TCR_Public/020702.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, July 2, 2002, Vol. 6, No. 129     

                          Headlines

360NETWORKS: Has Until July 15 to File Reorg. Plan Exclusively
ANC RENTAL: Intends to Buy 157 New Buses from ElDorado National
ADELPHIA: Century Gets Until July 10 to Comply with Rule 1007
ADELPHIA COMMS: Gets Immediate Access to $500MM of DIP Financing
ADVANCED GLASSFIBER: Lenders Agree to Forbear Until August 13

ALLEGIANCE TELECOM: Fitch Junks $500M Facilities & 12-7/8% Notes
AMERICAN GREETINGS: S&P Affirms BB+ Subordinated Debt Rating
AMERICAN MILLENIUM: Needs New Capital to Continue Operations
AMPEX CORP: Gets Extension to Meet AMEX Listing Requirements
ANGEION CORPORATION: Creditors' Meeting Will Convene on July 18

ARMSTRONG: AWI Wants Removal Period Deadline Moved to January 31
ASHANTI CAPITAL: Will Redeem Outstanding $218 Mill. 5-1/2% Notes
ASHANTI GOLDFIELDS: Withdraws Proposed 5-1/2% Note Restructuring
AURORA FOODS: Gets Additional Financing & Amends Credit Facility
BURNHAM PACIFIC: Transfers Remaining Assets & Debt to Trustees

CAMBRIDGE ADVANTAGED: Trien Rosenberg Airs Going Concern Doubt
CHELL GROUP: Will Host Investor Update Conference Call Today
CLEARCOMM LP: Working Capital Deficit Tops $122MM at March 31
COHO ENERGY: Denbury Resources Pitches Best Bid for Oil Hedges
COVANTA ENERGY: Has Until Jan. 4, 2003 to Remove Pending Actions

DYNASTY COMPONENTS: CCAA Protection Extended Until July 29, 2002
ENCOMPASS SERVICES: Board Approves Equity Sale of Up to $72.5MM
ENRON CORP: Court Okays Stipulation on Letter of Credit Proceeds
ENRON: Exco Intends to Appeal Milbank Disqualification Order
ETOYS INC: Files Joint Liquidating Plan and Disclosure Statement

EXIDE: Will Supply Batteries for New Ford Fuel Cell Vehicle
EXODUS COMMS: Wins Nod to Sell LA3 IDC to Disney for $8.6 Mill.
FEDERAL-MOGUL: Equity Committee Signs-Up Bell Boyd as Counsel
FLAG TELECOM: Court Okays Gibson Dunn's Continued Engagement
GLOBAL CROSSING: Court Approves Stipulation with Telco Utilities

GLOBAL LIGHT: Gets Creditors' Protection Under CCAA in Canada
GRANDETEL TECHNOLOGIES: Auditors Issue Going Concern Opinion
HAYES LEMMERZ: Restructuring Performance Bonus Capped at $37.5MM
HOLLYWOOD CASINO: S&P Places B Ratings on Watch Developing
HOMELIFE CORPORATION: Files Plan and Disclosure Statement in DE

HOST FUNDING: Debt Restructuring Critical to Continue Operations
HUNTSMAN CORP: Obtains Forbearance Pact Extension Until Aug. 15
ITC DELTACOM: S&P Cuts 8.875% & 11% Sr. Unsec. Note Ratings to D
ITC DELTACOM: Seeks Poorman-Douglas' Appointment as Claims Agent
KMART CORP: U.S. Trustee Appoints Official Equity Committee

LAIDLAW INC: Gets Okay to Amend Surety Bond Agreement with FIC
LERNOUT & HAUSPIE: Secures Sixth Solicitation Period Extension
MED DIVERSIFIED: Delays Form 10-K Filing & Will Delist From AMEX
NTL INC: Court to Consider Disclosure Statement on July 12, 2002
NATIONAL STEEL: Maintains Plan Filing Exclusivity Until Nov. 5

NATIONSRENT INC: Wants More Time to Make Lease-Related Decisions
NEWPOWER: Vectren Source to Acquire Ohio Natural Gas Customers
NEWPOWER: Seeking Court Approval of Asset Sale Pact with Vectren
NEXTCARD: S&P Lowers Asset-Backed Ser. 2000-1 & 2001-1 Ratings
NOMURA CBO: S&P Slashes 1997-1's Class A-2 Notes Rating to BB-

OLYMPUS HEALTHCARE: Court Confirms Amended Joint Chapter 11 Plan
OREGON STEEL MILLS: S&P Assigns BB- Corporate Credit Rating
PACIFIC GAS: Wants to Acquire IT Equipment for New Entities
PACIFIC SYSTEMS: March 31 Balance Sheet Upside-Down by $303K
PAPER WAREHOUSE: Nasdaq SmallCap Delists Shares Effective Today

