TCR_Public/020612.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Wednesday, June 12, 2002, Vol. 6, No. 115     


ANC RENTAL: Wants To Enter Into New Master Lease Pacts with SPEs
AT&T CANADA: Will Begin Talks to Restructure $4.5BB Public Debt
ADELPHIA COMMS: Tow and Schneider Resign from Board of Directors
ADELPHIA COMMS: Peter Venetis Bows-Out of Board of Directors
ARMSTRONG HOLDINGS: Trafalet Taps Peter J. Solomon for Advice

ASHANTI GOLDFIELDS: Reviewing Alternative Restructuring Proposal
BCI INC: Sets Special Shareholders' Meeting for July 12, 2002
BAY VIEW: Fitch Upgrades Short-Term Deposits & Debt Ratings to B
COLONIAL COMMERCIAL: Nasdaq Delists Shares Effective June 10
COMDISCO INC: Selling Certain Assets to CLIX Network, Inc.

COMMSCOPE INC: Expects Sequential Decline Second Quarter Sales
COVANTA ENERGY: Court Amends Order Re Kilpatrick's Engagement
CROWN RESOURCES: Emerges from Chapter 11 Proceedings
CYNET: Defaults on Obligations to Customers & Trade Creditors
DELTA AIR LINES: Unit Taps Deloitte & Touche to Replace Andersen

DOBSON COMMS: Shareholders Okay Stock Employee & Incentive Plans
DYNAGEAR: Taps Dresner as Fin'l Advisors for Planned Asset Sale
ECHAPMAN INC: Fails to Comply with Nasdaq Listing Requirements
ECHOSTAR COMM: Discontinues Andersen's Engagement as Accountants
EMERGING VISION: Sets Annual Shareholders' Meeting for July 11

ENCORE SOFTWARE: Enters Pact to Sell Certain Assets to Navarre
ENRON CORP: Bridgeline Demands $2.6MM Admin. Expense Payment
ENRON CORPORATION: Court Modifies Compensation Procedures Order
EXIDE TECH: Craig Muhlhauser Named Board of Directors' Chairman
EXIDE TECHNOLOGIES: Closes $177.5MM Securitization Financing

EXODUS COMMS: Wants Lease Decision Period Extended to August 22
FFP MARKETING: Violates Financial Covenant Under Loan Agreements
FEDERAL-MOGUL: Panel Asks Court to Reconsider Bates' Employment
GLOBAL CROSSING: Obtains Approval of Stipulation with JP Morgan
HAYES LEMMERZ: Seeks Court's Nod to Sell Schenk to Metallwerke

IMPSAT FIBER: Files for Chapter 11 Protection in New York
IMPSAT FIBER: Case Summary & 20 Largest Unsecured Creditors
INTRAWARE INC: CEO Peter Jackson Replaces Prioleau as President
JAGGED EDGE: Case Summary & 20 Largest Unsecured Creditors
KMART CORP: U.S. Bank Wins Nod to Use and Apply Bond Proceeds

KMART CORP: Court Allows Keybank to Retain $1.9MM of Accounts
LTV CORP: Steel Unit Resolves Claims Dispute with Hunter Corp.
LAIDLAW INC: Fails to Meet Annual Report Filing Deadline
MADGE NETWORKS: Annual Shareholders' Meeting Set for June 27
MAGNESIUM CORP: Judge Gerber Okays Asset Sale to US Magnesium

MAXITILE INC: Court Fixes August 30 Bar Date for Proofs of Claim
MCDERMOTT INT'L: S&P Affirms B Corporate Credit Rating
METALS USA: Earns Okay to Employ Ordinary Course Professionals
METROCALL INC: Signs-Up Lazard Freres as Investment Bankers
METROCALL INC: Secures Approval Restricting Securities Trading

NII HOLDINGS: Requesting Court to Schedule Claims Bar Date
NATIONAL STEEL: Ingleside Wants to Sell Texas Real Estate Asset
NET NANNY: Will Restructure Operations Under BIA in Canada
NET2000: Chapter 7 Trustee Convenes Creditors' Meeting Today
NEWPOWER: Will Transition All TX Customers to Reliant and TXU

NEWPOWER HOLDINGS: Commences Chapter 11 Reorg. in Georgia
NEWPOWER HOLDINGS: Case Summary & 30 Largest Unsec. Creditors
NORTEL NETWORKS: Revises Expectations Re Two Public Offerings
NUTRASTAR INC: Lewak Greenbaun Expresses Going Concern Doubt
PACIFIC GAS: Court Okays Certain Claims Estimation Procedures

PACIFIC SYSTEMS: March 31 Balance Sheet Upside-Down by $303,000
PRUDENTIAL SECURITIES: S&P Cuts 2 Certificate Class Ratings to D
PSINET INC: Will Vote for Argentinian Subsidiary's Dissolution
SAFETY-KLEEN: Court Resets Asset Sale Hearing for June 17, 2002
SLEEPMASTER LLC: Court Tells Serta to Share Reports With Panel

STATIONS HOLDING: Inks Pact to Sell Assets to Gray for $500MM
SUNRISE TECH: Defaults on Loan Pact with Silicon Valley Bank
TYCO INT'L: Fitch Downgrades Senior Unsecured Rating to BB
US AIRWAYS: Files Application for $900MM Federal Loan Guarantee
US AIRWAYS: PSA Unit Reaches Agreement for Regional Jet Flying

VIATEL INC: Successfully Emerges from Chapter 11 Proceedings
WARNACO: Seeks Approval to Settle Dispute with Banco Nacional
WILLIAMS COMMS: Shareholders Seek Equity Committee Appointment

* H. Sean Mathis Joins Financo Restructuring as Special Advisor

* Meetings, Conferences and Seminars


ANC RENTAL: Wants To Enter Into New Master Lease Pacts with SPEs
ANC Rental Corporation and its debtor-affiliates ask for the
Court's authority to:

A. enter into new Master Lease Agreements with Lessor Special
   Purpose Entities (SPEs),

B. guarantee the obligations of each lessee under the New Master
   Lease Agreements,

C. grant certain protections and pay the fees associated with
   the transaction and

D. enter into other agreements and documents necessary to
   consummate the transaction.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, tells the Court the motion is in order for
the Debtors to cater to the their financing needs for June 2002.
The Debtors have determined that it is in their best interests
to proceed with the new MBIA transaction because of timing
issues related to the issuance of 2002-2 MTN Notes to be issued
by DB Alex Brown.  The Debtors and DB Alex Brown are continuing
to negotiate on the issuance of the 2002-2 MTN Notes to provide
the additional fleet financing that will be needed by the

Mr. Packel explains that a new transaction with MBIA will make
possible the issuance of a Medium Term Note (MTN) in an amount
not to exceed $500,000,000 by ARG Funding Corp., or another
special purpose subsidiary of ANC, to an affiliate of MBIA
Insurance Corp.  The proceeds of the transaction are to be used
by certain existing, or yet-to-be-formed, non-debtor special
purpose entities to finance the purchase of vehicles critical to
the Debtors reorganization efforts.  The Term Sheet of the
Transaction provides that ARG will issue the MTN to MBIA in an
amount up to $500,000,000.  It is anticipated that DB Alex Brown
will provide additional fleet financing needed by the Debtors.
MBIA will also be renumerated with:

A. A monthly fee of 150 bps per annum paid monthly in advance of
   the Series 2002-1 Outstanding Amount; and

B. An upfront fee 125 bps on the MTN Balance paid at closing.

All obligations of the Debtors pursuant to the Transaction,
meanwhile, will be allowed super-priority administrative
expenses of the Bankruptcy Code and the New Master lease
Agreements will not be subject to rejection under Section 365 of
the Bankruptcy Code.  Mr. Packel submits that under the
circumstances, the Debtors believe that the fees provided are
reasonable for the size of the transaction and are necessary to
induce MBIA to facilitate the incremental financing.

Mr. Packel states that with the issuance of the MTN, the lessor
SPEs will enter into the New Master Lease Agreements with the
operating companies.  ANC and each lessor SPE will issue a
segregated series of variable funding notes to ARG as collateral
for the MTN.  Pursuant to this, each lessor SPE will borrow
funds from ARG to finance the purchase of vehicles to be leased
to the operating companies under the New Master Lease
Agreements.  The New Segregated Leasing Company Notes will be
secured by the vehicles leased under the lease under the New
Master Lease Agreements as well as the Lessor SPE's rights to
receive payments under the New Master Lease Agreements. (ANC
Rental Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

AT&T CANADA: Will Begin Talks to Restructure $4.5BB Public Debt
AT&T Canada Inc. (NASDAQ: ATTC) (TSE: TEL.B), Canada's largest
facilities-based competitor, reported that consistent with its
business process to position the company as a strong and growing
competitor in the Canadian telecommunications marketplace over
the long term, it will begin discussions with its public debt
holders over the next several weeks aimed at deleveraging its
capital structure through a consensual restructuring of its
public debt.

The objective of this initiative is to further enhance AT&T
Canada's financial flexibility as it builds its competitive
position. The interests of AT&T Canada's deposit receipt holders
will continue to be governed by the June 1999 Deposit Receipt

As of March 31, 2002, AT&T Canada has $4.5 billion of publicly
held debt, consisting of seven series of debentures.

John McLennan, Vice Chairman and CEO of AT&T Canada, stated, "As
we previously reported, AT&T Canada has the expertise, operating
base and brand equity to be a successful provider of
telecommunications services for the Canadian marketplace. To
that end, we have been aggressively moving forward under a
strategic process to position the company for the long term.
This consists of having effective and efficient operations and a
new capital structure with less debt that enables AT&T Canada to
have the appropriate funding and financial flexibility to fuel
the building of our business. In this connection, we have
recently announced that the company had reached agreement with
its bank syndicate for a restructured bank agreement. We now
expect to work closely with the bondholders to reach a
consensual agreement and we will be seeking the input of AT&T

"This is the next step in our plan to be a strong competitor and
growing company in the long term. Over the past year, we have
implemented a number of cost saving initiatives to build our
business efficiencies and operating strength. We will compete
aggressively in the Canadian telecom market and will continue to
provide the highest quality service to our customers.

"In addition to building AT&T Canada's operational strengths and
the financial structure to support its operations, AT&T Canada
is fully committed to working towards achieving a sustainable
telecommunications marketplace in Canada. Such a marketplace is
important for all customers and in the best interest of the
company and its stakeholders.

"We have publicly expressed our disappointment with the May 30
CRTC ruling regarding the regulatory frame work. While the
ruling represents a marginal improvement over the status quo, we
believe that the regulators missed an important opportunity to
make a considerable advancement towards a competitively neutral
and sustainable telecommunications marketplace. As we have also
previously stated, we are diligently conducting a thorough
review of this ruling to determine what actions we might take,
including the possibility of an appeal.

"We will continue to keep all our stakeholders informed of all
aspects of our progress and developments to our business model,
as we position our company for the long term."

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

AT&T Canada Inc.'s 10.75% bonds due 2007 (ATTC07CAR1),
DebtTraders says, are trading at about 8.75. See
for real-time bond pricing.

ADELPHIA COMMS: Tow and Schneider Resign from Board of Directors
Adelphia Communications Corporation (OTC: ADELA) issued the
following statement in response to the announcement by Leonard
Tow and Scott Schneider that they had resigned their seats on
the Company's Board of Directors:

"We are disappointed that Messrs. Tow and Schneider chose not to
continue their service as directors and help Adelphia resolve
the challenges it faces. Nevertheless, the Company's independent
directors, management and employees remain committed to
preserving Adelphia's many strengths and restoring the Company's
credibility among its key stakeholders."

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

ADELPHIA COMMS: Peter Venetis Bows-Out of Board of Directors
Adelphia Communications Corporation (OTC: ADELA) announced that
Peter Venetis, a son-in-law of Company founder John Rigas, had
resigned his seat on the Board of Directors.

As previously announced on May 23, 2002, the Board and its
Special Committee had passed resolutions calling upon Mr.
Venetis to resign.

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

DebtTraders reports that Adelphia Communications' 10.875% bonds
due 2010 (ADEL10USR1) are quoted at 73. See
for real-time bond pricing.

ARMSTRONG HOLDINGS: Trafalet Taps Peter J. Solomon for Advice
Dean Trafalet, Legal Representative for Future Claimants, in
Armstrong Holdings, Inc.'s chapter 11 cases, asks Judge Newsome
to approve his retention of Peter J. Solomon Company as his
investment banker and financial advisor, nunc pro tunc to
February 20, 2002.  Mr. Trafalet reviews the complexity and size
of the Debtors' cases, and reviews all of the professionals
previously approved by Judge Newsome and Judge Farnan to
represent the Debtors and the Official Committees.  Mr. Trafalet
tells Judge Newsome that he believes PJSC the best suited to
assist him in the capacities for which he seeks the Judge's
approval of employment.  He assures Judge Newsome that the terms
of the engagement letter were negotiated at arm's length, and
that the compensation is reasonable and consistent with that
paid to similar professionals in other cases, as well as
favorable to Mr. Trafalet's constituents.  While no party has
raised any concerns in connection with this employment, Mr.
Trafalet is aware of certain comments from the bench with regard
to PJSC's fees, Mr. Trafalet's role in these cases, and whether
Mr. Trafalet actually needs PJSC's services, which Mr. Trafalet
addresses in a supplement to the Application.

The terms of this engagement as revised are:

     (1) Term:  Initial term of six months from February 20,
         2002, but retention may continue after that on a
         month-to-month basis without further application           
         or judicial approval;

     (2) Termination:  After the initial six-month period,
         either the Futures Representative or PJSC may terminate
         this retention on 30 days' prior written notice;

     (3) Compensation:  As compensation, PJSC will charge the
         Futures Representative a monthly fee of $155,000,
         [reduced by $20,000] commencing on February 20, 2002,
         for a period of two years, and a monthly fee of
         $145,000 [a flat fee replacing a tiered structure
         ranging from $150,000 to $100,000] for the duration of
         these Chapter 11 cases;

     (4) Indemnity:  PJSC and its affiliates or any employee,
         agent, officer, servant, director, attorney,
         shareholder or any person who controls PJSC are
         entitled to be indemnified from and against certain
         losses and liabilities arising from or related to
         PJSC's performance of its services on behalf of the
         Futures Representative.  The indemnity will not apply
         to any liability that has been "judicially determined
         to have resulted from the gross negligence, fraud, lack
         of good faith, bad faith, willful misfeasance or
         reckless disregard of the obligations or duties of

Mr. Trafalet believes this agreement, as revised, should address
Judge Newsome's concerns.  No constituency in these Chapter 11
cases has a larger or more vital stake in the Debtors'
reorganization process than the future claimants, and Mr.
Trafalet wants to be sure he has the best assistance in meeting
his constituency's needs.

PJSC's services include:

       (1) valuation of the Company as an on-going concern, in
           whole or part;

       (2) valuation analyses of the Company's asbestos

       (3) review of and consulting on the financing options for
           the Company including proposed DIP financing;

       (4) review of and consulting on the potential
           acquisition, divestiture, and merger transactions of
           the Company;

       (5) review of and consulting on the capital structure
           issues for the reorganized Company, including debt

       (6) review of and consulting on the financial issues and
           options concerning potential plans of reorganization,
           and coordinating negotiations in that connection;

       (7) review of and consulting on the Company's operating
           and business plans, including an analysis of the
           Company's long-term capital needs and changing
           competitive environment;

       (8) general advice and consultation regarding the
           adequacy of funding of any trust contemplated by the
           Bankruptcy Code;

       (9) testimony in court on behalf of the Futures
           Representative as needed; and

      (10) any other necessary services as the Futures
           Representative or the Representative's counsel may
           from time to time request with regard to financial,
           business or economic issues that may arise.

Bradley I. Dietz, a Managing Director of PJSC, avers to Judge
Newsome that PJSC is a disinterested party and has no
relationships with parties or the Debtors, except that:

       (i) PJSC was retained in late 2001 to provide expert
witness and other advisory services to Weil Gotshal & Manges on
behalf of General Electric Capital Corporation in the Montgomery
Ward bankruptcy pending in Delaware.  This engagement is
inactive and PJSC no longer receives compensation.

      (ii) Kirkland & Ellis serves as debtors' counsel in the
Quality Stores Chapter 11 case in the Western  District of
Michigan. PJSC serves as the debtors' investment banker and
recently completed the sale of the majority of the debtors'

     (iii) PJSC has been retained by Shearman & Sterling on
behalf of two agent banks, including Citibank, in the Warnaco
Group Chapter 11 case.  PJSC provides advisory services to these
two banks, as well as a steering committee of banks, with
respect to asset values and strategic alternatives to maximize
the value of the Warnaco estate.  The steering committee
includes parties in interest such as Bank of American National
Trust & Savings Association, and JP Morgan Chase.

      (iv) PJSC serves on Fleet National Bank's New York
administrative committee, which is not a formal board of
directors and is not subject to Regulation O.  The Committee
meets quarterly, and its purpose is a marketing and advisory
tool for the New York market.

       (v) PJSC serves as a special advisor to Fleet Retail
Finance in connection with a litigation matter involving a major
retail chain. (Armstrong Bankruptcy News, Issue No. 23;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

ASHANTI GOLDFIELDS: Reviewing Alternative Restructuring Proposal
As stated in the announcement of 16 May 2002 and in the
documentation despatched by Ashanti to its Securityholders,
including holders of the 5-1/2% Exchangeable Notes due 2003, in
connection with the proposed restructuring of the Existing
Notes, Ashanti's Board will continue to review any other bona
fide proposals which it considers to be in the interests of

Among the proposals being considered is one in which all of the
Existing Notes are redeemed at par. This would be funded through
a larger revolving credit facility, the early exercise of some
outstanding warrants and the issue of new equity to certain
existing shareholders. The proposal, if capable of being
implemented, would result in a simplified capital structure and
less dilution for existing shareholders. It would be the
intention of Ashanti to extend to all other existing
shareholders, as soon as practicable thereafter, the right to
participate in the equity fundraising on comparable terms. This
proposal is in the early stages of development and there is no
certainty that it is capable of being implemented.

In considering any alternative proposals, Ashanti's Board will
take into account the requirement to repay in full when due
Ashanti's existing revolving credit facility and the Existing
Notes and the deliverability of any such proposal. Consequently,
Ashanti would only seek to implement an alternative transaction
if it obtained all the appropriate approvals to any such
proposal, including that of the relevant majority of hedge
counter-parties in order to allow it to maintain continued
margin-free trading in respect of its hedging activities.

The Court Meeting at which approval of the Noteholders will be
sought for the Proposed Restructuring is to be held on 17 June
2002. The Extraordinary General Meeting at which Shareholder
approval will be sought for the Proposed Restructuring will be
held on 28 June 2002. Ashanti confirms that the Proposed
Restructuring continues to be recommended by its Board. In the
absence of any alternative proposal being recommended by
Ashanti's Board, the Directors of Ashanti urge Securityholders
to vote in favour of the Proposed Restructuring.

Ashanti's Chief Executive, Sam Jonah said: "In accordance with
the Board's fiduciary duties, we are evaluating an alternative
restructuring proposal that at the current gold prices would
offer less dilution to shareholders. We are working with our
stakeholders in this regard. In considering any alternative
proposal, Ashanti will only do so in a way that does not
jeopardise the important strides made towards a restructured

BCI INC: Sets Special Shareholders' Meeting for July 12, 2002
Bell Canada International Inc. announced that it had obtained an
interim court order authorizing it to hold special meetings of
shareholders and noteholders on July 12, 2002 to approve a Plan
of Arrangement.  The record date for the meetings has been set
at June 7, 2002.

As announced on June 3, 2002, BCI is seeking approval for a Plan
of Arrangement pursuant to which BCI will conclude the sale of
its interest in Telecom Americas; proceed with the disposition
of its remaining assets in an orderly fashion; and seek
expeditious resolution of outstanding claims in order to
accelerate final distributions to BCI stakeholders.  Court
approval of the Arrangement, if granted, would be obtained
shortly after the meetings.

BCI is also proposing, as part of the Plan of Arrangement, a
consolidation of its outstanding common shares, to take effect
shortly after court approval of the Arrangement, which would
result in BCI having 40 million common shares outstanding
following the consolidation, whether certain affiliates of
American International Group, Inc. exercise a put option before
or after the date of the meetings, or not at all.  Based on the
4,797,313,638 currently outstanding common shares, the
consolidation ratio would be approximately one to 120.

The formal Notice of Special Meeting and Management Proxy
Circulars of BCI contain a detailed description of the proposed
Arrangement and outline the actions to be taken at the special
meetings of shareholders and noteholders.  These materials will
be mailed to all shareholders and noteholders and will also be
available on BCI's Web site at http://www.bci.caas of June 14,  

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

BAY VIEW: Fitch Upgrades Short-Term Deposits & Debt Ratings to B
Fitch Ratings raises both the short-term deposits and short-term
debt ratings for Bay View Bank to 'B' from 'C'. Concurrently,
Fitch Ratings removes its Negative Rating Watch for both Bay
View Bank and its parent holding company Bay View Capital
Corporation and the Rating Outlook is Stable for both entities.
All others ratings are affirmed at this time. A complete list of
the ratings can be found below.

Fitch's rating action is the result of improving trends in some
key financial performance measures, but reflects the still
fragile financial profile of Bay View Capital Corporation (BVC)
and its operating subsidiary Bay View Bank (bank). The most
noticeable improvement has been a significant reduction in BVC's
troubled franchise loan portfolio, which now represents less
than 6% of the total loan portfolio. This reduction has helped
credit costs somewhat stabilize and should result in less asset
quality deterioration in the future. Additionally, the bank
continues to operate a sound and improving deposit franchise,
which is shifting increasingly toward low-cost transaction
accounts, the primary contributor to improved profitability, as
healthier margins have resulted from reduced funding costs.
BVC's NIM expanded to 4.15% from 3.85% on a linked quarter
basis, helping BVC report two consecutive quarters of net income
following a string of losses. Further, a significant reduction
in debt over the past two years should provide for better
flexibility and aid in future financial performance.

Despite the aforementioned improvements, particularly at the
bank, our current ratings reflect an institution whose recovery
remains frail, as it grapples with still elevated credit costs,
falling reserves and marginal profitability. Though BVC reported
two consecutive quarters of earnings, those quarters may well
have ended in the red had provision expenses kept pace with
charge-offs, as asset quality continues to be problematic. NPAs
represented 3.4% of loans and other real estate owned for 1Q02,
which compares favorably on a linked quarter basis (3.8% for
4Q01), but remains well above the industry average. Though
significantly reduced, the franchise loan portfolio still
warrants heighten concerns, as that portfolio represented $56
mln or 68% of total NPAs ($82.8 mln) and $6.2 mln or 73% of
total NCOs ($8.5 mln) for 1Q02. Exacerbating elevated NPAs and
NCOs, are reserves that continue to decline. Reserve coverage of
NPAs (55.7%) and provision coverage of NCOs (57.4%) reached
close to 5-yr lows, despite improvements in both nominal NPA and
NCO levels. Increased emphasis on auto leasing may put further
pressure on asset quality should the leasing market continue to
be weak.

BVC remains prohibited from drawing dividends from the bank, and
likewise, is restricted from paying any dividends, including
dividends on the trust preferred securities issued by Bay View
Capital Trust 1. These prohibitions relate to a 2000 agreement
with its primary regulators that required, among other things,
BVC and the bank to achieve certain minimum regulatory capital
requirements. The bank continues to meet well-capitalized
minimums with Total and Tier I risk-based capital and Tier I
leverage ratios of 10.2%, 7.2% and 5.6%, respectively at
12/31/01, compared to regulatory minimums of 10%, 6% and 5%. On
a consolidated basis, BVC reported ratios of 8.4%, 4.8% and 4.2%
for 1Q02, respectively, which are considered adequately
capitalized, but are still in need of improvement given BVC's
current risk profile. As mentioned, while BVC has taken
reasonable strides to better its overall financial profile,
Fitch incorporates the company's delicate recovery and potential
for unexpected events into our current ratings. Even so, Fitch
expects to see BVC continue to make progress in a positive
direction, by way of real profitability improvements, resolution
of asset quality concerns and capital growth.

                  Bay View Capital Corporation

               --Long-term debt affirmed at 'B-';

               --Subordinated debt affirmed at 'CCC';

               --Individual affirmed at 'D';

               --Support affirmed at '5';

               --Rating Outlook Stable.

                          Bay View Bank

                --Long-term deposits affirmed at 'B+';

                --Long-term debt affirmed at 'B-';

                --Short-term deposits upgraded to 'B' from 'C';

                --Short-term debt upgraded to 'B' from 'C';

                --Subordinated debt affirmed at 'CCC';

                --Individual affirmed at 'D';

                --Support affirmed at '5';

                --Rating Outlook Stable.

                      Bay View Capital Trust I

                --Preferred Stock affirmed at 'CC'.

COLONIAL COMMERCIAL: Nasdaq Delists Shares Effective June 10
Colonial Commercial Corp. has received notice from a Nasdaq
Listing Qualifications Panel that the Company's securities have
been delisted from the Nasdaq SmallCap Market, effective with
the opening of business on Monday, June 10, 2002.

Armstrong Holdings Inc.'s 9.0% bonds due 2004 (ACK04USR1) are
trading at about 58.5, DebtTraders says. See  
real-time bond pricing.

COMDISCO INC: Selling Certain Assets to CLIX Network, Inc.
Comdisco, Inc., and its debtor-affiliates seek the Court's
authority to sell their interest in certain assets to CLIX
Network, Inc.

