisal companies.

Peter Blake, Vice President of Finance of Ritchie Bros.
Auctioneers (America) Inc., informs the Court that, prior to the
Petition Date, the Debtors retained Ritchie Bros. to sell
certain of the Debtors' equipment at unreserved public auctions.
Ritchie Bros. conducted approximately 50 these auctions during
the year immediately preceding the Petition Date, and the
Debtors made no direct payments to Ritchie Bros. on account of
the services rendered by Ritchie Bros. in connection with these
auctions. Pursuant to the terms of its engagement, however,
Ritchie Bros. deducted a percentage of the funds generated from
the sale of the Debtors' equipment at these auctions to satisfy
commissions and authorized expenses before remitting the auction
proceeds to the Debtors. Ritchie Bros. based its commission fee
on a certain percentage of the auction proceeds.

Mr. Blake tells the Court that Ritchie Bros. have previously
held liens against certain assets that the firm has sold at
public auction.  In connection with the sale of these assets,
Ritchie Bros. may have remitted a portion of the funds generated
from the sale of these assets to the Debtors' major equipment
lessors and certain Licensors, including American Finance Group,
Inc. d/b/a Guaranty Capital Corp., Associates Leasing Ltd., Bane
One Leasing Corp., Case New Holland Credit Company, Caterpillar
Financial Services, Fleet Capital Corporation, General Electric
Capital Corp., GTE Capital/Verizon Credit, Inc., General
Electric Capital Corp., Genie Financial Services, JCB Finance,
John Deere Credit, Key Corporate Capital Inc., LaSalle National
Leasing Corp., BB&T Leasing Corporation, Bombardier Capital,
Inc., The CIT Group/Equipment Financing, Inc., Citizens Leasing
Corporation, Debis Financial Services, Inc., Heller Financial
Leasing Inc., ICX Corporation, NationsBanc Leasing
Corporation/Bank of America, Southtrust Bank, N.A., StarBank,
N.A./US Bancorp Equipment Finance, Inc., TCF Leasing, Inc.,
TransAmerica Business Credit Corp., Zions Bank, N.A., Case New
Holland Credit, Paccar Financial, Textron Financial Corporation;

Mr. Blake adds that Ritchie Bros. has retained the law firm of
Blank, Rome, Comisky & McCauley LLP -- counsel to parties to
certain litigation with the Debtors -- to provide legal services
on matters unrelated to these Chapter 11 cases. (NationsRent
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

OSE USA: Says Cash Balances Ample to Meet Working Capital Needs
OSE USA Inc.'s manufacturing operating segment generally
recognizes revenues upon shipment of its products. The
distribution segment earns revenue through a distributor
agreement with OSE where revenues are derived from fees received
on the sales of OSE's and OSEP's semiconductor assembly and test
services to customers headquartered in North America and
revenues are recognized on a net commission basis.

Revenues decreased 31% to $2.5 million for the three-month
period ended March 31, 2002 from $3.6 million for the three-
month period ended April 1, 2001.

Revenues for the three month period ended March 31, 2002 for the
manufacturing segment were $1.5 million compared with $2.5
million for the comparable period in the prior fiscal year. The
decrease in revenues for the manufacturing segment are primarily
due to decreased orders as a result of the general slowdown in
the semiconductor industry, partially offset by higher average
selling prices due to a change in product mix.

Revenues for the three month period ended March 31, 2002 for the
distribution segment were $1.0 million compared with $1.1
million for the comparable period in the prior fiscal year.

Gross loss for the three-month period ended March 31, 2002 was
$0.3 million compared with a gross profit of $0.1 million for
the comparable period in the prior fiscal year. Gross loss as a
percentage of revenues was 13% for the three-month period ended
March 31, 2002, compared to gross profit as a percentage of
revenues of 3.3% for the comparable periods in the prior fiscal
year. This decrease in gross profit for the three-month period
ended March 31, 2002 was primarily the result of lower revenue
for the manufacturing segment of $1.0 million. This was due to
lower unit shipments, partially offset by higher average selling
prices as a result of a change in product mix.

The Company believes that existing cash balances, together with
the renewal of existing bank lines, will be sufficient to meet
its projected working capital and other cash requirements
through 2002. On March 27, 2002, the Company entered into an
amended line of credit agreement with two banks that provides
for advances up to the lesser of $15.0 million (committed
revolving credit line) or the advance rate against qualified
accounts receivable. Over advances under this agreement are
immediately payable to the lender. At March 31, 2002, borrowings
of $10.4 million were less than the advance rate against
qualified accounts receivable by $0.2 million. This under
advance was available to the Company for borrowing as of March
31, 2002. The Company believes that its existing bank line of
credit of $15.0 million, which expires August 15, 2002, will be
further extended because it is guaranteed by the Company's
principal stockholder, OSE. There can be no assurances, however,
that the bank line will be renewed or that lower than expected
revenues, increased expenses, increased costs associated with
the purchase or maintenance of capital equipment, or other
events will not cause the Company to seek more capital, or
capital sooner than currently expected. There can be no
assurance that such additional financing will be available when
needed or, if available, will be available on satisfactory

OSE USA (formerly Integrated Packaging Assembly Corporation)
receives wafers from its customers, cuts the wafers into
individual chips, adds wire leads, and encases each chip in
protective plastic, ready for installation into such products as
PCs, cars, cameras, and telecommunications equipment.

OWENS CORNING: Seeks Approval of Settlement Pact with Bank Group
Owens Corning and its debtor-affiliates move the Court to
approve a Settlement Agreement between Owens Corning and the
Bank Group comprised of Credit Suisse First Boston (CFSB), as
agent, and other banks that are parties to the Standstill
Agreement.  The Debtors also ask to modify the automatic stay
for the limited purpose of permitting the Bank Group to exercise
setoff rights against funds frozen in certain bank accounts.

J. Kate Stickles, Esq., at Saul Ewing LLP in Wilmington,
Delaware, tells the Court the Settlement Agreement was reached
after extensive negotiations between the Debtors and the Bank
Group. Te Debtors and the Bank Group opted for the Settlement
since the issues raised in CFSB's Setoff Motion and in the
Debtors' objection are very complex, and the outcome of the
litigation, if left to the Court to determine, would be
difficult to predict. CFSB had previously filed the Setoff
Motion on February 15, 2002 to request relief from the automatic
stay to exercise setoff rights against 22 bank accounts of
certain Debtors and non-Debtors, totaling approximately
$35,000,000, on which the Banks placed an administrative freeze
after the commencement of the Debtors' bankruptcy cases.

Ms. Stickles anticipates minor, non-material changes to the
Settlement Agreement, including possible changes to the precise
amounts of the Frozen Accounts, which would result in
corresponding changes to the amounts of the Debtors' portion and
the Banks' portion. The settlement agreement, nonetheless, will
be executed in the near future. The basic terms of the
Settlement Agreement include:

A) Within five days after the entry of a final Order of the
   Court, or other court of competent jurisdiction, approving
   The Settlement Agreement, each bank must wire transfer to
   CSFB all Frozen Funds (together with all accrued interest
   thereon) held by such bank from the Petition Date to the date
   of the entry of the Order net of Frozen Funds held by each
   such Bank that are subject to a Bilateral Setoff Claim;
   provided, however, that the rights of CSFB, on behalf of the
   Banks, with respect to any Frozen Funds withheld pursuant to
   a Bilateral Setoff Claim are expressly reserved.

B) No later than two business days after CSFB receives from the
   Banks at least $19,000,000, which is the Minimum Bank
   Transfer Amount, CSFB must wire transfer to Owens Corning the
   sum of $18,952,893 plus 51.532% of any and all interest
   accrued on the Frozen Accounts from October 5, 2000 through
   the date of the entry of the Order. This will constitute the
   Debtors' Portion. After Owens Corning receives the Debtors'
   Portion, Owens Corning will distribute the Debtors' Portion
   among the entities that own the Frozen Accounts and the
   denominator being the total amount of the Frozen Funds,
   provided, however, that:

  (a) the pro rated amount attributable to the Barclays account
      in the name of Owens Corning Alcopor UK Ltd., the amount
      of $3,575,3535 will be distributed to IPM, Inc.; and

  (b) the entire amount of the Wells Fargo-Fibreboard Account
      will be distributed to Fibreboard Corporation, subject to
      the claims of the insurance companies described below. The
      Debtors' Portion of the Frozen Accounts will be free of
      all claims and interests of the Banks and other parties,
      provided, however, that the Debtors' Portion will be
      deemed to include the sum of $1,588,158 from the Wells
      Fargo Bank, N.A. account of Fibreboard Corporation,
      #6250018439 (the Wells Fargo-Fibreboard Account), and that
      part of the Debtors' Portion attributable to such account
      shall remain subject to the claims of certain insurance
      companies which have asserted claims, disputed by the
      Debtors, to receive payments from the Wells Fargo-
      Fibreboard Account under a prepetition Settlement
      Agreement with Fibreboard Corporation. Wells Fargo will
      have no liability to the insurance companies for the
      claims or for transferring funds to CSFB in accordance
      with the Settlement Agreement or any order approving this

C) In the event that CSFB is unable to wire transfer to the
   Debtors the Debtors' Portion on or before the close of
   business on the date seven business days after the Approval
   Date, due to the fact that CSFB has not received from the
   Banks collectively the Minimum Bank Transfer Amount, CSFB
   must immediately notify the Debtors. The Debtors' remedy for
   the Banks' failure to timely pay the Debtors' Portion will

  (a) The Debtors will be entitled, immediately after the Final
      Payment Date (as defined in the Settlement Agreement), to
      file a motion with the Bankruptcy Court to compel each of
      the Defaulting Banks to comply with the terms of this
      Agreement, and to hold each such Defaulting Bank to be in
      contempt of Court for its breach of this Agreement and
      failure to comply with the Order.

  (b) The Debtors will be entitled to recover from each of the
      defaulting Banks the reasonable attorneys' fees and costs
      incurred by the Debtors in enforcing the Order and the
      Settlement Agreement.

