TCR_Public/020628.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, June 28, 2002, Vol. 6, No. 127     

                          Headlines

3DO COMPANY: Fails to Comply with Nasdaq Listing Requirements
ADELPHIA BUSINESS: Secures $15MM DIP Financing from Beal Capital
ADELPHIA BUSINESS: TD Bank Discloses $222 Million Exposure
ADELPHIA COMMS: S&P Drops Ratings to D After Chapter 11 Filing
ADELPHIA COMMS: Court to Consider Proposed DIP Financing Today

ADVANCE AUTO: S&P Upgrades Rating to BB- On Improved Performance
ALAMOSA: S&P Puts B- Rating on Watch With Negative Implications
ALLIANCE LAUNDRY: S&P Rates Proposed $243MM Bank Facility at B
ALTERRA HEALTHCARE: Gets More Time to Meet AMEX Listing Criteria
ATLANTIC EXPRESS: S&P Junks Ratings Over Weak Financial Profile

AUTOFUND SERVICING: Will Cease Operations Due to Lack of Capital
AVADO BRANDS: Makes Interest Payment on 9-3/4% Senior Notes
BORDEN CHEMICALS: Court Nixes Committee's Move to Convert Case
BREAKAWAY SOLUTIONS: Taps Klehr Harrison as Litigation Counsel
BRILLIANT DIGITAL: Gets More Time to Meet AMEX Listing Standards

CANAL CAPITAL: Todman & Co. Expresses Going Concern Doubt
CLASSIC COMMS: Taps Daniels & Associates as Cable Systems Broker
COMMUNITY HEALTH: Fitch Rates $1.25BB Senior Bank Facility at BB
COSERV ELECTRIC: Files Disclosure Statement & Plans in Texas
COSERV ELECTRIC: Unveils Terms of Chapter 11 Reorganization Plan

COVANTA ENERGY: Wants Plan Filing Exclusivity Moved to Nov. 27
DOBSON COMMS: Declares In-Kind Dividend on 13% Preferred Shares
DOMINO'S INC: S&P Raises Rating to BB- on Improved Performance
E.SPIRE COMMS: Wants Lease Decision Period Stretched to Sept. 30
ENRON CORP: Court Okays Settlement Agreement with Global Risk

ENRON CORP: Court Okays Alston & Bird as Neal Batson's Counsel
ETOYS INC: Signs-Up Ernst & Young as Bankruptcy Tax Accountants
EXIDE: US Trustee Balks At PricewaterhouseCooper's Retention
EXODUS COMMS: Gets Okay to Settle Dispute with Lakeside Purchase
FLAG TELECOM: Court Okays Appleby Spurling as Bermuda Counsel

FOCAL COMMS: S&P Junks Bank Loan & Senior Unsecured Debt Ratings
FRIEDE GOLDMAN: Will Auction-Off Halter Marine Assets on July 16
GEMSTAR-TV GUIDE: S&P Affirms BB+ Corporate Credit Rating
GENERAL DATACOMM: Taps Fiesner Wolfson for Chase Litigation
GLENOIT: Seeks to Extend Solicitation Period Pending Auction

GLOBAL CROSSING: Committee Taps Laiken as Actuarial Consultants
GREAT LAKES: Violates Nasdaq Continued Listing Requirements
GREEN TREE: Fitch Downgrades Certain Transactions to Junk Level
GROUP TELECOM: Canadian Court Grants CCAA Protection
HAYES LEMMERZ: Gets OK to Settle Schenk Intercompany Receivables

HARDWOOD PROPERTIES: Shareholders Approve Liquidation Plan
IMMUNE RESPONSE: Appoints Bjorn Lydersen as VP of Manufacturing
INTRAWARE INC: May 31 Balance Sheet Upside-Down by $3.4 Million
JUPITER MEDIA: Files Proxy Statement Describing Liquidation Plan
LOG ON AMERICA: E&Y Doubts Ability to Continue Operations

MALAN REALTY: Advises Shareholders to Reject MacKenzie's Offer
MANDALAY RESORT: Fitch Holds Low-B Rating Despite Improvements
MEDSOLUTIONS INC: Ability to Continue Operations Still Uncertain
MENTERGY LTD: Intends to Transfer to Nasdaq SmallCap Market
METALS USA: Bags Approval to Hire Colliers Bennett as Broker

MORTON INDUSTRIAL: Falls Below Nasdaq Continued Listing Criteria
MOTHERS WORK: S&P Rates $125MM Senior Unsecured Notes at B+
NATIONAL STEEL: Asks Court to Lift Stay to Pursue Toyota Setoff
NATIONSRENT INC: Plan's Classification & Treatment of Claims
NEON COMMS: Seeks Open-Ended Lease Decision Period Extension

NETMANAGE INC: Fails to Meet Nasdaq Continued Listing Standards
PACIFIC GAS: Pushing for Third Extension of Exclusive Periods
PARAGON TRADE: Weyerhaeuser Will Contest Claims in Lawsuit
PERSONNEL GROUP: Collects $19.2MM Federal Income Tax Refunds
POLAROID CORP: John W. Loose Elected as Chairman of the Board

POLAROID CORP: Court to Consider One Equity's Revised Bid Today
POWER EFFICIENCY: Lacks Resources to Satisfy Liquidity Needs
PSINET INC: Wins Approval to Sell TX Real Property for $11MM+
QSERVE: Seeks $12.5MM Cash Collateral Use to Continue Operations
QSERVE COMMS: Case Summary & 20 Largest Unsecured Creditors

REGAL ENTERTAINMENT: S&P Assigns BB- Rating to Corporate Credit
REPUBLIC TECH: USWA Seeks to Block Pension Plan Terminations
SLI INC: Mulling Broad Range of Alternatives to Restructure Debt
SAFETY-KLEEN: Sues Onsite Environ. to Recoup $1MM+ Preference
SELECT MEDIA: Looks to New Acquisitions to Stem Continued Losses

SUN HEALTHCARE: Wants Claims Objection Deadline Moved to Oct. 26
SWEET FACTORY: Wants to Stretch Lease Decision Period to Aug. 12
VERSATEL TELECOM: Wants to Bring-In DF King as Balloting Agent
WARNACO GROUP: Court Okays Settlement Pact with GE Capital Corp.
WILLIAMS COMMS: Bringing-In Blackstone for Financial Advice

WINSTAR COMM: Court Approves DIP Credit Pact Carve-Out Expansion
WORLDCOM: Full-Text of the SEC's $3.8 Billion Fraud Suit
WORLDCOM: ITXC Chair Disheartened by Improper Acctg. Practices
WORLDCOM: Financial Restatement Spurs S&P to Cut Rating to CCC-
WORLDCOM: Fitch Junks Sr. Unsecured Ratings on Accounting Issues

WORLDCOM: SEC Demands Detailed Report from WorldCom by July 1
XO COMMS: Court Sets Disclosure Statement Hearing for July 19

* BOOK REVIEW: Land Use Policy in the United States

                          *********

3DO COMPANY: Fails to Comply with Nasdaq Listing Requirements
-------------------------------------------------------------
The 3DO Company (Nasdaq: THDO) says it'll return to
profitability in the quarter ending June 30, 2002, and expects
to beat street estimates for net revenue, net income, and
earnings per share. In addition, the company expects to announce
final details of a planned credit facility of up to $15 million
within a few days. The company also announced that the 120-day
period during which preferred stockholders could convert to
common stock on favorable terms ended on June 14, 2002.

Separately, the company disclosed that because its common stock
price has remained below $1.00 per share, it is not currently in
compliance with Nasdaq's minimum bid price requirement (Nasdaq
Marketplace Rule 4450(a)(5)). The Company received a Nasdaq
staff determination indicating non-compliance on June 21, 2002.
As a result, its securities are subject to delisting from the
Nasdaq National Market. The Company, however, intends to request
a hearing regarding the Nasdaq staff determination and will
present its plan of action, which may include a reverse stock
split, to maintain compliance with the Nasdaq National Market
continued listing standards. The request for a hearing will
suspend the delisting action until the Nasdaq Listing
Qualifications Panel reaches a final decision on the Company's
appeal, but there can be no assurance that the Panel will decide
in the Company's favor.

All planned new product releases will make the June 2002
quarter, including the European releases of the Sven Goran
Eriksson soccer games that were successfully timed around
England's strong performance in the FIFA World Cup. Back catalog
licensing revenue have both been strong during the June quarter.
Heroes of Might and Magic(R) IV reached #1 on the PC charts in
France, #2 in England, and #2 in the USA during the quarter.
Other games including Might and Magic(R) IX, Army Men(R) RTS,
and High Heat(TM) Major League Baseball(R) also had good sell-
through during the quarter.

A rising star for 3DO, High Heat Major League Baseball has
tripled its sales from last year to-date and has doubled its
market share on the PlayStation(R)2 computer entertainment
system from one year ago. The major gaming press unanimously
picked High Heat to be the best PC and PlayStation 2 baseball
game of 2002, including The Official PlayStation Magazine,
Electronic Gaming Monthly, PSE2, PlayStation Magazine, GamePro,
Silicon, Gamers.com, Operation Sports, Baseball Sim Central,
Game Industry News, Reuters, USA Today Online and the San
Francisco Chronicle.

"We've right-sized the business and improved our operations,"
said Trip Hawkins, CEO. "And we have successful games in the
channel that have enabled us to be on a consistent reorder basis
with our major accounts. As a result we have been able to
operate the entire first half of the calendar year without
needing new capital infusions, or even the use of a credit line.
This Company-wide spending discipline, combined with market
growth and the new credit line that we expect to be able to
describe in detail shortly, gives us confidence that we will
continue to make good financial progress and achieve high growth
in revenues and profits next year."

The company's preferred stock financing in December, 2001,
allowed investors to convert to common at a discount to market
for a 120 day period ending June 14, 2002. This feature may have
contributed to selling pressure on the stock, including the
nearly twenty-fold increase in the cumulative short position on
3DO stock since the financing was closed. With the ending of the
favorable conversion period, the conversion price for preferred
stock into common stock is now fixed at approximately 78 cents
per share, a significant premium to market. As a result, the
company believes that holders of preferred stock no longer have
any incentive to short 3DO common stock. Conversion at the 78
cent price is permitted at any time until the end of the 3-year
conversion period in December, 2004. During the favorable
conversion period, through June 14, 2002, approximately 31% of
preferred stock was converted to common stock, resulting in the
issuance of approximately 7.6 million new shares of common
stock. While holders of preferred stock are not obligated to
convert their shares, approximately 14.2 million shares of
additional common stock would be issued if all shares of
preferred stock were converted. Prior to the December financing,
the company had approximately 53 million shares of common stock
outstanding.

"Naturally, we believe that it is not a coincidence that 3DO
shares traded under $1.00 per share beginning in February when
the registration statement regarding the December 2001 financing
became effective," said Hawkins. "Now that it is over, we hope
to see buying interest returning to the stock, particularly as
we improve our operating performance. We also hope that between
our business improvements and a higher stock price, potentially
enabled by a reverse stock split, we will attract new interest
from small cap investors and remain fully in compliance with the
continued listing requirements of the Nasdaq National Market.
We've turned an important corner. False rumors and speculation
about our prospects have been hurting us, but this news should
clear the air. We believe our position and prospects now are
better than at any time in the last two years."

One such example of false speculation is a recent story claiming
that the company had ceased operations in England, which is not
true. The company did change its address to 9Z Upper Aughton
Road, Southport, Merseyside, UK PR99UZ.

The 3DO Company, headquartered in Redwood City, Calif.,
develops, publishes and distributes interactive entertainment
software for personal computers, the Internet and advanced
entertainment systems such as the PlayStation(R)2 computer
entertainment system, the Nintendo GameCube(TM) and the Game
Boy(R) Advance systems.


ADELPHIA BUSINESS: Secures $15MM DIP Financing from Beal Capital
----------------------------------------------------------------
Adelphia Business Solutions (ABS) (Pink Sheets: ABIZQ) has
entered into an agreement with Beal Capital Markets, Inc., of
Plano, Texas in which Beal expresses an interest in providing to
ABS a proposed $15 million secured debtor-in-possession credit
facility, pending the satisfaction of numerous material
conditions, including the negotiation and execution of a
definitive agreement and the formal approval of the U.S.
Bankruptcy Court.  ABS believes that, in conjunction with
previous modifications to ABS' business plan, the Credit
Facility will provide ABS with the necessary liquidity to emerge
from the Chapter 11 process.

Under its modified business plan, ABS will continue to conduct
business operations in 35 company-owned markets located in the
eastern half of the U.S., and in 17 other company-managed
markets located throughout the country. Most of the 35 owned
markets, which stretch from Vermont to Florida and from Kansas
to Texas, are interconnected via a high-speed fiber optic
network that permits ABS to offer intercity services and allows
for efficient, cross-city use of existing telecommunications
technology.

"The recent upheaval in the telecommunications industry has
dramatically reduced the number of companies in the competitive
local exchange arena," notes Bob Guth.  "We intend to continue
to offer customers a choice and to ensure that competitive
forces are in place in the industry. We believe that we have a
terrific customer base, committed employees and extremely
valuable network assets, and expect that this modest interim
funding will see us through the Chapter 11 process toward a
fully-funded business plan."

"I'd like to thank all of our customers, who stood with us
during this period of uncertainty," continued Mr. Guth. "We
appreciate the value they place on choice, and sincerely
appreciate their commitment to ABS, and to the industry as a
whole."

ABS expects to continue to offer its full line of products and
services, including local voice and data, intercity services,
long distance, Internet, and a number of other value-added
services including web-hosting and co-location.

"We looked very closely at ABS' current results and business
plan and we see a profitable core operation with strong customer
relationships," notes Ken Springfield of Beal Capital Markets.
"We're looking forward to completing our due diligence and
developing a mutually beneficial business relationship with
the people at Adelphia Business Solutions."

Concurrent with this business-restructuring announcement, ABS
also announced that, on June 18, 2002, certain of its
subsidiaries (those not previously included in the initial group
of Chapter 11 cases commenced on March 27, 2002) commenced
affiliated Chapter 11 cases under joint administration with the
initial group of companies.  "This is purely an administrative
step for us, providing protection to our DIP lender, and is not
indicative of any change in the business status of these
operations," stated Mr. Guth.

The salient terms of the proposed DIP Financing facility are:

Borrowers:        Adelphia Business Solutions, Inc. and
                  indirect subsidiaries of ABIZ EXCEPT Adelphia
                  Business Solutions of Pennsylvania, Inc.,
                  PECO Hyperion Telecommunications,
                  Susquehanna Adelphia Business Solutions, and
                  Adelphia Business Solutions Capital, Inc.

Guarantors:       ABIZ-Pennsylvania and ABIZ-Capital

DIP Lender:       Beal Capital Markets, Inc., or Beal Bank,
                  S.S.B. or any wholly owned affiliate of Beal
                  Bank, S.S.B., as assignee of Beal Capital
                  Markets, Inc.

The Facility:     The Loan consists of a single-draw term
                  loan credit facility for $15,000,000.  The
                  ultimate amount of the Facility will be
                  subject to the DIP Lender's determination of
                  the appraised value of the DIP Collateral.

Drawdown:         The Loan will be advanced in one drawdown,
                  on the Closing Date.  No portion of the
                  Facility shall be available for drawdown after
                  the Closing Date.

Use of Proceeds:  The DIP Financing shall be used to:

                  * fund post-Closing Date operating expenses of
                    the Borrowers and Guarantors in accordance
                    with, but limited to, the Cash Budget;

                  * fund certain post-petition but pre-Closing
                    Date fees accrued under the Management
                    Services Agreement between ABIZ and
                    Adelphia Communications Corporation,
                    to the extent included in the Cash
                    Budget; and,

                  * pay all fees and expenses as provided under
                    the DIP Loan Agreement.

Cash Budget and
Business Plan:    Prior to the Closing Date, the Borrowers shall
                  have provided to the DIP Lender:

                  * a cash operating budget for the period from
                    July 1, 2002 through June 30, 2003;

                  * a business plan;

                  * other financial information to monitor
                    compliance with the Free Cash Flow Variance.

Term:             The DIP Loan shall be repaid in full at the
                  earliest to occur of:

                  (a) one year after the Closing Date, but not
                      later than June 30, 2003;

                  (b) the Termination Date; and,

                  (c) the effective date of a plan of
                      reorganization or liquidation for any of
                      the Borrowers.

Closing Date:     The date upon which all conditions precedent
                  to the making of the initial extension of
                  credit are satisfied.

Interest:         Loans will bear interest at an annual rate of
                  Wall Street Journal's highest Prime Rate
                  (published on the money section) plus 4% per
                  annum, but in no event less than 12% per
                  annum.  In the event of default, the interest
                  rate shall be the non-default rate plus 4% per
                  annum. Interest shall be payable in cash,
                  monthly in arrears.

Closing Date
Financing Fee:    A Closing Fee equal to 6% of the aggregate
                  facility (i.e., $900,000), fully earned as of
                  the Closing Date, shall be paid on the
                  Closing Date to the DIP Lender.

Monthly Admin.
Fee:              A monthly administration fee of $15,000 shall
                  be paid on the Closing Date and the first day
                  of each month thereafter as any portion of the
                  DIP Loan is outstanding.

Nature of Fees:   Non-refundable under all circumstances.

Voluntary
Prepayments:      Permitted at any time, upon 5 business days'
                  prior written notice and in reasonable
                  increments to be established in the DIP Loan
                  Agreement, without prepayment penalty.

Mandatory
Repayments:       (a) Mandatory repayment of the DIP Loan under
                     the Facility  shall be required in an
                     amount equal to 100% of insurance and
                     condemnation proceeds arising from,
                     derived or related to the DIP Collateral.

                  (b) Asset Sales:

                     (1) General Rule: Except for Paydown
                         Permitted Asset Sales and Non-Paydown
                         Permitted Asset Sales, any sale of
                         assets shall be subject to the
                         approval of the DIP Lender.  As
                         a condition to for approval, the DIP
                         Lender may require that the net sale
                         proceeds shall be applied to repayment
                         of the DIP Loan.

                     (2) Paydown Permitted Asset Sales: Sale
                         of equipment and inventory of the
                         Borrowers shall be permitted with
                         notice to but without prior approval
                         of the DIP Lender, if:

                         * all sales shall be for fair value,
                           in bona fide arm's-length
                           transactions with third party
                           purchasers;

                         * the gross purchase price for any
                           item must not exceed $500,000, and
                           must be payable entirely in cash at
                           closing;

                         * the net purchase price for any item
                           must equal at least 25% of the net
                           book value of that item;

                         * the sale otherwise must be permitted
                           without further order of the
                           Bankruptcy Court, in accordance with
                           the Omnibus Sale Order; and,

                         * all net proceeds of any sale shall
                           be applied to repayment of the DIP
                           Loan.

                     (3) Non-Paydown Permitted Asset Sales:
                         Sale of assets pertaining to specified
                         non-continuing markets shall be
                         permitted without prior approval of
                         the DIP Lender and without requiring
                         that the net sale proceeds be applied
                         to the repayment of the DIP Loan, if:

                         * all the sales shall be for fair
                           value, in bona fide arm's-length
                           transactions with third party
                           purchasers;

                         * the gross purchase price for any
                           item must not exceed $50,000, and
                           must be payable entirely in cash at
                           closing;

                         * the aggregate gross purchase price
                           of all the sales in any calendar
                           month must not exceed
                           $400,000; and,

                         * all net proceeds shall be retained
                           and applied to the expenses detailed
                           in the Cash Budget.

Collateral and
Priority:        All DIP obligations shall be:

                 (a) Secured (subject to the Carve-Out) by a
                     first priority, fully perfected security
                     interest in and lien on all of the
                     existing and after acquired assets of the
                     Borrowers and the Guarantors;

                 (b) Accorded administrative priority status
                     under Section 364(c)(1) of the Bankruptcy
                     Code, having a superpriority over any and
                     all administrative expenses of the kind
                     specified in Sections 503(b) or 507(b) of
                     the Bankruptcy Code, including any
                     superpriority administrative claims
                     granted the Subordinate DIP Creditors,
                     subject only to the Carve-Out; and,

                 (c) Joint and several among the Borrowers and
                     the Guarantors and senior in right of
                     payment to any obligations owed by the
                     Borrowers or the Guarantors to the
                     Subordinate DIP Creditors under the
                        Subordinate DIP Loan Agreement.

                    All DIP Collateral shall be free and clear
                    of any and all liens, claims and
                    encumbrances, except for:

                    * those in favor of the DIP Lender;
                    * the Permitted Pre-Petition Liens;
                    * the liens granted in favor of the
                      Subordinate DIP Creditors pursuant to the
                      Subordinate DIP Loan Agreement and the
                      April Interim DIP Order;
                    * the Permitted Wachovia Liens; and,
                    * the Permitted Post-Petition Liens

Carve-Out:        The Lenders agree to a $1,500,000 Carve-Out
                  following termination of the Facility due to
                  default to allow for payment of professional
                  fees incurred in these Cases and unpaid fees
                  pursuant to 28 U.S.C. 1930(a)(6) and any fees
                  payable to the Clerk of the Bankruptcy Court.

Collateral Value
Covenant:         The Borrowers shall maintain DIP Collateral at
                  least equal the greater of:

                  (a) $40,000,000 (subject to reduction as part
                      of paydowns of the DIP Loan); or,

                  (b) an amount equal to 200% of the DIP
                      Obligations then outstanding.

Accounts
Receivable
Covenant:         The Borrowers shall maintain, at all times,
                  bona fide accounts receivable in aggregate
                  amounts as the DIP Lender may establish from
                  time to time in its sole discretion. In any
                  case, accounts receivable owing by ABIZ or ACC
                  or the Rigas family, or any of their
                  respective affiliates, shall be ineligible.

Wachovia L/Cs:    Following the Closing Date, the Borrowers and
                  the Guarantors shall arrange for the
                  $20,000,000 letter of credit issued by
                  Wachovia Bank to the Commonwealth of
                  Pennsylvania in respect of the existing
                  contract between Commonwealth of Pennsylvania
                  and ABIZ-Pennsylvania to be replaced by a
                  letter of credit in like face amount issued by
                  the DIP Lender or its designee.

Events of
Default:         (a) dismissal of any of the Cases or
                     conversion of any of the cases to a
                     chapter 7 case;

                 (b) appointment of a chapter 11 trustee in any
                     of the Cases;

                 (c) the granting of any other claim
                     superpriority status or a lien or security
                     interest equal or superior to that granted
                     to the DIP Lender in any of the Cases;

                 (d) the entry of an order that in any respect
                     stays, reverses, vacates or otherwise
                     modifies the DIP Loan Agreement, any
                     intercreditor and subordination agreement
                     or the Final Order without the prior
                     written consent of the DIP Lender,

                 (e) appointment of an examiner having enlarged
                     powers beyond those set forth under
                     Section 1106(a)(3) and (4) of the
                     Bankruptcy Code;

                 (f) the failure of any of the Borrowers to pay
                     interest or fees when due and that
                     default shall continue for two business
                     days or principal when due;

                 (g) the failure of any of the Borrowers or
                     Guarantors to comply with any negative
                     covenant, collateral covenant, collateral
                     value covenant or accounts receivable
                     covenant or the covenants pertaining to
                     the Permitted Wachovia Liens,

                 (h) the actual or substantive consolidation or
                     combination of any Borrower with any other
                     person (other than a Borrower);

                 (i) the ABIZ/ACC Management Services Agreement
                     shall be terminated or rejected;

                 (j) the failure of any of the Borrowers or
                     Guarantors to perform or comply with any
                     other term or covenant and that default
                     shall continue unremedied for a period of
                     10 days;

                 (k) any representation or warranty by any of
                     the Borrowers or Guarantors shall be
                     incorrect or misleading in any material
                     respect when made;

                 (l) an unfavorable Free Cash Flow Variance
                     shall occur; and,

                 (m) any other event which constitutes an Event
                     of Default under the Subordinate DIP Loan
                     Agreement. (Adelphia Bankruptcy News, Issue
                     No. 8; Bankruptcy Creditors' Service, Inc.,
                     609/392-0900)


ADELPHIA BUSINESS: TD Bank Discloses $222 Million Exposure
----------------------------------------------------------
In response to recent developments and subsequent inquiries, TD
Bank Financial Group announced that its total exposure to the
Adelphia Group of companies is US$222 million. TDBFG has no
direct loan exposure to Adelphia Communications Corp.

Exposure is divided among five separate cable operating
subsidiaries of Adelphia Communications Corp. which form part of
the parent company's Chapter 11 filing. The exposure has been
designated impaired with an adequate reserve taken during the
current quarter.


ADELPHIA COMMS: S&P Drops Ratings to D After Chapter 11 Filing
--------------------------------------------------------------
Standard & Poor's lowered its ratings on cable television
operator Adelphia Communications Corp.'s senior unsecured debt,
subordinated debt, and preferred stock issues to 'D' following
the company's Chapter 11 bankruptcy filing. These ratings were
also removed from CreditWatch.

The corporate credit rating on Coudersport, Pennsylvania-based
Adelphia had been lowered to 'D' on May 20, 2002, following a
missed interest payment on the company's $500 million 9.375%
senior unsecured note issue.

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1) are
quoted at a price of 42.25, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


ADELPHIA COMMS: Court to Consider Proposed DIP Financing Today
--------------------------------------------------------------
Adelphia Communications Corporation (OTC: ADELA) announced that
the U.S. Bankruptcy Court for the Southern District of New York
has approved the Company's request for "first day orders,"
including:

     -- Immediate authority to pay employees' salaries and wages
and to continue to provide health and other employee benefits to
them;

     -- Authority to pay its local franchise authorities pre-
petition obligations; and

     -- Authority to continue to satisfy all of its pre-petition
obligations to customers, including with respect to rebates and
deposits.

The Court also entered various other orders to ensure that the
Company has the ability to operate smoothly during the Chapter
11 process.

The Company also announced that the Court has set a hearing for
Friday, June 28, 2002, for Adelphia's motion for immediate
access to $500 million of its $1.5 billion Debtor-in-Possession
financing provided by a consortium of bank lenders, led by
JPMorgan Chase Bank and Citigroup USA, Inc. Adelphia and more
than 200 of its subsidiaries announced earlier that voluntary
petitions under Chapter 11 of the U.S. Bankruptcy Code have been
filed with the U.S. Bankruptcy Court for the Southern District
of New York to restructure the Company's debt and reorganize the
business.

Adelphia is continuing to supply cable entertainment, high-speed
Internet access and other services to its millions of customers
without interruption in all of its markets which serve more than
3,500 communities across the nation.

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


ADVANCE AUTO: S&P Upgrades Rating to BB- On Improved Performance
----------------------------------------------------------------
Standard & Poor's raised corporate credit ratings on Advance
Auto Parts Inc. and primary operating subsidiary Advance Stores
Co. Inc. to double-'B'-minus from single-'B'-plus based on the
company's improved operating performance.