PENN SPECIALTY: Has Until July 9 to Decide on Unexpired Leases
PILLOWTEX: Duke Energy Wants Collateral Value Determination
POLAROID: Court Approves One Equity Partners' Asset Purchase
PRINTING ARTS: Has Until July 31 to File Chapter 11 Plan
RANOR INC: Wants Schedule Filing Deadline Moved to July 30

SAFETY-KLEEN: Sues Skowf Inc. to Recoup $1.3 Million Preference
SAFETY-KLEEN: 10-Day Appeal Period for Asset Sale Order Expires
SONTRA MEDICAL: Falls Short of Nasdaq Listing Requirements
TANDYCRAFTS: Seeking Fourth Extension of Lease Decision Period
TUTOR TIME: Childtime Learning Pitches Best Bid for Assets

VECTOUR INC: Exclusive Plan Filing Period Extended to August 29
VENTAS INC: John C. Thompson Resigns as Executive Vice President
WARNACO GROUP: Court OKs Settlement with HIS Equipment & Liberty
WILLIAMS COMM: Agrees to Produce Documents as Committee Requests
WINFIELD CAPITAL: Fails to Meet Nasdaq Listing Guidelines

WORLDCOM: Taps William McLucas to Conduct Independent Inquiry
WORLDCOM INC: UICI Discloses $7.5 Million Bond Position
WORLDCOM: Fitch Says No Material Claims Expected by Guarantors
WORLDCOM INC: Everest Re Group Discloses $30 Million Exposure
WORLDCOM: S&P Junks Ratings on 4 Related Synthetic Transactions

WORLDCOM: Delivers Explanation of What Went Wrong to SEC
WORLDCOM: Bank Lenders Formally Declare Events of Default
WORLDCOM: Fails to Comply with Continued Nasdaq Listing Criteria
XO COMMS: Will Continue Using Existing Cash Management System
ZAMBA SOLUTIONS: Commences Trading on OTCBB Effective July 1

                          *********

360NETWORKS: Has Until July 15 to File Reorg. Plan Exclusively
--------------------------------------------------------------
360networks announced the U.S. Bankruptcy Court for the Southern
District of New York has extended to July 15, 2002 the company's
exclusive period to develop and submit a reorganization plan. A
hearing on a motion to further extend the order is scheduled for
July 15.

The extension of the order was supported by the company's senior
bank lenders and unsecured creditors.

Last week, the Supreme Court of British Columbia extended to
July 31, 2002 the order providing the company time to file a
plan of reorganization and protection under Canada's Companies'
Creditors Arrangement Act (CCAA).

360networks plans to request a further extension to these orders
when it submits a reorganization plan for approval by the courts
in Canada and the U.S. It is expected the company will present a
plan in July and, if approved, emerge this fall from creditor
protection as a restructured company.

360networks offers optical services and network infrastructure
to telecommunications and data communications companies in North
America. The company's optical mesh fiber network is one of the
largest and most advanced on the continent, spanning
approximately 40,000 kilometers (25,000 miles) and connecting
more than 50 major cities in the United States and Canada.

On June 28, 2001, the company and several of its operating
subsidiaries voluntarily filed for protection under the
Companies' Creditors Arrangement Act (CCAA) in the Supreme Court
of British Columbia. Concurrently, the company's principal U.S.
subsidiary, 360networks (USA) inc., and 22 of its affiliates
voluntarily filed for protection under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. In October 2001, four operating
subsidiaries that are part of the 360atlantic group of companies
also voluntarily filed for protection in Canada. Insolvency
proceedings for several subsidiaries of the company have been
instituted in Europe and Asia. Additional information is
available at http://www.360.net


ANC RENTAL: Intends to Buy 157 New Buses from ElDorado National
---------------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates ask for Court
for authority to:

A. enter into an Agreement and Security Agreement with the
   ElDorado National Inc., a Kansas-based shuttle bus
   manufacturer, for the purchase of 157 buses;

B. grant a first priority security interest in the new buses to
   be purchased from ElDorado; and,

C. deliver title to 253 trade-in buses in accordance with the
   agreement free and clear of liens and encumbrances.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, tells the Court that in the course of
their operations, the Debtors maintain a fleet of approximately
650 buses, which periodically need to be replaced.  These buses
are used to transport the Debtors' customers to and from airport
terminals and the Debtors' rental car facilities.  The Debtors
have determined that it is time to retire 253 trade-in buses and
replace them with 157 new buses, which are to be purchased from
ElDorado.  The Debtors have been purchasing buses from ElDorado
since 1996.

Mr. Packel submits that the consummation of the ElDorado
agreement is necessary to enable the Debtors to replace and
modernize their fleet of buses.  Moreover the prices for the new
buses, the credit for the trade-in buses and the payment terms
provided in the agreement are fair and reasonable.  Absent
authorization to enter into the agreement, the Debtors' ability
to provide services to their customers would be impaired.