E) Immediately after the entry of an Order and confirmation of
   Owens Corning's receipt of CSFB's wire transfer of the
   Debtors' Portion, CSFB, on behalf of the Banks, may exercise
   the Banks' rights of setoff with respect to the balance of
   the Frozen Accounts, which in any event will not exceed in
   the aggregate the sum of $17,825,988 plus 48.468% of all
   interest accrued on the Frozen Accounts as of the date of the
   Order. This shall constitute the Banks' Portion. The Banks'
   Portion will be free and clear of the Debtors' claims and
   interests and will be subject to the individual setoff claims
   of any Banks arising under any claim of setoff right under
   any note, credit facility or other agreement other than under
   the Credit Agreement or otherwise arising under applicable
   law, and will be deemed to include the sum of $1,397,548 from
   these Frozen Accounts:

   (a) Wells Fargo Bank, N.A. account of Exterior Systems, d/b/a
       Norandex, #4496801770, in the amount of $479,288.35;

   (b) Bank One, National Association (Chicago) account of Owens
       Corning #55-22269, in the amount of $918,259;

   All bilateral setoff claims, including without limitation
   the bilateral setoff claims of Wells Fargo and Bank One,
   National Association (Chicago) against the Frozen Accounts
   described above, will be deemed to be asserted only against
   the Banks' Portion and not the Debtors' Portion, and the
   Debtors' Portion will be free and clear of all such Bilateral
   Setoff Claims.

F) Upon entry of the Order, the Motion of Debtors for Order to
   Compel Credit Suisse First Boston, as Agent, and Banks to
   Respond to Information Requests Relevant to and Necessary for
   Determination of Motion of Credit Suisse Boston, as Agent,  
   for an Order Modifying the Automatic Stay to Permit Setoff of
   Frozen Funds, will be withdrawn.

Ms. Stickles urges the Court to grant the Debtors permission to
execute the Settlement Agreement since it is favorable to the
Debtors' estates on these grounds:

A) It resolves in full CSFB's Motion for an Order Modifying the
   Automatic Stay to Permit Setoff of Frozen Funds, without the
   inherent risk of getting a less favorable outcome as a result
   of litigation;

B) The Debtors' estates will be enhanced through the release of
   the Frozen Funds free of the Banks' setoff claims;

C) The terms of the Settlement Agreement are fair and
   equitable; and

D) The issues presented by the Setoff Motion are complex and,
   absent consensual agreement, would likely cause the Debtors
   to incur substantial additional legal fees, costs and other
   expenses, without the benefit of certainty as to the outcome.
   (Owens Corning Bankruptcy News, Issue No. 32; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)   

PHYCOR INC: Exclusive Period Remains Intact through July 30
By order of the U.S. Bankruptcy Court for the Southern District
of New York, PhyCor, Inc. and its debtor-affiliates sought and
obtained an extension of their exclusive periods.  The Court
gives the Debtors, until July 30, 2002, the continued exclusive
right to propose and file their plan of reorganization and,
until September 30, 2002, the exclusive right to solicit
acceptances of that Plan.

PhyCor is a medical network management company that develops and
manages independent practice associations of physicians, manages
physician hospital organizations, provides contract management
services to physician networks owned by health systems, and
consulting services to independent medical organizations. The
Company filed for chapter 11 protection on January 31, 2002.
Kayalyn A. Marafioti, Esq. at Skadden, Arps, Slate, Meagher &
Flom LLP represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed total assets of $28,851,499 and total debts of

PSINET INC: Wants to Sell TX Assets for 11MM+ at Public Auction
Stream Realty Acquisition, L.L.C., entered into a Purchase
Agreement with Debtor PSINet Realty, Inc. to purchase real
property at 1333 Crestside Drive in Coppell, Texas, and then
informed the Debtors that it did not intend to proceed on the
original terms of the Agreement.  Realty subsequently terminated
the $10,500,000 Purchase Agreement and the Debtors.

Another prospective buyer emerged -- The Depository Trust &
Clearing Corporation.

Accordingly, the Debtors amend their motion to substitute the
DTC for Stream Realty and increase the purchase price to

The Debtors ask the Court to enter two orders relating to the
proposed sale to The Depository Trust & Clearing Corporation:

     * First, the Debtors seek entry of an order approving the
payment of a 3% breakup fee to the Buyer as well as other bid
protection procedures in advance of the consummation of such
sale (the Sale Procedures Order).

     * Second, the Debtors seek entry of an order approving the
sale of the Property to the Buyer under the terms of the Real
Property Purchase and Sale Agreement between PSINet Realty Inc.
(the Seller) and the Buyer, dated May 21, 2002 (the Purchase
Agreement), free and clear of all liens, claims, encumbrances,
rights and interests (other than Permitted Exceptions) or to the
highest and best bidder (the Sale Order).

Pursuant to the Purchase Agreement, the Seller agrees to sell
all of its right, title and interest in and to the Property to
the Buyer for $11,000,000 subject to certain usual and customary
adjustments as specified in the Purchase Agreement.  The Sale is
also subject to the Buyer being satisfied with the results of
its due diligence review.

As previously reported, the Property consists of a building of
approximately 80,000 square feet of rentable space improved with
raised flooring, suppplementai HVAC and redundant fiber network
and power to make it suitable for use as a hosting center (the
Building), together with approximately 6.527 acres of land,
located at 1333 Crestside Drive, Coppell, Texas.

The Buyer has placed into escrow cash in the amount of
$1,000,000 as the deposit.

The material provisions of the Purchase Agreement provide that
if the Buyer is satisfied with its due diligence (after a twenty
day period that commenced on May 21, 2002), then the entire
deposit will be paid to the Seller if the Buyer
breaches the Purchase Agreement.

If the Court approves the sale of the Property to the Buyer
pursuant to Section 363 of the Bankruptcy Code free and clear of
all liens, claims, encumbrances, rights and interests (other
than Permitted Exceptions) and the closing occurs, then the
deposit will be credited against the Purchase Price on the
Closing Date.

If the Buyer notifies the Seller prior to the conclusion of the
due diligence period that it declines to proceed to closing
based on its due diligence review because of an environmental
report that is not satisfactory to the Buyer, a structural
defect in the Building, defects in the infrastructure facilities
serving the Building which would cost more than $200,000 to cure
or liens or encumbrances on the Property other than Permitted
Exceptions or encumbrances of which the Property would be
conveyed free and clear by the Sale Order, then the escrow agent
will return the entire deposit to the Buyer.

If the Buyer notifies the Seller prior to the conclusion of the
due diligence period that it declines to proceed to closing for
any reason other than those set forth in the preceding sentence,
then the escrow agent will return the deposit, less the sum of
$200,000, to the Buyer and will disburse $200,000 to the Seller.

The Seller will only make minimal, customary representations and
warranties, which are set forth in the Purchase Agreement.

                       Sale Procedures

To obtain the greatest value for the Property, the Debtors
intend to expose the Property to sale at a public auction. For
this purpose, the Debtors request entry of a Sale Procedures

(a) authorizing and scheduling a bidding deadline (set for June
    11, 2002, at 4:00 p.m. prevailing Eastern time) and an
    Auction to be held on June 12, 2002, at 10:00 a.m. Eastern
    time if one or more Competing Bids made in compliance with
    the Bidding Procedures are received;

(b) scheduling a Sale Hearing to be held on or about June 13,
    2002, at 9:45 a.m.. Eastern time (depending on the Court's
    availability) to consider the Sale Order;

(c) approving the Bidding Procedures, including a breakup fee;

(d) approving the manner of notice of the Sale, the bidding
    deadline, the Auction, the Bidding Procedures and the Sale

To help solicit higher and better offers, the Debtors have
retained The Staubach Company - Northeast to help them, among
other things, actively market for sale certain of the Debtors'
real property assets, including the Property.

At the Sale Hearing, the Debtors will request the Court to enter
the Sale Order either (i) authorizing the Debtors, if no
Qualified Competing Bids have been submitted, to consummate the
Purchase Agreement with the Buyer, or (ii) confirming the
results of the Auction and approving the sale of the Property to
the bidder who has made the highest and best offer, and granting
related relief.

                       Bidding Procedures

*  Qualified Competing Bid

    The Debtors will consider only Competing Bids that are made
in compliance with the Bidding Procedures.

    To be qualified, a Competing Bid must:

    (a) be submitted (with a copy to the Committee and the
        Buyer) on or before the Bidding Deadline;

    (b) be for the purchase of the entire Property;

    (c) be in writing in the form of the Purchase Agreement
        marked to show all changes thereto; and

    (d) provide for the payment to the Debtors of at least
        $11,380,000 in cash (the Minimum Overbid) (which
        reflects the sum of the Buyer's Purchase Price of
        $11,000,000, plus the Breakup Fee of $330,000, plus an
        overbid of $50,000).

*  Auction

    If a Qualified Competing Bid is submitted prior to the
    Bidding Deadline, the Debtors will commence the Auction on
    June 12, 2002, at 10:00 a.m. Eastern time at the offices of
    Wilmer, Cutler & Pickering, 1600 Tysons Boulevard, 10th
    Floor, Tysons Corner, Virginia.

    Only the Buyer and any prospective buyer who has timely
    submitted a Qualified Competing Bid will be entitled to
    participate in the Auction. The Buyer will be entitled to
    make an overbid and to credit bid the amount of the Breakup
    Fee against any such overbid. At the Auction, bidding will
    begin with the highest Qualified Competing Bid timely
    submitted on or before the Bidding Deadline. All subsequent
    overbids must include additional consideration of at least
    $50,000 more than the previous bid. The Auction will not
    conclude until each participating bidder has had the
    opportunity to submit any additional overbid with full
    knowledge of the existing highest bid.

    The Debtors will determine in good faith whether a submitted
    Competing Bid complies with the Bidding Procedures and
    whether the Purchase Agreement or a submitted Qualified
    Competing Bid constitutes the most favorable transaction for
    the Debtors' estates. The most favorable bid as determined
    by the Debtors will be submitted to the Court for review and
    approval at the Sale Hearing.

*  Breakup Fee.

    Pursuant to the Bidding Procedures, the Seller shall pay to
    the Buyer the Breakup Fee in an amount equal to $330,000,
    which constitutes 3% of the Purchase Price if:

    (1) the Seller sells the Property to another bidder at or
        following the Auction pursuant to a Qualified Competing
        Bid, and

    (2) the Buyer was not, as of the date set by the Bankruptcy
        Court for the Auction, itself in breach of any material
        provision of the Purchase Agreement as to entitle the
        Debtors not to proceed to closing, and

    (3) the Buyer's right to terminate the Purchase Agreement
        has expired or been waived by the Buyer and the Buyer
        had not, on or prior to the date set by the Bankruptcy
        Court for the Auction, terminated the Purchase

    Such amount shall be payable within 5 business days of the
    closing of a sale to the bidder submitting such Qualified
    Competing Bid.