Felicia Gerber Perlman, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, relates that the Debtors entered
into an agreement with Clickradio, Inc. wherein the Debtors:

    (i) lend Clickradio $3,000,000 in subordinated debt; and

   (ii) extend a credit line of $1,500,000 for equipment lease

"In order to secure the sub-debt, the Debtors were granted a
lien in all the assets of Clickradio," Ms. Perlman says.  With
respect to the Lease Credit-Line, Clickradio drew down nearly
all of its credit line.  Accordingly, since the Leases related
to the credit line are operating leases, the Debtors are the
titleholders to the underlying equipment.

Ms. Perlman tells the Court that Clickradio has been in default
on the sub-debt and the Lease Credit-Line.  "No other loan was
outstanding that was senior to the sub-debt," Ms. Perlman adds.
Accordingly, the Debtors hold a valid first-priority lien in all
of Clickradio assets.  While the assets are of no use to the
Debtors, Ms. Perlman explains that certain of the assets are
significant and can be foreclosed by the Debtors.  The Debtors
elected to foreclose the assets at a public auction where they
marketed the assets to various investors and buyers.

However, Ms. Perlman reports that very few bids were submitted,
and the Debtors submitted a credit bid in the amount of
$1,025,000.  "As a result, the Debtors were the successful
bidders," Ms. Perlman adds.

The Debtors and CLIX Network then entered into an agreement
wherein the Debtors will sell to CLIX the assets for more than
twice the amount of their credit bid.  Ms. Perlman provides the
salient terms of the agreement as:

  (i) the Purchase Price at the closing date for the assets
      would be equal to:

      (a) $1,980,000 by wire transfers of immediately available
          United States funds; plus

      (b) $500,000 in the form of 3-year subordinated, secured
          promissory note; plus

      (c) warrants exercisable for $500,000 of capital stock of

(ii) the proposed sale will include all of the Debtors' right,
      title and interest in the assets.

Ms. Perlman explains that the Agreement represents the highest
offer received by the Debtors for the assets.  The Debtors
therefore seek the Court to approve the proposed sale of the
assets because it is in the best interests of the estates and is
proposed in good faith. (Comdisco Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

COMMSCOPE INC: Expects Sequential Decline Second Quarter Sales
CommScope, Inc. (NYSE: CTV), a world leader in the manufacture
of broadband and high-performance communication cables, now
expects a sequential decline in second quarter 2002 sales and
gross margin.

"We are revising our previous guidance for the second quarter
primarily due to the impact of significantly reduced sales to
Adelphia Communications Corporation," said Jearld L. Leonhardt,
CommScope Executive Vice President and Chief Financial Officer.  
"While we previously expected modest sequential sales growth in
the second quarter, we currently expect second quarter 2002
sales to be between $150 and $160 million compared to $160
million reported in the first quarter of 2002.  We expect second
quarter gross margin to be approximately 19-21% compared with
the previous expectation of modest improvement over first
quarter margin of 22%.  This decline is primarily due to lower
than expected sales, product mix and pricing pressure for
certain products.  Despite these challenges, we continue to
expect to generate free cash flow (cash from operations less
capital expenditures) during the second quarter and for the
remainder of 2002."

During the first quarter of 2002, Adelphia represented
approximately 11% of total sales and approximately 16% of total
accounts receivable.  As of May 31, 2002, the Company indicated
that receivables from Adelphia were approximately $22.5 million.  
Management is evaluating the need for a possible charge related
to an allowance for Adelphia receivables.  The Company will
continue to assess the situation and will make a determination
as additional facts and information become available.

CommScope also stated that the global market for fiber optic
cable products continues to be affected by weak demand and
significant pricing pressure.  "We expect OFS to incur
significant restructuring charges this quarter as they continue
worldwide cost reduction efforts," noted Leonhardt. "We believe
that second quarter 2002 earnings will be a net loss after
inclusion of CommScope's portion of OFS BrightWave's losses.  We
expect to recognize non-cash equity in losses from OFS
BrightWave's operations for the remainder of 2002."

CommScope acquired an 18.4% ownership interest in OFS
BrightWave, an optical fiber and fiber cable venture between
CommScope and Furukawa Electric Co., Ltd. (Tokyo: 5801), during
the fourth quarter of 2001 and CommScope is reporting results
using the equity method of accounting for this investment.

CommScope is the world's largest manufacturer of broadband
coaxial cable for Hybrid Fiber Coaxial (HFC) applications and a
leading supplier of high-performance fiber optic and twisted
pair cables for LAN, wireless and other communications

Through its relationship with OFS, CommScope has an ownership
interest in one of the world's largest producers of optical
fiber and cable and has access to a broad array of
technologically advanced optical fibers.

As previously reported, Standard & Poor's raised the CommScope's
rating to BB+ owing to the company's solid performance.

COVANTA ENERGY: Court Amends Order Re Kilpatrick's Engagement
Judge Blackshear amends his prior order to the extent that the
retention of Kilpatrick Stockton LLP as Covanta Energy
Corporation and its debtor-affiliates' Legal Advisor on
Antitrust Matters is effective on May 22, 2002, instead of April
2, 2002. (Covanta Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

CROWN RESOURCES: Emerges from Chapter 11 Proceedings
Crown Resources Corporation has emerged from its Chapter 11
Bankruptcy and that as of June 12, 2002, it will begin trading
under its new stock symbol "CRCE."

On May 30, 2002, the United States Bankruptcy Court for the
District of Colorado confirmed Crown's Disclosure Statement and
Plan of Reorganization. The previously announced Effective Date
of June 10, 2002, is now set for June 11, 2002, to allow for
certain regulatory approvals.

Holders of Common Stock:

In connection with the Plan, on and after the Effective Date,
all holders of Common Stock share certificates of at least 500
shares will be required to exchange those certificates for new
certificates which will reflect the one-for-five reverse split.
All holders of such existing certificates will be required to
send their certificates, by certified or registered mail (return
receipt requested) to American Stock Transfer and Trust, 59
Maiden Lane, Attn: Reorganization Department, New York, NY
10038. There is no cost to the holders of existing certificates
for this exchange. Holders with less than 500 shares will
receive no distribution.

Holders of Common Stock certificates will have five years from
May 30, 2002, to exchange their old certificates for new
certificates. However, as of the Effective Date, the old
certificates will no longer be accepted by brokerage firms or
stock exchanges for trading or sale of the securities

Common Stock held by brokerage firms on behalf of beneficial
holders (often referred to as "Streetname" holders) will be
automatically exchanged for the new certificates by the
brokerage firms and individual holders will not be required to
take any action to exchange certificates. Holders with less than
500 shares will receive no distribution.

In order to comply with the requirements of the Over The Counter
Bulletin Board Exchange, after the Effective Date and pending
regulatory approval by NASDAQ, Crown will begin trading under
the new symbol "CRCE."

Holders of 5.75% Convertible Subordinated Debentures:

Holders of Crown's 5.75% Convertible Subordinated Debentures
will surrender their Debenture certificates to Wells Fargo Bank,
the Disbursing Agent, in exchange for each $5,000 Debenture:

     (i) $333.33 in cash and;

    (ii) $666.67 in 10% Convertible Secured Promissory Notes due
October 2006

   (iii) $1333.33 in 10% Convertible Subordinated Promissory
Notes due October 2006

    (iv) A Warrant to purchase Common Stock of the Company equal
to the number of shares subject to conversion pursuant to the
terms of the Convertible Secured Notes received by the tendering
holder with an exercise price of $0.75 per share, which expire
in October 2006.

Crown is a U.S. domiciled gold exploration company whose major
assets are the Crown Jewel Project located in north-central
Washington State and a 41.2% interest in Solitario Resources
Corporation (TSE:SLR). Crown is currently traded on the OTC
Bulletin Board under the trading symbol CRRSQ. On June 12, Crown
will be traded under the new symbol CRCE.

CYNET: Defaults on Obligations to Customers & Trade Creditors
Cynet, Inc., is an Internet business solutions provider
integrating full convergent messaging with Internet services.
The Company's products and services are convergent messaging,
which includes Fax, Data, E-Mail and Wireless Messaging.

The Company is a Texas corporation founded in 1995 to become a
provider of fax broadcasting services to business customers.
Since the change of control and management that occurred in
1998, the Company was transformed from a privately-owned fax
broadcasting business with significant securities law
liabilities into a publicly reporting eMessaging solution
provider, incorporating full eMessaging, convergent messaging
and wireless messaging capabilities.

The Company has incurred significant costs in the pursuit of
this strategy financed, primarily, by a combination of private
equity and debt financing transactions.  Nevertheless, the costs
of pursuing its business strategy substantially exceeded the
Company's ability to generate revenues, resulting in operating
losses. Beginning in the last quarter of 2000 and throughout
2001, the Company took steps to aggressively reduce its expenses
and curtail business operations in order to move the Company
closer to profitability.  In addition, the downturn in the
capital markets for technology businesses during 2001
significantly reduced the Company's ability to raise additional
equity capital to finance its business.  The Company's business
and financial condition also caused it to default on many of its
obligations to customers, suppliers and other trade creditors
during 2000 and 2001. These defaults have led to the Company's
involvement in a significant number of legal proceedings.

While the Company has substantially reduced its operating
expenses for 2002 as compared with 2001, the Company has
experienced reductions in revenue and is continuing to
experience negative cash flow. The Company's management is
working on a restructuring plan to enable the Company to
continue its operations. The Company's primary goal has been to
expand its operating revenues without significant cost
increases.  The Company expects to achieve or exceed prior year
revenues with fewer than 30 employees while holding down non-
employee costs to minimum levels. In April 2002, the National
Urban Coalition endorsed the Company as the exclusive
telecommunications back bone for their National Information
Network with expected national rollout in the Company's 2002
fiscal year. As a result of the Company's work with the NUC and
similar organizations, the Company expects that its revenues
will increase in 2002 over 2001.

Revenues decreased to $404,395 for the three months ended March
31, 2002 from $1,610,883 for the three months ended March 31,
2001. The decrease of $1,206,488, or 75%, was attributable to a
decrease in sales of the Company's products and services.

The Company incurred a net loss of $803,224 for the three months
ended March 31, 2002 compared to a net loss of $3,720,844 for
the three months ended March 31, 2001.

As of March 31, 2002 the Company had $9,128 cash on hand and a
deficit working capital position of $10,712,245. The Company
currently does not have sufficient capital to meet its cash flow
requirements over the next 12 months. As a result, the Company
will be required to satisfy cash flow shortages through private
placements, public offerings and/or bank financing. The Company
is currently in discussions with several investors, including
existing capital partners, and financial institutions regarding
additional equity and debt financing, however no definitive
agreements have been reached.

DELTA AIR LINES: Unit Taps Deloitte & Touche to Replace Andersen
The Delta Family-Care Savings Plan, on May 24, 2002, informed
Arthur Andersen LLP that Andersen would no longer be engaged as
the Plan's independent public accountants. The Plan also engaged
Deloitte & Touche LLP to serve as the Plan's independent public
accountants for 2002.

Delta Air Lines, the #3 US carrier (behind UAL's United and
AMR's American), is expanding its US regional operations while
building a global alliance. With hubs in Atlanta, Dallas/Fort
Worth, Cincinnati, New York City (Kennedy), and Salt Lake City,
Delta flies to 205 US cities and about 45 foreign destinations.
It also serves more than 220 US cities and nearly 120
destinations abroad through code-sharing agreements. In the US,
Delta owns regional carriers Delta Express, Atlantic Southeast,
and COMAIR. Internationally, it has formed the SkyTeam alliance
with Air France, AeroMexico, and Korean Air Lines to compete
with rival alliances Star and Oneworld. Delta also owns 40% of
computer reservation service WORLDSPAN.

As reported in the September 25, 2001, edition of the Troubled
Company Reported, Standard & Poor's lowered its corporate
credit, senior secured debt and senior unsecured debt ratings on
Delta Air Lines Inc., to the low-B level, and were placed on
CreditWatch with negative implications.

The downgrades, S&P said, reflected the severe impact of sharply
reduced air traffic since the September 11 terrorist attacks in
New York City and Washington, D.C., with expectations for only a
slow recovery in the coming months. This worsens significantly
an already grim airline industry outlook, with depressed
business travel and higher labor costs.

The extent of the downgrades was determined principally by:

    * The risk of a downward rating action prior to the current
      crisis, and thus how much credit "cushion" was available
      within those ratings;

    * The cash and bank lines available to Delta Air Lines Inc.,
      as well as the amount of owned, unsecured aircraft that
      could be used in secured debt or sale-leasebacks to raise
      further funds; and

    * The ability of Delta Air Lines to reduce cash operating
      expenses and commitments for capital spending.

DebtTraders reports that Delta Air Lines' 9.75% bonds due 2021
(DAL21USR1) are quoted at a below-par price of 91. See  
real-time bond pricing.

DOBSON COMMS: Shareholders Okay Stock Employee & Incentive Plans
Dobson Communications Corporation (Nasdaq:DCEL) approved three
issues during the annual meeting of shareholders last week.

A majority of shareholders approved the re-election of Justin L.
Jaschke and Albert H. Pharis, Jr. to the board of directors;
approved the Dobson Communications Corporation 2002 Employee
Stock Purchase Plan; and approved the Dobson Communications
Corporation 2002 Stock Incentive Plan. No other issues were
voted during the meeting.

Dobson Communications is a leading provider of cellular phone
services to rural markets in the United States. Headquartered in
Oklahoma City, the Company owns or manages wireless operations
in 17 states. For additional information on the Company and its
operations, please visit its Web site at  

At March 31, 2002, Dobson Communications reported having a total
shareholders' equity deficit of about $266 million.

DYNAGEAR: Taps Dresner as Fin'l Advisors for Planned Asset Sale
Dynagear, Inc., a diversified manufacturer of automotive
components, has retained Chicago-based Dresner Investment
Services, Inc. as financial advisor in connection with the sale
of selected operating units and affiliates of the Company. The
selected operating units, consisting of eight distinct business
units, generated sales of approximately $100 million in 2001.
The core business of the Company is the manufacture and sale of
timing components, which include gears, sprockets and chains.
These products are sold to original equipment manufacturers,
engine products distributors and major auto parts retailers.
Other affiliates of the Company manufacture powdered metal
components, oil pumps, pistons and valves, primarily for the
automotive aftermarket.

On April 24, 2002, the Company filed a voluntary petition for
relief under Chapter 11 of the US Bankruptcy Code in Chicago,
Illinois. In the reorganization process, the Company intends to
sell certain of its operating units and affiliates as going
concerns at an auction that it expects to take place on or about
July 10, 2002. Accordingly, the Company has retained Dresner
Investments to market these businesses. Qualified bidders should
contact John Riddle, Gregg Pollack, Joe Kacergis or Jordan Levin
at Dresner Investments directly:

          Dresner Investment Services, Inc.
          20 North Clark Street, Suite 3550
          Chicago, Illinois 60602
          Telephone: 312-726-3600
          Facsimile: 312-726-7448

Dynagear, Inc. and its affiliates manufacture engine components
for the automotive industry through seven manufacturing
facilities in the US, Canada and Mexico. Founded in 1975, the
Company is headquartered in Downers Grove, Illinois.

Dresner Investment Services, Inc. is a Chicago-based NASD-
registered broker dealer providing investment banking services
to middle market businesses throughout the United States.
Founded in 1991, the firm specializes in merger & acquisition
advisory services and institutional private placements of debt
and equity for both privately held and publicly traded
companies, as well as valuations, fairness opinions and related
consulting engagements.

ECHAPMAN INC: Fails to Comply with Nasdaq Listing Requirements
eChapman, Inc. (Nasdaq: ECMN) has received a Nasdaq Staff
Determination on June 3, 2002, indicating that the Company fails
to comply with the minimum market value of publicly held shares
and minimum bid price requirements for continued listing as set
forth in Marketplace Rule 4450, and that its common stock,
therefore, is subject to delisting from the Nasdaq National
Market.  The Company has requested request a hearing before a
Nasdaq Listing Qualifications Panel to review the Staff
Determination.  There can be no assurance the Panel will grant
the Company's request for continued listing.

ECHOSTAR COMM: Discontinues Andersen's Engagement as Accountants
Effective June 1, 2002, EchoStar Communications Corporation
determined not to renew the engagement of its independent
accountants, Arthur Andersen LLP and appointed KPMG LLP as its
new independent accountants, effective immediately for EchoStar
and all of its consolidated subsidiaries including, but not
limited to, EchoStar Broadband Corporation and EchoStar DBS
Corporation. This determination followed EchoStar's decision to
seek proposals from independent accountants to audit EchoStar's
financial statements for the fiscal year ending December 31,
2002. The decision not to renew the engagement of Andersen and
to retain KPMG was approved by EchoStar's Board of Directors
upon the recommendation of its Audit Committee.

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

In its March 31, 2002 balance sheet, the company reported a
total shareholders' equity deficit of about $862 million.

EMERGING VISION: Sets Annual Shareholders' Meeting for July 11
The Annual Meeting of Shareholders of Emerging Vision, Inc. will
be held at 100 Quentin Roosevelt  Boulevard, Garden City, New
York 11530, on Thursday, the 11th day of July 2002, at 9:00 a.m.
(local time), for the following purposes:

     (1) to elect two Class 1 Directors to the Company's Board
of Directors to hold office until the 2004 Annual Meeting of
Shareholders or until each of their respective successors shall
have been duly elected and qualified;

     (2) to consider and act upon an amendment to the Company's
Certificate of Incorporation to  increase the number of shares
of the Company's authorized common stock, par value $0.01 per
share,  from 50,000,000 to 150,000,000; and

     (3) to transact such other business as may properly come
before the Meeting or any adjournment or adjournments thereof.

The Board of Directors has fixed the close of business on May
24, 2002 as the record date for the  determination of the
shareholders of the Company entitled to notice of, and to vote
at, the Annual Meeting of Shareholders.  

Emerging Vision (formerly Sterling Vision) owns about 30 optical
outlets and franchises about 200 others under the Sterling
Optical, Sight for Sore Eyes, and other names in 26 states, the
US Virgin Islands, and Ontario, Canada. Emerging Vision scrapped
its plans to sell its retail chain operations and establish
itself as an Internet portal supply chain serving businesses
within the optical industry. It's refocused on its optical
businesses once again to create brand awareness. To that end, it
has sold its outpatient ambulatory surgery center in New York, a
part of its wholly owned subsidiary, Insight Laser Centers
(laser vision correction centers), which it is planning to sell.
At June 30, 2001, Emerging Vision had a working capital deficit
of about $400,000.

ENCORE SOFTWARE: Enters Pact to Sell Certain Assets to Navarre
Navarre Corporation (Nasdaq: NAVR) has entered into a purchase
agreement to acquire certain business assets of Encore Software,
Inc., the nation's largest privately owned entertainment and
education PC software publisher. Encore also publishes console
video game titles.

Encore Software, Inc. filed for protection under Chapter 11 of
the United States Bankruptcy Code on March 22, 2002 in the
United States Bankruptcy Court for the Central District of
California and is currently operating as a debtor in possession.
Navarre has acted as a distributor of Encore software products
since 1995. Navarre is not assuming the liabilities of Encore.

The purchase agreement is subject to approval of the United
States Bankruptcy Court, and to other conditions, including bank
approval, and conditions related to the continued operations of
Encore Software's business. Subject to satisfaction of these
conditions, the Company currently expects the transaction to
close on or before July 31, 2002.

The terms of the proposed purchase were not disclosed.

Navarre Corporation (Nasdaq: NAVR) provides distribution and
related services to leading developers and retailers of home
entertainment content, including PC software, audio and video
titles, and interactive games. Navarre's client-specific
delivery systems allow its product lines to be seamlessly
distributed to over 11,000 retail locations throughout North
America. The Company provides such value-added services as
inventory management, Web-based ordering, fulfillment and
marketing and EDI customer and vendor interface.  Since its
founding in 1983, Navarre has built a broad base of partnerships
with such leading retailers as CompUSA, Best Buy, The Musicland
Group, Transworld, Sam's Club, Circuit City, and Costco, as well
as content developers including Microsoft, Apple, Symantec, and
independent record labels including Cleopatra and Riviera
Entertainment.  For more information, please visit the Company's
Web site at  

Encore is a leading interactive publisher in the videogame and
PC CD-ROM markets.  In 2002, the company has released Circus
Maximus(TM) and will release such highly anticipated next-gen
console games as Chariot Wars, Daredevil(TM), and Dragon's Lair
3D(TM).  As the nation's largest privately held PC entertainment
and education publisher, Encore also offers a broad range of
titles under internationally recognized properties, such as
Sesame Street(TM), Dragon Tales(TM), National Geographic(TM) and
Kaplan.  Encore products are sold in over 35,000 stores
nationwide, and in major international markets.  The company has
been recognized in the past two years by Inc magazine as one of
America's 500 fastest growing private companies.  For more
information, visit

ENRON CORP: Bridgeline Demands $2.6MM Admin. Expense Payment
Bridgeline Holdings LP and its wholly owned subsidiaries,
Bridgeline Storage Company LLC, and Bridgeline Gas Distribution
LLC, ask the Court to compel Enron North America to pay certain
charges under the Gas Storage Agreement and the Gas
Transportation Agreement as administrative expenses.

Richard M. Meth, Esq., at Herrick, Feinstein LLP, in Newark, New
Jersey, reports that as of March 31, 2002, ENA owes Bridgeline
$2,601,599 for post-petition obligations:

           $1,243,887   Gas Storage Agreement
           $1,357,712   Gas Transportation Agreement

Mr. Meth asserts that the Post-Petition Obligations are valid
claims of Bridgeline against ENA.

In order for ENA to utilize the Gas Storage Agreement, Mr. Meth
explains that ENA must retain the Gas Transportation Agreement
with Bridgeline in order to be able to deliver gas for injection
into storage, or withdraw gas for re-delivery to pipelines that
interconnect with Bridgeline.  Throughout the post-petition
period, Mr. Meth tells the Court that Bridgeline has stored
1,930,552 MMBtus of gas for the benefit of ENA in accordance
with the terms of the Gas Storage Agreement.

Mr. Meth explains that the Agreements give ENA "firm capacity"
rights that afford ENA the opportunity to call on all, or any
portion of, that capacity on a day-to-day basis.  "If any part
of, or all of, the firm capacity is not used by ENA, ENA is
nevertheless obligated to pay for the capacity because it is
reserved for ENA's exclusive use at any time," Mr. Meth further
elaborates.  So as long as capacity in the Bridgeline storage
facility and pipeline is subject to firm capacity contracts, Mr.
Meth says, Bridgeline cannot sell the storage capacity to any
other party or sell the transportation capacity to any other
party on a firm basis.

According to Mr. Meth, Bridgeline is required to reserve 100% of
the contracted firm capacity pursuant to the Gas Storage
Agreement and Gas Transportation Agreement to transport and
continue to store gas for the benefit of ENA.  However, Mr. Meth
reports that ENA has failed to make post-petition payments for
reservation and use of the capacity under these Agreements.

"Although ENA is in default under the Agreements, Bridgeline is
obligated to perform because ENA has not rejected the
Agreements," Mr. Meth notes.  Obviously, Mr. Meth says, ENA's
continued failure to perform under the Agreements will adversely
affect Bridgeline's revenues and businesses.

The bleeding of Bridgeline's resources must stop, Mr. Meth

Mr. Meth points out that the Agreements are not only
fundamental, but are clearly vital to the operation of ENA's
estate -- not only because they provide firm capacity, but also
because of the unique flexibility that access to Bridgeline's
storage facility and pipeline provides.  Mr. Meth relates that
the access enables ENA to hold gas ready for delivery on short

    (i) to ENA's customers, thus giving ENA the ability to cure
        any past due gas obligations to their customers and
        realize profits;

   (ii) to other gas marketers who would purchase gas from ENA
        for ultimate delivery; and

  (iii) to cure gas imbalances that ENA may have with any of the
        several interstate pipelines that connect with
        Bridgeline's pipeline.

Bridgeline is connected to 16 interstate pipelines and 6
intrastate pipeline and gathering systems.

Mr. Meth informs Judge Gonzalez that the Debtors have expressed
their intention to return to full utilization of the firm
capacity available under the Agreements, which provide for a 20-
year term.  "This shows that the Bridgeline operations,
including the Agreements, are beneficial to the conduct of the
estates' business," Mr. Meth says.

The Post-petition Obligations represent charges for:

  (i) actual physical use of Bridgeline's storage system, which
      benefits ENA's estate because of the increased value of
      the stored gas while stored with Bridgeline, and

(ii) possession of rights to further firm storage and
      transportation capacity, which are fundamental and vital
      to ENA's operations, and which ENA has indicated are
      beneficial to the estates' operations.