The pertinent points of the ElDorado Asset Purchase Agreement
are:

A. Sale and Purchase of New Buses: ANC will purchase 157 new
   buses from ElDorado.  All of the new buses will be
   manufactured by ElDorado at its facilities.  ANC must issue
   three purchase orders (PO) to ElDorado for the new buses:

       1st PO -- 41 Aerotech Model 240 Para-transit buses
       2nd PO -- 41 Aerotech Model 220 buses
       3rd PO -- 75 Aerotech Model 220 buses

B. Price:

       Aerotech Model 220 bus             -- $50,000 each
       Aerotech Model 240 Paratransit bus -- $65,000 each

   The purchase price of the 157 new buses will be reduced by
   $6,600 per vehicle, which is the total unit consideration for
   the trade-in buses.  There will be no other credit or
   consideration for the trade-in buses.

C. Payment:

   a. ANC will pay to ElDorado as nonrefundable down payment:

             1st PO down payment -- $528,900;
             2nd PO down payment -- $344,400;
             3rd PO down payment -- $630,000.

      ElDorado agrees to return to ANC, within 15 days after an
      Event of Default by ElDorado a portion of the down payment
      equal to the down payment allocable to the New Buses not
      delivered by ElDorado to ANC prior to the event of
      default. Default will occur if ElDorado:

      1. fails to deliver all of the New Buses to ANC prior to
         the Final Delivery Date, which will be 120 days after
         the date ElDorado receives the last chassis;

      2. admits in writing its inability to pay its debts as
         they become due or makes an assignment for the benefit
         of creditors, files a petition in bankruptcy or
         commences any proceeding under any bankruptcy,
         reorganization, arrangement, liquidation or similar law
         of any jurisdiction, or any petition or application, or
         any proceeding is commenced against ElDorado, which
         remains undismissed for a period of 60 days or more, or
         if ElDorado by any act or omission indicates its
         consent to that petition, application, proceeding; or,

      3. suffers any material adverse change occurs in its
         financial condition.

   b. The remaining balance of the Net Purchase Price for each
      New Bus must be paid to ElDorado by ANC on these
      schedules:

     1st PO -- 36 monthly payments at $1,490/month plus interest
     2nd PO -- 36 monthly payments at $1,146/month plus interest
     3rd PO -- 36 monthly payments at $1,146/month plus interest

      Monthly payments will commence with a payment due on the
      first day of the calendar month following delivery of the
      New Bus to ANC, and a like payment on the first day of
      each of the next 35 succeeding calendar months thereafter.

D. Trade-In Buses:

   a. The $6,600 credit for buses currently owned by
      ANC which will be traded-in to ElDorado is applicable to
      only 157 New Buses pursuant to the three purchase orders.
      The buses being traded include 39 mid-size, rear engine
      buses and 214 Cutaway buses;

   b. After ANC submits its first purchase order, ANC will also
      deliver up to a maximum of 90 buses for trade-in.  These
      buses are made available as a result of ANC's
      consolidation of certain of its airport locations.  Then,
      ANC must deliver another 157 buses for trade-in, on a one-
      for-one basis for the 157 New Buses; and,

   c. ElDorado will cause a dealer, Creative Bus Sales, Inc., to
      pick up and relocate the Trade-In Buses used at the ANC
      locations within 20 business days following the receipt by
      ElDorado of the Trade-In Buses certificates of titles.
      ElDorado will be responsible to arranging and paying for
      all freight and transportation in connection with the pick
      up and relocation of the Trade-In Buses.

E. Grant of First Priority Security Interest: ANC will grant
   ElDorado a continuing first priority security interest in
   each New Bus to secure the unpaid balance of the aggregate
   Net Purchase Price under this Agreement and the performance
   by ANC of all liabilities and obligations due.  ANC further
   agrees to take other actions upon request by ElDorado,
   including executing and delivering other documents that may
   be necessary for ElDorado to perfect its security interest in
   each New Bus. (ANC Rental Bankruptcy News, Issue No. 15;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADELPHIA: Century Gets Until July 10 to Comply with Rule 1007
-------------------------------------------------------------
Adelphia-affiliate, Century Communications Corporation sought
and obtained extension through July 10, 2002., to comply with
Rule 1007 of the Federal Rules of Bankruptcy Procedure.  That
Rule, as supplemented by a Local Bankruptcy Rule 1007-2,
requires delivery of lists of a debtor's creditors, descriptions
of the debtor's property and other materials traditionally
delivered with a bankruptcy petition.

Marc Abrams, Esq., at Willkie Farr & Gallagher, in New York,
explains that Century is part of a vast corporate structure.  To
assemble the materials required will require the Debtor to
locate the information from the voluminous books and records and
complex accounting system of the Debtor and its various non-
debtor affiliates.  Due to the circumstances surrounding the
filing of the Debtor's voluntary petition, the Debtor has been
unable to assemble the required information in time to complete
the Rule 1007 affidavit.  Century estimates that the 30-day
extension would provide sufficient time to locate relevant
information. (Adelphia Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ADELPHIA COMMS: Gets Immediate Access to $500MM of DIP Financing
----------------------------------------------------------------
Adelphia Communications Corporation (OTC: ADELQ) announced that
the U.S. Bankruptcy Court for the Southern District of New York
has approved Adelphia's request for immediate access to $500
million of the $1.5 billion debtor in possession credit
facility, provided by a consortium of bank lenders, led by
JPMorgan Chase Bank and Citigroup USA, Inc., to be used by the
Company to fund operations during the Chapter 11 process.  The
Company also announced that the Court set a hearing on
Adelphia's motion for final approval of access to the full
credit facility for August 9, 2002.