    Although the Debtors seek approval of the Breakup Fee at a
    time when the Buyer is still conducting due diligence, the
    Buyer will not be entitled to the Breakup Fee unless its due
    diligence condition has expired or been waived.

    The Debtors submit that the Breakup Fee is the result of
    extended, good faith, arm's-length bargaining between the
    Debtors and the Buyer. The Debtors agreed to the Breakup Fee
    because, in their considered business judgment, the Debtors
    believed that the availability of this payment provides a
    net benefit to the Debtors' estates and that a transaction
    as favorable could not have been reached without it. The
    Buyer has indicated that it is unwilling to proceed with the
    Purchase Agreement unless the Breakup Fee is approved.

    The Breakup Fee is fair and reasonable, particularly in view
    of the Buyer's efforts to date to market the Property and
    the stalking horse risk to which public dissemination of its
    valuation now exposes it, the Debtors represent. The Buyer's
    $11,000,000 Purchase Price, once the due diligence
    conditions are waived or expire, will establish a floor
    against which other bidders can base their bids without
    conducting their own expensive due diligence. The Debtors
    believe that other bidders interested in the Property will
    be more inclined to bid, and to bid higher than they
    otherwise would.

*  Notice

    The Debtors propose to serve the Motion, the Purchase
    Agreement, the proposed Sale Order and the Sale Procedures
    Order on or before June 4, 2002, by overnight courier and/or
    first-class mail, postage prepaid, upon (i) the Office of
    the United States Trustee for the Southern District of New
    York; (ii) counsel for the Buyer; (iii) counsel for the
    Committee; (iv) all entities (or their counsel) known to
    have asserted any lien, claim, right of refusal, encumbrance
    or other interest of any kind whatsoever in or upon the
    Property; (v) all federal, state and local regulatory or
    taxing authorities or recording offices which have a
    reasonably known interest in the relief requested by the
    Motion; (vi) all parties known to have expressed a bona fide
    interest in acquiring the Property; (vii) the Internal
    Revenue Service; (viii) all entities who have filed a notice
    of appearance and request for service of papers in the
    Debtors' cases; and (ix) each indenture trustee of the

    The Debtors submit that such notice constitutes good and
    sufficient notice under the circumstances.

The Debtors further propose, pursuant to Bankruptcy Rule 9014,
that objections, if any, to the Sale of the Property must be
filed with the Court so as to be received on or before 4:00 p.m.
on June 11, 2002 by (i) counsel to the Debtors; (ii) counsel to
the Buyer; (iii) counsel for the Committee; and (iv) the Office
of the United States Trustee.

The Debtors submit that their decision to sell the Property
pursuant to the Purchase Agreement is an exercise of reasonable
business judgment and in the best interests of the Debtors'
estates and creditors. The Property is currently used as a
hosting center for the Debtors. The Debtors have determined, in
their business judgment, that the Purchase Price exceeds the
value to be realized if the Debtors were to continue operating
this facility as a hosting center. The Debtors believe that a
sale of the Property is necessary for their reorganization.

The Debtors believe the Bidding Procedures will promote active
bidding that will result in the highest and best offer the
marketplace can offer.

The Debtors believe that the proposed schedule balances the goal
of providing ample opportunity for prospective bidders to
formulate their highest and best bids, with the counterweighing
goal of selling the Property expeditiously to maximize the value
obtained for the benefit of the Debtors' estates and their
creditors. Moreover, the schedule conforms with the timeframes
negotiated in the Bidding Procedures and Purchase Agreement,
under which, among other things, the Buyer may terminate the
Purchase Agreement if (i) the Sale Order is not entered on or
before 60 days after the Due Diligence Period has expired; or
(ii) the Court enters an order approving the sale of the
Property to a person other than the Buyer.

The Debtors submit that the conduct of the Sale is also
consistent with the timetable for confirmation and effectiveness
of the Debtors' plan of reorganization.

Pursuant to Rule 6004(g) of the Bankruptcy Rules, unless the
court orders otherwise, all orders authorizing the sale of
property pursuant to Section 363 of the Bankruptcy Code are
automatically stayed for ten days after entry of the order. The
purpose of Rule 6004(g) is to provide sufficient time for an
objecting party to request a stay pending appeal before the
order can be implemented.

Because the Debtors believe that a prompt sale will aid in
minimizing administrative expenses of the estates, and they need
to close this Sale as soon as possible after all closing
conditions have been met or waived, the Debtors request that the
Court eliminate the 10-day stay period under Bankruptcy Rule
6004(g) or, in the alternative, if an objection to the Sale is
filed, reduce the stay period to the minimum amount of time
needed by the objecting party to file its appeal in order to
permit the sale to close as provided under the Agreement.
(PSINet Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

QWEST COMMS: Expresses Disappointment over Moody's Downgrade
Qwest Communications International Inc. said it was disappointed
by Moody's decision to lower the company's long-term corporate
credit rating.

Qwest executive vice president and CFO, Robin R. Szeliga said,
"Although we are disappointed with the actions taken by Moody's
and S&P, these firms traditionally tend to follow one another on
ratings adjustments.  We are concerned that the adjustment by
Moody's, as with S&P, is not based on any new information.  
However, unlike S&P, Moody's has recognized the strength and
stability of our core local services business with a Baa3
rating, which is still investment grade."

Given Qwest's current debt structure, the company believes this
downgrade will have no substantial impact on its operations.  
Qwest has stable cash flows from its local service operations,
which contribute nearly 80 percent of revenue and more than 90
percent of adjusted EBITDA.  The company also said that the
downgrade does not result in a default of the syndicated credit
facility or any other indentures.

The entire long-distance sector has been severely impacted by
challenging economic and market conditions over the last 12
months.  To better address these current market challenges, the
company is taking steps to bring operational costs more in line
with current demand for these types of services and to increase
its focus on the enterprise market.

On a conference call last week, the company confirmed that it
expects to be cash flow positive for the second quarter and the
remainder of 2002 and that it continues to make progress in its
efforts to reduce its debt, including the sale of some of its
non-strategic assets.

Qwest Communications International Inc. (NYSE: Q) is a leader in
reliable, scalable and secure broadband data, voice and image
communications for businesses and consumers.  The Qwest Macro
Capacity(R) Fiber Network, designed with the newest optical
networking equipment for speed and efficiency, spans more than
190,000 miles globally.  For more information, please visit the
Qwest Web site at  

RESIDENTIAL ACCREDIT: Fitch Places 2 Bonds on Rating Watch Neg.
Fitch Ratings places the following Residential Accredit Loans
Inc. (RALI) mortgage pass-through certificates on Rating Watch

     --Series 1999-QS15 class B-2 'B';

     --Series 2000-QS6 class B-2 'B'.

These actions are taken due to the high level of delinquencies
in relation to the applicable credit support levels as of the
May 25, 2002 distribution.

RIVERWOOD INT'L: Commences Cash Tender Offers For Senior Notes
Riverwood International Corporation announced it has commenced
cash tender offers to purchase any and all of its outstanding
10-7/8% Senior Subordinated Notes due 2008 (CUSIP No.
769507AJ3), 10-5/8% Senior Notes due 2007 issued in July 1997
(CUSIP No. 769507AM6) and 10-5/8% Senior Notes due 2007 issued
in June 2001 (CUSIP No. 769507AQ7).  In conjunction with the
offers, Riverwood is soliciting consents to proposed amendments
to the indentures governing each issue of the Notes.  The
proposed amendments to each indenture would eliminate
substantially all of the restrictive covenants, certain
repurchase rights and certain events of default and related
provisions contained in such indenture.

Holders who tender Notes pursuant to an offer on or prior to the
applicable consent expiration date are obligated to consent to
the related proposed amendments.  Holders that consent to the
proposed amendments with respect to an issue of notes are
required to tender their Notes in the related offer and may not
revoke such consent without withdrawing the previously tendered
Notes to which such consent relates.

The tender offer consideration to be paid for each validly
tendered Note will be equal to (i) with respect to the Senior
Subordinated Notes, $1,040.78 per $1,000 principal amount of the
Senior Subordinated Notes and (ii) with respect to each issue of
the Senior Notes, $1,053.13 per $1,000 principal amount of the
Senior Notes, plus, in each case, accrued and unpaid interest up
to, but not including, the relevant date of payment for Notes
accepted for purchase.  Each holder of Notes who validly
consents to the proposed amendments with respect to such issue
of Notes on or prior to the consent expiration date for such
Notes will be entitled to a consent payment in the amount of
$2.50 per $1,000 principal amount of Notes with respect to which
consents are delivered.

Each offer will expire at 12:00 midnight, New York City time, on
Wednesday, June 26, 2002, unless extended.  Each solicitation
will expire at 5:00 P.M., New York City time, on Friday, June
14, 2002, unless extended, if at least one day prior to such
date Riverwood has made a public announcement that it has
received the requisite consents with respect to such issue of
Notes, or on the first date thereafter at least one day prior to
which Riverwood has received such consents and has made a public
announcement regarding such receipt.  Holders who tender their
Notes after the applicable consent expiration date will not be
entitled to receive the consent payment. Tendered Notes may be
withdrawn and related consents may be revoked at any time on or
prior to the consent expiration date for the related offer, but
not thereafter.

Riverwood is making a separate offer with respect to each issue
of Notes, and no offer is conditioned on the consummation of any
other offer. Consummation of each offer is subject to certain
conditions, including (1) the consummation of the proposed
initial public offering of common stock by Riverwood's parent,
Riverwood Holding, Inc., and the consummation of certain other
anticipated financing transactions, in each case on terms
satisfactory to Riverwood, and (2) the receipt of the requisite
consents with respect to the applicable proposed amendments and
the execution of the related supplemental indenture to the
indenture governing the relevant issue of Notes. Subject to
applicable law, Riverwood may, in its sole discretion, waive or
amend any condition to any offer or solicitation, or extend,
terminate or otherwise amend any offer or solicitation.

Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc.
are the dealer managers for the offers and solicitation agents
for the solicitations. MacKenzie Partners, Inc. is the
information agent and State Street Bank and Trust Company is the
depositary in connection with the offers and solicitations.  The
offers and solicitations are being made pursuant to an Offer to
Purchase and Consent Solicitation Statement, dated May 30, 2002,
and the related Consent and Letter of Transmittal, which
together set forth the complete terms of the offers and
solicitations.  Copies of the Offer to Purchase and Consent
Solicitation Statement and related documents may be obtained
from MacKenzie Partners, Inc. at (800) 322-2885.  Additional
information concerning the terms of the offers and the
solicitations may be obtained by contacting Deutsche Bank at
(212) 469-7772 or JPMorgan at (800) 831-2035.

