TCR_Public/020611.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Tuesday, June 11, 2002, Vol. 6, No. 114     


AIRGATE: S&P Puts B- Rating on Watch Neg. Over Covenant Concerns
AIRTRAN HOLDINGS: S&P Affirms B- Rating as Performance Improves
AMERICAN LAWYER MEDIA: S&P Further Junks Corporate Credit Rating
AMERICAN TISSUE: Court Approves $33M Asset Sale to Cascades Inc.
APPLIEDTHEORY: ClearBlue Acquires Managed Hosting & Dev't Assets

AVATEX CORP: March 31, 2002 Balance Sheet Upside-Down by $5MM
BETHLEHEM STEEL: BP Energy Appeals Gas Contracts Rejection Order
BETHLEHEM STEEL: CEO Miller Not So Concerned by USTR Exclusions
CELL TECH: Cash Flows Insufficient to Meet Current Obligations
CENTURY COMMS: Files for Chapter 11 Reorganization in New York

CENTURY COMMUNICATIONS: Voluntary Chapter 11 Case Summary
COASTCAST CORP: NYSE Accepts Plan to Meet Listing Requirements
COLONIAL COMMERCIAL: Violates Nasdaq Listing Requirements
COMDISCO INC: Intends to Implement Stay Bonus and Incentive Plan
COMVERSE: S&P Changes Outlook of BB Corporate Rating to Negative

CONSECO INC: Fitch Hatchets Insurance Units' Ratings Down to BB
CORECARE BEHAVIORAL: Commences Chapter 11 Reorg. Proceedings
COVANTA ENERGY: Hearing on Deloitte's Engagement Tomorrow
CRESCENT REAL ESTATE: Appoints Three Additional Trust Managers
DESA HOLDINGS: Files for Chapter 11 Reorganization in Delaware

DESA HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
ENRON CORP: Seeks Approval to Outsource SAP Work to CAP Gemini
ENRON CORP: Asks Court to Reconsider Fiduciary Services Order
EXIDE TECHNOLOGIES: Daramic Demands Prompt Decision on Contract
EXODUS COMMS: Pushing for Removal Period Extension to August 22

FAIRMOUNT CHEMICAL: Auditors Express Going Concern Doubt
FEDERAL-MOGUL: Ignition Unit Inks STAG Litigation Settlement
GALEY & LORD: Gets Nod for Ernst & Young Retention as Auditors
GLOBAL CROSSING: Wants to Guaranty UK Unit's Lottery Obligations
HAYES LEMMERZ: Intends to Settle Schenk Intercompany Receivables

ICG COMMS: Secures OTC Bulletin Board Listing Under ICGCV Symbol
IMAGICTV: Commences Trading on Nasdaq SmallCap Under IMTV Symbol
INACOM: Wants to Maintain Plan Filing Exclusivity to September 2
INTELEFILM CORP: Mulling Potential Sale of Subsidiary Assets
JACOBSON STORES: Board Shoos-Away Arthur Andersen as Auditors

JORDAN INDUSTRIES: Buys-Back $110MM of Series A Disc. Debentures
KAISER ALUMINUM: Has Until November 12 to Remove Pending Actions
KMART: Utility Company Squabbles Up for Hearing on June 25
KMART CORP: Court Carves-Out 12 Utilities from Utility Order
L-3 COMM: S&P Keeping Watch on BB Rating After $14M Equity Issue

LTV CORP: Proposed Allocation of Steel Sale Proceeds Draws Fire
LAIDLAW INC: Appoints Williams Sanger as New AMR Unit's CEO
LECTEC CORP: Nasdaq Okays Listing Transfer to SmallCap Market
MCMS INC: Has Until September 12, 2002 to File Chapter 11 Plan
MATLACK SYSTEMS: Debtors' Exclusive Period Intact Until June 24

MED DIVERSIFIED: AMEX Sets Appeal Hearing for July 23, 2002
METALS USA: Gets Okay to Sell $5 Million of Miscellaneous Assets
METROCALL INC: Asks Court to Appoint BMC as Claims Agent
METROMEDIA INT'L: Closes Sale of Alma-TV Business Interests
MICROFORUM INC: Files CCAA Plan with Ontario Court

NII HOLDINGS: Signs-Up Richards Layton as Bankruptcy Co-Counsel
NATIONAL STEEL: Wants Plan Filing Exclusivity Moved to January 3
NEON COMMS: Nasdaq Delists Shares Effective June 10, 2002
NET2000 COMMUNICATIONS: Court Converts Case to Chapter 7
NORTEL NETWORKS: Expects to Raise $1.3BB from 2 Public Offerings

NU-LIFE: TSX Suspends Shares for Failing to Meet Requirements
PCA INTERNATIONAL: S&P Rates $160M Senior Unsecured Notes at B-
PFSWEB: Commences Trading on Nasdaq SmallCap Under PSFW Symbol
PACIFIC GAS: Wins Nod to Defray Permit & Franchise Work Expenses
PARKER DRILLING: S&P Keeping Watch on B+ Over Planned Purchase

PREMCOR: Sabine River Completes Creditor-Approved Restructuring
PRESSTEK INC: Sr. Management Team Implements Repositioning Plans
PROTECTION ONE: Taps Deloitte & Touche to Replace Andersen
PSINET INC: Seeks Approval of Liquidation Manager's Engagement
ROHN INDUSTRIES: Bank Lenders Agree to Amend Credit Agreement

SNTL CORPORATION: Wins Creditors' Nod for Reorganization Plan
SAFETY-KLEEN: Court to Consider Clean Harbors Bid on Thursday
SIMON TRANSPORTATION: Intends to File a Liquidation Plan
TELEX COMMS: Commences Exchange Offer for 13% Sr. Discount Notes
THE A CONSULTING: Nasdaq Hearing Re Listing Status Set for Today

WARNACO: Enters New Settlement Pact with HIS Equipment & Liberty
WEINER'S STORES: DE Court Confirms Chapter 11 Liquidating Plan
WILLIAMS COMMS: Court Fixes July 10 Bar Date for Proofs of Claim
XO COMMS: Nixes Forstmann & TELMEX's Move to Bolt from Agreement
YORK RESEARCH: Files for Chapter 11 Reorganization in New York

YORK RESEARCH: Case Summary & 20 Largest Unsecured Creditors


AIRGATE: S&P Puts B- Rating on Watch Neg. Over Covenant Concerns
Standard & Poor's placed the single-'B'-minus corporate credit
rating on wireless carrier AirGate PCS on CreditWatch with
negative implications based on Standard & Poor's concern that
the company could be challenged to meet the minimum subscriber
covenant under the stand-alone senior credit facility of its
wholly owned operating subsidiary iPCS Wireless Inc. for the
quarter ending June 30, 2002. AirGate markets its services under
the Sprint brand primarily in lower-tiered markets in the
Southeast and Midwest.

iPCS, formerly an independent wireless carrier that sold
services under the Sprint brand in several states in the
Midwest, was acquired by AirGate in the fourth quarter of 2001.
Atlanta, Ga.-based AirGate had $619 million consolidated debt
outstanding as of March 31, 2002.

"iPCS has to add about 12,000 net subscribers in the current
quarter to meet the minimum subscriber covenant," Standard &
Poor's credit analyst Michael Tsao said. "However, net
subscriber additions through the end of May 2002 were running at
a level significantly below the trajectory needed to meet the

Standard & Poor's said it is concerned that covenants will
likely be an ongoing issue for iPCS in the absence of any
material amendment. The minimum subscriber covenant requires
iPCS to aggressively add about 30,000 net subscribers in both
the third and fourth calendar quarters of 2002. Other critical
covenants that iPCS has to meet in 2002 include maximum EBITDA
loss and minimum revenue tests. Given competition, the weak
economy, increased overhead associated with the rollout of third
generation (3G) services, and problems relating to sub-prime
customers, AirGate may find it challenging to meet these

Standard & Poor's is also concerned that AirGate's overall
liquidity may not provide adequate cushion against significant
execution risks. AirGate had about $116 million in cash and bank
availability at the end of the first calendar quarter of 2002.
This level of liquidity, after adjusting for still-sizable
capital expenditures for the remainder of 2002, may not allow
AirGate to comfortably address any unexpected deterioration in
operating metrics over the next several quarters.

The resolution of the CreditWatch listing will depend both on
the outcome of AirGate's discussion with banks on amending the
three covenants under the iPCS credit facility and AirGate's
ability to show improvement in net subscriber additions,
revenues, EBITDA, and churn. Even if the company is able to
amend the covenants, the ratings may be lowered to reflect
weaker fundamentals.

AIRTRAN HOLDINGS: S&P Affirms B- Rating as Performance Improves
Standard & Poor's affirmed its single-'B'-minus corporate credit
ratings on AirTran Holdings Inc. and subsidiary AirTran Airways
Inc. and removed all ratings from CreditWatch, citing the
airline's relatively good operating performance amid difficult
industry conditions. The ratings were placed on CreditWatch on
September 13, 2001. Approximately $166 million of rated debt is
affected. The outlook is negative.

"Ratings have been affirmed and removed from CreditWatch due to
AirTran's relatively good operating performance, within an
industry that continues to incur massive losses," said Standard
& Poor's credit analyst Betsy Snyder. The company reported a
loss of only $3 million in the first quarter of 2002, a
significantly better performance than most of its peers. In
addition, its load factor comparisons have improved, despite
significant increases in capacity. However, the company's
prospects still depend on the expected recovery in the airline
industry. If it is weaker than expected and/or another terrorist
attack occurs, ratings on AirTran could be lowered.

Ratings on AirTran reflect the company's modest competitive
position within the U.S. airline industry, and a relatively weak
financial profile. Its major operating subsidiary is AirTran
Airways Inc., which operates primarily at its hub at Atlanta.
AirTran offers low fares that cater primarily to leisure
travelers out of 37 cities located in the East, Southeast, and
Midwest. However, Atlanta is also Delta Air Lines Inc.'s major
hub and Delta has competed aggressively against AirTran there.
Since 1999, AirTran has been upgrading its fleet, adding new
Boeing 717 aircraft, which has aided its operating costs and
reduced the relatively old age of its fleet significantly.
Ratings on AirTran also reflect the adverse airline industry
environment in which it operates, which tends to be competitive
and cyclical. The industry began to experience declining traffic
levels and pressure on pricing in early 2001 due to a softening
economy, trends that were exacerbated by the events on Sept. 11,
2001, and from which the industry will likely not recover fully
until 2003.

Going forward, AirTran's already relatively low unit costs are
expected to benefit as it continues to take delivery of
additional 717's. However, the airline is adding approximately
20% more capacity in 2002, in an environment when most other
airlines are continuing to operate at reduced capacity levels
and fares are not expected to return to 1999-2000 levels for the
foreseeable future. As a result, Airtran's revenues and
profitability could remain under pressure. At the same time,
AirTran's credit profile is expected to remain weak due to its
increasing use of off-balance sheet leases to finance new
aircraft deliveries.

A weaker-than-expected recovery in the airline industry and/or
another terrorist attack could hinder AirTran's recovery, either
of which could result in a downgrade.

AMERICAN LAWYER MEDIA: S&P Further Junks Corporate Credit Rating
Standard & Poor's lowered its corporate credit rating on
American Lawyer Media Holdings Inc. and its subsidiary American
Lawyer Media Inc., to triple-'C' from triple-'C'-plus and also
removed all ratings from CreditWatch, where they were placed on
Sept. 6, 2001. The downgrade reflects the company's continued
weak operating performance, primarily as a result of declining
advertising revenues for its publications.

The current outlook for the New York, New York-headquartered
company is negative.

"The downgrade reflects continued weak operating performance,
thin interest coverage, and increasing cash interest
requirements in 2003," said Standard & Poor's credit analyst Hal
Diamond. "Standard & Poor's is concerned that the lackluster
legal advertising market may continue to hamper profitability
despite cost reductions. Further deterioration in profitability
would prompt another downgrade."

Advertising revenues, which account for about 55% of total
sales, fell 18% in the three months ended March 31, 2002,
reflecting reduced regional classified and national display
advertising as a result of a weak economy.

The company's EBITDA declined 42.5% during the quarter ended
March 31, 2002, largely because of the declining advertising
revenues. In response, American Lawyer Media Holdings has
implemented a number of cost containment initiatives.

American Lawyer Media Holdings Inc. publishes 24 national and
regional legal magazines and newspapers. The company's other
businesses include book, custom and newsletter publishing,
production of legal trade shows and conferences, and educational
seminars. The company's total debt as of March 31, 2002, was
$257 million.

AMERICAN TISSUE: Court Approves $33M Asset Sale to Cascades Inc.
Cascades (CAS-TSX) announced that the American Bankruptcy Court
approved Thursday the previously announced purchase of a tissue
paper mill, two conversion sites and a paper machine. These
assets were previously owned by American Tissue Inc., a tissue
and fine paper manufacturer presently reorganizing under the
U.S. Bankruptcy Code.

With a total combined annual production capacity of 110,000
short tons, the tissue paper manufacturing units are located in
Mechanicville, New York, and in St-Helens, Oregon. This
transaction valued at $33 million US, and is in addition to the
acquisition of 33 converting lines for approximately $20 million
US, announced last April.

According to Suzanne Blanchet, President and Chief Executive
Officer of the Cascades Tissue Group, "these are strategic
acquisitions for our commercial and industrial sector that
offers a diversified range of papers in the form of bathroom
tissue, paper towels, napkins and facial tissue. Furthermore,
this transaction will push Cascades from the 5th to the 4th
position among North American tissue paper manufacturers."

The transaction is scheduled to close in mid-June, at which time
Cascades will hold a conference call for the press and analysts.

Cascades Inc. is a leader in the manufacturing of packaging
products, tissue paper and specialized fine papers.
Internationally, Cascades employs more than 14,000 people and
operates close to 160 modern and versatile operating units
located in Canada, the United States, Mexico, France, England,
Germany and Sweden. Cascades recycles more than two million tons
of paper and board annually, supplying the majority of its fibre
requirements. Leading edge de-inking technology, sustained
research and development, and 38 years of experience in
recycling are all distinctive strengths that enable Cascades to
manufacture innovative value-added products. Cascades' common
shares are traded on the Toronto Stock Exchange under the ticker
symbol CAS.

APPLIEDTHEORY: ClearBlue Acquires Managed Hosting & Dev't Assets
ClearBlue Technologies, a provider of outsourced IT management
solutions, successfully purchased assets of AppliedTheory
Corporation in a bankruptcy auction held May 24, 2002.  Under
the terms of agreement, ClearBlue Technologies will acquire
AppliedTheory's managed hosting and development services
business including corporate assets, intellectual property, and
hundreds of name-brand clients.  The purchase allows ClearBlue
to offer new and existing customers a breadth of managed
services and provides them with direct access to ClearBlue's
nationwide facilities.

"We're pleased about this groundbreaking acquisition because it
allows us to move firmly into the managed services area with an
established, proven services offering," said Mark Lambourne,
president, ClearBlue Technologies. "By acquiring a proven market
performer, we're delivering on our commitment to providing a
complete outsourced IT solution, from colocation to web

A leader in outsourced IT technology management, ClearBlue
Technologies will immediately begin extending the newly acquired
services to all its facilities, ensuring that customers are
given the highest levels of seamless, uninterrupted service
during the consolidation process.  AppliedTheory will continue
to operate under its own name in Syracuse, NY.

AppliedTheory combines its strong knowledgebase with the ability
to build, integrate and manage Internet business solutions in an
increasingly complex online economy.  The company offers a
comprehensive and fully integrated suite of managed hosting,
application development and security services, providing one of
the industry's most reliable sources for large enterprise
Internet needs.  For additional information about the company,

ClearBlue Technologies Inc. -- is a  
privately-held firm based in San Francisco, Calif.  ClearBlue
operates approximately 450,000 square feet of colocation space
at 21 carrier-neutral data centers throughout the United States.  
The company's UK operating entity, ClearBlue Technologies Ltd.,
operates one facility in London.

AVATEX CORP: March 31, 2002 Balance Sheet Upside-Down by $5MM
Avatex Corporation (OTC Bulletin Board: AVAT) announced
financial results for the fourth quarter and fiscal year 2002
ending March 31, 2002.

                         Fourth Quarter

The Company reported a loss from continuing operations of $2.6
million compared with a loss from continuing operations of $5.3
million for the same period last year.  The principal components
of the differences in loss from continuing operations for the
fourth quarter this fiscal year compared to the same period for
the prior year were:

     i) a decrease in our loss from our equity investment in
        Phar-Mor, Inc.,

    ii) a decrease in interest expense,

   iii) a decrease in interest and dividend income,

    iv) other expense of $1.1 million principally related to a
        reduction in the carrying value of our investment in
        iLife Systems, Inc. compared to other income in the
        prior period of less than $0.1 million, and

     v) decreased operating costs, principally attributed to a
        reduction in legal expenses.

After a gain of $0.7 million on disposal of discontinued
operations, a portion of which related to an operation
discontinued in fiscal 1998 and a portion to another operation
discontinued prior to 1991, the Company recorded a net loss of
$1.9 million.  For the same period last year Avatex reported net
income to common shareholders of $2.7 million.  The prior year's
comparable period contained a $4.6 million extraordinary gain on
the settlement of the note owed by the Company to the FoxMeyer
Corporation Bankruptcy Trustee, a $1.2 million extraordinary
gain from Avatex's equity in Phar-Mor's extraordinary gain on
the early extinguishment of its debt and a gain of $2.2 million
related to certain operations discontinued prior to 1991.

                         Fiscal Year 2002

The Company reported a loss from continuing operations of $18.2
million for the fiscal year ending on March 31, 2002, compared
with a loss from continuing operations of $23.1 million for the
prior year.  The reduction in total operating loss was
principally due to an increase in net legal settlements received
and a further reduction in legal expenses.  Another major
component of the reduction in loss from continuing operations
included a reduction in interest expense as a result of the
settlement and repayment of a note owed by the Company to the
FoxMeyer Corporation Bankruptcy Trustee in fiscal 2001 and the
early extinguishments of certain of the 6.75% notes due in
December 2002 issued by the Company's wholly owned subsidiary,
Avatex Funding, Inc.  The decreased equity in loss of affiliates
is principally due to a reduction in the loss attributed to our
equity interest in Phar-Mor, Inc., which filed for bankruptcy
protection under Chapter 11 of the Bankruptcy Code on September
24, 2001, partially offset by an increase in equity in loss of
Chemlink Acquisition Company, LLC and Chemlink Laboratories,
LLC.  The Company's investment in Phar-Mor was reduced to zero
at June 30, 2001.  As indicated above, the other expense for the
period principally related to a reduction in the carrying value
of our investment in iLife Systems, Inc. partially offset by
recoveries on investments written off in prior years.  The final
major component of the change in loss from continuing operations
was a $1.2 million reduction in interest and dividend income
principally due to lower investable cash balances and lower
interest rates.  The net loss from the current year includes a
$0.7 million gain on discontinued operations as described above,
compared to a $2.2 million gain on discontinued operations in
the prior year.  The Company also recognized in the current
fiscal year a $2.5 million extraordinary gain on the early
extinguishment of debt.  In the prior year the Company
recognized a $4.9 million extraordinary gain on the early
extinguishment of debt and a gain of $8.9 million from the
Company's equity in Phar-Mor's extraordinary gain on the early
extinguishment of its debt.

The Company recorded a net loss to common shareholders of $15.0
million for the current year, compared to the prior fiscal
year's net loss to common shareholders of $7.1 million.

It is possible that the Company will not have sufficient cash to
pay the $14.3 million face amount of the 6.75% notes issued by
Avatex Funding, Inc., and guaranteed by the Company, when they
mature on December 7, 2002. Management continues to investigate
strategies and alternatives to address this issue.  However,
should the Company not be able to generate sufficient cash flows
from its investments, restructure its liabilities, and/or obtain
additional financing, the Company may have to seek protection
under the federal bankruptcy laws.

At March 31, 2002, Avatex's balance sheet shows a total
shareholders' equity deficit of around $5 million.

BETHLEHEM STEEL: BP Energy Appeals Gas Contracts Rejection Order
BP Energy Company is not satisfied with Judge Lifland's decision
approving Bethlehem Steel Corporation's rejection of the two
executory gas purchase contracts with Conoco, Inc. and BP Energy

Keith H. Wofford, Esq., at Kelley Drye & Warren LLP, in New
York, tells the Bankruptcy Court that it intends to take an
appeal from Judge Lifland's order to the U.S. District Court for
the Southern District of New York for review.

BP Energy wants the District Court to answer these questions:

  (a) whether the Bankruptcy Court erred in entering the Order,
      which allowed the Debtors to reject the natural gas
      supply contract between the Debtors and BP Energy
      effective March 5, 2002, prior to the Bankruptcy Court's
      March 14, 2002 hearing to consider the Debtors' Motion
      seeking the Order; and

  (b) whether the Bankruptcy Court erred in entering the Order
      allowing rejection of the Contract retroactive to March
      5, 2002, despite the Bankruptcy Court's valid and
      existing October 15, 2001 Order Providing Adequate
      Assurance to Utility Companies, which prohibits BP Energy
      from discontinuing its supply of natural gas to the
      Debtors prior to the Hearing.

                            *   *   *

As previously reported, the two executory Gas Purchase Contracts
that Bethlehem Steel Debtors wanted to reject effective March 5,
2002, are:

   Gas Supplier           Contract Date       Expiration Date
   ------------           -------------       ---------------
   BP Energy Company      October 2000        December 31, 2002
   Conoco Inc.            October 2000        December 31, 2002

George A. Davis, Esq., at Weil, Gotshal & Manges, in New York,
relates that the Debtors entered into several gas purchase
agreement with various suppliers.  According to Mr. Davis, the
Conoco and BP Energy Contracts contain the classic provision of
price hedging, which establishes "ceiling" and "floor" prices to
protect the Debtors from excessive market price fluctuations.

For year 2002, the floor prices for natural gas are set to $3.56
for Conoco and $3.70 for BP Energy, per one million British
thermal units -- "MMBtu".  However, Mr. Davis notes that the
current spot price of natural gas remains below $2.50 and
industry sources predict the average price will remain below $3
this year.

Accordingly, Mr. Davis asserts that the contracts should be
rejected.  The Debtors will save an additional $1 for each MMBtu
purchased from other sources and the Debtors estimate the
savings to reach $8,000,000 with the rejection of the two
contracts. (Bethlehem Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

BETHLEHEM STEEL: CEO Miller Not So Concerned by USTR Exclusions
In response to media inquiries concerning the first round of
exclusions granted by the office of the U.S. Trade
Representative, the following statement is attributable to
Robert S. Miller, Jr. chairman and chief executive officer of
Bethlehem Steel Corporation:

    "The office of the USTR has granted 61 exclusions to the
tariff program on steel products announced by President Bush on
March 5. Of those 61 products, 42 are flat rolled steel, which
is the primary product of Bethlehem. Thirty-six of those
products are not made by Bethlehem, while six products are made
by Bethlehem. Of the six exclusions granted, most products come
from mills in Europe.

    "The exclusions granted by the USTR are not of a concern.
However, we remain concerned that the President's steel trade
program not be compromised by additional exemptions that would
not allow the 201 program to do the job it was intended to do.
We are hopeful that the office of the USTR will continue to
grant exemptions only to products that are not made by domestic
producers who were to be provided breathing room by the 201
program to restructure and increase competitiveness.

    "Additionally, we remain concerned by the negative publicity
about the 201 program and the erroneous implication that steel
prices are dramatically rising to the detriment of our U.S.
steel consumers. Steel prices are being restored to levels that
are far from their height and are merely taking us out of the
20-year-low price abyss that was created following the onslaught
of imports that began in late 1997."

Bethlehem Steel Corporation's 10.375% bonds due 2003 (BS03USR1),
DebtTraders says, are quoted at a price of 10. See  
real-time bond pricing.

CELL TECH: Cash Flows Insufficient to Meet Current Obligations
Cell Tech International Inc. is a network marketing company and
developing and distributing a wide range of products made with
Aphanizomenon flos-aquae (trade name Super Blue Green(R) Algae)
and other nutrients and ingredients through a network of
independent distributors. The Company currently offers twenty
different products intended to appeal to health-conscious
consumers. Its products are divided into five product lines
including Daily Health Maintenance, Digestive Health, Defensive
Health, Powdered Drinks and Snacks, and Animal and Plant Food.

Cell Tech harvests SBGA and manufactures most of its products at
its modern production facilities in Klamath Falls, Oregon. It
markets its products through independent Distributors located in
all fifty states, the District of Columbia, Guam, Puerto Rico,
American Samoa, the Virgin Islands and Canada. The Company
encourages its Distributors to recruit interested people as new
Distributors for Cell Tech products. These recruits are placed
beneath the recruiting Distributor in the "network" and are
referred to as the distributor's "downline" or "network."
Distributors earn commissions on sales by their organizations as
well as retail profits on the sales they generate directly. Cell
Tech assists Distributors in establishing their own businesses
and provide support programs such as audio and videotapes for
training, empowerment teams, seminars and an annual convention
called the August Celebration.

The Company's net sales for the year ended December 31, 2001
were $30,012,076, a decrease of 23.0% from net sales of
$38,976,663 for the year ended December 31, 2000. The decrease
in sales is directly related to a decrease in orders for the
same period with a decrease in the average order size to $116
from $124 over the same period. The average number of
distributors in 2001 decreased to an average of 52,948 in 2001,
which was 13% lower than the average of 60,899 distributors in
2000. Sales of  food supplement products are made through a
multi-level marketing network of distributors, so sales are
positively linked with the number of distributors.

Net loss for 2001 increased 80% to $5 million from $2.8 million
reported in the prior year. The increase was primarily due to:
(1) decreases in retail sales and (2) the write-down of
approximately $2.6 million in assets.

Working capital deficit at December 31, 2001 amounted to
$6,437,186. The Company had a bank overdraft of $763,105 versus
a bank overdraft of $1,310,551 as of December 31, 2000.

Cell Tech has experienced recurring net losses and has negative
working capital at December 31, 2001 and April 30, 2002. In
addition, it is not in compliance with certain restrictive
covenants of its $15 million Line of Credit Agreement with a
financial institution. Accordingly, the entire amount
outstanding under the Line of Credit Agreement of $1,847,196 at
December 31, 2001 has been classified as a current liability. In
order to pay-off the outstanding balance the lender began
withholding funds from Cell Tech's daily collections and applied
such withholdings to the outstanding balance. The Company's
ability to borrow under the Line of Credit Agreement was also
restricted as a result of the lender reducing the availability
under the Line of Credit Agreement by the cumulative amount of
the daily withholdings. As a result, the Company is experiencing
difficulty in generating sufficient cash flows to meet
obligations. These conditions give rise to substantial doubt
about Cell Tech's ability to continue as a going concern.

CENTURY COMMS: Files for Chapter 11 Reorganization in New York
Century Communications Corporation, an indirect, wholly-owned
subsidiary of Adelphia Communications Corporation (OTC: ADELA),
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York.

The bankruptcy filing was made to protect Century's fifty
percent interest in Century-ML Cable Venture, a joint venture
that owns and operates cable television systems serving the
cities of San Juan, Levittown, Toa Alta, Catano and Toa Bajo,
Puerto Rico, against attempts by ML Media Partners, L.P. to
foreclose on Century's fifty percent interest in the Joint

ML, the other fifty percent partner in the Joint Venture, has
notified Century that it intends at the start of business
Tuesday, June 11, 2002 to seize management control of the Joint
Venture and foreclose on Century's fifty percent interest in the
Joint Venture unless the Joint Venture or Adelphia completed the
purchase of ML's 50% interest in the Joint Venture for $275
million by the close of business on Monday, June 10.

In response to ML's threatened foreclosure, Century sought, but
was not able to obtain, a temporary restraining order in the
Supreme Court of the State of New York that would have prevented
ML from foreclosing on Century's 50% interest in the Joint
Venture and seizing management control.  The Chapter 11
bankruptcy filing was made following the failure to obtain the
temporary restraining order on Monday afternoon.

Adelphia Chairman and interim CEO Erland Kailbourne said, "We
had hoped that we would not have to seek bankruptcy protection
for Century and we took every reasonable step to resolve the
situation without a filing.  With all the critical issues facing
this Company, I'm deeply disappointed in ML's action, which we
believe would likely impair these valuable assets and could
prejudice other stakeholders.  Despite our continuous, good
faith efforts to reach an agreement with ML, it has taken
actions that left Century with no other choice but to seek the
protection of the bankruptcy court to avoid the wrongful seizure
of a valuable asset.

"I want to assure Adelphia's employees and customers in Puerto
Rico that the bankruptcy filing will not interfere with the
Company's continued ability to serve them.  I'd also like to
thank our employees and customers in Puerto Rico for their
continued loyalty and assure them that under the protection of
the bankruptcy court, we will continue to provide the high
quality, reliable service that they are accustomed to."

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

CENTURY COMMUNICATIONS: Voluntary Chapter 11 Case Summary
Debtor: Century Communications Corporation
        One North Main Street
        Coudersport, Pennsylvania 16915

Bankruptcy Case No.: 02-12834

Type of Business: Century Communications Corporation, an
                  affiliate of Adelphia Business Solutions,
                  Inc., is primarily engaged in the ownership
                  and operation of cable television systems and
                  earns its revenues from subscriber fees.

Chapter 11 Petition Date: June 10, 2002

Court: Southern District of New York (Manhattan)

Debtors' Counsel: Marc Abrams, Esq.
                  Willkie Farr & Gallagher
                  787 Seventh Avenue
                  New York, New York 10019-6099
                  (212) 728-8000
                  Fax : (212) 728-8111

Estimated Assets: More than $100 Million

Estimated Debts: More than $100 Million

COASTCAST CORP: NYSE Accepts Plan to Meet Listing Requirements
Coastcast Corporation (NYSE:PAR) announced that the New York
Stock Exchange has accepted the Company's proposed plan to
attain compliance with the NYSE's continued listing standards.
The Company previously announced, on April 18, 2002, that it was
not in compliance with the NYSE minimum continued listing
standards with respect to market capitalization and total

As a result of the NYSE's decision to accept Coastcast's
proposed plan, the Company listing on the NYSE will continue,
subject to quarterly monitoring by the Listings and Compliance
Committee of the NYSE for compliance with the goals and
initiatives as outlined in the plan. Failure to achieve the
plan's financial and operational goals will result in the
Company being subject to NYSE trading suspension and delisting.

Hans H. Buehler, Chairman and CEO, commented, "We appreciate the
acceptance by the Exchange of our business plan.  We are
continuing to pursue opportunities to improve our financial
performance to acceptable levels and believe that the Company
can achieve the objectives as set forth in the plan."

At its annual shareholder meeting last week, Coastcast
management obtained discretionary authority from shareholders to
effect a reverse split of its shares.  

Coastcast, a manufacturer of golf clubheads, produces metal
woods, irons and putters in a variety of metals, including
stainless steel and titanium. Customers include Callaway
(including Odyssey), Cleveland, Cobra, Ping and Titleist. The
company also manufactures a variety of investment-cast
orthopedic implants and surgical tools and other specialty
products that are made to customers' specifications.  
Coastcast's has been downsizing rapidly in response to eroding
sales and market share as cheaper products made in China appear
in the marketplace.    

COLONIAL COMMERCIAL: Violates Nasdaq Listing Requirements
Colonial Commercial Corp. (Nasdaq:CCOME) (Nasdaq:CCOPE) has
received a Nasdaq Staff Determination that the Company failed to
timely file its Form 10-Q for the quarter ended March 31, 2002,
as required by Nasdaq Marketplace Rule 4310(C)(14), and that the
Company's securities are therefore subject to delisting from the
Nasdaq SmallCap Market.

At a hearing before a Nasdaq Listing Qualifications Panel on May
16, 2002 the Company asked for a review of prior Nasdaq Staff
Determinations that the Company's securities were subject to
delisting from the Nasdaq SmallCap Market because the Company
had not filed its Form 10-K for 2001, the market value of its
publicly held shares of common stock was less than the required
$1 million, and the closing bid price of its common stock was
less than $1 per share. The Panel may or may not grant the
Company's request for continued listing. In making its
determination the Panel will also consider the Company's failure
to timely file its Form 10-Q for the quarter ended March 31,

The Company has not filed its Form 10-K and its Form 10-Q
because completion of its audit for 2001 has been delayed by
Chapter 11 reorganization proceedings of its wholly owned
subsidiary, Atlantic Hardware & Supply Corporation. The Company
expects that it should be in a position to file its Form 10-K
and its Form 10-Q shortly once its audit is completed.

COMDISCO INC: Intends to Implement Stay Bonus and Incentive Plan
Comdisco, Inc., and its debtor-affiliates seek the Court's
authority to approve their Stay Bonus Plan and Management
Incentive Plan.