Thus, Bridgeline contends that ENA must be compelled to pay the
Post-Petition Obligations as well as all future payments as they
become due under the terms of the Agreements. (Enron Bankruptcy
News, Issue No. 31; Bankruptcy Creditors' Service, Inc.,

Enron Corp.'s 9.125% bonds due 2003 (ENRON2), DebtTraders
reports, are trading at about 12.5. For real-time bond pricing,

ENRON CORPORATION: Court Modifies Compensation Procedures Order
After review and discussion with the Fee Committee and Court-
approved professionals in Enron Corporation's chapter 11 cases,  
regarding the establishment of procedures and the submission of
budgets, the Court has decided to modify the Fee Orders.  
Specifically, Judge Gonzalez rules that:

  1. The Fee Orders are modified to provide that:

     (a) fee applications relating to the period from December
         2, 2001 up to and including March 31, 2002 shall be
         filed with the Court and served in accordance with the
         Fee Orders on or before June 14, 2002, and

     (b) subsequent quarterly Applications shall be filed on or
         before the first business day that is 75 days following
         the conclusion of the quarterly period;

  2. The delivery of each of the professionals' agreed budgets,
     unredacted monthly statements and unredacted fee
     applications to the Fee Committee shall not be, nor shall
     it be construed to be, a waiver of the attorney-client
     privilege between the professional and its respective
     client; and

  3. Except as expressly modified, the provisions of the Fee
     Orders remain in full force and effect. (Enron Bankruptcy
     News, Issue No. 31; Bankruptcy Creditors' Service, Inc.,

EXIDE TECH: Craig Muhlhauser Named Board of Directors' Chairman
Exide Technologies (OTCBB: EXDT) announced that Craig H.
Muhlhauser has been named Chairman of the Board of Directors of
Exide, effective May 17, 2002. Muhlhauser has been a Director
and Chief Executive Officer since September 2001. The Company
said that Muhlhauser was elected Chairman during a meeting of
its board of directors on May 17.

Muhlhauser, 53, succeeds Robert A. Lutz, who resigned as
chairman, but will remain a director of Exide. Lutz had been
chairman since December 1998.

Lutz, said, "Craig has shown himself to be a strong and
capable leader for Exide, and we are thrilled that he has
accepted the chairmanship. He has been instrumental in
developing and implementing Exide's operational improvements and
leading the Company's financial restructuring. We look forward
to his leadership as Chairman."

Muhlhauser said, "It is a great honor to be elected chairman
by the board of directors and to lead the Company in its efforts
to achieve a successful turnaround and reorganization." (Exide
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

EXIDE TECHNOLOGIES: Closes $177.5MM Securitization Financing
Exide Technologies, Inc. (OTCBB: EXDTQ) said that on May 31,
2002 it funded and closed its $177.5 million pan-European
securitization facility.

The financing, which was announced on April 15, 2002, was
arranged by Citicorp USA, a subsidiary of Citibank N.A., and
other financial institutions.

Craig Muhlhauser, Chairman and Chief Executive Officer of Exide
Technologies, said, "The securitization financing ensures that
our international operations, which are not included in our
Chapter 11 filing, can continue to support our customers'
requirements and move forward with the implementation of our
business plan."

As previously announced, Exide Technologies and certain of its
U.S. subsidiaries filed petitions to reorganize under Chapter 11
of the U.S. Bankruptcy Code on April 15, 2002.

Exide Technologies is the world's largest industrial and
transportation battery producer and recycler, with operations in
89 countries. Industrial applications include network-power
batteries for telecommunications systems, fuel-cell load
leveling, electric utilities, railroads, photovoltaic (solar-
power related) and uninterruptible power supply (UPS) markets;
and motive-power batteries for a broad range of equipment uses,
including lift trucks, mining vehicles and commercial vehicles.
Transportation uses include automotive, heavy-duty truck,
agricultural, marine and other batteries, as well as new
technologies being developed for hybrid vehicles and new 42-volt
automotive applications. The Company supplies both aftermarket
and original-equipment transportation customers. Further
information about Exide Technologies, its financial results and
other information can be found at  

DebtTraders says that Exide Technologies' 10% bonds due 2005
(EXIDE2) are quoted at 14.5. For real-time bond pricing, see

EXODUS COMMS: Wants Lease Decision Period Extended to August 22
Exodus Communications, Inc., and its debtor-affiliates move the
Court to extend the time within which they must elect to assume
or reject unexpired real property leases through and including
August 22, 2002.

David R. Hurst, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, tells the Court that although a
significant number of leases have been rejected or assume and
assigned by the Debtors, a significant number is still being
held by the Debtors.

Mr. Hurst explains that the Debtors need the requested extension
in order to avoid the deemed rejection of the leases with the
lapse of the deadline, which could significantly reduce the
return to unsecured creditors of the Debtors' estates.

Mr. Hurst assures the Court that the Debtors satisfy the Court's
set factors in determining if cause exists to extend the lease
decision period:

A. The case is complex and involves a large number of leases;

B. The leases are primary among the assets of the Debtors; and

C. The lessor continues to receive postpetition rental payments.

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 11.625% bonds due 2010 (EXDS3),
DebtTraders says, are quoted at about 17.75. See  
real-time bond pricing.

FFP MARKETING: Violates Financial Covenant Under Loan Agreements
FFP Marketing Company, Inc. (Amex: FMM) anticipates filing in
approximately two weeks the results of operation for its fiscal
year ended December 30, 2001 and for its first quarter ended
March 31, 2002.  At that time, the Company expects to report a
net loss of $4,703,000 for 2001, and a net loss of $1,496,000
for the first quarter of 2002.  The primary reason for the net
loss in both the year 2001 and the first quarter of 2002 was a
decrease in the Company's retail margin from the sale of motor
fuel.  The release of financial information set forth in this
release has been delayed to date pending the completion of an
independent audit of the Company's financial statements for the
reasons explained below.

In 2002, the Company became aware of certain bookkeeping errors
in the accounting records of one of its subsidiaries.  The
bookkeeping errors relate to the Company's accounting for credit
card accounts receivable and related fuel payables, and their
resulting effect on cost of motor fuel sold, and the related
effect on income tax expense or benefits.  A subsequent analysis
determined that the errors will require a charge of $1,121,000
and $448,000, net of taxes, to the net income (loss) of the
Company in 2000 and 1999, respectively.  As a result, the
Company's consolidated financial statements as of year end 2000
and 1999, and for operations in 2000 and 1999, will be restated
to correct those misstatements, rather than the amounts shown in
its previously issued consolidated financial statements and
annual reports.

The following table compares selected financial results for
2001, 2000 and 1999 (with the restated amounts shown below for
2000 and 1999):

                            2001           2000           1999

(In thousands)

Total revenues            $622,080        $688,393      $504,379
Total gross margin          68,012          75,700        72,900
EBITDA [A]                   6,257          11,384         9,363
Operating income [B]        (3,076)          2,706         1,263
Net income (loss)           (4,703)           (398)      (1,255)

   [A]  "EBITDA" is net income (loss) before interest expense,
        income taxes, and depreciation and amortization expense.

   [B]  "Operating Income" is net income (loss) before interest
        income, interest expense, incomes taxes, and
        extraordinary items.

A comparison of the net loss in fiscal year 2001 to results in
2000 and 1999 is set forth above.  The net loss for the first
quarter of 2002 compared favorably to a net loss of $2,513,000
($0.66 per share, basic and diluted) for the first quarter of
2001, as restated.

At year end 2001 and the end of the first quarter of 2002, the
Company was not in compliance with a financial covenant
contained in the loan agreements for its long-term notes
payable.  The Company has made all payments required under its
loan documents and is currently seeking to obtain, and expects
to obtain, a waiver of such non-compliance in the next two
weeks.  At that time the Company anticipates filing its Form 10-
K annual report for 2001 and its Form 10-Q quarterly report for
the first quarter of 2002.  The failure to meet the above
financial covenant under its long-term notes payable also causes
the Company to be in non-compliance under its revolving credit
facility, although the Company is in compliance with its
financial covenant under the loan agreement for that facility.  
The Company anticipates that funding will be continued under its
revolver until the waiver is obtained.  There can be no
assurance at this time, however, that the waivers will be

John Harvison, Chairman of the Board and Chief Executive
Officer, commented as follows: "Our results in 2001 were
admittedly poor, and we do not take that lightly.  But we are
already pursuing several strategies in an effort to turn our
profitability around.

"1.  Strengthen Our Core Businesses.  We will strengthen our
core businesses by examining every aspect of our revenue and
cost structure and then making every reasonable effort to
increase our revenues and decrease our costs.  This analysis and
resulting action could include the sale of assets or components
of our businesses, the closing of certain stores, or other
actions considered necessary to increase net profitability.  
Like others in our industry, we have experienced decreasing
retail motor fuel margins per gallon at our stores, especially
in the fourth quarter of 2001 and the first two months of 2002.  
No doubt, a key aspect in our efforts to improve our
profitability will be to increase our fuel margins.  We are
happy to note that those margins did improve late in the first
quarter of 2002.  In any event, we will aggressively reassess
all aspects of our store operations, not only to cut store
operating and inventory costs but also to find new sources of
store income.  In addition, a thorough study and reorganization
of our fuel payable procedures and policies has already begun.  
We are also currently analyzing and implementing a
reorganization of certain departments in order to streamline
their function and improve their performance.  These initiatives
are designed to reduce our costs of operation and increase our
operational efficiencies.

"2.  Manage Convenience Stores for Third Parties.  In the first
quarter of 2002, the Company entered into management contracts,
money order agency agreements, and fuel supply contracts for 114
convenience stores.  We will be operating those stores for two
different lenders that acquired them through foreclosures from
other convenience store operators.  In addition to receiving
monthly management fees, the Company sells motor fuel on a
wholesale basis under fuel supply agreements and its money
orders to those stores under money order agency agreements.  
Forty of those stores were sold by one of the lenders late in
May 2002, reducing the number of stores we now manage under
those two management contract to 74 stores.  We would also like
to expand our management services for those and other lenders in
the future.

"3.  Obtain Additional Fee Income.  We will seek new sources of
profit at our retail stores.  In so doing, we will attempt to
capitalize on our network of approximately 1,000 retail
locations serving customers in several states. We are optimistic
that the past many months of planning may result in expanded fee
income from the stores from the following:

     --   selling financial products and services,

     --   selling additional telephone products and services,

     --   collecting utility payments for certain utility

     --   expanding our check cashing services, and

     --   expanding our ATM network.

"4.  Convert Company-Operated Stores to Gas-Only Stores.  We
will continue to implement our strategy of selling/converting
selected Company-operated convenience stores to independent
third party operators and continuing such outlets as Gas-Only
Stores.  By converting a store to a Gas-Only Store, we can often
improve our profitability at that store in cases where our
sublease income, motor fuel margin, and reduction in direct
store expenses exceeds the margin on merchandise sales and the
commission paid on motor fuel sales.  We converted 26 stores in
2001 and 34 stores in 2000 in that manner and have targeted an
additional 50 Company-operated stores as potentially suitable
candidates for future conversions.  We are examining these
conversions carefully, however, in light of our recent retail
motor fuel margin experience and will effectuate these
conversions when we believe they are in the Company's best

"5.  Grow Our Wholesale and Terminal Business.  Utilizing our
new $20 million line of credit facility obtained last November,
we intend to expand our wholesale and terminal operations.  Our
wholesale business in the last few years was curtailed by a
smaller line of credit, and we expect that the increased
availability under our new line of credit will facilitate the
profitable expansion of this growing segment."

FFP Marketing owns 424 convenience stores, truck stops, and
retail fuel concessions at Company-operated and independently
operated stores in Texas and 10 other central, southern, and
southwestern states.  The Company also sells motor fuel on a
wholesale basis, operates a fuel processing plant and terminal,
and sells money orders under the name Financial Express Money
Orders.  Its common stock is listed under the symbol "FMM" on
the American Stock Exchange.

FEDERAL-MOGUL: Panel Asks Court to Reconsider Bates' Employment
Judge Newsome ruled from the bench on May 1, 2002, denying the
Unsecured Commercial Creditors' Committee's application to
employ Bates White and Ballentine as their Asbestos-Related
Bodily Injury Consultant.

             Committee's Motion To Reconsider Decision

The Official Committee of Unsecured Creditors of Federal-Mogul
Corporation urge the Court to reconsider the Order denying the
Committee's application to retain Bates, White and Ballentine.

According to Eric M. Sutty, Esq., at The Bayard Firm, in
Wilmington, Delaware, unquestionably, the Committee needs to
know with some degree of accuracy the correct value of the
asbestos claims.  Given the enormity of the unliquidated amounts
suggested and the wide range in values, it is essential that the
Committee have expert advice and analysis as to the number,
nature and value of present and future claims.  That expert
advice and analysis may also be needed to pursue judicial
rulings which provide for the legally correct definition of the
scope of allowable asbestos claims and the use of legally proper
information on which to base valuations of those claims.  Just
as important, the Committee cannot properly analyze or consider
any consensual resolution of these cases, including settlement
proposals currently being discussed resulting from preliminary
work conducted by Bates White.

Mr. Sutty asserts that the Committee's interest here is not the
same as that represented by the Debtors.  The Debtors' conduct,
to date, amply shows that it is not aligned with the Committee
on the fundamental issue of treatment and resolution of asbestos
claims.  Presently, the single most important event bearing on
the resolution of asbestos liability in these cases has been the
motions brought by Ford, GM, DaimlerChrysler and others to
transfer actions in which they are codefendants with the Debtors
to these Bankruptcy cases.  Despite vigorous litigation of the
matter, the Debtors have taken no position in support of or
against these fundamental asbestos motions.  The Debtors instead
plead that ". . . at this time, [the Debtors] do not express a
view as to whether the Court should grant or deny the motion."

"Instead, all of the litigation as to the impact of the proposed
transfer on asbestos claim resolution has been by the two
official committees," Mr. Sutty points out.  In addition, while
these two committees have briefed, argued and litigated the
matter, the Debtors are not even a party to the Third Circuit
appeal of the District Court's February 8, 2002 order denying
the transfer.  They have no interest in the matter, and are
disabled by their conflicting duties to the competing

Mr. Sutty notes that, emphasizing the lack of community of
interest between the Committee and the Debtors, the Debtors have
refused to share their existing analysis of present and future
asbestos claim liability with the Committee.  The Debtors have
consistently refused to discuss strategy as to asbestos personal
injury liability issues.  In the Committee's view, the Debtors
have no desire or program to meaningfully contest asbestos
personal injury liability and have little focus on preservation
of value for commercial claimants.  Moreover, it is also
manifestly unjust for the Asbestos Claimants' Committee and the
Future Representatives to have their own experts to develop a
case against the Creditors' Committee's interest and leave the
Committee without any expert advice or analysis on these issues.
It would inject error into the entire case.  Had the Committee
been permitted to give a full exposition of their points at the
May 1, 2002, hearing, the Committee believes that the Court will
have ruled differently on the application.

Mr. Sutty assures the Court that the Committee acknowledges the
Court's concern with the costs of administration of these cases.
However, the denial of critical, necessary advice and assistance
is not an appropriate response to those concerns.  The Court has
appointed a fee examiner and the fees and expenses incurred by
all professionals are subject to scrutiny and approval of the
bankruptcy court.  Additionally, the Committee's use of Bates
White to date and its preliminary analyses of asbestos
liabilities has facilitated and advanced negotiations taking
place between the Committee and the Asbestos Committee and the
possibility of an expeditious consensual resolution of these
cases.  This expeditious resolution can save significant costs.

Mr. Sutty adds that, to deny the Committee of an expert advice
hinders the speedy resolution of these cases and likely
engenders litigation on issues that experts could otherwise
resolve, thus prolonging the cases and materially increasing the
costs of administration.  If a consensual resolution does not
occur, then the Committee still requires the services of an
asbestos expert. (Federal-Mogul Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Federal-Mogul Corporation's 8.8% bonds
due 2007 (FEDMOG6) are quoted at 21. See  
real-time bond pricing.

GLOBAL CROSSING: Obtains Approval of Stipulation with JP Morgan
Global Crossing Ltd., and its debtor-affiliates sought and
obtained Court approval of a stipulation providing adequate
protection to JP Morgan Chase Bank, as Administrative Agent for
the senior secured lenders.

According to Michael F. Walsh, Esq., at Weil Gotshal & Manges
LLP in New York, Global Crossing Holdings Ltd. and Global
Crossing North America, Inc. are borrowers under an Amended and
Restated Senior Secured Credit Agreement, dated as of August 10,
2000, with JPMorgan Chase Bank, as Administrative Agent. The
Administrative Agent asserts that the Debtors have guarantied
the obligations of the Borrowers under the Senior Secured Credit
Agreement. The Administrative Agent asserts that the Borrowers
and certain of the Guarantors have pledged to the Administrative
Agent the capital stock of certain subsidiaries to secure their
obligations under the Senior Secured Credit Agreement or under
their respective guaranties.

The Administrative Agent asserts that on December 20, 2001,
Global Crossing North American Holdings, Inc. and certain
affiliates sold all of the capital stock of IPC Information
Systems, Inc., a Delaware corporation, for cash; that the
capital stock of IPC was part of the collateral security for the
obligations of the Borrowers under the Senior Secured Credit
Agreement; that the senior lien of the Administrative Agent
attached to and continued in the cash proceeds from that
transaction; and that the IPC Proceeds were placed in escrow
with Wilmington Trust Company by Global Crossing North American
Holdings, Inc. and thereafter transferred to the Administrative
Agent on or about December 28, 2001.

As of the Commencement Date, the Administrative Agent asserts
that there is outstanding under the Senior Secured Credit
Agreement an aggregate of $2,247,700,000 of principal
obligations plus accrued interest, and applicable costs and fees
(including professional fees). The Debtors' have represented
that under their normal cash management procedures, funds may be
transferred from any of the Debtors to any non-Debtor affiliates
of the Debtors and vice versa.

The Administrative Agent asserts that it is entitled to the
benefits of a senior perfected security interest in all of the
Collateral and the Guaranties and has asserted that the
continued operations of the Debtors may adversely impact the
interests of the Senior Secured Lenders in the Pledged
Collateral or the benefits of their rights under the Guaranties.
The Debtors have not sought to use the IPC Proceeds and,
therefore, no adequate protection is sought at this time as to
the Administrative Agent's asserted interest in the IPC
Proceeds. Accordingly, the Debtors and the Administrative Agent
have discussed how to provide adequate protection with respect
to the Pledged Collateral and the Guaranties in accordance with
the provisions of the Bankruptcy Code.

The terms of the stipulation are:

A. Each Debtor that is a Pledgor grants to the Administrative
   Agent, on behalf of the Senior Secured Lenders, a priority
   claim against the Pledgor's estate in accordance with and
   with the priority specified in Section 507(b) to the extent
   that the interest of the Senior Secured Lenders in the
   Pledged Interests pledged by each Pledgor declines in value
   as measured by the net decline in value of the Pledged
   Interests that were pledged by each Pledgor on a Pledgor by
   Pledgor basis, due to the commencement or continuation of the
   Pledgors' chapter 11 cases; provided that in no event shall
   any Superpriority Claim granted by any Pledgor exceed
   the aggregate value of the Pledged Interests pledged by the
   Pledgor as of the Commencement Date. The Superpriority Claims
   shall be subject, and subordinate, to:

    a. any loans or extensions of credit in respect of any
       Debtor's postpetition financing facility approved by the

    b. the fees payable to the United States Trustee,

    c. fees and expenses of professionals of the Debtors and the
       statutory creditors committee appointed to represent
       unsecured creditors in these cases in an amount not to

       1. for the period prior to entry of an order granting the
          Administrative Agent relief from the automatic stay as
          to the Administrative Agent's interests in all the
          Pledged Interests or entry of an order converting the
          Debtors' cases to cases under chapter 7, all fees and
          expenses of the Professionals incurred or accrued
          prior to entry of the Relief Order, subject to those
          amounts being finally allowed; and

       2. from and after the entry of the Relief Order,
          $4,000,000.00; and

    d. the "superpriority claims" granted by the Debtors to one
       another in the Final Cash Management Order.

B. The Debtors stipulate and acknowledge that the IPC Proceeds
   are "cash collateral" and that the Debtors cannot use the
   cash collateral unless either the Administrative Agent and
   the Senior Secured Lenders consent to its use, or the
   Bankruptcy Court, after reasonable notice and a hearing
   authorizes its use. Debtors further stipulate and agree that
   they shall not seek authority to use the IPC Proceeds until
   the aggregate amount of funds in all other unrestricted bank
   and investment accounts of the Debtors and Non-Debtor
   Affiliates is less than $125,000,000 and only by motion on at
   least 20 days notice.

C. Nothing in this Stipulation or in the Cash Management Order
   shall constitute a waiver by the Administrative Agent or the
   Senior Secured Lenders right to challenge the existence,
   validity, extent, priority, amount, or characterization of
   any of the prepetition intercompany claims and the
   Administrative Agent and the Senior Secured Lenders hereby
   reserve all rights to make any objections or challenges.

D. The Pledgors agree to reimburse the Administrative Agent for
   the actual, reasonable, documented fees and out-of-pocket
   expenses incurred by its U.S. and non-U.S. legal counsel,
   financial advisors, M&A advisor, and other professionals as
   the Administrative Agent may retain, in connection with these
   chapter 11 cases, the non-U.S. insolvency proceedings
   commenced by the Pledgors, or in connection with the
   enforcement or collection of Pledgors' obligations relating
   to the Senior Secured Credit Agreement or the Guaranties.
   Unless and until the Court determines that the Administrative
   Agent is entitled to add the Administrative Agent's Fees and
   Expenses to the Senior Secured Lenders' Claims, any payments
   made by the Debtors' estates or from the retainers on account
   of the Administrative Agent's Fees and Expenses incurred on
   or after May 1, 2002 shall be deemed a distribution on
   account of the Senior Secured Lenders' Claims and shall,
   therefore, serve to reduce any subsequent distributions made
   from the Debtors' estates on account of the Senior Secured
   Lenders' Claims. The Administrative Agent's Fees and Expenses
   incurred between the Commencement Date and May 1, 2002,
   estimated to be approximately $3.5 million, shall be paid in
   accordance with the Interim Order and shall not be offset
   against any distributions. All Administrative Agent's Fees
   and Expenses permitted to be paid herein shall be paid first
   out of the retainers, until exhausted, and then by the

E. To the extent practicable, the Debtors shall deliver to the
   Administrative Agent and the Creditors Committee, with copies
   to its counsel:

   a. all of the financial information and related reports,
      documents and analysis as required under the Senior
      Secured Credit Agreement as and when required as described
      therein, and, without duplication,

   b. copies of all financial reports, borrowing base
      certificates, and other financial analyses or other
      reports and documents delivered to any Creditors'
      Committee or any DIP Lender, if any, as and when delivered
      to the Creditors' Committee or DIP Lender,

   c. through electronic filing with the court, copies of all
      monthly reports, status reports, pleadings, motions, and
      any other requests, objections or documents filed by the
      Debtor immediately upon filing those documents with the

   d. a weekly report setting forth by legal entity the
      aggregate amount of all funds maintained in all bank and
      investment accounts of the Debtors and Non-Debtor
      Affiliates comprising the "Restricted Persons" under the
      Senior Secured Credit Facility, and

   e. any other information regarding the operations, business
      affairs, and financial condition of the Debtors and the
      Non-Debtor Affiliates as shall reasonably be requested.

G. Each of the Administrative Agent and the Senior Secured
   Lenders expressly reserve their rights to request additional
   or further adequate protection of their interests in the
   Collateral, to move for relief from the automatic stay, or to
   request any other relief in this case; provided, however, the
   Debtors and any other Authorized Party reserve the right to
   object to any of those requests. In addition to any other
   rights that they may have, the Debtors and the Committee
   shall have the right to request that the Court modify, change
   or otherwise alter the terms of any obligation to reimburse
   the Administrative Agent for the Administrative Agent's Fees
   and Expenses at or after the time as the Administrative Agent
   or the Senior Secured Lenders:

   a. move for relief from the automatic stay to enforce any
      rights in respect of the Collateral,

   b. move to convert any of the Debtors' cases to cases under
      chapter 7,

   c. move to terminate the Debtors' cash management system as
      provided for in the Final Cash Management Order or to
      limit the funding to any Debtor or non-Debtor entity so
      that the practical effect is that the entity is no longer
      able to continue in business; or

   d. take any actions similar or equivalent to those above in
      the insolvency proceedings certain of the Debtors
      commenced in Bermuda;

   provided, however, that any Modification Request shall only
   apply to the Administrative Agent's Fees and Expenses
   incurred after the Administrative Agent or the Senior Secured
   Lenders move for relief.

H. Subject to the limited reservation of rights, Debtors
   acknowledge and stipulate that the Senior Secured Lenders'
   Claims and the Guarantors' obligations under the Guaranties,
   including without limitation, principal, interest, fees,
   costs, charges and expenses are due and owing, and are legal,
   binding and enforceable prepetition obligations of Debtors   
   and Guarantors not subject to any offset, defense, claim,
   counterclaim or any other diminution of any type, kind or
   nature whatsoever, and the Senior Secured Credit Agreement,
   the Guaranties, and any agreements pursuant to which
   collateral security has been granted by any of the Debtors to
   the Administrative Agent and the Senior Secured Lenders as
   security for the Senior Secured Lenders' Claims, together
   with any related agreements, is valid and enforceable in
   accordance with its terms, is not subject to any offset,
   defense, claim, counterclaim or diminution of any type, kind
   or nature whatsoever, and is not subject to avoidance
   pursuant to applicable state or federal laws.