The ratings were also removed from CreditWatch, where they had
been placed April 26, 2002. The outlook is stable. Roanoke,
Virginia-based Advance Auto has about $923 million of rated
debt.

"Advance Auto has continued to generate strong same-store sales
in a challenging economy," Standard & Poor's credit analyst
Patrick Jeffrey said. "Free cash flow generation, an $89 million
secondary equity offering, and the expected refinancing of a
portion of its bank facility have contributed to significant
debt reduction since the company completed the acquisition of
Discount Auto Parts Inc. in November 2001."

Standard & Poor's said it believes Advance's operations will
remain stable despite the weakened U.S. economy. It said that,
over the long term, the company will need to continue to
demonstrate success in paying down debt, improving operating
margins, and integrating the remaining Discount Auto stores.
Success could eventually result in consideration of a higher
rating.

Standard & Poor's said Advance's lease-adjusted operating
margins improved to 13% in 2001 from 11% in 1999. Margins should
improve in 2002 if the company realizes the $30 million of
expected synergies from the Discount Auto Parts integration and
other operating initiatives. EBITDA coverage of interest is
trending at about 3 times and could improve to more than 3x in
2002 if the company continues to improve earnings and reduce
debt.

Advance achieved strong same-store sales increases of 7.8% in
the first quarter of 2002 and 6.2% in 2001, a result of enhanced
merchandising and marketing efforts. Total debt to EBITDA is
trending in the mid-3x area and could reduce to about 3x in 2002
due to expected reduced debt levels. A $160 million revolving
credit facility gives Advance financial flexibility. Debt
maturities and term loan amortization are expected to be funded
through internally generated cash flow and borrowings under the
revolving facility.


ALAMOSA: S&P Puts B- Rating on Watch With Negative Implications
---------------------------------------------------------------
Standard & Poor's placed its single-'B'-minus corporate credit
rating on Alamosa Holdings Inc. on CreditWatch with negative
implications due to Standard & Poor's increased concerns over
the impact of Alamosa's slowing growth on covenant compliance
and liquidity.

At the end of the first quarter of 2002, Lubbock, Texas-based
Alamosa had about 551,000 subscribers and total debt of about
$846 million. The company is a Sprint PCS affiliate that
provides wireless services in markets in 15 states with a
combined covered population of about 11.5 million.

"Alamosa recently reduced its guidance for net subscriber
additions for the second quarter of 2002 by 30% to 50% due to
competition, reduced additions of sub-prime customers, and a
general expectation of slower subscriber growth," Standard &
Poor's credit analyst Michael Tsao said. "The lower growth
trajectory and intensifying competition may make it challenging
for Alamosa to meet the minimum subscriber level under its bank
loan covenant, particularly when this tightens in the fourth
quarter of 2002. These factors could also narrow the cushion
allowed by the total debt-to-EBITDA and EBITDA-to-pro forma debt
service coverage covenants for execution risks in 2003."

Standard & Poor's said that, aside from the covenant issue, the
company has limited liquidity beyond 2002. Alamosa had about
$155 million in cash and bank availability at the end of the
first quarter of 2002. Standard & Poor's projects that cash
usage will likely be in the $80 million area for the remainder
of 2002, leaving the company with about $75 million in liquidity
at year end. Given industry volatility and that Alamosa is
unlikely to generate material free cash flow in 2003, this level
of liquidity does not provide a significant margin of safety.

Standard & Poor's said the resolution of the CreditWatch listing
is dependent on its assessment of Alamosa's ability to meet
covenants in 2002 and 2003, and the impact of lower growth on
cash flows.


ALLIANCE LAUNDRY: S&P Rates Proposed $243MM Bank Facility at B
--------------------------------------------------------------
Standard & Poor's assigned its single-'B' senior secured bank
loan rating to Alliance Laundry Systems LLC's proposed $243
million bank facility maturing 2007.

In addition, Standard & Poor's affirmed its single-'B' corporate
credit and triple-'C'-plus subordinated debt ratings on the
company and revised its outlook for the company to stable from
negative. Standard & Poor's will withdraw its existing single-
'B' senior secured bank loan rating upon closing of the new
facility.

The outlook revision reflects the refinancing of existing
secured bank debt. The new facility includes an extended
maturity, a reduced annual amortization schedule, and revised
financial covenants.

The rating on the bank facilities is the same as the corporate
credit rating. The bank facility consists of a $193 million term
loan due 2007 and a $50 million revolving credit facility due
2007. All the tangible and intangible assets and the capital
stock of the company, as well as each of the company's direct
and indirect domestic subsidiaries and first-tier foreign
subsidiaries secure the facilities. Although the credit
facilities derive strength from their secured position, based on
Standard & Poor's simulated default scenario (which incorporates
severely distressed cash flows that would trigger a default on
payment), it is unclear that the distressed enterprise value
would be sufficient to cover the entire loan balance when fully
drawn if a default were to occur.

For analytical purposes, Standard & Poor's treats receivables
sold to the special purpose financing subsidiary as direct debt
of Alliance Laundry, while the equipment lease portion of the
portfolio is not viewed as company indebtedness.

Ripon, Wisconsin-based Alliance Laundry is a leading
manufacturer of a full line of stand-alone commercial laundry
equipment for sale predominately in the U.S. Its high debt
leverage and thin credit protection measures are partially
offset by the company's solid market position in the niche
commercial laundry equipment market.

"As a result of the planned bank refinancing, Alliance Laundry
is expected to generate annual discretionary cash flow in excess
of its debt amortization requirements during the next few years.
Additional financial flexibility is provided by the availability
of substantially all of the $50 million revolving credit
facility at closing," said Standard & Poor's credit analyst Jean
C. Stout.

Ms. Stout added, "The company's growth plans and ongoing
operating efficiencies should enable Alliance Laundry to sustain
credit protection measures appropriate for the rating over the
outlook period."

Alliance Laundry's heavy debt burden, incurred in connection
with the company's 1998 recapitalization, significantly limits
the company's financial flexibility to react to its competitor's
actions and economic changes. Standard & Poor's has not factored
any acquisitions into its rating on the company.


ALTERRA HEALTHCARE: Gets More Time to Meet AMEX Listing Criteria
----------------------------------------------------------------
Alterra Healthcare Corporation (AMEX: ALI) was notified on June
19, 2002, that the American Stock Exchange had accepted a plan
submitted by Alterra to bring the Company into compliance with
AMEX's continued listing standards.

As reported in the Company's Form 10-K filed on March 29, 2002,
AMEX informed the Company that it had fallen below certain of
AMEX's continued listing guidelines and that it was reviewing
the Company's listing eligibility. In a March 28, 2002, letter
from AMEX, AMEX informed the Company that, based on AMEX's
continuing review of the Company's listing eligibility, the
Company had fallen below the following continued listing
standards set forth in the AMEX Company Guide: Section
1003(a)(i) with shareholders' equity of less than $2.0 million
and losses from continuing operations and/or net losses in two
of its three most recent fiscal years; Section 1003(a)(ii) with
shareholders' equity of less than $4.0 million and losses from
continuing operations and/or net losses in three of its four
most recent fiscal years; and Section 1003(a)(iv) in that it had
sustained losses which are so substantial in relation to its
overall operations or its existing financial resources, or its
financial condition has become so impaired, that it appears
questionable, in the opinion of the Exchange, as to whether the
Company will be able to continue operations and/or meet its
obligations as they mature.

The Company was afforded the opportunity to submit a plan of
compliance to the Exchange and on May 7, 2002, the Company
submitted its plan of compliance and supporting documentation.
On June 19, 2002, the Exchange notified Alterra that it had
accepted the Company's plan of compliance and granted the
Company an extension of time to regain compliance with the
continued listing standards. The Company will be subject to
periodic review by Exchange staff during the extension period.
Failure to make progress consistent with the Company's plan of
compliance or to regain compliance with the continued listing
standards by the end of the extension period could result in the
Company being delisted from the American Stock Exchange.

Alterra offers supportive and selected healthcare services to
our nation's frail elderly and is the nation's largest operator
of freestanding Alzheimer's/memory care residences. Alterra
currently operates in 25 states.

The Company's common stock is traded on the American Stock
Exchange under the symbol "ALI."

As previously reported, Alterra Healthcare has a working capital
deficit of $130 million at December 31, 2001.


ATLANTIC EXPRESS: S&P Junks Ratings Over Weak Financial Profile
---------------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
secured debt ratings on Atlantic Express Transportation Corp. to
triple-'C' from single-'B' due to the school bus provider's
weakening financial profile and a delayed March (fiscal third
quarter) 2002 10-Q filing with the SEC. Ratings remain on
CreditWatch with negative implications where they were placed
June 14, 2002. Approximately $120 million of rated debt is
affected.

"Atlantic Express Transportation's credit profile began to
weaken in fiscal 2001, and this trend has continued into 2002,"
said Standard & Poor's credit analyst Betsy Snyder. "In
addition, the company has delayed filing its March 2002 10-Q
report with the SEC, without any indication of when the filing
is expected to occur," the analyst said. In 2001, Atlantic
Express Transportation's operating profit narrowed, which
combined with higher interest expense due to an increase in
outstanding debt, resulted in a wider loss of $7.9 million. This
trend has continued in 2002, with the company's loss widening to
$10.1 million in the first six months versus $7.2 million in the
prior year period. The company has limited financial flexibility
due to its privately held status and only $4.4 million available
under its $125 million secured revolving credit facility at Dec.
31, 2001 (the latest information available). In addition, the
company has indicated that it could have difficulty funding
increased insurance and workers' compensation costs through cash
on hand, internally generated funds, and external sources
through December 2002. The delayed filing of the March 31, 2002,
10-Q report, without explanation, also raises concerns.

The rating reflects Atlantic Express Transportation's small size
and weak financial profile. Its primary business--close to 80%
of revenues--is providing school bus transportation in the U.S.
Although it has a strong position in the markets it serves, it
is considerably smaller than industry leaders Laidlaw Inc. and
FirstGroup PLC, a U.K.-based diversified transportation provider
that acquired Ryder System Inc.'s transit operations in
September 1999. In addition, National Express Group PLC, another
U.K.-based diversified transportation provider, has purchased
several large U.S. school bus providers. The U.S. school bus
transportation industry has grown, due in large part to
outsourcing of student transportation by school districts and
the growth in public school enrollment, trends expected to
continue. The industry has favorable credit characteristics,
including predictable revenues from multiyear contracts and good
growth prospects. Atlantic Express also owns Central New York
Coach Sales and Service Inc., the largest Blue Bird bus
distributor in the U.S.

Standard & Poor's will continue to monitor the situation to
determine the company's ability to pay interest on its
obligations and to survive as a going concern.


AUTOFUND SERVICING: Will Cease Operations Due to Lack of Capital
----------------------------------------------------------------
Total revenue of AutoFund Servicing, Inc., the Texas
corporation, for the three months ended March 31, 2002, was
$316,216 compared to the three months ended March 31, 2001,
which was $531,240 and thus a decrease in total revenue, period
over period, of $215,024.

Total expenses for the three months ended March 31, 2002, was
$435,657 compared to the three months ended March 31, 2001,
which was $475,360. This is a decrease in expenses of $39,703.
Expenses have decreased slightly, however, the decrease is
minimal.

The net loss for the three months ended March 31, 2002 was
$78,830 compared to the three months ended March 31, 2001, which
showed a gain of $38,274. Net gain has decreased by $40,556 for
this three-month period.

On May 29, 2002 Mr. James D. Haggard, Chairman, Sole Director,
President and Secretary/Treasurer (Principal Financial and
Accounting Officer) sent a letter to all of the company vendors.  
The letter, in its entirety read as follows; "As of June 5, 2002
AutoFund Servicing, Inc., a Texas corporation, will cease
operation. We have exhausted all known avenues in an attempt to
raise capital and have been unsuccessful. We truly regret having
to take this action but there are no other options."

AutoFund Servicing, Inc., the Texas Corporation, was the only
source of revenue for the holding company AutoFund Servicing,
Inc., the Nevada Corporation. The holding company will now
search for a merger candidate in its same industry if possible.


AVADO BRANDS: Makes Interest Payment on 9-3/4% Senior Notes
-----------------------------------------------------------
Avado Brands, Inc. (OTC Bulletin Board: AVDO) has made its semi-
annual interest payment to holders of its 9-3/4% Senior Notes.
The interest payment was originally due on June 1, 2002 and as
the Company indicated earlier, the payment was made within the
30 day, no-default period provided for under the terms of the
Indenture.

The Company continues to closely monitor its liquidity position
and reiterated its belief that it will be able to make the semi-
annual interest payment due to holders of its 11-3/4% Senior
Subordinated Notes, which was originally due on June 15, 2002,
within the 30 day no-default period provided for under the terms
of that Indenture.

Avado Brands owns and operates three proprietary brands,
comprised of 14 Canyon Cafe restaurants, which are held for
sale, 131 Don Pablo's Mexican Kitchens and 74 Hops Restaurant *
Bar * Breweries.

                           *    *    *

As reported in Troubled Company Reporter's June 6, 2002 edition,
Standard & Poor's lowered its corporate credit rating on casual
dining restaurant operator Avado Brands Inc. to 'D' from triple-
'C' and lowered its rating on the company's $125 million 9.75%
senior unsecured notes due in 2006 to 'D' from triple-'C'
following the company's failure to remit the June 1, 2002,
interest payment on those notes.

The rating on the $100 million 11.75% subordinated notes was
also lowered to single-'C' from double-'C' due to the company's
announcement that it intends to delay the June 15, 2002,
interest payment on those notes. When that payment is missed,
Standard & Poor's will lower the rating on the subordinated
notes to 'D'.

In addition, the rating on Avado Brands Financing I's
convertible preferred securities (TECONS) was lowered to 'D'
from single-'C' due to the company's announcement that it had
made a one-time payment of accrued interest, equal to $4.25 per
share, to holders of its TECONS. This was conditional on the
holders of at least 90% of the outstanding TECONS agreeing to
convert their securities into shares of common stock of Avado
pursuant to the terms of the TECONS. Standard & Poor's views
this exchange as coercive because the total value of the equity
offered was materially less than the originally contracted
amount.


BORDEN CHEMICALS: Court Nixes Committee's Move to Convert Case
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware denied a
motion by the Official Committee of Unsecured Creditors of
Borden Chemicals and Plastics Operating Limited Partnership's
chapter 11 cases to convert the Debtors' cases to proceedings
under chapter 7 of the Bankruptcy Code.

After reviewing the objections of the Debtors and the responses
of the Committee and the U.S. Environmental Protection Agency,
the Court finds that it is in best interest of the Debtors and
the creditors to continue the restructuring of the Debtors under
chapter 11 of the Bankruptcy Code.

The Court however, rules that the Debtors shall make
informational reports available to the Committee on a weekly
basis, detailing the operational status and financial
performance of the Debtors' manufacturing facility in Geismar,
Louisiana.  The Debtors and the Committee will agree upon the
terms and contents of the Reports.  Additionally, the Debtors
shall allow the Committee to conduct reasonable monitoring of
the activities at the Geismar Facility.

Borden Chemicals and Plastics Operating Limited Partnership,
producer PVC resins, filed for chapter 11 protection on April 3,
2001 in the U.S. Bankruptcy Court for the District of Delaware.
Michael Lastowski, Esq. at Duane, Morris, & Hecksher represents
the Debtors in their restructuring efforts.

DebtTraders says that Borden Chemical & Plastics' 9.5% bonds due
2005 (BCPU05USR1), are trading at 5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BCPU05USR1
for real-time bond pricing.


BREAKAWAY SOLUTIONS: Taps Klehr Harrison as Litigation Counsel
--------------------------------------------------------------
Breakaway Solutions, Inc. wants the U.S. Bankruptcy Court for
the District of Delaware to give it authority to employ Klehr,
Harrison, Harvey, Branzburg & Ellers LLP as special litigation
counsel.

The Debtor relates that it needs Klehr Harrison to represent it:

     i) in connection with certain litigation to collect
        accounts receivables against PacifiCare Behavioral
        Health of California, Inc., Netfolio, Inc. and Zone
        Telecom;

    ii) against several other defendants in possible litigation
        to collect accounts receivable; and

   iii) in possible litigation against the Debtor's former chief
        financial officer.

The Debtor assures the Court that Klehr Harrison will not
perform services typically performed by the Debtor's general
bankruptcy counsel.

The Debtor also seeks approval to pay Klehr Harrison a
contingency fee of 35% on any recovery from persons or entities
to be pursued in the Litigation, plus reimbursement of actual
and necessary expenses incurred.

Breakaway Solutions, Inc., which provides collaborative business
solutions to its clients, filed for Chapter 11 petition on
September 5, 2001 in the U.S. Bankruptcy Court for the District
of Delaware.  Gary M. Schildhorn, Esq., and Leon R. Barson,
Esq., at Adelman Lavine Gold and Levin and Neil B. Glassman,
Esq., and Steven M. Yoder, Esq., at The Bayard Firm represent
the Debtor in its restructuring efforts. When the company filed
for protection from its creditors, it listed $45,319,579 in
assets and $25,877,720 in debt.


BRILLIANT DIGITAL: Gets More Time to Meet AMEX Listing Standards
----------------------------------------------------------------
Brilliant Digital Entertainment, Inc. (AMEX:BDE), a developer
and distributor of rich media advertising technologies and,
through its Altnet subsidiary, secure peer to peer solutions,
received a notice from the American Stock Exchange Staff on
March 28, 2002 indicating that the Company is below certain of
the Exchange's continued listing standards.

Specifically, the Company has fallen below the following
sections of the Amex Company Guide: Section 1003 (a)(i) with
shareholders' equity of less than $2,000,000 and losses from
continuing operations and/or net losses in two of its three most
recent fiscal years; Section 1003 (a)(ii) with shareholders'
equity of less than $4,000,000 and losses from continuing
operations and/or net losses in three of its four most recent
fiscal years; Section (a)(iii) with shareholders' equity of less
than $6,000,000 and losses from continuing operations and/or net
losses in its five most recent fiscal years; and Section 1003
(a)(iv) in that it has sustained losses which are so substantial
in relation to its overall operations or its existing financial
resources, or its financial condition has become so impaired
that it appears questionable, in the opinion of the Exchange, as
to whether the Company will be able to continue operations
and/or meet its obligations as they mature. The Company was
afforded the opportunity to submit a plan of compliance to the
Exchange and on April 30, 2002 presented its plan to the
Exchange.

On June 19, 2002, the Exchange notified the Company that it
accepted the Company's plan of compliance and granted the
Company an extension of time to regain compliance with the
continued listing standards. The Company will be subject to
periodic reviews by the Exchange Staff during the extension
period. Failure to make progress consistent with the plan or to
regain compliance with the continued listing standards by the
end of the extension period could result in the Company being
delisted from the American Stock Exchange.

Brilliant Digital also announced the election to the Company's
Board of Directors at its Annual Stockholders' Meeting, held on
Thursday, June 20, of Abe Sher, Mark Dyne, Chairman of the Board
of Directors and Kevin Bermeister, President and CEO for terms
expiring in 2005. Abe Sher is the newest member of the Board of
Directors having served since February 2002. Mr. Sher has been
Managing Director of Slingshot Ventures, LLC since 1998 and from
May 1998 to June 2001, Mr. Sher served as Executive Vice
President of xSides Corp. Mr. Sher also serves as a member of
the board of directors of Microlab, Inc., xSides Corp., and VKB,
Inc.

Kevin Bermeister, President and CEO, commented, "We are thrilled
to have someone of the caliber of Abe Sher serve on our Board of
Directors. His wealth of experience and contacts in the industry
are already proving very valuable to us in many key areas of our
business. We look forward to his continued involvement and
contribution in the execution of our business plan." Bermeister
continued, "We continue to work closely with the American Stock
Exchange and are pleased with our progress toward regaining
compliance with the Exchange's continued listing requirements.
While more work needs to be done, we are optimistic with the
progress we are making with our rich media Brilliant Banner
advertising and initiatives in the peer to peer space through
our Altnet subsidiary."

Brilliant Digital Entertainment, Inc. (AMEX:BDE) is a developer
of 3D rich media advertising and content creation technologies
for the Internet. It sells its b3d Studio content creation and
authoring toolset to enable the creation and delivery of
interactive, streaming, real-time 3D graphics over the Internet,
and licenses its ad serving technology to the content and
advertising communities. The b3d Studio toolset is targeted for
use by studios, production houses, web content suppliers and
advertising agencies to produce entertainment, advertising and
music content for consumers distributed over the Internet.
Brilliant also licenses its Brilliant Banner ad serving
technology to the web based advertising industry. Find out more
at http://www.brilliantdigital.com  

Altnet is the first peer-to-peer network created to give
consumers easy access to secure content that originates from
content owners. Altnet provides TopSearch, a product that
integrates to applications and web sites via the Internet
allowing content owners to direct paying customers to their
content through search. Altnet also provides cost-effective
bandwidth functions for enterprise customers and content owners.
Altnet is a subsidiary of Brilliant Digital Entertainment
(AMEX:BDE).


CANAL CAPITAL: Todman & Co. Expresses Going Concern Doubt
---------------------------------------------------------
In its June 4, 2002 Auditors Report on the financial condition
of Canal Capital Corporation, the New York firm of Todman & Co.,
CPA's, P.C., says:

   "[T]he Company has suffered recurring losses from operations
   in nine of the last ten years and is obligated to continue
   making substantial annual contributions to its defined
   benefit pension plan. All of these matters raise substantial
   doubt about the Company's ability to continue as a going
   concern."

Canal Capital Corporation is engaged in two distinct businesses
the management and further development of its agribusiness
related real estate properties located in the midwest and
stockyard operations.

Real estate operations resulted in operating income of $231,000
and $96,000 for the six month periods ended April 30, 2002 and
2001, respectively. Additionally, real estate operations
contributed $711,000 and $490,000 to Canal's revenues for the
six month periods ended April 30, 2002 and 2001, respectively.

Canal's art sales generated income of $12,000 (net of a decrease
in the valuation allowance of $108,000) as compared to a loss of
$15,000 for the six month periods ended April 30, 2002 and 2001,
respectively.

The Company had approximately $857,000 and $1,012,000 of art
inventory (at original cost) on consignment with third party
dealers at April 30, 2002 and October 31, 2001, respectively.

At April 30, 2002, substantially all of Canal's real properties,
the stock of certain subsidiaries, the investments and a
substantial portion of its art inventories are pledged as
collateral.

Canal recognized net income of $348,000 for the six month period
ended April 30, 2002 as compared to a net loss of $25,000 for
the same period in fiscal 2001. After recognition of an
unrealized loss on investments held for sale of $0 and $44,000
for the six month periods ended April 30, 2002 and 2001,
respectively, the Company recognized comprehensive income of
$348,000 and a comprehensive loss of $69,000 for the six month
periods ended April 30, 2002 and 2001, respectively. Further,
after recognition of preferred stock dividend payments of
$156,000 and $144,000 for the six month periods ended April 30,
2002 and 2001, respectively, the Company recognized net income
applicable to common stockholders of $192,000 and a net loss
applicable to common stockholders of $169,000  for the six month
periods ended April 30, 2002 and 2001, respectively. Included in
the 2002 results is other income of approximately $323,000
received by Canal as a demutualization compensation payment from
an insurance company, from which, Canal had purchased annuity
contracts in the early 1980's for certain of its retired
stockyards employees. Included in the 2001 results is other
income of approximately $143,000 comprised primarily of a damage
award Canal received in connection with its lawsuit against a
meat packing company in South St. Paul, Minnesota which was
subsequently fully reserved at year end due to the financial
instability of the debtor.


CLASSIC COMMS: Taps Daniels & Associates as Cable Systems Broker
----------------------------------------------------------------
Classic Communications, Inc., and its debtor-affiliates sought
and obtained approval from the U.S. Bankruptcy Court for the
District of Delaware to hire Daniels & Associates, LP as their
Cable Systems Broker.

The Debtors chose Daniels as their cable systems broker because
of the firm's extensive expertise and knowledge in the cable
television industry. This engagement will be limited to
brokering the small cable systems. The services that Daniels
will render include:

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

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

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

Daniels will collect a fee equal to 5% of gross sale price for
each completed transaction plus reimbursement for all actual
out-of-pocket expenses incurred in connection with the services
it renders to the Debtors.

Classic Communications, Inc., a cable operator focused on non-
metropolitan markets in the United States, filed for Chapter 11
petition on November 13, 2001 along with its subsidiaries.
Brendan Linehan Shannon, Esq., at Young, Conaway, Stargatt &
Taylor represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $711,346,000 in total assets and $641,869,000 in total
debts.


COMMUNITY HEALTH: Fitch Rates $1.25BB Senior Bank Facility at BB
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to CHS/Community Health
Systems, Inc.'s new $1.25 billion senior secured bank facility.
The new bank facilities (maintained at the operating subsidiary
level -- CHS/Community Health Systems, Inc.) include a $450
million, 6-year revolving credit facility and a $800 million, 8-
year term loan B facility. While the company is not expected to
immediately draw on the revolver, proceeds from the term loan
will be used to refinance existing debt and fund 2002
acquisitions. The bank facility is secured by a perfected first
priority security interest in the capital stock of CHS/Community
Health Systems Inc. and all wholly owned subsidiaries. Fitch has
also assigned a 'B+' rating to Community Health Systems, Inc.'s
(Community's parent company) convertible subordinated notes due
2008. The Rating Outlook is Stable.

Fitch anticipates leverage to remain relatively stable as cash
from operations will fund acquisitions and capital expenditures,
limiting significant increases in borrowing but, conversely,
also limiting debt reduction. Additional equity issues are
possible. For the 12 months ended March 31, 2002,
EBITDA/interest was 3.9 times, with total debt-to-EBITDA of
3.4x. Total debt at March 31, 2002, was approximately $1 billion
and lease-adjusted debt-to-adjusted capital was approximately
56%.

Community is the largest for-profit, rural hospital management
company (in terms of facilities) in the U.S., and third largest
in terms of acute care hospitals behind HCA (185 hospitals) and
Tenet (115). Community operates 59 hospitals strictly in non-
urban or rural markets. The vast majority (86%) of Community's
hospitals are the only hospital in their respective market.

The rating reflects the validity of the company's business model
and it's leading market presence, experienced management and
positive industry dynamics offset by modestly high leverage and
acquisition-associated risks. The rating further reflects the
company's improved capital structure and rebalanced maturity
schedule.

Community's business model is similar to that of other for-
profit hospital management companies that rely on size for
efficiencies and market presence for payor leverage. Community
employs all of the mechanisms that make the for-profit model
successful including standardized/centralized administration,
group purchasing, information system leverage, capital
investment in facilities, and skilled nurse and technician
retention efforts. Its rural focus allows Community to
capitalize on a limited payor base and generate better managed
care pricing. A Community facility is typically the only
provider in a given market and, therefore, has significant
leverage when negotiating contracts. In addition, Community's
size allows the company to coordinate effective physician
recruitment for its facilities. Attracting physicians to rural
markets can be difficult; yet, Community and other national
chains have the ability to conduct national searches and have
the resources to provide a host of incentives in attracting
physicians not available to their poorly capitalized
competitors. Incentives typically include office space, income
guarantees, office management resources and group malpractice
insurance rates.