George N. Panagakis, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, relates that the Stay Bonus Plan was
designed to provide incentives for the Debtors' essential
support and professional staff to remain in the Debtors' employ
throughout the pendency of their Chapter 11 cases.  The
Management Incentive Plan was designed to provide incentive
compensation to certain key employees tied to various
performance-based criteria related to maximizing the value of
the Debtors' estates.

Mr. Panagakis explains that in order to maximize recoveries
under the Plan, it is essential that critical employees be
retained and remain motivated to execute the Debtors' port-
petition emergence business strategies under the Plan.  In
essence, the employees need to know what they will be paid for
maintaining their employment with the Debtors.  "The Plans are
designed to clearly provide compensation incentives both for
length of stay and for performance," Mr. Panagakis adds.

In addition, the Plans have been heavily negotiated with the
Creditors' Committee.  Information was also provided to the
Equity Committee and the Plans are described in the Disclosure
Statement, thus providing the Committee's with ample opportunity
to comment.  Mr. Panagakis further relates that the Debtors have
been working closely with their financial advisors, the Human
Capital Group of Arthur Andersen, in developing the Plans and
assess the reasonableness of the Plans and their necessity in
the marketplace.  "As a result, the Plans represent strategic,
well-targeted programs designed to maximize employee incentive
to remain with the Debtors," Mr. Panagakis says.

                         Stay Bonus Plan

The Stay Bonus Plan is a retention program covering
approximately 426 employees, including 65 European employees,
directly responsible for the success of the Plan.  Eligible
participants under the Plan will accrue one week's salary for
every two weeks of work after April 1, 2002.  One-half of the
accrued benefits will be paid in two semi-annual installments
paid on or about May 15 and November 15 of each year.  The
remaining one-half will be paid upon job termination other than
for cause or voluntary resignation.  The total cost of the Plan
is expected to be approximately $18,500,000.  Employees eligible
under this Plan are not eligible to participate in the
Management Incentive Plan. This Plan also replaces any prior
bonus/incentive/commission compensation programs for which the
employees would have been eligible, with the exception of any
payments with respect to previously approved retention programs
and payments from the previously approved chairman's
discretionary fund.

                     Management Incentive Plan

The Management Incentive Plan covers key managers and employees
directly responsible for the overall direction of a particular
business unit and the results achieved within the business unit.
This Plan also covers key corporate employees whose services are
required to facilitate business operations and to administer
claims and related Chapter 11 matters.  "This Plan replaces any
prior bonus/incentive/commission compensation programs for which
employees would have been eligible," Mr. Panagakis reports.
Employees who voluntarily terminate their employment prior to
their respective payment dates under the Plan or are terminated
for cause, are not eligible for any payments from this Plan that
have not already been paid with the exception of payments for
previously approved retention programs and chairman's
discretionary fund.

Mr. Panagakis explains further that this Plan is tailored for
each of the Reorganized Debtors' business units -- U.S. Leasing,
Ventures, European Leasing and Corporate Asset Management Group
-- as well as at the corporate level.  The Plan establishes
varying levels of incentive compensation depending upon whether
the business unit reaches its threshold target or business plan
target.  For purposes of measuring achievement relative to the
Plan, cash flows will be discounted using rates specified in
each business unit plan at the time the cash is distributed to
creditors.  However, prior to the initial distribution after
confirmation, the incremental cash that would have been
available for distribution at the end of each month will be
discounted at the appropriate discount rate from the end of that
month to April 1, 2002.

  (i) U.S. Leasing

      The Plan for the U.S. Leasing unit covers approximately 32
      key employees.  All participants are eligible to receive
      semi-annual performance bonuses, and approximately 22 of
      these employees are eligible to receive upside sharing
      opportunities.  The Debtors have set a Leasing threshold
      target of approximately $571,000,000 and a business plan
      target of approximately $649,000,000 on a present value
      basis using an appropriate discount rate to April 1, 2002.

      The semi-annual performance bonus component is designed to
      reward employees for meeting specified business
      objectives.  The employees who will meet their specified
      objectives will accrue bonuses up to a certain percentage
      of their annual base salary for each six months of
      employment after April 1, 2002.  For employees eligible
      for an upside sharing bonus, after the end of fiscal year
      2003, these semi-annual bonus percentages will be reduced
      by one-half.  For participants other than sales personnel,
      one-half of their accrued bonuses will be paid on or about
      May 15 and November 15 of each year; the remaining one-
      half will be paid upon job termination other than for
      cause or voluntary resignation.  Sales personnel will
      receive the entire accrued bonus amount at each semi-
      annual payment date.  One-half of the bonus amounts will
      be determined by management's assessment of individual job
      performance.  The other half will be dependent upon
      meeting the business unit's cumulative cash-flow
      objectives necessary to achieve the targeted threshold and
      plan recoveries.

      For the cash flow component, participants are eligible to
      receive a range of 70% of their cash flow bonus amount to
      100% of the amount.  If the unit does not achieve 90% of
      the threshold target for that time period, on a cumulative
      basis, participants are not eligible to receive cash
      flow bonus amount.  The total maximum cost of the semi-
      annual bonus component for eligible employees under this
      unit is approximately $8,800,000.

      Participants will be considered fully vested in the upside
      sharing plan when 75% or greater of the total present
      value recovery has been realized.  "Fully vested means
      that the participants will receive their full share in the
      upside sharing plan at the end of the term during
      distribution.  All other salary and bonus amounts will not
      be paid," Mr. Panagakis says.  If terminated without cause
      prior to achievement of 75% of the total value recovery,
      participants will receive a pro rata share of the upside
      sharing amount.  However, if prior to termination, the
      employee satisfactorily performed all duties under the
      plan and at least 50% of the total present value recovery
      has been achieved, then the employee will be considered
      fully vested.  "Upside sharing payments will not be made
      until the end of term," Mr. Panagakis adds.

      If substantially all of the U.S. Leasing assets are sold
      prior to the unit achieving its business plan target, and
      assuming that performance is either tracking or exceeding
      the Plan, then the participants will receive the greater

      (a) the upside sharing payout at plan target; or

      (b) the upside sharing amount if the sale proceeds exceed
          the plan target.

(ii) Ventures

      The Plan under this unit covers approximately 25 key
      employees.  This program is structured similarly to that
      for the U.S. Leasing unit and includes a semi-annual
      performance bonus and an upside sharing opportunity.  The
      Debtors have set the threshold target for this unit at
      $376,000,000 and a business plan target at $427,000,000 on
      a present value basis using an appropriate discount rate
      to April 1, 2002.  For the semi-annual performance bonus,
      eligible participant's bonus percentages are based on
      position and range from 37.5-50% of annual base salary.

      The total maximum cost of the semi-annual bonus component
      for eligible employees is approximately $4,000,000.  The
      upside sharing opportunities has been established at
      predetermined levels and is based upon exceeding targeted
      present value recovery in connection with the run off of
      the Ventures portfolio.  In addition, the Ventures leasing
      portfolio includes the ability to realize value on
      warrants and equity issued to the debtors by customers.
      The Debtors have designed the Plan to create potential
      value opportunities in their warrant and equity positions
      through restructuring the obligations and re-pricing of
      warrants while seeking to maximize the value of the
      portfolio.  "Since the value of the warrants and equity is
      dependent upon market factors, the Debtors will not overly
      compensate the employees if a higher range should be
      realized," Mr. Panagakis tells the Court.  Only 25% of
      every dollar realized in both warrants and equity proceeds
      contributes toward achieving the threshold and plan

(iii) Europe

      Aside from the previously approved and implemented
      country-specific retention programs, the Chief Executive
      Officer and the Chief Financial Officer of European
      operations are eligible to participate in the European
      Management Incentive Plan.  With respect to the core
      European countries, the two participants are eligible to
      receive a bonus of 1.5 to 2 times base salary in
      connection with a sale of those business units depending
      upon percentage of Net Book Value realized and speed of
      closing a transaction.  The total maximum cost of this
      Plan in the event of a sale is approximately $1,400,000.

      If a sale cannot be timely effectuated or a decision is
      made to abandon a sale process, then the sale compensation
      plan will not be operative.  In its place:

        (a) the two participants would be eligible to receive a
            semi-annual performance bonus of up to 75% of base
            salary if other business objectives related to an
            orderly liquidation are satisfied; and

        (b) the two participants will receive a one-time payment
            of up to 100% of base salary if more than 75% of
            book value is ultimately realized on the core
            European assets.

      "The maximum cost of the orderly liquidation program will
      not exceed $1,400,000 per year during the liquidation
      period," Mr. Panagakis states.

      With non core European businesses, the two participants
      are eligible to receive a bonus payment of up to 50% of
      base salary if the leasing portfolios in those countries
      are either sold, orderly liquidated or consolidated into
      the core countries with the respective offices closed by
      December 31, 2002.

      All other employees in the core and non-core European
      countries are eligible to participate in retention and
      incentive programs with a total aggregate cost of

(iv) Corporate Asset Management Group

      Five key employees are eligible to participate under this
      unit relating to the corporate assets not included in U.S.
      Leasing, Ventures or European operations.  This program is
      structured similarly to those of the other units and
      includes a semi-annual performance bonus and an upside
      sharing opportunity.  The Corporate Asset Management group
      threshold target has been set to $465,000,000 and a
      business plan target of $527,000,000 on a present value
      basis using appropriate discount rate to April 1, 2002.

      Bonuses will be based on a percentage of a participant's
      annual salary for each six months of employment after
      April 1, 2002.  These percentages are based on position
      and range from 50-75% of annual base salary.  The total
      maximum cost of the semi-annual bonus component for
      eligible Corporate Asset Management Group employees is
      approximately $1,400,000.

      Three of the five eligible employees in this unit will
      share in the upside sharing opportunity based upon
      exceeding targeted present value recovery in connection
      with the sale of all corporate assets not included in the
      other units.

      Two of the five eligible employees under this unit will
      share in 5% of the upside realized from the sale of
      specific Electronics and Laboratory and Scientific
      Inventory in excess of a threshold target of $29,000,000
      and a plan target of $38,400,000.  The anticipated cost of
      this program is approximately $29,000,000.  For these two
      participants, the upside sharing bonus is capped at an
      achievement of 150% of the plan target.

  (v) Corporate

      Approximately 17 division executives and members of
      corporate management whose services facilitate the overall
      functioning of the Company's operations is eligible to
      participate in a semi-annual performance bonus plan.
      Approximately 10 employees are eligible to participate in
      an additional incentive pool based on meeting certain
      claims reduction targets.  This program is structured
      similarly to those of the other units.  Bonus percentages
      will be based on position and range from 50-150% of annual
      base salary.  For the Chief Executive Officer, one-half of
      the semi-annual bonuses shall be reduced after fiscal year
      2003.  The Debtors have set a consolidated corporate
      threshold target of approximately $1,511,000 and a plan
      target of approximately $1,717,000 on a present value
      basis using various discount rates to April 1, 2002.  The
      total maximum cost of the semi-annual bonus component
      under this unit is $9,900,000.

      In addition, the ten corporate management and staff
      participants with direct line responsibility for claims
      management is eligible to participate in an incentive
      pool based on reducing off-balance sheet claims and tax
      claims filed in these Chapter 11 cases.  To the extent
      that those claims are reduced to below a threshold of
      $267,000,000, participants will be eligible to share in a
      graduated incentive pool.

                       Severance Plan

Mr. Panagakis relates that in order to provide an appropriate
severance compensation for senior key executives and senior
managers who are new to the Company, an enhanced severance plan
is now established.  Designated senior executives and senior
managers are eligible for the Plan.  This Plan will pay the
greater of:

  (i) the regular severance program;

(ii) 100% of base salary for senior executives and 50% of base
      salary for senior managers, if terminated within 12 months
      of emergence from the Chapter 11 cases; or

(iii) 50% of annual base salary for senior management, if
      terminated after 12 months of emergence from the Chapter
      11 cases.

For participants in this Plan, the semi-annual bonus plan or
upside sharing plan (whose total compensation from April 1, 2002
to their termination exceeds 300% of their total base salary),
the end of term payment will be reduced by the excess up to a
maximum reduction equal to the total severance amount.
Participants whose end-of-term payments have not been reduced by
the full amount of severance will receive their severance
payments in monthly installments following termination.
Employees eligible for this program will no longer be eligible
if he or she participates in the Management Incentive Plan.

                     Consulting Agreement

According to Mr. Panagakis, the Debtors propose to enter into a
consulting agreement with William Pontikes to provide consulting
services associated with the implementation of their post
emergence business strategy.  "Because the Consultant has a long
standing relationship with the Company and is currently a
Director and was formerly a senior officer of the Company, the
Debtors seek the Court's approval out of abundance of caution,"
Mr. Panagakis adds.  The Debtors seek to enter into this
consulting agreement because of the Consultant's unique
knowledge of the Company, relationships with the Company's
employees and ability to help maximize the value of the estates
through the implementation of the Plan.  The Consulting
agreements provide that:

  (i) the Agreement is for no more than 24 months, starting at
      the earlier of:

      (a) the date when the Consultant ceases to be employed by
          the Company; or

      (b) August 1, 2002.

(ii) the Consultant will provide on-site assistance and
      spearhead special assignments as directed by the
      President, Chief Executive Officer or other officers of
      the Company;

(iii) the Consultant will be compensated with a base salary of
      $275,000 annually;

(iv) the Consultant will also be eligible for incentive
      compensation of:

      (a) an emergence bonus of $68,750;

      (b) a $137,000 annual bonus, contingent on meeting certain
          performance objectives, one-half of which is payable
          semi-annually and the other half paid at the end of

      (c) an upside sharing bonus in the amount of $495,000 if
          the corporate Plan is achieved or $742,500 if 10% or
          more exceeds the plan. (Comdisco Bankruptcy News,
          Issue No. 29; Bankruptcy Creditors' Service, Inc.,

COMVERSE: S&P Changes Outlook of BB Corporate Rating to Negative
Standard & Poor's revised its outlook on Comverse Technology
Inc. to negative from positive. The corporate credit rating on
Comverse is double-'B.' The outlook revision reflects the
continuing deterioration in operating performance and
profitability measures resulting from the prolonged slump in
investment spending by wireless and wireline telecommunications
network operators, Comverse's primary served market.

Woodbury, New York-based Comverse is a leading supplier of
software-driven voice mail and related messaging systems for the
telecommunications industry. It has total debt outstanding of
$600 million

Comverse management expects to see a 10% decline in revenue in
the current quarter ending July 31, 2002, from the $211 million
in revenues reported for its fiscal first quarter, which was
itself a 20% decline from the previous quarter. The net loss is
expected to widen to about $22.5 million in the current quarter
from $8.2 million reported for the fiscal first quarter.

The deterioration in operating performance is due primarily to
the ongoing slump in spending by telecommunications network
operators. About 80% of Comverse's revenues are generated from
selling to the telecommunications vertical end market, which
continues to delay purchases of non-essential equipment. While
Comverse has responded with cost-cutting efforts, those measures
have not offset the significant revenue declines.

"Further deterioration in operating performance and/or a
prolonged delay in recovery in demand in Comverse's end market
could cause the rating to be lowered," said Standard & Poor's
credit analyst Joshua G. Davis.

The weak profitability is offset by a highly liquid balance
sheet that includes nearly $1.9 billion of cash.

CONSECO INC: Fitch Hatchets Insurance Units' Ratings Down to BB
Fitch Ratings has lowered the insurer financial strength ratings
of Conseco Inc.'s insurance subsidiaries with the exception of
Manhattan National Life Insurance Company to 'BB' from 'BBB-'.
Fitch has affirmed all other Conseco-related corporate ratings.
All ratings are removed from Rating Watch Negative. The Rating
Outlook for all ratings is Negative.

The downgrade of Conseco's insurer financial strength ratings
reflects the decline in statutory capital adequacy of insurance
companies on a consolidated basis. Previous rationale for the
large gap between Conseco's senior debt rating and insurance
subsidiaries' financial strength ratings was the strong
consolidated statutory capitalization of the insurance
operations. This action narrows the gap.

Adjusted statutory capital declined from $2,530 million at year-
end 2000 to $2,163 million at year-end 2001. This decline was
tempered by insurance accounting codification adopted in 2001
that added $147 million to adjusted capital. Statutory net loss
was $110 million in 2001 including $188 million of net realized
capital losses. In addition, the company had unrealized net
capital losses of $147 million and paid a dividend of $192
million. NAIC risk based capital ratio was 240% at year-end 2001
vs. 244% at year-end 2000. During 2001, the NAIC adopted
material changes in the risk based capital formula. Fitch
estimates that the impact of the formula changes improved
Conseco's ratio by approximately 40 points. In addition, the
adoption of statutory accounting codification improved the ratio
by 19 points. Therefore, the company's ratio decreased
significantly on a comparable basis meaning its capital adequacy
declined on an economic basis.

The affirmation of the Conseco senior debt and preferred stock
ratings, the removal of Rating Watch Negative and the assignment
of a Negative Rating Outlook for all ratings follows resolution
of Fitch's near term concerns regarding principal repayments,
and the unqualified audit opinion received on the year-end 2001
financial statements.

Ratings on Conseco Finance also consider this company's good
relations with its banks and the significantly reduced
outstanding debt exposure during the last three months.
Notwithstanding, the Negative Rating Outlook continues to center
on the company's dependence on secured funding facilities, the
lack of unencumbered assets on the balance sheet and uncertain
direction of credit quality. During the second half of 2001, and
to a lesser extent the first quarter of 2002, CFC more actively
utilized loss mitigation strategies (payment extensions,
forebearance, rate modifications, default transfer of equity) to
reduce the stress put on its customers from the economic
downturn. These policies are intended to defer foreclosure and
ultimate charge-offs on outstanding manufactured housing and
subprime home equity loans. However, Fitch is uncertain if these
policies will ultimately generate lower loss results, or simply
delay actual loss recognition. Additionally, while the
retirement of most of the outstanding unsecured debt is viewed
as a positive development, Fitch still recognizes that CFC
incurs further risk through the $1.5 billion guarantee of
payments related to subordinated pieces in its securitization

Fitch remains concerned about Conseco's ability to meet 2003
debt maturities. Fitch believes the company will require
additional asset sales or other cash raising transactions. These
efforts will be challenging given the difficult economic
environment and the company's limited financial flexibility.
Fitch will continue to monitor progress on these issues.

Conseco has entered into a definitive agreement to sell
Manhattan National to Great American Financial Resources, Inc.
for $48.5 million. Upon completion of the transaction, Fitch
expects to upgrade Manhattan National's insurer financial
strength rating. Therefore, the rating remains at 'BBB-' on
Rating Watch Evolving. If the transaction with Great American is
not completed, the Manhattan National rating would be lowered to
'BB' with a Negative Rating Outlook.

All ratings removed from Rating Watch Negative

                         Conseco Inc.

     --Long-term rating 'B-', Affirmed, Negative;

     --Senior debt rating 'CCC+', Affirmed, Negative;

     --Short-term rating 'B'; --Commercial paper rating 'B'.

                  Conseco Financing Trust I-VII

     --Preferred securities ratings 'CCC', Affirmed, Negative.

                      Conseco Finance Corp.

     --Senior debt rating 'CCC', Affirmed, Negative.

     --Short-term rating 'C'.

                    Insurer Financial Strength

     --Bankers Life & Casualty Co., lowered to 'BB' from 'BBB-',

     --Conseco Annuity Assurance Co., lowered to 'BB' from
       'BBB-', Negative;

     --Conseco Direct Life Insurance Co., lowered to 'BB' from      
       'BBB-', Negative;

     --Conseco Health Insurance Co., lowered to 'BB' from
       'BBB-', Negative;

     --Conseco Life Insurance Co., lowered to 'BB' from 'BBB-',

     --Conseco Life Insurance Co. of New York, lowered to 'BB'
       from 'BBB-', Negative;

     --Conseco Medical Insurance Co., lowered to 'BB' from
       'BBB-', Negative;

     --Conseco Senior Health Insurance Co., lowered to 'BB' from           
       'BBB-', Negative;

     --Conseco Variable Insurance Co., lowered to 'BB' from
       'BBB-', Negative;

     --Pioneer Life Insurance Co., lowered to 'BB' from 'BBB-',      

Conseco Inc.'s 10.75% bonds due 2008 (CNC08USR1), DebtTraders
reports, are trading at about 38. For real-time bond pricing,

CORECARE BEHAVIORAL: Commences Chapter 11 Reorg. Proceedings
On May 6, 2002, CoreCare Behavioral Health Management, Inc.
d/b/a/ Kirkbride Center and CoreCare Realty Corporation filed
for relief under Chapter 11.  This action was taken to preserve
the Company's major asset, Kirkbride Center, as its mortgage
expired on May 15, 2002 and a mortgage extension was uncertain.  
The Company has engaged Ciardi, Maschmeyer & Karalis, P.C.

Kirkbride Center, formerly known as the Institute of
Pennsylvania Hospital, was acquired in February 1997 with an
initial appraised value of $11,700,000.  Today 14 acres of the
21-acre property has been valued at $25,300,000 by
PricewaterhouseCoopers and 4 acres of the 7.75-acre excess land
are under agreement of sale for $1,750,000 to J&K Development
Company. Kirkbride Center is owned by CoreCare Behavioral Health
Management, Inc. Portions of the Center are leased to its sister
Company, CoreCare Realty Corporation, which sublets space to
various third party tenants.  The appraised value of the
property exceeds the first mortgage of $13,750,000. While the
Company has other significant debts it is confident that due to
improving asset value it will be able to secure a mortgage
refinancing to restructure its debts.

CoreCare Systems, Inc. (Pink Sheets: CRCS) the parent Company of
CoreCare Behavioral Health Management, Inc. and CoreCare Realty
Corporation was NOT included in the Chapter 11 filing.  
Westmeade Healthcare, Inc. and Quantum Clinical Services Group,
wholly owned subsidiaries of the parent Company were NOT
involved in the Chapter 11 proceedings.  CoreCare Systems
provides a comprehensive range of behavioral health services
through its two subsidiaries, CoreCare Behavioral Health
Management, Inc. and Westmeade Healthcare, Inc.; clinical drug
testing for central nervous systems drugs through its
subsidiary, Quantum Clinical Services Group and tenant leasing
through CoreCare Realty Corporation.

CoreCare Behavioral Health Management, Inc. is licensed as a 74-
bed psychiatric hospital and a 148-bed Drug & Alcohol
Rehabilitation program as well as several intensive outpatient
programs.  In February 2002, CoreCare Systems, Inc. sold the
real estate and buildings owned in Bucks County by Westmeade
Healthcare, Inc. and relocated the behavioral services to
Kirkbride Center as a tenant.  This relocation allowed Westmeade
to expand its licensed services from 32 beds to 42 beds while
reducing overhead and eliminating debt. Kirkbride Center located
at 49th & Market Streets in West Philadelphia is the Company's
remaining property and now contains 100% of CoreCare Systems

CoreCare Systems, Inc. filed its last 10-K in November 2000
which included its 1999 audit report.  Reporting delays have
occurred due to the Company's change of audit firms for its 1999
audit to BDO Seidman.  In connection with the 1999 audit, the
Company restated its 1998 and 1997 audit reports to present them
in accordance with GAAP which disrupted the Company's reporting
cycle.  The Company's auditors have substantially completed
their 2000 audit procedures and the 2000 audit report is now
being finalized.  The unaudited consolidated CoreCare Systems
financial statement for 2000 shows net revenues of $21,731,557
and a net loss after interest and depreciation of $2,467,545.
Comparison of these results to the 1999 audit show a decrease in
revenue from $25,799,731 in 1999 by 16% due to the downsizing of
the hospital.  Net loss for the Company improved from $7,251,311
in 1999 to $2,467,545 in 2000, an improvement of over
$4,700,000, due to significant re-engineering and the dramatic
growth of drug and alcohol program.  While the Company's 2001
audited financial statements will not be immediately available,
the Company has continued to improve its overall operating
efficiency and results. Additionally management expects 2002 and
future years to be profitable given the economies of scale that
the Company has achieved.  These economics are a result of its
consolidation of services at Kirkbride; two recent
rehabilitation bed expansion to 148 beds which occurred in
October 2001 and March 2002, and increasing tenant revenue.

CoreCare Systems, Inc. is a regional provider of behavioral
services in Southeastern Pennsylvania.  It provides services to
adolescents, geriatrics, dual diagnosis, and drug and alcohol
rehabilitation patients.  The Company also conducts clinical
drug trials as well as developing its real estate holdings.

COVANTA ENERGY: Hearing on Deloitte's Engagement Tomorrow
Judge Blackshear permits Deloitte, on an interim basis pending a
final hearing on June 12, 2002, to perform any and all auditing,
accounting, tax advisory, and consulting services for Covanta
Energy Corporation and its debtor-affiliates.

As previously reported, Covanta wishes to employ and retain,
pursuant to Section 327(a) of the Bankruptcy Code and Bankruptcy
Rule 2014(a), Deloitte & Touche as their independent auditors,
accountants, tax advisors, and consultants.  Deloitte will
perform the extensive independent auditing and accounting,
tax advisory, and consulting services that the Debtors' will
require during the Chapter 11 proceedings. They ask that
employment be nunc pro tunc to the Petition Date.

Deloitte's responsibilities in these Chapter 11 cases will

     (a) auditing the consolidated annual financial statements
         of the Debtors and auditing the consolidated annual
         financial statements of the Debtors' subsidiaries;

     (b) auditing the annual financial statements of retirement
         plans of the Debtors and auditing the annual financial
         statements of retirement plans of the Debtors'

     (c) performing reviews of interim financial statements;

     (d) tax services, including, without limitation, preparing
         the Debtors', and as required, the Debtors'
         subsidiaries, federal, state, local and foreign income
         tax returns, assisting the Debtors, and as required,
         the Debtors' subsidiaries, in responding to federal,
         state, local and foreign income tax examinations,
         reviewing and analyzing the Debtors' quarterly and
         annual worldwide tax accruals, and providing expatriate
         tax services, sales and use tax rebate services, and
         other tax services;

     (e) consulting services relative to certain price
         adjustments in connection with previously completed
         transactions unrelated to the potential acquisition
         referred to below; and

     (f) as may be agreed to by Deloitte, rendering other
         professional services, including, without limitation,
         business interruption and insurance claim consulting
         services, actuarial and accounting assistance,
         including, without limitation, assistance in connection
         with reports requested of the Debtors by the Court, the
         U.S. Trustee and/or parties-in-interest, as the
         Debtors, their attorneys, or financial advisors may
         from time to time request.

Furthermore, the Debtors have paid Deloitte approximately
$4,932,000 for audit, accounting, tax and consulting services
rendered to the Debtors during 2001 and $3,237,000 to date
during 2002 prior to the Petition Date. Deloitte is currently
owed approximately $50,000 for sales and use tax services and
approximately $28,000 for expatriate tax services rendered pre-

Deloitte's rates are:

     Partner/Principal/Director     - $470 to $540 per hour
     Senior Manager                 - $340 to $450 per hour
     Manager                        - $250 to $320 per hour
     Senior Accountants/Consultants - $200 to $240 per hour
     Staff Accountants/Consultants  - $180 to $200 per hour
     Administrative Assistants      -  $60 per hour

In addition, reasonable expenses, including travel, report
production, delivery services, and other expenses incurred in
providing the services, will be included in the total amount
billed. (Covanta Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

CRESCENT REAL ESTATE: Appoints Three Additional Trust Managers
Crescent Real Estate Equities Company (NYSE:CEI) said that
Dennis H. Alberts, Robert W. Stallings, and Terry N. Worrell
have been elected to the Company's Board of Trust Managers.

Dennis H. Alberts serves as president and chief operating
officer of Crescent. Prior to joining Crescent, he founded and
served as president and chief executive officer of Pacific
Retail Trust, a privately held retail shopping center REIT whose
largest shareholder was the Security Capital Group. Pacific
Retail Trust was merged into Regency Realty Inc., a publicly
traded REIT, in 1999. Prior to founding Pacific Retail Trust,
Mr. Alberts served as president and chief executive officer of
Rosewood Property Company, leading the company's office and
hotel operations. Mr. Alberts has also served as president and
managing partner of Trammell Crow Residential Companies of

Robert W. Stallings currently serves as chairman and president
of Stallings Capital Group, Inc., a Dallas-based merchant
banking firm specializing in the financial services industry.
Mr. Stallings is non-executive chairman of Gainsco, Inc., a
specialty property and casualty insurance enterprise, for whom
he also provides consulting services. Mr. Stallings also serves
as a director of Texas Capital Bank. He is the recently retired
chairman and founder of ING Pilgrim Capital Corporation, a $20
billion asset management firm which was acquired by ING Group in
September 2000 and with which he had been associated since 1991.

Terry N. Worrell, president of Worrell Investments, has been a
private investor in securities, real estate, and other business
ventures since 1989. From 1974 to 1989, he served as founder,
president, and chief executive officer of Sound Warehouse of
Dallas, Inc. which operated 150 stores nationwide and was sold
to the Blockbuster organization.

Mr. Worrell serves as a director of Regency Centers Corp., a
developer/operator of shopping centers, and Tremont Corp., a
holding company with operations conducted primarily through NL
Industries and Titanium Metals.

John C. Goff, chief executive officer, commented, "In the two
years that Denny Alberts has served as Crescent's chief
operating officer, he has been integral in rebuilding the
management team and repositioning the company for future growth.
He brings tremendous leadership qualities and 30 years of real
estate experience to our board, and we welcome him."

Goff continued, "I am also honored to have Bob Stallings and
Terry Worrell join our board. Both Bob and Terry have
successfully built multi-billion dollar companies from the
ground up and have significant experience operating them as
public companies. In addition, they have a great understanding
of the investment business, which will be valuable to us as we
move forward executing our strategic vision."

Crescent's Board of Trust Managers consists of: Richard
Rainwater, chairman; John Goff, chief executive officer; Dennis
Alberts, president and chief operating officer; Anthony Frank;
William Quinn; Paul Rowsey; David Sherman; Bob Stallings; and,
Terry Worrell.

Crescent Real Estate Equities Company, through its subsidiaries,
owns and manages some of the highest quality properties in the
country. Its portfolio consists primarily of 76 office buildings
totaling over 28 million square feet located in six states, as
well as world-renowned luxury resorts and spas and upscale
residential developments.

As reported in the April 3, 2002 edition of Troubled Company
Reporter, Standard & Poor's affirmed its ratings on Crescent
Real Estate Equities Co. and Crescent Real Estate Equities L.P.
and removed them from CreditWatch, where they were placed on
Jan. 23, 2002.  The outlook remains negative.

Crescent's financial profile is weak, with low coverage measures
and a largely encumbered portfolio that limits financial
flexibility. The company's core office portfolio performance has
been fairly stable but is highly concentrated in markets with
current weak fundamentals. Sustained portfolio weakness, coupled
with the potential for meaningful activity on the company's
share repurchase program (which has over $400 million
remaining), could stress financial measures further, prompting a
one-notch downgrade. Alternatively, a return to stable would be
driven by successful portfolio performance, despite the current
market softness, and a demonstrated commitment by management to
a more conservative financial profile with a tempered policy
toward share repurchases.

       Ratings Affirmed And Removed From CreditWatch

     Issue                           To            From

Crescent Real Estate Equities Co.
   Corporate credit rating          BB            BB/Watch Neg
   $200 million 6-3/4%
      preferred stock               B             B/Watch Neg
   $1.5 billion mixed shelf  prelim B/B+   prelim B/B+/Watch Neg

Crescent Real Estate Equities L.P.
   Corporate credit rating          BB            BB/Watch Neg
   $150 million 6 5/8% senior
      unsecured notes due 2002      B+            B+/Watch Neg
   $250 million 7 1/8% senior
      unsecured notes due 2007      B+            B+/Watch Neg

DESA HOLDINGS: Files for Chapter 11 Reorganization in Delaware
DESA Holdings Corporation and DESA International, Inc., of
Bowling Green, Kentucky, have filed voluntary petitions for
reorganization under chapter 11 of the Bankruptcy Code. DESA
International is a leading manufacturer and marketer of zone
heating and specialty power tool products.

In its filings in U.S. Bankruptcy Court for the District of
Delaware, in Wilmington, DESA said it has obtained a commitment
from a bank syndicate led by Bank of America to provide a $35
million debtor-in-possession credit facility. The DIP facility,
which is subject to Bankruptcy Court approval, will be used to
supplement the Company's existing cash flow, and to ensure its
ability during the reorganization to pay vendors, suppliers and
other business partners under normal terms and to meet employee
payroll and benefit obligations.

As part of the reorganization, the Company intends to pursue a
sale process involving substantially all of its operating
assets, such that DESA would continue to operate with the same
people, products, and vendor and customer relationships under a
new ownership structure. In that regard, the Company has already
received expressions of interest from various potential bidders,
and it expects to consummate a sale transaction by the end of
September 2002.