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.

The DIP credit facility will enable Adelphia to continue to
operate smoothly and provide quality cable programming
throughout the reorganization process.  In addition, it will
fund the Company's continued build out and upgrade efforts in
order to offer Adelphia's customers digital cable, high- speed
data and other enhanced services.

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. All employees are receiving
their salaries, wages and health and other benefits.  Adelphia
will be satisfying all its obligations going forward to local
franchise authorities, programming suppliers and vendors as
required by the laws governing reorganization under Chapter 11.  
In addition, Adelphia will segregate within the Company's own
accounting system the franchise fees it receives from customers.

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

Adelphia Communications' 10.8785% bonds due 2010 (ADEL10USR1),
DebtTraders reports, are quoted at 42.25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


ADVANCED GLASSFIBER: Lenders Agree to Forbear Until August 13
-------------------------------------------------------------
Advanced Glassfiber Yarns LLC is in discussions with its senior
secured lenders regarding a consensual restructuring of the
approximately $180 million of indebtedness currently outstanding
under a revolving credit and term loan facility.

In connection with such discussions, the Company and its lenders
entered into an amendment and forbearance agreement under which
the lenders, among other things, agreed to forbear from
exercising their rights and remedies under such facility until
August 13, 2002.

The Company also announced that it will not be making the $7.4
million July 15 interest payment on its $150 million of 9-7/8%
senior subordinated notes due 2009, and stated that it intends
to use the 30-day grace period provided under the governing
indenture to enter into consensual restructuring discussions
with the noteholders.

The Company noted that there can be no assurance that it will be
successful in achieving a consensual restructuring of its
indebtedness.

The Company has retained Credit Suisse First Boston as its
financial advisor to explore strategic alternatives and is
actively pursuing such alternatives, as well as implementing
various cost savings measures. The Company noted that it has
paid, and expects to continue to pay, its day-to-day trade
obligations.

Advanced Glassfiber Yarns, headquartered in Aiken, SC, is one of
the largest global suppliers of glass yarns, which are a
critical material used in a variety of electronic, industrial
construction and specialty applications.


ALLEGIANCE TELECOM: Fitch Junks $500M Facilities & 12-7/8% Notes
----------------------------------------------------------------
Fitch Ratings has downgraded Allegiance Telecom's (ALGX) 11%
senior discount notes due 2008 and 12-7/8% senior notes due 2008
to 'CCC' from 'B' and its $500 million secured credit facilities
to 'CCC' from 'B+'. The Rating Outlook has been changed from
Stable to Negative.

The major issue surrounding Allegiance is the uncertainty
regarding its ability to meet its bank covenants in 2002. The
covenant requires $755 million in revenue for 2002, with
quarterly requirements of $155 million, $180 million, $200
million and $220 million in 1Q'02, 2Q'02, 3Q'02 and 4Q'02,
respectively. While revenue of $162 million in the first quarter
of 2002 was above the covenant, it was below Fitch's
expectations. Fitch is concerned about the company's ability to
continue to generate strong growth in its core business, and its
ability to exceed the future revenue covenants by comfortable
margins.

Importantly, Allegiance's recent purchase of WorldCom's customer
premise equipment provisioning and maintenance businesses for
$30 million is expected to add incremental revenue of $30
million each quarter, of which $15 million can be applied to the
bank covenant. While this additional revenue should provide a
cushion to Allegiance to remain in compliance with the covenant,
Fitch's concern is that without this purchase, in the coming
quarters the company may have violated the covenants, as it is
unclear to what extent the core business growth is slowing.

By Fitch's estimates, the company will have less than $300
million in cash at the end of 2Q'02, with $150 million still
remaining undrawn on its credit facility. Since the company is
not generating any cash flow at this time, it is apparent that
if Allegiance did violate a bank covenant and was forced to pay
back the $350 million outstanding balance on the facility, it
would not have sufficient funds to do so.

Positively, Fitch believes that the Integrated Access (IAD)
product is exhibiting growth and now accounts for the majority
of new orders. Fitch has been and will continue to monitor the
success of this product. As a result of the retention programs
implemented in 1Q'02, the company should begin to experience
reduced churn and improved SG&A efficiencies going forward.
Until there is evidence that operational metrics are improving
and there is no further attrition of organic growth in the
company's core business, the Outlook will remain Negative.