Community has grown though acquisitions and Fitch anticipates
the company will continue to grow by adding 2-4 non-profit
community hospitals per year, typically rural hospitals that are
the sole provider in their respective communities. Community has
a demonstrated track record of successful acquisitions and has
consistently elevated margins at acquired facilities. That said,
certain risks inherent with acquired facilities, namely
operating risks and any assumed potential liabilities, need to
be noted.

Favorable industry dynamics further support Community's rating.
Reimbursement levels have improved from recent years. Medicare
reimbursement is back in-line with traditional levels and third-
party payor rates remain favorable. Reimbursement trends will
remain favorable for at least the near-to-intermediate term as
Medicare rates are essentially established for 2003 and are in-
line with industry expectations and the majority of managed care
contracts have been signed covering the next fiscal year.
Additionally, the legislative environment vis-a-vis health care
reimbursement is markedly more favorable than recent experience.
Given the damage previous efforts to limit spending did to the
industry and the importance of the sector (including political
considerations) legislators are unlikely to make significant
cuts in health care funding despite anticipated deficit
spending. Despite concerns of cuts in some state Medicaid
budgets, any impact on Community would likely be immaterial.
Favorable demographics and positive utilization trends are also
key industry considerations.

Cost pressures may strain Community's margin enhancement
efforts. Labor costs, although somewhat abated in recent
quarters, will continue to be a source of concern and Community
may encounter challenges in recruiting nurses to rural markets
amid a nationwide skilled-nurse shortage. Other cost pressures
stem from increasing pharmaceutical and supply costs and rising
insurance premiums.


COSERV ELECTRIC: Files Disclosure Statement & Plans in Texas
------------------------------------------------------------
CoServ Electric and eight of its related companies, including
the CoServ telephone and cable businesses, announced that plans
of reorganization and other related disclosure statements were
filed June 24 in the U.S. Bankruptcy Court for the Northern
District of Texas.

CoServ Realty Holdings, L.P. filed its reorganization plan and
disclosure statement June 13.

It is anticipated that the CoServ entities currently moving
through the reorganization process will emerge from this process
before or during the fourth quarter of 2002.

The CoServ Electric plan was filed by CoServ Electric, CoServ
Utility Holdings, L.P. and CoServ Investments, L.P., and was
filed jointly with the National Rural Utilities Cooperative
Finance Corporation, embodying the global settlement reached by
the parties on May 2, 2002. The CoServ Electric plan provides
for the continued existence of the electric cooperative for the
benefit of its members, payment in full of all allowed claims of
the debtors' estates and the establishment of a $200 million 10-
year credit facility for future capital expenditures of the
electric cooperative. Exit financing is provided by both CFC and
CoBank, ACB, another electric cooperative lending institution.

The CoServ Realty plan likewise provides for payment in full to
all creditors, including CFC, which will receive a transfer of
the debtor's real estate developer loan portfolio. This plan
will provide for the continued funding of the developer loans by
CFC.

The CoServ Telecom plan provides for payment of an estimated 70%
of all claims to the creditors of the CoServ telecom companies.
The telecom companies previously announced debtor in possession
financing from CFC in the amount of $7.8 million, which will
provide funding through the end of 2002. If the assets are not
sold prior to that time, the ownership of the operations will be
transferred to CFC. The customers of CoServ Communications are
expected to continue receiving uninterrupted service through
this plan.

"We will emerge from bankruptcy with a stronger balance sheet,
poised for future growth and focused on our core electric
business," said Bill McGinnis, president and chief executive
officer of CoServ Electric. "This plan is a great outcome for
our members and our creditors."

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


COSERV ELECTRIC: Unveils Terms of Chapter 11 Reorganization Plan
----------------------------------------------------------------
Papers were recently filed with the U.S. Bankruptcy Court that
will enable Denton County Electric Cooperative (d/b/a CoServ
Electric), Corinth, Texas, to emerge from bankruptcy and repay
its primary creditor, National Rural Utilities Cooperative
Finance Corporation, the entire principal amount of its $1-
billion debt.

The plan also enables the utility to continue as a not-for-
profit cooperative, with a renewed focus on its core electric
distribution business.

In summary, the plans call for Denton County Electric
Cooperative to repay $601 million in debt to CFC; to turn over
to CFC its real estate lending portfolio--currently totaling
approximately $365 million outstanding--as well as other equity
interests and realty holdings; and to sell its
telecommunications assets, with the net proceeds being paid to
CFC.

The general terms of the plans are as follows:

                         Electric

Denton County Electric Cooperative will refocus on its core
electric distribution business.

     --  Denton County EC's debt obligations, totaling $601
million, will be restructured to fully amortize the principal
over a 35-year period, although at an impaired yield.

     --  These obligations will be secured by all of Denton
County EC's assets.

     --  CFC will provide secured financing for necessary
capital expenditures, within certain agreed-upon limitations, to
ensure continued electric service delivery to Denton County EC's
current and future members.

     --  Unsecured creditor claims will be settled.

     --  Once Denton County EC emerges from bankruptcy,
significant changes will be made to its executive management.

                    Telecommunications

Denton County Electric Cooperative will sell all of its
telecommunications assets or transfer them to an entity
designated by CFC.

     --  The Court has appointed a Chief Restructuring Officer,
designated by CFC, to manage the operations of Denton County
EC's telecommunications holdings and to maximize the value of
the telecommunications assets in a sale, the net proceeds of
which will be paid to CFC.

     --  Should a sale not take place on the later of the
telecom plan's effective date or September 30, 2002--on terms
satisfactory to CFC--the telecommunications assets will be
transferred to an entity designated by CFC in order to
effectuate their sale.

     --  CFC will continue to fund its previously approved
debtor-in-possession loan commitments to the telecommunications
holdings.

     --  Unsecured creditors will receive a partial settlement.

                            Realty

An entity designated by CFC will take possession of and manage
all of Denton County Electric Cooperative's real estate lending
portfolio and realty holdings.

     --  All of Denton County EC's real estate lending
portfolio, with a current outstanding principal balance of
approximately $365 million, will transfer to an entity
designated by CFC.

     --  Denton County EC will transfer to CFC certain realty
holdings and equity interests in the realty portfolio.

     --  CFC will honor Denton County EC's existing financing
commitments to the real estate projects in the portfolio, but
will not engage in any new real estate lending.

     --  Denton County EC will transfer to CFC all real estate
loans under their existing terms, which include interest rates
that are higher than what CFC charges its member electric
cooperatives.

Under the plans, all parties will end all litigation against
each other.

It is expected that Denton County Electric Cooperative will
emerge from bankruptcy and that these plans will become
effective by September 30, 2002. The plans are subject to the
review and approval of the U.S. Bankruptcy Court.

CFC is a not-for-profit finance cooperative that serves the
nation's more than 1,000 electric cooperatives and their
subsidiaries. With more than $20 billion in assets, CFC provides
its member-owners with an assured source of low-cost capital and
state-of-the-art financial products and services.


COVANTA ENERGY: Wants Plan Filing Exclusivity Moved to Nov. 27
--------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates ask the
Court to extend their exclusive period to file a plan of
reorganization through and including November 27, 2002.  
Furthermore, the Debtors ask the Court to extend their exclusive
period to solicit acceptances of that plan through and including
January 26, 2003.

Deborah M.  Buell, Esq., at Cleary, Gottlieb, Steen & Hamilton,
in New York, relates that since Petition Date, the Debtors and
their professionals have take several key steps towards a
successful and consensual resolution of the Chapter 11 cases,
like:

    (a) stabilizing the workforce and preserving vital customer,
        vendor and service provided relationships;

    (b) negotiating and obtaining Court approval, over numerous
        objections, of the Debtors' postpetition credit
        facility to provide adequate liquidity to fund their
        operations in these proceedings;

    (c) obtaining Court approval, over numerous objections, for
        the use of cash collateral;

    (d) filing of their voluminous schedules and statement of
        affairs;

    (e) pursing the sales or pre-sale marketing efforts for
        non-core assets;

    (f) engaging in an adversary proceeding relating to a
        substantial sublease with the city of Anaheim, in
        connection with the potential disposition of that asset;

    (g) spending substantial time with the creditors'
        representatives in order to provide diligence and
        background on the Debtors' and their financial issues;

    (h) engaging in discussions and providing of diligence to
        KKR and other potential acquirors in connection with a
        potential offer;

    (i) getting Court approval to implement a restructuring for
        its non-debtor subsidiary Covanta Power Pacific, Inc.;

    (j) initiated several adversary proceedings;

    (k) preparation for the development and negotiation of a
        Plan;

    (l) initial development of a five-year business plan;

    (m) continue working with KKR in a manner consistent with
        the Letter of Intent; and

    (n) begin a comprehensive evaluation of all the various
        property leases.

Even though substantial progress has been made, Ms. Buell
contends that the Debtors need additional time to permit them to
develop and negotiate with the major constituencies to develop a
Plan and Disclosure Statement that would enable the Debtors to
successfully emerge from these Chapter 11 proceedings.  
Moreover, Ms. Buell adds, "these cases are complicated cases,
involving more than 120 debtors, many thousands of creditors and
many hundreds of millions of liabilities."

Ms. Buell assures the Court that the extension will not
prejudice the legitimate interests of any creditor or equity
security holder and will afford the parties the opportunity to
pursue to fruition the beneficial objectives of a Plan. (Covanta
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


DOBSON COMMS: Declares In-Kind Dividend on 13% Preferred Shares
---------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) declared an in-
kind dividend on its outstanding 13% Senior Exchangeable
Preferred Stock. The dividend will be payable on August 1, 2002
to holders of record at the close of business on July 15, 2002.
The CUSIP number for the 13% Senior Exchangeable Preferred Stock
is 256072 50 5.

Holders of shares of 13% Senior Exchangeable Preferred Stock
will receive 0.03322 additional shares of 13% Senior
Exchangeable Preferred Stock for each share held on the record
date. The dividend covers the period May 1, 2002 through July
31, 2002. The dividends have an annual rate of 13% on the $1,000
per share liquidation preference value of the preferred stock.

Dobson Communications is a leading provider of wireless 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 http://www.dobson.net  

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


DOMINO'S INC: S&P Raises Rating to BB- on Improved Performance
--------------------------------------------------------------
Standard & Poor's raised its corporate credit rating on pizza
delivery company Domino's Inc. to double-'B'-minus from single-
'B'-plus based on the company's improved operating performance
and credit protection measures.

The outlook is stable. Ann Arbor, Michigan-based Domino's had
$640 million total debt outstanding as of March 24, 2002.

"Systemwide sales increased 6.8% to $3.8 billion in 2001 while
same-store sales for domestic franchise stores, which represent
about 60% of Domino's store base, rose 8.0% in the first quarter
of 2002 following a gain of 3.6% in all of 2001," Standard &
Poor's credit analyst Robert Lichtenstein said. "Moreover,
operating margins expanded to 15.4% for the 12 months ended
March 24, 2002, from 14.4% in the comparable period of 2001."

Standard & Poor's said the company's profits have increased as a
result of franchise unit expansion and new promotions and
product introductions. This, in turn, resulted in improved
credit protection measures, with EBITDA coverage of interest for
the 12 months ended March 24, 2002, at 2.6 times, up from 2.0x
in the comparable period of 2001.

Standard & Poor's said the ratings on Domino's reflect its
participation in the highly competitive pizza industry, a narrow
product focus, and a significant debt burden. These factors are
partially mitigated by the company's strong brand identity,
simple and cost-efficient operating system, and improved
profitability.

The company's highly leveraged capital structure is the result
of its 1998 recapitalization. For the 12 months ended March 24,
2002, total debt to EBITDA declined to 3.8x from 4.6x. Liquidity
is provided by a $100 million revolving credit facility, of
which $82.6 million was available as of March 24, 2002.


E.SPIRE COMMS: Wants Lease Decision Period Stretched to Sept. 30
----------------------------------------------------------------
To continue the orderly wind-down of their businesses, e.spire
Communications, Inc., along with its debtor-affiliates, asks the
U.S. Bankruptcy Court for the District of Delaware for a fourth
extension of their lease decision period.  The Debtors wish to
stretch the time period within which they must decide to assume,
assume and assign, or reject their unexpired nonresidential real
property leases through September 30, 2002.

The Debtors point out that currently they have approximately
75 unexpired leases of nonresidential real property.  Most of
the remaining Leases are either for space that has not yet been
assigned to the Buyer, or is not part of the assets purchased by
the Buyer.  The latter are spaces used by the Debtors for
conducting the operation and monitoring their switch equipment,
addressing customer issues and conducting administrative,
corporate sales functions that comprise their remaining business
operation. The Debtors explain that these leases are integral to
the Debtors' continued operations as they seek to close on the
sale approved by the Sale Motion, and wind down their remaining
operations, post-sale.

e.spire Communications, Inc. is a facilities-based integrated
communications provider, offering traditional local and long
distance internet access throughout the United States. The
Company filed for chapter 11 protection on March 22, 2001.
Domenic E. Pacitti, Esq., Maria Aprile Sawczuk, Esq. and Mark
Minuti at Saul Ewing LLP represents the Debtors in their
bankruptcy cases.


ENRON CORP: Court Okays Settlement Agreement with Global Risk
-------------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, Enron Corporation and Enron Global Markets LLC
obtained the Court's approval of its settlement agreement with
Global Risk Strategies (Bermuda) Ltd.

Global Risk Strategies (Bermuda), Ltd. is a Bermudian company
formed August 29, 2001.  Its owners are:

       25% - Global Risk Trading (Bermuda) Ltd.

       75% - Enron (Bermuda) Ltd., a Bermudian company that is
             indirectly owned 100% by Enron Global Markets.

Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
tells the Court that Global Risk Strategies Ltd.'s business has
been the trading of insurance claims, primarily through the
purchase of claims against solvent and insolvent insurance
companies and the subsequent prosecution of those claims.
"Global Risk Strategies Ltd. continues to operate this business,
albeit in a wind-down phase, and neither it nor Enron Bermuda is
party to any insolvency proceeding," Ms. Gray relates.

According to Ms. Gray, the rights and obligations of Enron
Bermuda and Global Risk Trading with respect to Global Risk
Strategies Ltd. are governed by a Shareholders Agreement dated
September 5, 2001.  Ms. Gray explains that the Shareholders
Agreement provides for Enron Bermuda to make working capital
loans and transaction loans (for the purchase of insurance
claims or otherwise to fund approved transactions) to Global
Risk Strategies Ltd.  In the event Enron Bermuda fails to fund a
working capital loan or transaction loan), then the Shareholders
Agreement is deemed terminated and Global Risk Strategies Ltd.
must liquidate its existing transactions.  "Repayment to Enron
Bermuda of such Funding Obligations are given the first priority
out of such liquidation proceeds," Ms. Gray says.  Since the
inception of Global Risk Strategies Ltd., Ms. Gray estimates
that Enron Bermuda has funded approximately $6,500,000 in
Funding Obligations.

The Funding Obligations are secured by a guaranty dated
September 5, 2001 from Enron Corp. made for the benefit of
Global Risk Trading, pursuant to which Enron irrevocably and
unconditionally guaranteed the timely payment when due of the
Funding Obligations.  In November 2001, Ms. Gray recalls that a
transaction loan obligation in the amount of $85,000 came due
that Enron Bermuda did not fund.  This prompted Global Risk
Trading to send Enron Bermuda a demand notice.  Still, Enron
Bermuda did not comply within the following seven-day cure
period.  Since that time, Ms. Gray relates, Global Risk
Strategies Ltd. has been in a wind-down phase.  "This means it
must liquidate its existing insurance claims and transactions,"
Ms. Gray explains.

Global Risk Trading is not at all happy with the developments.
Ms. Gray tells the Court Global Risk Trading has alleged that it
was fraudulently induced to enter into the Shareholders
Agreement relating to the formation of Global Risk Strategies
Ltd., and that it suffered loss as a result.  Moreover, Ms. Gray
says, Global Risk Trading has threatened action against Enron
Bermuda, Enron and Enron Global Markets in relation to such
claims.  On the other hand, Enron Bermuda, Enron and Enron
Global Markets continue to dispute such allegations.

To resolve these outstanding disputes, Global Risk Trading and
certain of its principals and affiliates, and Enron Bermuda and
certain of its parent entities, including Enron and Enron Global
Markets have negotiated a settlement agreement.

The salient terms of the Settlement Agreement are:

   (a) Enron Bermuda is to receive no less than $3,000,000 from
       Global Risk Strategies Ltd., $2,000,000 of which is
       immediately payable upon the effectiveness of the
       Settlement Agreement. The remaining payment is to be the
       greater of:

        (i) 75% of the liquidation proceeds of certain defined
            assets of Global Risk Strategies Ltd., as collected
            from the date of the signing of the Settlement
            Agreement and April 30th, 2003, or

       (ii) $1,000,000.

       The additional $1,000,000 will be secured by a first
       fixed charge over the remaining insurance claims or their
       proceeds;

   (b) The Global Risk Trading Parties and the Enron Parties
       completely and fully release each other from all claims
       of any kind relating to Global Risk Strategies Ltd., with
       exceptions.  In particular: Enron Bermuda forgives
       repayment of the Funding Obligations (in consideration
       for the payment received), the Enron guaranty is
       terminated, and the Enron Parties and all of their
       affiliated entities are completely released from any
       allegations of fraud or misconduct (pursuant to the
       general release provided); and

   (c) Certain express covenants of the Settlement Agreement are
       carved out of and survive the general mutual release,
       such as the forward payment obligation to Enron Bermuda,
       certain confidentiality and non-disparagement covenants,
       and record-keeping covenants. (Enron Bankruptcy News,
       Issue No. 33; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)

Enron Corp.'s 9.125% bonds due 2003 (ENRON2), says DebtTraders,
are quoted at a price of 12.5. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON2


ENRON CORP: Court Okays Alston & Bird as Neal Batson's Counsel
--------------------------------------------------------------
Enron Corporation Examiner, Neal Batson, obtained the Court's
authority to retain Alston & Bird LLP as his legal counsel in
these Chapter 11 cases, nunc pro tunc to May 28, 2002.

Mr. Batson expects Alston & Bird to:

  (a) take all necessary actions to assist the Examiner in his
      examination;

  (b) prepare on behalf of the Examiner all reports, pleadings,
      applications and other necessary documents in the
      discharge of the Examiner's duties;

  (c) assist the Examiner in the other tasks that may be
      directed to be undertaken by the Court; and

  (d) perform all other necessary legal services in connection
      with the Case.

In return for its services, Alston & Bird will be compensated
pursuant to its standard hourly rates, which are subject to
periodic adjustments to reflect economic and other conditions:

        Partners           $330-620
        Counsel             275-550
        Associates          170-375
        Paraprofessionals   105-235

It is the firm's policy to charge its clients in all areas of
practice for all expenses incurred in connection with the
client's cases.  The expenses charged to clients include, among
other things, long distance telephone charges, telecopier
charges, mail and express mail charges, special or hand delivery
charges, document processing, photocopying charges, travel
expenses, computerized research, transcription costs, as well as
non-ordinary overhead expenses like secretarial and other
overtime. (Enron Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ETOYS INC: Signs-Up Ernst & Young as Bankruptcy Tax Accountants
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
a request by eToys, Inc. and its affiliated debtors to employ
Ernst & Young LLP as their Tax Accountants.

Ernst & Young will render tax accounting services as needed
throughout the course of these Chapter 11 cases, including:

     a. preparing the United States Consolidated Income Tax
        Return, Form 1120 for the Debtors for the year ended
        March 31, 2001; and

     b. preparing the 2001 state and local income and franchise
        tax returns for the Debtors.

The Debtors clarify that this scope of services may be broadened
as the need arises.

Ernst & Young will be compensated in accordance with its
customary hourly rates charged to this engagement and as agreed
with the Debtors are:

                                 Tax Compliance
                              Standard Hourly Rates
                              ---------------------
     Principals                     $510
     Practice Coordinator           $435
     Senior Engagement Coordinator  $390
     Manager                        $320
     Technical Leader               $235
     Specialist                     $207
     Staff                          $155
     Paraprofessional               $106
     Intern                          $75

                                 Tax Consulting
                              Standard Hourly Rates
                              ---------------------
     Partners                      $510-600
     Principals                    $510-540
     Senior Managers               $495-510
     Managers                      $390-400
     Seniors                       $265-300
     Staff                         $200-210

eToys, Inc., now known as EBC I Inc, operated a web-based toy
retailer based in Los Angeles, California.  The Company filed a
Chapter 11 Petition on March 7, 2001.  When the company filed
for protection from its creditors, it listed $416,932,000 in
assets and $285,018,000 in debt.  eToys sold its assets and name
to toy retailer KB Toys. The Company's SEC report on February
28, 2002, the Debtors listed 32,091,918 in total assets and
192,396,702 in total liabilities. Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell and Howard Steinberg, Esq., at
Irell & Manella represent the Debtors as they wind-up their
financial affairs.


EXIDE: US Trustee Balks At PricewaterhouseCooper's Retention
------------------------------------------------------------
The U.S. Trustee objects to Exide Technologies' bid to hire
PricewaterhouseCoopers because:

A. The scope of services as set forth in the Application is
   extremely broad, encompassing a panoply of accounting,
   auditing, consulting, tax assistance and tax planning
   services.

B. It is a matter of common knowledge that the performance of
   consulting services by auditing firms, including but not
   limited to PwC, is currently a matter of great public
   concern. Indeed, on February 5, 2002, one of PwC's
   competitors, Arthur Andersen LLP, announced that former
   Federal Reserve Chairman Paul Volcker had been appointed to
   chair an independent oversight board "with authority to
   mandate changes in Andersen's auditing processes."  On  
   February 6, 2002, Andersen released a letter from its CEO
   summarizing certain interim changes that Andersen was
   immediately implementing in its engagement policies,
   including refraining from assignments in which Andersen would
   be performing both auditing and consulting services.

C. In a statement issued on February 14, 2002, Mr. Volcker
   summarized the concerns that led to the appointment of the
   oversight board.  On the subject of combined auditing and
   consulting engagements, Mr. Volcker noted, "Large and
   profitable consulting assignments may, even subconsciously,
   affect auditor judgment."

D. Significant elements of the consulting and non-audit work PWC
   proposes to perform for the Debtors appear to constitute
   internal audit services as well as general accounting and
   consulting services.

E. As a result, the UST believes that the terms of the proposed
   engagement are of questionable propriety even outside of
   bankruptcy (leaving aside the question whether they were
   appropriate in the past).  PwC should not be permitted to
   perform a combination of services in a bankruptcy case (where
   the level of scrutiny should be heightened rather than
   relaxed) when the propriety of such a combination of services
   is now called into question by accounting professionals and
   where the services to be performed may require PwC to review
   not only its own post-petition work but also audit, tax and
   consulting work that it performed for the Debtors pre-
   petition.

F. The Application and the attached Affidavit of John Kiely in
   support of the Application indicate that PwC performed audit,
   tax and consulting services for the Debtors and a number of
   their subsidiaries pre-petition.  The Kiely Affidavit also
   states that PwC is not a creditor of the Debtors.  However,
   the Application provides information regarding pre-petition
   payments made to PwC, even during the course of the ongoing
   engagement described in the engagement letter annexed to the
   Application.  The payments may have been avoidable
   preferences which would create an interest adverse to the
   estates, precluding the necessary finding that PwC is a
   disinterested person and therefore precluding employment of
   PWC.  Employment of PwC for any purpose pursuant to 11 U.S.C.
   Section 327(a) should not be approved until PwC produces
   sufficient information to demonstrate that it is in fact a
   disinterested person. (Exide Bankruptcy News, Issue No. 6;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Exide Technologies' 10% bonds due 2005
(EXIDE2) are trading at about 15. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXIDE2for  
real-time bond pricing.


EXODUS COMMS: Gets Okay to Settle Dispute with Lakeside Purchase
----------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates sought
and obtained the entry of an Order approving a stipulation with
Lakeside Purchase, LLC to resolve Lakeside's objection for the
removal of personal property at 350 Cermak in Chicago, Illinois.

Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
in Wilmington, Delaware, tells the Court that the Debtors had,
on January 24, 2002, served a Sale Notice on the personal
property attached to the Site pursuant to the Miscellaneous
Assets Sale Order. Lakeside had filed an objection to this Order
on February 14, 2002.  The lease was originally entered into
between Global Crossing subsidiaries Frontier Corporation,
FrontierGlobalCenter, Inc. (predecessors-in-interest to debtor
GlobalCenter, Inc.) and 350 East Cermak, LLC (predecessor-in-
interest to Lakeside).