W. Michael Clevy, President and Chief Executive Officer of DESA
International, Inc., said: "DESA is an operationally strong
company with outstanding products, brands, customer and vendor
relationships, and people. For several years, however, we have
been burdened by a level of debt that has hampered our growth
and earnings potential. The reorganization we are pursuing will
enable us to make a fresh start. The new DESA will be a
stronger, healthier company, with reduced debt and a new
ownership structure. The $35 million of DIP financing we have
arranged with Bank of America will ensure DESA'a ability to meet
our vendor obligations going forward, to continue to serve our
customers, and to meet ongoing payroll and benefit obligations,"
Mr. Clevy said.

DESA said that the Company's overseas operations, including its
manufacturing facilities in the People's Republic of China, are
not included in the filing, and will continue to operate as
usual. The Company said that its facilities in North America
should also continue to operate normally, and that it does not
expect Monday's court filing to result in the closing of any of
its facilities or any workforce reductions.

DESA said that it filed 22 first day motions in the Delaware
bankruptcy court to support its customers, vendors, employees,
and other stakeholders. The court filings include requests to
obtain interim financing authority; to retain legal, financial
and other professionals to support the Company's reorganization
cases; and for other relief. In its filings, DESA listed total
assets of $235 million and total liabilities of $370 million.

DESA International, Inc. manufactures and markets high-quality
zone heating products, hearth products, security lighting and
specialty tools for use in homes and commercial buildings. Its
products carry the Vanguard, Comfort Glow, Reddi Heaters,
Remington, Master and Heath/Zenith brand names. DESA sells its
products through multiple consumer and commercial channels of
distribution including home centers, mass merchants, hardware
cooperatives, specialty heating distributors, construction and
industrial equipment dealers, farm supply outlets and natural
gas utilities.

DESA HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
Lead Debtor: DESA Holdings Corporation
             2701 Industrial Drive
             Bowling Green, Kentucky 42102

Bankruptcy Case No.: 02-11672

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     DESA International, Inc.                   02-11673              

Chapter 11 Petition Date: June 8, 2002

Court: District of Delaware (Delaware)

Debtors' Counsel: Laura Davis Jones, Esq.
                  Pachulski, Stang, Ziehl Young & Jones
                  919 N. Market Street
                  16th Floor
                  Wilmington, Delaware 19899-8705
                  302 652-4100
                  Fax : 302-652-4400

Estimated Assets: $1 Million to $50 Million

Estimated Debts: $50 Million to $100 Million

Debtors' 30 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Greenwich Street Capital   Public Bonds -          $21,000,000
Partners                   9-7/8% due 12/15/2007
Tom Libassi
500 Campus Drive, Suite 220
Florham Park, NJ 07930
Phone: (973) 437-1020
Fax: (937) 437-1037

Highland Capital           Public Bonds -          $20,555,000
Management                 9-7/8% due 12/15/2007
John Morgan
13455 Noel Road, Suite 3300
Dallas, TX 75240
Phone: (972) 233-4300
Fax: (972) 628-4147

Barclays Capital LLC       Public Bonds -          $20,000,000
Jason Koh                   9-7/8% due 12/15/2007
222 Broadway, 10th Floor
New York, New York 10038
Phone: (212) 412-2663
Fax: (212) 412-1706

Blue Ridge Capital, LLC    Public Bonds -          $14,000,000
Rich Abrahams               9-7/8% due 12/15/2007
660 madison Avenue, 20th Floor
New York, New York 10021
Phone: (212) 446-6210
Fax: (212) 446-6210

White Ridge Investment     Public Bonds -           $8,500,000
Advisors                   9-7/8% due 12/15/2007
Jeff peskind
9 West 57th Street, 30th Floor
New York, New York 28255
Phone: (212) 583-8190
Fax: (212) 407-5409

Golden Tree Asset          Public Bonds -           $8,500,000
Management                 9-7/8% due 12/15/2007
Tom Shandell
300 Park Avenue, 25th Floor
New York, New York 10022
Phone: (212) 847-3510
Fax: (212) 847-3535

Bay Harbour Investment     Public Bonds -           $7,000,000
Management                 9-7/8% due 12/15/2007
Jay Stout
885 Third Avenue, 34th Floor
New York, New York 10022
Phone: (212) 371-2211
Fax: (212) 371-7497

Colonial Management        Public Bonds -           $4,800,000
Associates                 9-7/8% due 12/15/2007
David O'Brien
One Financial center
Boston, MA 02111
Phone: (617) 772-3916
Fax: (866) 283-0330

Credit Suisse First        Public Bonds -           $4,200,000
Boston                     9-7/8% due 12/15/2007
Andy Rebak
466 Lexington Avenue
New York, NY 10017
Phone: (212) 538-4786
Fax: (212) 538-4075

Prudential Investments    Public Bonds -            $4,200,000
George Edward
Gateway Center, 100
Mulberry Street
Newark, NJ 07102
Phone: (212) 538-4786
Fax: (212) 538-4075

Timesquare Capital         Public Bonds -           $3,500,000
Management                 9-7/8% due 12/15/2007
Amy Kennedy
Four Times Square, 25th Floor
New York, NY 10036
Phone: (917) 342-7821
Fax: (917) 342-7901

UBS Asset Management /     Public Bonds -           $3,000,000
Brinson Partners
Renata Jacobson
1285 Avenue of the Americas
15th Floor
New York, NY 10019
Phone: (212) 821-6393
Fax: (212) 821-3062

Merrill Lynch Investment   Public Bonds -           $3,000,000
Broadway 16th Floor
New York, NY 10038
Phone: (212) 670-0380

Shinn Fu of America        Trade                    $1,682,284
Michelle Hockaday
10939 N. Pomona
Kansas, City, MO 64153
Phone: (816) 891-6390
Fax: (816) 891-6599

Mass-Hansen Steel Corp    Trade                       $792,389
Terry Self               
2435 E. 37th Street
Vernon, California 90058
Phone: (800) 647-8335
Fax: (323) 586-9535

Olin / Winchester          Trade                      $713,894    
Terry Joggerst   
5065 Collections Center Drive
Chicago, Illinois 60693
Phone: (800) 356-2666
Fax: (618) 258-3393

Plaspros Inc.             Trade                       $674,193
Jack neth
Dept. 20, PO Box 5940
Carol Stream, IL 60197-5940
Phone: (662) 563-8635
Fax: (662) 563-1737

S.I.T.                    Trade                       $643,679
Michell Plyler
8100G Arrowbridge Blvd.
Charlotte, NC 28273-5675
Phone: (503) 653-4683
Fax: (503) 353-6464

Southwestern Ohio Steel    Trade                      $538,473
Jon Webb
PO Bo 8712
West Chester, OH 45071-8712
Phone: (513) 896-2741
Fax: (513) 896-2790

Burner Systems             Trade                      $281,586
Sue Morgan
3600 Cummings Road
Chattanooga, TN 37419
Phone: (423) 822-3600
Fax: (423) 822-2222

GS Electric                Trade                      $241,582

Custom Packaging Inc.      Trade                      $216,965

DIAM POP Group             Trade                      $200,207

Direct Metals              Trade                      $195,574

Allwood, Inc.              Trade                      $170,991

Kent H. Landsberg Co.      Trade                      $149,392

Associated Commodity, Inc. Trade                      $147,837

Roadway Package Systems,   Trade                      $133,846

Engineered Sinterings      Trade                      $133,351

ENRON CORP: Seeks Approval to Outsource SAP Work to CAP Gemini
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that the Enron Companies' Integrated Solutions Center
provides technical and functional support for the SAP system
that supports, with the exception of a few joint ventures, all
debtor and non-debtor Enron entities.  Ms. Gray notes that the
SAP system encompasses the software that the Enron Companies use
to run their vital business support functions, like accounting,
purchasing, and payroll.  According to Ms. Gray, the ISC
operations provide support to the Enron Companies in critical
areas including, but not limited to:

    -- general ledger,
    -- accounts payable,
    -- financial reporting,
    -- purchasing,
    -- project management,
    -- payroll, and
    -- asset management.

In addition, Ms. Gray says, Enron is contractually obligated to
provide SAP system support to two third parties:

    (1) UBS Warburg, and

    (2) Northern Natural Gas.

Ms. Gray explains that without the critical accounting and
business support functions supported by the SAP system, the
Enron Companies would have:

    (1) substantial difficulty in recognizing revenue and
        managing cash,

    (2) would be practically unable to operate their businesses,

    (3) would, accordingly, experience a significant loss in

For instance, Ms. Gray illustrates, the Enron Companies would be
unable to pay their employees or vendors and would not be able
to purchase goods to support their business operations.  Thus,
Ms. Gray asserts, it is imperative that the ISC continue to
function at a level of service that will enable the Enron
Companies to continue to operate effectively.

But since the Petition Date, a lot of ISC personnel resigned.
What used to be a company with 134-strong workers had only 27
remaining employees as of April 19, 2002.  "The ISC continues to
rapidly lose employees who support the Enron Companies'
accounting, payroll, and procurement systems," Ms. Gray tells
the Court.  As employees continue to leave, Ms. Gray says, they
are replaced with far more expensive contractors who are
unfamiliar with the Enron Companies' businesses.  There are
currently 19 contractors performing Core Services in the ISC.

Ms. Gray points out that the Debtors are still at risk for
further defection of ISC employees.  "These skilled employees,
who are uncertain of their job security at Enron, are likely to
seek out employment with other employers that are not currently
in bankruptcy," Ms. Gray explains.

For these reasons, the Debtors seek to enter into an outsourcing
arrangement with Cap Gemini Ernst & Young U.S. LLC for the
operation of the Enron Companies' business support systems in
the ISC.  As part of this transaction, Ms. Gray reports that Cap
Gemini will extend offers of employment to Enron's current ISC
employees and replace certain of the contractors currently
providing these accounting support services to the Enron
Companies.  "Once the Agreement becomes effective, Cap Gemini
will perform the ISC function for the Enron Companies," Ms. Gray

Under the Agreement, Cap Gemini will, among other things:

  (a) Perform Core Services, including systems analysis,
      software integration, software maintenance and
      enhancement, testing, release management, SAP help desk
      and related software support services;

  (b) Make Additional Services available, including providing
      additional professional staff to respond to Service
      Requests, and providing additional software applications
      support and minor enhancement Services through Cap Gemini
      personnel staffed at its Kansas City Service Center;

  (c) Extend offers of employment to substantially all current
      Enron eligible employees in the ISC and add 1-3 leadership
      and support personnel;

  (d) Replace at least 1 contractor per month, effectively
      capping the Enron's year-one ISC personnel cost at
      $10,140,000 (assuming the ISC remains constant or
      decreases the cost of contractors not yet replaced); and

  (e) Maintain or improve current ISC service levels.

Ms. Gray relates that Cap Gemini is already familiar with the
Enron Companies' ISC as a result of having two contractors
currently providing services to the Enron Companies and having
provided primary assistance in implementing the SAP system.
"Although the Debtors will retain contracts with other existing
contractors until Cap Gemini replaces the contractors, Cap
Gemini incentives under the Agreement are designed to accelerate
replacement of contractors and reduce costs to the Debtors," Ms.
Gray explains.

Under the Agreement, Ms. Gray says, Cap Gemini will provide Core
Services using a baseline staff of 52.7 full time personnel at a
monthly fee ranging from $384,101 to $646,935.  The monthly fees
for Services increases as each contractor is replaced with Cap
Gemini personnel, and is subject to other adjustments.

The initial term of the Agreement expires on February 28, 2003,
and will continue in effect for successive one-year terms unless
one party gives written notice of the expiration of the
Agreement at least 30 days prior to the expiration of the then-
current term.

By entering into the Agreement, Ms. Gray estimates that the
Enron Companies will avoid costs of $1,800,000 in the first year
alone.  Ms. Gray points out that the departure of one employee
results in a cost savings of approximately $8,231 per month,
while replacing that employee with a contractor leads to an
estimated monthly cost increase of $23,625.  The cost
differential for replacing an employee with a contractor is
approximately $15,393 per month. "If one employee resigns each
month for the next 12 months, the ISC's costs will increase
almost $1,800,000 from its current projected personnel cost of
$8,900,000," Ms. Gray speculates. And even if no other Enron
employees resign, Ms. Gray says, next year's cost increase will
be $2,200,000 higher.

"Equally important is that the Enron Companies' key business
support systems are at risk as "knowledge capital" continues to
depart," Ms. Gray adds.  Some of the key skills lost as
employees continue to leave include:

    (i) functional support for the general ledger and for
        financial reporting, and

   (ii) knowledge of BASIS and ABAP, which are technical
        "languages" used for technical system support, writing
        interfaces, reporting functions, and other similar

By entering into the Agreement, Ms. Gray notes, the Enron
Companies will not lose employees who already possess knowledge
not only of the Enron Companies' SAP systems, but also of the
nature of the Enron Companies' businesses, because Cap Gemini
will make offers of employment to eligible Enron employees in
the ISC.

Thus, the Debtors seek the Court's authority to enter into the
Outsourcing Agreement. (Enron Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

Enron Corp.'s 9.125% bonds due 2003 (ENRON2) are quoted at a
price of 12.5, says DebtTraders. See  
real-time bond pricing.

ENRON CORP: Asks Court to Reconsider Fiduciary Services Order
By a supplemental motion, Enron Corporation and its debtor-
affiliates ask the Court to reconsider its order denying payment
of fees and expenses to State Street Bank and Trust Company and
authorize the payment of the fees and expenses incurred under
the Fiduciary Services Agreement directly from their estates.

Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP, in
New York, tells the Court that prior to the Petition Date, the
Debtors paid for fiduciary insurance, legal fees,
indemnification arrangements with plan fiduciaries and all
Employee Stock Ownership Plan expenses.  Mr. Bienenstock points
out that the denial of the Debtors' authority to continue paying
these expenses diminishes the total compensation package of
those employees participating in the Debtors' defined
contribution plans.  Moreover, Mr. Bienenstock says, if the
savings plans must pay these expenses, persons who have left the
Debtors will withdraw their savings from the plan.  "That will
increase the cost to all current employees," Mr. Bienenstock

In a defined contribution plan like the Enron Corp. Savings
Plan, Mr. Bienenstock explains that if the employer does not
subsidize the plan expenses, the expenses must be funded solely
from the contributions of participants.  Mr. Bienenstock relates
that a certain portion of the funds that participants contribute
for their investment options is maintained in the form of cash
to satisfy administrative fees.  In the event the Liquidity
Portion is not sufficient to cover administrative fees, Mr.
Bienenstock notes, an individual participant's equity position
in investment accounts must be liquidated to the extent
necessary to provide the cash needed for the fees.  Accordingly,
Mr. Bienenstock says, the fees paid from the Savings Plan will
either reduce the rate of return on a participant's investment
or increase the rate of loss (in a negative yielding fund).

In the face of losses sustained due to the precipitous drop in
value of Enron stock, negative publicity, and colleague
attrition, Mr. Bienenstock points out that the essential core of
the Debtors' employees have remained employed with and faithful
to the Debtors.  "This loyalty is recognized by the Debtors in
the form of compensation and, through the approval of the
Debtors' Key Employee Retention Program, has been recognized by
the Court," Mr. Bienenstock emphasizes.

Mr. Bienenstock asserts that it is unfair to reward these
employees with one hand while simultaneously diminishing their
savings with the other.

Thus, the Debtors ask Judge Gonzalez for an order determining
that the Debtors can adjust employee salaries in the ordinary
course to defray the expenses, or alternatively, permitting
reimbursement of fees and expenses relating to State Street
under section 363(b) of the Bankruptcy Code.

Mr. Bienenstock contends that the cost of making current
employees whole will exceed the amount of expenses paid by the
savings plan at the employees' expense.  The employees' money in
the Savings Plan is tax deferred until withdrawal.  Additional
salary paid to employees is immediately taxable.  Therefore, Mr.
Bienenstock concludes, the Debtors will likely have to pay
employees approximately 150% of the amounts they lose in the
savings plan to fully compensate them for the loss of the
principal and of its tax deferral.  The costs related to State
Street are estimated at $1,500,000 for fees, $1,200,000 for
insurance, and up to $3,000,000 for professional fees, per year.
(Enron Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

EVERCOM INC: Lenders Agree to Amend Pact & Forbear Until June 28
Evercom, Inc. (formerly known as Talton Holdings, Inc.), a
provider of inmate telecommunications systems, has entered into
a Fourth Amendment to its Loan and Security Agreement with
respect to its senior credit facility with its senior lenders.
The agreement extends the term of the Company's existing
forbearance period until June 28, 2002.

As previously disclosed, Evercom is in default of certain
covenants under its Senior Credit Facility.  Under the terms of
the forbearance agreement, the Company's senior lenders will not
exercise remedies available to them during the period ending
June 28, 2002.  The Company is in the process of exploring
strategic and financial alternatives.  These explorations
include discussions with potential investors, the Company's
investors and creditors, and potential strategic partners.

Evercom is a provider of inmate telecommunications systems,
serving approximately 2,000 correctional facilities throughout
the United States.  The Company has become a recognized leader
in providing comprehensive, innovative technical solutions and
responsive value-added service to the corrections industry.

EXIDE TECHNOLOGIES: Daramic Demands Prompt Decision on Contract
Daramic Inc., moves for an order compelling Exide Technologies
and its debtor-affiliates to immediately assume or reject
various supply Contracts.

According to Francis A. Monaco, Esq., at Walsh Monzack & Monaco
P.A. in Wilmington, Delaware, Daramic and the Debtors entered
into certain supply contracts.  These supply contracts -- which
have been delivered to the Court under seal to keep them out of
public view -- consist of:

A. An agreement entered into on December 15, 1999, entitled,
   upon amendment in July 2001, the "North American, Australian
   and New Zealand Supply Agreement for Automotive Separators".
   The Agreement, in general, is a requirements contract in
   which the Exide Entities agreed to purchase 100 % of the
   separators required to manufacture batteries in the Exide
   Entities' facilities in North America, Australia and New
   Zealand with that amount having a guaranteed minimum;

B. An agreement entered into in July 2001, entitled the "Golf
   Cart Separator Supply Contract". The Agreement, in general,
   is a requirements contract in which the Exide Entities agreed
   to purchase 100% of the separators required by the Exide
   Entities to manufacture golf cart batteries on a worldwide
   basis to the extent Daramic produced those separators that
   were equal or superior in performance to competing
   separators; and

C. An agreement entered into on January 1, 1996, entitled, upon
   amendment in July 2001, the "Automotive and Industrial Supply
   Agreement". The Agreement, in general, is a requirements
   contract in which the Exide Entities agreed to purchase 100%
   of the separators required by the Exide Entities on a
   worldwide basis:

    1. to the extent Daramic produced separators of a
       specification required by the Exide Entities and

    2. with the exception of separators covered by the GCS
       Agreement or the NA Agreement.

Mr. Monaco informs the Court that each of the Supply Contracts
expires on December 31, 2009.  Termination of any of the Supply
Contracts requires written consent from both Daramic and Exide
Technologies, or a material, uncured breach by either party.
Almost all of the Exide Separators are produced to
specifications peculiar to the requirements of the Exide
Entities in that, other than the Exide Entities, there is
virtually no market for separators manufactured to the
specifications of the Exide Separators.

Pursuant to and in reliance upon the Supply Contracts, Mr.
Monaco relates that Daramic has spent, and continues to spend,
in excess of $100,000 per month to develop Exide Separators
based on new specifications, develop improved materials and
patterns for use in the Exide Separators, conduct other research
and development for the benefit of the Exide Entities, expand
and maintain production capability to meet the production
requirements of the Exide Entities, and to retool its machinery
to produce a universal separator that will greatly reduce the
Exide Entities' costs of battery production. Daramic continues
to carry significant amounts of Exide specific inventory to meet
Exide's next day requirements.

Mr. Monaco states that the Debtors use a form of (nearly)
Just-In-Time inventory management to reduce their inventory
carrying costs. In order to meet this requirement, and because
Daramic cannot produce Exide Separators on a short notice,
Daramic must maintain large amounts of Exide Separators of all
types in sufficient quantities to meet the varying daily demands
of the Exide Entities. Pursuant to and in reliance upon the
Supply Contracts, Daramic continues to produce and maintain
these high levels of inventory at considerable expense.

Because of the volume commitments contained in the Supply
Contracts and the long-term nature of the Supply Contracts, Mr.
Monaco claims that the Exide Entities are currently enjoying the
benefit of below market pricing specified in the Supply
Contracts. Daramic estimates that the benefit to the Exide
Entities and the detriment to Daramic of this favorable pricing
exceeds $500,000 per month. The Exide Entities are failing to
fulfill minimum purchase provisions of the Supply Contracts. The
Supply Contracts require the Exide Entities to compensate
Daramic for failure to make the minimum required purchase. At
current purchasing levels, Daramic will have accrued an
administrative expense claim of approximately $6,000,000 by the
end of the year.

Mr. Monaco adds that the Supply Contracts also include numerous
other favorable terms benefiting the Exide Entities which are
better than those offered to other customers. For example,
Daramic offers the Exide Entities extended payment terms beyond
that customary in the industry. The favorable pricing and sales
terms extend not only to the Exide Entities' North American
operations, but also to their facilities around the world.
Pursuant to the Supply Contracts, Daramic also granted favorable
pricing and payment terms to the other non-U.S. Exide Entities.

As of the Petition Date, Mr. Monaco submits that the Debtors
owed Daramic approximately $11,200,000 under the Supply
Contracts for which it has not been paid. Approximately
$1,600,000 of this amount consists of "up-charges," from the
2001 contract year. This shortfall resulted in an increase in
the price of separators purchased by the Exide Entities in the
2002 contract year. In addition to the $11,200,000 owed to
Daramic by the Debtors, as of May 13, 2002, Daramic is also owed
approximately $7,500,000 by the non-debtor Exide Entities, of
which approximately $700,000 is past due.

Mr. Monaco notes that Daramic is by far the largest unsecured
trade creditor of the Debtors. The prepetition debt owed to
Daramic is almost three times the amount owed to any other trade
creditor, even though the cost of separator material constitutes
a relatively small part of the Exide Entities' total raw
material costs. The separator cost is typically 3 to 5 % of the
total manufacturing cost of a battery. Other raw materials
constitute a significantly higher proportion of the total
battery cost.

Mr. Monaco explains that the reason for Daramic's extremely high
exposure, despite its relatively small portion of the Exide
Entities' total raw material costs, is that Daramic further
extended its credit terms to the Exide Entities beyond the
already favorable terms prescribed in the Supply Contracts in an
effort to assist the Exide Entities avoid bankruptcy. This
forbearance on the part of Daramic was based in large part on
the verbal assurances from Exide's Acting CFO and Chief
Restructuring Officer, Ms. Lisa Donahue, of Jay Alix &
Associates, that Daramic was indeed Exide's most critical
vendor. Ms. Donahue repeatedly affirmed Exide's intentions to
pay all invoices from Daramic should Exide ultimately file
chapter 11, through a critical vendor set-aside that would be
requested. Daramic has recently learned that the Exide Entities
no longer intend to make payment in full to Daramic from their
critical vendor set-aside as approved by the Court.

Since entering into, and in reliance upon, the Supply Contracts,
Mr. Monaco contends that Daramic has expanded its production
capacity at a cost of over $50,000,000 in order to meet the
minimum volume requirements of the Exide Entities set forth in
the Supply Contracts and particularly the North America
Agreement. Daramic's Corydon, Indiana, facility was purchased in
reliance upon the Supply Contracts, and in excess of 75% of the
facility's production is devoted to the production of Exide
Separators. Daramic continues to fully staff these facilities
and pay the carrying and maintenance costs associated with them.

Mr. Monaco tells the Court that Daramic is currently in the
process of negotiating new contracts with its primary labor
unions at both of its U.S. manufacturing facilities, as well as
its primary European manufacturing facility. These contract
renewals and the terms to which Daramic is willing to agree are
based largely on whether the Exide Entities affirm or reject the
Supply Contracts. Approximately 75% of the volume produced at
one of the two Daramic North American facilities is dedicated to
Exide Entities' North American requirements. The other
facilities produce large volumes of product for Exide as well.

Mr. Monaco maintains that the Supply Contracts are executory
contracts. With respect to the Automotive & Industry Agreement
and the North America Agreement, the Exide Entities have an
ongoing duty to purchase 100% of its worldwide separator
requirements from Daramic to the extent Daramic makes a
separator meeting the Exide Entities' specifications; likewise
and to the extent Daramic makes separators meeting the Exide
Entities' specifications, Daramic has an ongoing duty to sell to
the Exide Entities a sufficient number of separators to meet
100% of their worldwide separator requirements. With respect to
the Golf Cart Agreement, each party has a good faith obligation
to qualify Daramic's existing polymer-based golf cart battery
separators for use by the Exide Entities. Once any of Daramic's
separators are qualified by the Exide Entities, the parties have
the same crossing obligations to purchase and sell as in the
Automotive & Industry Agreement and the North America Agreement.
Failure of either the Exide Entities or Daramic to perform any
of these obligations would constitute a material breach excusing
performance by the other.

Until the status of the Supply Contracts is resolved, Mr. Monaco
avers that Daramic will have to consider whether it will
continue to spend money to expand and improve the Exide
Separator line of products, work with the Exide Entities in
developing, for example, a universal separator that should
reduce the Exide Entities' production costs, or produce and
maintain line item inventory levels necessary to support Exide's
just-in-time inventory requirements. Daramic currently spends in
excess of $100,000 per month in retooling and research and
development related to future production that can only be
recouped if the Supply Contracts are assumed. For example,
Daramic has developed and recently presented to Exide various
research, development, and support projects which, upon
implementation, have the potential to save Exide $4,000,000-
7,000,000 per year. Daramic believes it to be in both parties'
interests to either assume or reject the Supply Contracts as
soon as possible so that Daramic may either continue improving
the Exide Separators or cease committing money to projects
having no future.

Mr. Monaco avers that there are no safeguards to protect any
further investments of this type by Daramic. The Debtors should
be required to assume or reject the Supply Contracts immediately
because Debtors' assumption of the Supply Contracts assures the
Debtors of continued research and development support for their
benefit or, conversely, stops otherwise wasted expenditures by
Daramic. Further commitment of funds to research and development
will harm Daramic if the Supply Contracts are ultimately
rejected, and Daramic will protect its interests accordingly.

Mr. Monaco points out that Daramic is currently in the process
of negotiating new contracts with its primary labor unions at
both of its U.S. manufacturing facilities, as well as its
primary European manufacturing facility. The results of these
negotiations will affect the lives of these workers and the
future operations of Daramic and, potentially, the Exide
Entities for years to come. Until the status of the Supply
Contracts is resolved, Daramic will have insufficient
information with which to make informed decisions as to the
number of workers it will require or the benefits and
compensation to pay them. Daramic believes it is in both
parties' interests to either assume or reject the Supply
Contracts immediately to avoid the potential harms that Daramic
may contract for a workforce that subsequently has no work to
perform or that Daramic lays off a workforce that Daramic and
the Exide Entities require to meet the Exide Entities'
production needs. If the Court does not require the Exide
Entities to assume or reject the Supply Contracts very soon,
Daramic will be forced to negotiate with the unions without
the most critical piece of information it requires, and there
are no safeguards for either Daramic or the Exide Entities in
the event Daramic makes the wrong decision because it lacked
this information.

Because the volume of orders for Exide Separators had decreased
even before the Petition Date, Mr. Monaco claims that Daramic
has considerable excess capacity allocated to the Exide
Entities. Because of its obligation to provide the Exide
Entities with minimum quantities of Exide Separators, Daramic is
holding open excess capacity that could be used to manufacture
separators for other customers. In addition, Daramic cannot
effectively market its separators to other large-volume users
because it cannot be sure whether the excess capacity will be
required upon assumption of the Supply Contracts or not. Daramic
is harmed because of the real costs of maintaining a less than
fully utilized workforce and the opportunity costs of
maintaining excess capacity. In addition, Daramic is harmed
because it is not able to market to other large-volume users on
a long-term contract basis, which these potential customers
would require for supply security. There are no safeguards to
protect Daramic's interests with respect to this issue.

Because of the volume commitments contained in the Supply
Contracts and the long-term nature of the Supply Contracts, Mr.
Monaco asserts that the Exide Entities are currently enjoying
the benefit of below market pricing specified in the Supply
Contracts. The Exide Entities are failing to fulfill minimum
purchase provisions in the Supply Contracts, and Daramic
estimates that the benefit to the Exide Entities and the
detriment to Daramic of this favorable pricing exceeds $500,000
per month based on current purchasing volumes. The Supply
Contracts require the Exide Entities to compensate Daramic for
failing to make the minimum required purchase. Unless, in the
second half of the year, the Exide Entities significantly
increase the actual purchase volume of Exide Separators, the
shortfall will create an unpaid administrative expense claim of
approximately $6 million by the end of the year. Since there is
no assurance this claim will be paid, Daramic is not adequately
protected. It is unfair to allow the Exide Entities to enjoy the
benefits of this below market pricing post-petition, and then to
allow them to reject the Supply Contracts months later.

The Automotive & Industry Agreement and the Golf Cart Agreement
gives the Exide Entities exclusive purchasing rights on any new
separators developed by Daramic. Mr. Monaco relates that the
exclusive purchase period runs for six months from the time the
Exide Entities have conducted a qualification study, which
itself may last well over six months. Thus, the Exide Entities
may, at their option, prevent Daramic from offering new
separator products to third parties for at least one year.
Daramic has developed new products for which the Exide Entities
would have exclusive purchase rights. Daramic will be greatly
harmed if the Exide Entities enforce the exclusive purchasing
arrangement in the near term but ultimately reject the Supply
Contracts because Daramic will be prevented from offering these
products to third parties for at least one year and, as a
result, may lose valuable sales opportunities and potential
market share. There are no safeguards to protect Daramic's
interests with respect to this issue. (Exide Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Exide Technologies' 10% bonds due 2005
(EXIDE2) are quoted at a price of 14.5. See  
real-time bond pricing.

EXODUS COMMS: Pushing for Removal Period Extension to August 22
Exodus Communications, Inc., and its debtor-affiliates move the
Court to extend until August 22, 2002 the time within which they
may file notices of removal of numerous judicial and
administrative proceedings currently pending in various courts
and administrative agencies throughout the United States.

David R. Hurst, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, tells the Court that although the
Debtors' cases are expected to be consummated by the end of June
2002, it is out of an abundance of caution that an extension of
the Removal Deadline is being sought.

According to Mr. Hurst, the extension deadline is necessary
because if the Debtors fail to emerge from Chapter 11 as
expected, such an extension will afford the Debtors a sufficient
opportunity to assess whether the actions can and should be
removed.  This, in effect, protects the Debtors' valuable right
to adjudicate lawsuits.

Mr. Hurst assures that the Debtors' adversaries will not be
prejudiced by the proposed extension because they may not
prosecute the actions absent relief from the automatic stay.
Furthermore, the parties to actions that the Debtors seek to
remove will not be prejudiced from pursuing remand.

A hearing on the motion is scheduled on June 27, 2002. (Exodus
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Exodus Communications Inc.'s 11.25% bonds due 2008 (EXDS2),
DebtTraders reports, are trading at about 17.75. See  
real-time bond pricing.

FAIRMOUNT CHEMICAL: Auditors Express Going Concern Doubt
The December 31, 2001 financial statements of Fairmount Chemical
Company Inc. contain an explanatory paragraph in the Independent
Auditor's Report relating to Fairmount's ability to continue as
a going concern. Fairmount has reported substantial losses
during the last fiscal three years and does not expect
performance to improve during the first half of 2002. On October
4, 2001, Fairmount laid off 13 production employees, or
approximately 50% of its production employees, and subsequently
terminated two management employees. During the first quarter of
2002, Fairmount terminated one administrative employee and two
sales/marketing employees.

One of Fairmount's major foreign customers reduced its purchases
by 75% in the fourth quarter of 2001. Because of the low selling
price, high cost of production and the stronger dollar,
Fairmount has not pursued this business. Another major customer,
Polaroid Corporation, has filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. The
potential loss of this customer is expected to have a material
adverse effect on Fairmount going forward since Polaroid
accounted for $156,600 of sales for the three months ended March
31, 2002 compared to $343,800 during the same period in 2001.
Sales to Polaroid were $995,700, or 9.9 % of sales during year
ended December 31, 2001.

During the second quarter of 2001, Fairmount started receiving
orders for a hydrazine derivative product from a new customer.
Worldwide sales to this customer were $2,445,600 in 2001,
compared to none in 2000. In January 2002, Fairmount advised the
customer that it could no longer supply the product under the
same terms and conditions. As a consequence, Fairmount does not
anticipate sales of this product to the customer in 2002.