AMERICAN GREETINGS: S&P Affirms BB+ Subordinated Debt Rating
------------------------------------------------------------
Standard & Poor's affirmed its triple-'B'-minus corporate credit
and senior secured debt ratings and its double-'B'-plus
subordinated debt rating for American Greetings Corp. and
removed the ratings from CreditWatch where they were placed
January 23, 2002.

The Cleveland, Ohio-based company, the second-largest
manufacturer and distributor of greeting cards, had about $860
million of debt outstanding at May 31, 2002. The outlook is
negative.

A successfully completed major corporate reorganization of the
core greeting cards business to rationalize its brands,
products, and facilities in the fiscal year ended February 2002
is expected to generate pretax savings of about $90 million this
fiscal year.

Aided by the reorganization benefits and greater free operating
cash flow generation, Standard & Poor's expects the overall
financial profile to strengthen meaningfully this fiscal year.
American Greetings has started fiscal 2003 with its first
quarter ahead of expectations. Financial flexibility is provided
by the company's cash position, which totaled about $180 million
at May 31, and its undrawn credit facilities.

"Ratings may be lowered if American Greetings' performance in
fiscal 2003 is meaningfully weaker than current earnings and
cash flow expectations," said Standard & Poor's credit analyst
Donald Wong.


AMERICAN MILLENIUM: Needs New Capital to Continue Operations
------------------------------------------------------------
Revenue of American Millenium Corporation, Inc., consists of
hardware and airtime sales and custom development of products
for its customers. During the nine months ended April 30, 2002,
revenues increased approximately 209% to $462,290 compared to
the same period in 2001. This increase in year over year revenue
was due to a higher number of subscribers to the Company's
service.

American Millenium had a net loss of $1,354,858 on revenues of
$462,290 for the nine months ended April 30, 2002, compared to a
net loss of $1,888,903 on revenues of $221,613 for the period
ended April 30, 2001. The decrease in net loss was primarily
attributable to increased revenues and a decrease in selling,
general and administrative expenses.

Management has indicated that it understands that cash and
equivalents on hand at April 30, 2002, are not adequate to meet
even short-term capital needs. On April 29, 2002 the Company
sold 1,000,000 shares of its common stock and received net cash
proceeds of $750,000. This cash was subsequently used to
purchase 2,400,000 shares of NSI Global, Inc. under the
Company's agreement with NSI regarding the South American
regional operation agreement.

As a result of net losses incurred, American Millenium has used
substantial working capital in its operations. As of April 30,
2002, current liabilities exceeded current assets by $161,788.
There is substantial doubt as to the ability of the Company to
continue as a going concern without additional financing or
capital infusion.

During the last three months the Company has sold 5,800,000
shares of its common stock, pursuant to option and warrant
agreements for net proceeds of $100,000. Although it believes
that its current and several new investors are committed to the
Company's future success, there can be no assurance
that additional funds will be available when needed on
commercially reasonable terms.

Conditions have limited the ability of the Company to market its
products and services at amounts sufficient to recover its
operating and administrative costs. The Company has continued to
incur operating losses ($1,354,858 for the nine months ending
April 30, 2002). In addition, the Company has used substantial
working capital in its operations. As stated abpve, as of April
30, 2002, current liabilities exceeded current assets by
$161,788. Because of these factors, there is substantial doubt
as to its ability to continue as a going concern.


AMPEX CORP: Gets Extension to Meet AMEX Listing Requirements
------------------------------------------------------------
Ampex Corporation (Amex:AXC) announced that the American Stock
Exchange has accepted the Company's plan to bring itself into
compliance with the Amex listing requirements no later than June
30, 2003, and is continuing the listing of its Common Shares
pursuant to an extension. By such date, the Company will be
required to have Common Shareholders' Equity in excess of $4
million. At March 31, 2002, the Company reported a Common
Shareholders' Deficit of approximately $124 million.

The Company's plan for attaining compliance with the Amex's
continued listing requirements is dependent on a number of
factors that are beyond its control, including equity capital
market conditions. Accordingly, there can be no assurance that
the Company will attain compliance within the extension period
or at any future date. Furthermore, the Amex has advised the
Company that it may initiate delisting proceedings at any time,
notwithstanding the extension it has provided to the Company.

Ampex Corporation -- http://www.ampex.com-- headquartered in  
Redwood City, California, is one of the world's leading
innovators and licensors of technologies for the visual
information age.


ANGEION CORPORATION: Creditors' Meeting Will Convene on July 18
---------------------------------------------------------------
The United States Trustee will convene a meeting of Angeion
Corporation's creditors on July 18, 2002 at 9:30 a.m., in the
U.S. Courthouse, Room 1017, 300 S. 4th Street, Minneapolis,
Minnesota 55415. This is the first meeting of creditors required
under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

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

Angeion Corporation conducts all of its operating activities
through its Medical Graphics, Inc. subsidiary. Medical Graphics
Corporation designs and markets cardiopulmonary diagnostic
systems along with related software. The Debtor filed for
chapter 11 protection on June 17, 2002 at the U.S. Bankruptcy
Court for the District of Minnesota. Michael F. McGrath, Esq. at
Ravich Meyer Kirkman McGrath & Nauman PA represents the Debtor
in its restructuring efforts. When the Company filed for
protection from its creditors, it listed $20,547,745 in assets
and $21,265,525 in debts.