The pertinent terms of the stipulation are:

A. The Debtors agree to reject the Lease effective February 28,
   2002.  The Debtors agree to pay the sum of $1,250,000,00 by
   wire transfer to Lakeside;

B. Lakeside is entitled to retain any and all payments or
   deposits made after September 26, 2001 on account of the
   Lease.  This is including any rent or security deposit paid
   by the Debtors or Global Crossing Ltd., is in full
   satisfaction of any rent and any other obligations owed to
   Lakeside under the Lease accruing from September 26, 2001
   through February 28, 2002.  But if Global Crossing, the
   Official Committee of Unsecured Creditors in the Global  
   Crossing bankruptcy cases, any estate representative, or any
   other party acting on behalf of the Global Crossing, obtain a
   judgment requiring Lakeside to return any security deposit or
   rent paid by Global Crossing Ltd., then Lakeside will, in the
   Debtors' cases, have an allowed administrative expense claim
   in the amount of the returned security deposit or rent;

C. In lieu of the Proof of Claim of Lakeside dated April 10,
   2002 on file with the Court, the Debtors and Lakeside agree
   that Lakeside will have these allowed general unsecured
   claims:

   a. $153,157 for unpaid operating expenses for 2000 and 2001;

   b. $3,000,000 with respect to the mechanics liens, including
      lienholders' attorneys' fees, court costs and expenses,
      and interest payable to lienholders in resolution of the
      mechanic's liens;

   c. $500,000 for attorneys' fees, court costs and expenses to
      the extent actually paid by Lakeside (which Lakeside will
      establish by submitting evidence of payment to the Debtors
      or Plan Administrator as the case may be) in its defense
      of and resolution of the mechanic's liens;

   d. the actual amount paid by Lakeside to unaffiliated
      lienholders for attorneys' fees, court costs, expenses,
      and interest that are not included in the amount of
      $3,000,000 described in (b); and,

   e. in the event that additional mechanics liens are filed
      against Lakeside and the Site that relate to the premises
      leased to the Debtors, the Debtors agree that Lakeside's
      allowed general unsecured claims will be increased by (i)
      the total amount of payments made by Lakeside to the
      lienholders to obtain releases of the Additional Liens,
      and (ii) the amount of attorneys' fees paid by Lakeside in
      its defense of that Additional Liens;

  The Debtors agree that the claims described in (d) and (e) are
  not Disputed Claims as defined in the Debtors' Reorganization
  Plan;

D. By June 10, 2002, the Debtors will have conveyed all of the
   Debtors' right, title and interest in and to the Personal
   Property listed in the Sale Notice.  This includes all other
   tenant improvements and other personal property located at
   the Site, including, without limitation, raised flooring,
   equipment racks and system furniture on an "as is-where is"
   basis.  The Debtors wil assign any warranties provided by
   third parties with respect to the Property that can be
   assigned by the Debtors at no cost or expense to the estates;

E. Provided that no appeal of the approval of the stipulation
   has been filed with the Court, Lakeside releases and
   discharges the Debtors and their estates from any and all
   claims that Lakeside may have with respect to the Lease,
   including, without limitation, any claims for rejection
   damages and administrative rent claims;

F. In the event that the Debtors, the Official Committee of
   Unsecured Creditors, any estate representative, or any other
   party on behalf of the Debtors' estates assert any cause of
   action against Lakeside, the claims released will be
   resurrected in that the Resurrected Claims can be asserted
   defensively.  This can occur even after the confirmation of
   the Reorganization Plan and despite any discharge that may be
   granted by the Court.  This can be done by way of setoff,
   recoupment, counterclaim provided that Lakeside's ability to
   assert the Resurrected Claims is expressly reserved and
   Lakeside need not take any further action in the Debtors'
   cases to preserve the ability to assert the Resurrected
   Claims; and,

G. By June 15, 2002, the Debtors would have delivered any and
   all "as built" plans and CAD drawings with respect to the
   Site currently in the Debtors' possession.  The Debtors will
   have its contractors and agents provide access to and copies
   of the CAD drawings to Lakeside at no further cost or expense
   to the Estates. (Exodus Bankruptcy News, Issue No. 20;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)

Exodus Communications Inc.'s 11.625% bonds due 2010 (EXDS3) are
trading at about 17.75, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDS3for  
real-time bond pricing.


FLAG TELECOM: Court Okays Appleby Spurling as Bermuda Counsel
-------------------------------------------------------------
Judge Allan L. Gropper grants FLAG Telecom Holdings Limited and
its debtor-affiliates interim authority to employ Appleby,
Spurling & Kempe as special Bermuda counsel effective April 12,
2002.

The interim Order follows the withdrawal of the Objection of the
FLAG Telecom Holdings Ltd. noteholders. The Objection relates to
the allocation among the Debtors of costs in retaining Appleby.

In a second Order, Judge Gropper makes clear that the note-
holders may still object to the retention of Appleby on the
grounds that FTHL's interests are adverse to that of the other
Debtors and therefore it requires a separate counsel. That
Objection, however, cannot form the basis for objecting to
Appleby's application for compensation.

                        *    *    *

As previously reported, the Debtors expect Appleby to provide
the services sought, among them:

   (a) representing the Debtors in the provisional liquidation
       proceedings in Bermuda, including filing various
       applications and motions and instructing counsel,
       including where appropriate, Queen's Counsel with respect
       to Court appearances;

   (b) identifying issues under Bermuda law that will arise in
       the provisional liquidation and during the course of
       these Chapter 11 proceedings, and counseling the Debtors
       with regard to the issues;

   (c) coordinating as necessary with the Debtors' United States
       counsel with respect to the Debtors' Chapter 11 cases;

   (d) continuing with the representation of FLAG Limited in
       relation to ongoing litigation that was commenced in the
       Supreme Court of Bermuda in 1998. (Appleby currently
       represents FLAG Ltd. in a declaratory action that it
       commenced against Nicholas Reda and Jamal Abdul-Jalil.
       The Declaratory Action was commenced in the Supreme Court
       of Bermuda in 1998 with Judgment being entered on 23
       March 2000. There have been subsequent appeals of that
       decision and it is currently being determined before the
       Judicial Committee of the Privy Council in the United
       Kingdom. The Privy Council hearing commenced the week of
       15 April 2002.)

   (e) providing such other services relating to issues arising
       under Bermuda law as the Debtors reasonably request
       from time to time with respect to the reorganization of
       its business.

                         Compensation

Appleby bills for its services on an hourly basis:

       Partners     $425 to $525 per hour
       Associates   $200 to $475 per hour
       Paralegals   $150 to $200 per hour

The partners, counsels, associates and paralegals currently
expected to work on the engagement are:

       Professional                 Compensation
       ------------                 -------------
       John Riihiluoma              $500 per hour
       Peter Bubenzer               $500 per hour
       Jennifer Fraser              $475 per hour
       Geoffrey Bell                $425 per hour
       Susan Davis                  $275 per hour
       Jeremy Leese                 $420 per hour
       Bal Bhullar                  $390 per hour
       Ian Stone                    $470 per hour
       Arabella di Iorio            $425 per hour
       Dianne Alleyne               $200 per hour

Appleby will be reimbursed for out of pocket expenses, such as
travel expenses, duplicating charges, computer and research
charges, messenger services and telephone charges. (Flag Telecom
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


FOCAL COMMS: S&P Junks Bank Loan & Senior Unsecured Debt Ratings
----------------------------------------------------------------
Standard & Poor's assigned its triple-'C' bank loan rating to
integrated communications service provider Focal Communications
Corp.'s senior secured credit facility and assigned its double-
'C' rating to the company's senior unsecured debt. The company
completed a comprehensive recapitalization plan on October 26,
2001.

A triple-'C' corporate credit rating was also assigned to the
company. The outlook is developing. As of March 31, 2002,
Chicago, Illinois-based Focal had total debt outstanding of
about $477 million, including $103 million of convertible notes.
The company offers voice and data services to large enterprise
and Internet service provider (ISP) customers in 22 metropolitan
markets.

"The rating on Focal reflects the very high business risk
profile of the competitive local exchange carrier (CLEC)
industry and the company's weak financial position," Standard &
Poor's credit analyst Rosemarie Kalinowski said. "In addition,
ISPs represent about 40% of the company's revenue mix. Although
this percent has declined over the past few quarters, the
company has experienced a significant amount of line churn
because a good degree of ISPs continue to have financial
difficulties."

"The high line churn of ISPs, along with slower growth in the
enterprise business segment, contributed to a low 1% growth in
net lines installed in the first quarter of 2002 compared with
6% growth in the fourth quarter of 2001," Ms. Kalinowski added.

Standard & Poor's said a developing outlook indicates that a
company's rating could be raised or lowered depending on certain
factors. It said the rating on Focal could be raised over the
next year if cash flow measures and its competitive position
improve. However, the rating could be lowered if Focal's plan to
increase enterprise customers and significantly improve cash
flow does not materialize.

Standard & Poor's said Focal's $225 million amended secured bank
facility, which matures in 2007, is rated the same as the
corporate credit rating because of the likelihood of meaningful
recovery of principal in event of default or bankruptcy. The
company's liquidity position as of March 31, 2002, included
about $70 million of cash and $35 million availability under the
bank facility. If Focal meets bank covenants through March 31,
2003, then the remaining $95 million under the bank facility
will be available.


FRIEDE GOLDMAN: Will Auction-Off Halter Marine Assets on July 16
----------------------------------------------------------------
Friede Goldman Halter, Inc. (OTCBB:FGHLQ) received milestone
dates from the U.S Bankruptcy Court regarding the sale of Halter
Marine. The Court auction date has been set for July 16, 2002
with the sale hearing to take place on July 23, 2002. A copy of
the procedures for participating in the auction is available
from counsel for the Selling Debtors, Douglas G. Walter, Andrews
& Kurth, Mayor, Day, Caldwell & Keeton, 600 Travis, Suite 4200,
Houston, Texas 77002. The sale contemplates an agreement for the
purchase of all the operating assets and properties of Halter,
including the assets at Halter Pascagoula, Halter Moss Point,
Moss Point Marine, Halter Port Bienville, Halter Lockport, and
Halter Gulfport East including the Corporate Headquarters,
Gulfport Central and Three Rivers. The closing is expected to
take place in early August 2002.

"There have been a number of parties considering Halter for
possible inclusion in their operating platforms because of its
strong market presence," said Jack Stone, Principal, Glass &
Associates, Inc. and Chief Restructuring Advisor to FGH. "We're
pleased with this interest; the sale of Halter Marine is a major
step in providing a return to the creditors. The continued
loyalty of the employees, customers and suppliers has made this
possible."

Friede Goldman Halter is a leader in the design and manufacture
of equipment for the maritime and offshore energy industries.
Its core operating units are Friede Goldman Offshore
(construction, upgrade and repair of drilling units, mobile
production units and offshore construction equipment) and Halter
Marine, Inc. (a significant domestic and international designer
and builder of small and medium sized vessels for the
government, commercial, and energy markets).


GEMSTAR-TV GUIDE: S&P Affirms BB+ Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's has revised its outlook on Gemstar TV Guide
International Inc. to negative from stable based on concerns
about increased competition the company could face following an
unfavorable court determination.

Standard & Poor's said that its double-'B'-plus corporate credit
rating on Pasadena, California-based Gemstar is affirmed. The
company currently has $303 million in debt outstanding.

Standard & Poor's said that it believes Gemstar could face
increasing competition following an initial determination by the
U.S. International Trade Commission (ITC) that the patents of
Gemstar have not been infringed by rival guides included as a
part of imported set-top cable-television boxes. The ITC also
ruled that the company misused one of the patents that was found
to be unenforceable for failure to name a co-inventor. The ITC
judge did uphold the validity of all patents in the suit.

"The ruling potentially undermines the company's position as
industry leader in developing and licensing TV programming guide
technology, its ability to win new or renew existing contracts,
and generate revenues from its technology and interactive
programming guides (IPG) in line with expectations," said
Standard & Poor's credit analyst Alyse Michaelson. She added
that, "The company may now have to transition to a more product-
oriented, marketing-driven, and customer-centric operating model
given that the foundation for a legal strategy has weakened."
Ongoing patent infringement litigation and the potential for
future management instability exacerbate Standard & Poor's
concerns.

Standard & Poor's said that its ratings on the company could be
lowered if it does not continue to gain traction in its
technology, licensing and IPG businesses, and maintain its cash
cushion.


GENERAL DATACOMM: Taps Fiesner Wolfson for Chase Litigation
-----------------------------------------------------------
On or about April 30, 2002, JP Morgan Chase Bank, et al.
initiated a complaint in foreclosure upon General Datacomm
Industries, Inc.'s property in Middlebury, Connecticut.

In this connection, General Datacomm Industries, Inc. and its
debtor-affiliates ask permission from the U.S. Bankruptcy Court
for the District of Delaware to employ Feiner Wolfson LLC as
Counsel in connection with the JP Morgan Chase Bank V. General
Datacomm Industries, Inc. pending in the Superior Court for the
Judicial District of Waterbury, Connecticut.

The Debtors believe that Fiesner Wolfson is well-qualified and
able to provide the needed services to the Debtors' in a cost-
effective, efficient, and timely manner.

Subject to court approval, the Debtors propose to compensate
Fiesner Wolfson on an hourly basis, plus reimbursement of
actual, necessary expense and other charges incurred by the
firm. The principal attorney designated to represent the Debtors
is Mr. John M. Wolfson and his current standard hourly rate is
$235 per hour. Fiesner Wolfson estimates that its compensation
and reimbursement expenses will not $35,000.

Due to the limited nature of this representation, Fiesner
Wolfson will submit detailed time records to the Debtors, the
Office of the United States Trustee and counsel for the
Committee in lieu of filing monthly fee applications with this
Court.

General DataComm Industries, Inc. is a worldwide provider of
wide area networking and telecommunications products and
services. The Company filed for Chapter 11 protection on
November 2, 2001. James L. Patton, Esq., Joel A. Walte, Esq. and
Michael R. Nestor, Esq., represent the Debtors in their
restructuring effort. When the Company filed for protection from
its creditors, it listed $64,000,000 in assets and $94,000,000
in debts.


GLENOIT: Seeks to Extend Solicitation Period Pending Auction
------------------------------------------------------------
Glenoit Corporation and its debtor-affiliates move to enlarge
the time period within which they have an exclusive right to
solicit acceptances of a chapter 11 plan and file a Disclosure
Statement.

After two months of negotiations, Galaxy Enterprise Corp., the
agent for the Debtors' Secured Lenders, the Office of the United
States Trustee, and certain individual Secured Lenders, the
parties have agreed on a form of order governing the auction
procedures for the sale of the Debtors remaining two operating
divisions.  The Debtors intend to convene an auction on
August 5, 2002.

Until then, the Debtors intend to use the next two months to
work with other interested buyers in order to convene a
successful, competitive auction. In the meantime, the Debtors
assure the Court that they will also work on two other plan
alternatives, depending on the results of the auction.

Many of the Secured Lenders have expressed a willingness to
convert some of their debt to equity under the Plan, and the
Debtors are highly confident they could confirm such a Plan
quickly, if the auction is not successful. However, in the event
that the auction is successful, the Debtors intend to prepare a
liquidating Plan and accompanying Disclosure Statement which
will be promptly filed, the Debtors explain.

Due to the fact that they do not yet know which of these options
will resolve the case, the Debtors contend that it is not
efficient or productive to complete a Disclosure Statement at
this time. In this connection, the Debtors seek an extension,
until September 10, 2002 to file a Disclosure Statement with
respect to the Plan, and to solicit acceptances of the Plan.

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


GLOBAL CROSSING: Committee Taps Laiken as Actuarial Consultants
---------------------------------------------------------------
Global Crossing Ltd.'s Official Committee of Unsecured Creditors
sought and obtained Court approval authorizing them to retain
Laiken Associates Inc. as actuarial consultants, nunc pro tunc
to April 22, 2002.

The general nature of services that Laiken will perform for the
Committee may include the following:

A. Assist the Committee to determine and analyze the value of
   accrued liabilities of the Frontier Corp. Plan for Employees
   Pension & Death Benefits and determination of their actuarial
   surplus;

B. Assist the Committee in reviewing and analyzing actuarial
   reports, valuations, financial data, and other materials
   concerning the Plan;

C. Attend and advise at meetings with the Committee and its
   Counsel;

D. Attend meetings with the Debtors and their representatives
   and advisors;

E. As may be agreed to by Laiken and subject to a separate
   engagement letter, as appropriate, render expert testimony on
   behalf of the Committee; and

F. Provide other services as may be requested by the Committee
   and as agreed to by Laiken.

Subject to Court approval, Laiken intends to charge for its
professional services on an hourly basis in accordance with its
ordinary customary hourly rates in effect on the date the
services are rendered and seek reimbursement of reasonable
expenses.  Laiken's regular hourly rates are:

       Level                     Range of Rates
       -----------------------   --------------
       Officers                  $350 to $450
       Senior Managers/Actuary   $250 to $350
       Actuary                   $200 to $300
       Consultants               $175 to $250

Leslie M. Laiken, an Officer of Laiken Associates Inc., assures
the Court that Laiken neither holds nor represents any interest
adverse to the Debtors or their estates in matters for which it
is to be retained.  According, Laiken is a "disinterested
person" as defined in the Bankruptcy Code. (Global Crossing
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

DebtTraders says that Global Crossing Holdings Ltd.'s 9.625%
bonds due 2008 (GBLX3) are trading at about 1.625. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX3for  
real-time bond pricing.


GREAT LAKES: Violates Nasdaq Continued Listing Requirements
-----------------------------------------------------------
Great Lakes Aviation, Ltd. (Nasdaq: GLUX) has received notice
from Nasdaq that it intends to delist the Company's securities
from the Nasdaq SmallCap Market at the opening of business on
June 28, 2002, due to non-compliance with applicable continued
listing criteria for either the minimum net tangible assets or
minimum stockholders' equity as stated in Marketplace Rule
4310(C)(2)(B).

In response to the notice, Great Lakes Aviation has requested a
hearing before a Nasdaq Listings Qualification Panel to contest
the delisting of its shares from the Nasdaq SmallCap Market. The
hearing request will stay the delisting of Great Lakes
Aviation's securities pending the Nasdaq Listing Qualification
Panel's decision. The company intends to submit a specific plan
in oral and written presentations to Nasdaq that includes a
significant financial restructuring of the company and also
enables the company to attain compliance with the listing
criteria. Nasdaq may not accept Great Lakes Aviation's arguments
in favor of continued listing, in which case, Great Lakes
Aviation's securities would be delisted and no longer be able to
be traded in the Nasdaq SmallCap Market.

If Great Lakes Aviation's securities do not continue to be
listed on the Nasdaq SmallCap Market, such securities would
become subject to certain rules of the SEC relating to "penny
stocks." Such rules require broker-dealers to make a suitability
determination for purchasers and to receive the purchaser's
prior written consent for a purchase transaction, thus
restricting the ability to purchase or sell the securities in
the open market. Additionally, trading, if any, would be
conducted in the over-the-counter market in the so-called "pink
sheets" or on the OTC Bulletin Board, which was established for
securities that do not meet the Nasdaq listing requirements.
Selling Great Lakes Aviation shares would be more difficult
because transactions could be delayed, and security analyst and
news media coverage of Great Lakes Aviation may be reduced.
These factors could result in lower prices and larger spreads in
the bid and ask prices for Great Lakes Aviation shares.


GREEN TREE: Fitch Downgrades Certain Transactions to Junk Level
---------------------------------------------------------------
Fitch Ratings has downgraded the limited guaranty class of the
Green Tree Recreational, Equipment and Consumer Trusts listed
below to 'CCC'. Interest and principal on the class B
certificates of each noted series are guaranteed by Conseco
Finance Corp. (CFC), whose senior unsecured rating is currently
'CCC'. The rating actions are in response to declining excess
spread and continued use of guaranty payments to support the
classes listed below, and therefore link the credit risk profile
of CFC to the security ratings.

   Green Tree Recreational, Equipment and Consumer Trust:

--Series 1996 B asset backed-certificates to 'CCC' from 'B';

--Series 1996 C asset backed-certificates to 'CCC' from 'B';

--Series 1996 D asset backed-certificates to 'CCC' from 'B';

--Series 1997 A asset backed-certificates to 'CCC' from 'B';

--Series 1997 B class B certificates to 'CCC' from 'B';

--Series 1997 C class B certificates to 'CCC' from 'B';

--Series 1997 D asset backed-certificates to 'CCC' from 'B';

--Series 1998 A class B-C, B-H certificates to 'CCC' from 'B';


GROUP TELECOM: Canadian Court Grants CCAA Protection
----------------------------------------------------
GT Group Telecom Inc. has sought and obtained from the Ontario
Superior Court of Justice an order granting it and its
affiliates protection under the Companies' Creditors Arrangement
Act. The effect of the Order is to stay all proceedings against
the Company and to suspend payments in respect of any debt
obligations existing on or before today's date pending
development of a restructuring plan. The Order provides for an
initial period of 30 days' protection, subject to further
extension by the Court, and permits the Company to operate its
business in the ordinary course. PricewaterhouseCoopers Inc. has
been appointed by the Court to act as the Company's monitor. The
Company will also be initiating ancillary filing in the United
States.

Dan Milliard, Interim Chairman and Chief Executive Officer of
Group Telecom, said "Obtaining the CCAA Order permits the
Company to continue providing uninterrupted service to our
customers while allowing additional time to negotiate a
restructuring plan with our stakeholders. The Company has ample
liquidity to permit us to carry on our business in the ordinary
course during the restructuring period, including providing
service to our customers, paying for goods and services supplied
after the date of the Order and the on- going payment of wages
and benefits to employees."

The Company currently has sufficient cash to allow it to
continue to provide service to customers in an uninterrupted way
during the CCAA period.

The Company is continuing discussions with its lenders with the
objective of negotiating a successful restructuring of its debt
and operations.

As Group Telecom works through this restructuring process, it
will reduce its overall employee headcount by approximately 360
employees and tightly manage capital expenditures. These cost
savings are designed to significantly reduce its use of cash in
order to position the company for a successful restructuring.

Group Telecom also confirms the resignation from its Board of
Directors of Messrs. Jim Shaw, Ron Rogers and Michael D'Avella
that was announced by Shaw Communications Inc. on June 19, 2002
and Mr. Leo Hindery Jr. effective June 24, 2002.

Group Telecom is Canada's largest independent, facilities-based
telecommunications provider, with a national fibre-optic network
linked by 454,125 strand kilometres of fibre-optics, at March
31, 2002. Group Telecom's unique backbone architecture is built
with technologies such as Gigabit Ethernet for delivery of
enhanced network performance and Synchronous Optical Network
(SONET) for the highest level of network reliability. Group
Telecom offers next-generation high-speed data, Internet,
application and voice services, delivering enhanced
communication solutions to Canadian businesses. Group Telecom
operates with local offices in 17 markets across nine provinces
in Canada. Group Telecom's national office is in Toronto.

GT Group Telecom's 13.25% bonds due 2010 (GTGR10CAR1) are quoted
at a price of 6. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=GTGR10CAR1


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

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

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

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

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

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

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

Notwithstanding Schenk's difficulties, and the issues discussed
above, facing Hayes' European operations generally, Hayes is
pleased with the recent performance of its European operations.
Hayes' management believes the European operations are
performing well and exceeding plan projections. Other than
Schenk, Hayes currently has no near-term business unit sales or
marketplace exits planned for any of its European operations.
(Hayes Lemmerz Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HARDWOOD PROPERTIES: Shareholders Approve Liquidation Plan
----------------------------------------------------------
Hardwood Properties Ltd. (TSX:HWP) announced that its
shareholders have unanimously approved the plan for the
voluntary liquidation and dissolution of the corporation that
was previously announced on May 21, 2002. As announced at that
time, the plan provides that Hardwood will first complete the
sale of its remaining real estate assets, terminate all of its
employees, satisfy all of its known and quantified obligations,
and otherwise wind-down and liquidate its business. Hardwood
will then distribute to its shareholders all of its cash on hand
(less a reserve in an amount sufficient to satisfy both ongoing
costs of maintaining its corporate existence until final
dissolution and any contingent or unknown and unaccounted for
liabilities). Upon the directors being satisfied that all
obligations of the Corporation have been satisfied, Hardwood
will be dissolved. The plan also provides the directors of the
Corporation with the discretion to not dissolve the Corporation
if a suitable business or new shareholder group through which
the Corporation could be revitalized is identified.

Hardwood Properties Ltd. is a Calgary based real estate company
that specializes in the acquisition, re-construction, management
and sale of multi-family residential properties.


IMMUNE RESPONSE: Appoints Bjorn Lydersen as VP of Manufacturing
---------------------------------------------------------------
The Immune Response Corporation (Nasdaq: IMNR) announced Bjorn
(Ken) Lydersen, Ph.D. has joined the Company as vice president
of Manufacturing Operations, a position under which he will
oversee all production of products, including REMUNE(R), and
manufacturing facilities in King of Prussia, Pennsylvania.

"Ken brings over 28 years of experience as a scientist,
researcher and medical manufacturing expert. We are fortunate to
attract such a talented and knowledgeable professional to
oversee our manufacturing efforts," said Dr. Dennis Carlo,
president and chief executive officer for The Immune Response
Corporation. "We are especially interested in having Ken step in
and begin the process of ensuring that production of REMUNE(R)
can move as quickly and efficiently as possible when the
opportunity to do so comes."

"This is an exciting opportunity for me. I look forward to being
involved in the production of a product such as REMUNE(R) that
may play an important role in the treatment of HIV-1 infection,"
Lydersen said.

Previously, Dr. Lydersen served as vice president of research
and development for Irvine Scientific from 1994-99. Before that,
Lydersen was director of in vitro antibody production for
Hybritech Inc., a biotechnology company acquired by Eli Lilly &
Co. He also served as manager of research and development for KC
Biologicals, and a senior research scientist for Corning Glass
Works. Most recently he served in several consulting roles for
biotechnology firms, medical journals and scientific forums. Dr.
Lydersen is the editor of two books that are widely used as
teaching tools at various universities, entitled "Large Scale
Cell Culture Technology" and "Engineering Handbook of
Biotechnology".

Dr. Lydersen received his doctorate in biophysics from
Pennsylvania State University, and his master's degree in
industrial management and bachelor's degree in mechanical
engineering from Clarkson College of Technology.

Co-founded by medical pioneer, Dr. Jonas Salk and based in
Carlsbad, California, The Immune Response Corporation is a
biopharmaceutical company developing immune-based therapies
designed to treat HIV, autoimmune diseases and cancer. The
Company also develops and holds patents on several technologies
that can be applied to genes in order to increase gene
expression or effectiveness, making it useful in a wide range of
therapeutic applications for a variety of disorders. Company
information also is available at http://www.imnr.com  

                         *   *   *

As reported in Troubled Company Reporter's June 20, 2002
edition, The Immune Response Corporation (Nasdaq: IMNR)
announced an agreement with Transamerica Technology Finance
Corporation to restructure its existing equipment loans, in
effect curing the existing default under those loans and
limiting the circumstances which can serve as the basis for any
future default, as part of an effort to solidify the Company's
finances.

The original equipment loan was used primarily to acquire
equipment in the Company's Pennsylvania manufacturing facility
and was primarily collateralized by the equipment on premises.
The restructured agreement affects $1.5 million of the Company's
outstanding debt.

Pursuant to the agreements signed with Transamerica, the Company
is obligated to pay Transamerica milestone payments upon receipt
by the Company of proceeds from a certain number of financing
activities. The payments would reduce the Company's existing
Transamerica debt. The Company also remains obligated to make
its scheduled debt payments to Transamerica until all the debt
and interest has been paid in full. Additionally, the Company
granted to Transamerica a security interest in the Company's
assets, including its intellectual property, subject to an
existing security interest in the intellectual property.


INTRAWARE INC: May 31 Balance Sheet Upside-Down by $3.4 Million
---------------------------------------------------------------
Intraware Inc. (NASDAQ: ITRA), a leading provider of global
electronic software delivery and management (ESDM) solutions,
announced financial results for the first quarter of fiscal year
2003.

Before a warrant charge associated with the sale of the Asset
Management software business, total revenues for the first
quarter of FY 2003 were $5.4 million. After the warrant charge,
total revenues for the first quarter of FY 2003 were $4.5
million compared to $14.0 million in the previous quarter and
$15.3 million in the first quarter of FY 2002. The decline in
total revenues is the result of the above mentioned warrant
charge as well as an anticipated $8.6 million decline in
revenues recognized from the discontinued third party software
resale business.