Riverwood, headquartered in Atlanta, Georgia, is a leading
provider of paperboard packaging solutions and paperboard to
multinational beverage and consumer products companies.

As previously reported, Standard & Poor's affirmed its B rating
on Riverwood International's Credit Rating due to the company's
increased indebtedness.

SAFETY-KLEEN: Clean Harbors Completes Due Diligence Process
Clean Harbors, Inc. (Nasdaq: CLHB), a leading provider of
environmental services throughout the United States and Puerto
Rico, has received commitments from various financial entities
to finance the proposed acquisition of the Chemical Services
Division of Safety-Kleen. In accordance with its February 2002
definitive agreement with Safety-Kleen, Clean Harbors has
successfully completed all of the steps required to move forward
as a "Qualified Bidder" including remitting a $3 million
deposit. The agreement remains subject to U.S. Bankruptcy Court
and final regulatory approvals.

Based upon a thorough due diligence review, Clean Harbors
reaffirmed that it remains comfortable with its bid to acquire
CSD/SK for $46.3 million in cash and the assumption of
environmental liabilities valued at approximately $265 million.

In addition, Clean Harbors has secured a financial assurance
program from a major insurance company to cover the permitted
facilities being acquired from CSD/SK. A number of states and
the U.S. EPA require that an acceptable form of financial
assurance be in place before any facility permits can be
transferred. Clean Harbors has notified each state where a CSD
facility will be acquired that it is requesting a permit
transfer, effective on the date when the transaction is closed.

On April 30, 2002, Clean Harbors announced that the U.S. Justice
Department completed its review of the Company's proposed
acquisition under the Hart-Scott-Rodino Antitrust Improvement
Act of 1976 and allowed the waiting period to expire without
further action.

Based in Columbia, South Carolina, Safety-Kleen is one of the
nation's largest environmental services companies, and is
operating under Chapter 11 protection in U.S. Bankruptcy Court
for the District of Delaware.

On May 15, 2002, a Clean Harbors' competitor, Onyx North America
Corp., a subsidiary of Vivendi Environnement, filed a motion
with the Bankruptcy Court objecting to the proposed sale of
CSD's assets to Clean Harbors and sought a delay in the bidding
deadline. The Court did not act upon the petition to delay the
bid deadline and set June 10, 2002 as the date when it would
hold a hearing on the objection by Onyx. On May 23, 2002,
Safety-Kleen filed its reply with the Court asking the Court to
deny the Onyx petition in its entirety. The timeline established
by the Court in its March 8, 2002 Bidding Procedures Order and
in response to the Onyx objection is as follows:

     -- May 30, 2002: Deadline for qualified bidders to submit

     -- June 3 through June 11, 2002: If there are qualified
bids, in addition to the existing bid of Clean Harbors, Safety-
Kleen will hold an auction during this period.

     -- June 10, 2002: Bankruptcy Court scheduled to hear the
objections of Onyx to the sale process.

     -- June 13, 2002: Bankruptcy Court scheduled to hold a sale
hearing to determine the winning bid.

Clean Harbors, Inc. through its subsidiaries provides a wide
range of environmental and waste management services to a
diversified customer base including a majority of the Fortune
500 companies, thousands of smaller private entities and
numerous governmental agencies. Within its national footprint,
the Company currently has service and sales offices located in
26 states and Puerto Rico, and operates 11 waste management
facilities strategically located throughout the country. For
more information, visit our Web site at

SECURITY ASSET: Pursuing Debt Financing to Maintain Operations
Results of operations of Security Asset Capital Corporation for
the three months ended March 31, 2002 and 2001 show revenue for
the three months ended March 31, 2001 was $11,146 as compared to
$120,135 for 2001. The decrease in revenues resulted from the
sale of SAP, the slowdown within the United State's economy, in
particular collections following the events of September 11,
2001, the decrease in Loan Portfolio sales due to management's
emphasis on development of the Debt Registry and fund raising

Net loss for the three months ended March 31, 2002 was $527,953
as compared to 941,877 for 2001, a decrease of $413,924 when
compared to the first three month of 2001. This decrease is
primarily due to the decline in general and administrative
expenses resulting from the issuance of common stock for
services, and the decrease in interest expense.

The Company plans to continue funding its operations and
proceeds from additional debt and equity capital offerings.
There is no assurance that management will be successful in
these endeavors.

Security Asset Capital Corporation operates through its wholly
owned subsidiaries. Security Asset Management, Inc. acquires,
manages, collects and markets distressed consumer credit
portfolios for their own account and third parties. Security
Asset Properties, Inc. owns and operates 14 income producing
residential properties in San Diego County, California.
Broadband Technologies, Inc. was capitalized by the contribution
from the Company of a patent and certain patents pending and
licensing for direct online full screen video technology. holds certain technology and rights related to
an online market place for buyers and sellers of distressed debt
portfolios, internally known as The Debt
Registry, uses the acquired broadband technology, develops it
further and applies it to the registration and tracking of
individual debt accounts sold by lending institutions to third

SIMMONS: S&P Raises Corp. Credit & Secured Debt Ratings to BB-
Standard & Poor's raised its corporate credit and secured debt
ratings on U.S. bedding manufacturer Simmons Co. to double-'B'-
minus from single-'B'-plus, as a result of improved operating

At the same time, the subordinated debt rating was raised to
single-'B' from single-'B'-minus. The outlook for Atlanta,
Georgia-based Simmons is stable. About $288 million in total
debt was outstanding as of March 30, 2002.

"The upgrade reflects improved operating performance from
stronger pricing, market share gains, and reduced debt," said
Standard & Poor's credit analyst Martin Kounitz. "Simmons' good
business position and stable cash flow should result in credit
measures consistent with the rating," he added.

The revised ratings are based on Simmons's leveraged financial
profile, partially offset by its favorable position in the
stable, but highly competitive, bedding market and its stable
cash flow generation.

The company's good business position stems from its well
recognized brand names, strong relationships with retailers, and
broad distribution. Revenues have grown over the past couple of
years due to increased marketing efforts and the solid
acceptance of Simmons' brands, particularly the Beautyrest line
of no-flip mattresses.

Management's strategy is to continue to gain market share by
emphasizing premium and new products on which it can increase
prices, improving profitability. The company regards
manufacturing as a means to gain competitive advantage. Through
its Zero Waste Initiative, Simmons has improved profitability
despite a weak retail environment.

Simmons is the second-largest U.S. bedding manufacturer, with
over a 15% market share.

SMARTSERV: Asks For Review Of Nasdaq Delisting Determination
Smartserv Online, Inc. (Nasdaq: SSOL) announced that on May 23,
2002, it received a Nasdaq Staff Determination indicating that
the Company fails to comply with the Net Tangible Assets
requirements for continuing listing set forth in Marketplace
Rule 4450(a)(3) of the NASD.  Therefore, its securities are
subject to delisting from The Nasdaq National Market.  The
Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination.  A date
for this hearing has not yet been established, and the Company
has been advised that NASDAQ will not take any action to delist
its common stock pending the results of the hearing. There can
be no assurance the Panel will grant the Company's request for
continued listing.

SmartServ recently announced that is has signed an agreement to
provide the Company with an initial round of equity financing,
consisting of the sale of common stock and warrants to purchase
additional common stock.  The parties expect to close and
complete the financing upon receipt of Nasdaq approval and the
satisfaction of customary closing conditions. This financing is
the first of several contemplated financings that in the
aggregate should move SmartServ back into compliance with Nasdaq
National Market listing requirements. There is no assurance,
however, that the Company will be able to complete all or any of
the contemplated financings or that the net proceeds of such
financings will be sufficient to comply with Nasdaq National
Market listing requirements.

SmartServ (Nasdaq: SSOL), founded in 1993, is a B2B wireless
technology leader with a focus on providing financial
institutions and network service providers with potent, real-
time financial applications and transaction routing systems for
virtually any portable device, such as PDAs, RIM and mobile
handsets, over any wireless network, including GSM, CDMA and the
future 3G.  SmartServ's products include sophisticated engines
capable of routing high-volume transactions, alerts, real-time
global market quotes, and news to multiple destinations;
proprietary W2W Middleware(TM) that configures content and
applications for a wide array of devices and networks; and a
suite of applications designed so that businesses and their
customers can access real-time or streaming information in order
to make critical financial decisions. Visit SmartServ at

TECSTAR: Creditors' Committee Taps Young Conaway as Attorneys
The Statutory Committee of Unsecured Creditors in the chapter 11
cases of Tecstar, Inc. and Tecstar Power Systems, Inc., sought
and obtained permission from the U.S. Bankruptcy Court for the
District of Delaware to employ Young Conaway Stargatt & Taylor,
LLP as their counsel, effective February 19, 2002.

As Counsel, Young Conaway is expected to:

     a) consult with the Committee, the Debtors, and the U.S.
        trustee concerning the administration of these chapter
        11 cases;

     b) review, analyze and respond to pleadings filed with
        this Court by the Debtors and to participate in hearings
        on such pleadings;

     c) investigate the acts, conduct, assets, liabilities,
        and financial condition of the Debtors, the operation of
        the Debtors' businesses, and any matters relevant to
        these chapter 11 cases in the event, and to the extent,
        required by the Committee;

     d) take all necessary actions to protect the rights and
        interests of the Committee, including negotiations and      
        preparation of documents relating to any plan of
        reorganization and disclosure statement;

     e) represent the Committee in connection with the with
        the exercise of its powers and duties under the
        Bankruptcy Code and in connection with these chapter 11

     f) perform all other necessary legal services in
        connection with these chapter 11 cases.

The professionals presently designated to represent the
Committee and their current standard hourly rates are:

     a) Robert Brady               $400 per hour
     b) Brendan Linehan Shannon    $380 per hour
     c) Maribeth L. Minella        $220 per hour
     d) David M. Saxman            $120 per hour

Tecstar, Inc. manufactures high-efficiency solar cells that are
primarily used in the construction of spacecraft and satellite.
The Company filed for chapter 11 protection on February 07,
2002. Tobey M. Daluz, Esq. at Reed Smith LLP and Jeffrey M.
Reisner at Irell & Manella LLP represent the Debtors in their
restructuring efforts. When the company filed for protection
from its creditors, it listed assets of over $10 million and
debts of over $50 million.

TELEGLOBE: Seeking Authority to Pay Critical Vendors' Claims
Teleglobe Communications Corporation and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware for
an authority to pay, in their sole discretion, the prepetition
claims of certain critical vendors and service providers in the
ordinary course of the Debtors' businesses.