ARMSTRONG: AWI Wants Removal Period Deadline Moved to January 31
----------------------------------------------------------------
Armstrong World Industries, Inc., Nitram Liquidators, Inc., and
Desseaux Corporation of North America, ask Judge Randall J.
Newsome to again extend the time period during which the Debtors
may file notices to remove litigative and administrative matters
which were pending on the Petition Date.  Specifically, the
Debtors propose that the time by which they must file notices of
removal with respect to any actions pending on the Petition Date
be extended through and including the later of (i) January 31,
2003, or (ii) 30 days after entry of an order terminating the
automatic stay with respect to any particular action sought to
be removed.

The Debtors explain that they are parties to numerous judicial
and administrative proceedings currently pending in various
courts or administrative agencies throughout the country and
involving a wide variety of claims.  Due to the number of
proceedings involved, and the wide variety of claims these
proceedings present, the Debtors require additional time to
determine which, if any, of the proceedings should be removed
and, if appropriate, transferred to this district. Accordingly,
the Debtors seek entry of an order extending the removal period
by an additional 180 days.

The requested extension is necessary to afford the Debtors with
additional time to assess whether the proceedings can and should
be removed, thereby protecting the Debtors' valuable right to
economically adjudicate lawsuits if the circumstances warrant
removal.  Accordingly, the Debtors submit that the requested
extension is in the best interests of the creditors and their
estates.

The requested extension will not prejudice the Debtors'
adversaries because such adversaries may not prosecute the
actions and proceedings pending relief from the stay.  
Furthermore, the Debtors say that nothing in this Motion will
prejudice a party to a proceeding that the Debtors seek to
remove because the party may seek remand of any removed action
or proceeding.  Accordingly, the requested extension will not
cause prejudice to any party to an action or proceeding.

Unless the requested extension is granted, the Debtors will be
forced to address these claims and proceedings in a piecemeal
fashion to the detriment of their creditors. (Armstrong
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

Armstrong Holdings Inc.'s 9% bonds due 2004 (ACK04USR1), an
issue in default, are quoted at a price of 58.5, says
DebtTraders. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=ACK04USR1


ASHANTI CAPITAL: Will Redeem Outstanding $218 Mill. 5-1/2% Notes
----------------------------------------------------------------
Ashanti Capital will redeem all of the outstanding Notes at
their principal amount (being in an aggregate principal amount
of US$218,571,000), together with accrued interest and other
Additional Amounts (as defined in the indenture dated 5 March
1996 between Ashanti Capital as issuer, Ashanti (as guarantor)
and The Bank of New York (as trustee) as amended by a
supplemental indenture dated 10 May 2002) on 2 August 2002,
pursuant to Article 12 of the Indenture.

Interest will cease to accrue from the Redemption Date. Any
Notes held must be surrendered for payment of the Redemption
Price (as defined in the Indenture) at the offices of the
Trustee, The Bank of New York, at 48th Floor, One Canada Square,
London E14 5AL, United Kingdom.

Formal notices are being issued to the registered holders of the
Notes as at the date of this announcement and otherwise in
accordance with the Indenture.

As previously reported, Ashanti Capital has commenced
proceedings under Section 304 of the U.S. Bankruptcy Code in the
United States Bankruptcy Court for the District of New York.


ASHANTI GOLDFIELDS: Withdraws Proposed 5-1/2% Note Restructuring
----------------------------------------------------------------
Ashanti Goldfields Company Limited (NYSE:ASL) announces that it
is withdrawing the Proposed Note Restructuring which was
announced on 25 January 2002 and is implementing an early cash
redemption of all of its outstanding 5.5% Exchangeable
Guaranteed Notes due March 2003 and US$48 million outstanding
under the existing revolving credit facility

The cash redemption is being funded by the proceeds of a new
fund raising of approximately US$315 million as follows :

     -   the early exercise of certain Warrants to raise at
         least US$40 million

     -   a new US$200 million revolving credit facility

     -   the issue of US$75 million Mandatorily Exchangeable
         Notes to Lonmin plc  

Ashanti will seek to effect a rights issue within 18 months so
as to enable all shareholders to participate in the
recapitalization of Ashanti on the same terms as Lonmin. Margin
free trading arrangements announced on 18 March 2002 have become
unconditional and Ashanti will now have the benefit of ongoing
margin free trading.

Sam Jonah, Chief Executive of Ashanti, said "The transaction we
have announced today meets all of Ashanti's financial
obligations pursuant to the Exchangeable Guaranteed Notes and
its existing revolving credit facility prior to their respective
maturities. Furthermore, the transaction enhances shareholder
value and minimises dilution for existing shareholders when
compared with other alternatives. We are grateful for the
support shown by our major shareholders and creditors throughout
this process."