I. The determination of the amount, validity, perfection,
   enforceability and unavoidability of liens, security
   interests and secured claims is without prejudice to the
   right of any committee appointed by the United States
   trustee, without the necessity of further action by the
   Court, to:

   a. investigate and challenge the Cash Collateral Finding and
      any aspect of the SSLC Validity Finding, including,
      without limitation, the amount, validity, enforceability,
      priority or perfection of any liens, security interest or
      claims of the Administrative Agent or the Senior Secured
      Lenders and the value of any collateral; and

   b. to the extent successful, avoid any liens, security
      interest or claims of the Administrative Agent or the
      Senior Secured Lenders;

   provided, however that any challenge, except as expressly
   provided below, shall be made by the commencement of an
   adversary proceeding no later than August 15, 2002. (Global
   Crossing Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
   Service, Inc., 609/392-0900)

HAYES LEMMERZ: Seeks Court's Nod to Sell Schenk to Metallwerke
According to Grenville R. Day, Esq., at Skadden Arps Slate
Meagher & Flom LLP in Wilmington, Delaware, Hayes Lemmerz
International, Inc. reviewed its alternatives with respect to a
divestiture of Schenk, including sale, insolvency proceeding or
out-of-court wind-up. This is given Schenk's poor performance
and its projected future cash requirements from Hayes, which are
significant in both 2002 and 2003.  Ultimately, Hayes, with the
assistance of its German counsel, determined that a sale of
Schenk is the only feasible alternative.  This is considering
(i) the harm to Hayes' customers that an insolvency proceeding
for Schenk would cause, (ii) the massive costs that would have
to be incurred in winding-up Schenk through an out-of-court
process, and (iii) the fact that a sale provided the only
potential opportunity, although remote, for Hayes or HLI Europe
to recover their loans receivable.

The Debtors determined that commencing an insolvency proceeding
for Schenk in Germany would significantly harm their customer
relationships. Mr. Day points out that many of Schenk's
customers are also significant customers of Hayes, including
BMW, Mercedes-Benz, GM-Opel and TRW. If Schenk commenced an
insolvency proceeding in Germany, it likely would cause damaging
production disruptions for these key customers.  The
disruptions, in turn, would have a ripple effect on Hayes'
business with these customers both in Europe and the United
States. Hayes has worked diligently since these cases began to
maintain customer confidence in the Debtors' ability to continue
to serve their customers' businesses. The Debtors believe an
insolvency proceeding involving Schenk would adversely impact
these efforts.

Moreover, because Schenk has common vendors and credit insurance
suppliers with Hayes' other European businesses, Mr. Day fears
that Schenk's insolvency proceeding could cause a loss of credit
insurance and, as a result, supplier credit for Hayes' other
European businesses. Credit insurance companies already have
begun to apply pressure to these businesses, by taking steps to
gain security and reduce the percentage of supplier accounts
receivable that they will insure. An insolvency proceeding of a
Hayes' subsidiary in Europe may cause the various credit
insurance companies to decline to insure vendors' receivables
from Hayes' remaining subsidiaries and affiliates in Europe, and
this would result in a loss of supplier credit for such
subsidiaries and affiliates.

Beyond threatening credit insurance and, thus, supplier credit,
Mr. Day adds that a Schenk insolvency proceeding also may
jeopardize Hayes' ability to finance its European affiliates'
business operations. Most, if not all, of Hayes' European
affiliates finance their day-to-day business operations with
short-term, demand loan facilities from various European banks.
These banks may demand immediate repayment of the loan  
facilities at any time and in their sole discretion. Hayes is
concerned that a Schenk insolvency proceeding might cause many,
if not all, of these banks to lose confidence in the Hayes
enterprise and demand the immediate repayment of outstanding
balances and/or cease to extend further credit. Many of these
lenders already have signaled their concerns by increasing their
security positions and reducing their exposure to Hayes'
European operations. A Schenk insolvency proceeding likely may
seriously harm or destroy any remaining confidence such lenders
may have.

Similarly, Mr. Day believes that an out-of-court winding-up
would not be practicable because it potentially could cost Hayes
in excess of 10,000,000 Euros to shut-down Schenk under German
law. German counsel advised Hayes that numerous payments would
be required under German law, including payments to the
approximately 300 Schenk employees that would be terminated in a
winding-up, potential environmental clean-up costs, and other
costs likely to be incurred to facilitate an orderly shutdown.
Furthermore, many of the same problems created by an insolvency
proceeding (e.g., damage to customer relationships and loss of
bank and supplier credit) likely would be caused by shutting
Schenk down.

Based on the foregoing, Hayes determined to seek to sell Schenk
and initiated the sale process in January 2002. Mr. Day informs
the Court that Fabricated Holdings engaged the German investment
banking firm of Freyberg Close Brothers located in Frankfurt,
Germany to conduct the marketing and auction process for Schenk.
In February 2002, Freyburg contacted approximately 53 potential
buyers it identified, including auto suppliers, foundry
suppliers and financial buyers. These entities consisted of
European companies and U.S. companies with a strong
international presence. Of the companies Freyburg initially
contacted, 15 potential buyers signed confidentiality agreements
and received information memorandums during the week of March
11, 2002. The parties were asked to submit indicative offers by
early April 2002.

Of the 15 companies that received information memorandums, Mr.
Day submits that two provided preliminary indicative offers.
These two potential purchasers attended management presentations
and plant tours during the week of April 15, 2002. Thereafter,
the parties were offered access to Schenk's data room to conduct
further due diligence. One potential buyer declined to conduct
further due diligence, stating that Hayes would have to pay it
cash consideration to entice it to purchase Schenk's assets.

Mr. Day relates that the remaining interested party, Metallwerke
Kloss GmbH, reviewed the data room and conducted additional due
diligence. Metallwerke is a German corporation that owns five
foundries, three of which are located in Germany, including
Schenk's sister foundry, Schwabish Gmund, which Metallwerke
purchased in 2000 during the same insolvency proceedings in
which Hayes acquired Schenk. On information and belief,
Metallwerke has annual sales of approximately 80,000,000 Euros,
and is owned 25% by Georgsmarienhutte Holding GmbH, which, on
information and belief, has over 1,000,000,000 Euros in annual

Earlier this month, Mr. Day informs the Court that Metallwerke
submitted a written offer for the capital stock of Schenk. Such
offer expressly provided that Metallwerke would not assume any
inter-company indebtedness. On May 10, 2002, Hayes and
Metallwerke signed a letter of intent regarding the proposed
transaction. The letter of intent set forth a targeted closing
date of May 29, 2002. However, the actual closing date will not
occur until after Court approval of the relief requested herein.
Since executing the letter of intent, Hayes has been working
diligently to negotiate and finalize a Share Purchase and
Transfer Agreement (SPTA) between Fabricated Holdings and

Mr. Day explains that the current version of the SPTA provides
that Metallwerke will acquire the capital shares of Schenk from
Fabricated Holdings, as well as the 8,600,000 Euros in inter-
company loans receivable from Hayes and HLI Europe for 1 Euro
each. Additionally, Hayes will indemnify Metallwerke for general
liabilities of Schenk.  These include breach of any warranties
under the SPTA, up to an amount not to exceed 100,000 Euros
(although Metallwerke is obligated to pay these amounts
initially), and tax liabilities up to an amount not to exceed
500,000 Euros for a period of three years. Hayes is not aware of
the existence of any such tax liabilities at this time.
Metallwerke, however, will be liable for any tax consequences
arising from the purchase of the inter-company loans receivable
from Hayes and HLI Europe. Closing under the SPTA is conditioned
on Metallwerke's further due diligence (which as of the date
hereof has been substantially completed), approval of the
transaction by Hayes Board of Directors (approval was obtained
on May 16, 2002), and Bankruptcy Court approval.

Although the sale of Schenk requires the compromise and
settlement of the pre-petition inter-company loans receivable
owed to Hayes and HLI Europe, Mr. Day submits that the SPTA
allows for Schenk to repay the 650,000 Euro post-petition loan
from the Debtors prior to closing. Also, subject to
Metallwerke's due diligence, the SPTA allows Schenk to repay up
to 100,000 Euros in obligations owed to Hayes Lemmerz Holding
GmbH and Hayes Lemmerz Werke GmbH. Because Fabricated Holdings,
which owns and is selling Schenk to Metallwerke, is not a Debtor
in these cases, the Debtors believe that Court authority to sell
Schenk is unnecessary. However, in the event Court authority is
deemed necessary for Fabricated Holdings to sell Schenk, this
Motion will be considered as a request under Section 363 of the
Bankruptcy Code for such authority.

Mr. Day contends that Hayes must move quickly to sell Schenk
because it is the only practicable alternative under the current
circumstances. However, after extensive marketing efforts, only
one party has offered to purchase Schenk, which offer admittedly
is for de minimis consideration and is contingent upon Hayes and
HLI Europe, Debtors in these cases, compromising and settling
their inter-company loans receivable from Schenk. Hayes
acknowledges that the proposed sale terms and consideration are
less than it had hoped to receive. Notwithstanding these
circumstances, Hayes believes the transaction with Metallwerke
represents the only meaningful opportunity to excise Schenk from
the Hayes enterprise via a sale to a third party. Accordingly,
to the extent it is a condition precedent to such transaction,
the Debtors believe the compromise and settlement of the inter-
company receivables requested herein is in the best interests of
the Debtors' estates, creditors and parties in interest.

Mr. Day maintains that Schenk has not evolved into the strategic
asset Hayes anticipated it would become when it acquired Schenk
in 2000. Schenk has not obtained a single order from a European
customer utilizing the technology Hayes intended Schenk to bring
to the European marketplace. More importantly, Schenk has failed
to become cash flow or EBITDA positive and now is a serious cash
burden to the overall Hayes enterprise. Based on current
projections, Schenk is expected to require significant cash
contributions from Hayes or its affiliates to fund its ongoing
business operations during 2002 and 2003. Moreover, current
projections could significantly increase if Schenk is unable to
permanently resolve its issues with its credit insurers and
suppliers. Accordingly, Hayes clearly must divest itself of
Schenk to stop the outflow of cash from the Debtors' estates in
order to protect the Debtors' creditors and stakeholders.

Under the current circumstances, Mr. Day believes that selling
Schenk to Metallwerke pursuant to the terms set forth in the
SPTA, including compromising and settling the pre-petition
inter-company loans receivable, is the only alternative that
allows Hayes to rid itself of Schenk without causing substantial
harm to Hayes' overall enterprise. As discussed above, Hayes has
evaluated the potential approaches of placing Schenk into an
insolvency proceeding or seeking to orderly wind-up Schenk
pursuant to German law. For the many reasons discussed above,
both such approaches likely will cause irreparable harm to
Hayes' European operations and quite possibly its domestic
operations as well.

Mr. Day fears that commencing an insolvency proceeding for
Schenk would risk Hayes' relationships with numerous key
customers, and run the risk of destroying the ability of Hayes'
European operations to obtain financing from banking
institutions and suppliers. Such a result would effectively
cripple Hayes European operations, which represent approximately
50% of Hayes enterprise value and EBITDA, and could have a
disastrous effect on the Chapter 11 cases and potential
recoveries for the Debtors' creditors. Alternatively, seeking to
accomplish an orderly winding-up of Schenk's operations presents
the very same problems as an insolvency proceeding, and arguably
is more problematic. In order to wind-up Schenk under German
law, Hayes potentially could be required to contribute in excess
of 10,000,000 Euros to satisfy obligations to terminated
employees, environmental clean-up costs and other costs related
to an orderly winding-up.

Moreover, Mr. Day asserts that the proposed sale probably is the
only alternative that allows Hayes the opportunity to recover
any value with respect to Schenk. German counsel has advised
Hayes that in both an insolvency proceeding or winding-up under
German law, the inter-company loans to Schenk, both pre- and
post-petition, would be consider as capital contributions by an
equity holder and subordinated to the level of equity.  This
would effectively prohibit any recovery with respect to the
claims. Conversely, the SPTA allows for the 650,000 Euros
borrowed post-petiton by Schenk to be repaid prior to the
closing of the sale, as well as potentially another 100,000
Euros that are owed to certain European subsidiaries. Although
the ultimate repayment of these obligations is not certain, they
almost certainly will not be repaid in an insolvency or orderly

Mr. Day submits that Hayes undertook an exhaustive marketing
process designed to locate and notify each and every party that
might reasonably be anticipated to have an interest in
purchasing Schenk. From this process, only one interested
purchaser, Metallwerke, stands ready today to purchase Schenk.
Given Schenk's operational difficulties and projected cash
requirements for the foreseeable future, Hayes believes it is
fortunate to have an interested purchaser with the ability to
purchase Schenk. Moreover, Hayes believes the proposed
consideration for the transaction, although de minimis in the
abstract, is fair and reasonable under the present
circumstances. Hayes must take immediate steps to stop the
bleeding where Schenk is concerned. The proposed sale to
Metallwerke achieves that goal. Morever, Schenk actually may be
able to fully repay the 650,000 Euros post-petition loan

Because it is necessary to facilitate the sale to Metallwerke,
Mr. Day claims that the compromise and settlement of the
8,600,000 Euro in inter-company loans receivable owed by Schenk
to Hayes and HLI Europe represents a fair and reasonable
compromise under the current circumstances.  It provides a
result that is beneficial to the interests of the Debtors'
estates. Accordingly, the Debtors seek approval of this
compromise and settlement under Section 363 of the Bankruptcy
Code and Bankruptcy Rule 9019.

Mr. Day believes that the proposed compromise and settlement of
the inter-company loans receivable is fair and equitable. As
mentioned above, the Debtors, based upon the advice of German
counsel, determined that there is no meaningful opportunity to
recover the inter-company loans receivable from Schenk other
than as provided herein. In the situation of either an
insolvency proceeding or out-of-court winding-up, under German
law the inter-company loans from Hayes and HLI Europe, indirect
owners and affiliates of Schenk, would be deemed as equity
contributions and subordinated to the level of equity.
Accordingly, if the Debtors were to press the inter-company
claims, in litigation or otherwise, it is extremely unlikely
that they would be successful. Such efforts, particularly the
potential of litigating in Germany, also would be complicated
and costly.

Furthermore, Mr. avers that the proposed compromise and
settlement serves the paramount interest of creditors in these
cases. Absent the compromise and settlement of the inter-company
loans receivable, the sale of Schenk to Metallwerke will not
occur and, for the reasons discussed in detail above, the
Debtors' businesses and their creditors' interests will suffer.
Accordingly, the proposed agreement as specified in the SPTA is
in the best interest of the Debtors' estates and creditors, and
satisfies the standards for approval of compromises and

Mr. Day points out that it is also clear that there is more than
sufficient business justification for the Debtors to compromise
and settle the inter-company loans receivable. Eliminating the
cash drain related to Schenk and protecting its customer
relationships provide more than adequate justification for the
relief requested. Thus, based upon the foregoing, the Debtors
believe that the proposed compromise and settlement is
appropriate in light of the relevant factors and should be
approved. (Hayes Lemmerz Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

IMPSAT FIBER: Files for Chapter 11 Protection in New York
Impsat Fiber Networks, Inc. (OTC:IMPT), a leading provider of
integrated telecommunications services in Latin America, has
filed for Chapter 11 in New York, following the signing of
binding lock-up agreements with creditors representing over 59 %
of its debt.

The agreed upon restructuring plan, which was announced in
March, contemplates the reduction in Impsat's indebtedness by
approximately $680 million and its future annual interest
expense by about $90 million.

The Company expects to file a pre-negotiated Plan and Disclosure
Statement with the U.S. Bankruptcy Court for the Southern
District of New York in the coming four weeks and emerge from
Chapter 11 in the fourth quarter of 2002.

The plan involves a restructuring of Impsat Fiber Networks,
Inc.'s indebtedness under its vendor financing agreements, and
its Guaranteed Senior Notes due 2003, Senior Notes due 2005 and
Senior Notes 2008. The Company is also conducting discussions
with other creditors at the subsidiaries' level to agree on a
debt-restructuring plan incorporating similar conditions.

Impsat Fiber Networks, Inc. is a holding company and its
subsidiaries, which are independent legal entities, will
continue to operate without interruption and serve their
customers normally. After the restructuring is completed,
Impsat's strengthened capital structure will reinforce the
Company's leadership in the Latin American telecommunications

Ricardo Verdaguer, Impsat's chief executive officer, stated:
"The filing of Chapter 11 to effectuate the negotiated
transaction is the final step in the Company's financial
restructuring. Impsat's substantially de-levered capital
structure will enable us to strengthen our operations and
consolidate our market position in Latin America. We are deeply
grateful for the support we have received from our customers,
creditors, vendors, employees and directors throughout this
process. We are confident that this level of support will enable
us to consummate this plan through the U.S. Court in the fourth
quarter, while continuing with our normal operations in the

As announced on March 11, 2002, the pre-negotiated Plan will
provide, among other things, that:

     --  Holders of debt under the Company's Broadband Network
Vendor Financing Agreements will receive a combination of senior
secured indebtedness totaling in the aggregate $141 million, $23
million in the aggregate of new Senior Guaranteed Notes
initially convertible in the aggregate into 5% of the Company's
new common stock and warrants to acquire 15% in the aggregate of
the Company's new common stock.

     --  Holders of the Company's Senior Guaranteed Notes due
2003 will receive new Senior Guaranteed Notes in an aggregate
amount of $67 million, initially convertible in the aggregate
into 23% of the Company's new common stock.

     --  Holders of the Company's Senior Notes due 2005 and 2008
will exchange those Notes for initially 98% in the aggregate of
the Company's new common stock.

     --  The pre-negotiated Plan contemplates no distribution to
existing stockholders of the Company.

Completion of the restructuring plan remains subject to certain
conditions, including its acceptance by affected classes of
public debt and equity holders, whose approval will be solicited
as part of the Court process.

Impsat Fiber Networks, Inc. is a leading provider of fully
integrated broadband data, Internet and voice telecommunications
services in Latin America. Impsat has recently launched an
extensive pan-Latin American high capacity broadband network in
Brazil, Argentina, Chile and Colombia using advanced
technologies, including IP/ATM switching, DWDM, and non-zero
dispersion fiber optics.

The Company has also deployed fourteen facilities to provide
hosting services. Impsat currently provides services to 3,000
national and multinational companies, government entities and
wholesale services to carriers, ISPs and other service providers
throughout the region.

The Company has local operations in Argentina, Colombia,
Venezuela, Ecuador, Mexico, Brazil, the United States, Chile and
Peru. Visit http://www.impsat.comfor more information about the  

Impsat Corp.'s 13.750% bonds due 2005 (IMPT05ARR1), an issue in
default, are quoted at a price of 2, DebtTraders says. See
for real-time bond pricing.

IMPSAT FIBER: Case Summary & 20 Largest Unsecured Creditors
Debtor: IMPSAT Fiber Networks, Inc.
        Arnold & Porter
        399 Park Avenue
        New York, New York 10022

Bankruptcy Case No.: 02-12882

Type of Business: The Debtor is a provider of broadband
                  Internet, data, and voice services in Latin

Chapter 11 Petition Date: June 11, 2002

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Debtors' Counsel: Anthony D. Boccanfuso, Esq.
                  Michael J. Canning, Esq.  
                  Arnold & Porter
                  399 Park Avenue
                  New York, New York 10022
                  (212) 715-1315
                  Fax : (212) 715-1399

Total Assets: $667,189,368

Total Debts: $1,334,732,793

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Bank of New York as        Notes                  $300,000,000
Trustee for holders of                            plus accrued
13-3/4% Senior Notes due                          interest   
101 Barclay
Floor 21 West
New York, NY 10286
Attn: Corporate Trust
Phone: 212-815-4888

Bank of New York as        Notes                  $225,000,000
Trustee for holders of                            plus accrued
12-3/8% Senior Notes due                          interest
101 Barclay
Floor 21 West
New York, NY 10286
Attn: Corporate Trust
Phone: 212-815-4888

Nortel Networks Limited,   Guarantee of non-      $125,129,546
as administrative agent    debtor subsidiary      plus accrued
for Lenders under that     debt -  Brazil         interest
certain Financing Agreement
dated as of October 25,
1999, as amended c/o Nortel
(CALA) Inc.
Jorge Suarez
1500 Concord Terrace
Sunrise, Florida 33323-2815
Phone: 954-851-8930

Bank of New York as        Notes                  $125,000,000
Trustee for holders                               plus accrued
Of 12-1/8% Senior Guaranteed                      interest
Notes due 2003
101 Barclay
Floor 21 West
New York, NY 10286
Attn: Corporate Trust
Phone: 212-815-4888

Nortel Networks Limited,   Guarantee of non-      $120,777,954
as administrative agent    debtor subsidiary      plus accrued
for Lenders under that     debt - Argentina       interest
certain Financing Agreement
dated as of October 25,
1999, as amended c/o Nortel
(CALA) Inc.
Jorge Suarez
1500 Concord Terrace
Sunrise, Florida 33323-2815
Phone: 954-851-8930
Citibank NA                Guarantee of Non-        $8,356,976
Horacia Almada              debtor subsidiary      plus accrued
399 Park Avenue             debt - Argentina       interest
New York, NY 10043
Phone: 54-11-4329-1686

Sirti Argentina S.A.       Guarantee of non-        $8,303,860     
Av. Pte. Hipolito Yrigoyen  debtor subsidiary      plus accrued
4848                       debt - Argentina       interest  
Javier Defferrari
Anibal Civale
B1604 CMV, Florida         
Buenos Aires, Argentina
Phone: 54-11-4730-8879

Compania Ericsson          Guarantee of non-        $4,874,993  
S.A.C.I.                   debtor subsidiary      plus accrued
Juan Prgich                 debt - Argentina       interest
Av. Madero 1020 piso 15
Buenos Aires, 1106 Argentina
Phone: 54-11-4319-5522

Amtrade International      Guarantee of non-        $4,874,993
Bank of Georgia            debtor subsidiary      plus accrued
Jack Foster                 debt - Colombia        interest
One Midtown Plaza,
Suite 1105
1360 Peachtree Street, N.E.
Atlanta, Georgia 30127

Hughes Network Systems     Guarantee of non-        $3,424,867  
Chris Biondi                debtor subsidiary      plus accrued
1717 Exploration Lane       debt - Argentina       interest  
Germantown, MD 20816   
Phone: 301-428-2773

El Camino Resources de     Guarantee of non-        $2,544,230
America Latina, Inc.       debtor subsidiary      plus accrued
Jose Virginio de Rezende    debt - Brazil          interest
Otavio Olveira
45-18 Court Square,
Suite 501
Long Island City, NY
Phone: 55-21-3824-8910

Harris Corporation         Guarantee of non-        $2,277,427
Paul Hare                   debtor subsidiary      plus accrued
3 Hotel de Ville            debt - Argentina       interest
Quebec, H9B 3G4, Canada

Tellabs, Inc.              Guarantee of non-        $2,190,962
Gerald Rixie                debtor subsidiary      plus accrued
One Tellabs Center           debt - Argentina      interest
1415 West Diehl Road
Naperville, IL 60653  
Phone: 630-758-3512

DMC Startex Networks, Inc. Guarantee of non-        $1,496,888   
Gonzalo Ferrer              debtor subsidiary      plus accrued
170 Rose Orchard Way        debt - Argentina       interest
San Jose, CA 95134
Phone: 408-944-3562

Nortel Dassa SatCom -      Guarantee of non-        $1,015,579
Gessellschaft fur           debtor subsidiary      plus accrued
Satellitenkommunikation     debt - USA             interest
ssysteme mbH
An der Bundesstrasse 31
88039 Firedrichshafen,
Phone: 49-7545-939-8080
Bank of America as         Guarantee of non-          $829,267  
Successor to Barnett Bank  debtor subsidiary      plus accrued
N.A.                       debt - USA             interest   
Shawn Guicheteaui
One East Broward Boulevard
Ft. Lauderdale, FL 33301
Phone: 704-386-2433

Harris Corporation         Guarantee of non-          $621,530
Paul Hare                   debtor subsidiary      plus accrued
3 Hotel de Ville            debt - Venezuela       interest
Quebec, H9B 3G4, Canada

Cisco Systems Capital      Guarantee of non-          $620,365
Oscar Bode                  debtor subsidiary      plus accrued
8200 NW 41st Street,        debt - Brazil          interest
Suite 400
Miami, FL 33166 USA
Phone: 305-513-5281

Compaq Financing Services  Guarantee of non-          $232,440    
                            debtor subsidiary
                            debt - Argentina

INTRAWARE INC: CEO Peter Jackson Replaces Prioleau as President
Intraware, Inc. (Nasdaq:ITRA), the leading provider of
Electronic Software Delivery and Management (ESDM) solutions,
today announced that Frost Prioleau, president, has decided to
resign from his full-time duties with Intraware effective Aug.
31, 2002, the end of Intraware's current quarter. Prioleau will
then hand over his full-time duties to chief executive officer
Peter Jackson. Prioleau will remain a member of Intraware's
Board of Directors.

"Over the past 18 months, Frost has led the company in its
transformation from an incubator of technologies with an unclear
financial outlook, to a well-structured and focused organization
poised for profitability," said Jackson. "Today we are the clear
leader in Electronic Software Delivery and Management (ESDM) in
large part because of Frost's contributions. I am grateful that
Frost will be remaining on our Board of Directors, where we will
continue to benefit from his outstanding management skills and
his expertise in ESDM."

"I am proud of all that we have achieved at Intraware," said
Prioleau. "Intraware is now well positioned to grow with a
strong balance sheet, an excellent customer base, valuable
partnerships, a focus on the huge market opportunity in ESDM,
and a tremendous service. I feel like I have accomplished what I
set out to do in guiding Intraware through its restructuring and
positioning the company for success. I am leaving Intraware in
the hands of an excellent management team that can execute on
the opportunity before it."

The company does not intend to name a replacement for Prioleau.
CEO Peter Jackson will reassume the title of president effective
Sept. 1. Prioleau will provide additional counsel and assist
with the transition through calendar year 2002.