                  Network Provider Claims

In connection with the day-to-day operation of their businesses,
the Debtors rely on a number of network providers to:

     a) permit the Debtors access to and use of Indefeasible
        Right of Use and leased telecommunications circuits that
        form the basis of the Debtors' worldwide network;

     b) repair and maintain terrestrial and subsea cable system
        and satellite capacity provided to the Debtors; and

     c) provide and service certain crucial network equipment
        necessary to operate these circuits.

If the Debtors fail to pay the Network Providers Claim, the
Debtors believe that many Network Providers may stop providing
their essential goods and services to the Debtors for their
international network facilities.  This would cause a
substantial disruption to the Debtors' telecommunications
network, cutting service to entire areas and damaging the
Debtors' reputation.  Customers would then lose their confidence
on the Debtors, undermining their ability to generate ongoing
operating revenue.

The Debtors also point out that no other provider can supply the
goods or services provided by the Network Providers. More
importantly, the equipment/specifications on each system is

Even if viable alternative network providers were available for
some goods and services, the time and cost necessary to identify
these replacement network providers and migrate the Debtors'
network would cause a significant disruption to their operation.

The Debtors estimate that as of the Petition Date, the aggregate
amount of the Network Provider Claims is approximately $20

               Specialized Software Companies

The Debtors have retained certain specialized software companies
to develop and maintain software systems that allow the Debtors
to monitor and operate their network and keep track of traffic
for billing purposes.  The Debtors could not retain other
software companies with equal understanding of their system, nor
could they retain alternative vendors without incurring
substantial expense and delay. Without these systems, the
Debtors ability to track the performance of their network and
provide their customers and vendors with accurate information
would be severely hampered.  

As of the Petition Date, the aggregate amount of Specialized
Software Company does not exceed $1.5 million.

                  International Vendors

To effectively operate their international communications
network, the Debtors purchase a variety of critical goods and
services from international vendors and service providers.  

If these International Vendor Claims are not paid, there is a
significant risk that certain of the International Vendors will
cease providing the services necessary to maintain operation of
the Debtors' international network, thereby:

     -- disrupting the Debtors' worldwide and data businesses,

     -- damaging the Debtors' relationships with their largely
        international customer base.

More importantly, it is likely that International Vendors may
attempt to seize the Debtors assets located outside of Canada or
the United Kingdom, since it is difficult for the United States
Court to enforce the automatic stay against entity outside the
United States.

The Debtors aggregate amount of the International Vendor Claims
is pegged at $2.3 million.

The Debtors further claim that they have sufficient cash
reserves, together with anticipated access to sufficient DIP
financing to pay all Critical Vendor Claims, as they become due
in the ordinary course of their businesses.

Teleglobe Communications Corporation is a wholly-owned indirect
subsidiary of Teleglobe Inc., a Canadian Corporation. Teleglobe
currently provides services in more than 220 countries via a
fully integrated network of terrestrial, submarine and satellite
capacity. During the calendar year 2001, the Teleglobe Companies
generated consolidated gross revenues of approximately $1.3
billion. As of December 31, 2001, the Teleglobe Companies has
approximately $7.5 billion in assets and approximately 44.1
billion in liabilities on a consolidated book basis.  The
Debtors filed for chapter 11 protection on May 28, 2002. Mark D.
Collins, Esq., Patrick Michael Leathem, Esq., Daniel J.
DeFranceschi, Esq. at Richards Layton & Finger, PA represent the
Debtors in their restructuring efforts.

TELIGENT: Seeks to Extend Exclusivity & Lease Decision Periods
Teligent Inc. and its debtor-affiliates seek extensions of their
exclusive periods and their lease decision period. The Debtors
want to retain the exclusive right to file a plan of
reorganization plan through June 15, 2002, and the exclusive
right solicit acceptances of that plan through August 15, 2002.
The Debtors also seek to stretch their time period to determine
which unexpired leases must be assumed, assumed and assigned, or
rejected through August 15, 2002.

                  The Exclusive Periods

The Debtors assert that that there is sufficient cause to grant
the requested extension of the Exclusivity Periods because the
Debtors have continued to make substantial progress in these
chapter 11 cases. The Debtors remind the Court that they have
been engaged in concerted discussions over the last several
months with their major constituents on the terms and structure
of a liquidating chapter 11 plan of reorganization. While the
Debtors already filed their Joint Plan, they seek a brief
extension of their Exclusive Periods out of an abundance of

                 The Lease Decision Period

The Debtors tell the Court that they have made substantial
progress with respect to their Unexpired Leases since the Last
Extension, but need additional time to determine which Unexpired
Leases will be part of their restructuring.

As part of the continued reconfiguration of their businesses,
the Debtors have made substantial progress in resolving the
remaining Unexpired Leases. Since the last extension, the
Debtors have identified and rejected approximately 100 Unexpired
Leases pursuant to the expedited lease rejection procedure
approved by this Court. There still remain approximately 137
undetermined Unexpired Leases. Majority of these Unexpired
Leases is directly related to and necessary for the Debtors'
fixed wireless operations. As a result, the Debtors will need
additional time to determine whether these remaining Unexpired
Leases will be assumed or rejected, with any determination
likely to be made in conjunction with the Debtors' ultimate
resolution of these cases.

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

TIMCO AVIATION: March 31 Balance Sheet Upside-Down by $82 Mill.
TIMCO Aviation Services, Inc., formerly known as Aviation Sales
Company, is a Delaware corporation that, through its
subsidiaries, provides aircraft maintenance, repair and overhaul
services to commercial passenger airlines, air cargo carriers,
aircraft leasing companies, maintenance and repair facilities
and aircraft parts redistributors throughout the world. During
2001, the Company sold one of its MR&O operations.  On February
28, 2002, the Company completed a significant restructuring of
its capital and equity, including a note exchange and rights

Concurrent with the completion of the note exchange and rights
offering, the Company changed its capitalization by increasing
the number of its authorized shares of common stock from 30.0
million shares to 500.0 million shares and by reducing the
number of its issued and outstanding shares of common stock by
converting every ten shares of its issued and outstanding common
stock into one share. Additionally, the Company changed it
corporate name from "Aviation Sales Company" to "TIMCO Aviation
Services, Inc."

On May 6, 2002 the Company entered into an agreement to settle a
securities class action lawsuit previously filed against it and
certain of its former directors and officers in the United
States District Court for the Southern District of Florida.

          Three Months Ended March 31, 2002 and 2001

Operating revenue for the three months ended March 31, 2002
decreased $24.1 million, or 29.5%, to $57.5 million, from $81.6
million for the three months ended March 31, 2001.  Operating
revenue for the first quarter of 2001 included $21.4 million
from facilities and operations that were closed or sold in 2001.
Without the revenue from these facilities and operations,
comparative 2001 three-month revenue would have been $60.2

The decrease in revenue is primarily attributable to decreased
revenue from the Company's heavy airframe maintenance
operations. This decrease was generally caused by a reduction in
market opportunities due to adverse market conditions, which
have caused many of the Company's customers to delay maintenance
on their aircraft or park older aircraft maintained by it due to
rising fuel prices and general economic conditions. In addition,
revenue decreased due to the sale of the Caribe MR&O operation
in the second quarter of 2001, the consolidation of TIMCO's
Winston Salem, North Carolina heavy airframe maintenance
facility into its Greensboro, North Carolina operations and the
closure of its Oscoda operations. It was also impacted by
competitive conditions in the marketplace, which
experienced substantial overcapacity throughout 2001, causing
TIMCO to increasingly use fixed pricing on many of its MR&O

Gross profit increased $6.8 million to $6.2 million for the
three months ended March 31, 2002, compared with a gross loss of
$0.6 million for the three months ended March 31, 2001.  This
increase is due primarily to improved operating efficiencies,
resulting in a higher revenue realization per labor hour, and
cost reductions achieved through consolidation of operations in
addition to company-wide salary and benefit reductions in April
2001.  Gross profit as a percentage of operating revenues
increased to 10.9% for the three months ended March 31, 2002,
from a loss of 0.7% for the three months ended March, 2001.

Loss from continuing operations for the three months ended March
31, 2002 was $6.7 million, compared to a loss of $15.5 million
for the three months ended March 31, 2001.

As of March 31, 2002, the Company had outstanding indebtedness
of approximately $183.3 million (excluding outstanding letters
of credit of $12.1 million), of which $47.2 million was senior
debt that matures in July and August 2002, including amounts due
under the TROL financing, which is now characterized as a
capital lease, and the remainder of which was other
indebtedness.  TIMCO indicates that it does not anticipate that
it will be able to pay its senior debt when it matures and,
accordingly, is actively negotiating to refinance all of its
currently outstanding senior debt. Its ability to make payments
of principal and interest on outstanding debt will depend upon
future operating performance, which will be subject to economic,
financial, competitive and other factors beyond the Company's

While TIMCO had a negative net worth of $86.2 million at March
31, 2002, it includes as a liability $115.8 million in New
Notes. While the Company has the right, but not the obligation
to redeem the New Notes for cash and equity, other than in
connection with a change in control, it will never be obligated
to make any cash payments to the holders of the New Notes. As
such, had its New Notes been converted into common stock as of
March 31, 2002, its pro-forma stockholders' equity would have
been $29.6 million.

UNITED DEFENSE: Fitch Affirms Senior Secured Facilities at BB
Fitch Ratings has affirmed its 'BB' rating on United Defense
Industries' senior secured credit facilities, and has revised
the Rating Outlook to Stable from Positive. On May 28th, United
Defense announced the acquisition of U.S. Marine Repair for $316
million, to be financed with $300 million in bank debt and $16
million in cash. UDI bought USMR from The Carlyle Group, which
is also the largest shareholder of UDI. Fitch's actions consider
the impact of both the USMR acquisition and the likely
cancellation of the U.S. Army's Crusader mobile artillery

UDI's ratings are supported by the benefits of the USMR
acquisition, strong free cash flow, a track record of debt
reduction, adequate post-acquisition credit protection measures
and solid competitive positions in several defense markets.
Fitch also notes UDI's improved financial flexibility resulting
from the IPO last December.

Concerns center on the potential for additional acquisitions,
the uncertainty surrounding the Crusader program, higher debt
levels post-acquisition, and the uncertainty of UDI's position
in the U.S. Army's transformation plans. Fitch also notes UDI's
exposure to interest rate changes as a result of its floating
rate debt, which should total approximately $723 million after
the USMR transaction closes. This interest rate exposure is
partially mitigated by $250 million in interest rate swaps and
loan pricing reductions as debt is lowered.