As of March 1, 2002, Fairmount owed Bayer Corporation
approximately $673,600 for raw material purchases. Fairmount
issued a promissory note to Bayer for the amount owed as of
March 1, 2002. The Note matures February 1, 2003, and includes a
payment schedule. Non-payment is an event of default and
interest of 10% on the unpaid principal balance will accrue
until the default is cured. The Note contains a "confession of
judgment" provision, which may result in a court judgment being
entered against Fairmount, upon written notice but without a
hearing, and that the Company's real estate may be sold on a
writ of execution. Fairmount failed to make the required
payments for April and May 2002 and, as of May 2, 2002, the
Company is in default of payments totaling $151,300, including
interest of $11,300.

The Company's working capital, defined as current assets less
current liabilities, decreased by $796,600 in the three months
ended March 31, 2002, resulting in negative working capital of
$2,507,600, compared to a negative working capital of $1,711,000
as of December 31, 2001. As of March 31, 2001, Fairmount's had
working capital of $3,649,400. The decrease in working capital
during the first quarter of 2002 was due to decreased accounts
receivables of $301,200, decreased cash of $181,800 and
increased other accrued liabilities of $209,000.

In February 2002, the Newark Division of Water/Sewer notified
Fairmount that its 2002 sewer charge will be $659,900, an
increase of $421,600 in anticipated cash outflows as compared to
2001. Fairmount is appealing this increase.

There is too much uncertainty for Fairmount to predict its
short-term future prospects. If the promissory note holders
demand payment as a result of the default on principal and
interest payments, or if Fairmount is unable to effect cost
savings, enter into strategic alliances or a merger, and achieve
other short-term solutions, it may result in the Company not
having sufficient capital to continue its operations as
presently conducted. In which event, the Company may find it
necessary to seek protection under Federal bankruptcy laws or
other laws affecting debtor's and creditor's rights.

FEDERAL-MOGUL: Ignition Unit Inks STAG Litigation Settlement
Federal-Mogul Ignition Company asks Court authority to enter
into a STAG Settlement Agreement compromising and settling
claims with respect to Safety-Kleen Envirosystems Company.  FM
Ignition filed its bankruptcy petition before it was able to
execute the STAG Settlement Agreement.  FM Ignition contends
that Safety-Kleen is, likewise, a debtor in another Chapter 11
case pending in the District of Delaware.  In those proceedings,
Safety-Kleen has obtained court approval authorizing it to enter
settlements like the STAG Settlement Agreement.

According to Laura Davis Jones, Esq., at Pachulski Stang Ziehl
Young & Jones P.C. in Wilmington, Delaware, years back, FM
Ignition and various other potentially responsible parties
entered into numerous settlement agreements with other entities
who may also be responsible for some of the costs of remediating
environmental contamination at the Stickney Landfill/XXKem site
in Toledo, Ohio.  The Settling Parties conditioned the payment
of their agreed portion of the clean-up costs on the resolution
of disputes involving obligations of other potentially
responsible parties that had not yet settled.

In order to resolve those disputes, Ms. Jones continues, a
complaint was filed against Safety-Kleen Envirosystems Company
in the U.S. District Court for the Northern District of Ohio,
Western Division on September 14, 1998, commencing the STAG
action.  The Plaintiffs in the STAG Action are:

     a.  Stickney/Tyler Administrative Group on its own behalf
     b.  The Directors of Stickney/Tyler Administrative Group
     c.  BFI Waste Systems of North America, Inc.
     d.  DaimlerChrysler Corp.
     e.  E.I. duPont de Nemours and Company
     f.  FM Ignition
     g.  Honeywell International, Inc., and
     h.  GenCorp Inc.

These Plaintiffs, Ms. Jones says, asserted various complaints
against Safety Kleen and the other defendants named in the STAG
Action.  Their claims include claims to recover the costs of
remediating environmental contamination at the Stickney Site.  
In turn, Safety-Kleen asserted various counterclaims against the
Plaintiffs and cross-claims against other entities seeking to
recover the costs of the Stickney site remediation.  "Hence, FM
Ignition is both a plaintiff and a counter-defendant in the STAG
Action," Ms. Jones points out.

After over three years of settlement negotiation, on October
2001, the Plaintiffs, among them, FM Ignition, and Safety-Kleen
reached agreement on the terms of settlement as set forth in the
STAG Settlement Agreement.  "The Plaintiffs anticipate to
recover about $1,600,000 in aggregate consideration as a result
of the STAG Settlement Agreement including the payments from the
various potentially responsible parties that have entered into
settlement agreements," Ms. Jones says.  "This will result in FM
Ignition receiving a net benefit of approximately $125,000,
based upon the allocation of the financial rights and
obligations of the Plaintiffs."

Subject to this Court' approval, the principal terms of the STAG
Settlement Agreement are:

A. The Settling Parties will cause all of their claims and
   counterclaims against each other in the STAG Action to be
   dismissed with prejudice;

B. Within 30 days of executing the STAG Settlement Agreement,
   counsel for the Settling Parties will prepare and file in the
   District Court these Settlement Motions:

   a. a motion to find that the Settling Parties entered into
      the STAG Settlement in good faith; and,

   b. a motion to dismiss with prejudice all of the Settling
      Parties' claims and counterclaims asserted in the STAG

C. Within 20 days of entry of the orders granting the District
   Court Settlement Motions, McKesson Corporation, on behalf of
   Safety-Kleen, will pay a total of $800,000 as Settlement
   Payment to the Plaintiffs, on a collective basis;

D. Within 20 days following the later of the receipt of the
   orders granting the District Court Settlement Motions and the
   receipt of the Settlement Payment, the Plaintiffs will
   withdraw their claims in the Safety-Kleen Bankruptcy Case;

E. The Settling Parties reserve their respective rights to
   assert claims against each other or any non-party to recover
   all or part of any expenses actually incurred if the U.S. EPA
   or the Ohio EPA in the future orders any Settling Parties to
   incur expenses to perform repairs to the engineered base
   layer, the geosynthetic clay liner, the linear low density
   polyethylene geomembrane, or the geocomposite drainage layer
   within a certain area identified ion the STAG Settlement

F. The Settling Parties will work together to complete some
   minor remaining remediation matters at the Stickney Site,
   with Safety-Kleen bearing 50% of the costs and the
   Plaintiffs, except for FM Ignition, bearing the other 50% of
   the costs; and,

G. The Settling Parties will exchange contemporaneously all
   technical reports and data generated and provided by them to
   U.S. EPA and Ohio EPA.

Accordingly, to the extent that FM Ignition's entry into the
STAG Settlement Agreement and compromise of its claims pursuant
to the agreement constitutes a "sale" of those claims, the
Debtors request the Court to permit them to sell their part of
the claims free and clear of all liens, claims, interests and
encumbrances. "The only entities that may have any liens in FM
Ignition's claims are the Debtors' prepetition and postpetition
lenders," Ms. Jones believes.

Litigating the matters raised in the STAG Action would require
significant time, effort and resources to investigate and
propound discovery, to prepare motions and other documents and,
potentially, to prosecute full trials or evidentiary hearings.
"As a result, the Debtors would incur substantial attorneys fees
and expenses to litigate the STAG Action," Ms. Jones stresses.
The STAG Action involves numerous parties and complex issues
regarding proportional liability to remediate environmental
contamination.  The probability of success if the STAG Action
proceeds to trial and thereafter judgment, is, at best,

"The STAG Settlement Agreement will permit FM Ignition to
receive its proportional share of the Settlement Payment paid on
behalf of Safety-Kleen, as well as a proportionate share of the
settlement payments by other parties that have been conditioned
upon the consummation of the Safety-Kleen Settlement," Ms. Jones
submits.  "Safety-Kleen will also release FM Ignition from any
and all liability with respect to its claims asserted against FM
Ignition in the STAG Action." (Federal-Mogul Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)

According to DebtTraders, Federal-Mogul Corporation's 8.8% bonds
due 2007 (FEDMOG6) are trading at about 21. See  
real-time bond pricing.

GALEY & LORD: Gets Nod for Ernst & Young Retention as Auditors
The U.S. Bankruptcy Court for the District of Delaware approved
the application of Galey & Lord, Inc. to hire Ernst & Young LLP
as independent auditors and tax consultants in its Chapter 11

The Debtors inform the Court that Ernst & Young has served as
the Company's auditors and tax consultants for several years.
This retention afforded Ernst & Young with high familiarity on
the Debtors' business and financial affairs.

Pursuant to formal Retention Letters, Ernst & Young's services
in these Chapter 11 cases will include:

     a) Working with the appropriate Debtors' personnel and/or
        agents in developing an understanding of the business
        objectives related to the Debtors' recent Chapter 11
        filings, including understanding reorganization and/or
        restructuring alternatives the Debtors are evaluating
        with their existing bondholders, or other creditors,
        that may result in a change in the equity,
        capitalization, and/or ownership of the shares of the
        Debtors or their assets;

     b) Assisting and advising the Debtors in their bankruptcy
        restructuring objectives and post-bankruptcy operations
        by determining the most optimal tax manner to achieve
        these objectives, 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;

     c) Tax consulting regarding availability, limitations,
        preservation and maximization of tax attributes, such      
        as net operating losses and alternative minimum tax
        credits, minimization of tax costs in connection with
        stock or asset sales, if any, assistance with tax
        issues arising in the ordinary course of business
        while in bankruptcy, such as 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, discussions and
        analysis of federal and state income and franchise tax
        issues arising during the bankruptcy period;

     d) Assistance with settling tax claims against the Debtors
        and obtaining refunds of reduced claims previously
        paid by the Debtors for various taxes, including, but
        not limited to, federal and state income, franchise,
        payroll, sales and use, property, excise and business

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

     f) Analysis of legal and other professional fees incurred
        during the bankruptcy period for purposes of
        determining future deductibility of such costs;

     g) Documentation, as appropriate or necessary, of tax
        analysis, opinions, recommendations, conclusions, and
        correspondence for any proposed restructuring
        alternative, bankruptcy tax issue or other tax matter
        described above;

     h) Provide international tax consulting regarding US impact      
        of foreign operations and such other international tax
        consulting that may arise due to changes in such

     i) Assisting the Debtors with annual income tax filings for
        federal and state purposes;

     j) Assisting the Debtors' executives with annual income tax
        filing requirements;

     k) Auditing and reporting on the consolidated financial
        statements of the Debtors for the year ended September
        28, 2002;

     l) Preparing an opinion of fairness of the presentation of
        the consolidated financial statements in conformity
        with accounting principles generally accepted in the
        United States;

     m) Reviewing unaudited financial statements and other
        financial information necessary for filings with the
        Securities and Exchange Commission; and

     n) Providing such other accounting services as requested by
        the Debtors.

Ernst & Young's audit services will be coordinated by Mr.
Christopher D. Mandaleris, a partner, and Mr. Brian Littlejohn,
a manager.  Ernst & Young's tax services will be coordinated by
Mr. Danny Newcomb, a tax partner, and Mr. Brian Holt, a senior

Ernst & Young intends to charge for the professional services at
the Firm's current hourly rates:

     Tax Advice
          Partners and Principals   $580-$650
          Senior Managers           $420-$510
          Managers                  $320-$410
          Seniors                   $220-$310
          Staff                     $150-$210
          Client Serving Associate  $60-$100

     Audit Services and Accounting Assistance
          Partners and Principals   $490-$645
          Senior Managers           $400-$490
          Managers                  $290-$350
          Seniors                   $200-$250
          Staff                     $125-$175

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.

Galey & Lord Inc.'s 9.125% bonds due 2008 (GNL1), DebtTraders
reports, are quoted at about 14. For real-time bond pricing, see

GLOBAL CROSSING: Wants to Guaranty UK Unit's Lottery Obligations
According to Michael F. Walsh, Esq., at Weil Gotshal & Manges
LLP in New York, one of Global Crossing's non-filed
subsidiaries, Global Crossing (UK) Telecommunications Ltd.
(GCTL), provides telecommunications services to Camelot Group
PLC in connection with the national lottery business under an
existing network service agreement.  Camelot Group PLC runs the
national lottery for the United Kingdom.  Global Crossing Ltd.
guarantees GCTL performance under that agreement.

For both economic and technical reasons, the parties have
decided to enter into a new contract for these
telecommunications services. Pursuant to sections 363(b) and
364(b) of the Bankruptcy Code, the Debtors seek authorization to
guaranty the obligations of GCTL to Camelot under the
Replacement Network Services Agreement.

Mr. Walsh informs the Court that GCTL provides
telecommunications services to Camelot under a network services
agreement dated February 8, 1994, under which GCTL is required
to provide services to Camelot at a fixed rate for so long as
Camelot maintains its license to run the lottery in the United
Kingdom. Camelot's license expires in 2002, although it is in
the process of extending the license through 2009. Global
Crossing Ltd., one of the debtors in these cases, guarantied
GCTL's obligations under the Network Services Agreement. Camelot
is GCTL's single largest customer and receives approximately
$28,000,000 revenue annually in connection with the Network
Services Agreement.

Mr. Walsh submits that the network platform (hardware) on which
the telecommunications services are provided is now obsolete. It
is both difficult to maintain and very expensive to upgrade.
Under the contract, GCTL bears the entire cost of any upgrade.
These technical problems are impairing the economic benefits to
the Debtors under the Network Services Agreement. Accordingly,
the Debtors have renegotiated the terms of the contract to
change the pricing and change the technical specifications of
the network.

After extensive negotiations, GCTL and Camelot intend to enter
into the Replacement Network Services Agreement. Under the
Replacement Network Services Agreement, Mr. Walsh states that
GCTL will update Camelot's underlying network hardware and
software. The initial term of the Replacement Network Services
Agreement is through 2009 with Camelot having the option to
extend the contract for an additional three-year period. The
Debtors project that revenue under the Replacement Network
Services Agreement will be approximately $275,000,000 through

Mr. Walsh avers that the Debtors have guarantied the performance
of GCTL under the existing contract with Camelot. Those
obligations are prepetition and no claims have been made against
the existing guaranty. Camelot is unwilling to accept services
from GCTL under the revised agreement without a similar
performance guaranty from Global Crossing Ltd.

By executing the Replacement Network Services Agreement, Mr.
Walsh notes that the Debtors will be obligated to guaranty the
performance of GCTL. That guaranty will be a postpetition
obligation of its estate. GCTL's, and therefore, Global Crossing
Ltd.'s, aggregate liability to Camelot under the contract cannot
exceed Pounds Sterling 30,000,000. In addition, Camelot has the
duty to mitigate any losses, damages, costs and expenses giving
rise to a claim under the guaranty.

Mr. Walsh points out that the Debtors are in the process of
seeking bids for certain of their United Kingdom businesses,
including GCTL. In the event of a sale of GCTL, Global Crossing
Ltd. would no longer have any obligation under the guaranty,
although Camelot would have the right to terminate the new
contract unless the purchaser of GCTL provides a similar
guaranty that is reasonably acceptable to Camelot.

The Replacement Network Services Agreement provides several
benefits to the Debtors' estates, including:

A. By changing the network platform, the Debtors will
   significantly reduce the cost of providing the required
   services. In conjunction with expected receipts of
   approximately $275,000,000 through 2009, the new contract is
   significantly more profitable than the existing one.

B. The costs of upgrading the existing network platform based on
   its obsolete technology is estimated to be $30,000,000 or

C. Entering into a new telecommunications contract of this
   magnitude will send a positive message to potential customers
   that the parties expect Global Crossing will remain in
   business for a significant time.

D. The contract will make the Debtors one of largest providers
   of telecommunications services (based on the new network
   architecture) in the United Kingdom marketplace.

E. The contract allows GCTL to retain its largest customer.

Conversely, Mr. Walsh claims that the failure to enter into the
Replacement Network Services Agreement would have an adverse
impact on GCTL's business operations. GCTL would have to decide
whether to continue under the existing, increasingly
unprofitable contract or incur termination penalties in excess
of $45,000,000. Moreover, at some point in the existing contract
it may no longer be possible to keep the obsolete network

Mr. Walsh tells the Court that the Debtors have had extensive
negotiations on the terms of the Replacement Network Services
Agreement and the necessity for a guaranty of performance by the
Debtors. After weeks of discussions, it is clear that Camelot
will not award the contract to GCTL without the guaranty.
However, the overall obligations of GCTL under the contract are
limited to Pounds 30,000,000, which would also limit the
exposure of the Debtors.

In addition, in the event the Debtors sell GCTL, Mr. Walsh
accords that Camelot has agreed to consider accepting a
replacement guaranty by the purchaser (depending on
creditworthiness, etc.). Camelot's acceptance of a replacement
guaranty cannot be unreasonably withheld. In any event, the
guaranty by the Debtors continue only so long as GCTL is a
subsidiary of Global Crossing Ltd.

Based on the foregoing and the Debtors' economic analysis of the
value of the Replacement Network Services Agreement, the Debtors
have determined that Global Crossing Ltd. should become a party
to the contract. The Debtors have evaluated the Replacement
Network Services Agreement, and the guaranty thereunder, in
accordance with the Bankruptcy Code. The Debtors submit that the
Replacement Network Services Agreement is beneficial to the
Debtors, their estates, and creditors, and represents the sound
business judgment of the Debtors. This sound business judgment,
and the relief requested herein, should be approved by the Court
unless it finds the judgment is the product of bad faith, whim
or caprice. (Global Crossing Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Global Crossing Holdings Ltd.'s 9.625%
bonds due 2008 (GBLX3) are trading at about 2.25. See  
real-time bond pricing.

HAYES LEMMERZ: Intends to Settle Schenk Intercompany Receivables
Hayes Lemmerz International, Inc., and its debtor-affiliates
submit this motion, under 11 U.S.C. Section 363 and Federal Rule
of Bankruptcy Procedure 9019, asking the Court for authority to
compromise and settle two inter-company loans receivable.  These
are owed to Debtors Hayes and HLI (Europe), Ltd. by Hayes
Lemmerz Schenk GmbH, a non-Debtor subsidiary of the Debtors
located and incorporated in Germany.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, informs the Court that Schenk is a multi-
niche manufacturer of aluminum and magnesium castings using high
pressure die casting, permanent mold casting (gravity, tilt pour
and low pressure) as well as sand casting processes. Schenk's
manufacturing operations consist of a single foundry located in
Maulbronn, Germany. Schenk specializes in complex, non-ferrous
castings and produces a wide variety of more than 250 products,
which include aluminum automotive and motorbike castings,
aluminum housings for electrical and power transmission
companies, and specialty sand castings made of both aluminum and
magnesium. Schenk supplies castings to more than 50 customers,
consisting primarily of automotive original equipment
manufacturers (OEMs), automotive OEM suppliers, and power
transmission companies. Automotive clients, both OEMs and
suppliers to OEMs, accounted for the majority of Schenk's sales
in 2001.

Mr. Chehi states that Schenk is a wholly-owned indirect
subsidiary of Hayes. Its capital stock is owned entirely by
Hayes Lemmerz Fabricated Holdings B.V. -- not a Debtor in these
cases. Fabricated Holdings is 40% owned by Hayes Lemmerz
International - California, Inc. and 60% owned by HLI Europe.  
Both of these companies are wholly-owned direct subsidiaries of
Hayes and Debtors in these cases.

According to Mr. Chehi, Hayes acquired Schenk in September 2000,
in connection the German insolvency proceedings of Schenk's then
parent, to provide Hayes with a manufacturing base from which to
bring its domestic manufacturing technology to Europe. However,
since its acquisition, Schenk has failed to obtain a single
European customer order utilizing such technology. Moreover,
Schenk has consistently lost money and generated negative cash
flow. In fiscal 2001, the business generated negative EBITDA and
negative cash flow. In sum, Schenk simply is not the strategic
asset it was anticipated to be at the time of its acquisition.

Because of its inability to generate positive cash flow, Mr.
Chehi relates that Schenk required, and continues to require,
significant cash infusions from Hayes. Prior to the commencement
of these cases, Hayes and HLI Europe extended inter-company
loans to Schenk to fund its operations. As of the Petition Date,
Schenk owed the principal amounts of approximately 4,600,000
Euros to Hayes and 3,200,000 Euros to HLI Europe. Under German
law, as of the Petition Date, these loans (in the aggregate
amount of 8,400,000 Euros including accrued interest of
approximately 500,000 Euros) were pari passu with Schenk's other
unsecured creditors.

In late February or early March of this year, Mr. Chehi tells
the Court that it became apparent to Hayes that Schenk was
facing a technical insolvency when the inter-company debts owed
to Hayes and HLI Europe were considered. Under German law, an
insolvency event might have forced Schenk to immediately
commence an insolvency proceeding in Germany. A Schenk
insolvency event could have had adverse consequences to Hayes'
European operations. Thus, in late March, Hayes and HLI Europe,
after obtaining the consent of the Creditors Committee and the
Debtors' pre- and post-petition secured lenders, agreed to
subordinate 3,200,000 Euros of their 8,600,000 Euro loans
receivable to the claims of Schenk's general unsecured

Additionally, on March 1, 2002, Mr. Chehi submits that Schenk's
largest credit insurance provider stopped issuing credit
insurance on behalf of Schenk. As a result, Schenk's key
aluminum suppliers immediately placed Schenk on cash on delivery
terms, and Schenk's short-term cash requirements immediately
increased significantly. Thus, on March 15, 2002, the Debtors,
specifically HLI Europe, made loans in the amount of 650,000
Euros, as permitted under their DIP financing facility, in order
that Schenk could continue its operations until such time as
Hayes could locate a purchaser for Schenk and consummate a sale.
In connection with such loan, Schenk entered into guarantee,
collateral and pledge agreements with the DIP lenders, whereby
certain assets of Schenk were pledged to these lenders. Hayes
also provided a letter of credit in the approximate aggregate
amount of 600,000 Euros to Schenk's credit insurance supplier to
allow such insurance supplier to continue to insure vendors'
receivables from Schenk in amounts up to 1,500,000 Euros.

Notwithstanding Schenk's difficulties, and the issues discussed
above, facing Hayes' European operations generally, Mr. Chehi
maintains that Hayes is pleased with the recent performance of
its European operations. Hayes' management believes the European
operations are performing well and exceeding plan projections.
Other than Schenk, Hayes currently has no near-term business
unit sales or marketplace exits planned for any of its European
operations. (Hayes Lemmerz Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

According to DebtTraders, Hayes Lemmerz Intl Inc.'s 11.875%
bonds due 2006 (HAYES1) are quoted at a price of 67. See  
real-time bond pricing.

ICG COMMS: Secures OTC Bulletin Board Listing Under ICGCV Symbol
ICG Communications, Inc., and its debtor-affiliates secured a
listing this week for the New Common Stock to be issued under
their confirmed plan.  The shares will trade on the Over-the-
Counter Bulletin Board system under the ICGCV symbol.  There is
no indication that the Reorganized Debtors' stock is trading on
a when-issued basis yet and the Company has given no indication
about when the Effective Date will occur. (ICG Communications
Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

IMAGICTV: Commences Trading on Nasdaq SmallCap Under IMTV Symbol
iMagicTV (Nasdaq: IMTV; TSX: IMT), a provider of software
products that allow telephone companies and other service
providers to deliver multi-channel television and interactive
media services over high-speed broadband networks, has received
approval from The Nasdaq Stock Market to transfer the listing of
its common shares from The Nasdaq National Market to The Nasdaq
SmallCap Market effective at the open of business Friday, June
7, 2002.  The Company's common shares will continue trading
under its current symbols, "IMTV" in the United States and "IMT"
on the Toronto Stock Exchange in Canada. "Maintaining our
listing on The Nasdaq SmallCap Market will enable iMagicTV to
maintain liquidity on a well-regulated equity market in the U.S.
for the benefit of all our shareholders," said Jeff White,
iMagicTV's chief financial officer.  "We also believe that it is
important that our common shares remain listed on Nasdaq as it
offers us increased visibility in the marketplace.  We are
pleased that our application to transfer to The Nasdaq SmallCap
Market has been approved.

"The transfer to The Nasdaq SmallCap Market will be completely
transparent to our shareholders as there will be no change to
the ability to trade our shares in the U.S. or the access to our
trading information and our ticker symbol will go unchanged.  We
remain in compliance with the listing requirements for the
Toronto Stock Exchange."

As previously reported, iMagicTV was notified in March that its
common shares were not in compliance with Nasdaq's $1 minimum
closing bid price requirement for continued listing.  The
transfer to The Nasdaq SmallCap Market allows iMagicTV until at
least September 3, 2002 to regain compliance with the minimum
bid price requirement.  For further information on this matter
please review iMagicTV's recent annual filings, Form 20-F in the
U.S. and the Annual Report in Canada.

iMagicTV provides software products and related services that
enable telephone companies and other service providers to
deliver multi-channel digital television and interactive media
services to their subscribers over a broadband network
infrastructure.  iMagicTV's software can be deployed over high-
speed broadband networks including ADSL, VDSL, wireless,
Ethernet and Fiber to the Home (FTTH) technologies.
Incorporated in 1997, iMagicTV maintains its global headquarters
in Saint John, New Brunswick, Canada, its European headquarters
in Cambridge, UK, its Asia Pacific headquarters in Singapore and
its U.S. headquarters in Atlanta. For more information, visit  

INACOM: Wants to Maintain Plan Filing Exclusivity to September 2
Inacom Corp. and its debtor-affiliates seek an extension from
the U.S. Bankruptcy Court for the District of Delaware of their
exclusive time periods to propose and file their chapter 11 plan
and to solicit acceptances of that plan.  The Debtors wish to
extend their exclusive plan filing period through September 1,
2002 and the time to solicit favorable votes through November 1,

The Debtors have been unable to propose a plan of liquidation
due to the pendency of significant litigation involving the Bank
Group and Compaq Computer Corporation.  Recently, the Debtors,
the Committee, the Bank Group and Compaq have reached a global
settlement of all claims by and among each other.  The
settlement paves the way for the Debtors to file and confirm a
consensual plan of liquidation.

While waiting for a consensual resolution of the litigation, the
Debtors have focused their efforts on completing the liquidation
of their assets.  In addition, the Debtors have been pursuing
recovery of avoidance claims and administering the claims
objection process, tasks traditionally addressed post

The parties are in the process of documenting the settlement and
expect to present a motion to approve the settlement to the
Court in the near future. The settlement will not, however, be
approved until after June 1, 2002, the current deadline for the
Debtors to file a plan to maintain exclusivity.  The Debtors and
the Committee are now preparing a plan and expect to file a plan
within the next 90 days.

Inacom Corp. filed for Chapter 11 petition on June 16, 2000.
Laura Davis Jones and Christopher James Lhulier at Pachulski
Stang Ziehl Young & Jones PC represent the Debtors in their
restructuring efforts.

INTELEFILM CORP: Mulling Potential Sale of Subsidiary Assets
iNTELEFILM Corporation (OTCBB:FILM) has undertaken a substantial
workforce reduction while considering strategic alternatives
focused on the completion of the Company's long-running
litigation against ABC Radio Networks, Inc. and The Walt Disney
Company that resulted in a jury award of $9.5 million last

Also, its majority-owned subsidiary, Video3(video cubed), has
entered into a letter of intent for the sale of substantially
all of its assets to an entity to be formed by members of the
current Video3 management team.

Mark A. Cohn, iNTELEFILM's Chairman, President and Chief
Executive Officer said, "While we continue to believe in the
Video3 product offering and business, the completion of the ABC
Radio/Disney litigation is critical to our stakeholders. As a
result, we can no longer pursue both opportunities and
accordingly we are taking all steps necessary to see the
litigation through to its completion. In light of these
circumstances, we are delighted that the Video(3) management
team is interested in pursuing the Video3 opportunity. We wish
them well in their endeavors." The Company expects to close on
the asset sale, subject to completion of documentation and
receipt of Video(3) shareholder approval, by the end of June.

iNTELEFILM Corporation FILM, based in Minneapolis, is the
majority owner of Video3, is a developer of digital asset
management solutions which are designed to enable clients to
encode, share and leverage rich media assets online. iNTELEFILM
trades on the Over-the-Counter Bulletin Board under the symbol

iNTELEFILM's December 31, 2001 balance sheet shows a total
shareholders' equity deficit of about $2 million.

Additional information on the Company can be found in the
Company's filings with the Securities and Exchange Commission
and on the Company's Web sites: and

JACOBSON STORES: Board Shoos-Away Arthur Andersen as Auditors
On May 23, 2002, the Board of Directors of Jacobson Stores Inc.,
dismissed its independent auditors, Arthur Andersen LLP.
Although the Audit Committee of the Board did not meet
separately and, therefore, did not separately recommend or
approve the dismissal, all members of the Audit Committee
participated in the Board action and concurred with the
dismissal. The Audit Committee of the Board was directed to
search for a replacement independent auditor and to recommend
such replacement firm to the Board of Directors for appointment
as soon as practical.

Arthur Andersen's reports on the Company's consolidated
financial statements for the fiscal year ended February 2, 2002
includes an explanatory paragraph, saying:

    "The accompanying consolidated financial statements have
been prepared assuming the Company will continue as a going
concern. As discussed in the Company's Summary of Significant
Accounting Policies, Chapter 11 Reorganization and Basis of
Presentation, the Company voluntarily filed for Chapter 11
bankruptcy protection on January 15, 2002. This action, which
was taken primarily as a result of the economic slowdown in the
retail department store industry, the resultant negative impact
on the Company's liquidity and the Company's failure to remain
in compliance with the financial covenants on certain of its
indebtedness, raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in
regards to these matters are described in the accompanying
financial statements. The financial statements do not include
any adjustments that might result from the outcome of this

JORDAN INDUSTRIES: Buys-Back $110MM of Series A Disc. Debentures
On May 29, 2002, Jordan Industries, Inc. purchased $110,000,000
principal amount of its $214,036,493 11.75% Series A Senior
Subordinated Discount Debentures due 2009, for an average price
of $250.00 per $1,000 bond or $27,500,000. The Series A
Debentures were purchased from an institutional investor. After
the purchase, $104,036,493 of Series A Debentures will be
outstanding. The Company will report an extraordinary gain after
taxes of $82,711,167.

It is not anticipated that the Company will make any further
purchases at this time; however, some of the Company's
Directors, Officers and/or Shareholders may purchase some of the
Series A Debentures at prices commensurate to or above that of
the Company.

Jordan Industries, Inc. operates a diverse group of businesses
in the specialty printing and labeling, specialty plastic,
consumer and industrial products, automotive aftermarket
converters, and motors and gears markets. At December 31, 2001,
Jordan Industries' balance sheet shows a total shareholders'
equity deficit of about $139 million.

KAISER ALUMINUM: Has Until November 12 to Remove Pending Actions
Kaiser Aluminum Corporation and its debtor-affiliates obtained
an extension of the period within which they may remove those
lawsuits to the District of Delaware for further litigation.  
The Debtors' removal period has been extended to the later of
November 12, 2002, or 30 days after the entry of an order
terminating the automatic stay for any particular action sought
to be removed. (Kaiser Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

DebtTraders reports that Kaiser Aluminum & Chemicals' 12.75%
bonds due 2003 (KAISER2) are trading between 21 and 25. See  
real-time bond pricing.

KMART: Utility Company Squabbles Up for Hearing on June 25
J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom,
in Chicago, Illinois, asserts that San Diego Gas is already more
than adequately assured of payment for post-petition services
because Kmart Corporation and its debtor-affiliates have already
provided San Diego Gas with a letter of credit equal to at least
two month's average usage ($1,438,823) of utility services.

Moreover, Mr. Ivester continues, San Diego Gas and other
Objecting Utilities are adequately assured of payment for post-
petition services because:

    (2) the Debtors have $2,600,000,000 in currently available

    (3) any delays in payment are being corrected after
        installation of a new financial team; and

    (4) any payment delays have presumably been remedied through
        late payment fees.

Nevertheless, Mr. Ivester relates that the Debtors had offered
Rolla and Redding one-month security deposits, which are
standard in Chapter 11 cases.  Mr. Ivester adds that the Debtors
had offered one-half month security deposit to Singing River
since the Debtors are closing all stores, where it provides
services. "Given the Debtors' financial resources, no additional
adequate assurance is necessary," Mr. Ivester says.