Before the warrant charge, gross profit for the first quarter of
FY 2003 was $3.1 million. After the warrant charge, total gross
profit of FY 2003 was $2.2 million compared to $4.1 million in
the previous quarter ended February 28, 2002, and $5.4 million
in the first quarter of FY 2002. Gross profit from online
services and technology was $1.6 million in the first quarter of
FY 2003, compared to $2.9 million in the quarter ended February
28, 2002, and $3.0 million in the first quarter of FY 2002. The
majority of gross profit came from the ESDM business. Gross
profit margins totaled 48% in the first quarter of FY 2003,
compared to 29% in the previous quarter, and 35% in the first
quarter of FY 2002.

The net loss attributable to common stockholders was $6.8
million for the quarter ended May 31, 2002, compared to a net
loss attributable to common stockholders of $7.8 million for the
same quarter a year earlier and a net loss attributable to
common stockholders of $4.5 million for the immediately
preceding quarter ended February 28, 2002.

At its May 31, 2002 balance sheet, Intraware has a working
capital deficit of about $3 million, and a total shareholders'
equity deficit of about $3.4 million.

"We are very pleased with our accomplishments this quarter,"
said Peter Jackson, president and CEO. "During the first quarter
of FY 2003, we sold our IT Asset Management software business to
Computer Associates International, Inc. while continuing to
execute on our ESDM business strategy and expand our
SubscribeNet(R) customer base. In addition, we raised $3.9
million in a private placement, which combined with the sale to
CA, allowed us to convert or pay off all our outstanding debt
and increase our cash balance."

"We are now well positioned to take advantage of the
opportunities before us in the growing ESDM market," said the
company's CFO, Wendy Nieto. "With the sale of the Asset
Management software business, the additional financing, and
continued stringent cost controls, we have dramatically
strengthened our financial position."

                          Business Outlook

As previously announced, the company expects its total revenues
for FY 2003 to be between $14 and $16 million before any warrant
charges, and expects gross profit margins of 60% in the second
quarter of FY 2003 and 61% for the full fiscal year. Loss from
operations, which includes stock option compensation, is
expected to be between $3.2 and $2.9 million for the second
quarter of FY 2003. For the full fiscal year, loss from
operations, which includes stock option compensation,
restructuring, impairment of long-lived assets, and amortization
of intangibles is expected to be between $12.7 and $11.7
million. Subsequent to completion of the company's first quarter
financial review, the company is revising its loss from
operations guidance to reflect the classification of the gain on
sale associated with the sale of the Asset Management software
business from operating expenses to non-operating income and
expenses. The company expects net loss per share attributable to
common shareholders to be between $0.08 and $0.09 for the second
quarter of FY 2003 and between $0.26 and $0.29 for FY 2003.

"We are now solely focused on the rapidly growing ESDM market
and are positioned to garner additional market share within this
sector," stated Mr. Jackson. "Our SubscribeNet business model is
based almost completely on recurring revenues, and we have a
very loyal customer base. We are much more financially sound
today than we were 12 months ago, and we have already seen the
benefits of a stronger balance sheet through a growing sales
pipeline and recent SubscribeNet sales. Our primary objectives
for this fiscal year are to grow our SubscribeNet business and
to become cash flow positive, and I believe we are on our way to
achieving both of those goals."

Intraware, Inc. is a leading provider of global electronic
software delivery and management (ESDM) solutions for software
publishers worldwide. Intraware's unique and innovative delivery
management solutions have attracted strategic relationships with
industry leaders such as CorpSoft, Inc. and Sun Microsystems,
Inc. Intraware's IT management solutions power business-to-
business technology providers including: Business Objects SA,
Documentum Inc., E.piphany Inc., Hyperion Software Inc.,
PeopleSoft Inc. and RSA Security Inc. Intraware is headquartered
in Orinda, California, and can be reached at 888.797.9773 or
http://www.intraware.com  


JUPITER MEDIA: Files Proxy Statement Describing Liquidation Plan
----------------------------------------------------------------
Jupiter Media Metrix Inc. (Nasdaq: JMXI) has filed a preliminary
proxy statement with the Securities and Exchange Commission
related to its previously announced sale of the assets of its
Jupiter Research and Events businesses as well as a proposed
plan, approved by the company's board of directors on June 25,
2002, to liquidate and dissolve the company. As a Delaware
corporation, Jupiter Media Metrix must obtain stockholder
approval for the asset sale and the plan of dissolution and
liquidation. The date of the stockholder meeting will be
announced following the filing of the definitive proxy statement
with the SEC.

Pursuant to Delaware law, Jupiter Media Metrix will remain in
existence as a non-operating entity for three years following
the date that the company files a certificate of dissolution in
Delaware. The company will work expeditiously to complete the
sale of the Jupiter Research and Events businesses and any
remaining assets, satisfy outstanding obligations, and maximize
any distributions to its stockholders. Currently, the company is
unable to predict the precise nature, amount, or timing of any
distribution.

Jupiter Media Metrix will also seek stockholder approval to
change its corporate name to JMXI, Inc., as required under the
previously announced agreements for the sales of its Media
Metrix audience measurement business and Jupiter Research and
Events businesses.

"In February, we announced our plan to explore options that
would improve our financial position and ensure that Jupiter
Media Metrix' valuable brands and products remained in the
marketplace," said Robert Becker, chief executive officer of
Jupiter Media Metrix. "We are pleased with the progress we have
made in that regard and now believe that the dissolution of the
company is in the best interest of our stockholders."

As part of a management transition plan, the company also
announced that Jean Robinson would resign as Jupiter Media
Metrix' chief financial officer, effective June 28, 2002.


LOG ON AMERICA: E&Y Doubts Ability to Continue Operations
---------------------------------------------------------
"[T]he Company has incurred significant operating losses and has
a working capital and stockholders deficit. These conditions
raise substantial doubt about the Company's ability to continue
as a going concern," Ernst & Young LLP says in its opinion about
Log On America Inc.'s financial statements for the year ending
May 31, 2002.  

Log On America is a Northeast regional Information/Internet
service provider and competitive  local exchange carrier.  It
has been providing Internet access services to its customers
since its incorporation in 1992.  Initially it attracted and
continues to attract many of its customers by  providing them
Internet access.  Services include high-speed data and Internet
service and local exchange service.

Revenues decreased by approximately $1.67 million, or 13%, to
approximately $11.02 million for the year ended December 31,
2001 as compared to approximately $12.70 million for the
comparable period in 2000.  The decrease in revenues is due
primarily to a reduction in the number of residential dial-up
customers serviced for the full year compared to last year. This
decrease was partially offset by a growth in commercial revenues
and a growth in business solution revenues.

Specifically, revenues for residential revenues line decreased
by approximately $2.65 million, or 23%, to approximately $8.69
million for the year ended December 31, 2001 as compared to  
approximately $11.34 million for the comparable period in 2000.
This decrease was due to the sale of the Company's residential
voice customers during 2001 and attrition associated with its
residential dial up base.

While residential revenues decreased, this decrease was
partially offset by an increase in  commercial revenues.
Revenues for the commercial revenue line increased by
approximately $784 thousand, or 98%, to approximately $1.58
million for the year ended December 31, 2001 as compared to
approximately $798 thousand for the comparable period in 2000.
This increase was due to a more  focused commercial sales effort
and an expansion of sales efforts to existing customers along
with an aggressive marketing campaign in both Rhode Island and
Maine.

Finally, Log On America also recognized a slight increase in
revenues from the sale of business  solutions to commercial
customers.   These revenues increased by approximately $168
thousand, or 29%, to approximately $744 thousand for the year
ended December 31, 2001 as compared to  approximately $576
thousand for the comparable period in 2000.  This increase was
due to the  recognition of a full year of revenues from this
unit during 2001 versus only 10 months during  2000.

As of December 31, 2001, the Company had an accumulated
operating deficit of approximately $53.94 million and cash and
cash equivalents of approximately $638 thousand.  Net cash used
in operating activities was approximately $9.84 million and
approximately $15.44 million for the years ended December 31,
2001 and 2000, respectively.  The net cash used in operations
was primarily lower in 2001 compared to 2000 due to lower
network costs, lower marketing costs and lower personnel.

The management of Log On America believes that existing capital
resources will not be sufficient to fund operating deficits
through 2002.  In addition, if the Company misses any of its
scheduled  payments to its Preferred Shareholders it would be in
default, accelerating all monies owed.  If this occurred Log On
America does not have the resources or ability to make those
payments.  If it is unsuccessful in managing its accounts
payables with its major vendors, the Company faces potential
network shutdowns and service interruptions that could cause
material customer churn and loss of business.  Based on all
these factors, Log On America may not have sufficient funds to  
continue as a going concern through December 31, 2002, unless it
raises additional capital  through an equity or debt financing,
which may or not be available to it or may not be available to
it at acceptable terms.


MALAN REALTY: Advises Shareholders to Reject MacKenzie's Offer
--------------------------------------------------------------
Malan Realty Investors, Inc. (NYSE: MAL), a self-administered
real estate investment trust (REIT), is advising shareholders to
reject an unsolicited offer by MacKenzie Patterson, Inc. to
purchase up to 84,000 shares of Malan's outstanding common
stock. The offer, which Malan believes was first made on June
13, 2002 and amended June 25, 2002, is at a price substantially
lower than the market price on the New York Stock Exchange.

According to an offer obtained by Malan and a subsequent news
release issued by MacKenzie on June 24, 2002, MacKenzie is
offering $4.65 per share, less distributions paid after May 30,
2002, for the Malan stock, substantially below the closing price
of Malan's common stock on June 25, 2002, of $5.45. The offer is
said to expire on July 17, 2002, according to the news release.

Malan Realty Investors filed a preliminary proxy statement with
the Securities and Exchange Commission last week outlining its
proposed plan of liquidation to be voted on by shareholders at
its annual meeting, tentatively scheduled for August 28, 2002.
Contained in the proxy statement is the company's estimate of
net proceeds of liquidation to be distributed to shareholders,
which is expected to range from $4.75 to $8.50 per share.

"We continue to believe that $8.00 per share is a realistic
expectation of net proceeds to be distributed in liquidation,"
said Jeffrey Lewis, president and chief executive officer of
Malan Realty Investors. "Even if a shareholder were not inclined
to wait out the liquidation process, based on the current
trading prices, he or she could do substantially better than the
MacKenzie offer by selling in the open market" continued Lewis.

Lewis urged shareholders to review Malan's preliminary proxy
statement before making a decision to tender shares to
MacKenzie. The preliminary proxy statement is available at the
SEC's Web site http://www.sec.govand the company's Web site at  
http://www.malanreit.com

The company said it has had no contact with MacKenzie regarding
the tender offer, either prior to or after the announcement of
the offer, and it became aware of the offer through inquiries
from brokers and through press releases issued by MacKenzie.
Neither Malan nor its officers and directors have any
affiliation with MacKenzie.

Malan Realty Investors, Inc. owns and manages properties that
are leased primarily to national and regional retail companies.
The company owns a portfolio of 57 properties located in nine
states that contains an aggregate of approximately 5.4 million
square feet of gross leasable area.


MANDALAY RESORT: Fitch Holds Low-B Rating Despite Improvements
--------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on Mandalay Resort
Group's (NYSE: MBG) senior debt and the 'BB-' rating on the
company's senior subordinated debt. The rating action affects
approximately $2.1 billion in debt securities. Fitch has also
assigned a 'BB+' rating to the company's $1.1 billion senior
unsecured bank credit facility. The Rating Outlook has been
revised to Stable from Negative.

The revised Rating Outlook reflects the improving operating
fundamentals on the Las Vegas Strip, where MBG derives
approximately two-thirds of its EBITDA, and continued solid
performances at the company's gaming properties in Chicago (in
spite of the expected increase in tax rates) and Detroit. Las
Vegas visitor volumes, airline passenger traffic, gaming
revenues and occupancy and room rates have all shown meaningful
improvement since the fourth quarter of 2001. While MBG's
operating results during the first quarter of 2003 remained
below the comparable period last year, they have improved
significantly since the events of September 11th.

MBG's major capital spending plans over the next two years
include a $235 million, 1.8 million square foot convention
center, a $225 million new hotel tower development at the
Mandalay Bay and a $30 million retail connector bridge between
the Mandalay Bay and Luxor properties. Although the vast
majority of these discretionary capital expenditures will be
funded by internally generated funds, the heavy level of
expenditures will require access to external capital. In
addition, cash flow will be directed towards the settlement of a
$100 million forward equity contract. Although debt levels are
expected to increase moderately, increasing cash flow and equity
accumulation should improve credit protection measures.

Credit concerns include a concentration of cash flows in Nevada,
high debt levels, and aggressive share repurchases. In addition,
MBG's earnings could become more volatile with an increased
dependence on room rates, convention visitation, entertainment
and upscale retail and dining to drive profitability.


MEDSOLUTIONS INC: Ability to Continue Operations Still Uncertain
----------------------------------------------------------------
MedSolutions, Inc. was incorporated in Tezas in 1993, and
through its wholly owned subsidiary, EnviroClean Management
Services, Inc., collects, transports and disposes of regulated
medical waste in north and south Texas.

The Company has incurred consolidated net losses.  Additionally,
the Company has significant deficits in both working capital and
stockholders' equity.  Further, the Company is delinquent in
paying its payroll taxes to the IRS. These factors, raise
substantial doubt about the Company's ability to continue as a
going concern.

Revenues were $1,208,592 for the three months ended March 31,
2002 (unaudited).  The Company derives its revenues from
services to two principal types of customers: (i) long-term care
facilities, outpatient clinics, medical and dental offices,
municipal entities and other smaller-quantity generators of
regulated medical waste; and (ii) hospitals, blood banks,
pharmaceutical  manufacturers and other larger-quantity
generators of regulated medical waste.  Substantially all of the
Company's services are provided under customer contracts
specifying either scheduled or on-call regulated medical waste
management services, or both.  Contracts with "secondary waste  
generators" customers generally provide for annual price
increases and have an automatic renewal  provision unless the
customer notifies MedSolutions prior to completion of the
contract.  Contracts with hospitals and other "primary waste
generators" customers, which may run for more than one year,
typically include price escalator provisions, which allow for
price increases generally tied to an inflation index or set at a
fixed  percentage.  As of March 31, 2002, the Company served
approximately 800 customers.

Company revenues increased $321,693, or 36.3%, to $1,208,592
during the three months ended March 31, 2002 from $886,899
during the three months ended March 31, 2001.  The increase in
revenue from 2001 was due to increased volume of medical waste
processed.

Net losses were $205,168 during the three months ended March
31,2002 and management does not believe the existing cash
position and cash flow from operations will enable the Company
to satisfy current cash requirements.  MedSolutions will be
required to obtain additional financing to implement its
business plan.  Historically, the Company has met cash
requirements from a combination of revenues from operations
(which by themselves have been insufficient to meet such  
requirements), shareholder loans and advances, and proceeds from
the sale of debt and equity securities.

The following factors raise substantial doubt about the
Company's ability to continue as a going concern.  The Company
incurred consolidated net losses of $1,907,861 and $2,473,923
for the years ended December 31, 2001 and 2000, respectively,
which losses have continued into the first quarter of 2002.  
Additionally, the Company has significant deficits in both
working capital and  stockholders' equity at December 31, 2001
and March 31, 2002.  Further, although current with its  payroll
taxes for the year 2002, EMSI has a substantial payroll tax
obligation for the years ended December 31, 2001 and 2000, which
continues to accrue interest.

Historically, shareholders of the Company have funded cash flow
deficits. However, the shareholders are under no specific
funding obligation.  As a means of providing working capital and
funding for a proposed financing, the Company has received, from
private placements of the Company's common  stock, approximately
$857,273, $731,767, and $634,164 during the years ended December
31, 2000,  2001, and the three months ended March 31, 2002,
respectively. The largest shareholder loaned the Company $55,000
in 2001. Also, the Company President has advanced funds for
working capital from time to time totaling $262,721 through
December 31, 2001, and an additional $110,000 during the three
months ended March 31, 2002. There is no assurance that such
private placement funding and loans and advances will continue
to satisfy cash needs.

During the year ended December 31, 2001, sales of services to 24
customers represented approximately 83.1% of total revenues,
including sales to UTMB, which amounted to approximately 24.7%
of total revenues. A loss of any of these customers could reduce
revenues, increase losses from operations and limit Company
ability to achieve profitability.

MedSolutions has outstanding liabilities and debt of
approximately $3,342,909 at March 31, 2002. Its current rate of
revenue may be insufficient to enable it to repay debt upon
maturity. In the event that it cannot generate sufficient
revenue and it is unable to finance the repayment of  debt, the
Company could be sued or face judgments against it which could
result in a loss of assets and a discontinuation of operations.

At March 31, 2002, the Company's working capital deficit was
$2,125,338 compared to a working capital deficit of $2,642,775
at December 31, 2001.  The decrease in working capital deficit
was primarily due to an increase in cash offset by a slight
reduction in accounts receivable and prepaid insurance and a
decrease in bank overdraft and accounts payable.


MENTERGY LTD: Intends to Transfer to Nasdaq SmallCap Market
-----------------------------------------------------------
Mentergy(TM), Ltd. (Nasdaq:MNTE) has applied to Nasdaq for a
transfer to Nasdaq's Small Cap Market.

Mentergy had received a letter from Nasdaq informing Mentergy
that Nasdaq intends to delist Mentergy's Ordinary Shares from
trading on the Nasdaq National Market because Mentergy's
publicly held shares have failed to maintain a minimum market
value of $5,000,000 as required by Nasdaq rules. Mentergy will
continue to be subject to the reporting requirements of the
Securities and Exchange Commission.

Mentergy, Ltd. (Nasdaq:MNTE), formerly Gilat Communications,
Ltd. (Nasdaq:GICOF), is a global e-Learning company, providing
e-Learning products, consulting, and courseware development
services for large enterprises. With over 21 years of expertise
in the learning industry, Mentergy assists businesses worldwide
to make a cost-effective shift from traditional learning to a
blended e-Learning approach. Mentergy Ltd.'s North American
operations comprise of the Allen Communication Learning Services
division and the LearnLinc Live e-Learning division (Mentergy,
Inc.), in addition to John Bryce Training in Israel and Europe,
and a global sales and marketing operation that includes
Mentergy Europe. For more information about the company, visit  
http://www.mentergy.com


METALS USA: Bags Approval to Hire Colliers Bennett as Broker
------------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates obtained approval to
employ and retain real estate brokerage firm Colliers, Bennett &
Kahnweiler, Inc., to assist in marketing non-residential real
property located in Butler, Indiana.

The Butler Property is a production facility owned by Debtor
Metals USA Flat Rolled Central Inc.  At the Petition Date, the
Debtor leased the facility to a company known as Paragon.
Paragon had wanted to purchase the property from the Debtors.
However, Paragon is no longer a viable purchaser and has vacated
the property.

The Debtors also hires Colliers, pursuant to Section 327(a) of
the Bankruptcy Code, to list the Butler Property for sale and to
perform marketing services for the Debtors in these Chapter 11
cases.

The Debtors seek to compensate Colliers for its brokerage
services by paying from the proceeds of the sale of the property
a commission of 6% of the first $500,000 of the sales price and
5% of the sales price in excess of $500,000, without the
necessity of further application or authority from the Court.
Mr. Black submits that the Debtors are familiar with the
professional standing and reputation of Colliers as an
experienced realty-marketing firm associated with the Society of
Industrial and Office Realtors.  It is thus well qualified to
market industrial facilities like the Butler Property. (Metals
USA Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


MORTON INDUSTRIAL: Falls Below Nasdaq Continued Listing Criteria
----------------------------------------------------------------
Morton Industrial Group, Inc. (Nasdaq: MGRP), a leading contract
manufacturing supplier to large industrial original equipment
manufacturers (OEMs), has been notified by the Nasdaq Listing
Qualifications Department that its securities would be delisted
from the Nasdaq SmallCap Market for the Company's inability to
comply with the net tangible assets/stockholders' equity/market
capitalization/net income requirement for continued listing on
Nasdaq in accordance with the NASD Rule 4310(C)(2)(B). The
Company intends to appeal the Staff's determination.

NASD Rule 4310(C)(2)(B) requires the Company to have a minimum
of $2,000,000 in net tangible assets or $2,500,000 in
stockholders' equity or a market capitalization of $35,000,000
or $500,000 of net income from continuing operations for the
most recently completed fiscal year or two of the three most
recently completed fiscal years. NASD Rule 4820(a) allows for
the Company to request an oral hearing before a Nasdaq Listing
Qualifications Panel to appeal the Staff's determination. The
time and place of such a hearing will be determined by the
Panel. Pursuant to the same NASD Rule 4820(a), a request for a
hearing will stay the scheduled delisting of the Company's
securities pending the Panel's determination. If the Panel does
not grant the relief that the Company will request at the oral
hearing, the Company's securities could be delisted from the
Nasdaq without further notice. Should the Company's securities
cease to be listed on the Nasdaq, the Company's securities may
continue to be listed on the Over-the-Counter Bulletin Board
Market.

William D. Morton, Chairman and Chief Executive Officer of
Morton Industrial Group, Inc. stated: "This potential delisting
from the Nasdaq SmallCap Market results primarily from the
financial impact of last year's drastic reduction in demand from
our customers. We are pleased that our 2001 Restructuring Plan,
which has continued into 2002 using Six Sigma methodologies, has
significantly lowered our operating costs. That effort coupled
with numerous new customer awards causes us to believe that we
are favorably positioned to return to profitability as the
economic climate changes favorably for our customers."

Morton Industrial Group, Inc. is a supplier of highly engineered
metal and plastic components and subassemblies for large
industrial original equipment manufacturers. The Company
provides large industrial original equipment manufacturers with
a wide range of services including design, prototype
development, precision tool making and production of metal
fabrications and plastic component parts. The Company's eleven
manufacturing facilities employ approximately 1800 in the
Midwestern and Southeastern United States and are strategically
located near our customers' manufacturing and assembly
facilities. Morton's principal customers include B/E
Aerospace, Bombardier, Caterpillar Inc., Compaq Computer
Corporation, Deere & Company, EMC Corp., GE Appliances, and
Honda of America Mfg., Inc.


MOTHERS WORK: S&P Rates $125MM Senior Unsecured Notes at B+
-----------------------------------------------------------
Standard & Poor's revised its outlook on maternity clothing
retailer Mothers Work Inc. to positive from stable based on the
strengthening of the company's balance sheet and credit protect
measures.

In addition, a single-'B'-plus rating was assigned to the
company's proposed $125 million senior unsecured notes due in
2010. The single-'B'-plus corporate credit rating on Mothers
Work was also affirmed. The Philadelphia, Pennsylvania-based
company had $119 million of funded debt outstanding as of March
31, 2002.

"The company's balance sheet and credit protection measures have
strengthened as a result of its proposed debt and equity
offerings and its improved operating performance," Standard &
Poor's credit analyst Diane Shand said. "The new securities
replace higher-priced debt and lengthen the company's unsecured
debt maturity to 2008 from 2005."

Standard & Poor's said the company's EBITDA coverage of interest
expense is currently 2.2 times and is expected to improve
significantly over the next few years due to lower interest
expense and continued improvement in operating performance.
Mothers Work's debt burden is high, with total debt to EBITDA at
3.9x. Liquidity is provided by a $56 million revolving credit
facility due in 2004, and lack of near-term maturities. As of
March 31, 2002, the company had $33 million available under its
credit facility.


NATIONAL STEEL: Asks Court to Lift Stay to Pursue Toyota Setoff
---------------------------------------------------------------
Prior to the Petition Date, National Steel Corporation, its
debtor-affiliates and Toyota Tsusho America, Inc. entered into a
series of agreements wherein Toyota provided toll work to the
Debtors, and the Debtors provided Toyota with steel products.  
"As of the Petition Date, the Debtors owed Toyota $503,898 and
Toyota in turn owed the Debtors $4,563,631 under the Contracts,"
Mark A. Berkoff, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, says.

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

   -- the Debtors' prepetition claim is $4,563,631;

   -- Toyota's prepetition claim is $503,898;

   -- effective upon entry of an order and this stipulation,
      the automatic stay is modified to permit Toyota to
      accomplish the setoff.  As a result of this setoff, Toyota
      is indebted to the Debtors in the prepetition amount of
      approximately $4,059,733;

   -- Toyota will pay the Debtors within two business days
      of Toyota's receipt of a copy of this stipulation, duly
      approved by the Court;

   -- upon payment of the prepetition Toyota debt, the Debtors
      and Toyota release each other of all claims relating to
      the prepetition claim.  However, the release will not bar
      Toyota from asserting a claim as to a Customer Program;
      and

   -- the Debtors consent to the lifting of the automatic stay
      for the limited purpose of allowing the setoff. (National
      Steel Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


NATIONSRENT INC: Plan's Classification & Treatment of Claims
------------------------------------------------------------
In accordance with Bankruptcy Code Section 1122, NationsRent
Inc.'s Plan provides for the classification of Classes of Claims
and Equity Interests.  Section 1122(a) permits a plan to place a
claim or an interest in a particular class only if the claim or
interest is substantially similar to the other claims or
interests in that class.  Additionally, in accordance with
Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims
and Priority Tax Claims have not been classified.  NationsRent
believes that its classification of Claims and Equity Interests
under the Plan is appropriate and consistent with applicable
law:

Class Description               Treatment
----- -----------               ---------
N/A  Administrative Claims     Paid in full in Cash

N/A  Priority tax claims       Holders will receive deferred
                                cash payments over a period not
                                to exceed six years from the
                                date of assessment of that claim
                                on the unpaid portion of each
                                allowed priority tax claim.

  1    Bank Loan Claims --      Impaired. On the Effective Date,
       Estimated amount of      holder of an Allowed Bank Loan
       Claims: $762,000,000     Claim will be entitled to
                                receive or retain its Pro Rata
                                share of:

                                a. $196,700,000 in cash which
                                   includes $547,500,000 paid as
                                   adequate protection prior to
                                   the Effective Date;

                                b. 100% of the New Common Stock,
                                   subject to dilution through
                                   the issuance of stock under
                                   the Senior Management
                                   Incentive Program and the
                                   issuance of stock upon the
                                   exercise of the Warrants; and

                                c. $150,000,000 in principal
                                   amount of the New Medium Term
                                   Notes.

                                 Estimated Percent Recovery: 59%

  2   Other Secured Claims      Debtors will decide as to the
      -- Estimated amount of    treatment of an Allowed claim:
      of claims: $46,900,000
                                Option A: Unimpaired.  Paid in
                                   full in cash unless the
                                   holder agrees to less
                                   favorable treatment;

                                Option B: Unimpaired.  Allowed
                                   Claims will be reinstated;

                                Option C: Impaired. Holder will
                                   receive, and the Debtors
                                   will release and transfer to
                                   the holder, the collateral
                                   securing the Allowed Claims;

                                Option D: Impaired. Allowed
                                   Claims will receive a
                                   promissory note, secured by a
                                   first priority security
                                   interest in the applicable
                                   collateral, in the aggregate
                                   principal amount of that
                                   Allowed Claims, payable
                                   in annual installments over
                                   the term of the useful life
                                   of the collateral and bearing
                                   an interest rate per annum.