As president, Prioleau has been responsible for refocusing
Intraware's business on its ESDM product line, right-sizing the
company around the ESDM business, forging key channel
relationships with industry partners to accelerate sales to a
broader range of customers, and strengthening the company's
financial position. Prioleau has supervised the company's day-
to-day business operations, including product management, sales,
marketing, technology operations, business development, finance,
legal and human resources. He has also driven key corporate
transactions, including capital financing transactions and the
recent sale of the company's Asset Management business unit to
Computer Associates International, Inc., that have helped
strengthen the company's balance sheet and focus its mission.
Prior to being named president, Prioleau was Intraware's
executive vice president of products and services and vice-
president of e-services.

Intraware, Inc. (Nasdaq:ITRA) is a leading provider of global
electronic software delivery and management (ESDM) solutions to
the enterprise software market. Intraware's ESDM solutions power
business-to-business technology providers including: Business
Objects SA, Documentum, Inc., Hyperion Software, E.piphany,
Inc., Level 3 Communications, Inc., PeopleSoft, Inc., RSA
Security, Inc., and Sun Microsystems, Inc. Intraware is
headquartered in Orinda, Calif., and can be reached at 888/797-
9773 or

In its February 28, 2002 balance sheet, Intraware had a working
capital deficit of about $9 million.

JAGGED EDGE: Case Summary & 20 Largest Unsecured Creditors
Debtor: Jagged Edge Mountain Gear, Inc.
        55 E. 100 S.
        Moab, Utah 84532

Bankruptcy Case No.: 02-17894

Type of Business: The Debtor designs, produces and sells
                  technical outdoor clothing and accessories,
                  using high performance fabrics for outdoor
                  sports activities.

Chapter 11 Petition Date: May 24, 2002

Court: District of Colorado (Denver)

Judge: A. Bruce Campbell

Debtor's Counsel: Lee M. Kutner, Esq.
                  Kutner Miller Kearns, P.C.
                  303 E. 17th Avenue
                  Suite 500
                  Denver, Colorado 80203

Total Assets: $721,302  

Total Debts: $1,338,608

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Dalton, Susan              Note                       $242,250

Propeller, Inc.            Trade Debt                 $195,260

John M. Carney/Jack        Note                       $100,000
P. Slovak

Sawyer, Hugh               Note                       $100,000

SJ Manufacturing           Trade Debt                  $85,000

Foremart Corporation       Trade Debt                  $75,000

Silvertip Consulting       Trade Debt                  $65,000

American Express Corporate Trade Debt                  $42,488

Eileen Cotra-Manes         Note                        $30,000

Fishbone Graphics          Retail Supplier             $20,000

Maiden Mills               Trade Debt                  $16,668

First USA Visa             Credit Card                 $15,798

EMap USA, Inc.             Advertisement               $12,987

Alale                      Trade Debt                  $11,732

Jay Geier                  Trade Debt                  $11,203

Wells Fargo Mastercard     Credit Card                 $11,196

Polaris Printing           Catalog Printer             $11,042

Sumner, Arnie              Note                        $10,000

Advanta Business Card      Credit Card                  $7,551   

Next Card Visa             Credit Card                  $7,168

KMART CORP: U.S. Bank Wins Nod to Use and Apply Bond Proceeds
To the extent that the funds in the Bond Indenture Accounts are
property of the estate, and thus subject to the automatic stay,
the Court terminates the automatic stay with respect to all
funds in the Bond Indenture Accounts.

Judge Sonderby authorizes U.S. Bank to use and apply the funds
in the Bond Indenture Accounts pursuant to the terms of the
Trust Indentures and related documents.

Kmart Corporation and its debtor-affiliates reserve all rights
to object to any claim filed by U.S. Bank, if any.  This will
include any on the grounds that the Indenture Trustee has not
applied the payments made by the Debtors to the Bond Indenture
Accounts, if any, in accordance with Sections 502 and 506 of the
Bankruptcy Code.  In no event will any funds in the Bond
Indenture Accounts be subject to recovery by, or return to, the
Debtors, their estates or any other entity, except as may be
provided in the Trust Indentures, and no claims can be made
against U.S. Bank with respect thereto. (Kmart Bankruptcy News,
Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

KMART CORP: Court Allows Keybank to Retain $1.9MM of Accounts
With both parties' consent, the Court rules that:

  (1) Of the $3,207,249 on deposit in Kmart Corporation's      
      accounts with Keybank as of the Petition Date, Keybank
      shall be entitled to retain, in full satisfaction,
      settlement, and release of the claims asserted in the
      Motion, an amount equal to $1,924,349;

  (2) Of the Amount in the Accounts, the Debtors will be
      entitled to retain, in full satisfaction, settlement, and
      release of the claims asserted in the Objection, an amount
      equal to $1,282,900;

  (3) An amount equal to $320,725 of the amount to be retained
      by the Debtors will be retained by the Debtors in the
      Accounts until August 27, 2002;

  (4) During the Holdback Period, KeyBank will retain a right
      to setoff its pre-petition claim against the Adequate
      Protection Amount, but only in the event that the Debtors
      terminate their depositary relationship with KeyBank prior
      to termination of the Holdback Period.  After termination
      of the Holdback Period, KeyBank will not retain any right
      of setoff or recoupment of its pre-petition claims against
      the Adequate Protection Amount.  After termination of the
      Holdback Period and upon termination of all Kmart banking
      relationships with KeyBank, its subsidiaries and
      affiliates, the Adequate Protection Amount shall be
      retained by the Debtors, net of the fees, charges, and
      losses sustained, if any, by KeyBank by reason of the
      Debtors' depositary relationship with KeyBank; and

  (5) The motion will be considered withdrawn with prejudice.
      Nothing in this Agreed Order will be deemed an assumption
      by the Debtors of any cash management or depository
      agreement between the Debtors and KeyBank. (Kmart
      Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)

LTV CORP: Steel Unit Resolves Claims Dispute with Hunter Corp.
Hunter had requested immediate payment of its administrative
claim, which was opposed by LTV Steel.  After several responses
and replies, Judge Bodoh follows up on his bench ruling denying
immediate payment and directing reconciliation of Hunter's claim
by issuing his opinion deciding this matter.

Judge Bodoh notes that there is no dispute that Hunter provided
post-petition labor and materials to LTV Steel, but disagrees on
almost everything else, including the amount of Hunter's claim.  
Hunter demanded $718,057.26, but LTV Steel, while not objecting
to allowance of an administrative expense claim for Hunter, says
its books only reflect $441,555.76 due to Hunter.  LTV Steel
says that third-party contractors owe Hunter the difference.

Since there is no dispute that a claim exists, Judge Bodoh
sustains Hunter's request to the extent that it seeks allowance
of administrative expenses, pending reconciliation by the
parties of the amount of the claim.

Judge Bodoh refuses to order immediate payment and states
several reasons.

The Code permits the payment of post-petition expenses; however,
it does not require "immediate" payment.  Although bankruptcy
Courts have the power to order payment, this power must be
balanced against the Code's mandate that administrative expense
claims will be distributed in pro rata shares.  Moreover,
ordering immediate payment does not guarantee a creditor will
keep the payment because interim payments are subject to re-
examination by the court and adjustment.  If some administrative
expenses are paid before all administrative expenses are
accounted for, and it is later determined that insufficient
funds exist, claimants that did not receive interim payments
could receive unequal treatment.  Entities receiving interim
payments may receive a larger portion of the estate than those
entities that did not receive interim payments.  In the
alternative, claimants receiving interim payments could be
required to disgorge funds so that all administrative claims
share pro rata.

The size of this case must be taken into account prior to
ordering payment of piecemeal expenses.  Rather than ordering
immediate payment of individual claims on an ad hoc basis, Judge
Bodoh orders prompt resolution of all administrative expense
claims.  In the interest of efficiency and fairness to all
administrative claimants, Judge Bodoh reminds the parties that
he set a deadline for the filing of administrative expense
claims that are entitled to first priority in a bankruptcy
distribution.  These claims are to be established with finality
before any distribution may be made to any subordinate classes
of creditors.  By establishing an administrative expense bar
date, Judge Bodoh expedites the process by which all claimants,
including Hunter, may receive resolution of their claims.

Judge Bodoh holds that Hunter's request for immediate payment is
overruled because: (1) the Code provides for permissive payments
rather than immediate payment, and (2) ordering immediate
payment contradicts the Code's pro rata distribution to
administrative expense claimants.

                   The Reconciling Stipulation

Hunter Corporation and LTV Steel present Judge Bodoh with a
Stipulation and Order on Hunter's Motion for allowance and
immediate payment of its administrative claim in the amount of

Having ruled orally at a hearing on this Motion in November 2001
sustaining Hunter's motion for allowance of its claim, subject
to LTV Steel and Hunter reconciling the amount, but denying
immediate payment of the claim, the parties now agree that:

       (1) Hunter's administrative claim is allowed against LTV
Steel's estate; however, Hunter is not entitled to immediate
payment of this claim.  This agreement does not expand, limit or         
otherwise modify Hunter's rights with respect to the ultimate
treatment of its claim in these cases.

       (2) To the extent, if any, that any claim asserted
against LTV Steel by any Hunter vendor or supplier is allowed,
LTV Steel is entitled to a setoff against the Hunter claim.  If
LTV Steel and Hunter are unable to agree with regard to any
setoff, the matter will be submitted to Judge Bodoh for

       (3) This Stipulation and Order is without prejudice to
Hunter's right to seek prejudgment interest regarding this claim
by the bar date for filing administrative claims, or LTV Steel's
right to object to any claim or request for interest. (LTV
Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service,
Inc., 609/392-00900)

LAIDLAW INC: Fails to Meet Annual Report Filing Deadline
Laidlaw Inc. is delinquent in its Annual Financial Statements.
Ontario securities law requires that Annual Financial Statements
be filed within 140 days of the fiscal year end.  This issuer
has not filed an AIF within 140 days of the fiscal year end, as
required by OSC Rule 51-501. (Laidlaw Bankruptcy News, Issue No.
18; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

MADGE NETWORKS: Annual Shareholders' Meeting Set for June 27
The Annual General Meeting of Shareholders of Madge Networks
N.V. will be held at the offices of the Company's Dutch counsel,
Houthoff Buruma, Parnassusweg 126, 1070 AM Amsterdam, The
Netherlands, on June 27, 2002 at 12:30 p.m., local time, for the
following purposes:

     1.   To elect one managing director to hold office until
the 2003 Annual General Meeting and until his successor is duly
elected and qualified;

     2.   To acknowledge the resignation of Michael Fischer from
the Supervisory Board and to grant Mr Fischer discharge from his
duties as a member of the Supervisory Board;

     3.   To correct the mistake made in the notice sent out for
the Special General Meeting held on October 10, 2001 and to
ratify the amendment to the Companies 1993 Employee Stock Option
Plan to increase the number of common shares reserved for
issuance under the plan by 6,500,000 and not the stated

     4.   To adopt the Annual Accounts of the Company for the
year ended December 31, 2001 and to discuss the annual report;

     5.   To grant full discharge to all members of the
Management Board and Supervisory Board for all matters apparent
from the Annual Accounts for the year ended December 31, 2001;

     6.   To approve the appointment of Ernst & Young as the
Company's Netherlands and worldwide auditors for the year ending
December 31, 2002;

     7.   To approve the designation of the Management Board for
a period of five years from the date of the Annual General
Meeting as the body authorized to issue all common and preferred
shares to the extent permitted by law and to grant options to
purchase such shares;

     8.   To authorize the Management Board, for a period of
five years from the date of the Annual General Meeting, to limit
or exclude the pre-emptive rights provided for in the Articles
of Association of the Company or by law; and

     9.   To authorize the Management Board, for a period of 18
months from the date of the Annual General Meeting to repurchase
common shares of the Company for a purchase price not exceeding
the fair market value thereof, to the extent permitted by law.

Only holders of record of common shares of the Company at the
close of business on May 20, 2002 will receive notice of the
meeting. In accordance with Dutch Law, the Management Board has
determined that only holders of record of common shares at the
close of business (New York time) on June 20, 2002 will be
entitled to vote at the meeting.

Madge Networks sells token ring LAN products, including hubs,
switches, and adapter cards, through its Madge.connect
subsidiary. An unsuccessful attempt to move beyond the token
ring market has resulted in the company's decision to sell off
or discontinue operations of its Madge.web unit, which offers
voice and data networking, virtual private network, and Web
hosting services. Madge holds a minority stake in a Bluetooth
networking company, Red-M, which started as a Madge subsidiary.
Madge Networks generates 40% of its sales outside of Europe.
Founder and CEO Robert Madge owns more than half of the company
through several trusts.

As reported in the January 8, 2002 edition of Troubled Company
Reporter, the Company had a net working capital deficit
(excluding restricted cash) of $34.1 million and a shareholders'
deficit of $9.2 million as of September 30, 2001. Restricted
cash as of September 30, 2001 was $7.0 million.

Based on (i) expected future operating results of the
Madge.connect business, (ii) continuation of Madge.connect's
funding facilities, and (iii) repayment of a further portion of
the $6.3 million provided to the Administrators, and assuming
the Company can effectively discontinue the Madge.web business
including the successful mitigation of amounts payable for
guarantees and other obligations, the Company believes that its
current liquidity levels and committed financial resources are
sufficient to meet the needs of its ongoing operations at least
through the end of 2002.

There does, however, exist doubt about the Company's ability to
continue as a going concern as there can be no assurance that
its assumptions and estimates will prove correct or that its
currently available sources of funding will remain available. To
the extent that the Company's guarantees on behalf of Madge.web
and other obligations cannot be mitigated as planned and have to
be fully and immediately discharged by the Company, the
Company's future cash flow and liquidity will be materially
adversely affected. Furthermore, it may be necessary to place
the remaining Madge.web entities (Madge.web Inc. and Madge.web
N.V.) into liquidation. In addition, the anticipated repayment
of a portion of the funds provided to the Administrators
could also not occur.

MAGNESIUM CORP: Judge Gerber Okays Asset Sale to US Magnesium
Judge Robert E. Gerber of the U.S. Bankruptcy Court in Manhattan
on Wednesday approved an asset purchase agreement under which
Magnesium Corp. of America (MagCorp) will sell its assets to US
Magnesium LLC, according to court papers obtained by Dow Jones
Newswires.  Under the agreement, US Magnesium will assume about
$15 million outstanding under MagCorp's debtor-in-possession
(DIP) financing agreement, the newswire reported, as well as
about $7 million of the company's liabilities.  The buyer also
will pay the company $1 million.  Salt Lake City-based MagCorp.
is the second-largest producer of magnesium in the United
States. (ABI World, June 7, 2002)

MAXITILE INC: Court Fixes August 30 Bar Date for Proofs of Claim
                        Los Angeles Division

In re                             ) Case No. LA 02-15046-BB
MAXITILE, INC., a California      ) Chapter 11
corporation,                     )
          Debtor and              ) NOTICE OF DEADLINE FOR
          Debtor-in-Possession    ) FILING PROOFS OF CLAIM
(Taxpayer Identification No.      )
  95-3998636)                     )

      On February 20, 2002, Maxitile, Inc. commenced a Chapter
11 bankruptcy case in the United States Bankruptcy Court,
Central District of California, Los Angeles Division.

      The Bankruptcy Court has set a deadline of 4:00 p.m.
Pacific Daylight Time on August 30, 2002 for the following
categories of persons and entities to file Proofs of Claim
against or in the Debtor's estate: (i) governmental units, (ii)
trade creditors, (iii) holders of ownership interests in the
Debtor, (iv) the holders of other unsecured claims against the
Debtor that do not relate to products distributed by the Debtor,
and (v) holders of claims relating to products distributed by
the Debtor that: (a) were installed before the Petition Date
(February 20, 2002), and (b) who knew, or reasonably should have
known, of defect and or damage to or from such products on or
before the Petition Date. By way of example only, if you hold a
warranty that has not yet expired on product distributed by the
Debtor that was installed prior to February 20, 2002 and you
have experienced a problem with such product prior to February
20, 2002, you are considered a Current Claimant in category (v)

      Persons or entities whose claims relate to products
distributed by the Debtor that: (a) were installed before the
Petition Date (February 20, 2002); but (b) there was no defect
and/or damage to or from such products and/or who did not know,
or reasonably could not have known of defect and/or damage to or
from such products, on or before the Petition Date may, but do
not need to, file Proofs Of Claim before the Claims Bar Date. By
way of example only, if you hold a warranty that has not yet
expired on products distributed by the Debtor that was installed
prior to February 20, 2002 and you have not experienced a
problem with such product prior to February 20 2002, you are
considered a Future Claimant. The Debtor's Plan Of
Reorganization will establish a mechanism for the filing and
administration of the claims of Future Claimants.

      Persons or entities who installed product distributed by
the Debtor after the Petition Date (February 20, 2002) are
neither Current Claimants or Future Claimants, and therefore, do
not need to file Proofs of Claim at this time, as their rights
will not be affected by the Claims Bar Date.

      Each Current Claimant that holds or asserts a claim
against or relating to the Debtor, including but not limited to
claims on warranties issued by the Debtor on products it
distributes that were installed before the Petition Date, or for
reimbursement or contribution allowed under the Bankruptcy
Code on account of such a claim, or for any alleged obligation
or liability of the Debtor whatsoever, which arose or is deemed
to have arisen prior to the Petition Date, must file a Proof Of
Claim before the Claims Bar Date. The term "claim" means: (i)
any right to payment or (ii) any right to an equitable remedy
for breach of performance if such breach gives rise to a right
to payment.

      All Proofs Of Claim must be sent postage prepaid to the
following address: Clerk's Office, United States Bankruptcy
Court, 300 N. Los Angeles Street; Los Angeles, CA 90012. In
order to be filed, a Proof Of Claim of a Current Claimant must
be actually received at this address on or before the Claims Bar
Date. Facsimile or email Proofs Of Claim are not acceptable, and
will not be valid for any purpose.

      There are severe consequences if Current Claimants do not
timely file a Proof Of Claim. Any Current Claimant who fails to
file a Proof Of Claim on or before the Claims Bar Date shall be
forever barred from asserting that claim against the Debtor or
its property, and shall not be treated as the holder of a claim
for purpose of voting on, or participating in any distribution
under, any Plan of Reorganization that is filed or confirmed in
this case. The mechanism for the receipt, analysis and redress
for the claims of Future Claimants will be set forth in the
Debtor's Plan Of Reorganization.

      Copies of the Debtor's Schedule of Assets and Liabilities,
the Bankruptcy Court's order establishing the Claims Bar Date
and a blank Proof Of Claim form are available for inspection
during regular business hours at the Offices of the Clerk of the
Bankruptcy Court, 300 N. Los Angeles Street, Los Angeles, CA
90012.  In addition copies of such documents may be viewed on
the internet at entering the  
user name "debtor" and the password "sonic."

MCDERMOTT INT'L: S&P Affirms B Corporate Credit Rating
Standard & Poor's affirmed its single-'B' corporate credit
rating on McDermott International Inc. and related entities.

At the same time, the rating on New Orleans, Louisiana-based
firm was removed from CreditWatch where it was originally placed
on February 22, 2000, following the bankruptcy filing by its
indirect subsidiary, Babcock & Wilcox Co.  Standard & Poor's
assigned a developing outlook on McDermott, a leading provider
of marine construction services, government operations, and
electrical power generation equipment. About $101 million in
consolidated debt is outstanding.

In February 2001, B&W and its debtors filed a reorganization
plan, and filed an amended plan in May 2002, superceding the
original plan. The debtor exclusivity period has expired and
creditors may now file reorganization plans. Thus far, no
additional McDermott units have been brought into the
bankruptcy, and the bankruptcy court's preliminary injunction
(prohibiting asbestos lawsuits against non-filing affiliates of
the debtor's) runs through July 15, 2002. "The timing as to when
B&W might emerge from bankruptcy and what value McDermott will
retain in B&W is uncertain," said Standard & Poor's analyst
Daniel Di Senso.

Assuming that other units are not called into the bankruptcy,
McDermott has sufficient liquidity to satisfy operating and
funding needs. In March 2002, McDermott repaid the outstanding
$208.3 million, 9.375% notes, thereby eliminating near-term
refinancing risk. Financial flexibility is currently
satisfactory. At March 31, 2002, McDermott had $94 million in
unencumbered cash, has no near-term debt maturities, has
adequate bank line availability, and expects to receive some
cash proceeds from pending asset sales.

The ratings could be raised should B&W emerge from bankruptcy
under favorable terms, whereby McDermott can once again
consolidate B&W and retain at least a portion of this unit's
cash flows. On the other hand, credit quality could be impaired
and ratings lowered should other McDermott units be called into
the current bankruptcy proceeding.

METALS USA: Earns Okay to Employ Ordinary Course Professionals
Metals USA, Inc. and its debtor-affiliates obtained Court
authority to retain professionals utilized in the ordinary
course of business as of and after the Petition Date.

As proposed, no law firm that is an Ordinary Course Professional
will receive payment for post-petition services rendered until
the professional files an affidavit with the Court, pursuant to
Section 327(e) of the Bankruptcy Code.  The affidavit will set
forth any amounts that the Profession is owed by the Debtors for
pre-petition work.  It will also indicate that the Professional
does not represent or hold any interest adverse to the Debtors
or their estates with respect to matters for which the
professional seeks retention. In addition, the Debtors will not
make any payments to Ordinary Course Professionals on account of
pre-petition claims. Debtors propose also that all Retention
Affidavits be served, by first-class mail, on the Office of the
United States Trustee for the Southern District of Texas,
counsel for the Bank Group, and counsel for the Creditors'
Committee. The Debtors believe that the notice provided for
herein is fair and adequate and no other notice is necessary.

It was also proposed that the Debtors will be permitted to pay
each Ordinary Course Professional without prior application
before the Court 100% of the fees and disbursements incurred by
such professional.  This is provided, however, that any
professional's disbursements do not exceed $10,000 per month.
Payments will be made after the Debtors have approved an
appropriate invoice listing in reasonable detail the nature of
the services rendered and disbursements actually incurred since
November 14, 2001. (Metals USA Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

METROCALL INC: Signs-Up Lazard Freres as Investment Bankers
Metrocall, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
hire Lazard Freres & Co. LLC as their investment bankers.

Lazard Freres is a financial advisory and investment banking
firm focused on providing financial and investment banking
advice and transaction execution on behalf of its clients.
Lazard's broad range of corporate advisory services includes
general financial advice, domestic and cross-border mergers and
acquisitions, divestitures, privatizations, special committee
assignments, takeover defenses, corporate restructurings, and
strategic partnerships and joint ventures.

The Debtors tell the Court that the Lazard's resources,
capabilities, and experience in advising Metrocall are crucial
to the Company's successful restructuring.

Lazard Freres will:

     a) review and analyze the Debtors' business, operations and
        financial projections;

     b) evaluate the Debtors' debt capacity in light of its
        projected cash flows;

     c) assist in the determination of an appropriate capital
        structure for the Debtors;

     d) assist in the determination of a range of values for the
        Debtors on a going concern and liquidation basis;

     e) advise the Debtors on tactics and strategies for
        negotiating with its various groups of Creditors;

     f) render financial advice to the Debtors and participate
        in meetings or negotiations with the Creditors in
        connection with any Restructuring Transaction;

     g) advise the Debtors on the timing, nature, and terms of
        any new securities, other consideration or other
        inducements to be offered to its Creditors in connection
        with any Restructuring Transaction;

     h) assist the Debtors in preparing any documentation
        required in connection with the implementation of any
        Restructuring Transaction;

     i) in the event a Restructuring Transaction is implemented
        in a proceeding under title 11 of the United States
        Bankruptcy Code, provide financial advice and assistance
        to the Debtors in developing and obtaining confirmation
        of a plan of reorganization, and as the same may be
        modified from time to time;

     j) assess the possibilities of bringing in new
        lenders/investors to replace, repay or settle with any
        of the Creditors;

     k) advise the Debtors with respect to the structure of and
        negotiations relating to any potential sale of all or
        any substantial portion of the Debtors' assets to, or
        any merger or consolidation of the Debtors with and
        into, any other person or entity;

     l) assist in arranging financing (including debtor-in-
        possession financing or exit financing) for the Debtors;

     m) advise and attend meetings of the Debtors' Board of
        Directors and its committees;

     n) provide testimony, as necessary, in any proceeding in
        any judicial forum;

     o) if requested, render an opinion as to the fairness, from
        a financial point of view, to the Debtors, of the
        Restructuring Transaction; and

     p) providing the Debtors with other customary general
        restructuring advice and valuation advice.

Lazard Freres is entitled to be compensated for its services
only in the event that the Debtors consummate a Restructuring,
in which case Lazard Freres shall receive a $4,000,000
Restructuring Transaction Fee.  Lazard will agree to credit the
total of all monthly advisory fees paid by the Debtors prior to
the Petition Date against the Restructuring Transaction Fee.  
The Debtors have previously paid Lazard Freres $3,000,000 on
account of monthly advisory fees.

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: Secures Approval Restricting Securities Trading
Metrocall, Inc. (OTCBB:MCLLQ), pursuant to a court order entered
on June 6, has obtained approval to restrict trading in its
preferred stock and common stock with respect to certain
categories of shareholders or trades.

As previously announced, Metrocall filed a voluntary petition
for reorganization in bankruptcy on June 3, 2002. The proposed
plan of reorganization does not provide for any recovery for the
holders of equity of the Company.

Any shareholders who are restricted from selling their Metrocall
stock as a result of the order described above should consult
their tax advisors regarding the availability of a "worthless
security" deduction in respect of their stock.