The revised Outlook is based on higher debt levels and the
uncertainty surrounding the likely cancellation of the Crusader
program. While UDI's credit statistics should steadily improve
after the acquisition as debt is reduced with free cash flow,
the improvement will not be as strong as Fitch estimated before
discounting the contribution from Crusader.

USMR is the leading private-sector provider of ship repair,
maintenance and modernization services to the U.S. Navy (USN),
and a leading provider of these services to other U.S. defense-
related agencies and commercial customers. USMR provides a range
of services from standard topside ship repair to full dry-dock
services at six strategically located ship repair facilities in
the largest USN homeports. USMR's cash flow is stable, with
growth prospects tied to the aging of the USN fleet and
continued high operating tempo. Last twelve month sales and
EBITDA at USMR were $432 million and $48 million, respectively.

The USMR acquisition complements and expands UDI's existing
Naval business, which generated sales of approximately $320
million in 2001. The acquisition will allow UDI to service its
customers' vessels over the full ship life cycle. Fitch believes
that integration risks are minimal given little overlap in the
two businesses, retention of USMR's management team, and some
overlap on the Board of Directors.

The transaction also improves UDI's revenue mix, with pro forma
naval-related revenues accounting for more revenues than pro
forma Army-related revenues, even including Crusader revenues.

UDI estimates pro forma leverage (debt to EBITDA) post-
acquisition will be 3.3x, declining to 2.1x by the end of 2003.
UDI's projections do not rely on cost savings or synergies.
Fitch has evaluated the combined company under a more
conservative set of assumptions than those used by UDI,
including a significant reduction in Crusader contributions and
much lower debt reduction. With these conservative assumptions,
Fitch estimates that UDI will have credit protection measures
within the 'BB' category, and credit quality should improve as
debt is reduced. Fitch notes that UDI has consistently repaid
debt ahead of schedule since the 1997 LBO.

Acquisitions are a part of UDI's strategic plan, and future
transactions could negatively affect credit quality. However,
Fitch believes the company will digest the USMR acquisition
before taking on another target, and the potential for secondary
equity offerings partially mitigates the risk of higher
acquisition-related debt levels. However, additional debt-
financed transactions within the next 6-12 months will require
Fitch to review its rating of UDI.

The Bush Administration has announced plans to cancel the
Crusader mobile artillery system, which accounts for more than
20% of UDI's revenues. Although some support for Crusader
remains in Congress, it looks increasingly likely that the
program will be terminated. Although cancellation of the
Crusader program would significantly alter UDI's business
portfolio, compensation from the DOD to UDI, and the potential
to apply Crusader technology to other Army programs, including
the Future Combat System, could mitigate a cancellation. The DOD
has already spent approximately $2 billion in development costs
on the Crusader.

As with the rest of the DOD, the U.S. Army is in the process of
transforming itself into a lighter, more mobile force utilizing
advanced communications, IT, and precision weapons. UDI's loss
in the Interim Armored Vehicle competition and the Crusader
cancellation increase the uncertainty of where UDI fits in the
Army's transformation plans.

WASH DEPOT: Plan Confirmation Hearing Scheduled for July 31
Wash Depot Holdings Inc. and its affiliates received approval
from the U.S. Bankruptcy Court in Delaware on May 23 in for its
reorganization plan's disclosure statement, reported Dow Jones.  
According to the newswire, Wash Depot has until June 5 to mail
solicitation packages containing the disclosure statement to
creditors.  A plan confirmation hearing is set for July 31;
objections are due by July 17.  The Saugus, Massachusetts-based
company listed assets and debts of more than $100 million each
in its October 1, 2001, chapter 11 bankruptcy petition. (ABI
World, May 30, 2002)

WEBLINK WIRELESS: Ability to Continue Operations Still Uncertain
The predecessor corporation of WebLink Wireless, Inc. was
incorporated as a Delaware corporation on May 8, 1989, to
provide wireless messaging products and services, under the name
PageMart, Inc. In January 1995, PageMart effected a corporate
reorganization pursuant to which PageMart Nationwide, Inc., a
Delaware corporation, became the holding company parent of
PageMart. In December 1995, the name of PageMart Nationwide,
Inc. was changed to PageMart Wireless, Inc. On January 28, 1998,
PageMart was merged into Wireless with Wireless as the surviving
corporation. On December 1, 1999, the name of Wireless was
changed to WebLink Wireless, Inc. The consolidated financial
statements of the Company include the accounts of PageMart PCS,
Inc., PageMart II, Inc., PageMart Operations, Inc., PageMart
International, Inc. and other subsidiaries of WebLink. Each of
these companies is a wholly-owned subsidiary of WebLink.
PageMart PCS, Inc. holds certain narrowband personal
communications services licenses. PageMart II, Inc. holds
certain Federal Communications Commission licenses. Other than
these licenses, the subsidiaries of WebLink have no significant
assets or liabilities.

                        Chapter 11 Filing

On May 23, 2001, WebLink and its subsidiaries, PageMart PCS,
Inc. and PageMart II, Inc., filed voluntary petitions for relief
under Chapter 11 of title 11 of the United States Bankruptcy
Code, and are presently operating their businesses as debtors-
in-possession subject to the jurisdiction of the United States
Bankruptcy Court for the Northern District of Texas, Dallas
Division. The Chapter 11 cases are being jointly administered
for procedural purposes only before the Bankruptcy Court under
Case No. 01-34275-SAF-11. WebLink and it's subsidiaries, as
debtors-in-possession, have continued to manage and operate
their assets and businesses pending the confirmation of a
reorganization plan and subject to the supervision and orders of
the Bankruptcy Court.

On April 15, 2002 the Company entered into a non-binding letter
of intent with its secured lenders on the material terms of a
plan of reorganization. The plan is expected to allow the
Company to emerge from the Chapter 11 proceeding. This new plan
of reorganization was filed with the Bankruptcy Court on April
23, 2002 and superseded the plan that was filed on January 31,
2002, which was based on a transaction described in the
Company's previously announced letter of intent with Sun Capital
Acquisition Corp. The Sun Capital letter of intent has expired,
and the Company is no longer pursuing the transaction.

The letter of intent with the secured lenders provides that the
Company would issue $40 million of new senior secured notes and
92.5% of the common stock of the reorganized entity to its
secured creditors, and 7.5% of the common stock of the
reorganized entity to its unsecured creditors upon the effective
date of the plan of reorganization. The common stock to be
issued to creditors would be subject to dilution by a management
equity plan. The new senior secured notes would be issued in two
tranches, $30.0 million of which would have interest paid
currently in cash with a four-year principal amortization
schedule and $10.0 million of which would have interest paid in
kind with a four-year maturity date. The Company's excess cash
at the effective date of the plan of reorganization would be
paid to the secured creditors, with the amount of excess cash
above $3.0 million being applied to pay the principal of the new
notes. Up to 15% of the common stock of the Company would be
reserved for issuance to management. WebLink does not expect its
current equity holders to receive any property, securities or
cash in exchange for their equity holding in a restructuring.
The Company expects the equity holders' stock will be cancelled
at the time a plan of reorganization becomes effective.

On April 26, 2002, the Official Committee of Unsecured Creditors
filed a competing plan of reorganization with the Bankruptcy
Court. The competing plan provides, among other things, that
450,000 shares of common stock of the reorganized entity would
be issued to unsecured creditors, 300,000 shares would be issued
to management of the Company, and 1,949,100 shares would be
issued to the secured creditors. In addition, warrants to
purchase 17,000,000 shares of common stock of the reorganized
entity at an exercise price of $7.00 per share would be issued
to unsecured creditors and management of the Company. The
competing plan also provides for the issuance of notes to the
secured creditors equal in principal amount to the Company's
plan, but on somewhat more favorable terms to the Company. The
Company's secured creditors have informed the Company that they
will vote against the competing plan of the Official Committee
of Unsecured Creditors.

Confirmation of any plan of reorganization is subject to
conditions imposed by the Bankruptcy Code, including the
approval of the Bankruptcy Court, and approval of the FCC of the
change in control of the Company's FCC licenses. Management can
provide no assurance that any plan of reorganization will be
approved or that additional plans may be presented to the court.

The Company reported operating losses for each of the three
years in the period ended December 31, 2001 and the first
quarter 2002, has incurred substantial net losses since
inception and has a significant working capital deficit and
stockholders' deficit at March 31, 2002. The Company's financial
condition, results of operations, lack of liquidity and
inability to obtain additional debt or equity financing, raise
substantial doubt about the Company's ability to continue as a
going concern.

Revenues for the three months ended March 31, 2001 were $63.4
million compared to $45.4 million and for the three months ended
March 31, 2002. Recurring revenues for wireless data for the
same periods were $16.4 million and $18.1 million, respectively.
Recurring revenues for traditional paging for the
same periods were $39.1 million and $23.2 million, respectively.
Revenues from equipment sales for the same periods were $7.1
million and $3.3 million, respectively. Network revenues,
comprised of: (1) non-recurring engineering fees; (2)
construction revenues related to the installation of
transmitting and receiving equipment; and (3) non-airtime
service revenues, for the same periods, were $0.9 million and
$0.8 million, respectively. ARPU for wireless data was $13.17
for the three months ended March 31, 2001 compared to $11.68 for
the same period in 2002. ARPU for traditional paging for the
three months ended March 31, 2001 was $7.49 compared to $8.11
for the same period in 2002. Management expects wireless data's
and traditional paging's ARPU will decline in 2002.

The Company sustained losses before extraordinary item of $39.3
million for the three months ended March 31, 2001. The Company
sustained losses before bankruptcy reorganization items and
extraordinary items for the three months ended March 31, 2002 of
$8.3 million. Bankruptcy reorganization items were $1.3 million
for the three months ended March 31, 2002. Bankruptcy
reorganization items consisted principally of legal and
professional fees. An extraordinary gain of $0.3 million was
recognized in the first quarter of 2002 for the forgiveness of
debt. Including the bankruptcy reorganization items and the
extraordinary gain, the Company's net losses for the three
months ended March 31, 2002 were $9.4 million. The decrease in
losses was primarily due to decreases in operating expenses
associated with the operations of the Company.