The Debtors advise Judge Sonderby that they have already settled
with Fort Pierce Utilities and Illinois Power Company.  The
hearing on the motion is continued to the June 25, 2002 omnibus
hearing as to five utilities: City of Ocala, Withlacoochee River
Electric Cooperative, Columbia Power & Water Systems, Bristol
Tennessee Electric Systems, and Dickson Electric System. (Kmart
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

KMART CORP: Court Carves-Out 12 Utilities from Utility Order
In 12 separate agreed orders, Judge Sonderby rules that:

  1) The Utility Order does not govern the terms of post-
     petition utility services provided by:

     (a) Bath Electric, Gas and Water Systems -- a utility
         company that provides utility services to Kmart Corp.'s
         store number 9589 under account number 2225-1 at
         service address Plaza 15, W. Morris Street in Bath, New

     (b) Arizona Public Service -- a utility company that
         provides utility services at the Debtors':

         Store No.  Service Address
         ---------  ---------------
           3014     1602 E. Roosevelt Phoenix, Arizona;
           7236     6767 W. Bell Road Peoria, Arizona;
           9101     1214 E. Florence Casa Grande, Arizona;
           4880     7550 E. Highway 69 Prescott Valley, Arizona;
           7313     1048 Willow Creek Road Prescott, Arizona;
           3108     3401 W. Greenway Road Phoenix, Arizona;
           3924     680 W. Deuce of Clubs Show Low, Arizona;
           4185     12025 N. 32nd Street Phoenix, Arizona;
           3995     2375 W. 32nd Street Yuma, Arizona; and
           3403     707, 753, & 801 E Bell Road Phoenix Arizona;

         under account number 393793284;

     (c) Oklahoma Gas and Electric Company -- a corporation that
         provides utility services to the Debtors under 10
         accounts in stores located at:

            1) 4 E. Shawnee, Muskogee, Oklahoma;
            2) 7434 Rogers, Ft. Smith, Arkansas;
            3) 2323 N. Harrison, Shawnee, Oklahoma;
            4) 4010 W. Garriott Road, Enid, Oklahoma;
            5) 5601 E. Reno, Midwest City, Oklahoma;
            6) 7401 S. Shields, Oklahoma City, Oklahoma;
            7) 2905 NW 36, Oklahoma City, Oklahoma;
            8) 8315 N. Rockwell, Oklahoma City, Oklahoma;
            9) 8375 N. Rockwell, Oklahoma City, Oklahoma;
           10) 7120 NW Expressway, Oklahoma City, Oklahoma;

     (d) Hawaiian Electric Company -- a utility that provides
         utility services to the Debtors' stores located at:

            1) 500 Kamokila Blvd., Kapolei, Hawaii;
            2) 4561 Salt Lake Blvd., Honolulu, Hawaii;
            3) 94825 Lumiana Street, Waipahu, Hawaii;
            4) 501 Sumner Street, Honolulu, Hawaii; and
            5) 500 N. Nimitz Highway #N, Honolulu, Hawaii.

     (e) Florida Power & Light Company -- a utility company that
         provides utility services to the Debtors under various
         account numbers at various service addresses;

     (f) Guam Power Authority -- a utility company that provides
         utility services under account number 00181499 to the
         Debtors' store in upper Tumon, Guam.

     (g) City of Charlevoix -- a utility company that provides
         utility services to the Debtors' store number 3820 at
         service address 06600 M-66 Highway, Charlevoix,

     (h) Southern California Edison -- a utility company that
         provides utility services to the Debtors under various
         account numbers at various service addresses;

     (i) Sacramento Municipal Utility District -- a utility
         company that provides utility services to the Debtors
         under various account numbers at various service

     (j) Ramco-Gershenson Inc. -- a utility company that
         provides utility services to the Debtors':

           Store No.  Service Address
           ---------  ---------------
             4192     Tel-Twelve Mall in Southfield, Michigan
             3537     West Oaks I in Novi, Michigan
             n/a      West Oaks II in Novi, Michigan

     (k) Fort Pierce Utilities Authority -- a utility company
         that provides utility services to the Debtors' store
         number 3381 at service address 2111 S. Federal Highway
         in Fort Pierce, Florida;

     (l) Illinois Power Company -- a utility company that
         provides utility services to the Debtors at various
         locations under approximately 32 account numbers;

  2) Specifically, the terms of post-petition utility services
     are governed by the applicable rules, regulations, tariffs,
     statutes, laws, ordinances, and customary billing
     procedures governing utilities in the State where the
     Accounts by which the Utilities provide services to the
     Debtors are located;

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

  4) The Debtors must pay a post-petition security deposit in
     the amount of:

       -- $3,600 to Bath Electric,
       -- $100,000 to Arizona Public Service,
       -- $83,000 to Oklahoma Gas,
       -- $57,060 to Hawaiian Electric,
       -- $1,079,420 to Florida Power,
       -- $63,000 to Guam Power (Advance Payment)
       -- $10,829 to Charlevoix,
       -- $1,284,767 to Southern California Edison,
       -- $104,729 to Sacramento Municipal,
       -- $36,000 to Ramco-Gershenson,
       -- $17,000 to Fort Pierce,
       -- $202,053 to Illinois Power,

     The Debtors may pay the Security Deposit by check or wire

  5) Payment to Oklahoma gas by any means other than wire
     transfer or electronic funds transfer will be sent to:

       c/o Stacy Romines
       Credit & Collections Department
       Oklahoma Gas & Electric Company
       3220 S. High, MC23
       Oklahoma City, Oklahoma 73129 (non-mail delivery),


       P.O. Box 321, MC23
       Oklahoma City, Oklahoma (mail delivery).

     By August 28, 2002, either the Debtors or Illinois Power
     may request an adjustment to the amount of the Security
     Deposit.  Should the Debtors and Illinois Power be unable
     to agree on an appropriate adjustment, the Debtors must
     serve and file a motion for determination of adequate
     assurance of payment in accordance with the Utility Order
     by September 27, 2002.

  6) As soon as reasonably possible and to the extent feasible
     as to each party, the Debtors and:

       -- Oklahoma Gas,
       -- Florida Power,
       -- Guam Power,
       -- Southern California Edison,
       -- Sacramento Municipal,
       -- Ramco-Gershenson,
       -- Fort Pierce,
       -- Illinois Power,

     agree to make a good-faith effort to arrange a system by
     which the Utility will submit the Invoices to the Debtors
     through electronic means, including electronic data
     interchange or other electronic file transfers, and the
     Debtors will submit their payments to the Utilities through
     electronic funds transfer.

  7) Furthermore, the Debtors and Oklahoma Gas agree to re-
     evaluate the amount of the Post-petition Deposit:

     (a) After the expiration of three months of complete
         service periods for all of the Accounts (each with
         service for approximately 30 days) following Oklahoma
         Gas' receipt of the full amount of the Post-petition
         Deposit, either:

            (i) the Debtors may write a letter to Oklahoma Gas,
                c/o Ms. Romines, and to its counsel, Gilbert L.
                Hamberg, Esq., at 1038 Darby Drive in Yardley,
                Pennsylvania, in which they request that
                Oklahoma Gas re-evaluate the Amount; or

           (ii) Oklahoma Gas may write a letter to the Debtors,
                c/o Mark A. McDermott, Esq., at Skadden, Arps,
                Slate, Meagher & Flom, in Chicago, Illinois, in
                which it re-evaluates the Amount, and of whether
                the Amount should be changed;

     (b) If the average of these three months of Invoices for
         all of the Accounts is less than 15% above or below the
         amount of the Post-petition Deposit, then there will
         be no change in the Amount; e.g., if at the first
         three-month anniversary the Average falls within a
         range from $70,551 to $95,450, then there will be no
         change in the Amount;

     (c) If the Average is at least 15% below the amount of the
         Post-petition Deposit, then the Amount will decrease
         to the nearest $1,000 of the Average, e.g., if at the
         first three-month anniversary, the Average is $68,225,
         then the Amount will decrease to $68,000.  This is
         provided, however, that after Oklahoma Gas' receipt of
         the Post-petition Deposit, if the Debtors pay more than
         one Invoice per Account after the applicable due date,
         then the Amount will not be reduced.  Oklahoma Gas will
         apply the credit balance from the reduction towards
         payment of any unpaid charges on the Invoices, and any
         remainder will be applied to future Invoices, if

     (d) If the Average is at least 15% above the amount of the
         Post-petition Deposit, then Amount will increase to
         the nearest $1,000 of the Average; e.g., if at the
         first three-month anniversary the Average is $97,346,
         then the Amount shall increase to $97,000.  "Additional
         Post-petition Deposit means the amount of that
         increase; e.g., if at the first three-month anniversary
         the Amount increases from $83,000 to $97,000, then the
         Additional Post-petition Deposit will be $14,000;

     (e) If the Debtors send a Debtors' Re-evaluation Letter to
         Oklahoma Gas, then Oklahoma Gas has 30 days from its
         receipt to respond and sent Oklahoma Gas' Reevaluation
         Letter to the Debtors.  Within 15 days of the sending
         of Oklahoma Gas' Re-evaluation Letter, in which an
         Additional Post-petition Deposit applies, the Debtors
         must pay the Additional Post-petition Deposit to
         Oklahoma Gas;

     (f) Thereafter, so long as these bankruptcy proceedings
         remain pending, and following the determination of the
         amount of each re-computation, these procedures to re-
         evaluate the Amount will repeat after the passage of
         each succeeding, three additional months of complete
         service periods for all of the Accounts (each with
         service of approximately 30 days);

  8) On each three-month anniversary of the initial payment of
     the Security Deposit to:

       -- Florida Power,
       -- Southern California Edison,
       -- Illinois Power,

     the amount of the Security Deposit will be modified based
     on the actual usage for the preceding three monthly billing
     periods if and only if the average month's dollar amount to
     that usage is at least 15% more or less than the amount of
     the Security Deposit.  In that case, the Debtors will be
     entitled to a refund in the amount by which the Security
     Deposit exceeds the average monthly dollar usage for the
     prior three monthly billing periods, or the Utilities will
     be entitled to an additional Security Deposit in the amount
     by which the average monthly usage for the prior three
     monthly billing periods exceeds the Security Deposit.  The
     Utilities will satisfy each Security Deposit Refund by
     applying the amount of the refund as payment for future
     utility services under the Accounts.  The Debtors may pay
     the Security Deposit Increase by check, electronic funds
     transfer or wire transfer within 15 days of receiving the
     Utilities' notice of the Security Deposit Increase;

  9) Guam Power may apply the Advance Payment to any post-
     petition amount the Debtors owe to Guam Power, including
     the amount the Debtors will owe Guam Power for the next
     regular billing period.  The Debtors must make the Advance
     Payment by check or wire transfer.

     For each regular billing period thereafter, including the
     billing period in which the Advance Payment was received by
     Guam Power, the Debtors will pay Guam Power the amount
     billed by the due date stated on the monthly bill.

     The Debtors will pay in the ordinary course of business and
     according to the ordinary payment terms between the Debtors
     and Guam Power all charges for post-petition services
     rendered before the start of the billing period to which
     the Advance Payment applies.

10) On each six-month anniversary of the initial payment of the
     Security Deposit to Sacramento Municipal, the amount of the
     Security Deposit will be modified based on the actual usage
     of the preceding six monthly billing periods if and only if
     the average month's dollar amount of that usage is at least
     15% more or less than the amount of the Security Deposit.
     In that case, the Debtors will be entitled to a refund in
     the amount by which the Security Deposit exceeds the
     average monthly dollar usage for the prior six monthly
     billing periods or Sacramento Municipal will be entitled to
     an additional Security Deposit in the amount by which the
     average monthly dollar usage for the prior six monthly
     billing periods exceeds the Security Deposit.  Sacramento
     Municipal will satisfy each Security Deposit Refund by
     applying the amount of the refund as payment for future
     utility services under the Accounts.  The Debtors may pay
     the Security Deposit Increase by check, electronic funds
     transfer or wire transfer within 15 days of receiving
     Sacramento Municipal's notice of the Security Deposit

11) The Security Deposit (and the Additional Post-petition
     Deposit as to Oklahoma Gas) will bear interest and must
     be returned to the Debtors, less any amounts due for unpaid
     Invoices for post-petition services, as provided under the
     Regulations.  In any event, the Security Deposit must be
     returned to the Debtors no later than 15 days after the
     effective date of a confirmed plan of reorganization,
     without prejudice to the Utilities' request for a security
     deposit to cover any post-confirmation time period in
     accordance with its Regulations.

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

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

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

     In addition, Guam Power agrees to transmit simultaneously
     by facsimile a copy of any default notice sent to the
     Debtors to:

       Kurt Ramlo
       Skadden, Arps, Slate, Meagher & Flom LLP
       300 South Grand Avenue, 34th Floor
       Los Angeles, California
       Facsimile No. 213-687-5600

13) Any undisputed charge for post-petition utility services
     provided by the Utilities to the Debtors constitutes an
     administrative expense in accordance with Sections
     503(b)(1)(A) and 507(a)(1) of the Bankruptcy Code.

14) As to Oklahoma Gas, the automatic stay is modified and
     Oklahoma Gas is authorized to recoup or offset from unpaid
     invoices for utility services in the amount of $110,725
     rendered pre-petition to the Accounts, the $40,800 security
     deposit that the Debtors gave to Oklahoma Gas before the
     Petition Date.

15) As to Guam Power, if the Debtors request service be
     connected to any additional Account, the Debtors must make
     an advance Payment in the amount equal to an average bill
     for electrical service for one month for the new account.
     The Debtors will make the Advance Payment for the new
     account at the end of the third month after opening the
     additional Account and the monthly bills for electrical
     service for the three preceding months shall be used to
     determine the average bill for electrical service for one
     month.  Guam Power will provide utility services to the
     additional Account and thereafter all terms and conditions
     of the Agreed Order will apply to the additional Account.
     Upon termination of service to an Account for any reason,
     the Advance Payment apportioned to that Account must be
     returned to the Debtors, less any amounts due for unpaid,
     post-petition services relating to that Account;

     Upon termination of service to all Accounts for any reason,
     any credit balance due to the Debtors (less any amounts due
     for unpaid, post-petition services) from their post-
     petition payments, including the Advance Payment and any
     subsequent Advance Payment for additional accounts, may not
     be applied by Guam Power against any pre-petition charges
     owed by the Debtors to Guam Power.  Guam Power must return
     any credit balance to the Debtors. (Kmart Bankruptcy News,
     Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-

Kmart Corp.'s 9.875% bonds due 2008 (KMART18), DebtTraders says,
are quoted at a price of 45. For real-time bond pricing, see

L-3 COMM: S&P Keeping Watch on BB Rating After $14M Equity Issue
Standard & Poor's placed its double-'B' long-term corporate
credit rating on L-3 Communications Corp. on CreditWatch with
positive implications. The rating action follows the defense
company's announcement that it will issue 14 million shares of
common stock (approximately $900 million proceeds based on L-3
Communications' recent share price and the exercise of a 1
million share over-allotment option) and $750 million in senior
subordinated debt securities due 2012. New York, N.Y.-based L-3
Communications had approximately $2.2 billion in debt
outstanding at March 31, 2002.

"The equity issuance will enable L-3 Communications to restore
its capital structure after the company's recent $1.1 billion
debt-financed acquisition of Raytheon Co.'s Aircraft Integration
Systems (AIS) division," said Standard & Poor's credit analyst
Christopher DeNicolo.

The approximately $900 million proceeds from the equity issuance
are to be used to repay debt, as well as for general corporate
purposes, including potential acquisitions. Proceeds from the
debt issuance are to be used to refinance the $500 million
senior subordinated bridge loan related to the company's March
2002 acquisition of AIS and to repurchase or redeem the $225
million of outstanding 10 3/8% senior subordinated notes due
2007. The company's debt to total capital will be reduced to
below 50% pro forma for the securities issuance, from almost 66%
at March 31, 2002.

L-3 Communications participates in the defense sector, providing
secure communication systems, specialized communication devices,
and flight simulation and training.

Standard & Poor's will meet with management to discuss the
company's business strategies and financial policy to determine
the effect on credit quality and will resolve the CreditWatch

LTV CORP: Proposed Allocation of Steel Sale Proceeds Draws Fire
LTV Steel's proposed allocation of the proceeds from the sale of
its integrated steel mill assets to W.L. Ross has drawn numerous

1.  Viatec Inc.:  Significant Value

Viatec, Inc., represented  by Jayne M. Scott, Esq., of the Grand
Rapids firm of Warner Norcross & Judd LLP, provided tanks and
other equipment to the Debtors' Indiana Harbor Works and
Hennepin Works locations.  Due to the Debtors' failure to pay
for the tanks and equipment, Viatec filed a mechanic's lien
against the Indiana Harbor Works facility for $460,601, and
against the Hennepin Works facility for $75,000. According to
the Notice, the Debtors agree that $445,007 of  Viatec's
$460,601 lien asserted on the Indiana Harbor Works is valid, but
assert that none of it should be paid because the Indiana Harbor
Works facility allegedly has a negative cash value.  The Debtors
agree that the entire amount of Viatec's Hennepin Works lien is
valid and should be paid in full.  Viatec objects because:

       (1) Viatec believes that the Indiana Harbor Works
facility does have significant value and Viatec's lien should be
paid in full.  Viatec has sought information about the value of
the Indiana harbor Works facility, but has received very little

       (2) Viatec's lien on the Indiana Harbor Works is listed
as having been reduced from $460,601 to $445,007.  Viatec
objects to this and says the lien is in the proper amount of
$460,601, plus interest and attorney's fees.

       (3) To a limited extent, Viatec objects to the allocation
as to the Hennepin Works facility.  While the Debtor agrees
Viatec's lien of $75,000 should be paid in full, Viatec is also
entitled to interest on the $75,000 and attorney's fees. These
amounts should be paid before any amounts are paid to JP Morgan
Chase Bank.

2.  Cuyahoga County Taxing Authority:  Flawed Methodology

Cuyahoga County, a political subdivision and taxing authority
organized under the laws of the State of Ohio, represented by
William D. Mason Esq., Prosecuting Attorney, objects.  The
Debtors are obligated to the County for unpaid and delinquent
real property taxes in the approximate amount of $6,305,872 for
the tax years 2000, 2001 and 2002.  This claim is secured by a
real estate tax lien on all property owned by the Debtors within
Cuyahoga County.  The Cleveland Works to which this lien
attaches has been assigned a negative value by The Blackstone
Group and the Debtors.  The payment assigned to Cuyahoga County
is thus zero. The County also objects to the amounts attributed
to its lien on the L-S Electro Galvanizing Facility, Hennepin,
the Cleveland Works, and the LTV Tech Center.

A few days before the objection deadline, the County was
provided with a copy of the "Steel Asset Sale Cash Purchase
Price Allocation."  This document indicated Blackstone's
conclusions regarding the fair allocation of purchase price to
the acquired assets and summarized the analytical framework that
had been used to reach these conclusions.  To date, despite a
verbal and written request for additional materials, the County
has received no further response.

                         Flawed Methodology

The County objects to:

    (1) The methodology utilized by Blackstone in estimating the
         value of the Cleveland Works;

    (2) The value assigned to the Cleveland Works, as the County
        asserts that the assets have "substantial value";

    (3) The property allocation in that the Debtors and
        Blackstone ignore the substantial value of the assets
        comprising the Cleveland Works;

    (4) The anticipated payment of zero dollars on the County's
        first-priority real estate tax claim in that it is based
        on an improper valuation of the assets and a flawed
        property allocation;

    (5) The methodology used by Blackstone in estimating the
        value of the Hennepin Works;

    (6) The valuation of the Hennepin Works at $84 million in
        that it is based on a flawed valuation methodology;

    (7) The property allocation assigned to the Hennepin Works
        as based on a flawed valuation;

    (8) The allocation of $7 million in "transaction costs" to
        the selling expenses;

    (9) The treatment of the County's tax claim on the real
        property comprising the L-S Electro Galvanizing
        Facility.  The delinquent real property taxes
        attributable to this property serves as a first and best
        tax lien.  The existence vel non of a contractual
        agreement between the Debtor and a third party does not
        negate the County's tax claim;

   (10) As to L-S, the County further objects to the amount of
        the reconciled lien and says that the lien amount is
        more than listed by the Debtors; and

   (11) The amount of the reconciled lien as to the Cleveland
        Works, LTV Tech Center, and L-S, saying that the lien
        amount is more than listed.

3.  Lake Erie Electric Inc.:  Cleveland Works Integral

Lake Erie Electric Inc., is represented by James W. Moennich,
Esq., and Michael R. Niederbaumer, Esq., at Wicksn Herzer Panza
Cook & Batista in Lorain, Ohio.  Lake Erie objects, reminding
the Debtors that it asserts two separate mechanic's liens
against the Cleveland Works and the Grand River Lime Plant
assets.  One lien is identified on the Debtor's Notice dated
February 20, 2001 for $294,107.09.

The second lien has not been identified by the Debtor in either
Cleveland Works or Grand River lime Plant allocations, and
should be included in any allocation of proceeds.  The second
lien is in the amount of $261,044.24.  It was filed February 15,
2001 in the Cuyahoga County Recorder's files and on that same
date in the Lake County Records.

Lake Erie further objects to the Debtor's proposed valuation of
the Cleveland Works as having a negative value.  The Cleveland
Works is an integral part of the package of assets being
acquired by the purchaser, so that it is doubtful that the
transaction would proceed without a transfer of the Cleveland
Works.  An allocation of zero value to this asset is grossly
unjust to creditors.

4.  Hunter Corporation Objects:  Erroneous Valuation

Hunter Corporation, represented by James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, objects to the property allocation and
allocation of net proceeds.  Hunter objects because the
estimated negative cash value allocated to the Indiana Harbor
Works is erroneous, and the prorated allocation of zero with
regard to the Indiana Harbor Works is erroneous. Indiana Harbor
has "substantial value" and there should be a substantial
prorated allocation with regard to that asset.

Hunter objects to the anticipated payment to lienholders, saying
it is entitled to full payment of the amount of its lien.  The
lien schedule for Indiana Harbor does not show the mechanic's
lien of Hunter timely filed with the Lake County Recorded on
February 12, 2002, in the amount of $2,839,247.14 for materials
and services furnished by Hunter.

5.  Mid-American, Inc. Objects: Transaction Fees Excessive

Represented by John A. Lygizos, Esq., at Lygizos & Associates,
Mid-American objects to discharge of the lien and debt incurred
by LTV Steel in January 2001 when it asked Mid-American to
provide labor and materials to the Indiana Harbor facility, and
specifically the No. 2 Galvanized Line and Radiant Tube Furnace.  
The amount of $105,746.54 was not paid and is due and secured by
a mechanic's lien recorded on March 6, 2001, in the Lake County
Recorder's Office.

In the Notice, the Debtors list Mid-American's lien. They agree
that it is valid for the full amount, but the notice says there
are $7 million in transaction costs, which consist of $5.5
million of investment banking fees and $1.5 million of legal and
other expenses to be paid from the proceeds.

These investment banking fees and legal fees are excessive under
the circumstances of this case.  Mid-American and other
contractors enhanced the value of the assets that are the
subject of the sale for which the investment banking fees and
legal fees are to be paid.  The amount due to the lienholders
should be paid in full, or at the very least in the same pro
rata amount as the investment banking and legal fees.

Further, Mid-American objects to the valuation of Indiana Harbor
at zero.  This assessment is not only unfair and unjustified,
but is intended to improperly avoid valid and justified debts
and liens.

6.  Objections by Graycor Industrial, Graycor Blasting and
    Morrison Construction:  Assets Sold As Unit; Allocation
    Should Be Too

Graycor Industrial Contractors, Inc., Graycor Blasting Company
Inc., and Morrison Construction Company, Inc., represented by
Andrew L. Swope, Esq., at the Harrisburg firm of Kirkpatrick &
Lockhart LLP, object. They say that they hold liens totaling
$1,818,066 that were recorded in Lake County for labor,
materials and improvements to the Harbor Works Facility.

The Notice says that Graycor Industrial has a valid mechanic's
lien in the amount of $1,189,083, and Graycor Blasting has a
valid $7,011 lien.

In January 2001, Morrison recorded a $459,293 mechanic's lien in
Lake County because wasn't paid for labor, materials and
improvements it provided to Harbor Works.  The Notice admits
this lien and amount as valid.

The Creditors object, noting that, despite the fact that the
integrated steel assets were sold as an economic unit, the
Debtors now elect to attribute the proceeds of the sale only to
certain of the facilities. The Notice alleges, without support
or evidence, that the Harbor Works facility has a negative value
and none of the sale proceeds will be distributed to the
claimants who have liens against that property. However, the
proceedings in this case show that Harbor Works has
"substantial" positive value, citing Judge Bodoh's APP Order as
evidence.  "Obviously there is no need to protect the value of  
assets that have a negative net worth," Mr. Swope concludes.  In
addition, the Asset Purchase Agreement approved by Judge Bodoh
in February 2002 shows that the Harbor Works facility has a
positive value.

The Notice does not include any basis or methodology for the
proposed allocation, improperly asserts that the Harbor Works
Facility has a negative value, and does not allocate any portion
of the sale proceeds for distribution to claimants who have
liens against that asset.  The proposed allocation also
improperly allows certain lien claimants with lower priority to
recover on their claims while other lien claimants with senior
priority recover nothing.

The Notice improperly includes real property taxes with respect
to property other than the Harbor Works facility.  The
allocation of sale proceeds is in general neither fair nor
reasonable, Mr. Swope says.  "At least some portion of the sale
proceeds should be allocated to the sale of the Harbor Works

6.  Kvaerner Songer Inc.:  Value of Indiana Harbor Unfair

On August 6, 2000, the No. 3 Ore Bridge at the Indiana Harbor
Works facility was severely damaged and made unusable as a
result of a storm. Kvaerner responded to LTV's request for
emergency assistance and began work on the Ore Bridge on August
7, 2000.  While LTV made some payments, Kvaerner is still owed
$954,902.52, for which Kvaerner recorded a mechanic's lien on
April 16, 2001, in Lake County.  In the Notice, the Debtors
admit the validity of Kvaerner's mechanic's lien.

Kvaerner, also represented by Andrew L. Swope, Esq., at the
Harrisburg firm of Kirkpatrick & Lockhart LLP, objects to the
proposed allocation on the same grounds as those asserted by
Graycor and Morrison.

7.  Bank One Trust Company, Collateral Trustee:  First Priority

Bank One Trust Company, NA, successor in interest to Bank One
Ohio Trust Company NA, objects to the allocation of proceeds
asserted by the Debtor LTV Steel.  The allocation is inadequate
based on (i) the appraised value of the collateral, (ii) the
actual bidding on the collateral in connection with the
integrated steel sale, and (iii) representations by the Debtors,
their legal counsel and their financial advisors made in
connection with the integrated steel sale.  The Trustee further
objects to that portion of the allocation in which the Debtors
assert that certain mechanic's liens have priority senior to the
priority of the Collateral Trustee's liens and security

Victoria E. Powers, Esq., and Eric M. Soller, Esq., at
Schottenstein Zox & Dunn Co. LPA, in Columbus, Ohio, note that
the Debtors have reported in various pleadings that the Debtors'
operations fall into two primary business segments: (i) the
integrated steel business segment, and (ii) the metal
fabrication business segment.  In September 1992, the Debtors
entered into a settlement agreement with the USWA, under which
the Debtors, in their first Chapter 11 proceeding, agreed to pay
certain retiree benefits and employer contributions, and to
grant liens and security interests to secure these payments.

On the Petition Date, the Debtors filed an affidavit of Glenn J.
Moran in support of its petitions and requests for first-day
relief, in which Mr. Moran, on behalf of the Debtors, asserted
that the Cleveland West facility had an appraised value of $500

In May 1993, the Debtors, the USWA, and the Collateral Trustee
entered into a Collateral Trust Agreement that implemented the
settlement agreement.  Under the Trust Agreement, the Debtors
agreed to grant to the Collateral Trustee a lien on and/or
security interest in certain of their plant, property and
equipment under an Open-End Mortgage, Security Agreement and
Fixture Filing.  This was dated as of June 29, 1993, and
intended to secure payment of (i) certain retiree benefits to
salaried and hourly employees and retirees; (ii) certain
employer contributions under a defined contribution plan for
hourly employees; (iii) the fees, costs and expenses of the
Collateral Trustee; (iv) payment under a Note; and (v) certain
other amounts.  The Collateral includes land, improvements,
leases, rents, permits, easements, personal property, equipment,
licenses and permits, and proceeds, associated primarily with
the Debtors' Cleveland West Works plant in Cleveland, Ohio.

The Debtors then signed and delivered a Note in favor of the
Collateral Trustee.  This Note is a non-interest-bearing
promissory note from the Debtors in the principal amount of $250
million.  The Note is due in 2092, or on any earlier date on
which the Debtors receive a "Distribution Notice" from the USWA.  
The USWA is entitled to forward a Distribution Notice to the
Collateral Trustee upon the occurrence of a "Distribution
Event."  The Note can be discharged prior to the payment of the
principal amount, but only upon the Debtors' satisfaction of
certain conditions under the Collateral Trust Agreement.

The Mortgage is the first and best lien on the real property
collateral, subject to the interest of the county taxing
authority for unpaid real estate taxes.  In addition, the
Collateral Trustee filed U.C.C.-1 financing statements, by
virtue of which the Collateral Trustee has a first and best
security interest in the personal property collateral.

According to the Debtors' presentation, Blackstone considered
factors to determine its allocation of the purchase price of (i)
previous indications of interest, (ii) historical financial
performance, (iii) impact of start-up costs, (iv) impact of
environmental liabilities, (v) third-party appraisals, and (vi)
comparable transaction analyses.  The application of these
allocation considerations varies according to the acquired

The Collateral Trustee objects to the allocation on the grounds
that it allocates an insufficient portion of the sale proceeds
to the Cleveland West Facility and related personal property
based on (i) the appraised value of the collateral contained in
the record of this case, and (ii) the amount bid by CSN for the
rolling and finishing assets of the Cleveland West Facility.  
The Collateral Trustee further objects to the Debtors' assertion
in the Notice that the mechanic's liens of record are senior in
priority to the Collateral Trustee's Liens.

The Notice is wholly inadequate and its enforcement would be
inequitable.  The Notice fails to provide any analysis of the
allocation, and fails to designate proceeds as between real and
personal property.  This lack of analysis has placed the
Collateral Trustee and other creditors at a significant
disadvantage, as it is difficult to glean from the Notice any
rationale for the allocation of any particular portion of the
sale proceeds to any particular asset.  In essence, creditors
are asked to participate in an exercise in mind reading.

The Collateral Trustee submits that correct valuation is in a
range between an amount reflecting a $15 million bid for a
portion of the Cleveland West Facility, and the $500 million
appraisal referred to by the Debtors.  The Collateral Trustee
therefore asks Judge Bodoh to revise the allocation to more
accurately reflect the value of the collateral, and to designate
proceeds as between the real property collateral and the
personal property collateral.  This will prevent future disputes
between parties secured only by the real property, such as the
Cuyahoga County Treasurer, and the Collateral Trustee.

8.  Treasurer of Putnam County Illinois:  How Taxes Are Computed

Represented by Larry J. McClatchey, Esq., at the Columbus firm
of Kegler Brown Hill & Ritter, the Treasurer objects because the
correct amount of the taxes owed by the Debtors from the
Hennepin Works, secured by a first and best lien, superior to
the interests of all other lien creditors, including mortgagees,
is $805,142.92, more than the amount proposed in the Notice.

The Treasurer explains the errors in the Debtors' calculation of
the taxes due, saying that under Illinois law, the liability for
real property taxes depends upon the date of the deed
transferring title to the property, not the date of recordation.  
The Quit Claim Deed from the Debtor to ISG Hennepin, Inc., is
dated April 12, 2002, but it was not recorded until April 17,
2002.  Thus, the Debtor is responsible for real property taxes
for at least one additional day.  In addition, the Debtor
assumed that 2001 and 2002 real property taxes are equal to the
2000 real property taxes.  This is incorrect.  Real property tax
calculations are done in arrears.  Liability for the first half
taxes for the preceding year arise on June 1, and the liability
for the second half taxes for the preceding year arise on
September 1 (provided that the tax bills are mailed at least 30
days in advance).  It is the responsibility of the Supervisor of
Assessments of each county to make calculations in accord with
law before the County Treasurer can generate real property tax
bills.  The Supervisor estimates that the real property tax for
year 2001 payable in 2002 for the Hennepin Works property will
be $342,358, and estimates that the real property taxes for 2002
payable in 2003 will be $359,766.  Finally, the Debtor did not
include interest which has accrued on real property taxes of
$325,615.80 for tax year 2000.  These real property taxes became
a line on the property as of January 1, 2000, but were payable
in 2001.  When the Debtor did not pay these taxes, interest
began to accrue.  The Treasurer has calculated that interest is
accruing at the rate of $2,442.12 per month, beginning November
13 2001, for the first half taxes for the year 2000, and
beginning December 15, 2001, for the second half.  Assuming that
Putnam County is paid for the first half taxes no later than
July 12 2002, the first half tax bill for the year 2000 includes
interest in the amount of $19,536.96.  It is paid for the second
half taxes no later than July 14, 2002.  The second half tax
bill for the year 2000 includes interest in the amount of

Effective July 13, 2002, there will be an additional monthly
accrual for the first half taxes for the year 2000.  This raises
the interest to $21,979.08.  Effective July 15, 2002, there will
be an additional monthly accrual for the second half taxes for
the year 2000, raising the interest to $19,536.96.  Effective
August 13, 2002, the interest due will increase to $24,421.20
for he first half taxes, and effective August 15, 2002, the
interest due will increase to $21,979.08 for the second half

The total amount due is therefore $805,142.92 as of July 12,
2002.  The Treasurer explains that, given the nature of the real
property tax assessment and collection procedures in Illinois,
it is possible, but not likely, that the ultimate real property
tax liability for periods prior to and including April 12, 2002,
will be less than $805,142.92. This is provided that the
disbursement is made to the Treasurer before that date.  If this
is the case the Treasurer will refund any unused portion of the
real property tax liability as the Debtor may direct.