                                Estimated Percent Recovery: 100%

  3   Unsecured Priority        Impaired.  Paid in cash equal to
      Claims -- Estimated       the amount of the claim.
      Amount of claims:         Estimated Percent recovery: 100%
      $6,500,000

  4   General Unsecured         Impaired.  Holder will receive
      Claims -- unsecured       pro rata share of the Warrants.
      Claims not otherwise
      Classified in 3, 5,
      6, including claims
      on account of the Old
      Senior Subordinated
      Notes and the Deficiency
      claims.  Estimated
      amount of claims:
      $787,400,000

  5   Inter-company Claims      Impaired. No property will be
      -- inter-company claims   distributed to or retained by
      that are not admin.       holder.  Debtors holding this
      claims                    claim will be deemed to have
                                accepted the Plan.

  6   Penalty Claims            Impaired. No property will be
      -- claims against the     distributed to or retained by
      Debtors for fine,         holders.
      penalty, or forfeiture,
      or for multiple, exemplary
      or punitive damages to
      the extent that these
      Claims are not compensation
      for the holder's actual
      pecuniary loss.

  7   NationsRent Subsidiary    Unimpaired.  Allowed interests
      Debtors Old Stock         will be reinstated.  Estimated
      Interests -- Interests    percent recovery: 100%
      on account of Old Stock
      of the NationsRent
      Subsidiary Debtors.

  8   NationsRent Old Stock     Impaired.  No property will be
      Interests -- Interests    distributed to or retained by
      on account of the Old     holders.  Interests will be
      Stock of NationsRent      terminated as of the
                                Effective Date.

Additionally, the Debtors submits that the classification and
treatment of allowed claims under the Plan take into
consideration all Allowed Secondary Liability Claims which will
be treated as follows:

A. the Allowed Secondary Liability Claims arising from or
   related to any Debtors' joint or several liability for the
   obligations under any allowed claim that is being reinstated  
   under the Plan or executory contract or unexpired lease that
   is being assumed by and assigned to another Debtor or any
   other equity, will be reinstated; and,

B. holders of all other Allowed Secondary Liability Claims will
   be entitled to only one distribution in respect of the
   underlying Allowed Claim.

No multiple recovery on account of any Allowed Claim will be
permitted. (NationsRent Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says NationsRent Inc.'s 10.375% bonds due 2008
(NATRENT) are quoted at a price of 1. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NATRENTfor  
real-time bond pricing.


NEON COMMS: Seeks Open-Ended Lease Decision Period Extension
------------------------------------------------------------
NEON Communications, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to give them as
much time as they need to decide how to dispose of their
unexpired leases.  The Debtors want to extend the limited time
period imposed under 11 U.S.C. Sec. 365(d)(4) within which to
elect to assume, assume and assign, or reject unexpired leases
of nonresidential real property leases through the Effective
Date of any Plan of reorganization proposed in the Company's
chapter 11 cases.

The majority of the Debtors' Unexpired Leases are used by the
Debtors to operate their offices and Network, and all of the
Unexpired Leases are assets of the Debtors' estates. The Debtors
remind the Court that the Unexpired Leases are integral to the
Debtors' continued operations as they seek to reorganize.

Article 10 of the Prepackaged Plan filed by NEON on Day one of
its chapter 11 cases provides for assumption of all unexpired
leases that are not the subject of a motion or otherwise
designated for rejection on or prior to confirmation of the
Plan, the Debtors relate.  The Debtors argue that this Plan
provision would be defeated if the deadlines under the
Bankruptcy Code expired prior to the hearing on the confirmation
of the Plan or the Effective Date.

NEON Communications, Inc. owns certain rights to fiber and all
of the outstanding stock of NEON Optica, Inc., which owns and
operates a fiber optic network offering the following services.
The Company filed for chapter 11 protection on June 25, 2002.
David B. Stratton, Esq. at Pepper Hamilton LLP and Madlyn Gleich
Primoff, Esq. at Richard Bernard, Esq. represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from its creditors, it listed $55,398,648 in assets
$19,664,234 in debts.


NETMANAGE INC: Fails to Meet Nasdaq Continued Listing Standards
---------------------------------------------------------------
NetManage, Inc. (Nasdaq:NETM), experts in host access and
integration solutions, announced that it received a Nasdaq staff
determination letter dated June 20, 2002 indicating that the
Company has not met the minimum bid price requirement for
continued listing, as set forth in Marketplace Rule 4450 (a)
(5), and that the Company's common stock is therefore subject to
delisting from the Nasdaq National Market.

The Company has appealed this determination by requesting a
hearing before a Nasdaq listing qualifications panel. During the
hearing, NetManage will present a comprehensive plan to address
the pending delisting action. The hearing has been scheduled for
August 1, 2002. The Company has been advised that Nasdaq will
not take any action to delist its stock pending the conclusion
of that hearing.

In anticipation of the Nasdaq listing qualifications hearing,
the Company's Board of Directors has approved a reverse stock
split of the Company's common stock. The reverse stock split is
subject to stockholder approval and will assist the Company in
meeting the Nasdaq minimum bid requirement of $1.00 per share.
Even if a split is approved by the Company's stockholders, it is
the Company's Board of Directors that decides whether a split is
actually effected, as well as the timing and magnitude of the
split.

"We believe it is in the best interests of the stockholders and
the Company to remain listed on a national market such as
Nasdaq," said Zvi Alon, Chairman, president and CEO of
NetManage. Mr. Alon went on to say, "We are strong financially
with over $30 million in cash and no debt and we have made
significant progress in executing our business plan even under
the current poor economic conditions."

It is entirely up to the Nasdaq National Market to accept or
deny the Company's appeal and there are no guarantees that the
appeal will lead to a continued Nasdaq listing.

Additional information about NetManage, Inc. is available at the
company's Web site at http://www.NetManage.com  

Founded in 1990, NetManage, Inc. (Nasdaq:NETM), experts in host
access and integration solutions, provides software and
consulting services to extend and maximize a company's
investment in existing legacy systems and applications.
NetManage offers a full range of host access and host
integration software and services for mid-size and Global 2000
enterprises. NetManage has more than 30,000 customers including
480 of the Fortune 500. NetManage sells and services its
products worldwide through its direct sales force, international
subsidiaries, and authorized channel partners. NetManage is
headquartered in Cupertino and has offices worldwide.


PACIFIC GAS: Pushing for Third Extension of Exclusive Periods
-------------------------------------------------------------
There are now two Chapter 11 Plans for which the Court has
approved the respective Disclosure Statements, proposed by the
Pacific Gas and Electric Company Proponents and by CPUC
respectively and the solicitation process is underway.

If another party were to file a plan at this time, Pacific Gas
tells Judge Montail, it would be both confusing and
counterproductive. Among other things, it would be impossible
for such a plan to be included on the same time track as the
PG&E Plan and CPUC Plan, and would serve no useful purpose.

Thus, PG&E requests that the Court, pursuant to Bankruptcy Code
Section 1121(d) further extend the period during which PG&E
maintains plan exclusivity (except with respect to the CPUC)
pursuant to Bankruptcy Code Section 1121(c)(3) until December
31, 2002 (or such later date as the Court may order).

PG&E submits that there is "cause" to grant the requested
extensions pursuant to Bankruptcy Code Section 1121(d).

PG&E reminds the Court that the present case is large, involving
tens of billions of dollars of assets, and claims of more than
13,000 creditors. In addition, it is exceedingly complex, based
on, inter alia, PG&E's status as a utility company subject to a
myriad of state and federal statutes, rules and regulations, and
an unprecedented energy crisis to grapple with. Moreover, PG&E
has already made substantial efforts towards a successful
reorganization and there is nothing to suggest that PG&E seeks
the requested extensions in order to pressure its creditors to
accede to its reorganization demands Gary M. Kaplan of Howard,
Rice, Nemerovski, Canady, Falk & Rabkin tells the Court.
"Indeed, in view of the alternate CPUC Plan, PG&E would have
difficulty pressuring its creditors to accede to its
reorganization demands in any event, Mr. Kaplan says, "Rather,
PG&E has continued to diligently work the plan confirmation
process through a fast track, in an effort to accelerate the
resolution of this case for creditors and other interested
parties as quickly as possible."

The requested extension will protect this process while the PG&E
Plan confirmation efforts are concluded, which could take
several months, Mr. Kaplan represents. (Pacific Gas Bankruptcy
News, Issue No. 39; Bankruptcy Creditors' Service, Inc.,
609/392-0900)   


PARAGON TRADE: Weyerhaeuser Will Contest Claims in Lawsuit
----------------------------------------------------------
Weyerhaeuser Company (NYSE:WY) said that unfair allegations have
been made against it in a lawsuit arising out of the bankruptcy
of Paragon Trade Brands Inc. and that Weyerhaeuser will
vigorously contest the plaintiff's allegations.

Weyerhaeuser made the comments after Judge Margaret Murphy, U.S.
Bankruptcy Court for the Northern District of Georgia, Atlanta
Division, granted the plaintiff's motion for a partial summary
judgment holding that Weyerhaeuser is liable to the plaintiff
for breaches of warranty. The judge indicated that she intends
to enter a written order within approximately 40 days.

Weyerhaeuser said that it strongly disagrees with the court's
decision and will pursue all available relief.

The plaintiff, who is the representative for the bankruptcy
estate, has asserted claims against Weyerhaeuser in connection
with the sale of Weyerhaeuser's private label diaper business to
Paragon in 1993. The plaintiff alleges that Weyerhaeuser
breached certain representations and warranties concerning
intellectual property rights and assets that were transferred to
Paragon. The plaintiff further alleges that Paragon is entitled
to indemnification for losses arising from the alleged breaches
and claims that Paragon has suffered damages in excess of $400
million. No trial date has been set for the determination of
damages.

Weyerhaeuser Company, one of the world's largest integrated
forest products companies, was incorporated in 1900. In 2001,
sales were $14.5 billion. It has offices or operations in 18
countries, with customers worldwide. Weyerhaeuser is principally
engaged in the growing and harvesting of timber; the
manufacture, distribution and sale of forest products; and real
estate construction, development and related activities.
Additional information about Weyerhaeuser's businesses, products
and practices is available at http://www.weyerhaeuser.com


PERSONNEL GROUP: Collects $19.2MM Federal Income Tax Refunds
------------------------------------------------------------
Personnel Group of America, Inc. (NYSE:PGA), a leading
information technology and professional staffing services
company, announced that it had collected over $19.2 million of
federal income tax refunds.

PGA President and Chief Financial Officer James C. Hunt said,
"As previously announced, we had originally expected to collect
$15.0 million to $18.0 million in federal income tax refunds
during the third quarter of this year. Our tax team has worked
extremely hard to expedite this process and we are delighted to
have collected more than we originally anticipated and certainly
much sooner than we had planned."

Larry Enterline, PGA Chief Executive Officer, added, "We are
very pleased with the early receipt of these funds as it gives
us even more flexibility in the consideration of potential
opportunities to improve the Company's balance sheet. Our
objectives now are no different than those behind our cost
reduction efforts and the recent bank amendments; we intend to
use this money in a manner that will most benefit the collective
interests of the Company."

Personnel Group of America, Inc. is a nationwide provider of
information technology consulting and custom software
development services; high-end clerical, accounting and other
specialty professional staffing services; and technology systems
for human capital management. The Company's IT Services
operations now operate under the name "Venturi Technology
Partners" and its Commercial Staffing operations are being
rebranded "Venturi Staffing Partners" over the balance of 2002.

                         *   *   *

As reported in the May 27, 2002 edition of Troubled Company
Reporter, Personnel Group of America announced that with the
senior credit facility extensions in place, the company has the
time to evaluate a full range of alternatives and select the
path it believes most beneficial to the Company. And with that
flexibility, the company would not expect to pursue any
deleveraging strategies, whether with the CSFB group
or otherwise, that did not appropriately balance the
improvements in PGA's balance sheet and long-term prospects
expected from any specific strategy with the current
shareholders' ownership interest. The company is going to work
closely with its advisor, UBS Warburg, to examine any
alternatives presented to the company by the CSFB group or
otherwise.


POLAROID CORP: John W. Loose Elected as Chairman of the Board
-------------------------------------------------------------
Polaroid Corporation announced that John W. Loose has been
elected chairman of the company's board of directors, effective
July 1, 2002. He replaces Gary T. DiCamillo, who steps down as
chairman but remains as a member of the board of directors.

Loose, 60, recently retired from his position as president and
chief executive officer of Corning Incorporated, where he had
served in a series of progressively responsible positions over
the past 38 years. He was elected to the Polaroid board of
directors in 1994.

"John brings a solid foundation of leadership skills and
business experience to the chairman's role. He possesses a broad
knowledge of Polaroid and is uniquely qualified to lead the
board through the final phase of Chapter 11," said DiCamillo,
who has served as chairman of the Polaroid board of directors
since 1995.

Polaroid Corporation is the worldwide leader in instant imaging.
The company supplies instant photographic cameras and films;
digital imaging hardware, software and media; secure
identification systems; and sunglasses to markets worldwide.
Additional information about Polaroid is available on the
company's Web site at http://www.polaroid.com

DebtTraders says that Polaroid Corporation's 11.5% bonds due
2006 (PRD3) are trading at 1.25. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRD3


POLAROID CORP: Court to Consider One Equity's Revised Bid Today
---------------------------------------------------------------
Polaroid Corporation will seek final court approval of a revised
bid submitted by One Equity Partners to purchase substantially
all of its business. A hearing on the proposed transaction is
scheduled for 9 a.m. tomorrow at the U.S. Bankruptcy Court in
Wilmington, Delaware.

The revised bid from One Equity Partners provides for cash
consideration of $255 million plus a 35 percent interest in the
new company for the benefit of unsecured creditors,
significantly more equity than the prior bid. Both the unsecured
creditors committee and the company's secured lenders support
the proposed sale transaction.

Completion of the transaction with One Equity Partners remains
subject to final bankruptcy court approval and to certain other
closing conditions. Subject to these conditions, the proposed
transaction is expected to close by the end of July.

While no reorganization plan has been finalized, Polaroid
believes, as previously announced, it is unlikely that there
will be any recovery for the company's stockholders.

One Equity Partners is the private equity arm of Bank One
Corporation (NYSE: ONE) and manages $3.5 billion of investments
for Bank One, the sixth largest bank holding company in the U.S.

Polaroid Corporation is the worldwide leader in instant imaging.
The company supplies instant photographic cameras and films;
digital imaging hardware, software and media; secure
identification systems; and sunglasses to markets worldwide.
Additional information about Polaroid is available on the
company's Web site at http://www.polaroid.com.


POWER EFFICIENCY: Lacks Resources to Satisfy Liquidity Needs
------------------------------------------------------------
Power Efficiency Corporation was incorporated in Delaware on
October 19, 1994. From inception through 1997, the Company was a
development stage entity that sought to become engaged in the
design, development, marketing and sale of proprietary solid
state electrical components designed to effectively reduce
energy consumption in alternating current induction motors.
Alternating current induction motors are commonly found in
industrial and commercial facilities throughout the world.

On August 7, 2000, the Company executed an Asset Purchase
Agreement  with Performance Control, L.L.C., a Michigan limited
liability company and formerly the largest distributor of the
Company's products. Percon was formed on February 15, 1996.
Pursuant to the terms and conditions of the Asset Agreement,
Power Efficiency acquired Percon's (i) contracts; (ii)
inventory; (iii) state and municipal permits, certificates,
registrations, licenses and authorizations; (iv) intellectual
property, including the name "Performance Control"; (v)goodwill;
(vi) accounts receivable; (vii) prepaid expenses; (viii)
furniture, fixtures and equipment; (ix)customer lists; and (x)
Internet web site located at www.performancecontrol.com in
consideration for an aggregate of 1,112,245 newly issued shares
of Power Efficiency's common stock, $.001 par value per share.
The Company also assumed $438,888 of Percon's liabilities.

Revenues for the twelve months ended December 31, 2001, were
$633,563 compared to $179,524 for the twelve months ended
December 31, 2000, an increase of $454,039, or 253%. The
increase in revenues was principally attributable to the
increase in sales by the Company's OEM's and major accounts
expanding their use of the Company's products.

Cost of revenues for the twelve months ended December 31, 2001,
increased to $597,018, or 94.2% of revenues, from $157,035, or
87.4% of revenues, for the twelve months ended December 31,
2000. The increase in cost of revenues was primarily due to the
increase in revenues and the cost of materials attributable to
the acquisition of Percon inventory.

Research and development expenses were $242,243, or 38% of
revenues, for the twelve months ended December 31, 2001, as
compared to $120,429, or 67% of revenues, for the twelve months
ended December 31, 2000. The development of automatic safety
systems for products with public applications increased research
and development costs.

Selling, general and administrative expenses decreased to
$1,652,404, or 261% of revenues, for the twelve months ended
December31, 2001, from $4,255,940, or 2,371% of revenues, for
the twelve months ended December31, 2000. The significant
decrease in selling, general and administrative expenses was due
primarily to the prior year's recognition of compensation
expense attributable to the issuance and repricing of options.
The options were issued with an exercise price of $2.00 per
share, which was below the fair market value of the stock at the
time of issuance. The difference between the exercise price and
the fair market value was recorded as compensation expense in
the amount of $3,649,776. There was an increase in 2001 general
expenses due to increases in sales, marketing and administrative
personnel from eight to ten.

As of December 31, 2001, Power Efficiency had cash and cash
equivalents of $35,245.

Cash used for operating activities for the twelve months ended
December 31, 2001, was $1,107,265 and was $669,184 in 2000. Of
the $1,107,265 of cash used for operating activities in 2001,
the largest contributing factors were a net loss of $1,863,802,
depreciation and amortization of $281,587, additional paid in
capital related to write-off of deferred financing costs of
$38,502, debt restructuring of $130,000, issuance of stock
options of $47,300, decreases in accounts receivable of
approximately $103,048, increases in inventory of approximately
$83,091 and increases in prepaid expenses and deposits of
$9,057. In addition, operating activities reflected a $216,426
increase in accounts payable and accrued expenses and an
increase in accrued salaries and payroll taxes of $31,822. Of
the $669,184 of net cash used for operating activities in fiscal
2000, the largest contributing factors were a net loss of
$4,354,080 and repricing and issuance of stock options of
$3,649,776, which were offset by approximately $138,154 in
depreciation and amortization and an increase in accounts
receivable of approximately $43,916. In addition, there was a
decrease in accounts payable and accrued expenses of
approximately $106,727 and an increase in accrued salaries and
payroll taxes of approximately $14,930.

The Company expects to experience growth in its operating
expenses, particularly in research and development and selling,
general and administrative expenses, for the foreseeable future
in order to execute its business strategy. As a result, it
anticipates that operating expenses, as well as planned
increases in inventory expenditures, will constitute a material
use of any cash resources.

Since capital resources are insufficient to satisfy the
Company's liquidity requirements, management intends to seek to
sell additional equity securities or debt securities or obtain
debt financing.  In December 2000, Power Efficiency obtained an
asset-based bank line of credit of up to $750,000, with
borrowings secured by all of its assets. Borrowings under the
line are based on a formula derived from the levels of the
Company's eligible accounts receivable and inventory. The line
of credit agreement was extended effective February 1, 2002
until April 30, 2002.  This extension was retroactive and
occurred after the date of the last Auditor's Report. At the
time of this filing, the Company was in default under the terms
of the line of credit agreement. Under the agreement, the
Company's borrowings may not exceed the amount calculated
pursuant to a borrowing formula. Based on the formula, the
Company exceeded its borrowing capacity by approximately
$132,000 on December 31, 2001. On May 31, 2002, the Company
received a letter from Bank One in which Bank One agreed to
forebear from taking any collection activity concerning the
expired line of credit until June 17, 2002. If an extension of
the line of credit was not received by June 17, 2002, the bank
has the right under the line of credit agreement to demand
immediate payment of all amounts owed. In such an event, it is
unlikely the Company would have sufficient available funds to
pay Bank One all amounts owed and could be forced to transfer
other assets, including inventory and accounts receivable, to
Bank One in satisfaction of the debt, which would have a
material adverse effect on the future operations, cash flow and
liquidity of the Company. Management was attempting to negotiate
an extension of the line of credit agreement and was hopeful
that the default would be waived or cured.

As of December 31, 2001, the Company had suffered recurring
losses from operations, current liabilities then exceeded
current assets by $650,533, the balance sheet reflected a
negative tangible net worth. These matters raise substantial
doubt as to the Company's ability to continue as a going
concern.


PSINET INC: Wins Approval to Sell TX Real Property for $11MM+
-------------------------------------------------------------
PSINet Realty, Inc. obtained Court approval to sell its real
property at 1333 Crestside Drive in Coppell, Texas to new buyer
The Depository Trust & Clearing Corporation for a purchase price
of $11 million.

Thus, the Court entered an order approving the payment of a 3%
breakup fee to the Buyer as well as other bid protection
procedures in advance of the consummation of such  sale (the
Sale Procedures Order).

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

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

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

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

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

                       Sale Procedures

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

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

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

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

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

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

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

                       Bidding Procedures

*  Qualified Competing Bid

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

    To be qualified, a Competing Bid must:

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

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

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

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

*  Auction

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

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

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

*  Breakup Fee.

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

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

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

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

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

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

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

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

*  Notice

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

    The Debtors submit that such notice constitutes good and
    sufficient notice under the circumstances. (PSINet
    Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
    Service, Inc., 609/392-0900)


QSERVE: Seeks $12.5MM Cash Collateral Use to Continue Operations
----------------------------------------------------------------
Bankrupt qServe Communications Inc., an engineering company
serving the broadband and wireless industries, is expected to
win the right for the emergency use of $12.5 million in cash
collateral so the debtor can continue to fund operations,
reported The Daily Deal.  Chief Judge Arthur Federman of the
U.S. Bankruptcy Court for the Western District of Missouri
indicated on June 25, Tuesday that he would approve the critical
post-petition funding if qServe makes changes he requested,
according to The Deal. According to the online newspaper, the
company wants Federman to approve the interim use of its $3.25
million credit facility with J.P. Morgan Chase & Co. and
Comerica Bank, as well as a $9.275 million secured note with
Finova Mezzanine Capital Inc. of Phoenix, documents show.

Lee's Summit, Missouri-based qServe sought chapter 11 bankruptcy
protection on June 21, listing its cash flow at a negative
$50,550 as of last weekend and projected a negative cash flow of
$268,765 for July, documents show, reported The Deal.  The
company estimated debt at $16 million and assets of up to $10
million, and listed Talisman Capital as lead investor. (ABI
World, June 26, 2002)


QSERVE COMMS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: qServe Communications, Inc.
        401 SE Fleetway Drive
        Lee's Summit, Missouri 64081
        fka Skyfield Tower, Inc.
        fka New Digital Corporation
        fka United Tower, Inc.

Bankruptcy Case No.: 02-43265

Chapter 11 Petition Date: June 21, 2002

Court: Western District of Missouri (Kansas City)

Judge: Jerry W. Venters

Debtor's Counsel: John Joseph Cruciani, Esq.
                  Lentz & Clark, PA
                  9260 Glenwood
                  P.O. Box 12167
                  Overland Park, KS 66282
                  913-648-0600
                  Fax : 913-648-0664

Estimated Assets: $1 Million to $10 Million

Estimated Debts: $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Jones Walker                                           $34,022

ACM Equipment                                          $35,000

Longfellow Drilling Inc.                               $37,405

Brookstone Equipment & Service                         $38,569

Carolina First Bank                                    $39,453

Site Design Services Inc.                              $42,620

Jack Martin Consulting Contract                        $44,625

Diversified Thermal Services                           $53,920

Cigna HealthCare                                       $56,136

Hutton Communications Inc.                             $56,597

Imperial Premium Finance   Insurance Premium           $58,871
Inc.                       Financing

Galaxy Tri-State Electric  Subcontractor               $60,258
Co.                          

PricewaterhouseCoopers                                 $81,201

Carolina First Bank                                    $94,572

Robert Camp                Note Payable                $98,172

Dave Harris                Note Payable                $98,172

James R Schumacher         Note Payable                $98,172

Radio Frequency Systems Inc.                          $102,360

Costello & Associates                                 $117,201
Insurance

Beller Welding & Fabrication                          $144,279


REGAL ENTERTAINMENT: S&P Assigns BB- Rating to Corporate Credit
---------------------------------------------------------------
Standard & Poor's has assigned its double-'B'-minus corporate
credit rating to motion picture exhibitor Regal Entertainment
Group (REG). REG was recently formed to consolidate the
ownership of Regal Cinemas Inc., United Artists Theatres Co.,
and Edwards Theatres Inc.

Standard & Poor's noted that its ratings on the new entity are
analyzed on a consolidated basis to reflect the closer business
and financial ties between these companies. As a result, the
corporate credit rating on Regal Cinemas Inc. is being raised to
double-'B'-minus from single-'B'-plus to reflect the improved
credit profile of the consolidated entity. United Artists and
Edwards are unrated. The outlook is stable.

REG is the largest movie theater operator in the U.S. with 5,886
screens in 561 theaters located in 36 states. The Knoxville,
Tennessee-based company currently has approximately $732 million
in debt outstanding.

"The integration of the three circuits has been very quick and
should accelerate the realization of cash flow benefits
resulting from reducing corporate overhead, consolidating vendor
contracts for concessions, and other economies of scale,"
according to Standard & Poor's analyst Steve Wilkinson. He
added, "In addition, the financial profile of the combined
entity has improved as a result of a net reduction in debt of
$280 million and preferred stock of $70 million with proceeds
from the company's initial public equity offering and excess
cash balances."

Standard & Poor's said that its ratings reflect REG's
geographically diverse and relatively modern theater circuit,
the expectation that the consolidated entity will generate
favorable margins relative to its peers, and the company's
improved, but still somewhat aggressive, financial profile.

Standard & Poor's said that ratings stability relies on REG
delivering consistent operating performance and maintaining
financial policies that preserve its current credit profile.


REPUBLIC TECH: USWA Seeks to Block Pension Plan Terminations
------------------------------------------------------------
The United Steelworkers of America filed a motion Tuesday in the
U.S. District Court for the Northern District of Ohio seeking to
intervene as a party to oppose the termination of two pension
plans that cover USWA members at Republic Technologies
International.

Without any advance notice to either RTI or the USWA, the
Pension Benefit Guaranty Corporation asked the Court to
terminate four defined pension plans sponsored by the company
effective June 14, 2002, one month prior to the expected closure
of all RTI facilities. This action, if approved, would deny
"shutdown" benefits to employees with 15, 20 or more years of
service to the company.

"It is an unconscionable act of greed for the PBGC to attempt to
deny our members these benefits," stated USWA international
president Leo W. Gerard. "The money necessary to pay ``shutdown'
benefits at RTI pales in comparison to its $7.7 billion surplus.
Given that the PBGC has allowed shutdown benefits at LTV and
CSC, there is no reason for them to treat RTI workers
differently."