In general, owners of securities are entitled to worthless
security deductions in the taxable years of the owners in which
the security becomes worthless and the worthlessness is
evidenced by an "identifiable event." Whether the Metrocall
stock is worthless, and when it becomes worthless for tax
purposes, is a question of fact.

The bankruptcy court order entered on June 6 serves to restrict
trading in the Company's stock by any shareholder that currently
owns 5% or more of the outstanding capital stock of the Company,
will own 5% or more of the outstanding capital stock of the
Company after the proposed transfer, or intends to transfer any
portion of its capital stock to any shareholder which falls into
either of the preceding two categories.

Any shareholder who falls into one or more of the above
categories must provide a notice to the Company at least five
business days prior to the proposed transfer (which includes any
sale, purchase, trade, assignment, acquisition, gift or transfer
by other means) of either the Company's common stock or
preferred stock, or any options, warrants or other rights

In the notice provided to the Company, the shareholder must
represent that the proposed transfer will not result in an
"ownership change" with respect to Metrocall within the meaning
of Section 382 of the Internal Revenue Code, and must provide a
detailed explanation supporting this representation.

Metrocall has given instructions to Equiserve Trust, N.A., its
transfer agent, not to process any transfer which would trigger
such an ownership change. Any transfer in violation of the
procedures established by this order will be null and void.

A notice containing a more complete description of the
restrictions imposed by this order will be sent to all Metrocall
shareholders of record. This notice also contains information
regarding procedures to be followed by any shareholder that
wishes to object to these trading restrictions.

All objections must be filed with the Bankruptcy Court in
Delaware on or before July 1, 2002 at 12 noon and all
shareholders who have timely filed an objection will have the
opportunity to be heard on July 8, 2002 at 2:30 p.m. at the
Bankruptcy Court in Wilmington, Delaware.

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

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

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

NII HOLDINGS: Requesting Court to Schedule Claims Bar Date
NII Holdings, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to fix a Claims
Bar Date by which all proofs of prepetition claims against the
Debtors must be filed.  The Debtors request that the Court set
the bar date at 45 days after the date on which the Debtors send
out a Bar Date Notice.

The Debtors anticipate completing and filing their Schedules of
Assets and Liabilities no later than 15 business days after the
Petition Date.  Once the Schedules are completed and filed with
the Court, the Debtors claims agent will customize individual
proof of claim forms for all of the Debtors' scheduled
creditors.  As soon as practicable after the filing of the
Schedules and the completion of the customized proof of claim
forms, the Debtors will mail the Bar Date Notice to all
creditors. The Debtors clarify that the Bar Date for these cases
will be indicated clearly on the Notice.

Given the pre-negotiated nature of these cases, all interested
parties desire to move the plan process forward on an expedited
basis.  The Debtors anticipate filing a plan of reorganization
and related disclosure statement shortly after the Petition

The Debtors add that they have estimated the number of creditors
to be fewer than 1,000. The Debtors are confident that the
Schedules will identify most, if not all of their creditors.

Proofs of Claims are not required to be filed anymore if they

     i) Claims already has been properly filed with the Court;

    ii) Claims previously allowed by Order of the Court;

   iii) Claims listed in the Debtors' schedules of liabilities
        filed with the Court which are not listed as contingent,
        unliquidated or undisputed; and

    iv) Claims under 11 USC 507(a)(1) as an administrative
        expense of the Debtors' chapter 11 cases

     v) Principal or accrued interest under the Debtors' 13%
        senior redeemable discount noted due April 15, 2007, the
        Debtors' 12.125% senior redeemable notes due April 15,
        2008, or the Debtors' 12.75 senior serial redeemable
        discount notes due August 1, 2010.

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: Ingleside Wants to Sell Texas Real Estate Asset
Ingleside Holdings -- a Debtor -- seeks the Court's authority to
sell certain real estate and pay a broker's commission at

David N. Missner, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, relates that Ingleside Holdings holds the
title to certain real property located in San Patricio County,
Texas, consisting of 262 acres of land and 48 acres of submerged
land near the Naval Station Ingleside.  "The property is not
developed and is not essential to business or reorganization of
Ingleside Holdings or of the other Debtors," Mr. Missner adds.

Mr. Missner states that the Debtor has been marketing the
property for sale since 1996 but has obtained very few offers.
The Debtor has entered into a contract to sell the property for
$3,400,000 to the Port of Corpus Christi.  Mr. Missner assures
the Court that the Port Authority is not an insider nor does it
have any connection to the Debtor or these cases.   "As to the
value, the Debtor does not have a recent appraisal of the
property but was advised that, within 20 miles on the same
highway as the property, more acreage of real estate was sold
for less than the purchase price proposed for the property," Mr.
Missner reports.  In addition, the purchase price proposed, is
the same price that the Debtor attempted to obtain for the
property a couple of months ago, suggesting that Ingleside has
obtained maximum value for the property.  Although the contract
does not contain any financing contingencies, it does permit the
Debtor to retain 50% interest in its right, title and interest
to oil, gas and other minerals in and under the property.

"The property will be sold free and clear of liens and
encumbrances," Mr. Missner adds.

The Debtor further requests for authority to pay a broker's
commission at closing to W.I. Bates Co., Inc.  "Bates was
responsible for locating the Port Authority as buyer of the
property," Mr. Missner says.  Under a pre-petition arrangement
with the Debtor, Bates is entitled to a 5% commission at

Mr. Missner tells the Court that if a holder of a lien, claim or
encumbrance receives a notice of this motion and does not object
within the prescribed period, the holder will be deemed to have
consented to the proposed sale. (National Steel Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900)

NET NANNY: Will Restructure Operations Under BIA in Canada
Net Nanny Software International Inc. (OTCBB: NNSWF), (TSX: NNS)
has filed a Notice of Intention to Make a Proposal in
anticipation of submitting a plan to its creditors to reorganize
the Company under the Bankruptcy and Insolvency Act.

"This filing finally allows the Company some "breathing space"
as well as stops a number of legal actions that had been taken
against the Company by various secured and unsecured creditors"
Net Nanny CEO Gordon Ross said "We have filed this Notice in
order to restructure our operations and focus on the Company's
core business of security in order to return to profitability
and repay our creditors. We believe these steps will provide the
Company with the time to develop a repayment plan for our

The Company has taken a number of steps in the past year to
reduce expenses while focusing on sales of Net Nanny 4 and
BioPassword, the Company's Internet filtering and its security
software products. Unfortunately, the Company has not been able
to repay liabilities accumulated during the latter part of 2000
and early 2001 and these creditors have been pursuing legal
actions for collection.

Net Nanny Software International Inc., a publicly traded company
(OTCBB: NNSWF), (CDNX: NNS) with headquarters and subsidiaries
in the United States and Canada, specializes in Internet safety
and computer security products for both the home and enterprise
markets. For more information on the Company and its products,
please visit

NET2000: Chapter 7 Trustee Convenes Creditors' Meeting Today
The United States Trustee will convene a meeting of Net2000
Communications, Inc.'s Chapter 7 creditors on June 12, 2002, at
3:00 p.m., at the U.S. District Court, 844 King Street, Room
2112, Wilmington, Delaware.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy

All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of

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

NEWPOWER: Will Transition All TX Customers to Reliant and TXU
NewPower Holdings, Inc. (PINK SHEETS: NWPW), parent of The New
Power Company, has signed agreements to transition all of its
customers in Texas to Reliant Energy Retail Services and TXU
Energy Retail Company LP.

Under these agreements, NewPower will transition approximately
45,000 residential and small commercial customers in north Texas
to Reliant and approximately 35,000 residential and small
commercial customers in the Houston area to TXU. The Texas
Public Utility Commission has reviewed these agreements and has
issued letter rulings stating that these agreements are
consistent with Commission rules and are in the public interest.

NewPower also announced that in connection with the transition
of these power customers, NewPower and IBM have reached an
agreement to terminate their customer service outsourcing
agreement, subject to the continued provision of services during
a transition period.

In 2001 and 2002 several factors severely and adversely affected
NewPower's liquidity and cash resources. Accordingly, during the
past few months, NewPower has been reviewing all of its
strategic alternatives and has been in discussion with several
parties concerning the sale of its assets.

NewPower Holdings, Inc. through The New Power Company, is the
first national provider of electricity and natural gas to
residential and small commercial customers in the United States.
The Company offers consumers in restructured retail energy
markets competitive energy prices, pricing choices, improved
customer service and other innovative products, services and

                           *   *   *

As reported in the May 6, 2002 edition of Troubled Company
Reporter, NewPower Holdings, Inc. is currently reviewing all of
its options which include a sale of a portion of its assets and
business and a continuation on a more limited scale in a smaller
number of markets without the expected need for additional

NEWPOWER HOLDINGS: Commences Chapter 11 Reorg. in Georgia
NewPower Holdings, Inc. (PINK SHEETS: NWPW) and its subsidiaries
TNPC Holdings, Inc. and The New Power Company (collectively
NewPower), have filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in the U. S.
Bankruptcy Court for the Northern District of Georgia.

In 2001 and 2002 several factors severely and adversely affected
NewPower's liquidity and cash resources and accordingly the
company has been facing the substantial risk of not being able
to continue to operate as an independent entity. During the past
few months, NewPower has been reviewing all of its strategic
alternatives and is in discussion with several parties
concerning the sale of its assets. The Chapter 11 filing offers
a process that allows the potential purchasers to acquire these
assets free of liability and also enables NewPower to continue
the operation of its business during the sale approval process.
Accordingly, NewPower expects that the delivery of commodity and
service to customers will continue without disruption.

As announced and subject to bankruptcy court approval, NewPower
has agreed to transition all of its Texas power customers in the
TXU service area to Reliant Energy Retail Services, LLC, and its
customers in the Reliant service area to TXU Energy Retail
Company LP.

NewPower plans to seek permission in a variety of first day
motions with the bankruptcy court to approve the transition of
the company's Texas customers to Reliant and TXU and to continue
to make payments for employees' payroll and benefits and for
certain suppliers and vendors in the normal course of business,
among other matters.

NewPower Holdings, Inc. through The New Power Company, is the
first national provider of electricity and natural gas to
residential and small commercial customers in the United States.
The Company offers consumers in restructured retail energy
markets competitive energy prices, pricing choices, improved
customer service and other innovative products, services and

NEWPOWER HOLDINGS: Case Summary & 30 Largest Unsec. Creditors
Lead Debtor: NewPower Holdings, Inc.
             One Manhattanville Road
             Purchase, New York 10577
             aka EMW Energy Services Corp.
             aka TNPC, Inc.

Bankruptcy Case No.: 02-10836

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     The New Power Company                      02-10835
     TNPC Holdings, Inc.                        02-10837

Type of Business: The Debtors, through its operating unit, The
                  New Power Company, are a provider of
                  electricity and natural gas to residential
                  and small commercial customers in markets
                  that have been deregulated to permit retail
                  competition. NewPower Holdings, Inc. is a
                  public company that directly and indirectly
                  owns 100% of the stock of its subsidiaries
                  TNPC Holdings, Inc. and The New Power

Chapter 11 Petition Date: June 11, 2002

Court: Northern District of Georgia (Newnan)

Judge: W. Homer Drake

Debtors' Counsel: Paul K. Ferdinands, Esq.
                  King & Spalding
                  191 Peachtree Street
                  Atlanta, Georgia 30303-1763
                  (404) 572-4600

                  William M. Goldman, Esq.
                  Sidley Austin Brown & Wood LLP
                  875 Third Avenue
                  New York, New York
                  (212) 906-2000

Total Assets: $231,837,000

Total Debts: $87,936,000

Debtor's 30 Largest Unsecured Creditors:

TXU Electric Company
Attn: Marty Sullivan
1601 Bryan Street
Dallas, TX 75201-3411
Phone: (800) 460-3030
Fax: (214) 875-2953

OSI Outsourcing Services, Inc.
Attn: George Pollard
5022 Gate Parkway, Suite 204
Jacksonville, FL 32256
Phone: (904) 380-2600
Fax: (904) 380-2603

Wipro Limited
Attn: Sridhar Ramasubbu
Dept 1167
Los Angeles, CA 90084-1167
Phone: (408) 242-6285
Fax: (408) 615-7174

Partnersolve LLC
Attn: Andy Hopkins
Phone: 3758 Dunlin Shore Court
Norcross, GA 30092
Phone: (404) 909-1325
Fax: (770) 454-0155

Reliant Energy HL&P
Attn: Dale Ferrar
P. O. Box 1700
Houston, TX 77251-1700
Phone: (713) 207-5301
Fax: (713) 207-9054

Union - North Carolina
P. O. Box 60182
Charlotte, NC 28260
Phone: (843) 727-1080
Fax: (843) 727-1079
Attn: Rob Kendrick

Sitel Corporation
Attn: Carol Murphy
P. O. Box 3480
Omaha, NE 68103-0480
Phone: (402) 963-6423
Fax: (402) 963-5957

Attn: John Boland
225 W. Olney Road
Norfolk, VA 23510
Phone: (610) 263-6300/315
Fax: (610) 263-6310

Prudential Relocation
Attn: Rodney Bean
P. O. Box 93577
Chicago, IL 60673-3577
Phone: (480) 778-6631
Fax: (480) 778-7056

Bluestar Solutions
Attn: Rich Frank
20400 Stevens Creek Blvd.
Cupertino, CA 95014-2298
Phone: (408) 861-1356
Fax: (408) 253-2976

Hurrelbrink Advertising, Inc.
5714 Superior Dr.
Baton Rouge, LA 70816-6047
Phone: (225) 292-5555
Fax: (225) 293-6206

McLeodusa Integrated Business
P. O. Box 2564
Decatur, IL 62525-2564
Phone: (800) 593-1177
Fax: (319) 790-7015

Zac Technologies, Inc.
Attn: Mike Newton
1 Newark Street, Suite 10
Hoboken, NJ 07030
Phone: (201) 418-8700/308
Fax: (201) 418-9205

Pacific Gas & Electric Company
P. O. Box 770000
San Fransisco, CA 94177
Phone: (800) 743-5000
Fax: (408) 494-4061

Solid Systems, Inc.
P. O. Box 4493
Houston, TX 77210-4493
Phone: (713) 934-9494
Fax: (713) 690-2722

ADP-Proxy Services
Attn: John Fargnoli, Mgr.
P. O. Box 23487
Newark, NJ 07189
Phone: (631) 254-7422
Fax: (631) 254-7726

US Airways
P. O. Box 640265
Pittsburgh, PA 15264-0265
Phone: (336) 744-4715
Fax: (336) 744-4900

American Customer Care
948 Plaza Drive
Montoursville, PA 17754
Phone: (800) 267-0686
Fax: (860) 589-9128
Attn: Chris Malloy

Fosdick Fulfillment Corp
P. O. Box 5012
Wallington, CT 06492
Phone: (203) 269-0211
Fax: (203) 679-3270

Pricewaterhousecoopers LLP
Attn: Mary Reaganhart
1900 K. Street, N.W.
Washington, DC 20006-1110
Phone: (201) 894-2488
Fax: (201) 894-2430

Manpower, Inc.
P. O. Box 7247-0208
Philadelphia, PA 19170-0208
Phone: (215) 568-4050
Fax: (215) 569-1421

JP Rushing Consulting, LLC
4437 Northside Parkway #254
Atlanta, GA 30327

Customer Link
325 Lake Avenue South, Suite 710
Duluth, MN 55802
Phone: (218) 722-2800
Fax: (218) 722-3287

Software Concepts Associates, Inc.
11 Mill Street
Rhinebeck, NY 12572
Phone: (845) 876-7097

Credit Suisse First Boston
P. O. Box 6119
New York, NY 10277-2625
Phone: (212) 325-2000

Phonoscope Communications, Inc.
6105 Westline Dr.
Houston, TX 77036
Phone: (713) 272-4600
Fax: (713) 272-4648

Videoplus, Inc.
P. O. Box 972275
Dallas, TX 75397-2275
Phone: (940) 497-9700
Fax: (940) 497-9933

Courter, Kobert, Laufer & Cohen, PC
1001 Route 517
Hackettstown, NJ 07840
Phone: (908) 852-2600
Fax: (908) 852-8225

Special Olympics Of Northern California
3480 Buskirk Avenue, STE 340
Pleasant Hill, CA 94523
Phone: (800) 770-9401
Fax: (510) 944-8803

America Online, Inc.
P. O. Box 5696
New York, NY 10087-5696
Phone: (212) 206-4400

NORTEL NETWORKS: Revises Expectations Re Two Public Offerings
Nortel Networks Corporation (NYSE:NT)(TSX:NT.) announced that
the underwriters of the previously announced two concurrent
public offerings of 25,000 equity units(a) and 550 million of
its common shares have exercised their respective over-allotment
options to purchase an additional 3,750 prepaid forward purchase
contracts and 82.5 million common shares.

As a result, the aggregate net proceeds to Nortel Networks of
the offerings are now expected to be approximately US$1.475
billion, reflecting an increase in the net proceeds to Nortel
Networks of the offerings from approximately US$1.3 billion. The
proceeds will be used by Nortel Networks for general corporate
purposes, or otherwise advanced to or 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.

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. Based on an offering of 28,750 equity units, the
aggregate number of Nortel Networks common shares issuable on
the settlement date will be between approximately 485 million
and 583 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 reports, are trading at about 73.5. See  
real-time bond pricing.

NUTRASTAR INC: Lewak Greenbaun Expresses Going Concern Doubt
NutraStar Incorporated is a California corporation formerly
known as Alliance Consumer International, Inc.  As a result of
an Exchange Transaction, NutraStar's business is now the
business previously carried on by NutraStar Technologies
Incorporated, a Nevada corporation.  NutraStar is an emerging  
growth health sciences company focused on becoming a leading
nutraceutical company in the World through the development and
distribution of its "super food" products and natural arthritic
relief products for both humans and animals. NutraStar also
intends to distribute "all natural" cosmetics and beauty aids.
Most of NutraStar's products offer the beneficial elements of
stabilized rice bran and specially formulated rice bran oil.  
NutraStar's "all natural" nutraceutical products deliver
biological effects without the deleterious side effects of many
pharmaceuticals.  Accordingly, NutraStar believes that certain
of its products may be used in place of, or as a supplement to
some of the World's most widely distributed pharmaceuticals.  
NutraStar will continue to aggressively support its claims
through clinical trials and third party analysis.  To date,
NutraStar and its affiliates have conducted a number of limited  
clinical trials on several of its products, including, the
treatment of Type I and Type II Diabetes, high LDL cholesterol,
triglycercides, and Apolipoprotien B, a treatment for joint pain
and joint inflammation in mammals, a treatment for Irritable
Bowel Syndrome, and a treatment for Inflammatory Bowel Disease.

NutraStar has developed a number of product lines that are
immediately available for sale in the market through the
Company's four divisions: TheraFoods(R) (business to consumer),
NutraCea(TM) (medical foods), NutraGlo (animal products), and
NutraBeauticals(R) (cosmetics and beauty aids). Because of the
efficacy and safety of its products, NutraStar anticipates
developing strategic distribution and marketing agreements with
well-known retail product and pharmaceutical companies  and
medical practices and institutions.  NutraStar currently enjoys
such a relationship with W.F. Young, Inc., the distributors of
the Absorbine(R) line of human and animal products, including  
NutraStar's Absorbine Flex+(TM) equine product line which NTI
developed for W.F. Young, Inc.  NutraStar and W.F. Young, Inc.
have recently entered into a letter of intent to pursue a joint  
venture to market and distribute  NutraStar's NutraFlex(TM)
product line to relieve arthritic and  joint pain under the
Absorbine(R) branding.

During the fiscal year 2001, NutraStar generated net sales of
$1,610,222 compared to $127,954 for the eleven month period
ended December 31, 2000.  This substantial increase reflects the
Company's  progress from a start-up entity in fiscal year 2000
to a more fully operational business during fiscal year 2001.

The cost of goods sold for the year December 31, 2001 increased
to $945,633 compared to $157,170 in fiscal year 2000.  This
increase reflects the significant increase in production of
products for resale. Operating expenses of approximately  
$3,357,000 in fiscal year 2001 more than doubled over fiscal
year 2000 operating expenses of approximately  $1,513,000.  This
increase represents the Company's expansion of operations during
fiscal year 2001.

NutraStar incurred an operating loss of $2,692,315 during fiscal
year 2001 compared to an operating  loss of $1,542,237 during
fiscal year 2000.  This 74% increase in operating loss reflects
the  significant increases in the cost of goods sold and
operating expenses relating to the Company's  expanded business
operations during fiscal year 2001.

NutraStar has incurred significant operating losses for its
first two fiscal years since its  inception, and, as of December
31, 2001 NutraStar has an accumulated deficit of $5,328,174.  At
December 31, 2001, the Company had cash and cash equivalents of
$405,502 and a net working capital deficit of $52,760.

The independent auditing firm of Singer, Lewak, Greenbaum &
Goldstein LLP of Los Angeles, in its March 17, 2002 Auditor's
Report says of NutraStar: ". . . during the year ended December
31, 2001, the Company incurred a net loss of $3,771,474 and had
negative cash flows from operations of $855,316.  In addition,
the Company had an accumulated deficit of $5,328,174 at December
31, 2001.  These factors, among others, as discussed in Note 2
to the financial statements, raise substantial doubt about the
Company's ability to continue as a going concern."

PACIFIC GAS: Court Okays Certain Claims Estimation Procedures
Pacific Gas and Electric Company's Motion to establish claim
estimation procedures is granted as to the Employment Claims,
the Environmental Claims and the Tort Claims.

The motion is denied, without prejudice, as to the Commercial
Claims, the ESP Claims, the Generator Claims and the Sierra
Pacific Claim.

                         *   *   *

PG&E's proposed procedures and process for estimating the

(A) With respect to Environmental Claims, Commercial Claims,
    Employment Claims,

   -- Retention of a Court-approved expert to evaluate the

      The expert would report to the Court with a recommendation
      regarding the estimated amount PG&E will reasonably need
      to address these Claims. The expert could be empowered to
      determine in the first instance, subject to the Court's
      approval, the appropriate procedures for accomplishing the
      estimation. Subject to the Court's approval, PG&E proposes
      to file appropriate papers on or before April 17, 2002 for
      the retention of such expert, coupled with a motion for
      the Court's estimation of such Claims for feasibility
      purposes at such time as the Court has the benefit of such
      expert's report.

(B) With respect to Generator Claims, Energy Service Provider

   -- Estimation by the Court based on written submissions.
      Subject to the Court's approval, PG&E proposes to file one
      or more motions for estimation on or before April 17, 2002
      for the estimation of these Claims.

(C) SPI Commercial Claim

   -- Estimation by the Court of one commercial Claim, asserted
      by Sierra Pacific Industries (SPI), for more than $1
      billion, with which the Court is already familiar. Subject
      to the Court's approval, PG&E proposes to file a motion on
      or before April 17, 2002 for the estimation of this Claim.

(D) Tort Claims

   -- Retention of a Court-approved expert to assist the Court
      in estimating, on an aggregate basis, approximately 450
      miscellaneous tort Claims totaling more than $315 million,
      based on the application of statistical methodology to
      relevant litigation data accumulated by PG&E over the last
      five years.

      PG&E also will ask the Court to estimate the reasonable
      aggregate value of approximately 1,250 additional personal
      injury tort Claims, with an alleged value of approximately
      $580 million, that relate to alleged exposure to chromium
      from particular PG&E compressor stations.

      Subject to the Court's approval, PG&E proposes to file
      appropriate papers on or before April 17, 2002 for the
      retention of the expert to be retained in connection with
      valuation of the miscellaneous tort Claims, coupled with a
      motion for the Court's estimation of such Claims for
      feasibility purposes at such time as the Court has the
      benefit of such expert's analysis, as well as a motion for
      the Court's estimation of the Chromium Claims for
      feasibility purposes. (Pacific Gas Bankruptcy News, Issue
      No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

PACIFIC SYSTEMS: March 31 Balance Sheet Upside-Down by $303,000
The consolidated financial statements of Pacific Systems Control
Technology, Inc. include the accounts of Pacific Systems Control
Technology, Inc. and its wholly owned subsidiary, America's Best
Karate, which owned 100% of PeopleNet International Corporation
(formerly known as American Champion Media, Inc. or "AC Media")
until February 8, 2002 when AC Media was effectively spun-off
from the Company and became an independent entity, and American
Champion Marketing, which is a wholly owned subsidiary of AC
Media. There was no activity in AC Marketing during 2001 and the
three-month period ended March 31, 2002.

In August 2001, the Company changed its name from American
Champion Entertainment, Inc. to Pacific Systems Control
Technology, Inc.  AC Media also changed its name to PeopleNet
International Corporation.  On June 22, 2001, the Company
approved a plan to spin-off PeopleNet to the shareholders as a
tax-free distribution.  Under the plan, each stockholder of the
Company received one share of PeopleNet stock for every 17
shares of common stock held as of the record date of January 16,
2002.  Subsequent to and as part of the spin-off, PeopleNet
issued 374,587 shares of common stock, with registration rights,
to ECapital, an unrelated party, in exchange for the worldwide
exclusive rights to market and distribute ChiBrow, a safe web
browser software for children for three years. The related party
note payable to PeopleNet is also converted to common stock. The
spin-off became effective in January 2002 and all shares were
distributed to the above parties on February 8, 2002.  As part
of this plan, the advances PeopleNet made to ABK were offset
against the amounts due to the Company and the net amount were
converted to additional paid-in-capital of PeopleNet.  