9.  United Refractories Inc.:  Not Enough Information

United Refractories holds three mechanic's liens: one for
$126,865.81, one for $104,601.40, and a third for $84,618.86,
all timely recorded. United objects to the Debtors' Notice
because it fails to provide sufficient information to properly
allow United and other creditors holding mechanic's liens to
determine whether their liens have been recognized, and/or
whether their liens apply to property identified by the Debtors.  
Mr. Dean E. Nielsen, Esq., at Harrington Hoppe & Mitchell Ltd.,
cites as an example the Debtors' failure to indicate whether the
coke plant located on South Burley Avenue in Chicago, or the
Independence Road property in Cleveland, are part of the Notice
and proposed allocation.  It would seem that if those properties
are part of the proposed allocation, but not to receive a
distribution, those properties would have been listed and
identified with zero values, much like the Warren coke plant.  
Regarding the Lime Plant, the Tech Center and the L-S Electro
Galvanizing property, it is impossible to identify where the
properties are located.  Consequently, United and other
creditors cannot determine whether their liens have been
property identified, or to which properties the Notice refers.  
Finally, Mr. Nielsen says the Debtors' own counsel acknowledge
that the Notice does not include all postpetition mechanic's

10.  United Steelworkers of America:  First Priority Lien

The USWA objects.  They are represented by David M. Fusco, Esq.,
and Daniel S. White, Esq., at Schwarzwald & McNair, in
Cleveland, Ohio, David R. Jury, Esq., Assistant General Counsel
for the USWA, and Richard M. Seltzer, Esq., of the New York firm
of Cohen Weiss & Simon LLP.  Reciting the same facts alleged by
Bank One as Collateral Trustee, the USWA objects to the
allocations in the Notice because the estimated cash value of
the Cleveland Works and Cleveland West, in particular, is
greater than zero, and a substantial portion of the cash
proceeds should accordingly be allocated to those assets.  In
addition, the USWA has a first-priority lien position as to the
Cleveland West personal property.  The Debtor has not
established that the USWA lien is properly primed by the
subsequently filed mechanic's liens as to the Cleveland West
real property.

11.  Precision Environmental Company:  No Methodology Explained

Precision Environmental Company, represented by Bruce J. L.
Lowe, Esq., and Scott N. Opincar, Esq., at Calfee Halter &
Griswold LLP, in Cleveland, Ohio, is a mechanic's lien claimant
to Cleveland Works in the amount of $442,854.  This lien is
accorded no payment and the lien is described as "invalid,"
although no reason or basis is stated for this.

Precision gave a Notice of Perfection in accord with the
Bankruptcy Code on May 18, 2001.  Thereafter, Precision provided
extensive supporting detail to the Debtors upon request, and the
only subsequent inquiry from the Debtors has since been fully
addressed and clarified by correspondence dated May 3, 2002.  
While it is clear that if the proposed allocation of proceeds
under the Notice is upheld with respect to the Cleveland Works,
the amount accorded to Precision's lien would make no difference
for disbursement purposes.  However, Precision would,
nonetheless, prefer that the record reflect the true validity
and amount of its lien claim.

The Debtor's Notice does not provide any indication or breakdown
reflecting how the numbers for net proceeds and allocation were
derived from the entire amount of sale proceeds.  Until a
breakdown or explanation is provided, it is impossible for lien
claimants, such as Precision, to assess whether or not the
figures are properly arrived at or are objectionable.  
Similarly, no explanation is provided as to how the "estimated
cash value" of each location is calculated, and as to what
components comprise the calculations of the valuations of each
of the acquired assets.  In particular, from Precision's
standpoint, what actors result in a negative valuation for the
Cleveland Works?  Until these questions are fully answered,
precision is unable to determine whether or not the allocations
in the Notice are acceptable.

12.  Continental Electric Company:  Debtor Is Playing Games

Represented by Clay K. Keller, Esq., at Buckingham Doolittle &
Burroughs in Akron, Ohio, Continental objects in the first
instance to the overall allocation of net proceeds to the
various acquired assets.  Some properties have received a
negative estimated value and, accordingly, the escrow amount for
that particular acquired asset will receive no net proceeds and
all lienholders for the acquired asset will receive nothing.  
The Notice includes no data or analysis to indicate that there
was any rational basis as to why some of the acquired assets
have been assigned value while others have not.

A review of the lien schedules for each of the acquired assets
warrants close review by Judge Bodoh.  This is because it
appears that the process of assigning an estimated cash value to
each of the acquired assets inappropriately benefits the lower
priority lienholders, JP Morgan, at the expense of numerous
other lienholders with higher priority, such as Continental.  
Essentially, the acquired assets with a high number of
lienholders, such as Indiana Harbor and Cleveland Works, have
been assigned a negligible cash value.  No portion of the net
proceeds will find its way into the escrow accounts for these
acquired assets and all holders of liens on these assets will
receive no share of the net proceeds.  By way of contrast, for
no reason explained in the Notice, acquired assets with fewer
lienholders, such as Hennepin and Tech Center, have been
assigned value. The escrow accounts for these assets will
receive a portion of the net proceeds providing full or partial
payment to holders of liens on these assets.  By far the largest
"benefactor of the proposed allocation" is JP Morgan, which also
is in almost every case the lowest priority lienholder.

Mr. Keller suggests that Judge Bodoh should not allow games to
be played so that JP Morgan gains an unfair advantage over all
of the other lienholders who invested millions of dollars into
the acquired assets. Clearly the net proceeds cannot come close
to satisfying all of the liens, but that is no excuse not to
equitably allocate the cash proceeds that are available on a
rational basis which respect the intent and purpose of assigning
different levels of priority to liens.

Continental further objects to the "validity assignment" of its
mechanic's lien asserted against Indiana Harbor in the amount of
$519,916.58, and its mechanic's lien on the lien schedule for
Hennepin in the amount of $103,009.87.  Continental also filed a
third mechanic's lien in the amount of $94,153.79, which is
shown in the Notice as "valid" and against Indiana Harbor for
the full amount.  The lien schedules relating to the first two
liens simply states "invalid no notice".  Although it is
impossible to infer exactly what the Debtors are objecting to by
this three-word statement, Continental objects to this
designation and submits that all of its mechanics' liens are
completely valid.  Mr. Keller indicates he has already forwarded
additional documentation which the Debtors' counsel has
indicated satisfies their concerns that no notice was timely
provided. Continental reserves the right to supplement its

13.  Ramirez & Marsch, Inc.: Mechanics' Liens "Preferred"

On behalf of Ramirez & Marsch, Joseph Lucci, Esq., at Nadler
Nadler & Burdman, in Youngstown, Ohio, objects to the proposed
allocation on nine bases.  R&M has a $124,410 mechanic's lien
against Indiana Harbor perfected by recording on January 29,
2001 in the Office of the Recorder of Lake County.  R&M does not
object to this as the face amount of their lien before interest
and attorney's fees, but it is also entitled to recover these
matters from the sales proceeds.

                Sales Price Includes Assumed Debts

At a hearing in February 2002, LTV, through its counsel,
represented that the inventory would be sold for approximately
$47,500,000 and that this amount was subject to adjustment at
closing.  According to news reports, the amount to be paid for
the inventory is approximately $52,000,000.  The property
allocation erroneously fails to include an allocation for the
sales proceeds for the inventory, and R&M objects to the
omission - particularly since applicable state law includes
"machinery, tools, stock or material, work finished or
unfinished" in the scope of items subject to a mechanic's lien.

Further, the actual sales price is the total stated price, plus
the amount of the assumed liabilities.  At the February hearing,
the Debtor and its counsel represented the assumed liabilities

     (1) $33,400,000 for letters of credit;
     (2) $33,400,000 for expenses covered under the APP budget;
     (3) $200,000,000 for environmental liabilities.

When the assumed liabilities are added to the cash portion of
the purchase price for the real estate, improvements, equipment
and inventory, the actual purchase price is more than
$400,000,000.  The property allocation erroneously fails to
include an allocation for the actual total price for the
property sold, and R&M objects to the omission.  To allow the
Debtor to reduce the purchase price by the amount of various
assumed liabilities, and to then limit the allocation of the
sales proceeds for the lien claimants to the remaining "cash"
portion of the purchase price is contrary to applicable
bankruptcy and state law.  The liens attach to the total value
of the property and therefore attach to the total sales price.

    Mechanic's Liens Have Priority Over Transaction Costs

In Indiana, state law defines the priority of a mechanic's lien

       "If the person, firm, . . . is in failing circumstances,
the [mechanic's lien claims] shall be preferred debts whether a
claim or notice of lien has been filed or not."  Since it is
clear that the Debtor "is in failing circumstances," R&M's
mechanic's lien and the other mechanic's liens claims against
the Indiana Harbor assets must be treated as "preferred debts."  
Thus the mechanic's lien claims on the Indiana harbor assets
have priority over any expenses of the sale and must be paid
"off the top."

The property allocation reduces the proceeds to be allocated by
$8,000,000 for a reserve under the APA, and by $7,000,000 for
"estimated transaction costs."  These items do not have any
priority over the mechanic's lien claims and thus the amounts
set aside must be included in the allocation of sales proceeds
to the mechanic's lien claims. Further, only the gross sales
price for the acquired assets may be used in the allocation.

            Indiana Harbor Must Have Positive Value

The Notice does not contain any explanation as to the
methodology that was used in performing the property allocation.  
The Debtor arbitrarily assigned a negative value to the
Cleveland Works, the Indiana Harbor Works, and the Warren Coke
Facility.  Then the Debtor attempts to allocate an arbitrarily
low amount on a pro rata basis among the other properties based
on an "estimated cash value," except for special allocations for
the Short-Line Railroad Equipment, Cleveland natural Gas
Reserves, and Prepaid Expenses.  The end result is a property
allocation that has no factual or legal basis and is arbitrary
and capricious. Judge Bodoh should disregard the property
allocation in its entirety, rejecting both the flawed
methodology that was used and the resulting flawed computations.  
After all, if the Indiana Harbor Works had no value, then why
did the buyer purchase it as part of the total package? The
buyer chose not to purchase the Chicago Coke Plant.  If the
buyer believed that the Indiana Harbor Works had no value, then
the buyer would have also excluded the Indiana Harbor Works from
the package.  If the value of this property truly is negative,
then the buyer would have reduced the total purchase price
because of its inclusion.  If such reduction occurred, then the
true sales prices for the other plants (those with a positive
value) was actually more.  In these circumstances, the Debtor
may have breached its fiduciary duties by giving up additional
sales proceeds in consideration for getting rid of real estate
with a negative worth.

This chain of reasoning leads inevitably to the conclusion that
Indiana Harbor is a valuable property.  R&M notes that the buyer
has already begun to operate the Indiana Harbor Works and
intends to have all of the steelmaking facilities at Indiana
Harbor in full production in the near future.

                         Taxes Overstated

The lien schedule for Indiana Harbor lists real estate taxes to
the Lake county Treasurer as a first priority in the amount of
$117,851,248.  R&M believe this amount is overstated.  This
amount includes taxes for the Debtors' Calumet College facility
located in Hammond, Indiana.  R&M objects to this overstatement
of amount and payment of any portion of the real estate taxes
attributable to the Hammond facility.  The Hammond facility was
not sold and there is no basis for using sales proceeds to pay
its taxes.

                          Other Objectors

Other creditors objecting urge one or more of the bases for
objection described in the preceding objections.  These other
objectors and their counsel are:

       Solid Platforms, Inc., represented by Joseph Lucci, Esq.,
of the Youngstown, Ohio, firm of Nadler Nadler & Burdman,
together with Stephen M. Maish, Esq., at Maish & Mysliwy in
Hammond, Ohio;

       Field Technologies, Inc. represented by Joseph Lucci,
Esq., of the Youngstown, Ohio, firm of Nadler Nadler & Burdman,
together with Stephen M. Maish, Esq., at Maish & Mysliwy in
Hammond, Ohio;

       Meccon Industries, Inc. represented by represented by
Joseph Lucci, Esq., of the Youngstown, Ohio, firm of Nadler
Nadler & Burdman, together with Stephen M. Maish, Esq., at Maish
& Mysliwy in Hammond, Ohio;

       JWP/Hyre Electric Co. of Indiana, Inc., represented by
Joseph Lucci, Esq., of the Youngstown, Ohio, firm of Nadler
Nadler & Burdman, together with Stephen M. Maish, Esq., of the
Hammond, Ohio, firm of Maish & Mysliwy and Kenneth D. Reed,
Esq., at Abrahamson & Reed in Hammond, Ohio;

       Hasse Construction Company, Inc., represented by Joseph
Lucci, Esq., of the Youngstown, Ohio, firm of Nadler Nadler &
Burdman, together with Stephen M. Maish, Esq., of the Hammond,
Ohio, firm of Maish & Mysliwy; and

       J. M. Foster, Inc. and Didier-M & P Engineering, Inc.,
represented by John A. Gleason, Esq., at Benesch Friedlander
Coplan & Aronoff LLP in Columbus, Ohio; and

       "Comment" by Colliers International, represented by
Kathryn A. Williams, Esq., at Weltman Weinberg & Reis Co. LPA in
Cleveland, Ohio.

                     Hearing Rescheduled

In response to this storm of objections, LTV Steel moves for a
continuance in the hearing on this issue, which is granted.  The
Notice and objections will be considered by Judge Bodoh on June
18 and 19, 2002. (LTV Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 609/392-00900)

DebtTraders reports that LTV Corporation's 11.75% bonds due 2009
(LTV2), an issue in default, are quoted at a price of 0.5. See  
real-time bond pricing.

LAIDLAW INC: Appoints Williams Sanger as New AMR Unit's CEO
Laidlaw Inc. announced that Jack P. Edwards is no longer serving
as president and CEO of American Medical Response, Inc.,
Laidlaw's national U.S. ambulance services company.  Mr. Edwards
had been president and CEO of AMR since March 2001.

Laidlaw also announced that it has appointed William A. Sanger
as CEO of AMR.  Since January 2000, Mr. Sanger has been engaged
to manage the overall operations of Emcare Holdings Inc.,
Laidlaw's national U.S. emergency medicine management services
company, serving as Emcare's CEO.  Mr. Sanger, a former director
of Laidlaw, has extensive experience in the healthcare industry.
With over 30 years of healthcare experience, Mr. Sanger has led
both public and private healthcare companies.  His extensive
experience in all aspects of healthcare is well-regarded
throughout the industry.  Mr. Sanger is also the founder and a
principal of Bidon Companies, Inc., a healthcare consulting

Laidlaw Inc. is a holding company for North America's largest
providers of school and inter-city bus transportation, public
transit, patient transportation and emergency department
management services. (Laidlaw Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  

LECTEC CORP: Nasdaq Okays Listing Transfer to SmallCap Market
LecTec Corporation (Nasdaq:LECT) received approval to transfer
its listing from the Nasdaq National Market to the SmallCap
Market, effective at the opening of business June 10, 2002.

"Due to the nation's current economic climate, many companies
our size can no longer satisfy the requirements to maintain
their Nasdaq 'national' listing. Based on our current financial
status, we received notice from Nasdaq that we are not meeting
the minimum $5,000,000 market value of publicly held shares and
the $4,000,000 net tangible assets requirements for Nasdaq
National Market listing. For the benefit of companies like ours,
Nasdaq has created the SmallCap Market," stated Rod Young,
Chairman, CEO and President. "This switch to the SmallCap Market
will maintain our Nasdaq listing status and should have minimal
effect on how our shares will be traded or valued. Our move to
the SmallCap Market also gives us an excellent opportunity to
continue our commitment to creating true shareholder value. We
have an excellent product position with our branded
TheraPatch(R) and NeoSkin(R) lines, an improving contract
manufacturing business, as well as a strong patent portfolio. We
will continue to drive toward increasing LecTec's cash flow and
share price, with the intention of transferring back to the
Nasdaq National Market at the earliest opportunity," concluded

"This will maintain an important liquid market for LecTec's
shareholders because the stock will continue to trade in a
respected market recognized around the world. Operating in an
efficient, highly competitive electronic trading environment,
the Nasdaq SmallCap Market offers essentially the same
visibility and stock trading governance as the Nasdaq National
Market. The transfer will be seamless as the symbol remains the
same, the SmallCap Market uses the same trading system as the
National Market, and quotes and news are available from the same
sources," said Douglas Nesbit, CFO and Corporate Secretary.

LecTec is a health care and consumer products company that
develops, manufactures and markets products based on its
advanced skin interface technologies. Primary products include a
full line of over-the-counter therapeutic patches for muscle
aches and pain, insect bites, minor skin rashes, cold sores,
coughs due to colds and minor sore throats, psoriasis, and its
new products NeoSkin Rejuvenation and TheraPatch Sinus &

MCMS INC: Has Until September 12, 2002 to File Chapter 11 Plan
By order of the U.S. Bankruptcy Court for the District of
Delaware, MCMS, Inc. and its debtor-affiliate obtained an
extension of their exclusive periods.  The Court gives the
Debtors, until September 12, 2002, the exclusive right to file
their plan of reorganization and until November 12, 2002 to
solicit acceptances of that Plan.

MCMS, Inc., a global leading provider of advanced electronics
manufacturing services to original equipment manufacturers filed
for Chapter 11 protection on September 18, 2001. Eric D.
Schwartz, Esq. and Donna L. Harris, Esq. at Morris, Nichols,
Arsht & Tunnell represent the Debtors in their restructuring
effort.  When the company filed for protection from its
creditors, it listed $173,406,000 in assets and $343,511,000 in

MATLACK SYSTEMS: Debtors' Exclusive Period Intact Until June 24
By order of the U.S. Bankruptcy Court for the District of
Delaware, Matlack Systems, Inc. and its debtor-affiliates
obtained a fifth extension of their exclusive periods.  The
Court gives the Debtors, until June 24, 2002, the exclusive
right to file their chapter 11 plan and until August 26, 2002 to
solicit acceptances of that Plan.

Matlack Systems, Inc., North America's No. 3 tank truck company,
provides liquid and dry bulk transportation, primarily for the
chemicals industry.  The company filed for chapter 11 protection
on March 29, 2001 and is represented by Richard Scott Cobb,
Esq., at Klett Rooney Lieber & Schorling.  Matlack's 10Q Report,
filed with the Securities and Exchange Commission on March 31,
2001, lists assets of $81,160,000 and liabilities of

MED DIVERSIFIED: AMEX Sets Appeal Hearing for July 23, 2002
Med Diversified, Inc. (AMEX: MED), a leading provider of home
and alternate site health care services, announced the American
Stock Exchange has granted the Company a hearing scheduled for
July 23, 2002, to appeal the AMEX staff's decision to pursue
delisting the Company's common stock from the exchange. The
hearing will be held in New York City before the AMEX Listing
Qualifications Hearing Department.

On May 22, 2002, Med Diversified received a letter from AMEX
indicating the Company was not in compliance with certain AMEX
standards for continued listing. Med Diversified's management
team disputes AMEX's decision to proceed with delisting and is
working diligently to resolve the matter.

Should Med Diversified lose the appeal, the Company anticipates
listing its securities on the Over-the-Counter Bulletin Board
(OTCBB), a controlled quotation service that offers real time
quotes and volume information in over-the-counter securities.

Management stressed these actions will not affect the current
operations of the Company but ultimately should lead to its
enhanced compliance with AMEX standards.

Med Diversified operates companies in various segments within
the home and alternate site health care industry, including
pharmacy, home infusion, multimedia, management, clinical
respiratory services, home medical equipment, home health
services and other functions. For more information, see

METALS USA: Gets Okay to Sell $5 Million of Miscellaneous Assets
Metals USA, Inc., and its debtor-affiliates obtained Court
approval of their proposed uniform procedures for the sale of
$5,000,000 worth of Miscellaneous Assets pursuant to Section 363
of the Bankruptcy Code.

The Debtors also obtained Court authority to sell any individual
Miscellaneous Asset having a value of less than $100,000,
without the necessity of any further hearing, by following these

A. All sales will be for cash and no single sale to any one
    purchaser will aggregate more than $500,000.

B. Debtors will file and serve a Notice of Sale of Miscellaneous
    Assets to:

    a. the United States Trustee for the Southern District of

    b. Counsel for the Creditors' Committee,

    c. Counsel to the Bank Group and

    d. any party claiming a purchase money security interest in
       the Miscellaneous Asset to be sold.

    The Notice of Sale will provide a period of five business
    days in which an objection, if any, may be made to the price
    or terms of the proposed sale. If no objections are received
    within the Notice Period, Debtors would be authorized to
    sell the Miscellaneous Asset at the proposed price.

C. The Notice of Sale will provide the following information
    under oath:

    a. A description of the Miscellaneous Assets to be sold
       including the present location and ownership of the

    b. The original purchase price and date, depreciation life,
       depreciated value, net book value and the age of the
       miscellaneous Assets to be sold;

    c. The proposed sales price for the Miscellaneous Assets and
       a description of the manner in which the price was
       obtained or negotiated including the number of bids
       received, and any other relevant factors that justify the
       sales price;

    d. The identity of the purchaser including a disclosure of
       any prior sales of Miscellaneous Asset sales transactions
       of the purchaser with Metals USA and a statement that the
       purchaser has no connection with Metals USA which would
       otherwise prohibit it from making an arms-length offer to
       purchase the Miscellaneous Assets;

    e. A statement that parties have a period of five business
       days within which to file an objection to the price or
       terms of the proposed sale and if no objections are
       received within the Notice Period, Debtors will be
       authorized to sell the Miscellaneous Asset at the
       proposed price pursuant to the Order granting the Motion;

    f. A copy of the proposed Bill of Sale.

D. At the conclusion of the Notice Period, if no objections are
    Received, Metals USA will deliver to the purchaser the Bill
    of Sale, a copy of the Notice of Sale and a copy of the
    Order granting this Motion;

E. Each proposed Bill of Sale will include a statement that
    delivery of the Bill of Sale to the purchaser constitutes a
    certification by Metals USA that it has delivered a Notice
    of Sale in compliance with the Order granting this Motion,
    that no objections were received during the Notice Period
    and that title is being transferred free and clear of liens
    pursuant to the Order; and

F. Should any party object to the proposed sale of any
    individual Miscellaneous Asset, Metals USA may file a
    separate motion pursuant to 11 U.S.C. Section 363 seeking
    specific Court approval for the transaction. (Metals USA
    Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
    Service, Inc., 609/392-0900)

METROCALL INC: Asks Court to Appoint BMC as Claims Agent
Metrocall, Inc. and its debtor-affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to appoint
Bankruptcy Management Corporation as the official noticing,
claims, balloting agent in its chapter 11 cases.  

The Debtors have several hundred thousand creditors, potential
creditors and parties-in-interest to whom certain notices must
be sent. The Debtors believe that Bankruptcy Management's
assistance will cost-effectively expedite service of noticed and
streamline the claims administration and plan solicitation

Specifically, Bankruptcy Management will:

     a) prepare and serve required notices in these chapter 11

     b) within 5 business days after the mailing of a particular
        notice, file with the Clerk's Office a certificate of
        service that includes a copy of the notice involved, an
        alphabetical list of persons on whom the notice was
        served, along with their addresses and the date and
        manner of service;

     c) receive, examine and maintain originals of all proofs of
        claim and proofs of interest filed;

     d) create and maintain official claims registers in each of
        the Debtors' cases by docketing all proofs of claim and
        proofs of interest in the applicable claims database;

     e) implement necessary security, control and verification
        measures to ensure the completeness and integrity of the
        claims registers;

     f) periodically audit the claims information to satisfy the
        Clerk's Office that the claims information is being
        appropriately and accurately recorded in the Court's
        claims register;

     g) transmit to the Clerk's Office a copy of the claims
        registers on an agreed upon frequency;

     h) maintain an up-to-date mailing list for all entities
        that have filed a proof of claim or proof of interest,
        which list shall be available upon request to the
        Clerk's office or any party in interest;

     i) provide access to the public for examination of copies
        of the proofs of claims or interests without charge
        during regular business hours;

     j) comply with applicable federal, state, municipal and
        local statutes, ordinances, rules, regulations, orders
        and other requirements;

     l) provide temporary employees to process claims, as

     m) allow the Clerk's Office to independently audit the
        claims information at any time;

     n) allow the Clerk's office to inspect its premises at any

     o) promptly comply with such further conditions and
        requirements as the Clerk's Office may at any time

     p) respond to inquiries of a ministerial nature regarding
        claims and balloting;

     q) receive, review and tabulate ballot cast, and make
        determinations with respect to each ballot as to its
        timeliness, compliance with the Bankruptcy Code,
        Bankruptcy Rules and procedures ordered by this Court
        subject, if necessary, to review and ultimate
        determination by the Court;

     r) certify the results of the balloting; and

     s) perform such other administrative and support services
        related noticing, claims, docketing, solicitation and
        distribution as the Debtors or the Clerk's Office may

At the commencement of this engagement, the Debtors will provide
Bankruptcy Management with an advance payment retainer in the
amount of $65,000 for prepetition and postpetition services and
expenses.  At the termination of the Agreement, any unused
portion of the retainer shall be refunded to the Debtors.

Metrocall, Inc. is a nationwide provider of one-way and two-way
paging and advanced wireless data and messaging services. The
Company filed for chapter 11 protection on June 3, 2002. Laura
Davis Jones, Esq. at Pachulski Stang Ziehl Young & Jones
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
$189,297,000 in total assets and $936,980,000 in total debts.

Metrocall Inc.'s 10.375% bonds due 2007 (MCALL2) are trading at
about 4, DebtTraders reports. For real-time bond pricing, see

METROMEDIA INT'L: Closes Sale of Alma-TV Business Interests
Metromedia International Group, Inc. (AMEX:MMG), the owner of
various interests in communications business ventures in Eastern
Europe, the Commonwealth of Independent States and other
emerging markets, announced the sale of its business interest in
Alma-TV, the Company's 50% indirectly owned cable TV system
operator in Almaty, Republic of Kazakhstan.

The Company received cash proceeds from the sale of
approximately $9.4 million and has incurred transactional costs
of approximately $0.9 million, which are comprised principally
of a $0.85 million broker fee with the remaining balance related
to legal and accounting fees.

Carl Brazell, Chairman, President and Chief Executive Officer of
MMG, commented "As we have previously communicated, the sale of
certain non-strategic business assets is integral to our
strategy of improving liquidity and restructuring the overall
operations of the Company. While we still have much work to do,
we are pleased with our progress thus far."

Metromedia International Group, Inc. is a global communications
and media company. Through its wholly owned subsidiaries and its
business ventures, the Company owns and operates communications
and media businesses in Eastern Europe, the Commonwealth of
Independent States, China and other emerging markets. These
include a variety of telephony businesses including cellular
operators, providers of local, long distance and international
services over fiber-optic and satellite-based networks,
international toll calling, fixed wireless local loop, wireless
and wired cable television networks and broadband networks, FM
radio stations, and e-commerce.

As reported in the May 17, 2002 edition of Troubled Company
Reporter, Metromedia International expected to file For
bankruptcy protection if it would be unable to raise funds to
continue its operations.

Please visit http://www.metromedia-group.comfor more  
information about Metromedia International Group.

MICROFORUM INC: Files CCAA Plan with Ontario Court
Microforum Inc. (TSE: MCF) has received the approval of the
Ontario Superior Court of Justice pursuant to its proceedings
under the Companies' Creditors Arrangement Act to deliver its
Plan of Compromise or Arrangement to the Company's creditors.

In addition, the Company announced that all of the conditions to
the agreement dated April 3, 2002 between Microforum and the
landlord at its Ferrand Drive premises, as approved by the Court
on April 12, 2002, have been satisfied and the Ferrand Landlord
has consented to the Plan on June 7, 2002.

In accordance with the Landlord Agreement, the Ferrand Landord
will receive a payment of $500,000, will be entitled to retain
Microforum's rental deposit in the amount of approximately
$110,000, and will receive 1,000,000 common shares of
Microforum, subject to regulatory approval, which will be
subject to a 12-month resale restriction. The Ferrand Landlord
will not be a claimant under the Plan.

The meetings for secured and unsecured creditors are scheduled
for June 25, 2002 at 10:00 a.m. (Toronto time) and 12:00 p.m.
(Toronto time), respectively, at the offices of Microforum Inc.,
150 Ferrand Drive, 10th Floor, Toronto, Ontario. The Company
will be mailing a copy of the Management Proxy Circular and
Disclosure Statement to each creditor prior to 11:59 p.m. on
June 7, 2002.

As part of the Company's continuing effort to restructure its
operations, the Company reduced its workforce yesterday from 65
to 45 employees. These staffing reductions will not impact
current client engagements.

Additional information, a copy of the Plan, the Circular and the
Affidavit filed in support of the Court application can be found
on the Company's Web site  

Established in 1987, Microforum sells software solutions to
organizations that seek a competitive edge. The company is
listed on The Toronto Stock Exchange (TSE: MCF).

NII HOLDINGS: Signs-Up Richards Layton as Bankruptcy Co-Counsel
NII Holdings, Inc. and its debtor-affiliates ask for authority
from the U.S. Bankruptcy Court for the District of Delaware to
employ Richards, Layton & Finger, P.A. in Wilmington, Delaware,
as their bankruptcy co-counsel.

By separate application, the Debtors also seek to employ Bingham
Dana as bankruptcy co-counsel in these cases. The Debtors submit
that it is essential for them to employ co-counsel in these
cases. The Debtors assure the Court that Bingham Dana and
Richards Layton have discussed a division of responsibilities
regarding representation of the Debtors and will make every
effort to avoid duplication of effort in these cases.

Richards Layton will:

     a) advise the Debtors of their rights, powers and duties
        as debtors and debtors in possession;

     b) take all necessary action to protect and preserve the
        Debtors' estates, including the prosecution of actions
        on the Debtors' behalf, the defense of any actions
        commenced against the Debtors, the negotiation of
        disputes in which the Debtors are involved, and the
        preparation of objections to claims filed against the
        Debtors' estates;

     c) prepare on behalf of the Debtors all necessary
        motions, applications, answers, orders, reports, and
        papers in connection with the administration of the
        Debtors' estates;

     d) negotiate and prepare on behalf of the Debtors a plan
        of reorganization and all related documents; and

     e) perform all other necessary legal services in
        connection with the Debtors' chapter I 1 cases.

The principal professionals and paraprofessionals designated to
represent these cases and their current standard hourly rates

          a) Daniel J. DeFranceschi      $390 per hour
          b) Russell C. Silberglied      $310 per hour
          c) John H. Knight              $310 per hour
          d) Paul N. Heath               $240 per hour
          e) Michael J. Merchant         $220 per hour
          f) Rebecca L. Booth            $200 per hour
          g) Diana M. Poole              $125 per hour
          h) Amanda R. Kernish           $115 per hour

NII Holdings, Inc., along with its wholly-owned non-debtor
subsidiaries, provides wireless communication services targeted
at meeting the needs of business customers in selected
international markets, including, inter alia, Mexico, Brazil,
Argentina and Peru.  The Company filed for chapter 11 bankruptcy
protection on May 24, 2002.  Daniel J. DeFranceschi, Esq.,
Michael Joseph Merchant, Esq. and Paul Noble Heath, Esq. at
Richards, Layton & Finger represent the Debtors in their
restructuring efforts.  When the Company filed for protection
from its creditors, it listed $1,244,420,000 in total assets and
$3,266,570,000 in total debts.

NATIONAL STEEL: Wants Plan Filing Exclusivity Moved to January 3
National Steel Corporation and its debtor-affiliates ask the
Court to extend the period within which they must file a plan of
reorganization through January 2, 2003.  The Debtors further ask
the Court to extend the period within which they can solicit
acceptances of that reorganization plan through March 2, 2003.

Mark A. Berkoff, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, explains that the Debtors need ample time to
stabilize their business operations and develop a strategic plan
to return their businesses to sustained profitability.  The
ultimate objective is to attain consensus among the primary
constituencies regarding the best manner to maximize the value
of the Debtors' estates for the benefit of all stakeholders.  
The Debtors believe that a six-month extension of the Exclusive
Periods is fully justified because:

    (i) the Debtors' cases are large and complex;

   (ii) the Debtors have made good faith progress toward a
        successful reorganization; and

  (iii) extension of the Exclusive Periods will facilitate
        reorganization of the Debtors and not prejudice any
        party in interest.