RTI, operating under a voluntary Chapter 11 petition filed on
April 2, 2002, is looking to sell its assets in a court-
supervised auction, which is expected to take place on July 9,
2002. This anticipated sale of assets and shuttering of other
plants gives RTI employees who qualify the right to receive
benefits as defined by the pension plans.

The Steelworkers are challenging the preemptive termination date
because the Union believes that PBGC is seeking to avoid paying
out claims that have already been earned by its members and
funded for with premiums paid by the company. The PBGC claim
that the preemptive termination date is needed to protect the
interests of the plan's participants is flawed reasoning at best
according to the USWA.

The principal reason employers and unions establish and maintain
defined benefit plans is to provide employees certainty and
security when their working days are over. The negotiated
agreements made by RTI and the USWA have been specifically
designed to account for the risks and uncertainties associated
with steel industry employment.

In particular, the plans for USWA-represented employees at RTI
promise a "shutdown" benefit. The shutdown benefit enables a
worker meeting certain age and service requirements to begin
receiving pension benefits after the shutdown, rather than
having to wait to reach a specified retirement age.


SLI INC: Mulling Broad Range of Alternatives to Restructure Debt
----------------------------------------------------------------
SLI, Inc. (NYSE: SLI), one of the world's largest vertically
integrated lighting manufacturers, held its Annual Stockholders
Meeting on June 20, 2002.

At the Annual Meeting, the Company discussed the status of its
Second Amended and Restated Credit Agreement. Frank M. Ward,
Chairman and CEO commented, "There can be no assurances that
lenders will agree to a long-term amendment to cure several
existing and potential future defaults and implement a revised
set of financial covenants by the end of the current waiver
period."  Mr. Ward also indicated that the board of directors
and management are currently considering with the Company's
professional advisors a broad range of alternatives for
restructuring the Company's debt.

SLI Inc., based in Canton, MA, is a vertically integrated
designer, manufacturer and seller of lighting systems, which are
comprised of lamps and fixtures. The company offers a complete
range of lamps (incandescent, fluorescent, compact fluorescent,
high intensity discharge, halogen, miniature incandescent, neon,
LED and special lamps). They also offer a comprehensive range of
fixtures. The company serves a diverse international customer
base and markets, has 37 plants in 12 countries and operates
throughout the world. SLI, Inc., is also the #1 global supplier
of miniature lighting products for automotive instrumentation.


SAFETY-KLEEN: Sues Onsite Environ. to Recoup $1MM+ Preference
-------------------------------------------------------------
Safety-Kleen Services, represented by Jeffrey C. Wisler of
Connolly Bove Lodge & Hutz of Wilmington, brings suit against
Onsite Environmental Staffing and other Onsite Companies to
avoid and recover transfers of money and property alleged to be
preferential under the Bankruptcy Code.

The Debtors say money and property was transferred to Onsite on
dates in March, April, May and June, 2000, within 90 days of the
Petition Date, in at least amounts totaling $1,059,672.  These
transfers were on account of an antecedent debt owed by one or
more of the Debtors to Onsite, and the transferring Debtors were
insolvent at the times of the transfers.  As a result of these
transfers, Onsite received more than it would have received if
these cases were liquidating proceedings under chapter 7 of the
Bankruptcy Code, the transfers had not been made, and Onsite
received a distribution from the resulting bankruptcy estate.

In the alternative, the Debtors say that Services received less
than a reasonably equivalent value in exchange for the
transfers, and was insolvent at the time of the transfers, or
became insolvent as a result of the transfers.

In either event, the Debtors want to recover the transfers and
ask for judgment against Onsite in the amount of $1,059,672,
plus pre- and post-judgment interest, and their costs.  Further,
the Debtors want Onsite's claims against these estates
disallowed if Onsite refuses to return the transfers. (Safety-
Kleen Bankruptcy News, Issue No. 40; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    


SELECT MEDIA: Looks to New Acquisitions to Stem Continued Losses
----------------------------------------------------------------
Select Media Communications Inc., a New York integrated media
company, was organized in September 1981.  On October 13, 1995,
the Company filed a voluntary petition for reorganization
pursuant to Chapter 11 of Title 11 of the United States
Bankruptcy Code.  The petition was filed in the  United States
Bankruptcy Court for Southern District of New York and its plan
of reorganization was confirmed on August 28, 1997.  In the
period from the Company's bankruptcy filing in October 1995
until September 1998, the Company was essentially dormant.  In
September 1998, the Company  reactivated its marketing efforts
and began marketing its vignette products to advertisers.

On January 18, 2000, the Company purchased all of the issued and
outstanding common stock of Sigma Sound Services, Inc. under the
terms of a stock purchase agreement.  The Company determined
that effective April 1, 2001 control of Sigma became temporary
when the Company defaulted on various  payments due to the
former owner of Sigma.  The Company negotiated a settlement of
this matter in which the ownership of Sigma reverted back to the
former owner.

Select Media is actively pursuing the acquisition of content
providers, production and post-production houses to become a
vertically integrated provider and distributor of
video/television programming and recorded music.  The Company
currently has two pending acquisitions.

The Company incurred a net loss of $515,071 for the three-month
period ended March 31, 2002, and, as of that date, the Company's
current liabilities exceeded its current assets by $6,572,722.  
Management of the Company is developing a plan to reduce its
liabilities and raise equity capital for acquisitions through
the issuance of additional common stock through private or
public offerings conforming to the requirements of the
Securities Acts. The Company has received a best efforts letter
of intent from Lloyds Bahamas Securities, Ltd. for an additional
$3 million in  financing once the Company's common stock is
eligible for quotation on the OTC Bulletin Board, which occurred
on April 20, 2001.  Additionally, in November 2001, the Company
entered into an agreement for a $20,000,000 Private Equity Line
of Credit.  There can be no assurance that such financings will
be completed or, if completed, be on favorable terms. Under this
plan the Company intends to use any funds raised to fund
operations and to make strategic acquisitions through  cash and
stock transactions.  Management hopes that these acquisitions
will enable the Company to generate positive cash flows from
operations.  If the Company is unable to raise the appropriate
funds it will not be able to make any acquisitions nor will the
Company be able to continue to fund operations. There can be no
assurances that the Company will be successful in its attempts
to  raise sufficient capital essential to its survival.  
Additionally, the Company has already significantly curtailed
its operations and is currently unable to pay many of its
obligations. To the extent that the Company is unable to
generate or raise the necessary operating capital it will become
necessary to cease operations.  These matters raise substantial
doubt about the Company's ability to continue as a going
concern.


SUN HEALTHCARE: Wants Claims Objection Deadline Moved to Oct. 26
----------------------------------------------------------------
Pursuant to the Plan of Reorganization, the Reorganized Sun
Healthcare Group, Inc. and its debtor-affiliates have until June
28, 2002 to object to the claims filed against them.  To date,
Mark D. Collins, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that the Reorganized Debtors have
filed 23 Omnibus Objections, systematically categorized as:

    (a) duplicate and amended superceded claims,

    (b) claims based on ownership of common stock,

    (c) claims for which no amount is due,

    (d) postpetition claims,

    (e) claims not reflected in the Debtors' books and records,

    (f) claims that have been settled,

    (g) duplicate, amended and superceded claims,

    (h) claims which were released, and

    (i) claims that should be reclassified as unsecured claims.

However, Mr. Collins tells Judge Walrath that the Reorganized
Debtors need more time to complete their evaluation of all
outstanding Claims.  Accordingly, pursuant to Sections 105 and
502 of the Bankruptcy Code, Bankruptcy Rule 3007 and Section 7.1
of the Plan, the Reorganized Debtors ask the Court to extend the
deadline through and including October 26, 2002.

Mr. Collins assures Judge Walrath that the extension is not
sought to delay or prejudice the Claimants. On the contrary, the
Reorganized Debtors will continue to diligently review, analyze
and timely resolve the remaining claims. (Sun Healthcare
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


SWEET FACTORY: Wants to Stretch Lease Decision Period to Aug. 12
----------------------------------------------------------------
Sweet Factory Group, Inc., and its debtor-affiliates seeks to
extend the time to determine what to do with their unexpired
nonresidential real property leases.  The Debtors want the U.S.
Bankruptcy Court for the District of Delaware to give them until
the earlier of the Effective Date of the Plan and August 12,
2002.  It's impossible, the Debtors suggest, to make intelligent
decisions about whether to assume, assume and assign or reject
unexpired leases at this juncture.

Concomitant with the confirmation of the Amended Plan, the
Debtors declare that they are in the process of selling
substantially all of their assets, pursuant to which the Debtors
shall sell, assign, and otherwise transfer to RDR Group all
their operating assets including certain leases.  The Debtors
anticipate the transaction will culminate in July. The Debtors'
Amended Plan provides for the final disposition of all remaining
leases.

Sweet Factory Group Inc. filed for chapter 11 protection on
November 15, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. Laura Davis Jones at Pachulski, Stang, Ziehl Young
& Jones represents the Debtors in their restructuring efforts.


VERSATEL TELECOM: Wants to Bring-In DF King as Balloting Agent
--------------------------------------------------------------
Versatel Telecom International, N.V., seeks to employ DF King &
Co., Inc., as its ballot and information agent, nunc pro tunc to
June 19, 2002. DF King was previously engaged as the Debtor's
Information Agent in connection with an exchange offer.

The Debtor contends that the size and magnitude of its creditor
body makes it impracticable for the office of the Clerk of the
United States Bankruptcy Court for the Southern District of New
York to serve notice efficiently and effectively. The Debtor
believes that the most effective and efficient manner of
noticing its creditors, is for the Debtor to engage an
independent third party to act as an agent of the Court.

As Ballot and Information Agent, DF King is expected to:

     a) relieve the Clerk's Office of all noticing under any      
        applicable rule of bankruptcy procedure;

     b) file with the Clerk's Office a certificate of service,
        within 5 days after each service, which includes a copy
        of the notice, a list of persons to whom it was mailed,
        and the date mailed;

     c) maintain an up-to-date mailing list for all entities
        that have requested service of pleadings in this case,
        which list shall be available upon request of the
        Clerk's Office;

     d) comply, in all material respects, with applicable state,
        municipal and local laws and rules, orders, regulations
        and requirements of Federal Government Departments and
        Bureaus;

     e) make all original documents available to the Clerk's
        Office on an expedited, immediate basis;

     f) provide advice to the Debtor and their other
        professionals regarding all aspects of the Plan
        solicitation process;

     g) mail voting documents to creditors and equity security
        holders, if necessary;

     h) receive and examine all ballots and master ballots cast
        by creditors and equity security holders;

     i) tabulate all ballots and master ballots received prior
        to the voting deadline in accordance with established
        procedures and prepare a vote certificate for filing
        with the court; and

     j) promptly complying with such further conditions and
        requirements as the Clerk's Office may prescribe.

The Debtor states that DF King has received a retainer of
$23,400 for services to be rendered and expenses to be incurred.
DF King will hold this retainer and will apply it to its fees
for prepetition services only as approved by the Court, the
Debtor assures the Court.

Versatel Telecom International, N.V. provides broadband Internet
and telecommunications services including voice and data
services, dedicated Internet access services, customized
telecommunication solutions and Internet-enabled applications in
The Netherlands, Belgium and northwest Germany. The Debtor filed
for chapter 11 protection on June 19, 2002. Douglas P. Bartner,
Esq. at Shearman & Sterling represents the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed $2,017,758,399 in total assets and
$1,605,897,821 in total debts.

Versatel Telecom BV's 13.25% bonds due 2008 (VERT08NLR2) are
quoted at a price of 25. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=VERT08NLR2


WARNACO GROUP: Court Okays Settlement Pact with GE Capital Corp.
----------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates obtained the
Court's authority to enter into a Settlement Agreement with GE
Capital Corporation and to approve the terms of their Settlement
Agreement in relation to their disputes over the 1994 and 1997
Master Leases Agreements.

The terms of the Settlement Agreement are:

    (a) GE Capital will have an allowed secured claim in the
        amount of $15,200,000, known as 1997 Lease Indebtedness,
        payable on the terms set forth herein, with respect to
        amounts due under the 1997 Master Lease Agreement;

    (b) Warnaco will have a credit against the 1997 Lease
        Indebtedness equal to the amount of all prior post-
        petition rental and other payments in cash or in kind to
        GE Capital during the course of the Debtors' Chapter 11
        cases;

    (c) Warnaco will pay GE Capital $550,000 per month through
        confirmation date of the Debtors' plan or plans of
        reorganization, and $750,000 thereafter, without
        interest, until the 1997 Lease Indebtedness is paid in
        full -- the Secured Payments;

    (d) The Debtors will have the right to sell any of their
        divisions or subsidiaries, free and clear of all liens
        and claims of GE Capital.  Upon the closing of any sale,
        GE Capital will be paid the percentage of the then
        outstanding 1997 Lease Indebtedness:

         Sale of the first Business:   25% of the remaining
                                       balance of 1997 Lease
                                       Indebtedness

         Sale of the second Business:  33-1/3% of the remaining
                                       balance of 1997 Lease
                                       Indebtedness

         Sale of the third Business:   50% of the remaining
                                       balance of 1997 Lease
                                       Indebtedness

         Sale of fourth Business:      100% of remaining
                                       balance of 1997 Lease
                                       Indebtedness

        In addition, subject to payments having been made, the
        monthly Secured Payments will also be reduced by the
        percentage applicable to the sale of the Business, which
        includes Ralph Lauren, Calvin Klein Underwear, Calvin
        Klein Jeans, Warner's/Olga and Authentic Fitness
        Corporation;

    (e) GE Capital will have an allowed general unsecured claim
        of $33,557,667 with respect to the 1997 Master Lease
         Agreement;

    (f) With respect to the 1994 Master Lease Agreement, the
        parties have agreed that:

        (1) Warnaco will assume the agreement and make a cure
            payment of $211,820 plus any amounts due from and
            after May 13, 2002;

        (2) Warnaco will continue to make the required payments
            with respect to certain schedules of the 1994 Master
            Lease Agreement; and

        (3) Warnaco will have the option, with respect to any
            Schedule of the 1994 Master Lease Agreement, to
            acquire the equipment in each Schedule at the then-
            applicable Stipulated Loss Value specified under the
            Schedule;

    (g) GE Capital will have a final allowed general unsecured
        claim in both Warnaco's and Warnaco Group's Chapter 11
        cases in the amount of $3,632,495 with respect to the
        Helicopter Lease, minus any net rental payments and any
        net sale proceeds received by GE Capital on account of
        GE Capital's lease or sale of the Helicopter;

    (h) The claims of GE Capital with respect to the Aircraft
        Lease, Claims Nos. 1822 and 1823, will be disallowed and
        expunged in their entirety; and

    (i) Except as set forth in the Settlement Agreement,
        including the claims GE Capital will respect to the
        Exempted Claims, the Settlement will constitute a mutual
        release of all claims between the Debtors and the
        Commercial Leasing Division of GE Capital with respect
        to any Master Lease Agreement or leasing arrangements
        with any of the Debtors. (Warnaco Bankruptcy News, Issue
        No. 27; Bankruptcy Creditors' Service, Inc., 609/392-
        0900)  


WILLIAMS COMMS: Bringing-In Blackstone for Financial Advice
-----------------------------------------------------------
Williams Communications Group, Inc., and its debtor-affiliates
desire to retain and employ The Blackstone Group, L.P. as their
financial advisor in these Chapter 11 cases nunc pro tunc to the
Petition Date.  The proposed retention will be pursuant to the
letter and indemnification agreements, dated June 3, 2002,
between the Debtors and Blackstone.

Scott Schubert, Chief Financial Officer of Williams
Communications Group, tells the Court that the Company has
determined, with the size of their operations and the complexity
of their financial difficulties, they need to employ experienced
advisors to render financial advisory and other related services
in connection with the Chapter 11 cases.

"The Debtors have selected Blackstone as their financial advisor
because of Blackstone's diverse experience, knowledge and
reputation in the restructuring field, understanding of the
issues involved in Chapter 11 cases, and because the Debtors
believe that Blackstone possesses the requisite resources and is
well qualified to provide the financial advisory services that
will be required here," Mr. Schubert claims.  Blackstone has
served as financial advisor to debtors or other constituencies
in many of the largest Chapter 11 cases in the United States,
including American Banknote Corp., AMF Bowling Worldwide, Inc.,
American Pad & Paper Company, Arch Wireless, Inc., Babcock &
Wilcox Company, Best Products, Big V Supermarkets, The Caldor
Corp., Chiquita Brands International, ContiFinancial Corp., Dow
Corning Corp., Enron Corp., Evans Products, Global Crossing,
Ltd., Globalstar L.P., Goss Holdings, Inc., Harnischfeger
Industries, Hills Department Stores, 5 Indesco International,
Inc., The Leslie Fay Companies, Levitz Furniture, Inc.,
Loehmann's, Inc., LTV Corporation, Marvel Entertainment Group,
Inc., MobileMedia Corp., Montgomery Ward Holding Co. (GECC),
Motorola, Inc. (in the restructuring of Iridium LLC), Paragon
Trade Brands, Inc., The Penn Traffic Company, Phar-Mor, Inc.,
Premium Standard Farms, Inc., R.H. Macy & Co., The Singer
Company N.V., and Vencor, Inc.

Mr. Schubert informs the Court that the Debtors retained
Blackstone as of November 1, 2001 to serve as their financial
advisor in connection with their restructuring efforts.  Since
then Blackstone has developed extensive knowledge of the
Debtors' businesses, operations and financial condition.  Hence,
upon approval of its retention, Blackstone will continue to
provide these professional services to the Debtors:

A. Assist in the evaluation of the Company's businesses and
   prospects;

B. Assist in revising and updating the Company's long-term
   business plan and related financial projections;

C. Assist in raising additional capital to consummate a plan of
   reorganization for the purpose of implementing a
   Restructuring;

D. Assist in the development of financial data and presentations
   to the Company's Board of Directors and holders of the
   Company's obligations;

E. Meet, at the Company's request, with the Company's Board of
   Directors to discuss the Restructuring and its financial
   implications;

F. Analyze various restructuring scenarios and the potential
   impact of these scenarios on the Company;

G. Prepare all necessary valuation analyses in connection with
   confirmation of a plan of reorganization for the Debtors;

H. Provide testimony in the Chapter 11 case;

I. Provide strategic advice with regard to restructuring of the
   Company's Obligations and consummation of a plan of
   reorganization; and,

J. Provide other advisory services as are customarily provided
   in connection with the analysis and negotiation of a
   Restructuring, as requested and mutually agreed.

Mr. Schubert submits that Blackstone will be compensated
according to this fee structure:

A. until the earlier of consummation of the Plan and a
   termination of the Letter Agreement, a monthly advisory fee
   in the amount of $200,000. The first two Monthly Fees are
   payable upon execution of the Letter Agreement by both
   parties for the months of May and June 2002, and additional
   installments of the Monthly Fee are payable in advance on the
   first day of each month;

B. a Capital fee of $6,000,000 as payment for raising additional
   material capital to consummate the Plan on terms approved by
   Williams Communications Group's (WCG) Board of Directors, and
   consistent with implementing the Qualifying Investment
   agreement, dated April 19, 2002, among WCG, Williams
   Communications LLC (WCL) and certain of WCG's note holders
   and certain of WCL's lenders.  The Capital Fee is due and
   payable upon the earliest of:

   a. execution of a binding commitment, subject to customary
      conditions and termination events, between the Company and
      the investor;

   b. receipt of consent from the Required Lenders for payment
      of the Capital Fee; and,

   c. consummation of the Plan;

C. a Restructuring Fee of $12,000,000 due and payable upon
   consummation of the Plan.  It is understood that, if no
   Capital Fee is payable, but a Plan of Reorganization is still
   consummated, Blackstone will be entitled to receive only 50%
   of the Restructuring Fee upon consummation of the Plan.  The
   Capital Fee and Restructuring Fee will be paid in cash
   promptly when due; and,

D. reimbursement of all necessary and reasonable out-of-pocket
   expenses incurred in connection with this engagement.

Additionally, Mr. Schubert identifies Blackstone's professionals
who will be responsible for providing professional services to
the Debtors: Timothy Coleman, Senior Managing Director; Michael
Hoffman, Senior Managing Director; Elias Dokas, Vice President;
Shervin Korangy, Vice President; Mark Buschmann, Associate;
Rakesh Chawla, Associate; Erica Tsai, Analyst; and Birche
Fishback, Analyst.

Mr. Schubert further states that Williams Communications, LLC,
the nondebtor subsidiary of WCG, is financially responsible for
payment of Blackstone's compensation and reimbursement.  This
arrangement excuses Blackstone from being required to file fee
applications.

As stated by Mr. Schubert, Blackstone has provided Restructuring
Advisory Services to WCL and the Debtors since November 1, 2001,
and has been paid for those services on a monthly basis in
accordance with the Letter Agreement.  To date, Blackstone has
received $7,200,000 for Restructuring Advisory Services rendered
and $98,680 in expense reimbursements.  Prior to the Petition
Date, Blackstone received a $50,000 advance to be maintained
against unbilled out-of-pocket expenses incurred in connection
with the Restructuring Advisory Services and will credit the
advance as of the Petition Date against expenses incurred
thereafter.

Furthermore, Mr. Schubert relates that, prior to its current
engagement, Blackstone was on retainer for other financial
advisory services from August 1999 to August 2001 and advised
WCG on the sale of its business units, Williams Communications
Solutions and Williams Communications Canada.  In the one-year
period preceding these Chapter 11 cases, Blackstone received a
total of $4,475,195 on account of these Financial Advisory
Services.  The Debtors do not owe Blackstone any amount for
prepetition services.

As to potential conflicts of interests with regards to the
retention of Blackstone, Timothy R. Coleman, its Senior Managing
Director, discloses that he has consulted a member of the firm
of Simpson Thacher & Bartlett for the preparation of Mr.
Coleman's verified statement concerning this retention.  Simpson
Thacher serves as counsel to an individual Lender under the
Amended Credit Agreement dated as of September 8, 1999 the
Debtors and their lenders.  Simpson Thacher is Blackstone's
principal outside counsel.

In additional, Mr. Coleman admits that his firm has also worked
or has existing relationships with affiliates of Credit Suisse
First Boston and The Chase Manhattan Bank.  Those relationships,
however, will not interfere with or impair Blackstone's
representation of the Debtors in these Chapter 11 Cases.
Blackstone had also been retained to advise Winstar
Communications, Inc., Global Crossing Ltd. and Flag Telecom
Holdings Ltd. in their respective Chapter 11 cases.  These
entities are either customers or competitors of the Debtors.
(Williams Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

DebtTraders says that Williams Communications Group Inc.'s
10.875% bonds due 2009 (WCG2) are trading at about 13. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCG2for  
real-time bond pricing.


WINSTAR COMM: Court Approves DIP Credit Pact Carve-Out Expansion
----------------------------------------------------------------
According to Rebecca L. Booth, Esq., at Richards Layton & Finger
LLP in Wilmington, Delaware, Lucent Technologies does not object
to the relief requested per se by Winstar Communications, Inc.'s
Trustee.  Lucent, however, wants to make sure that the Trustee
is not seeking to use Lucent's collateral to pay the carve-out
obligations and asks the Court to approve the Debtors' motion
with the explicit prohibition on the Debtors for making any
payments on the carve-out obligations using Lucent's collateral.  
Lucent holds a secured claim against the Debtors' estates and
has a valid and perfected security interest against a
substantial portion of the Debtors' assets.

Although the Trustee does not appear to be seeking authority to
pay the carve-out obligations at this time and appears to only
want to pay the carve-out obligations from the DIP Lenders'
collateral, Ms. Booth maintains that Lucent is still registering
its objection as the DIP Lenders' and Lucent's respective
secured rights and interests in the sale proceeds have not yet
been determined. The portion of the sales proceeds constituting
the DIP Lenders' collateral is not known at this time.

                           *   *   *

Judge Akard rules that the Carve-Out of the Lien granted by the
Court securing the obligations of the Debtors under the DIP
Facility is expanded.  The Carve-Out will now include (i) unpaid
salaries, severance and all other amounts payable to the
Employees, (ii) the cost of the bond required by the Office of
the United States Trustee, (iii) the agreed $300,000 flat fee
payable to the Trustee in connection with the amounts collected
in these cases through and including March 20, 2002, and (iv)
the 3% commission for the Trustee of all successful recoveries
for the Debtors estates for the duration of these cases.

The Carve-out will also include unpaid fees and expenses of
Impala Partners LLC, Shearman & Sterling and Young, Conaway
Stargatt & Taylor, PricewaterhouseCoopers, the Chapter 7
Trustee, Kay Scholer LLP and Fox, Rothschild, O'Brien & Frankel,
LLP, Parente Randolph, LLC, Bankruptcy Services LLC and all
other professionals retained by the Trustee necessary for the
Trustee's efficient and expeditious administration of the
Debtors' estates. (Winstar Bankruptcy News, Issue No. 29;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


WORLDCOM: Full-Text of the SEC's $3.8 Billion Fraud Suit
--------------------------------------------------------
                  UNITED STATES DISTRICT COURT
              FOR THE SOUTHERN DISTRICT OF NEW YORK

------------------------------------x
                                    :
Securities and Exchange Commission  :
450 Fifth Street, N.W.              :
Washington, D.C. 20539              :  Civil Action No. ________
                                    :
                 Plaintiff          :
                                    :  COMPLAINT
           v.                       :  (Securities Fraud)
                                    :
WORLDCOM, INC.                      :
                                    :
                 Defendant.         :
------------------------------------x

     The Securities and Exchange Commission ("the Commission")
alleges for its Complaint as follows:

     1. From at least the first quarter of 2001 through the
first quarter of 2002, defendant WorldCom Inc. ("WorldCom")
defrauded investors. In a scheme directed and approved by its
senior management, WorldCom disguised its true operating
performance by using undisclosed and improper accounting that
materially overstated its income before income taxes and
minority interests by approximately $3.055 billion in 2001 and
$797 million during the first quarter of 2002.

     2. By improperly transferring certain costs to its capital
accounts, WorldCom falsely portrayed itself as a profitable
business during 2001 and the first quarter of 2002. WorldCom's
transfer of its costs to its capital accounts violated the
established standards of generally accepted accounting
principles ("GAAP"). WorldCom's improper transfer of certain
costs to its capital accounts was not disclosed to investors in
a timely fashion, and misled investors about WorldCom's reported
earnings. This improper accounting action was intended to
manipulate WorldCom's earnings in the year ending 2001 and in
the first quarter of 2002 to keep them in line with estimates by
Wall Street analysts.

     3. By engaging in this conduct, WorldCom violated the anti-
fraud and reporting provisions of the federal securities laws
and, unless restrained and enjoined by this Court, will continue
to do so. The Commission requests, among other things, that
Worldcom be enjoined from further violations of the federal
securities laws as alleged herein, and that it pay a monetary
penalty.