Inquiries :

          Ashanti Goldfields Company Limited
          Sam Jonah, Chief Executive + 00 233 21 774913
          S. Venkatakrishan, Chief Financial Officer,
               + 00 233 21 778171
          
          Golin Harris - North American contact
          Alan Jordan, +1 212 697 9191
          
          Close Brothers Corporate Finance Limited
          Martin Gudgeon, Director, + 44 20 7655 3100

          Houlihan Lokey Howard & Zukin Capital, Inc.
          Joe Swanson, Senior Vice President, + 44 20 7839 3355

          CIBC World Markets plc
          Andy Quinn, Managing Director, + 44 20 7234 6400

Close Brothers Corporate Finance Limited, which is authorized in
the United Kingdom to carry on investment business by the
Financial Services Authority, is acting for Ashanti and no one
else in connection with the Cash Redemption Alternative and will
not be responsible to anyone other than Ashanti for providing
the protections afforded to its clients nor for giving advice in
relation to the Cash Redemption Alternative.

CIBC World Markets plc, which is authorized in the United
Kingdom to carry on investment business by the Financial
Services Authority, is acting for Ashanti and no one else in
connection with the Cash Redemption Alternative and will not be
responsible to anyone other than Ashanti for providing the
protections afforded to its clients nor for giving advice in
relation to the Cash Redemption Alternative.

                              Background

On 25 January 2002 Ashanti announced that it had agreed
conditionally with an ad hoc committee of holders of the
outstanding 5-1/2% Exchangeable Guaranteed Notes due 2003 of
Ashanti Capital Limited a proposed restructuring of the Existing
Notes. Subsequent to that date Ashanti has proceeded with the
steps required to implement the Proposed Restructuring. These
steps have included: recommending the Proposed Restructuring,
posting the public documentation required to implement the
Proposed Restructuring and convening the requisite meetings of
the holders of Existing Notes and holders of ordinary shares of
no par value in Ashanti. At the Court sanctioned meeting of
Noteholders held on 17 June 2002, approval was obtained from
Noteholders for the Proposed Restructuring.

The Proposed Restructuring remained conditional on, amongst
other things, sanction of the Cayman Islands Court and approval
of the holders of Ashanti Shares at an extraordinary general
meeting of Ashanti. In view of the fact that the Board of
Ashanti is able to make this announcement, the Board of Ashanti
will be proposing to indefinitely adjourn the extraordinary
general meeting and to withdraw the Proposed Restructuring.

As stated in the press announcement released by Ashanti at the
time of posting of the Scheme Documentation, the Ashanti Board
continued to review any other bona fide proposals which it
considered to be in the interests of Ashanti. On 11 June 2002,
Ashanti made an announcement that it was considering a proposal
relating to an alternative restructuring pursuant to which all
of the Existing Notes would be redeemed at par.

With the support of its two major shareholders, an alternative
structure is being implemented, which is believed by the Board
to be in the better interests of existing Ashanti shareholders
relative to the Proposed Restructuring.

                    Cash Redemption Alternative

The Board of Ashanti is now pleased to be able to announce that
it is implementing the Cash Redemption Alternative which will
result in the early redemption of the Existing Notes at par on 2
August 2002, together with accrued interest to that date in
accordance with the terms of the indenture governing the
Existing Notes and the early repayment of the existing revolving
credit facility.

The redemption of the US$218,571,000 of the outstanding Existing
Notes and the existing revolving credit facility will be funded
by part of the proceeds of a new fundraising of approximately
US$315 million which has today been completed by Ashanti. This
new fundraising comprises the following:

     -   the early exercise of a minimum of 13,810,440 of the
         warrants to subscribe for Ashanti Shares, issued to
         Ashanti's banks and hedge counterparties in November
         1999. In accordance with the terms of the issue of the
         Warrants, the subscription price in connection with the
         exercise of the Warrants is US$3.00 per Ashanti Share
         and this early exercise will raise approximately
         US$41.4 million. This includes Warrants already
         exercised on 19 June 2002 by one of Ashanti's hedge
         counterparties;

     -   a new US$200,000,000 revolving credit facility; and

     -   the issue of US$75,000,000 of mandatorily exchangeable
         notes to Lonmin plc on the basis described in Part II   
         of this Announcement. The MENs will automatically
         exchange into Ashanti Shares either on completion of a
         rights issue to Ashanti shareholders or following
         approval of the holders of Ashanti Shares if the
         Proposed Rights Issue is not completed within 18
         months. The MENs will exchange into Ashanti Shares at
         US$5.40 per Ashanti Share or such lower amount as
         Ashanti may determine as being the subscription price
         in connection with the Proposed Rights Issue.

Lonmin has granted to the Government of Ghana a transferable
call option to enable the Government to acquire new Ashanti
Shares arising from the conversion of $28,430,695 of the MENs if
and to the extent that the MENs are exchanged into new Ashanti
Shares in connection with the Proposed Rights Issue. The MENs
represent the entitlement of the Government and Lonmin to new
Ashanti Shares under the Proposed Rights Issue.