The Company is engaged in the development and sales of utilities
meter products and technology. This is a new line of business
for the Company and it anticipates generating revenues from
these operations beginning in 2002.

Management's plans and the ongoing operations of the Company are
expected to require working capital during 2002. The Company has
experienced continuing losses from operations. The Company is
also changing its principle lines of business with respect to
the manufacture and distribution of utility metering devices. In
addition, as stated, PeopleNet was spun-off in February 2002.
These factors cause substantial doubt about the ability of the
Company to continue as a going concern. Management will be
required to obtain additional capital to fund the ongoing
operations during the remainder of 2002.

During the three-month period ended March 31, 2002, Pacific
Systems Controls' main focus was on the spin-off of its
subsidiary, PeopleNet International Corporation.  The Company
had an insignificant amount of revenues for this three-month

During the three-month period ended March 31, 2002, the Company
incurred $24,599 in salaries and payroll expenses, $14,407 for
rent, and $59,839 in general and administrative expenses which
included legal and accounting expenses. Interest expense for the
period was $1,000.  As a result of foregoing factors, net loss
was $92,175 for the three-month period ended March 31, 2002 as
compared to the net loss of $65,485 for the same period in 2001.

Stockholders' equity decreased to a negative $303,778 at March
31, 2002 due to the spin-off distribution of PeopleNet from the
Company. Cash decreased for the three months ended March 31,
2002 by $491,256 primarily due to a loan to another company that
is owned by its largest shareholder Holley Holdings USA. Cash
utilized for operations for the three months ended March 31,
2002 was $129,589. Cash from financing activities was an
increase of $31,333.

The Company has historically financed its operating and capital
outlays primarily through sales of common stock, loans from
stockholders and other third parties and bank financing.  The
Company's largest shareholder, Holley Holding USA, has provided
the funds to the Company in terms of an unsecured loan with no
interests, for the Company's operational needs. However, there
is no assurance that Holley Holding USA will continue to assist
the Company in the future. A payable in the amount of $332,954
was set up to account for payables that were included in the
financial statements of PeopleNet International Corporation as a
result of the spin-off transaction. As part of the spin-off the
Company agreed to reimburse PeopleNet for these liabilities.

PRUDENTIAL SECURITIES: S&P Cuts 2 Certificate Class Ratings to D
Standard & Poor's lowered its ratings on classes G and H of
Prudential Securities Secured Financing Corp.'s commercial
mortgage pass-through certificates series 1995-MCF-2.
Concurrently, ratings are affirmed on all other classes from the
same series.

The lowered ratings on classes G and H reflect cumulative unpaid
interest shortfalls due to appraisal reductions and
nonrecoverable advances. In particular, three assets in the
pool, with a total exposure of $14.8 million, have been deemed
to have nonrecoverable advances outstanding. Property protection
advances continue to be made for the assets, contributing to
further shortfalls. Class G, which began getting shorted
interest on the April 25, 2002 distribution date when a
nonrecoverability determination was made on the second largest
loan in the pool, will continue to run interest shortfalls until
some, or all, of the underlying properties securing the non-
recoverable loans are liquidated.

The affirmations reflect the continued strong operating
performance of the performing loans in the pool and increased
credit enhancement levels.

As of the May 2002 distribution, total delinquencies for the
pool total 14.9% and include: one 60-day delinquency (1.5%);
three 90-day delinquencies (6.0%); and two REO (7.4%). All of
the delinquent assets are in specially servicing.

Specially serviced assets, including the aforementioned
delinquencies, total 20.1% of the pool by balance, with an
aggregate unpaid balance in the amount of $22.6 million and an
aggregate total exposure of $28.8 million. Delinquent specially
serviced loans with significant total exposure are as follows:

The second largest loan in the pool is secured by an assisted
living facility in Tennessee. It became REO in November 2000.
The asset has an unpaid principal balance of $5.8 million and a
total exposure of $8.6 million. The property was a nursing home
when it became REO. The property is in stage two of a three-
stage renovation process. The servicer made a nonrecoverable
advance determination on March 6, 2002. Additional shortfalls
are expected to impact the trust due to capital expenditures
associated with the renovation project. At this point in time,
it is not clear to Standard & Poor's how much the property will
be worth once the renovations are completed, and the trust may
incur significant losses upon disposition.

A $2.5 million loan secured by a multifamily facility in
Kentucky. Total exposure on the asset, which became REO in March
1998, is $4.7 million. The servicer made a nonrecoverable
advance determination in November 2001. The property was
unsuccessfully marketed for sale earlier in the year.
Significant principal losses are expected upon liquidation due
to outstanding advances. Interest shortfalls may also result if
the amount of liquidations proceeds is insufficient to pay down
outstanding advances.

Two crossed health care properties in Virginia and Texas, which
were formerly operated by Grand Court Lifestyles Inc. The loans
have been specially serviced since March 2000. The combined
unpaid balance of the loans is $4.6 million and the total
combined outstanding exposure is $6.4 million. The Texas
property is now dark. A new borrower had assumed both loans with
the intention of liquidating the Texas property. Any remaining
loan balance was to be added to the balance of the Virginia
loan, which has performed well historically, although no 2001
operating data is available. The debt service coverage (DSC) as
of December 2000 for the Virginia property was 1.82 times. This
scenario did not play out and the loans are now 90-plus days
delinquent. Significant principal loss is expected upon the
disposition of the Texas property. The servicer made a
nonrecoverable advance determination on the Texas loan in
January 2002.

There are two other delinquent loans as follows: A $2.1 million
loan secured by two Frank's Nursery properties in Michigan. The
loan is 90-plus days delinquent. Pursuant to the bankruptcy
proceedings, the loan will be modified to extend the maturity
and reduce the coupon. The properties will continue operating as
Frank's Nurseries. The second is a $1.7 million 60-day
delinquent loan secured by an office that recently sustained
flood damage. The loan was transferred to the special servicer
in May 2002. The loan reported a strong net cash flow (NCF) DSC
of 2.09x at June 30, 2002.

There are two other specially serviced loans. The first is a
$3.5 million loan secured by a retail center that suffered
interrupted debt service payments when Kmart Corp. rejected its
lease. Sublessees currently occupy the space formerly tenanted
by Kmart. The loan has become current and should return to the
master servicer. The second loan is a $2.4 million participation
in a mortgage loan encumbering a congregate care facility in
Brooklyn, N.Y. The operators of the facility, which serves as an
adult home for the mentally ill, recently lost their license to
operate the facility. The loan is expected to remain current
with a temporary waiver of escrows.

The pool consists of 51 loans with an aggregate unpaid balance
of $112.4 million, down from 85 loans with an unpaid balance of
$222.3 million at issuance. The majority of the loans are
balloon loans, at 93.2% of the pool, while the remainder are
fully amortizing. The pool consists of fixed-rate loans with a
weighted average coupon of 8.74%. The remaining loans were
originated by Midland Commercial Funding (97.2%) with the
balance originated by Union Labor Life Insurance Co. The
underlying properties are located in 27 states and the District
of Columbia, with California and Texas being the only states
with concentrations in excess of 10%, at 25% and 17%,
respectively. Significant property type concentrations include:
retail (47%); multifamily (24%); office (12%); and health care
(11%). Almost half of the retail concentration (48.4%) is
unanchored retail. All of the health care loans are specially

Trailing 12-month NCF was provided for 86% of the outstanding
loan pool. Based on this information, Standard & Poor's
calculated a weighted average DSC of 1.72x. Excluding the
specially serviced loans, the weighted average NCF DSC, based on
NCF, is 1.93x. This compares favorably to the weighted average
NCF DSC of 1.37x at securitization. No realized losses have been
reported to date.

There is one loan on the servicer's watchlist, in the amount of
$3 million. The loan is secured by a shopping center that is
anchored by a Kmart, which is scheduled to close.

Standard & Poor's analysis included running various stress
scenarios, which included the specially serviced and watchlist
loans, as well as those loans deemed to be nonperforming.

                     RATINGS LOWERED

     Prudential Securities Secured Financing Corp.
     Commercial mortgage pass-thru certs series 1995-MCF-2

          Class      To         From     Credit Support (%)
          G          D          BB       15.8
          H          D          B-       5.9

                     RATINGS AFFIRMED

     Prudential Securities Secured Financing Corp.
     Commercial mortgage pass-thru certs series 1995-MCF-2

          Class           Rating       Credit Support (%)
          A-2             AAA          73.2
          B               AAA          65.3
          A-EC            AAA          N/A
          C               AA+          53.4
          D               AA-          45.5
          E               BBB+         31.7

PSINET INC: Will Vote for Argentinian Subsidiary's Dissolution
PSINet, Inc., and its debtor-affiliates give notice of their
proposal to vote their shares of PSINet Realty Argentina, S.A.,
in favor of PSINet Realty Argentina's dissolution under
applicable local law.

PSINet Realty Argentina is a corporation organized and existing
under the laws of Argentina and a wholly-owned subsidiary of
Debtors R.G. Investments Delaware, Inc. and PSINet South America
Holdings, Inc.

The Notice is given pursuant to the Court's order granting
Debtors Omnibus Authority to Vote Their Shares of Foreign
Subsidiaries in Favor of Bankruptcy, Insolvency, Administration
or Similar Proceedings under non-U.S. Law.

According to the Court's Order, if neither the United States
Trustee for the Southern District of New York nor the Committee
objects to the proposed dissolution of PSINet Realty Argentina
within 10 days of the date of the notice (June 4, 2002), the
Debtors will be authorized to vote their shares of PSINet Realty
Argentina in favor of its dissolution without further notice or
hearing. (PSINet Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

SAFETY-KLEEN: Court Resets Asset Sale Hearing for June 17, 2002
An objection to the proposed sale of Safety-Kleen Corp.'s
Chemical Services Division was withdrawn by Onyx North America
during a Bankruptcy Court hearing Monday.  The court also set a
sale hearing for next Monday, June 17.

The court had originally set the sale hearing for June 13, but
rescheduled it to allow for a possible new bid from Onyx, which
must be received by Friday, June 14.  Onyx had submitted a bid
by the original bidding deadline of May 30, but that bid was
subsequently determined not to be "qualified" pursuant to the
court's requirements.  One qualified bid, from Clean Harbors,
Inc., was received.

Monday's court action was based on a motion filed with the
Bankruptcy Court by Onyx on May 15, 2002, objecting to the
proposed sale of the CSD, and seeking a 60-day delay in the
bidding deadline.  Safety-Kleen responded on May 23, 2002,
asking the Court to deny the Onyx objection in its entirety.

Based in Columbia, South Carolina, Safety-Kleen Corp. is the
largest industrial and hazardous waste management company in
North America, serving more than 400,000 customers in the United
States, Canada, Mexico and Puerto Rico.  Safety-Kleen Corp. is
currently under Chapter 11 bankruptcy protection, which it
entered into voluntarily on June 9, 2000.

SLEEPMASTER LLC: Court Tells Serta to Share Reports With Panel
Judge Mary F. Walrath of the U.S. Bankruptcy Court in Delaware
on June 6, Thursday, ordered Serta Inc. to share financial
documents it prepares for Sleepmaster LLC with Sleepmaster's
committee of unsecured creditors, reported Dow Jones.  The
documents contain the debtor's sales figures as well as the
financial information of all of Serta's licensees, many of which
are competitors of Sleepmaster.  According to the newswire,
Judge Walrath directed the parties to reach a confidentiality
agreement regarding the treatment of the information.  It is the
second time in a week Judge Walrath has ordered a party to
Sleepmaster's chapter 11 case to turn over documents, reported
Dow Jones.  Sleepmaster manufactures mattresses under the Serta
name, the newswire reported, under a licensing agreement with
Serta.  Serta provides the quarterly financial reports to all of
its licensees. (ABI World, June 7, 2002)

STATIONS HOLDING: Inks Pact to Sell Assets to Gray for $500MM
Gray Communications Systems, Inc. (NYSE: GCS GCS.B) of Atlanta,
Georgia, and Stations Holding Company, Inc., the parent company
of Benedek Broadcasting Corporation of Hoffman Estates,
Illinois, jointly announced that they have executed a definitive
merger agreement calling for a newly formed subsidiary of Gray
to be merged into SHC for consideration of approximately $500
million in cash.  A substantial portion of the cash
consideration paid by Gray will be used to satisfy, in full,
certain outstanding indebtedness of SHC in accordance with a
plan of reorganization to be proposed by SHC.

"This acquisition is consistent with our practice of seeking
well-managed affiliate television stations that are leaders in
mid-sized markets," said J. Mack Robinson, President and Chief
Executive Officer of Gray.  "These are excellent stations in
growing markets with limited competition.  When combined with
our existing stations, the merged group will be one of the
preeminent TV broadcasting groups," said Robert S. Prather,
Executive Vice President - Acquisitions of Gray.

Upon completion of the merger, Gray will own a total of 28
stations serving 23 television markets.  The stations will
include 15 CBS affiliates, 7 NBC affiliates and 6 ABC
affiliates.  The combined station group will have 23 stations
ranked #1 in viewing audience within their respective markets.
Gray will reach approximately 5% of total U.S. TV households.  
In addition, with 15 CBS affiliated stations, Gray will be the
largest owner of CBS affiliates in the country besides the
network itself.  The combined station group will have a
significant presence in the Southeast, Midwest, Great Lakes and
Texas.  The station locations, some of which are in adjacent
television markets, form natural geographic clusters.

Based on results for the year ended December 31, 2001, the
combined Gray and Benedek television stations produced
approximately $213.9 million of net revenue and $84.8 million of
broadcast cash flow.  Including Gray's publishing and other
operations, the combined Gray and Benedek operations for 2001
produced approximately $263.8 million of net revenue and $97.1
million of media cash flow.

Currently Gray owns 13 television stations serving 11 markets,
of which 10 are affiliated with CBS and 3 with NBC.  Gray is
publicly traded on the New York Stock Exchange and reported
total net revenue of $156.3 million in 2001 and media cash flow
of approximately $53.1 million.  For the same period Gray's
broadcast operations reported $106.4 million of net revenue and
approximately $40.8 million of broadcast cash flow.  In addition
to its television station operations, Gray operates four local
daily newspapers located in Georgia and Indiana.

As discussed below, Benedek has sold or will sell a total of
nine television stations to other parties prior to Gray
completing its acquisition of SHC.  Excluding the stations sold
or to be sold, Benedek operates 15 television stations serving
13 markets.  During 2001 those 15 stations earned approximately
$107.5 million of net revenue and approximately $44.0 million of
broadcast cash flow.

"We are excited about the prospects of combining these two great
station groups," offered James Yager, President of Benedek.  
"Our people are looking forward to closing the transaction and
joining Gray."

Gray intends to finance the acquisition by issuing a combination
of debt and equity securities.  Gray is considering raising the
equity financing through a follow-on public offering of Gray's
class B common stock.

The acquisition is subject to various regulatory approvals,
including the approval of the Federal Communications Commission
with respect to the transfer of control of Benedek's television
licenses.  The transaction is also subject to, among other
things, the approval of the United States Bankruptcy Court for
the District of Delaware, which has jurisdiction over SHC's
Chapter 11 reorganization.

Benedek will sell to a third party or parties eight television
one or more separate transactions prior to Gray's completion of
the merger transaction.  Benedek intends to use the net proceeds
of these sales to repay indebtedness under its senior secured
credit facility.  Benedek announced in April 2002 that it had
completed the sale of WTRF, Wheeling, WV.  Merrill Lynch acted
as financial advisor to Benedek.

Gray's acquisition transaction is expected to close during the
fourth quarter of 2002.

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

Gray Communications Systems, Inc. is a communications company
headquartered in Atlanta, Georgia, and currently operates ten
CBS-affiliated television stations, three NBC-affiliated
television stations, four daily newspapers, a wireless messaging
and paging business and a satellite uplink and production
business.  The Company's current operations are concentrated in
the South, Southwest and Midwest U. S.

SUNRISE TECH: Defaults on Loan Pact with Silicon Valley Bank
Sunrise Technologies International Inc. (OTCBB: SNRSE) Sunrise
Technologies International, Inc. has received a notice from the
Company's senior lender, Silicon Valley Bank declaring a default
under the Company's loan agreement and accelerating the bank's
debt. Silicon Valley Bank is owed approximately $3.75 million,
and has a first lien on all tangible assets of the Company and a
shared first lien of up to $1.5 million on the Company's
intellectual property.

Silicon Valley Bank has notified the Company that it has failed
to obtain agreement from a sufficient number of its unsecured
creditors to the proposed Restructuring plan announced by the
Company March 18, 2002, which would require 97% or more of the
unsecured creditors' claims to be converted in preferred stock
of the Company. As a result of this failure and other events of
default, the bank has made demand for immediate payment of the
full balance of principal, interest and other charges under the
loan by May 24, 2002, which the Company is unable to do.

Dale Bowerman, Chairman of the Board of Sunrise Technologies,
International, Inc., said "I very much regret the bank's action.
We have been trying very hard to restructure the Company's debts
and offer a solution that might allow all of our creditors to
recover their valid claims and still have a potential, future
return for our stockholders. I believe Silicon Valley Bank has
lost patience with this process."

David Brewer, Manager of Anesti Management LLC, which manages
the operations of Sunrise, said, "It's very unfortunate that we
have run out of time to convince Sunrise's creditors of the
virtues of the proposed Restructuring plan. I will continue to
help the Company seek new financing and other alternatives to
the bank's imminent foreclosure process. In the meantime,
Sunrise will continue to service its customers by providing
enablements and technical support for the Hyperion LTK. I am
confident that this product and the technology will continue to
be available to the world, in one form or another, regardless of
what happens next."

Sunrise Technologies International, Inc. is a refractive surgery
company based in Menlo Park, California, that has developed
holmium YAG laser-based systems that utilize a patented process
for shrinking collagen developed by Dr. Bruce Sand (the "Sand
Process") for correcting ophthalmic refractive conditions.

Internet users can access Sunrise's World Wide Web site at

TYCO INT'L: Fitch Downgrades Senior Unsecured Rating to BB
Fitch Ratings has downgraded the senior unsecured debt of Tyco
International Ltd., as well as the unconditionally guaranteed
debt of its wholly owned direct subsidiary Tyco International
Group S. A., to 'BB' from 'BBB'. The rating on the company's
commercial paper has been downgraded to 'B' from 'F3'. The
ratings remain on Rating Watch Negative. Separate rating actions
have also been taken on Tyco's 100% owned subsidiary, CIT.

The downgrades reflect concerns about Tyco's liquidity and near-
term maturity schedule, repeated changes in strategic direction,
the impact of the company's recent troubles on operating cash
flow, and shortcomings in corporate governance. The departure of
CEO Dennis Kozlowski last week evidences the uncertainties and
risks surrounding Tyco's ability to execute its most recent
strategic plan. The company has affirmed its intention to sell
CIT through an IPO in early July, an essential step in
addressing the company's near-term debt maturities.

Although Fitch believes that the sale of CIT will occur, final
proceeds are still open to question. The significant and
unexpected changes in Tyco's strategy and management during the
past several months, however, have damaged Tyco's credibility,
and its ability to raise funds in the capital markets is
extremely limited. Although Tyco is expected to have nearly $2.9
billion of cash on hand at the end of June 2002, the company is
reliant on completing asset sales to meet its maturing debt
obligations. Roughly half of Tyco's $27 billion of debt matures
by the end of calendar 2003 with the largest portions due in
February 2003 ($4.0 billion of bank debt and $2.3 billion of
convertible debt) and in November 2003 ($3.6 billion of
convertible debt). By the end of March 2003, Tyco expects to
have a refinancing requirement of approximately $5.7 billion.
This figure assumes a $2 billion operating cash balance
requirement, no asset sales and the February 2003 puttable
convertibles are repaid in cash. The successful IPO of CIT will
still leave Tyco reliant on external capital to meet maturing
obligations. The shortfall includes the effect of free cash
flow, estimated by the company to be $3.8 billion (before an
estimated $1.9 billion of acquisition spending) for the next
four quarters ending June 30, 2003 and assumes that roughly $700
million of securitizations and liabilities related to rating
triggers are refunded or paid.

Any disruptions in selling CIT would likely entail further
rating actions. Required refinancings that may become available
upon the reestablishment of investor confidence will entail
higher financing costs and more stringent credit terms. The
company's balance sheet contains goodwill of $28 billion, and
meaningful additional writedowns could potentially result in a
covenant violation under Tyco's bank debt that includes a
Debt/Capital restriction of 52.5%. Successful execution of the
IPO, a significant uncertainty, would meaningfully ease the
company's near-term maturity schedule.

Additional risks include Tyco's ability to meet internal cash
generation forecasts due to weakness in the company's end
markets and the impact of Tyco's problems on customer, supplier
and employee relationships. Tyco's credit profile and debt
ratings will be contingent not only on its ability to execute
the sale of CIT and address its near-term maturities, but on the
evolving capital structure policies and the degree to which Tyco
allocates free cash flow to debt repayment or other uses. Longer
term, the likelihood of Tyco continuing to operate as currently
organized remains an important issue to be resolved by the
company, and major structural changes could still occur. To a
large degree, this will depend on the results of the search for
a new CEO that Tyco has recently undertaken. The urgency of the
numerous challenges facing Tyco may limit its operating and
financial flexibility, a risk that is incorporated in Fitch's
Negative Watch on Tyco's rating.

US AIRWAYS: Files Application for $900MM Federal Loan Guarantee
US Airways filed its application with the Air Transportation
Stabilization Board for a $900 million federal government
guarantee of a $1 billion loan that the airline will use in a
corporate restructuring as it seeks to recover from the
continuing financial impact of the September 11 terrorist

In the reporting periods since the September 11 attacks, the
nation's seventh-largest airline has incurred net losses
totaling $1.425 billion, much of it directly related to the
post-September 11 drop in air travel, higher security costs, the
prolonged closure of Washington's Ronald Reagan National
Airport, and the disproportionate impact of the attacks on the
airline's East Coast route network.

President and Chief Executive Officer Dave Siegel, who took over
management of the airline in March 2002, has spent the last
three months putting together a restructuring plan to return the
airline to profitability, with the federal loan guarantee and
cost reductions as the cornerstones of the restructuring to
ensure sufficient cash resources and adequate liquidity.

"No airline has felt the impact of the steep drop in consumer
demand for travel more than US Airways," said Siegel.  "While
our position at Reagan National Airport and our strong route
network in the East have always been assets, over the past nine
months, those strengths have worked against us as travelers take
the train, drive, find cheap fares designed to spur travel, or
just stay home."

Siegel said that the airline is in active negotiations with its
labor unions, vendors, lessors and other stakeholders to
implement more than $1.3 billion in annual cost reductions that
will improve its competitive position.

"Our intent is to restructure US Airways and make it a
profitable and successful airline that will be a competitive
force, especially on the East Coast," said Siegel.  "This loan
guarantee is not an entitlement, and we know we must demonstrate
our ability to repay the loan, keep our costs in check, and have
a viable business plan.  We will spend the coming days working
with the ATSB staff to address their questions, respond to their
concerns, and finalize our application so that we have a strong
and compelling case for the loan guarantee."

US AIRWAYS: PSA Unit Reaches Agreement for Regional Jet Flying
US Airways announced that US Airways Express carrier, PSA
Airlines, has reached an agreement with the Air Line Pilots
Association that will allow the operation of regional jet

The agreement between PSA Airlines and ALPA's MEC is for
regional jet flying to be undertaken by the carrier's pilots.  
PSA Airlines -- a wholly- owned subsidiary of US Airways Group,
Inc. -- currently operates a fleet of 30 Dornier 328 turbo-prop
aircraft, serving 30 destinations centered in the Ohio Valley
and in the eastern U.S.

US Airways President and Chief Executive Officer Dave Siegel
said the agreement is "an important step" in preparing for US
Airways' expansion of regional jet services across its U.S.
network.  "This agreement is mutually beneficial for both the
company and its employees," he said.  "The growth of regional
jet operations represents the future for US Airways.  It is
central to the successful restructuring of our company."

PSA Airlines' previous agreement with ALPA did not include
provisions for the operation of regional jet aircraft.  The
development follows an agreement in April between US Airways and
ALPA to increase the number of regional jets within its US
Airways Express network from 70 to 140.

US Airways is currently evaluating aircraft types, and will be
making a decision shortly on its selection of regional jet
equipment, delivery schedules and the number of aircraft that
will be deployed in PSA Airlines. PSA Airlines, based in Dayton,
Ohio, employs more than 1,500 staff and currently operates 200
daily departures.

Siegel said that US Airways is in active negotiations with
regional jet manufacturers and credit providers to secure the
necessary capital required to obtain more RJ aircraft.  He said
that the placement of RJs at PSA Airlines would be determined by
US Airways' ability to secure aircraft delivery positions and
financing, but that "a major impediment -- the lack of a labor
agreement -- has now been resolved."

PSA Airlines is one of three wholly-owned US Airways Express
carriers, which, together with seven other affiliate carriers,
currently operate more than 2,200 US Airways Express flights
daily, serving 162 destinations in the U.S., Canada and the

VIATEL INC: Successfully Emerges from Chapter 11 Proceedings
Viatel Holding (Bermuda) Limited (OTC Bulletin Board: VTLAV),
the builder-operator-owner of a state-of-the-art pan-European
network today announced that Viatel, Inc.'s Plan of
Reorganization has become effective.  As previously announced,
the Plan received overwhelming approval from creditors on 8 May
2002 and was confirmed by the United States Bankruptcy Court for
the District of Delaware on 21 May 2002.