"The size and complexity of the Debtors' Chapter 11 cases
constitutes sufficient cause to extend the Exclusive Periods,"
Mr. Berkoff asserts.  As with virtually all domestic steel
producers, there are significant operational challenges that
face the Debtors and must be addressed if long-term viability is
to be achieved.  The Debtors have an extremely complicated
capital structure with obligations totaling billions of dollars.  
"There are also numerous diverse constituencies with which the
Debtors must negotiate and attempt to reach consensus," Mr.
Berkoff adds.

Mr. Berkoff further relates that despite the size and complexity
of the Debtors' cases, they have been progressing aggressively
with their reorganization efforts.  The Debtors have already
made substantial progress in stabilizing their business and
reducing expenses, as well as starting the difficult process of
evaluating all aspects of their operations to lay the foundation
for the creation of a viable, long-term business plan.  Since
the Petition Date, the Debtors have:

  (i) negotiated and obtained this Court's approval of the DIP
      Facility for up to $450,000,000, ensuring the availability
      of sufficient capital to complete their restructuring

(ii) implemented a key employee retention program and severance

(iii) negotiated and entered into an extremely favorable
      adequate protection stipulation with First Mortgage
      Bondholders and NKK, designed to preserve the Debtors'
      available liquidity;

(iv) rejected numerous unnecessary executory contracts and
      unexpired leases of nonresidential real property;

  (v) negotiated and entered into a highly favorable arrangement
      to keep in place critical surety bonds;

(vi) established a claims bar date; and

(vii) begun analyzing the Debtors' numerous capital leases to
      determine the true legal nature of the obligations.

The Debtors have also begun to prepare for the statutory meeting
of creditors scheduled for June 10, 2002.  "During this initial
phase, the Debtors have been in constant communication with
their key constituencies," Mr. Berkoff states.

In sum, the Debtors have responded to the operational and
administrative demands of these cases and worked diligently to
advance the restructuring process on multiple fronts.  For this
reason, Mr. Berkoff asserts that the Debtors' request for a 180-
day extension of the Exclusive Periods should be granted.
(National Steel Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

NEON COMMS: Nasdaq Delists Shares Effective June 10, 2002
NEON(R) Communications, Inc. (Nasdaq-NOPT), a leading provider
of advanced optical networking solutions and services in the
Northeast and mid-Atlantic markets, has received a Nasdaq Staff
Determination notice that NEON's securities will be delisted
from the Nasdaq National Market at the opening of business on
June 10, 2002.

The notice cited NEON's non-compliance with the Marketplace
Rules 4450(a)(2) and 4450(a)(5) which require a company's common
stock to maintain a minimum market value of publicly held shares
of $5,000,000 and a minimum closing bid price per share of $1.00
over the previous 30 consecutive trading days. The notice also
stated that NEON is not in compliance with Marketplace Rule
4450(a)(3) which requires a company to comply with a net
tangible assets or stockholder's equity test for continued

NEON has not requested, nor does it intend to request, a hearing
before a Nasdaq Listing Qualifications Panel to review the Staff

NEON Communications is a wholesale provider of high-bandwidth,
advanced optical networking solutions and services to
communications carriers on intercity, regional and metro
networks in the twelve-state Northeast and mid-Atlantic markets.

NET2000 COMMUNICATIONS: Court Converts Case to Chapter 7
Net2000 Communications, Inc. and its debtor-affiliates sought
and obtained authority from the U.S. Bankruptcy Court for the
District of Delaware to convert their chapter 11 cases to
chapter 7 liquidation proceedings.  In connection with the
conversion of these cases to chapter 7, the Court appoints
Michael B. Joseph, Esq., to act as interim trustee for these

The Court orders the Debtors to file and serve on the U.S.
Trustee all outstanding monthly operating reports and pay all
outstanding fees due.  All professionals retained in the
Debtors' chapter 11 cases, seeking reimbursement compensation
under the Bankruptcy Code are directed to file final fee
applications on or before June 24, 2002.

Net2000 Communications, Inc., providers of state-of-the-art
broadband telecommunications services to high-end customers,
filed for chapter 11 protection on November 16, 2001. Michael G.
Wilson, Esq. and Jason w. Harbour, Esq. at Morris, Nichols,
Arsht & Tunnell represent the Debtors as they wind up their
operations. When the Company filed for protection from its
creditors, it listed $256,786,000 in assets and $170,588,000 in

NORTEL NETWORKS: Expects to Raise $1.3BB from 2 Public Offerings
Nortel Networks(TM) Corporation (NYSE:NT) (TSX:NT.) announced
two concurrent public offerings of 25,000 equity units(a) and
550 million of its common shares. The offerings were priced
after the close of trading yesterday at US$28,571 per equity
unit (including US$22,542.53 per prepaid forward purchase
contract of Nortel Networks) and US$1.41 per common share,
respectively, and are expected to result in net aggregate
proceeds to Nortel Networks of approximately US$1.3 billion.
This reflects an approximately US$500 million increase in the
size of the expected net proceeds to Nortel Networks of the
offerings. The underwriters have also been granted options,
exercisable within 30 days, to purchase up to an additional
3,750 prepaid forward purchase contracts and 82.5 million common
shares in each case to cover any over-allotments.

The proceeds to Nortel Networks of the offerings will be used
for general corporate purposes, or advanced to or otherwise
invested in its subsidiaries to be used for general corporate
purposes. The closings of the two offerings are scheduled for
June 12, 2002 and are not conditioned on each other.

In the United States and Canada, the securities are being
offered pursuant to prospectus supplements and accompanying
prospectuses related to shelf registration filings made with the
United States Securities and Exchange Commission and the
Canadian securities authorities.

Credit Suisse First Boston, JP Morgan and Salomon Smith Barney
are joint book-running managers of the equity unit offering.
Credit Suisse First Boston and RBC Capital Markets are joint
book-running managers of the common share offering.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Metro and Enterprise Networks,
Wireless Networks and Optical Long Haul Networks. As a global
company, Nortel Networks does business in more than 150

(a) Each equity unit will initially evidence its holder's
ownership of: (i) a prepaid forward purchase contract to receive
Nortel Networks common shares; and (ii) zero-coupon treasury
securities issued by the United States government. The
settlement date for each purchase contract will be August 15,
2005, subject to acceleration or early settlement in certain
cases. The aggregate number of Nortel Networks common shares
issuable on the settlement date will be between 422 million and
507 million, subject to adjustment in some circumstances,
depending on the average of the closing prices of Nortel
Networks common shares on the New York Stock Exchange during a
defined period before the settlement date.

                              *   *   *

As previously reported, Moody's has downgraded Nortel Networks'
debt ratings to a low-B Level and its 2001-1 Certificates to
Ba3. Meanwhile, Standard & Poor's lowered the company's Lease
Pass-Through Certificates Rating to BB-.

Nortel Networks Ltd.'s 6.125% bonds due 2006 (NT06CAN1),
DebtTRaders says, are quoted at about 73.5. See  
real-time bond pricing.

NU-LIFE: TSX Suspends Shares for Failing to Meet Requirements
The common shares of Nu-Life Corporation (Symbol: NLF) were
suspended from trading as of the market close on Friday, July 7,
2002 for failure to meet the continued listing requirements of

PCA INTERNATIONAL: S&P Rates $160M Senior Unsecured Notes at B-
Standard & Poor's assigned its single-'B'-minus rating to
portrait photography company PCA International Inc.'s proposed
$160 million senior unsecured notes due in 2009. The notes are
being offered in lieu of a previously planned $200 million issue
of seven-year notes. Proceeds from the new note offering will be
used to repay a portion of $113 million outstanding on a $150
million credit facility and $104 million in subordinated notes.
A single-'B' corporate credit rating was also assigned to the
company. The outlook is positive. Pro forma for the transaction,
Matthews, North Carolina-based PCA has $226 million total debt
outstanding, including $30 million of parent company debt.

"The ratings on PCA reflect its participation in the highly
competitive professional portrait photography industry, its
dependence on Wal-Mart Stores Inc. for about 95% of its revenue,
weak credit measures, and a highly leveraged capital structure,"
Standard & Poor's credit analyst Robert Lichtenstein said.
"These risks are partially mitigated by PCA being the sole
portrait photography provider for Wal-Mart, and its vertically
integrated digital imaging and portrait processing system."

Standard & Poor's said the company is highly leveraged as a
result of a leveraged buyout in 1998, with pro forma total debt
(including preferred stock) to EBITDA at about 5.5 times. The
company's ability to fund its debt service obligations with cash
flow is thin; pro forma EBITDA covers interest by about 1.8x.
Financial flexibility is provided by a new five-year $50 million
revolving credit facility, which the company is entering into in
conjunction with the note offering. On completion of the
transaction, $14.5 million will be available.

PFSWEB: Commences Trading on Nasdaq SmallCap Under PSFW Symbol
PFSweb, Inc. (Nasdaq:PFSW), a provider of business process
outsourcing solutions, said that Nasdaq approved its transition
from the Nasdaq National Market to the Nasdaq SmallCap Market.

Concurrently, PFSweb withdrew its request for a hearing with the
Nasdaq Hearing Department of the Nasdaq National Market.

The Company's securities began trading on the Nasdaq SmallCap
Market on Monday, June 10, 2002, using the current symbol: PFSW.

This transition occurred in response to Nasdaq Marketplace Rule
4450(a)(5), which requires a minimum bid price of $1.00 for
continued listing on the Nasdaq National Market. Companies in
violation of that rule have the option to appeal the Nasdaq
notice of delisting, which PFSweb initially elected to pursue.
However, in cases of unfavorable rulings, while companies are
then provided the opportunity to apply to be listed on the
Nasdaq SmallCap Market, there is no guarantee of approval. For
this reason, PFSweb elected to transition to the Nasdaq SmallCap
Market at this time and to withdraw its hearing appeal.

The SmallCap Market also has a minimum bid price of $1.00 per
share. However, as compared to the 90-day grace period provided
by the Nasdaq National Market, the SmallCap Market currently has
a longer bid price minimum grace period of 180 days from receipt
of a Nasdaq Delisting Notification (February 14, 2002 for the
Company). This grace period now extends for the Company through
August 13, 2002.

Issuers that demonstrate compliance with the core initial
listing standards of the SmallCap Market -- that is either net
income of $750,000, stockholders' equity of $5 million or market
capitalization of $50 million -- will be afforded an additional
180-day grace period within which to regain compliance. Based on
PFSweb's stockholders' equity, which as of March 31, 2002,
exceeded $33 million, it is expected that PFSweb will be
eligible for this additional grace period, which would extend
through February 9, 2003.

Upon meeting the required maintenance standards, former Nasdaq
National Market issuers would be eligible to phase-up to the
Nasdaq National Market, if the company demonstrates compliance
with the $1 bid price requirement for 30 consecutive trading
days prior to the expirations of all SmallCap grace periods and
if it complies with all Nasdaq National Market maintenance

"We believe it was prudent for PFSweb to transfer its listing to
the Nasdaq SmallCap Market, as opposed to taking the risk of an
unfavorable ruling by the Nasdaq Hearing Department, coupled
with the risk of having to go through the new listing
application process," said Mark C. Layton, Senior Partner and
CEO of PFSweb. "Whether we are listed on the Nasdaq National
Market or the Nasdaq Small Cap Market, our business outlook
remains strong. We will continue to run our business with a
daily focus on providing outstanding client service and on
increasing shareholder value. Looking to the future, our primary
focus is to evolve our business to a level of sustainable

"We have asked our shareholders to grant our Board the ability
to enact an up to one-for-five reverse stock split at any time
prior to June 7, 2003," Layton said. "We view this authorization
as an opportunity in the future for us to enhance our listing
capability, if needed, or, as our business continues to
strengthen, to raise institutional awareness of our stock. We
are confident this shareholder proposal will pass at our annual
shareholder meeting on June 7, 2002."

When the world's brand names need proven, fast and secure
business infrastructure to enable traditional and e-commerce
strategies, they choose PFSweb for comprehensive outsourcing
solutions. The PFSweb team of experts designs diverse solutions
for clients around a flexible core business infrastructure.
PFSweb provides solutions that include: professional consulting
services, order management, web-enabled customer contact
centers, customer relationship management, international
distribution services, kitting and assembly services, managed
web hosting and site design, billing and collection services and
ERP information interfacing utilizing the Entente Suite (SM).

Our services are available for a multitude of industries and
company types, including such clients as International Business
Machines (NYSE:IBM), Adaptec (Nasdaq:ADPT), the U.S. Mint, Avaya
Communication (NYSE:AV), Dell (Nasdaq:DELL), Emtec Magnetics, a
manufacturer of BASF-branded data media and audio visual
products, Lancome, a cosmetics division of L'Oreal International
(ADR:LORLY), Xerox (NYSE:XRX), Thomson multimedia (NYSE:TMS),
Pharmacia&Upjohn (NYSE:PHA), Nokia (NYSE:NOK), Hewlett-Packard
(NYSE:HPQ), and Roots.

To find out more about PFSweb, Inc. (Nasdaq:PFSW), visit its Web
site at

PACIFIC GAS: Wins Nod to Defray Permit & Franchise Work Expenses
The City and County of San Francisco and the Counties of Fresno,
San Luis Obispo and Santa Clara object to this motion because
Pacific Gas and Electric Company has not demonstrated that the
consultants' claims are "actual, necessary costs and expenses of
preserving the estate" that merit administrative expense
treatment under section 503(b)(l) or that meet the business
judgment test under section 363(b).

The Counties note that, although the Debtor styles its requests
as motions under section 363(b)(1), the appropriate provision
under which to analyze the request is section 503(b)(1) because
the Debtor is actually seeking authority to incur administrative
expenses.  Based on this, the Counties argue that the motion
must be denied because the expenses the Debtor intends to occur
are not "actual, necessary costs and expenses of preserving the

Even under the business judgment test applied under section
363(b), the Debtor has not met its burden of showing the need to
use estate assets for its requested expenses, the Counties tell
the Court because the requested payment of expenses would be
necessary if and only if the PG&E Proponents' proposed break-up
of the Debtor's business into four components under the Plan
occurs. Until the Court has ruled that PG&E Plan is confirmed,
the requested expenses are speculative and premature, the
Counties point out. The Counties remind the Court that, although
the Debtor may consider $8 million to be a trifling sum, each
dollar that is saved now is a dollar less that must be raised to
pay creditors' claims.

The Counties also criticize that PG&E has been less than frugal
with its assets.  The Counties accuse PG&E of, for example,
willingly and knowingly failed to pay its full property taxes,
resulting in the Court's order requiring the payment of
penalties, which amounted to over $4 million.

The Counties described the requested $8 million as a potential
waste of estate assets, which should be sanctioned.

In the view of the Counties, should the PG&E Plan proponents
believe that they must proceed, co-proponent PG&E Corporation is
free to incur the expenses and seek reimbursement after
confirmation, in conjunction with its anticipated request for
$110 million in other administrative expenses.

                         *   *   *

Judge Montali considered the pleadings filed by PG&E and the
objection filed by the Counties, and rules that the motion is

               Motion for Additional Expenses

Subsequent to filing this motion and securing Judge Montali's
approval of it, PG&E has filed a motion requesting authorization
to incur additional expenses related to permits, outside of the
ordinary course of business pursuant to Bankruptcy Code Section
363(b)(l).  These expenses are in addition to those covered in
PG&E's prior Motion for Order Authorizing Expenditures related
to Permits and Franchises, filed on April 19, 2002 and approved
by the Court after hearing conducted on May 9, 2002.

While the previous motion focused on expenses related to the
transfer of Permits issued by local government agencies (as well
as expenses related to obtaining new franchises), this
Supplemental Motion focuses on expenses related to the transfer
of Permits issued by state and federal government agencies --
which comprise the majority of the Permits -- to be transferred
to the New Entities, PG&E tells the Court.  There are in excess
of 6,100 federal agency Permits and in excess of 6,700 state
agency Permits to be transferred to the New Entities.

By way of the previous motion, PG&E has been authorized to pay
(i) Transcon Infrastructure, Inc. approximately $950,000 over a
period beginning in February 2002 and (ii) the Entitlement
Agents approximately $3 millions, beginning April 2002, both
continuing to the Effective Date or such earlier date on which
the Permit and Franchise Work has been completed.

In this motion which supplements the previous motion, PG&E
requests approval to pay the Contractors listed below (including
any individuals employed by Corestaff) approximately $7 million,
over the period beginning May 2002 and continuing to the
Effective Date or such earlier date on which the Permit Work has
been completed. PG&E will pay the Contractors on a monthly basis
as work is completed, based on monthly billings by the
Contractors (except for individuals employed by Corestaff, who
will be paid on a weekly basis, based on the number of hours

The Contractors included in the motion are:

          *  CH2M-Hill, Inc.
          *  EDAW, Inc.
          *  Essex Environmental
          *  Matrix Environmental Planning
          *  Dinwiddie & Associates

PG&E tells the Court that the contractors have previously worked
for PG&E, are familiar with PG&E's unique permit issues and
possess specialized expertise and significant experience in
dealing with government entitlement issues. The Contractors will
handle, in addition to the state and federal government Permit
transfers, the more complex local government Permit transfers as

             Permit Work to be Performed by Contractors

The contractors will assist PG&E with the process of
transferring Permits to the New Entities. The Contractors will
perform the Permit Work at the direction of and under the
supervision of PG&E.

The Contractors who will perform this work are as follows:

* CH2M-Hill, Inc.
* EDAW, Inc.
* Essex Environmental
* Matrix Environmental Planning
* Dinwiddie & Associates

Specifically, the work to be performed by each of the
Contractors will include: (i) contact with agency staff to
conduct "pre-application" meetings to discuss and confirm
transfer requirements; (ii) analysis and assembly of necessary
supporting documentation; (iii) preparation and submission of
applications for the transfer of Permits; (iv) coordination and
resolution of agency inquiries relating to the transfer process;
and (v) negotiations with agencies as necessary.

PG&E anticipates hiring independent contractors to perform
similar functions. These individuals will be hired on a
temporary basis through Corestaff Services, Inc., and will also
have familiarity with PG&E's unique permit issues and experience
with government agency application processes. The number of
additional staff required will depend on the ability of the
Contractors to fully staff projects as well as the scope and
complexities of the Permit Work as the process advances. For
example, one individual (a retired PG&E employee) has been
chosen to lead the process of transferring Permits issued by the
California Department of Transportation. PG&E contemplates that
additional individuals will be similarly employed on an as-
needed basis.

PG&E believes that the Contractors and Corestaff employees are
not "professional persons" under the Bankruptcy Code due both to
the nature of the services to be provided and their limited role
in connection with PG&E's reorganization proceeding. Although
the Permit Work is related to implementation of the Plan, PG&E
believes that the Permit Work should not be considered "central"
to the Chapter 11 case or the Plan proceedings. (Pacific Gas
Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

PARKER DRILLING: S&P Keeping Watch on B+ Over Planned Purchase
Standard & Poor's placed its ratings on Parker Drilling Co.
(B+/Watch Neg/--) on CreditWatch with negative implications
following the company's announcement that it intends to bid for
international land drilling contractor Australian Oil & Gas
Corp. Ltd. for a total consideration of US$108 million, which is
comprised of a cash purchase price of $88 million plus the
assumption of about $20 million of AOG debt.

Parker has stated that it intends to fund the cash acquisition
price with equity. AOG is the object of takeover offers and no
agreement has been reached between Parker and AOG.

"Standard & Poor's believes that the acquisition of AOG, if
consummated, ultimately could prove beneficial to Parker's
credit quality by deleveraging it and strengthening it in its
core business lines," said Standard & Poor's credit analyst
Bruce Schwartz, CFA. "Nevertheless, Standard & Poor's has placed
Parker's ratings on CreditWatch because of concerns about the
company's ability to execute on its proposed equity financing.
If Parker is able to issue sufficient common equity to ensure
that Parker's financial profile is not adversely affected,
Standard & Poor's would affirm Parker's ratings," Schwartz added

The proposed acquisition would strengthen Parker, which is a
niche international land rig and domestic offshore contract
driller, in its core business lines through the cost savings
achieved through additional mass in the company's core
Asia/Pacific land drilling markets. AOG operates 28 land
drilling rigs that have substantial geographic overlap with
Parker's land drilling operations, which should offer cost
savings opportunities.

Standard & Poor's will resolve the CreditWatch listing after the
outcome of Parker's tender offer is clarified and its financing
plans are finalized.

PREMCOR: Sabine River Completes Creditor-Approved Restructuring
Premcor Inc. (NYSE: PCO) announced that its subsidiary, Sabine
River Holding Corp., has completed a restructuring permitted by
the successful consent solicitation of the holders of its Port
Arthur Finance Corp. 12-1/2% Senior Notes due 2009.

The restructuring resulted in Sabine and its subsidiary
companies becoming wholly owned direct or indirect subsidiaries
of The Premcor Refining Group Inc.  The Premcor Refining Group
Inc., a wholly owned indirect subsidiary of Premcor Inc., fully
and unconditionally guaranteed the payment obligations under the
Port Arthur Senior Notes.

Thomas D. O'Malley, Premcor's Chairman, Chief Executive Officer,
and President, said, "The consent has allowed Premcor to
simplify its previous corporate structure, which was overly
complicated, difficult to explain to investors, and expensive to
maintain. We now have a structure that will better enable us to
grow our business in an efficient manner.  The consent has also
allowed us to make available $137 million of cash at Sabine,
which was earning interest at two percent per annum, to pay off
debt at par that was costing us over seven percent per annum.  
We used approximately $84 million generated from our successful
IPO to pay off the remaining balance of our $221 million bank
debt at Port Arthur."

O'Malley continued, "We are rapidly reaching our goal of cutting
our $125 million annual interest burden in half, and reducing
our debt-to-total-capitalization ratio to 50 percent. We have
now repaid about $567 million of debt, representing an interest
savings of $52 million per annum, and we expect further debt
reductions before the end of the second quarter.

"The combination of interest expense reductions of approximately
$52 million per annum and the previously announced overhead
reductions of approximately $18 million per annum will provide
us with pretax profit enhancements of almost $18 million per
quarter, which will be clearly visible starting in the third
quarter of 2002."

In view of the restructuring, Occidental Petroleum exercised its
option to exchange its 10 percent interest in Sabine for
approximately 1.4 million newly issued shares of Premcor Inc.
common stock.  After this exchange, Premcor will have
approximately 57.4 million shares outstanding.

The Premcor Refining Group Inc. guarantee of the Port Arthur
Senior Notes has not been, and will not be, registered under the
Securities Act of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption
from registration requirements.

Premcor Inc. is one of the largest independent petroleum
refiners and marketers of unbranded transportation fuels and
heating oil in the United States.

PRESSTEK INC: Sr. Management Team Implements Repositioning Plans
Presstek, Inc. (Nasdaq: PRST), a leading provider of direct
digital imaging technology, announced that its new senior
management team has completed its business review and has begun
the implementation of its strategic repositioning plans. These
repositioning actions are expected to more closely align the
company with its Direct Imaging and computer-to-plate markets
and partners. Presstek's Lasertel subsidiary is largely
unaffected by these changes and will continue to supply Presstek
with its state-of-the-art laser diodes for its imaging systems.

"Upon my appointment as CEO, I initiated detailed reviews of all
the elements of our business. These reviews are now complete and
the necessary actions are underway to solidify our leading
position in the DI market and to improve future earnings
growth," said Edward J. Marino, president and chief executive
officer of Presstek. "The refocusing of our business on the
marketing and commercialization of our DI-enabling technology
will allow us to take advantage of the growth opportunities
available in the marketplace today and position us well for the

The first part of the market-focused repositioning includes the

     * New senior management organization;

     * Re-alignment to market-focused DI and CTP business units
       with full P&L responsibility and shared central

     * Re-alignment of personnel, including the termination of
       approximately 20% of Presstek employees; and

     * Consolidation and integration of the company's Hampshire
       Drive research & development facility into the company's
       main Executive Drive operations in Hudson, NH.

As a result of the above, Presstek expects to incur one-time
charges in the second quarter of this year of approximately $4.6
million related to these activities. The cash portion of these
charges is expected to approximate $1.7 million. Capital
expenditures and moving costs related to the Hampshire Drive
consolidation are expected to be minimal. The associated
annualized cost savings are expected to be approximately $5.6

The second part of the plan is a streamlining and prioritization
of company resources to focus on the most promising and
profitable opportunities. This will result in the discontinuance
of certain programs. Accordingly, reserves for asset write-offs
and accruals amounting to approximately $5.0 million will be
booked in the current quarter.

The majority of the repositioning is expected to be fully
implemented by June 30, 2002. We expect the facility
consolidation to be completed in the third quarter of this year.

"Presstek has a solid business and a bright future," Marino
said. "These changes will provide a strong market focus in the
organization to better capitalize on its wealth of technologies.
We expect to add further sales and marketing personnel as we
strengthen our marketing channels. This investment will support
the company's growth.

Marino continued, "The repositioning plan implemented [Fri]day,
together with the restructuring completed earlier in 2002, is
expected to result in a significant streamlining of our
organization, its resources and operations, and is expected to
produce an aggregate annualized cost savings of approximately
$8.2 million going forward."

Presstek, Inc. is a leading developer of digital laser imaging
and chemistry-free plate technologies for the printing and
graphic arts industries. Marketed to world-leading press
manufacturers and directly to end users, Presstek's patented
DI(R), CTP and plate products eliminate photographic darkrooms,
film and toxic processing chemicals, reduce the printing
turnaround time and lower the production costs. The company's
Lasertel subsidiary supplies it with the valuable resources
necessary for its next generation laser imaging devices.

PROTECTION ONE: Taps Deloitte & Touche to Replace Andersen
Effective May 30, 2002, the Audit and Finance Committees of the
Boards of Directors of Protection One, Inc. and Protection One
Alarm Monitoring, Inc. decided not to engage Arthur Andersen LLP
as the Companies' public accountants and engaged Deloitte &
Touche LLP to serve as the Companies' principal accountants for
fiscal year 2002.

Topeka, Kansas-based Protection One Alarm Monitoring is the
second largest security alarm company in the U.S., providing
monitoring and related security services to nearly 1.3 million
customers in North America.

At March 31, 2002, Protection One reported having a working
capital deficit of about $164 million.

PSINET INC: Seeks Approval of Liquidation Manager's Engagement
PSINet, Inc., and its debtor-affiliates have filed with the
Court their proposed form of the "PSINet Liquidating LLC
Manager's Engagement Agreement," dated as of June 14, 2002.

Subject to approval, the Engagement Agreement establishes the
terms of engagement by PSINet Liquidating LLC of One Stop
Recovery LLC to serve as the Manager of the Company.  This is in
accordance with the Debtors' First Amended Joint Liquidating
Plan of Reorganization, dated as of May 9, 2002 (as may be
amended), and the Operating Agreement of PSINet Liquidating LLC
(the LLC Agreement, as may be amended from time to time.) Once
the Plan becomes effective and the Company is established, One
Stop Recovery will serve under the Engagement Agreement as the
Manager of the Company.

The salient terms of the Engagement Agreement include:

*  Employment and Duties

   These are as specified in the Plan and in the LLC Agreement.

   One Stop Recovery agrees to cause its principals and/or
   employees to devote all required business time, attention,
   and energies to performing those duties.

*  Term of Employment

   The Term will begin as of the Effective Date of the Plan and
   will end upon expiration of the one-year anniversary of the
   Effective Date, unless sooner terminated under the Engagement
   Agreement or renewed.

*  Compensation

   Commencing on the Effective Date, One Stop Recovery will be
   entitled to receive compensation at the rate of $20,000 per
   month, to be paid on a "gross" basis and will be responsible
   for the payment of all taxes owing.

   One Stop Recovery will also be entitled to reimbursement of
   certain expenses as provided in the Engagement Agreement.

   At any time after expiration of the six-month period
   immediately following the Effective Date, the Liquidating
   Committee may in its sole discretion request that One Stop
   Recovery accept a reduction in the Compensation in the amount
   that the Liquidating Committee determines. If One Stop
   Recovery does not agree to accept the reduction in the
   Compensation, the Liquidating Committee may, in its sole
   discretion, terminate the engagement of One Stop Recovery at
   any time with five business days' prior written notice, and
   One Stop Recovery may, in its sole discretion, terminate its
   engagement upon 30 days' prior written notice.

*  Expenses

   One Stop Recovery will be entitled to reimbursement by the
   Company from the Expense Reserve Account (as defined in the
   Plan and the LLC Agreement) on a monthly basis for all
   reasonable and necessary out of pocket expenses actually
   incurred by One Stop Recovery in the performance of its
   duties in accordance with the Engagement Agreement, including
   without limitation:

  (1) the fees and expenses of professionals retained by the
      Company in accordance with the Plan and the LLC Agreement
      who are paid on an hourly, contingency or monthly basis,

  (2) the lease of temporary office space or storage facilities,

  (3) the purchase or lease of computer and/or other electronic
      office equipment to conduct the affairs of the Company,

  (4) reasonable and necessary travel and other business-related
      expenses, and

  (5) the purchase of appropriate insurance coverage for the
      Company, for One Stop Recovery in its capacity as Manager
      of the Company and for the members of the Liquidating
      Committee in these capacities (including liability
      coverage in an amount of not less than $15,000,000.00 from
      an insurance carrier with a "AAA" rating from Standard &
      Poors).  This is provided, however, that any professional
      compensation that may be payable to a lawyer, accountant
      or other advisor pursuant to a contingent fee arrangement
      is paid only from the gross Proceeds of the particular
      Debtor Claims from which these Proceeds are realized.

*  Termination

   The Liquidating Committee may terminate the engagement of One
   Stop Recovery at any time:

   A.  For Cause, if One Stop Recovery:

      (1) commits a material and willful breach of its
          obligations or agreements under the Engagement
          Agreement, the Plan or the LLC Agreement;

      (2) commits an act of fraud, material dishonesty, or gross
          negligence with respect to the Company or acts with
          willful disregard for the best interests of the
          Company and its Members; or

      (3) is convicted of or pleads guilty or no contest to a
          felony (or to a felony charge reduced to misdemeanor);
          or, with respect to its engagement, to any misdemeanor
          (other than a traffic violation); or, with respect to
          its engagement, knowingly violates any federal or
          state securities or tax laws.

     The termination of One Stop Recovery's engagement for Cause
     will be effective immediately upon the Liquidating
     Committee's written notice of the termination. Before
     terminating this engagement for Cause, the Liquidating
     Committee will specify in writing to One Stop Recovery the
     nature of the act, omission, refusal, or failure that it
     deems to constitute Cause.  The Committee will give One
     Stop Recovery 30 days after it receives notice to correct
     the situation (and thus avoid termination for Cause),
     unless the Liquidating Committee agrees to extend the time
     for correction. One Stop Recovery agrees that the
     Liquidating Committee will have the discretion to determine
     whether its correction is sufficient.

  B.  Without Cause:

      The Liquidating Committee may in its sole discretion
      terminate the engagement of One Stop Recovery without
      Cause at any time with 20 days' prior written notice.

   Termination by One Stop Recovery:

   One Stop Recovery may terminate its engagement with 60
   days' prior written notice to the Company (unless the
   Liquidating Committee has, in writing, previously waived this
   notice or authorized a shorter notice period).

*  Payments on Termination

   Upon any termination of the engagement of One Stop Recovery,
   the Company will pay One Stop Recovery any unpaid portion of
   its Compensation earned, and reimburse any unreimbursed
   expenses incurred by One Stop Recovery, both as of the date
   of its actual termination.

*  Indemnification

   One Stop Recovery will be entitled to the benefit of the
   releases and indemnification rights provided under Section
   11.6 of the Plan (with respect to the Liquidating Manager)
   and under Section 4.4 of the LLC Agreement (with respect to
   the Manager). These provisions will be deemed to be
   incorporated by reference in such form as those provisions
   shall exist on the Effective Date.

   Notwithstanding any subsequent amendment of the provisions in
   the Plan or the LLC Agreement that would make less favorable
   the releases and indemnification provisions, One Stop
   Recovery will be entitled to the benefit of the releases and
   indemnification rights as they existed on the Effective Date,
   unless the Engagement Agreement is subsequently amended.

*  Assignment

   This Agreement binds and benefits the Company and One Stop
   Recovery, and their respective successors or assigns.

   The Company may not assign or otherwise transfer the
   Engagement Agreement or any of its rights, duties,
   obligations, or interests under it without the consent of One
   Stop Recovery.

   Without the Liquidating Committee's prior written consent,
   One Stop Recovery may not assign or delegate this Agreement
   or any rights, duties, obligations, or interests under it.

   Neither One Stop Recovery nor the Company may modify or amend
   the terms of this Agreement without the consent of the
   Liquidating Committee. Either party's waiver of the other
   party's compliance with any provision of this Agreement does
   not affect any other provision of this Agreement.

*  Governing Law / Forum

   The substantive laws of the State of New York (without regard
   to conflict or choice of laws provisions) govern this
   Agreement. The Bankruptcy Court for the Southern District of
   New York (Gerber, USBJ) will retain exclusive jurisdiction to
   resolve any disputes arising under this Agreement.