                      The Fraudulent Scheme

     4. WorldCom is a major global communications provider,
operating in more than 65 countries. WorldCom provides data
transmission and Internet services for businesses, and, through
its MCI unit, provides telecommunications services for
businesses and consumers. WorldCom became an important player in
the telecommunications industry in the 1990s. However, as the
economy cooled in 2001, WorldCom's earnings and profits
similarly declined, making it difficult to keep WorldCom's
earnings in line with expectations by industry analysts.

     5. Starting at least in 2001, WorldCom engaged in an
improper accounting scheme intended to manipulate its earnings
to keep them in line with Wall Street's expectations, and to
support WorldCom's stock price. One of WorldCom's major
operating expenses was its so-called "line costs." In general,
"line costs" represent fees WorldCom paid to third party
telecommunication network providers for the right to access the
third parties' networks. Under GAAP, these fees must be expensed
and may not be capitalized. Nevertheless, beginning at least as
early as the first quarter of 2001, WorldCom's senior management
improperly directed the transfer of line costs to WorldCom's
capital accounts in amounts sufficient to keep WorldCom's
earnings in line with the analysts' consensus on WorldCom's
earnings. Thus, in this manner, WorldCom materially understated
its expenses, and materially overstated its earnings, thereby
defrauding investors.

     6. As a result of this improper accounting scheme, WorldCom
materially underreported its expenses and materially overstated
its earnings in its filings with the Commission, specifically,
on its Form 10-K for the fiscal year ending on December 31,
2001, and on its Form 10-Q for the quarter ending on March 31,
2002.

     7. In particular, WorldCom reported on its Consolidated
Statement of Operations contained in its 2001 Form 10-K that its
line costs for 2001 totaled $14.739 billion, and that its
earnings before income taxes and minority interests totaled
$2.393 billion, whereas, in truth and in fact, WorldCom's line
costs for that period totaled approximately $17.794 billion, and
it suffered a loss of approximately $662 million.

     8. Further, WorldCom reported on its Consolidated Statement
of Operations contained in its Form 10-Q for the first quarter
of 2002 that its line costs for that quarter totaled $3.479
billion, and that its income before income taxes and minority
interests totaled $240 million, whereas, in truth and in fact,
WorldCom's line costs for that period totaled approximately
$4.276 billion and it suffered a loss of approximately $557
million.

     9. Worldcom's disclosures in its 2001 Form 10-K and in its
Form 10-Q for the first quarter of 2002 failed to include
material facts necessary to make the statements made in light of
the circumstances in which they were made not misleading. In
particular, these filings failed to disclose the company's
accounting treatment of its line costs, that such treatment had
changed from prior periods, and that the company's line costs
were actually increasing substantially as a percentage of its
revenues.

                         Jurisdiction

     10. The Commission brings this action pursuant to Section
21(d) of the Securities Exchange Act of 1934 ("Exchange Act")
[15 U.S.C. Secs. 78u(d)].

     11. This Court has jurisdiction over this action pursuant
to Sections 21(d), and 27 of the Exchange Act [15 U.S.C. Secs.
78u(d) and 78aa].

     12. The defendant, directly and indirectly, has engaged in,
and unless restrained and enjoined by this Court will continue
to engage in, transactions, acts, practices, and courses of
business that violate Sections 10(b) and 13(a) of the Exchange
Act [15 U.S.C. Secs. 78j(b) and 78m(a)] and Rules 10b-5, 12b-20,
13a-1, and 13a-13 thereunder [17 C.F.R.   240.10b-5, 240.12b-20,
240.13a-1, and 240.13a-13].

                         The Defendant

     13. WorldCom is a Clinton, Mississippi-based company
incorporated in Georgia, which provides a broad range of
communications services to both U.S. and non-U.S. based
businesses and consumers. WorldCom is a public company whose
securities are registered with the Commission pursuant to
Section 12(b) of the Exchange Act and it is required to file
periodic reports with the Commission pursuant to Section 13 of
the Act. Throughout the relevant time period, WorldCom's stock
was covered by Wall Street analysts who routinely issued
quarterly and annual earnings estimates.

                        Claims For Relief

                           First Claim

     14. Paragraphs 1 through 13 above are incorporated herein
by this reference.

     15. Defendant Worldcom, directly or indirectly, by use of
the means or instruments of interstate commerce, or of the
mails, or of a facility of a national securities exchange,
knowingly or recklessly (a) employed devices, schemes and
artifices to defraud; (b) made untrue statements of material
fact or omitted to state material facts necessary in order to
make the statements made, in light of the circumstances under
which they were made, not misleading; and (c) engaged in acts,
transactions, practices, and courses of business which operated
or would operate as a fraud or deceit upon the purchasers of
securities and upon other persons, in connection with the
purchase or sale of a security.

     16. Defendant WorldCom, and members of its senior
management, knew, should have known, or were reckless in not
knowing, that its 2001 Form 10-K, and its Form 10-Q for the
first quarter of 2002, including the financial statements
contained therein, as filed with the Commission, contained
material misstatements and omissions.

     17. By reason of the foregoing, WorldCom violated Section
10(b) of the Exchange Act and Exchange Act Rule 10b-5.

                         Second Claim

                  Violation of Section 13(a) of
                     the Exchange Act and
          Exchange Act Rules 13a-1, 13a-13, and 12b-20

     18. Paragraphs 1 through 13 are hereby realleged and
incorporated herein by reference as if set forth fully.

     19. Section 13(a) of the Exchange Act and Rules 13a-1 and
13a-13 thereunder require issuers of registered securities to
file with the Commission factually accurate annual and quarterly
reports. Exchange Act Rule 12b-20 provides that in addition to
the information expressly required to be included in a statement
or report, there shall be added such further material
information, if any, as may be necessary to make the required
statements, in the light of the circumstances under which they
are made. not misleading.

     As a result of the accounting actions set forth above,
WorldCom violated Section 13(a) of the Exchange Act and Exchange
Act Rule 13a-1, 13a-13, and 12b-20.

                        Prayer for Relief

     WHEREFORE, the Commission respectfully requests that this
Court:

     Enter Orders:

     A. Permanently restraining and enjoining WorldCom from
violating Section 10(b) of the Exchange Act and Rule 10b-5
thereunder;

     B. Permanently restraining and enjoining WorldCom from
violating Section 13(a) of the Exchange Act and Rules 12b-20,
13a-1, and 13a-13 thereunder;

     C. Imposing civil monetary penalties on WorldCom pursuant
to Section 21(d) of the Exchange Act [15 U.S.C. Sec. 78u];

     D. Prohibiting WorldCom and its affiliates, officers,
directors, employees, and agents, from destroying, altering, or
removing from the court's jurisdiction any documents relevant to
the matters alleged herein;

     E. Prohibiting WorldCom and its affiliates from making any
extraordinary payments to any present or former affiliate, or
officer, director, or employee of WorldCom, or its affiliates,
including but not limited to any severance payments, bonus
payments, or indemnification payments.

     F. Appointing a corporate monitor to ensure compliance with
items D and E, above; and

     G. Granting such other and additional relief as this Court
may deem just and proper.

Dated: June 26, 2002       
                           Respectfully submitted,
         
                           ____________________________
                           Robert B. Blackburn (RB 1545)
                           Local Counsel for Plaintiff
                           Securities and Exchange Commission
                           Woolworth Building, 13th Floor
                           233 Broadway
                           New York, New York 10279
                           (646) 428-1610
                           (646) 428-1980 (fax)

                           ________________________
                           Stephen M. Cutler
                           William R. Baker III
                           Charles D. Niemeier
                           Peter H. Bresnan (PB 9168)
                           Arthur S. Lowry (AL 9541)
                           Lawrence A. West
                           Neil Welch
                           Jose Rodriguez

                           Counsel for the Plaintiff
                           Securities and Exchange Commission
                           Stop 9-11
                           450 Fifth St., N.W.
                           Washington, D.C. 20549
                           (202) 942-4868 (Lowry)
                           (202) 942-9581 (Fax)
                    


WORLDCOM: ITXC Chair Disheartened by Improper Acctg. Practices
--------------------------------------------------------------
In light of the significant announcements of accounting issues
that have arisen at WorldCom, ITXC Corp. (NASDAQ:ITXC) wishes to
communicate to investors, customers and the financial community
a current assessment of the impact WorldCom problems, including
any potential subsequent bankruptcy filings by WorldCom or its
affiliates, are likely to have on ITXC.

ITXC's knowledge of WorldCom's exact financial situation is
limited to the same public sources available to everyone and may
therefore be incomplete. Because of the profound public impact
of the news about WorldCom, ITXC is making an exception to its
normal policy of not commenting on customer specific details.

WorldCom and its affiliate companies worldwide, including the
various MCI companies, are among the largest players in the
world telecommunications markets. As such, ITXC has significant
business relationships with these companies, as a supplier, as a
customer and as a competitor. As a supplier to WorldCom, ITXC
completes calls worldwide for a number of the WorldCom
companies; as a customer of WorldCom, various WorldCom companies
provide call termination for ITXC in certain countries and
WorldCom also provides some connectivity to the Internet and
other services to ITXC.

First is the issue of services purchased by ITXC. ITXC
anticipates no circumstances in which any long term dislocation
could arise from WorldCom's problems. All of ITXC's major
systems are redundant with multiple suppliers, and even the
exceedingly remote likelihood of shutdowns in some services by
WorldCom would have no material long term impact on ITXC's
ability to provide services, although it might affect short term
capacity, margin or growth.

Second is the issue of the impact of WorldCom's disarray and a
potential WorldCom bankruptcy on ITXC's future business. ITXC
has found, as various customers have gone through reorganization
proceedings, that the companies in reorganization can become as
good or better customers than they were before the filing, often
operating on a prepaid basis with lower credit risk to ITXC.
While ITXC has no way of predicting the eventual outcome of
WorldCom's woes or whether it will even file for bankruptcy, it
is clear that whatever happens to one company, the calls it
handles do not go away and will be handled by some other
carrier. WorldCom's competitors are also customers of ITXC. ITXC
sees disarray as presenting opportunities as well as risks, and
believes there is no reason to assume that the disappearance of
a particular company would have an adverse impact on overall
revenue growth. ITXC does not expect such an eventuality to have
an impact on its long term growth.

Third is the issue of credit risk. ITXC has carefully monitored
WorldCom's credit for some time. Because ITXC has a relationship
in which it both sends and receives calls to and from WorldCom
companies, by mutual agreement ITXC and WorldCom have engaged in
the practice of offsetting monthly amounts owed by one party to
the other. The net amount owed at the end of any given day
fluctuates considerably, but under no circumstances has the net
amount owed by WorldCom ever reached a number that would have
any material effect on ITXC's financial position. As of June 25,
2002, current outstanding billings owed to ITXC by WorldCom
companies are approximately $3.4 million and current outstanding
billings from WorldCom companies to ITXC total approximately
$4.8 million. All of these amounts relate to traffic in the
current quarter.

In the past bankruptcy courts have often honored practices that
provided for such offset and considered the debt to be limited
to the net amount. On the other hand, it is impossible to
predict how a potential bankruptcy court might treat any
particular situation; therefore, ITXC must also consider the
risk that the court would require full payment of amounts due to
WorldCom while granting mere creditor status for amounts owed by
them or that courts might parse out the net amounts among the
numerous WorldCom companies. It is simply too early to determine
the final impact, if any, on ITXC's financial position of the
WorldCom situation. To be prudent, and in light of certain
outstanding billing disputes with WorldCom companies which
predate the recent announcement, ITXC expects to establish a
reserve of $1 million relating to the WorldCom situation. The
Company will continue to monitor the WorldCom situation and
vigorously pursue its positions. The actual amount of the
reserve may change. Even in the worst case, assuming bankruptcy
by all WorldCom companies and adverse ruling on all offset
issues, the resultant loss of approximately $3 million
additional would not significantly affect ITXC's financial
position going forward.

ITXC's Chairman and CEO Tom Evslin said, "We are extremely
disappointed that another American company has admittedly
engaged in improper accounting practices. It is disheartening to
all concerned and to everyone with a stake in the American and
world economies. We understand that investors' confidence in
American companies and their management has been substantially
damaged and must be restored.

"I applaud the reported candor of the new WorldCom management in
bringing this painful matter to light and wish them and all the
thousands of WorldCom employees the best in these trying times.
We look forward to continuing to work with WorldCom as a
customer and supplier. We will continue our vigilance to assure
that our own practices remain completely above board and
transparent. We reiterate the statements of principles we made
at the time of our annual report and will continue to provide a
simple and clear set of financial statements and stand behind
their integrity."

In four years of operation, ITXC Corp. has become the largest
U.S.-based pure wholesale carrier of international phone calls.
The Company ranks among the top 15 carriers of any kind in the
world based on minutes of international calling. ITXC's
customers include all major U.S. carriers as well as leading
carriers worldwide.

Proprietary ITXC technology has made it possible to build a tier
1 quality call completion network, ITXC.net(SM), in 159
countries (as of May 31, 2002) using the Internet as its
backbone. The efficiency of the Company's business model means
low prices, low capital requirements, and fast deployment for
ITXC's carrier customers. ITXC customers are pleased by the fact
that ITXC is EBITDA positive, has no net debt, and a balance
sheet as strong as it is simple.

ITXC is known as the essential off-net carrier taking calls to
and from everywhere a carrier's own network doesn't reach. For
more information about ITXC, please visit http://www.itxc.com


WORLDCOM: Financial Restatement Spurs S&P to Cut Rating to CCC-
---------------------------------------------------------------
Standard & Poor's lowered its long-term corporate credit rating
on global communications provider WorldCom Inc. to triple-'C'-
minus from single-'B'-plus following the company's announcement
that it intends to restate financial statements for 2001 and the
first quarter of 2002 due to the overstatement of EBITDA by
about $3.8 billion.

All ratings remain on CreditWatch with negative implications.
Clinton, Missouri-based WorldCom had about $30 billion of total
debt outstanding as of March 31, 2002.

"The downgrade is based on the high degree of uncertainty
surrounding WorldCom's ability to ultimately pay its outstanding
debt," Standard & Poor's credit analyst Rosemarie Kalinowski
said. "Furthermore, the restatement and the expansion of the SEC
investigation could adversely impact the current bank
negotiations and the company's ability to retain customers."

"These events increase the likelihood of a debt restructuring or
Chapter 11 filing near term," Ms. Kalinowski added.

Worldcom Inc.'s 10.875% bonds due 2006 (WCOM06USR2) are quoted
at 16, DebtTraders says. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM06USR2  


WORLDCOM: Fitch Junks Sr. Unsecured Ratings on Accounting Issues
----------------------------------------------------------------
Fitch Ratings downgraded the senior unsecured ratings of
WorldCom to 'CC' from 'B' following WorldCom's announcement of
accounting irregularities which overstated net income and cash
flow. The 'CC' rating category is defined as high risk with some
kind of default probable. As a frame of reference, telecom
companies have not fared well vis-a-vis recovery. Over the past
year, the average recovery for a defaulted telecom has been 11
cents on the dollar. Fitch Ratings believes the potential
fallout from this morning's downgrade, already reflected in a
sharp drop in WorldCom bond prices, may be widespread, affecting
a diverse group of investors and creditors.

With a reported $32 billion debt burden on its books, WorldCom
exposure is actively traded and held widely throughout the
market. As such, Fitch Ratings is engaging in a coordinated
analytical effort, covering banks, insurance companies,
suppliers and vendors, financial guarantee providers, structured
investments vehicles (SIVs), collateralized debt obligations
(CDOs), asset-backed commercial paper (ABCP), asset managers,
commercial mortgage backed securities (CMBS), local government
investment pools, and active participants in the credit default
swap market. Fitch Ratings has already identified $10bln of
WorldCom debt held by insurance companies and pension funds.
Fitch Ratings will release its findings regarding the credit and
rating implications, if any, as it gathers and processes the
relevant information.


WORLDCOM: SEC Demands Detailed Report from WorldCom by July 1
-------------------------------------------------------------
                   UNITED STATES OF AMERICA
                          before the
              SECURITIES AND EXCHANGE COMMISSION
                         June 26, 2002
____________________________
                            : ORDER REQUIRING THE FILING OF
WorldCom, Inc.              : A SWORN STATEMENT PURSUANT
                            : TO SECTION 21(a)(1) OF THE
File No. HO-09440           : SECURITIES EXCHANGE ACT OF 1934
____________________________:

     On March 14, 2002, the Commission authorized a Formal Order
of Private Investigation in this matter. Pursuant to Section
21(a)(1) of the Securities Exchange Act of 1934 ("Exchange
Act"), the Commission, in its discretion, deems it necessary, in
order to determine whether WorldCom, Inc. ("WorldCom"), has
violated, is violating, or is about to violate any provision of
the Exchange Act, to require WorldCom to file a statement in
writing, under oath, describing certain facts and circumstances
concerning the matter under investigation.

     Accordingly, it hereby ORDERED that WorldCom file a
statement in writing, under oath, describing in detail the facts
and circumstances underlying the events described in and that
led to WorldCom's announcement on June 25, 2002 (1) that
WorldCom intended to restate its financial statements for 2001
and the first quarter of 2002; (2) that WorldCom had determined
that certain transfers from line cost expenses to capital
accounts during this period were not made in accordance with
generally accepted accounting principles ("GAAP"); (3) that the
amount of these transfers was $3.055 billion for 2001 and $797
million for first quarter 2002; and (4) that without these
transfers, the company's reported Earnings before Interest,
Taxes, Depreciation and Amortization ("EBITDA") would be reduced
to $6.339 billion for 2001 and $1.368 billion for first quarter
2002, and the company would have reported a net loss for 2001
and for the first quarter of 2002.

     IT IS FURTHER ORDERED that the sworn statement and an
electronic copy of it be delivered to the Director of the
Division of Enforcement before 8:00 a.m. on July 1, 2002.

     By the Commission.

                                   Jonathan G. Katz
                                   Secretary


XO COMMS: Court Sets Disclosure Statement Hearing for July 19
-------------------------------------------------------------
According to Section 1125(b) of the Bankruptcy Code, in order to
solicit acceptance of the Plan from a holder of a claim or
interest, XO Communications, Inc. must first obtain the Court's
approval of the Disclosure Statement as containing adequate
information.  Section 1125(a) of the Bankruptcy Code defines
adequate information to mean: "information of a kind, and in
sufficient detail . . . that would enable a hypothetical
reasonable investor typical of holders of claims or interests of
the relevant class to make an informed judgment about the plan."

Because the Investment Agreement requires the Debtor to obtain a
final and non-appealable order confirming the plan by no later
than September 15, 2002 as one of the conditions to the
Investors' obligations under that agreement, in an effort to
comply with the requirements of this timetable, the Debtor
sought and obtained an order to show cause scheduling the
Disclosure Statement Hearing on July 19, 2002, at 10:00 a.m. and
shortening the notice period established in Bankruptcy Rules
3017 and 2002 by approximately 4 days.

On July 19, 2002, at 10:00 a.m., Judge Gonzalez will convene a
hearing to consider the entry of the Disclosure Statement Order:

(a) finding that the information contained in the Disclosure
    Statement is "adequate information" as such term is defined
    in section 1125 of the Bankruptcy Code;

(b) approving the Disclosure Statement;

(c) authorizing the Debtor, pursuant to section 1125(b) of the
    Bankruptcy Code, to transmit copies of the Disclosure
    Statement, the Plan and related documents to all known
    holders of claims against or interests in the Debtor, and to
    solicit acceptances of the Plan from the holders of claims
    against or interests in the Debtor that are being impaired
    and are not deemed to have rejected the Plan;

(d) establishing which classes under the Plan are impaired
    pursuant to section 1124 of the Bankruptcy Code and will be
    entitled to vote on the Plan;

(e) establishing a date and other directions for service and
    return of completed ballots;

(f) scheduling a hearing to consider confirmation of the Plan
   (the Confirmation Hearing);

(g) establishing a procedure for providing notice of the
    Confirmation Hearing;

(h) fixing a date and specifying the procedure by which
    objections, if any, to confirmation of the Plan shall be
    filed with the Court;

(i) fixing a record date for determining the identity of holders
    of claims and interests to be compromised or that are
    otherwise impaired under the Plan for purposes of providing
    notice to such holders of the Confirmation Hearing;

(j) establishing such other deadlines and procedures as may be
    appropriate and/or contemplated by the Plan; and

(k) granting such other and further relief as the Court may deem
    just and proper.

Bankruptcy Rules 2002(b) and 3017(a) require that the Court
shall hold a hearing on not less than 25 days notice by mail to
creditors, equity security holders and other parties in interest
of a hearing to consider approval of a disclosure statement.
Because of the exigency of the relief, pursuant to Bankruptcy
Rule 9006, the Court has reduced the period required.

Accordingly, the Court directed that, on or before the fourth
business day following the entry of the order (June 18, 2002),
the Debtor shall serve a conformed copy of the order to show
cause, the Motion, the Disclosure Statement and the Plan (as may
be amended, modified, or supplemented), and the Disclosure
Statement Hearing Notice, as approved, by first-class mail upon:
(i) the Office of the United States Trustee for the Southern
District of New York; (ii) counsel to the Investors; (iii)
counsel to the lenders under the Senior Credit Facility; (iv)
each of the Indenture Trustees under XO's indenture agreements;
(v) counsel to the two unofficial bondholder committees, and any
official committee appointed in this case; (vi) each of the
Debtor's top 30 largest unsecured creditors; (vii) the Internal
Revenue Service; (viii) the Attorney General of each state in
which the Debtor do business; and (ix) the Securities and
Exchange Commission.

The Court directed the Debtor to serve the Disclosure Statement
Hearing Notice on or before the fourth business day following
the date of entry of the order to show cause, by first-class
mail upon: (i) holders of known claims against and interests in
the Debtor as listed on the Debtor's creditor lists filed by the
Debtor with its chapter 11 petition; and (ii) all persons that
have filed requests for notices in this case pursuant to
Bankruptcy Rule 2002 as of the day prior to the date for service
of the Disclosure Statement Hearing Notice.

The Debtor shall publish the Disclosure Statement Hearing Notice
at least once in the national edition of The Wall Street
Journal, not later than July 3, 2002.

The Court ordered that, responses and objections, if any, to the
relief sought in connection with the approval of the Disclosure
Statement must be filed with the Court (with a copy to chambers)
and served so as to be received no later than July 15, 2002 at
4:00 p.m. (prevailing Eastern Time), by: (i) counsel to the
Debtor, Willkie Farr and Gallagher, 787 Seventh Avenue, New
York, New York 10019, Attn: Tonny K. Ho, Esq.; (ii) XO
Communications, Inc., 11111 Sunset Hills Road, Reston, Virginia
20190, Attn: Gary D. Begeman, Esq.; (iii) counsel to the
Investors, Fried Frank Harris Shriver and Jacobson, One New York
Plaza, New York, New York 10004, Attn: George B. South III,
Esq., and Latham & Watkins, 885 Third Avenue, Suite 1100, New
York, New York 10022-4802, Attn: Ms. Shari Siegel, Esq.; (iv)
counsel to the lenders under the Senior Credit Facility,
Skadden, Arps, Slate, Meagher & Flom, LLP, Four Times Square,
New York, New York 10036, Attn: Jay M. Goffman, Esq.; (v)
counsel to any official committee of unsecured creditors
appointed in this case; and (vi) the Office of the United States
Trustee, 33 Whitehall Street, Twenty-First Floor, New York, New
York 10004, Attn: Paul Schwartzberg, Esq.

If an objection to the disclosure statement is not filed and
served as prescribed, the objecting party may be barred from
objecting to the adequacy of the Disclosure Statement and may
not be heard at the hearing.

The record date for determining the identity of each holder of a
claim against or an interest in the Debtor that shall receive a
copy of the Disclosure Statement Hearing Notice is established
as July 12, 2002, at 5:00 p.m. (prevailing Eastern Time). (XO
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


* BOOK REVIEW: Land Use Policy in the United States
---------------------------------------------------
Author: Howard W. Ottoson
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt

In 1962, marking the 100th anniversary of the signing of the
Homestead Act by President Lincoln, 20 nationally recognized
economists, historians, a political scientist, and a geographer
presented papers at the Homestead Centennial Symposium at the
University of Nebraska. Their task was to appraise the course
that United States land policy had taken since independence. The
resulting papers are presented in this book, grouped into five
major areas: historical background; social factors influencing
U.S. land policy; past, present and future demands for lands in
the U.S.; control of land resources; and implications for future
land policy.

This book begins with a summary of the Homestead Act, its
antecedents, the arguments of its supporters and detractors, and
its intent versus implementation. The Act offered a quarter
section (160 acres) of public land in the West to citizens and
intended citizens for a $14 filing fee and an agreement to live
on the land for five years. The program ended in 1935.

Advocates claimed that frontier lad had no value to the
government until it was developed and began generating tax
revenue. Opponents feared the Act would lower land valued in the
East and pushed for government sale of the land. In practice,
states, territories, railroads and investors were able to set
aside more land than was eventually handed over to the
homesteaders.

One paper deals with land policy before 1862. From the start,
the U.S. required that "all grants of land by the federal
government should embody a description of the land not merely in
quality, but in place as defined by relation to an actual
survey." This policy avoided countless boundary disputes so
vexing to other countries.

Perhaps most interesting are the social history chapters:
Czechoslovakians pushing wheelbarrows across Nebraska,
"Daughters and Sons of the Revolution.(living) next
to.Mennonites," and "an illiterate.neighborly with a Greek and a
Hebrew scholar from a colony of Russian Jews." Mail-order
brides, "defectors from civilization," the importance of the
Mason jar, the Jeffersonian dream of a nation of agrarian
freeholders, and Santayana's observation that the typical
American skitters between visionary idealism and crass
materialism, all make for fascinating reading.

The land-use policy problems discussed certainly haven't been
solved today. And, although land use conflicts in the U.S.
haven't always been resolved equitably, "the big step forward
taken by the United States during the last one hundred and fifty
years in the age-long struggle of man towards the ideals of
mutuality and equity has been the working out of a system
wherein the sovereign superior who prescribes the working-rules
for land use and decision making have become, himself, a
collective of the citizenry."

A chapter is devoted to the arguments between the family farm ad
the "sentiment against concentration of wealth in the hands of a
few." The discussion of the Land Grant college system and its
contribution to international development closes with a quote
from Chester Bowles:

"Can we, now the richest people on earth, become creative
participants in the unprecedented revolutionary changes of our
era, changes that the most privileged people will oppose tooth
and nail, but which for the bulk of mankind offer the hopeful
prospect of a little more food, a little more opportunity, a
doctor for their sick child, and sense of personal dignity?"

                          *********

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
conferences@bankrupt.com.

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

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

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

                          *********

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

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

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

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

The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                     *** End of Transmission ***