Pursuant to the Plan, the unsecured creditors of Viatel, Inc.
and its United States subsidiaries, will receive, on a pro rata
basis, a total of 10,560,000 common shares of Viatel Holding
(Bermuda) Limited, a new holding company created to effectuate
the restructuring transaction.  Viatel, Inc.'s common (OTC
Bulletin Board: VYTLQ) and preferred stock have been cancelled.
The new common shares of Viatel Holding's will initially be
traded over the counter under the symbol "VTLAV" until Viatel
Bermuda qualifies for listing on the NASD National Market.

Viatel's Chairman and Chief Executive Officer, Michael J.
Mahoney, noted "With the demise of a number of our European
competitors, including 360 Networks, Pangea, Carrier 1 and KPN-
Qwest, and the recent decisions by numerous other competitors to
exit most, if not all, of their European markets, our
reemergence could not have happened at a better time."  "With
our debt free balance sheet and core network assets intact, we
are well positioned to provide customers with a safe harbor
during this extremely turbulent time."

Mahoney added, "We wish to thank our customers for their support
during this difficult period and look forward to continuing to
provide them with the highest quality of service.  We also wish
to thank our creditors for their vote of confidence and our
employees for their dedication and hard work during these past
13 months".

Viatel is the builder-operator-owner of a state-of-the-art pan-
European fiber-optic network and a provider of clear channel
broadband, IP transit and transport, and virtual private
networks to corporations, communications carriers, Internet
service providers and other wholesale customers, and end-user
business customers.  For more information about Viatel, visit
the group's Web site at

WARNACO: Seeks Approval to Settle Dispute with Banco Nacional
Banco Nacional de Comercio Exterior, S.N.C. of Mexico owned
three pieces of property and manufacturing facilities in the
Mexican municipalities of Huejotzingo, Huamantla and Tetla.  In
October 1998, Warnaco's non-debtor Mexican subsidiaries, Vista
de Pueblo, S.A. de C.V., Vista de Huamantla, S.A. de C.V. and
Centro de Corte de Tetla, S.A. de C.V., entered into a lease
agreement with Banco Nacional for the three facilities for an
initial term of 20 years with options to renew for another ten

To guaranty the payment of rent, J. Ronald Trost, Esq. at Sidley
Austin Brown & Wood, LLP in New York, explains, Warnaco executed
a Guaranty in favor of Banco Nacional.  Banco Nacional has also
entered into a Credit Agreement on November 17, 1998 for the
benefit of the Mexican Subsidiaries to finance the construction
of the Facilities.  Under the Credit Agreement, Mr. Trost
continues, amounts paid for rent and other amount due and owing
under the Leases were applied to amortize the amounts due and
owing under the Credit Agreement.

Under the Lease, Mr. Trost tells the Court, the rent may be
accelerated and become immediately due in the event of default.
Banco Nacional will also have the right to terminate all the
Leases and forfeit the Facilities.

The Warnaco Group, Inc., and its debtor-affiliates defaulted
under the Leases, Mr. Trost explains, when in late 2000, the
Debtors decided to close the Huejotzingo Facility and on June
11, 2001, the Debtors filed Chapter 11 protection, thus,
triggering the Warnaco Guaranty.

Accordingly, on January 4, 2002, Banco Nacional filed a proof of
claim, Claim No. 01846, in the amount of $473,760,649 plus
$1,000,000 in attorneys' fees.  However, the Debtors believe
that, at least of the next several years, the Huamantla and
Tetla Facilities are crucial to the Debtors' business operation.

Pursuant to Federal Rule 9019(a), the Debtors seek the Court's
authority to enter into a settlement agreement with Banco
Nacional under these terms:

    (a) The Huejotzingo Lease will be deemed terminated as of
        April 22, 2002;

    (b) Warnaco will pay the outstanding rent due under the
        Huejotzingo Lease in the total amount of $104,487,
        together with $8,000 for the cost of an engineer's
        report prepared in connection with Warnaco's exit from
        the Hujotzingo Facility, and will complete certain
        required repairs identified in the engineers' report;

    (c) the Huamantla Lease and the Tetla Lease will be amended
        to terminate on July 31, 2005 and Warnaco, the Initial
        Term, at its sole discretion, may extend the Initial
        Term, in the first instance, for a period of one to
        three years, and, thereafter, for seven successive
        renewable three-year terms, provided that Warnaco gives
        at least 12 months prior written notice of any

    (d) during the Initial Term, the rent payable under the
        Huamantla and Tetla Leases will be at a discount of
        19.2% less than the rent provided for in the existing
        Leases, and the rent during any renewable term will be
        at the rate set forth in the existing Leases;

    (e) the Warnaco Guaranty will be amended to secure the
        obligations of Vista de Huamantla, S.A. de C.V. and
        Centro de Corte de Tetla, S.A. de C.V. under the Amended

    (f) Banco Nacional will withdraw the Banco Nacional Claim,
        and, in exchange of the foregoing, Banco Nacional will
        have an allowed unsecured claim in the amount of
        $9,500,000 in Warnaco's Chapter 11 case; and

    (g) Warnaco and Banco Nacional will exchange mutual

Mr. Trost contends that the settlement is an exercise of a sound
business judgment of the Debtors because:

    (a) the Settlement resolves the significant claims against
        the Debtors that is triggered by the closing of the
        Huejotzingo Facility and the bankruptcy filing;

    (b) the Settlement ensures the Debtors of continued
        occupancy and use of the Huamantla and Tetla Facilities
        for the next three years, at least;

    (c) the Debtors will enjoy a 19.2% discount on its rent
        resulting in a savings of at least $760,000 over the
        next three years; and

    (d) the Settlement avoids the substantial costs, uncertainty
        and risks associated with pursuing an adversarial
        resolution of the situation. (Warnaco Bankruptcy News,
        Issue No. 26; Bankruptcy Creditors' Service, Inc.,

WILLIAMS COMMS: Shareholders Seek Equity Committee Appointment
Approximately 4,400 individual and institutional shareholders
who collectively hold approximately 60,000,000 shares of
Williams Communications Group, Inc. and its debtor-affiliates'
issued and outstanding common stock ask the Court, pursuant to
Section 1102(a)(2) of the Bankruptcy Code, to order the
appointment of a committee of holders of common stock.

According to Michael S. Etkin, Esq., at Lowenstein Sandler P.C.
in New York, New York, in a letter dated April 23, 2002, it was
formally requested that the United States Trustee for the
Southern District of New York appoint an Equity Committee in
these cases.  On April 24, 2002, a second letter was written to
Ms. Pamela J. Lustrin, Esq., Assistant United States Trustee for
the Southern District of New York, as the responsible attorney
in this case, again requesting the appointment of an Equity
Committee.  Shortly after the writing of the April 24, 2002
letter, a conversation took place between Ms. Lustrin and one of
the counsel for the Shareholders.  In this conversation in Ms.
Lustrin indicated that she would not consider the issue of
appointment of an Equity Committee until after the appointment
of the Official Committee of Unsecured Creditors.  By notice
dated May 2, 2002, Ms. Lustrin gave notice on behalf of the U.S.
Trustee of the appointment of the Creditors Committee.

On May 1, 2002, Mr. Etkins relates that a third letter was
written to Ms. Lustrin by counsel for the Shareholders providing
further analysis and detail in support of the appointment of an
Equity Committee in these cases.  On May 8, 2002, Ms. Lustrin
was further advised in writing by counsel for the Shareholders
that specific shareholders (who signed certifications of their
willingness to serve on an Equity Committee) would be willing to
serve on an Equity Committee.  Approximately five shareholders
indicated that they would be willing to serve on that Committee,
although it was obviously recognized that the composition of the
Committee was a matter for determination by the U.S. Trustee.

Also on May 8, 2002, Mr. Etkins avers that co-counsel to the
Shareholders wrote an additional letter to Ms. Lustrin
requesting the formation of an Equity Committee.  That letter
also provided substantive reasons for the necessity of a
committee in this case.  Conversations with Ms. Lustrin followed
the writing of the letters.  Ms. Lustrin explained that this
correspondence, including all prior letters, would be furnished
to counsel for the Debtor and counsel for the Creditors
Committee for their comment.  If those comments were ever
received in writing from the Debtor and the Creditors Committee,
they have not been furnished to the Shareholders despite several
telephonic and written requests.

Early in the discussions with the U.S. Trustee on this matter,
Mr. Etkins states that many Shareholders were concerned about
their treatment in this Chapter 11 proceeding and were therefore
also requesting individually the appointment of an Equity
Committee in this case.  Toward that end, the Shareholders are
aware of more than 25 letters that were written to the U.S.
Trustee expressing the desire and necessity for the appointment
and many dozens of phone calls were also placed to the U.S.
Trustee requesting the appointment of an Equity Committee.
During the course of these communications, the Shareholders
requested a meeting with the U.S. Trustee to discuss further
reasons for the appointment of an Equity Committee.  The U.S.
Trustee responded that a meeting would only be necessary if
there were questions that the U.S. Trustee had of the
Shareholders after the U.S. Trustee received replies from the
Debtor and the Creditors Committee concerning the appointment of
an Equity Committee.  Prior to the ultimate response of the U.S.
Trustee to the request for the formation of an Equity Committee,
the U.S. Trustee did not request the meeting.

Mr. Etkins accords that on May 17, 2002, by written
communication to counsel for the Shareholders and to parties who
had made written request for the appointment of an Equity
Committee, the U.S. Trustee stated that they would not appoint
an Equity Committee in these cases.  The primary reason given by
the U.S. Trustee was that, according to the 2001 year end
financial filings along with the 2002 Q1 financial filings, the
Debtors were shown to be insolvent and further, the 2002 Q1
filing showed financial deterioration in the Debtors as compared
with the year end 2001 filing.  Further, according to the U.S.
Trustee, the Debtor and the Creditors Committee opposed
formation of an official equity committee.

As the U.S. Trustee has already declined to appoint an Equity
Committee, Mr. Etkins believes that a hearing on this Motion
must be set at the earliest possible date.  The Debtor has
already filed its proposed Plan of Reorganization and Disclosure
Statement, which is consistent with the terms and conditions of
a prepetition Lock Up Agreement between the Debtor, note-holders
of the Debtor, the Debtor's secured lenders and other parties.
Specifically, if confirmed, the Plan will cancel and discharge
the "interests" of public shareholders in the Debtor and the
only debt remaining will be that owed to the secured lenders.  
The note-holders' claims and those of the Debtor's former
parent, The Williams Companies, Inc., will be recast as newly
issued equity in the reorganized Debtor.  Among other things,
the Debtor is contractually obligated to confirm this Plan by
July 15, 2002 although this confirmation deadline can be
extended in exchange for a reduction payment to the Bank Group.

The critical tasks which an Equity Committee, on behalf of the
public shareholders, will perform in this case are:

A. Lock Up Agreement Negotiations: A review of the Lock Up
   Agreement indicates that the Debtor's management knew on
   February 23, 2002 (and much earlier) that it was going to
   file for Chapter 11 protection. It gave away, as of that
   date, any pretense that it intended to protect the interests
   of public shareholders in this case. It is necessary to
   review the actions of management to see if the manner by
   which they proceeded in connection with their activities
   before and after February 23, 2002 were in furtherance of
   their fiduciary responsibilities to the corporation and to
   the shareholders.

B. Debtor's Valuations and Projections: An analysis of the
   projections which the Debtor has prepared in support of its
   Plan must be made to determine if those projections either
   support the enterprise value given by the Debtor to its
   business or whether the projections are overly conservative
   and would, upon proper analysis, support a higher valuation
   of the company. If an Equity Committee is not formed, there
   is no party in this case who will look at the assets on
   behalf of the public shareholders as an operating business to
   see if the values given to those assets by the Debtor are
   accurate. In this regard, the Shareholders wish to make the
   following additional points:

   a. A simple assets minus liabilities or balance sheet
      approach is not a true measure of value. The Debtor
      informed creditors and shareholders that assets exceeded
      liabilities at dates that were very recent as compared
      with the date of the Chapter 11 filing. However, shortly
      prior to its Chapter 11 filing, the Debtor engaged in a
      significant write-down of its assets. This action and its
      timing must be viewed with extreme suspicion. To the
      extent the decision of the U.S. Trustee regarding Equity
      Committee formation was based on a simple balance sheet
      statement of assets and liabilities, the U.S. Trustee's
      predicate for its decision should not be determinative;

   b. The value of the Debtor's assets as shown on the Debtor's
      books and records are based upon cost. However, the
      intrinsic or going concern value of these assets may be
      well in excess of their cost;

   c. There have been offers by outsiders to purchase the assets
      of the Debtor and to share some of the proceeds with the
      equity holders in this case. This interest in the purchase
      has been ignored by Debtor's management. The only way to
      determine fair value in this case is to objectively look
      at these offers and encourage a bidding process. No
      currently represented constituency has shown an interest
      in this regard;

   d. If the Plan, as proposed, is confirmed, there will only be
      the secured bank lines remaining as debt on the Debtor's
      consolidated books and records. This is less than 20% of
      the value of the Debtor's consolidated assets based upon
      the Debtor's valuations as of the filing of this case. A
      real question of good faith is presented where the
      de-leveraging of the Debtor is so drastic given the fact
      that the Debtor's operations can clearly sustain debt at a
      much higher level. The higher the debt level the Debtor
      can sustain, the more the Debtor has the ability to retain
      or recognize and maintain the value of the equity
      securities held by the public shareholders;

   e. An analysis of the cash flows that have been developed
      with regard to future operations based upon current
      customers, new customers, and new contracts with existing
      customers must be made. Until this is thoroughly
      investigated, there is no way to determine whether there
      is value beyond the Debtor's existing debt structure;

   f. The Shareholders believed, and it was represented by the
      Debtor very recently, that the Debtor is a major player in
      its market niche. Much of the Debtor's competition has
      gone out of business and a consolidation in the industry
      is otherwise under way. It is only a matter of time before
      the consolidation is complete, the over-development in the
      industry is absorbed by necessary demand, and the Debtor's
      pre-eminent place in its market is recognized by the
      investment community. The Debtor and the other parties to
      the Lock Up Agreement have picked a time when the Debtor's
      industry is depressed. They have set up a reorganization
      structure that will give them the full benefit of the
      return of the Debtor's industry to profitability and
      greater value. They seek under this Plan and the Lock Up
      Agreement to deprive the public shareholders of any
      equity, when it is realized. When Chapter 11 was written
      nearly 70 years ago after the Great Depression, it was
      done in an effort to avoid just these kinds of abuses.
      "Reorganization Value" under Chapter 11 could thus be
      preserved for a time when the economy of the United States
      regained its value and its footing. In this case, the
      parties to the Lock Up Agreement are using Chapter 11 to
      achieve the exact opposite result. Small and scattered
      public shareholders should have an opportunity to level
      the playing field by having an equity committee to
      advocate their interests before being summarily "wiped
      out" by enormous financial entities and insiders;

   g. Management clearly is in conflict with the interests of
      the public shareholders. They have negotiated preferential
      arrangements for themselves with the existing creditors.
      They should not be permitted to act in a conflicting
      position vis-a-vis the interests of public equity holders.
      Their conduct has to be examined;

   h. Certain creditors who are having their claims converted to
      equity are being given an opportunity to purchase
      additional shares following Plan confirmation. Why are
      they being preferred in this way? There is no explanation
      why they are permitted to participate in the future
      profitability of the Debtor and others are not. This also
      must be examined;

   i. An analysis of the different contracts held by the Debtor
      with third party customers must be carefully examined. The
      Debtor states in its Disclosure Statement that it has very
      valuable "Strategic Alliances and Relationships" with SBC,
      TelMex, and KDDI, large international entities. Did the
      U.S. Trustee consider those strategic alliances and
      relationships in relying only on the Debtor's balance
      sheet (and current operating losses) in determining not to
      appoint an Equity Committee? Losses are to be expected
      until there is stabilization after a large public company
      files for chapter 11; and

   j. The Equity Committee must investigate why the Debtor
      jeopardized its financial well being by having a wholly-
      owned subsidiary in the second half of 2001 purchase
      $551.0 million of WCG's senior redeemable notes in the
      open market. Prudent management would have held on to the
      $551.0 million to ride through the storm in its industry.

C. Secured Bank Group Claims and Cash Collateral:  Pursuant to
   the cash collateral motion, the Debtor agreed that no portion
   of the cash collateral or carve out could be used for any
   litigation or threatened litigation against the prepetition
   secured parties.  In reviewing the proposed Motion to assume
   the Lock Up Agreement, the Debtor alleges that the "operating
   company" has approximately $660,000,000 in cash and short
   term investments available for use in its business operations
   after making a $200,000,000 payment to the Bank Group. No
   reference is made to other assets of the Debtor although the
   book value of the Debtor's assets are close to $6,000,000,000
   and collateralize the bank debt which is currently
   $775,000,000. The cash collateral agreement should be subject
   to investigation since the question arises as to why the
   Debtor gave up many of its rights when it appears that the
   Bank Group is oversecured. Also, WCG collateralized its
   guarantee within one year of the filing of the Chapter 11
   petition. This transaction must also be investigated. It
   would not be unreasonable to conclude that the Debtor, TWC,
   and the Bank Group and other parties to the Lock Up Agreement
   structured these prepetition agreements to "eliminate" any
   opportunity for small public investors to investigate and
   effectively advocate their interests before same were
   cancelled and discharged.

D. The Lock Up Agreement: The Lock Up Agreement is a binding
   contract under which two of the three main constituencies of
   this case are contractually obligated to vote in a certain
   manner upon presentation of a Plan of Reorganization that the
   Debtor is contractually bound to present to the Court for
   confirmation and which it has already filed with this Court.
   It is specifically aimed toward establishing the rights of
   the Debtor and the voting constituencies who are signatory to
   it and eradicating the interests of the third main voting
   constituency in this case, the public shareholders.  The
   Debtor is funded in this effort, as are its professionals.
   The Creditors Committee is also funded by the Bankruptcy
   Estate.  It is likely that the secured creditors are also
   being funded by the estate.  It is only fair that the small
   and scattered public shareholders, through an Equity
   Committee, be able to retain professionals to advocate their
   interests and be paid from the Bankruptcy Estate.

E. Securities Law Damage Claims: There are a number of
   Securities Law claims that have been filed against WCG and
   other non-debtor defendants around the country.  These claims
   have been consolidated in the United States District Court
   for the Northern District of Oklahoma (Tulsa Division).  The
   Lock Up Agreement provides that these claims shall be
   extinguished and discharged under the Plan.  Many of the
   Shareholders are potentially beneficial participants in this
   litigation and should be permitted to maintain their claims
   for damages, pending conclusion of the litigation that has
   been filed.

F. TWC's Involvement With Its Former Subsidiary, WCG: The
   investigation now being undertaken by the Creditors Committee
   may also give rise to the possibility of the subordination of
   the claim of TWC, the Debtor's former parent, or the
   disallowance of the TWC claims. No one, as a result of the
   Lock Up Agreement and the rush to confirm the Debtor's Plan,
   will be in a position to effectively investigate or prosecute
   those claims if the Creditors Committee makes a deal with TWC
   that is not in the best interest of shareholders.  The
   Creditors Committee's main interest is to receive the new
   equity the Debtor wants to give TWC.  As noted in the Wall
   Street Journal, TWC is having its own problems in the market
   place and it is not inconceivable that it will want the
   matter quickly resolved.

G. Motion to Assume Lock Up Agreement: The Debtor has made a
   Motion to assume the Lock Up Agreement as an executory
   contract. The effect of this Motion upon the eventual Plan
   and upon claims in this Bankruptcy Case must be reviewed.  
   The Shareholders have objected to this Motion and the hearing
   upon it has been adjourned until June 27, 2002.  No other
   objections to this Motion have been noted.

H. Costs: It is fair to assume that this Court will have a
   concern with regard to costs. The Debtor proposes to
   restructure over $7,000,000,000 in debt. Debtors' counsel
   indicate in their employment application that they received
   more than $6,000,000 prior to the filing of the Bankruptcy
   Petition on account of their work on restructuring and
   bankruptcy issues.  Based on other large cases, it would not
   be presumptuous to assume that the professional fees of the
   Debtor, the Creditors' Committee and other parties to the
   Lock Up Agreement will substantially exceed the $6,000,000
   already paid to the Debtor's lawyers.  Costs of an Equity
   Committee will pale in comparison to those costs.  The Court
   can monitor costs to avoid abuses by all the professionals.

I. Public Policy: Finally, the Court has a very strong interest
   in seeing that the Bankruptcy process is fairly and
   impartially administered.  The Court has already seen how
   some shareholders perceive the process thus far.  The
   Bankruptcy Code was passed in 1978 and enacted on October 1,
   1979.  At its forefront was the change that administration of
   bankruptcy cases would not take place behind closed doors or
   in meetings where all interested parties were not allowed to
   participate. Instead, Congress sought to create a system
   where fairness and disclosure were the watchwords of the
   process.  The Debtor's self-dealings with its Bank Group, its
   former parent, TWC, and certain of its note-holders and its
   existing management (who stand to benefit by the release
   provisions in the Plan and by forgiveness of bonus payments
   made to them) is exactly what Congress intended to prevent.  
   At the present time, no one is looking out for the public
   shareholders.  To level the playing field, this Court should
   grant the public shareholders an opportunity to test the
   Debtor's Plan and its valuation assumptions and conclusions
   as well as investigate other aspects of the Plan and pre-
   petition activity that must be subject to fair and reasonable
   scrutiny under the Code, by the appointment of an Equity

Mr. Etkins points out that the Debtors are solvent even on a
balance sheet test if the alleged $2,300,000,000 claims of TWC
are subordinated to the level of equity or disallowed
altogether. If the TWC claims were disallowed, the public
shareholders as well as the preferred shareholders would
preserve some of their interests in the Reorganized Debtor.   
Because the public shareholders are only now learning about the
facts regarding the Spin-Off, at this point in time, they
necessarily have to rely on the Creditors Committee charges that
the TWC claims are suspect and, therefore, possibly not
allowable.  It is also reasonable to anticipate that TWC and the
Creditors Committee will come to some settlement regarding TWC's
claims to enable the Debtor to further accelerate the plan
confirmation process.  Before that occurs, the public
shareholders need to do their own investigation of the TWC
claims to determine if they are entitled to be part of a plan.  
Through an Equity Committee the public shareholders will, at
least, have their "day" in court.

Mr. Etkins contends that the facts and circumstances supporting
the appointment of an Equity Committee are not only compelling,
but overwhelming.  It is right and fair to appoint the
Committee. In this case, a Plan has been filed which cancels and
discharges the interests of public shareholders.  The
disallowance or different treatment of the claims of TWC could
change the public shareholders treatment under a new plan even
assuming the enterprise value alleged by the Debtor.  The
additional reasons in favor of the appointment of an Equity
Committee have been detailed above and include the Debtor's
abdication of its responsibilities to its public shareholders in
order to benefit its former parent, TWC, and themselves.
(Williams Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

* H. Sean Mathis Joins Financo Restructuring as Special Advisor
Financo Restructuring, the financial reorganization advisory
division of Financo, Inc., one of the country's leading
independent investment banking firms, announced that H. Sean
Mathis, has joined the firm as Special Advisor, effective
immediately. Mathis will join Financo Restructuring's senior
advisory team, including Robert Miller (President) and Mary Ann
Domuracki (Director), in offering restructuring advice to
troubled companies, their creditors and other interested

"Sean has over twenty years experience with troubled companies
as both an investor and an advisor," said Robert Miller.  "He
adds another experienced, senior level professional to our
advisory staff."

Mathis joins Financo as a seasoned business investor and

Most recently he was President of Litchfield Asset Holdings, an
investment advisory company he founded in 1983.  Mathis played
an integral role in leading several prominent companies through
restructuring, serving as Chairman of the Official Shareholders
Committees for A.H. Robins Co., Salant Corporation, Allis-
Chalmers Corporation and Revere Copper and Brass.

During the 1990s Mathis held several CEO positions with
companies such as Ameriscribe Corporation, a New York Stock
Exchange Service Company, and RCL, a predecessor firm of Allied
Digital Technologies, a manufacturer of audio cassettes, video
tapes, CDs and CD-ROMs.  Mr. Mathis began his career at Lehman
Brothers as an investment banker.

Mathis received his B.A. from Allegheny College and his M.B.A.
from Wharton Graduate School of Business, University of
Pennsylvania.  He currently serves on the board of directors of
Kasper A.S.L., Ltd. and Thousand Trails, Inc.

Financo Restructuring provides financial advisory and investment
banking services to companies, their creditors and other
interested parties.  Robert Miller, the President of Financo
Restructuring, is one of the country's leading bankruptcy
experts with over twenty years of experience in major, complex
restructurings including Macy's, Trump Taj Mahal, Days Inn, A.H.
Robins, Continental Airlines, Insilco, Charter Company,
Integrated Resources and Zales.

Financo, Inc. is one of the country's leading independent
investment banking firms, with particular experience and
expertise in the retail and merchandising sectors.  Founded in
1971 by Gilbert W. Harrison, its Chairman, the firm specializes
in mergers and acquisitions, financial restructuring, principal
transaction sponsorship and consulting.  For more information
please visit Financo's Web site at

* Meetings, Conferences and Seminars
June 13-15, 2002
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
         Securities, and Bankruptcy
            Seaport Hotel, Boston
                  Contact: 1-800-CLE-NEWS or http://www.ali-               

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.

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

This material is copyrighted and any commercial use, resale or
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                     *** End of Transmission ***