WebLink Wireless, Inc. is a leader in the wireless data
industry, providing wireless email, wireless instant messaging,
information on demand and traditional paging services throughout
the United States. The company filed for Chapter 11 protection
on May 23, 2001. Michael A. McConnell, Esq. at Winstead,
Sechrest & Minick is helping the Debtor in its restructuring

WHEELING-PITTSBURGH: Tatum's Retention Not to Prejudice Others
Judge Bodoh grants Wheeling-Pittsburgh Steel Corp.'s and its
debtor-affiliates' Application to employ Tatum CFO Partners LLP
for short-term consulting, but directs that nothing in his Order
will prejudice the rights of the United States Trustee, the
Official Committee of Unsecured Noteholders, the Official
Committee of Unsecured Trade Creditors, or any other creditor as
to any objection to the reasonableness of the fees requested in
any fee application filed by Tatum.  Further, if the Debtors
wish to further expand Tatum's services not otherwise described
in the Retention Agreement approved by Judge Bodoh, they must
first apply for judicial permission to employ Tatum to perform
any additional services, and for approval of any fees to be paid
in compensation for additional services, with appropriate
                           *   *   *

As previously reported in the May 14, 2002 issue of the Troubled
Company Reporter, the Debtors asked Judge Bodoh for authority to
further employ Tatum CFO Partners, LLP, a second time, to
provide short-term financial consulting services to WPC and WPSC
relating to WPC's equity investment in Ohio Coatings Company and
WPSC's supply agreement with OCC.

The Debtors sought and obtained Judge Bodoh's approval for the
retention of Tatum to provide short-term financial consulting
services to WPC and WPSC with respect to WPC's 50% equity
investment in OCC and WPSC's supply agreement with OCC.

OCC is a company that produces tin plate.  OCC's current senior
financing is maturing and OCC is actively looking for
alternative sources of financing.  The interests of OCC are
intertwined with those of WPC and WPSC to the extent that, if
OCC were to be unable to sustain operations, it would have a
negative impact on the financial condition and operations of the

In the original Application, the Debtors said they anticipated
that the services to be provided by Tatum to WPC and WPSC would
be completed no later than the end of April 2002 and probably
sooner.  Although Tatum has made substantial progress in its
attempt to obtain alternative sources of financing for OCC and
in its negotiations with Dong Yang Tin Plate of Korea, the
remaining 50% shareholders of OCC, to restructure WPC's
ownership interest in OCC, additional time is needed for Tatum
to complete its services to WPC and WPSC.  The Debtors now
anticipate that the services to be provided by Tatum to WPC and
WPSC should be completed no later than the end of June 2002.

The Tatum Order stated that, if the Debtors wish to have Tatum
perform additional services not otherwise described in the Tatum
Agreement, the Debtors will first apply to Judge Bodoh for
permission to further employ Tatum and for approval of any fees
to be paid to Tatum for additional services.

Tatum, by and through Mr. James R. Duncan, Jr., will continue to
provide specific services for WPC, WPSC and the Debtors as the
Debtors deem appropriate and feasible in order to advise the
Debtors with respect to their interests in OCC, including:

      (1) continuing to assist WPC in the development of a
recapitalization strategy for WPC's substantial equity interest
in OCC;

      (2) continuing to assist WPC with respect to enhancing the
value of WPC's equity interest in OCC;

      (3) continuing to assist WPC in the development of a
strategy for the disposition of some or a part of WPC's equity
interest in OCC;

      (4) continuing to assist WPC and the Debtors with any
negotiations involving Dong ^Yang Tin Plate of Korea relating to
these services;

      (5) continuing to assist the Debtors in considering the
OCC banking relationships and acting as a liaison for the
Debtors with OCC's current lenders in responding to any
information requests received by the Debtors from OCC's lenders;

      (6) continuing to assist WPSC in maintaining its favorable
supply agreement with OCC relating to the sale of tin plate; and

      (7) continuing to provide such other necessary services as
are requested by the Debtors in these connections.

The Debtors proposed that Tatum be compensated for these
services at its ordinary billing rate of $150 per hour, but not
to exceed $1,350.00 in any one day, in accordance with its
customary billing practices regarding charges and expenses.

As disclosed in the original Application, Tatum received a
retainer from the Debtors in the amount of $20,000.  In Tatum's
first application for allowance of interim compensation and
expense reimbursement, Tatum agreed to apply the retainer, in
part, against the $6,981 professional fee holdback.  The
original Application provided that the retainer would be applied
to time charges and expenses specific to Tatum's last
application for payment for its engagement. In this second
Application, Tatum and the Debtors have agreed that Tatum will
apply the retainer against the 20% professional fee holdback
in connection with its First Fee Application and future fee
applications.  Tatum's agreement to apply the retainer against
the 20% professional fee holdback as of the ate that Judge Bodoh
approves its First Fee Application represents a more favorable
result to the Debtors and their estates. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

WHISPERING OAKS: Working Capital Deficit Tops $693K at Dec. 31
Whispering Oaks International, Inc. was incorporated in December
1997. Prior to February 20, 2001 the Company was engaged in the
acquisition and sale of thoroughbred racing horses. As of
December 31, 2000 the Company owned one thoroughbred horse.  In
February 2001 the Company ceased its business activities
relating to the acquisition and sale of thoroughbred race

On February 21, 2001, the Company issued 150,000 (1,950,000 post
split) shares of its common stock to acquire all of the issued
and outstanding shares of Lagostar Trading S.A. At the time of
this acquisition, Lagostar Trading owned certain technology and
patents which relate to the early detection of cancer.

On March 1, 2001 the Company's Board of Directors declared a
13:1 forward stock split.

On March 25, 2001 the Company acquired the following assets from
Curex Technologies Inc. in consideration for the assumption by
the Company of promissory notes in the amount of $2,326,869
which were payable by Curex to various third parties.

                        Patents                $     204,815
                        Property Technology          993,022
                        Goodwill                     871,715
                        Cash                         129,032
                        51% interest in BioLargo
                           Technologies, Inc.        128,285
                              Total:             $ 2,326,869

In May 2001, the Company issued 1,544,404 shares of its common
stock in payment of the notes, plus accrued interest, which the
Company assumed in connection with the acquisition of assets
from Curex Technologies.

                   Cancer Detection Kit

As a result of the Company's acquisition of technology in
February and March 2001 the Company owns the patents and
intellectual properties relating to certain technology which can
be used to detect cancer.  The cancer diagnostics market is
presently estimated at $4 billion per year.  A principal goal of
cancer research is to differentiate cancer cells from healthy
cells. One way to achieve this goal is to detect molecules
(markers) that are present on cancer cells but not on healthy
cells. The Company's technology relates to the RECAF(TM) marker,
which can be used in blood and tissue tests to determine if a
patient has cancer. These tests can also be used on a regular
basis for the early detection of recurring cancer, thereby
allowing a more effective treatment of cancer patients. The
RECAF(TM) marker has been found in all tissues studied,
including breast, lung, stomach and prostate.

Whispering Oaks International has incurred a loss from
operations, has a negative cash flow from operations, and a
working capital deficiency which raises substantial doubt about
its ability to continue as a going concern.  The Company does
not have sufficient cash, nor does it have an established source
of revenue to cover its ongoing operating costs and allow it to
continue as a going concern. These factors raise substantial
doubt about the Company's ability to continue. As of December
31, 2001, the Company had a working capital deficiency of
$693,408 and incurred a loss for the year ended December 31,
2001 totaling $1,372,806.

WKI HOLDING: Files for Chapter 11 Reorganization in Illinois
WKI Holding Company, Inc., which operates principally through
its subsidiary World Kitchen, Inc., has reached agreement on the
terms of a financial restructuring with the steering committee
for its bank group and a group of affiliated parties that is
comprised of the Company's primary shareholder as well as its
largest bondholder, which holds approximately 40% of the
outstanding senior subordinated bonds. By reducing WKI's funded
debt by approximately $440 million, from $812 million to $373
million, the debt restructuring will provide the Company with
more financial flexibility to implement its business strategy.

To pursue the financial restructuring, WKI and all of its direct
and indirect wholly-owned U.S. subsidiaries have filed voluntary
petitions for reorganization under chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the Northern District of Illinois. Given that the proposed
financial restructuring has the support of parties representing
more than 80% of the Company's funded debt, the Company hopes
to emerge from the chapter 11 process on an expedited timeline.

WKI expects to file a proposed plan of reorganization in the
near future, and will work expeditiously with its stakeholders
to finalize, obtain court approval for and implement the plan.

WKI intends to maintain normal business operations on a global
basis during the chapter 11 process, including at its non-U.S.
subsidiaries, which are not included in the chapter 11
proceedings. The Company will continue delivering all of its
customer orders on time and in full. It also will make timely
payment for goods and services provided on or after the filing
date in the normal course of business and in accordance with the
terms of existing supplier agreements. It is anticipated that
employees will be paid in the normal manner and all health and
welfare benefit plans will continue. The Company plans to fund
operations during the chapter 11 process with existing cash,
cash flow from operations and up to $75 million in a new debtor-
in-possession financing package that has been committed by a
bank group led by JPMorgan Chase Bank.

The terms of the proposed financial restructuring include the
conversion by the bank group of $189 million of its debt into
equity, conversion by an affiliated lender of 100% of its
separate $25 million credit facility claims into equity, and the
conversion of $200 million of senior subordinated bondholders'
claims into equity.

WKI's proposed financial restructuring represents a milestone in
the Company's turnaround, which began in early 2001, and
initially focused on improving the quality of its operations.
During the chapter 11 process, WKI intends to continue to make
operational improvements while also increasing new product and
marketing initiatives geared toward enhancing its portfolio of
well-known housewares brands.

Steven G. Lamb, President and Chief Executive Officer of WKI,
said: "When I joined World Kitchen early last year, it was a
company with considerable potential -- one with the finest brand
portfolio in its industry -- but in need of considerable change
in order to maximize the value of its industry-leading assets.
We have accomplished a lot during the past year by increasing
supply chain efficiency, improving our working capital  
management and enhancing customer service. These initiatives
have begun to bear fruit, as evidenced by the positive response
of our customers and improved financial results.

"This Company simply has too much debt to fully execute its
business strategy. The development of our proposed financial
restructuring is an important accomplishment and its
implementation will give us financial flexibility to operate our
business more efficiently. Equally important, the support we
have received from our stakeholders in developing this plan
illustrates their confidence in World Kitchen's future  

Mr. Lamb concluded: "While we regret the impact that our chapter
11 filing might have on some of our constituencies, it is the
right course of action to establish a capital structure that
will enable us to realize our full potential. We are confident
that we will be able to maintain business as usual during this
process, including payment for goods and services provided
to us on or after the filing date, full and timely deliveries of
all customer orders, and normal salary and benefits for our
employees. Our objective is to complete the chapter 11 process
as quickly as possible so that we can focus on executing our
business strategy, delighting our customers and creating value
for all of our stakeholders."