*  Superseding Effect

   This Agreement supersedes all prior or contemporaneous
   negotiations, commitments, agreements, and writings with
   respect to the subject matter of this Agreement. (PSINet
   Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)   

ROHN INDUSTRIES: Bank Lenders Agree to Amend Credit Agreement
ROHN Industries, Inc. (Nasdaq: ROHN), a global provider of
infrastructure equipment for the telecommunications industry,
has entered into an amendment to its credit agreement with its
bank lenders.  The amendment decreases the maximum revolving
loan commitment from $35 million to $25 million and provides for
a collateral monitoring fee of $10,000 a month payable by ROHN.  
ROHN previously announced, on June 4, 2002, that it had entered
into an amendment to its existing forbearance agreement with its
bank lenders under which the bank lenders agreed to forbear from
enforcing any remedies they may have under the credit agreement
until June 30, 2002 arising from ROHN's breach of a covenant
related to minimum EBITDA (earnings before interest, taxes,
depreciation and amortization).  ROHN is in negotiations with
its bank lenders regarding a further amendment to the credit
agreement that will revise the EBITDA covenant and other
provisions of the credit agreement and under which the bank
lenders will waive this default.  If ROHN does not enter into an
amendment to its credit agreement by June 30, 2002 and the
forbearance agreement is not further extended, the bank lenders
will be able to exercise any and all remedies they may have in
the event of a default.

ROHN Industries, Inc. is a leading manufacturer and installer of
telecommunications infrastructure equipment for the wireless and
fiber optic industries. Its products are used in cellular, PCS,
fiber optic networks for the Internet, radio and television
broadcast markets.  The company's products include towers,
equipment enclosures, cabinets, poles and antennae mounts, as
well as design and construction services.  ROHN has
manufacturing locations in Peoria, Ill.; Frankfort, Ind.; and
Bessemer, Ala.

SNTL CORPORATION: Wins Creditors' Nod for Reorganization Plan
SNTL Corporation (Pink Sheets:SNLLQ) announced at 5:00 p.m.,
June 7, 2002, the completion of voting for the approval of
SNTL's First Amended Joint Plan of Reorganization (the "Plan").
The Plan was approved by 13 of 15 classes of claimants and
interests entitled to vote, with $701,937,952 of $702,103,552
(99.98%) claims by dollars, and 178 of 188 (94.68%) ballots,
voting in favor of the Plan.

Two small impaired classes, Classes 2b and 2d, failed to approve
the Plan. No Class 2b ballots were returned, and one of three
Class 2d ballots representing approximately 43% of the total
$4,662 of Class 2d claim dollars voted against the Plan. A class
has accepted the Plan when more than half in number, and at
least two-thirds in dollar amount, of the claims that actually
voted, voted in favor of the Plan. Generally, a reorganization
plan can not be confirmed unless all impaired classes have voted
to accept it, unless it is eligible to be confirmed by

The Bankruptcy Code allows SNTL's Plan to be "crammed down" on
non-accepting classes if it 1) meets all consensual requirements
except the voting requirements of the Bankruptcy Code, 2) the
Plan does not "discriminate unfairly," and 3) it is "fair and
equitable" toward each impaired Class that has not voted to
accept the Plan. SNTL has already requested that the Bankruptcy
Court confirm the Plan by cramdown on each impaired Class that
did not vote to accept the Plan.

SNTL President and CEO, J. Chris Seaman, stated, "SNTL is
gratified by the broad support for our Plan of Reorganization by
our creditors and stockholders. We are hoping to receive
approval of the Plan at the Bankruptcy Court reorganization
hearing scheduled for June 18, 2002."

SAFETY-KLEEN: Court to Consider Clean Harbors Bid on Thursday
Clean Harbors, Inc. (NASDAQ: CLHB), a leading provider of
environmental services throughout the United States and Puerto
Rico, announced that its bid to acquire the assets of Safety-
Kleen Corp.'s Chemical Services Division (SK/CSD) had been
designated by Safety-Kleen as the only "qualified bid" received
during a recent court-sanctioned bidding process.

Clean Harbors also announced that it has been notified that
Safety-Kleen will not conduct an auction of the SK/CSD assets,
and will present the Clean Harbors bid to the Bankruptcy Court
for approval during a scheduled June 13, 2002 hearing.

Alan S. McKim, Chairman and CEO of Clean Harbors stated: "We are
encouraged by the notification from Safety-Kleen that Clean
Harbors submitted the only qualified bid and we look forward to
the scheduled hearings before the Bankruptcy Court. We have
always believed that our bid is in the best interests of Safety-
Kleen's stakeholders and the employees of CSD. By joining CSD
with Clean Harbors we will be able to provide our combined
customers with a much wider range of innovative and cost
effective environmental services."

On February 25, 2002, Clean Harbors signed a definitive
agreement to acquire SK/CSD, one of the nation's largest
environmental services companies, for $46.3 million in cash and
the assumption of environmental liabilities valued at
approximately $265 million. Safety-Kleen Corp., based in
Columbia, South Carolina, is currently operating under Chapter
11 bankruptcy protection.

On May 15, 2002, Onyx North America Corp., a subsidiary of
Vivendi Environnement and a competitor of Clean Harbors, filed
an objection to the SK/CSD sale process with the Bankruptcy
Court. Safety-Kleen responded to that objection and asked that
the Court deny Onyx's objection in its entirety. The Court is
scheduled to hear the Onyx objection on June 10, 2002.

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

SIMON TRANSPORTATION: Intends to File a Liquidation Plan
Simon Transportation Services, Inc. (OTC Bulletin Board: SIMQE)
and its subsidiary, Dick Simon Trucking, Inc. announced several
important developments in its bankruptcy proceedings, including
its intention to file a liquidation plan and cancel the
interests of all common shareholders.

On April 8, 2002, the Bankruptcy Court for the District of Utah,
Central Division in Salt Lake City issued an order approving the
previously announced bid for the acquisition of substantially
all of the assets of the Company from Central Freight
Refrigerated Services, a wholly owned subsidiary of Central
Freight Lines, Inc. an entity controlled by Mr. Jerry Moyes (the
Company's current majority stockholder).

On April 22, 2002, the Company closed the sale of substantially
all of its assets to Central Freight.  In addition, Central
Freight assumed certain of the Company's liabilities.  Although
this transaction represented a significant benefit to the
Company, the Company's liabilities currently exceed its assets
by a substantial margin.  The Company expects that unsecured
creditors will receive, at best, cents on the dollar for their
claims. Accordingly, the Company does not expect the holders of
its common stock to receive any return of their investment or
any distribution under the liquidation plan.

With regard to the sale to Central and the future of the
Company, Chief Financial Officer Rob Goates said: "We are very
pleased that after the sale of substantially all of our assets,
the Company's former operations and employees have continued
under the ownership and management of Central Freight
Refrigerated Services.  However, following the sale it is clear
that the Company does not have sufficient assets or revenue-
generating capacity to pay its liabilities or to continue
operations of any kind.  It is therefore our intention to file a
liquidating plan, part of which will be a proposal to cancel the
interests of the holders of the Company's common stock.  On June
6, 2002 we sent notification to market makers in the Company's
stock and major broker-dealers of our intentions and requested
that they cease making markets and trading in our stock."

TELEX COMMS: Commences Exchange Offer for 13% Sr. Discount Notes
Telex Communications, Inc. is offering to exchange 13% Senior
Subordinated Discount Notes due 2006,  Series A, in the
aggregate principal amount at scheduled maturity of $105,100,502
for a like principal amount of its outstanding 13% Senior
Subordinated Discount Notes due 2006. The terms of the Exchange
Offer are as follows:

     Telex accept for exchange all Existing Notes that are
validly tendered and not withdrawn prior to the expiration of
the Exchange Offer.

     Noteholders may withdraw tenders of their Existing Notes at
any time prior to the expiration of the Exchange Offer.

     Telex believes that the exchange of Existing Notes will not
be a taxable event for U.S. federal income tax purposes, but
offerors should see "Certain U.S. Federal Income Tax
Considerations" for more information.

     The Company will not receive any proceeds from the Exchange

The terms of the New Notes are substantially identical to the
Existing Notes, except that the New Notes are registered under
the Securities Act of 1933, as amended, and the transfer
restrictions and registration rights applicable to the Existing
Notes do not apply to the New Notes.

Telex is a leader in the design, manufacture and marketing of
sophisticated audio, wireless and multimedia communications
equipment for commercial, professional and industrial customers.
Telex provides high value-added communications products designed
to meet the specific needs of customers in commercial,
professional and industrial markets, and, to a lesser extent, in
the retail consumer electronics market.* Founded in 1936 as a
hearing aid manufacturing company, Telex is controlled by
Greenwich Street Capital, an affiliate of Citigroup. As of
December 31, 2001, the company has a total shareholders' equity
deficit of about $40 million.

THE A CONSULTING: Nasdaq Hearing Re Listing Status Set for Today
The A Consulting Team, Inc. (Nasdaq:TACX), an IT and e-Service
provider to Fortune 1000 companies, announced that its request
for a hearing before a Nasdaq Listing Qualifications Panel was
granted and is scheduled for July 11, 2002.

The request for this hearing, which was announced in a press
release on May 23, 2002, was the result of a Nasdaq Staff
Determination indicating that the Company is not in compliance
with the minimum bid price and market value of public float
requirements for continued listing of its common stock.

The panel will determine whether the Company's common stock will
continue trading on the Nasdaq National Market or transition to
the Nasdaq SmallCap Market or the OTC Electronic Bulletin Board

TACT (Nasdaq:TACX) is an end-to-end IT Services and e-Services
provider to Fortune 1000 companies and other large
organizations. TACT provides its clients with modernization
services, which include the e-Valuation of systems that should
be replaced and rewritten, enhanced, converted or Web Enabled.

Replacement systems are written or re-written as Web Based
utilizing state of the art leading tools such as Java and Visual
Studio. More information about TACT(R) can be found at its web
site at

WARNACO: Enters New Settlement Pact with HIS Equipment & Liberty
HIS Equipment declared the previous settlement agreement with
The Warnaco Group, Inc., and its debtor-affiliates null and
void when Liberty Mutual Insurance Company objected to the
proposed settlement.  Accordingly, the Debtors renegotiated in
good faith with HIS Equipment and Liberty for a consensual
resolution of the disputes.  On May 23, 2002, the parties
reached an agreement essentially stating:

  (a) Liberty will pay to HIS Equipment by certified bank check
      or wire transfer the amount of $491,000 within seven days
      from release of Court order;

  (b) Warnaco will pay to HIS Equipment by certified bank check
      or wire transfer the amount of $399,000 within seven days
      from release of Court order;

  (c) Warnaco and HIS Equipment will execute and file a
      withdrawal and dismissal of the Appeal;

  (d) Warnaco and HIS Equipment will execute and file a
      stipulation dismissing with prejudice the State Court

  (e) HIS Equipment will execute and deliver to Warnaco a quit
      claim releasing all interests in and rights and claims to
      the Equipment remaining in Warnaco's possession;

  (f) HIS Equipment will be deemed to have allowed a general
      unsecured claims in the aggregate amount of $1,900,000
      against the Chapter 11 estates of Warnaco Inc. and Calvin
      Klein Jeanswear Company, with no need for HIS Equipment
      to file a proof of claim; and

  (g) Liberty will be deemed to have allowed a general
      unsecured claims, with no need to file a proof of claim,
      in the aggregate amount of $1,000,000 to be allocated
      against the Chapter 11 estates of:

        -- the Warnaco Group, Inc. in the amount of $500,000,

        -- Warnaco Inc. in the amount of $250,000 and

        -- Calvin Klein Jeanswear Company, in the amount of

Thus, the Debtors request the Court to approve the Settlement
Agreement and to allow the Debtors to execute the Settlement

J. Ronald Trost, Esq., at Sidley Austin Brown & Wood, LLP, in
New York, contends that, pursuant to Rule 9019(a) of the Federal
Rules on Bankruptcy Procedure, the requested relief should be
granted because the settlement would be an equitable resolution
of the dispute that upholds the best interest of the Debtors'
estate and creditors.  The contention of Mr. Trost is supported
by these factors:

  (a) the expenses that the Debtors will incur in defending the
      case or in case of a loss in the Appeal would be far
      greater than the settlement amount;

  (b) the inconvenience and the associated delay of litigation
      when the Debtors' counsel and employees attention would
      be diverted from the reorganization efforts of the

  (c) the probability of the success in litigation is uncertain
      given that it is now on appeal;

  (d) the litigation is very complex;

  (e) the likely difficulties in collection; and

  (f) the paramount interest of the creditors is not prejudiced
      in the settlement. (Warnaco Bankruptcy News, Issue No. 26;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)  

WEINER'S STORES: DE Court Confirms Chapter 11 Liquidating Plan
On May 16, 2002, the United States Bankruptcy Court for the
District of Delaware entered an order confirming the Joint
Liquidating Plan of Reorganization of Weiner's Stores, Inc. and
the Official Committee of Unsecured Creditors in connection with
the Company's case under Chapter 11 of Title 11 of the United
States Code (Case no. 00-3955(PJW)). The Company originally
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code with the Court on October 16, 2000. The
effective date of the Plan is the first Business Day the date on
which the conditions to the effectiveness of the Plan have been
satisfied, or waived. The Effective Date is expected to occur
within 30 days after the Confirmation Date.

The Plan constitutes a liquidating plan of reorganization for
the Company. All of the Company's assets have been or will be
liquidated, and net proceeds will be distributed to the
Company's creditors. The Plan designates three Classes of Claims
and one Class of Equity Interests. These Classes take into
account the differing nature and priority under the Bankruptcy
Code of the various Claims and Equity Interests.

Holders of Allowed Claims in Classes 1 and 2 will be paid in
full. Holders of Allowed Claims in Class 3 will receive a pro
rata distribution of the remaining net liquidation proceeds
after the Claims in Classes 1 and 2 have been paid in full.
Holders of Equity Interests in Class 4 will receive no
distribution, and all such Equity Interests in the Company will
be canceled.

The initial payments of cash under the Plan will be made to
holders of Allowed Administrative Claims, Allowed Priority Tax
Claims and Allowed Claims in Classes 1 and 2 on, or as soon
thereafter as is practicable, the later of (i) the Effective
Date and (ii) the date such Claim becomes an Allowed Claim.
Distributions to holders of Allowed Claims in Class 3 will be
made as directed by the Company and the Creditors Committee, and
such distributions may be made in partial payments. The Company
expects the first distributions to holders of Allowed Claims in
Class 3 to be made during the summer of 2002.

WILLIAMS COMMS: Court Fixes July 10 Bar Date for Proofs of Claim
Williams Communications Group, Inc., and its debtor-affiliates
sought and obtained permission from the Court to establish July
10, 2002 at 5:00 p.m. (Eastern Time) as the last date and time
by which an entity, other than a governmental unit, may file a
proof of claim against a Debtor. The fixing of July 10, 2002 as
the Bar Date will enable the Debtors to receive, process and
begin their initial analysis of creditors' claims in a timely
and efficient manner. Based on the notice procedures, the Bar
Date will give all creditors ample opportunity to prepare and
file proofs of claim.

Erica M. Ryland, Esq., at Jones Day Reavis & Pogue in New York,
tells the Court that pursuant to the proposed bar date order,
each entity that asserts a claim against a Debtor that arose
prior to the Petition Date must file an original, written proof
of claim.  The proof of claim substantially conforms to the
Proof of Claim or Official Form No. 10.  These must be received
on or before the Bar Date.  An original of the claim form must
be delivered either by:

A. U.S. Mail, to the Clerk of the United States Bankruptcy Court
   for the Southern District of New York, re: Williams
   Communications Group, Inc., et al, P.O. Box 5074, Bowling
   Green Station, New York, NY 10274 or

B. overnight or hand delivery, to the Clerk of the United States
   Bankruptcy Court for the Southern District of New York, re:
   Williams Communications Group, Inc., et al, One Bowling
   Green, Room 534, New York NY 10004.

Proofs of Claim sent by facsimile or telecopy will not be

Pursuant to the proposed Bar Date Order, the following persons
or entities are not required to file a proof of claim at this

A. any entity that already has properly filed a proof of claim
   against one or more of the Debtors;

B. any entity whose claim against a Debtor is not listed as
   disputed, contingent or unliquidated in the Schedules and
   that agrees with the nature, classification and amount of its
   claim as identified in the Schedules;

C. any entity whose claim against a Debtor previously has been
   allowed by order of the Court;

D. any entity, other than an indenture trustee, whose claim is
   limited exclusively to a claim for the repayment by the
   applicable Debtor of principal and interest under a senior
   redeemable note issued by WCG or under an indenture governing
   a senior redeemable note issued by WCG.  This is provided,
   however, this exclusion does not apply to any entity that
   wishes to assert a claim arising from or relating to a Note
   Instrument other than a Note Claim;

E. any governmental unit;

F. any entity having a claim under Section 507(a) of the
   Bankruptcy Code as an administrative expense of the Debtors'
   Chapter 11 cases;

G. any entity whose claim has been paid;

H. any director, officer or employee of a Debtor that served in
   some capacities on or after the Petition Date and who has or
   may have claims against a Debtor for indemnification,
   contribution, subrogation or reimbursement;

I. any entity that holds a claim arising out of or based solely
   upon an equity interest in the Debtors; and

J. any entity that holds a claim solely against WCL or any other
   non-debtor affiliates of the Debtors.

Pursuant to the proposed Bar Date Order:

A. Bank of America, N.A., as administrative agent under that
   certain amended and restated credit agreement dated September
   8, 1999, is explicitly authorized to file a single proof of
   claim on behalf of each and all lenders under the amended and
   restated credit agreement;

B. Wilmington Trust Company, as successor trustee under those
   certain indentures dated as of October 6, 1999 and as of
   August 8, 2000, is explicitly authorized to file a single
   proof of claim on behalf of each and all holders of the
   Debtor's senior redeemable notes governed by the indentures;

C. Wells Fargo Bank, N.A. as successor trustee under that
   certain indenture dated March 28, 2001, is explicitly
   authorized to file a single proof of claim on behalf of each
   and all holders of the Debtor's senior reset note governed by
   the indenture.

Pursuant to the Claims Agent Order, Ms. Ryland recounts that
Logan is the authorized claims agent for the Court with respect
to the Debtors' Chapter 11 cases.  In that regard, Logan is
responsible for, among other things, maintaining the database
containing the Debtors' Schedules.  To facilitate and coordinate
the claims reconciliation and bar date notice functions, Logan,
in accordance with the Claims Agent Order, will mail the proof
of claim forms and notice of the Bar Date.  In these Chapter 11
cases, the Debtors and Logan have prepared a proof of claim
form, based on Official Form 10, but tailored to conform to
these Chapter 11 cases. Using the Proof of Claim will:

  * ensure that each creditor whose claim is listed on the
    Debtors' Schedules will receive a "personalized" Proof of
    Claim form printed with the appropriate creditor's name; and

  * facilitate the matching of scheduled and filed claims, and
    the claims reconciliation process.

The substantive modifications to the Official Form 10 include
the following:

A. allowing the creditor to correct any incorrect information
   contained in the name and address portion;

B. adding additional categories to the Basis of Claim section;

C. including certain instructions.

Regarding the entry of the Bar Date Order, the Court approves
the use of the Proof of Claim and directs that each claim filed
against a Debtor must:

A. be written in the English language;

B. be dominated in lawful currency of the United States as of
   the Petition Date; and

C. conform substantially with the Proof of Claim provided or
   Official Form No. 10.

The Court also rules that any entity that is required to file a
proof of claim for a particular claim against a debtor but fails
to do so by the Bar Date, will be forever barred, estopped and
enjoined from:

A. asserting any claim against a Debtor that:

     * is in an amount that exceeds the amount, if any, that is
       identified in the Schedules on behalf of the entity as
       undisputed, noncontingent, and liquidated, or

     * is of a different nature or a different classification
       than any claim identified in the Schedules on behalf of
       the entity; or

B. voting upon, or receiving distributions under, any plan or
   plans of reorganization in these Chapter 11 cases in respect
   of the unscheduled claim. In addition, the entity will not
   be entitled to any further notice in these Chapter 11 cases
   with respect to the claim.

Pursuant to Bankruptcy Rule 2002(a)(7), the Debtors will mail a
bar date notice, and a Proof of Claim form to:

A. the Office of the United States Trustee for the Southern
   District of New York;

B. the Administrative Agent;

C. each member of the statutory creditors' committee appointed
   in this Chapter 11 case and the attorneys for the Committee,
   including the Indenture Trustees;

D. all known holders of claims listed on the Debtors' Schedules
   at the addresses stated therein;

E. the District Director of Internal Revenue for the Southern
   District of New York;

F. the Securities and Exchange Commission; and

G. all persons and entities requesting notice pursuant to
   Bankruptcy Rule 2002 as of the date of entry of the order
   approving this Application.

The Debtors also obtained authorization from the Court to send a
Bar Date Notice to certain entities not listed on the Debtors'
Schedules, but with whom, prior to the Petition Date, the
Debtors had done business with or who may have asserted a claim
against the Debtors in the recent past.  Ms. Ryland believes
that providing the notice will enable any creditor inadvertently
omitted on the Debtors' Schedules to receive notice of the Bar
Date.  The notice will similarly enable the Debtors to determine
the amount and magnitude of all prepetition claims against their
Chapter 11 estates.  The proposed Bar Date Notice notifies the
parties of the Bar Date and contains information regarding who
must file a proof of claim, the procedure for filing a proof of
claim and the consequences of failure to timely file a proof of

With respect to proofs of equity interests, Ms. Ryland states
that the Bar Date Order provides that any holder of an equity
interest in a Debtor need not file a proof of interest.  The
Debtors submit that no notice to those holders is required
because the Debtors possess or can obtain a list of all the
record holders if and when it becomes necessary to identify
those holders.  The Debtors propose to include with the Bar Date
Notice and the Proof of Claim form a statement indicating how
the Debtors have listed each creditor's respective claim on
their Schedules, including the amount of the claim and whether
the claim has been listed as contingent, unliquidated or

The Debtors have determined that it would be in the best
interest of their estates to give notice by publication to
certain creditors including:

A. those creditors to whom no other notice was sent and who are
   unknown or not reasonably ascertainable by the Debtors;

B. known creditors with addresses unknown by the Debtors; and

C. creditors with potential claims unknown by the Debtors.

In order to satisfy the requirements of Bankruptcy Rule
2002(a)(7) with respect to Unknown Creditors, the Debtors are
authorized, pursuant to Bankruptcy Rule 2002(l), to publish the
Bar Date Notice on one occasion at least 20 days prior to the
General Bar Date in the Tulsa World, The Wall Street Journal
(National Edition) and The New York Times (National Edition).
The Publication Notice includes a telephone number that
creditors may call to obtain copies of the Proof of Claim form
and information concerning the procedures for filing proofs of
claim. The Debtors further request the Court find that the
Debtors' proposed procedures regarding the Publication Notice
shall be deemed good, adequate and sufficient publication

Ms. Ryland accords that the Debtors are required to file their
Schedules on or before June 16, 2002.  The Debtors have been
advised by Logan that based upon the number of entities to whom
the Debtors propose to provide notice, including all creditors
who are entitled to receive notice, Logan will be able to
complete the mailing of the Proof of Claim forms and Bar Date
Notices within three business days after the Debtors file their
Schedules.  By establishing the Bar Date, all potential
claimants will have an adequate period of time within which to
file a proof of claim and more than the 20 days' notice of the
Bar Date that is required by Bankruptcy Rule 2002(a)(7).
(Williams Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

WYNDHAM INT'L: Calls-Off Proposed Senior Secured Note Offering
Wyndham International, Inc. (NYSE:WYN) said it would not proceed
with the issuance of senior secured notes as previously
announced on May 17, 2002.

"We found the market conditions not deep enough to issue the
notes on terms that made sense to the Company and its
shareholders," stated Wyndham International Chairman and Chief
Executive Officer Fred J. Kleisner. "We appreciate the hard work
of the underwriters and potential investors, but since the
Company does not have any bank debt maturities until June 30,
2004 we feel it prudent to evaluate the market later and
continue to execute our strategic plan."

Wyndham International, Inc. (NYSE:WYN) offers upscale and luxury
hotel and resort accommodations through proprietary lodging
brands and a management services division. Based in Dallas,
Wyndham International owns, leases, manages and franchises
hotels and resorts in the United States, Canada, Mexico, the
Caribbean and Europe. For more information, visit

As previously reported, Standard & Poor's assigned a B- rating
to Wyndham International's proposed $750 million debentures.

XO COMMS: Nixes Forstmann & TELMEX's Move to Bolt from Agreement
XO Communications, Inc. (OTCBB:XOXO) issued the following
statement in response to a letter delivered by attorneys for
partnerships affiliated with Forstmann Little & Co. and
Telefonos de Mexico, S.A. de C.V. asking XO to release Forstmann
Little and TELMEX from their obligations under their existing
stock purchase agreement.

    "As acknowledged by counsel for Forstmann Little and TELMEX
in their letter, the stock purchase agreement among XO,
Forstmann Little and TELMEX remains in full force and effect. We
do not believe that the investors have any right to terminate
their obligations unilaterally, and see no reason to believe
that the closing conditions cannot be satisfied.

    "However, if for any reason the Forstmann Little/TELMEX
agreement fails to close for any reason, it is important to note
that in recent weeks XO has made substantial progress with the
steering committee of its senior secured lenders to formulate a
standalone plan which would come into effect in that event.

    "We flatly reject the investors' notion that it is
'virtually impossible' for the conditions to the investors'
obligations to be fulfilled. We believe that our operating
results for the first quarter, which reflected improved EBITDA
performance, and the dismissal last week of the class action
litigation that was pending in the Federal Court in Virginia
constitute significant progress toward meeting the conditions of
the stock purchase agreement. Under the circumstances, we are
obviously not in a position to terminate the stock purchase
agreement without substantial consideration. We remain confident
that so long as the investors fulfill their obligations under
the agreement including the obligation to use reasonable best
efforts to take actions necessary to complete the transactions,
the conditions can be fulfilled and the transactions

XO Communications is one of the world's leading providers of
broadband communications services offering local and long
distance voice communication services, Digital Subscriber Line
access, Web hosting and e-commerce service, Virtual Private
Networks, dedicated access, global transit and application
infrastructure services for delivering applications over the
Internet or a VPN.

XO has assembled an unrivaled set of facilities-based broadband
networks and Tier One Internet peering relationships throughout
the United States. XO currently offers facilities-based
broadband communications services in 65 markets throughout the
United States.

YORK RESEARCH: Files for Chapter 11 Reorganization in New York
York Research Corporation (Nasdaq: YORK.BB - news; "York")
reached an agreement with the Informal Committee of holders of
the $150,000,000 12% Senior Secured Bonds due October 30, 2007
issued by York Power Funding (Cayman) Limited with respect to a
restructuring of York.

Pursuant to a Restructuring Agreement dated June 5, 2002 entered
into with the holders of approximately 99% of the Portfolio
Bonds, York has filed a bankruptcy petition and become a Chapter
11 debtor. These holders of the Portfolio Bonds agreed to permit
a subsidiary of York to provide debtor-in-possession financing
to York; the indenture trustee for the portfolio bonds will act
as agent for this financing. This DIP financing expires in
approximately four months.

During this four-month period, York and the consenting
bondholders will seek approval of an agreed Plan of
Reorganization. Pursuant to the proposed Plan, York's
operational projects would be operated for the benefit of York's
creditors, with a view to their ultimate disposition. York's
development projects and certain other assets would be spun off
to a new entity, Jasper Energy LLC, controlled by York's current
management and owned by York creditors and management. Jasper
would manage the operational projects on behalf of York. York's
existing outstanding common stock would be cancelled.
Conditioned on a successful restructuring, the consenting
bondholders have agreed to finance Jasper, including its
management of York's operational projects, through May, 2003.

As previously announced, since York will have no publicly traded
securities as a result of the restructuring and its operations
are limited to maintenance of the operational projects, York
will not be filing any further reports under the Securities
Exchange Act of 1934. York's common stock has been delisted from
the NASDAQ Stock Market.

YORK RESEARCH: Case Summary & 20 Largest Unsecured Creditors
Debtor: York Research Corporation
        550 Mamaroneck Avenue
        Suite 303
        Harrison, New York 10528

Bankruptcy Case No.: 02-12792

Type of Business: York develops, constructs and operates energy
                  production facilities, including (i)
                  cogeneration projects that utilize natural
                  gas as a fuel to produce thermal and electric
                  power and (ii) renewable energy projects
                  primarily converting wind and solar energy
                  into transmittable electric power.

Chapter 11 Petition Date: June 7, 2002

Court: Southern District of New York (Manhattan)

Judge: Prudence Carter Beatty

Debtor's Counsel: Alan Kolod, Esq.
                  Moses & Singer LLP
                  1301 Avenue of the Americas
                  New York, NY 10036
                  (212) 554-7866
                  Fax : (212) 554-7700

Total Assets: $119,900,326

Total Debts: $16,357,474

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Wells Fargo Bank of        Trustee                $220,000,000
Minnesota, N.A.                                  
Nick Tally, Esq.                                  Collateral:
MAC N 9303-120                                     $20,000,000  
Sixth & Marquette
Minneapolis, MN 55479

Credit Suisse First        Bondholder              $56,006,000  
Boston Corporation        Beneficial Owner
Barbara Nottebohm
Eleven Madison Avenue
New York, NY 10010
Phone: 212-325-7229

John Hancock Life          Bondholder              $27,956,000  
Insurance Company         Beneficial Owner
Al Seghezzi
John Hancock Tower
200 Clarendon Street
Boston, MA 02117
Phone: 617-572-4610

Putnam High Yield Trust    Bondholder              $14,858,000
Paul Scanlon               Beneficial Owner
One Post Office Square
Boston, MA 02109
Phone: 617-292-1000

Prudential High Yield      Bondholder              $14,766,000
Fund Inc.
Lisa Korsten
Two Gateway Center
Newark, NJ 07102
Phone: 206-516-4838

General Electric Capital    Bondholder             $13,314,000
Assurance Company          Beneficial Owner
John Endres
General Electric Financial
601 Union Street
Seattle, MA 02109
Phone: 206-516-4838

Putnam High Yield Adv.     Bondholder              $13,028,000  
Paul Scanlon               Beneficial Owner
One Post Office Square
Boston, MA 02109
Phone: 617-292-1000

TXU/Ensearch Energy        Guaranty                $10,976,000
Robert Crenshaw
1301 Fannin Street, Suite 2300
Houston, TX 77002
Phone: 713-210-5128

Putnam Diversified         Bondholder               $9,476,000
Income Trust               Beneficial Owner
Paul Scanlon
One Post Office Square
Boston, MA 02109
Phone: 617-292-1000

Putnam Funds Trust -       Bondholder              $8,116,000
Putnam High Yield         Beneficial Owner
Trust II
Paul Scanlon
One Post Office Square
Boston, MA 02109
Phone: 617-292-1000

MBIA: Shyppco Finance      Bondholder               $6,388,000
Co., LLC                  Beneficial Owner
Robert Claiborne
113 King Strret
Armonk, NY 10504
Phone: 914-765-3347

Marathon Oil               Guaranty                 $5,329,000
Linda Brown
539 South Main
Findlay, OH 45840
Phone: 419-421-2457

Putnam Variable Trust      Bondholder               $4,992,000
High Yield Fund           Beneficial Owner
Paul Scanlon
Putnam Investments, Inc.
One Post Office Square
Boston, MA 02109
Phone: 617-292-1000

El Paso Energy Marketing   Guaranty                 $4,749,999
Hillary Mack
1001 Louisiana Street
Houston, TX 77002
Phone: 713-420-5375

John Hancock Variable      Bondholder               $4,740,000
Life Insurance            Beneficial Owner
Al Seghezzi
John Hancock Tower
200 Clarendon Street
Boston, MA 02117
Phone: 617-572-4610

Prudential Series Fund     Bondholder               $4,062,000
Inc. High Yield           Beneficial Owner
Lisa Korsten
Prudential investments
Two Gateway Center
Newark, NJ 07102
Phone: 973-802-2475

GE Edison Life Insurance   Bondholder               $3,996,000
Company                   Beneficial Owner
John Endres
General Electric Financial
601 Union Street
Seattle, WA 98101
Phone: 206-516-4838

Coral Energy Resources,    Guaranty                 $3,846,458
909 Fanin, Suite 700
Houston, TX  77010
Phone: 713-230-3843

CNG Transmission Field     Guaranty                 $3,000,000
Services (Dominion)
Amy Lamm
445 West Main Street
Clarksburg, WV 26301
Phone: 304-623-8815

Putnam Premier             Bondholder               $2,266,000
Paul Scanlon               Beneficial Owner
One Post Office Square
Boston, MA 02109
Phone: 617-292-1000

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

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
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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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