Patrick Daniello, a Managing Director of JPMorgan Chase Bank,
which serves as administrative agent for WKI's secured credit
facility and as a member of the bank steering committee, said:
"The proposed financial restructuring being contemplated with
World Kitchen and the other parties is an effective step towards
positioning the Company to realize its full potential. We have
considerable confidence in what the Company's strong management
team can achieve once its debt has been reduced."

WKI and its U.S subsidiaries have filed a number of first-day
motions with the Bankruptcy Court in order to accomplish a
smooth transition to chapter 11 without business disruption. The
Company expects that these motions, which are consistent with
those made in other chapter 11 filings, will be addressed
promptly by the Bankruptcy Court. The motions include requests
to pay employee wages and benefits, honor pre-petition customer
obligations and take other steps to preserve business as usual
to the maximum extent possible.

Suppliers with questions about the restructuring may call
800/721-9884 (in the U.S.) or +852-2610-2323 (outside of the
U.S.) or send an e-mail to

World Kitchen's principal products are glass, glass ceramic and
metal cookware, bakeware, tabletop products and cutlery sold
under well-known brands including CorningWare, Pyrex, Corelle,
Visions, Revere, EKCO, Baker's Secret, Chicago Cutlery, Regent
Sheffield, OXO and Grilla Gear. World Kitchen has been an
affiliate of Borden, Inc. and a member of the Borden Family of
Companies since April 1998. The Company currently employs
approximately 3,200 people and has major manufacturing and
distribution operations in the United States, Canada, South
America and Asia-Pacific regions.

WKI HOLDING: Case Summary & 50 Largest Unsecured Creditors
Lead Debtor: WKI Holding Company Inc.
             77 West Wacker Suite 3500
             Chicago, Illinois 60601

Bankruptcy Case No.: 02-21258

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     World Kitchen Inc.                         02-21257
     Chicago Cutlery Inc.                       02-21259
     CSC of Tennessee Inc.                      02-21260
     Ekco Cleaning Inc.                         02-21261
     Ekco Group Inc.                            02-21263
     Ekco Distribution of Illinois Inc.         02-21262
     Ekco Housewares Inc.                       02-21264
     Ekco Manufacturing of Ohio Inc.            02-21265
     WB of Ohio Inc.                            02-21266
     World Kitchen Ghc Inc.                     02-21268
     WKI Latin America Holding LLC              02-21267

Type of Business: WKI Holding Company, Inc. is a holding
                  company, which owns operating companies
                  engaged in the manufacturing of housewares,
                  including bakeware, dinnerware, rangetop
                  cookware, kitchen and household products,
                  cuttlery and precision cutting tools.

Chapter 11 Petition Date: May 31, 2002

Court: Northern District of Illinois

Judge: Jack B. Schmetterer

Debtors' Counsel: Michelle Harner, Esq.
                  Ilana N. Glazier, Esq.
                  Jones, Day, Reavis & Pogue
                  77 West Wacker
                  Chicago, Illinois 60606


                  Richard M. Cieri, Esq.
                  Jeffrey Ellman, Esq.
                  Jones, Day, Reavis &  Pogue
                  North Point
                  901 Lakeside Avenue
                  Cleveland, Ohio 44114-1190
                  Tel: 216-586-3939
Total Assets: $728,012,000

Total Debts: $1,029,208,000

Debtor's 50 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
HSBC Bank USA              Unsecured Note         $200,000,000
Indenture Trustee for the
9.625% Senior Sub. Notes
Due 2008
Frank J. Gondino
10 East 40th Street
New York, New York 10016
Phone: 212-525-1316
Fax: 212-525-1300

State Street Bank & Trust  Unsecured Note           $2,877,000
Indenture Trustee for 9.25%
Senior Notes
Michael Hopkins
801 State Street
Quincy, Illinois 62303
Phone: 217-223-6480
Fax: 217-223-8770

Wings Trading Company      Trade Debt               $2,861,345
Mr. Benson Pau
Block B, 1/F
342 Kwien Tong Road
Kowloon, KLN
Phone: 852-2755-3221
Fax: 852-2796-1331

Shanghai Xing Xin          Trade Debt               $1,700,781
Cookware Co. Ltd.
Terri Zhu
Room 1701 Trade Mansion
No. 800 Qu-Yangrd
Shanghai 20
Phone: 8231-6553-9212
Fax: 8621-6553-9211

PT Maspion                 Trade Debt               $1,443,322           
Lily Go
Maspion I
Desa Sawotratap, Gedangan
Sidcarjo 61252, Indonesia
Phone: 6231-853-1531
Fax: 6231-853-2812

H & K International LTd.   Trade Debt                $711,826
Hanson Chan
Unit 605, Juke Tower
8 Tai Chung Road
Tsuen Wan, N.T. Hong Kong
Phone: 852-2411-3289
Fax: 852-2489-5109

Chuco International        Trade Debt                 $684,634
Co., Ltd.
Philip Chu
Roo 209 Kowloon Centre
29 Ashley Road
Tsimshatsui, Hong Kong
Phone: 852-2461-3911
Fax: 852-2456-3279

Re/Max Int'l. Relocation   Trade Debt                 $659,771
Services, Inc.
Linda Wood
8390 East Crescent Parkway
Suite 500
Greenwood Village, CO 80111
Phone: 303-796-3600
Fax: 303-796-3599

Schneider Logistics,       Trade Debt                 $655,841
Inc. Rail
Bill Van-Beek
PO Box 2660
Greenbay, WI 54306
Phone: 920-592-3215
Fax: 920-592-3891

MTI/Luana Marketing        Trade Debt                 $532,874
Michael Lu
Room 1, 16th Floor
No. 204, Sec 5
Min Sheng E. Road
Taipei, Taiwan
Phone: 8862-2753-1600
Fax: 8862-2753-1921

Hongbao                    Trade Debt                 $424,147
Ming Gao
Daxin Town
Zhangjiagang City 100
Phone: 86520-876-0337
Fax: 86520-876-0535

PCA                        Trade Debt                 $417,488
Diana Patterson
PO Box 905197
Charlotte, NC 28290-5197
Phone: 301-497-9090
Fax: 301-497-7115

Pedone & Partners, Inc.    Trade Debt                $392,759
Mike Pedone
100 Fifth Avenue
New York, NY 10011-6903
Phone: 212-627-3300
Fax: 212-627-3966

Crown Ceramics             Trade Debt                 $378,779
Kovit Tharerantanavibool
Chimpee Taling Chan
33/33 MOO 14
Bardatajehonanee Road
Bangkok, Thailand 10170
Phone: 662-887-6707
Fax: 662-687-6701

Jensen Industrial Limited  Trade Debt                 $329,910
Jeff Bailey
11/02 Wanchai Comm. Ctr.
194-204 Johnson Road
Wanchai, H.K.
Phone: 852-2574-7487
Fax: 852-2574-7665

Chef Pro International     Trade Debt                 $329,585
Hanson Chan
Unit 605
Juko Tower
8 Tai Chung Road
Tsuen Wan, NT
Phone: 852-2411-3289
Fax: 852-2498-5109

Will Partners LLC          Trade Debt                 $304,498
Kevin Shield
5800 Industrial Drive
Monee, IL 60449
Phone: 310-546-4578
Fax: 310-546-7550

Wai Shing Ind. (HK) Ltd.   Trade Debt                 $300,671
Hong Kong & Shanghai BK
Corp. LTd.
Unit 9, 21/F CCT Telecom Bldg.
110 Wo Shing Street
Folan Shatia, NT Hong Kong
Phone: 852-2607-2000
Fax: 852-2609-3311

Booz-Allen & Hamilton      Trade Debt                 $291,600
Pat Houston
Suite 1700
225 West Wacker Drive
Chicago, IL 60606
Phone: 312-346-1900
Fax: 312-578-4664

Weirton Steel Corp.        Trade Debt                 $289,658
Micah Daugherty
400 Three Springs Drive
Weirton, W VA 26062
Phone: 304-797-2000
Fax: 304-797-2782

NYSEG                      Trade Debt                 $283,522
Thomas K. Stanz
PO Box 3287
Ithaca, NY 14852-3287
Phone: 800-572-1111
Fax: 607-347-2760

Davis Staffing, Inc.       Trade Debt                 $237,478

Howell Packaging           Trade Debt                 $222,625

Wellbase Industrial Ltd.   Trade Debt                 $214,922

Samuel Shapiro & Co.       Trade Debt                 $213,281

Patrice Tanaka & Company, Inc.  Trade Debt            $183,939

Flower City Printing, Inc.  Trade Debt                $181,665

Hayco Manufacturing Ltd.    Trade Debt                $171,518

Chong Woo Metal             Trade Debt                $164,919

Modern Marketing Concepts, Inc.   Trade Debt          $150,834

Internet University, Inc., Trade Debt                 $141,197
dba iMC2        

Baltrans USA, Inc.         Trade Debt                 $139,236      

Ashland Distributing       Trade Debt                 $137,876

Cheung Woo Industrial      Trade Debt                 $137,381
Mfg., Ltd.

World Commerce Services Inc.  Trade Debt              $137,034

Conestoga-Rovers &         Trade Debt                 $124,116   
Associates, Inc.

Ferro Corporation          Trade Debt                 $122,879

Acme International LLC     Trade Debt                 $118,838

APV Engineered Coatings    Trade Debt                 $111,309

Interstate Paper Supply    Trade Debt                 $103,594
Co., Inc.

Majestic                   Trade Debt                 $102,823

ARC International North    Trade Debt                 $102,257

Bind View                  Trade Debt                 $100,817

Red Star Industries Ltd.   Trade Debt                 $100,762

Sun Life Insurance, Co.    Trade Debt                  $95,956   

Yue Wing Cheong            Trade Debt                  $93,784
Manufacturing, Ltd.

Yue Wing Cheong            Trade Debt                  $93,645
Manufacturing, Ltd.

Hwa Sung Stainless         Trade Debt                  $91,784
Indust. Co., Ltd.

Graphics Universal, Inc.   Trade Debt                  $85,409

Herald Houseware Ltd.      Trade Debt                  $85,044

Chapman Corporation        Trade Debt                  $84,685

* BOND PRICING: For the week of June 3 - 7, 2002
Following are indicated prices for selected issues:

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


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

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

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

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 Go to order any title today.

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