If the Proposed Rights Issue is implemented, all holders of
Ashanti Shares will be able to participate in the
recapitalization of Ashanti on the same basis as Lonmin and the
Government. It is not currently intended that the Proposed
Rights Issue will be underwritten.

            Completion of the Cash Redemption Alternative

The Cash Redemption Alternative is now unconditional in all
respects and accordingly :

     -   the US$75,000,000 subscription proceeds from the issue
         of MENs have already been received by Ashanti from
         Lonmin;

     -   a minimum of 13,810,440 Warrants have been exercised
         and the holders of those Warrants have agreed to pay to
         Ashanti an aggregate of approximately US$41.4 million
         in subscription proceeds in respect of such exercise;
         and

     -   the conditions precedent to drawdown of the Enlarged
         RCF having been satisfied, a request for the drawdown
         has been submitted by Ashanti.

                         Enlarged RCF

Ashanti has entered into a new secured US$200,000,000 revolving
credit facility with a group of 14 banks including the eight
banks who participated in the Existing RCF. All conditions
precedent to the Enlarged RCF have been satisfied. It will be
repaid in eight semi-annual installments each of US$20,000,000
commencing in 12 months from today with a further final
installment of US$40,000,000. The term of the Enlarged RCF is 5
years.

        Status of the margin free trading arrangements

The requisite majority of Ashanti's hedge counterparties have
approved the Cash Redemption Alternative and accordingly the
margin free trading arrangements announced on 18 March 2002 have
become unconditional and accordingly all the rights of the
relevant hedge counterparties to call for margin have been
cancelled. Ashanti will now have the benefit of ongoing margin
free trading.

                    Proposed Rights Issue

Ashanti will seek to effect the Proposed Rights Issue as soon as
practicable once issues raised in comment letters from the
Division of Corporation Finance of the United States Securities
and Exchange Commission concerning Ashanti's 20-F for the year
ended 31 December 2000 have been resolved . The Proposed Rights
Issue will also require the filing and clearing of prospectus
documentation in a number of jurisdictions, including the United
Kingdom and Ghana and a registration statement with the SEC. In
light of the above, Ashanti is not in a position at this early
stage to commit to a definitive timetable for the implementation
of the Proposed Rights Issue. A further announcement will be
made in due course in connection with the Proposed Rights Issue.
It is currently intended that the subscription price of the
Proposed Rights Issue will be set at US$5.40, although Ashanti
reserves the rights to reduce the subscription price as it sees
fit. It is not intended that the Proposed Rights Issue will be
underwritten and therefore there is no guarantee that Ashanti
will raise any new equity in the Proposed Rights Issue.

               Application Of Funds Raised Pursuant
                To The Cash Redemption Alternative

Of the approximately US$315 million raised pursuant to the Cash
Redemption Alternative, US$223,145,812 will be used to repay the
Existing Notes in full which figure includes accrued interest to
the early redemption date of 2 August 2002. Ashanti will be
serving the notice of early redemption for the Existing Notes
specifying 2 August 2002 as the date for repayment of the
Existing Notes. US$223,145,812 will be deposited with The Bank
of New York as trustee under the provisions of the Existing
Notes Indenture. The balance of the proceeds from the Cash
Redemption Alternative will be used to fully repay the Existing
RCF, meet the expenses of the Proposed Restructuring and Cash
Redemption Alternative and to provide for the ongoing working
capital requirements of Ashanti.

          Lonmin Put Option In Connection With The Early
                    Exercise Of The Warrants

In order to facilitate the early exercise of the Warrants,
Lonmin has agreed to provide Warrantholders with the right to
put to it, on certain dates, the Ashanti Shares resulting from
the Early Warrant Exercise at US$3 per Ashanti Share. This Put
Option is being provided by Lonmin at no cost to Ashanti and has
been agreed between the Warrantholders and Lonmin. However,
Ashanti has agreed with each of the Warrantholders exercising
the Warrants that it will pay to them on a quarterly basis a fee
which is intended to compensate the Warrantholders for the cost
of funding the Early Warrant Exercise.

                Mandatorily Exchangeable Notes

The US$75,000,000 of MENs which have been issued effectively
represent the early subscription by Lonmin on behalf of itself
and the Government of their respective entitlements to subscribe
for Ashanti Shares in the Proposed Rights Issue. Until the
Proposed Rights Issue is completed or the MENs are otherwise
exchanged into Ashanti Shares, the MENs will constitute
unsecured debt of the Ashanti Group which will, except as set
out below, be subordinated to the Enlarged RCF until 30 June
2008. As part of the arrangements between Lonmin and the
Government, Lonmin has given the Government the right to call at
the subscription price for the Proposed Rights Issue for Ashanti
Shares arising as a result of the exchange of US$28,430,695 of
the MENs, being equivalent to the Government's pro-rata
entitlement under the Proposed Rights Issue. The call option
will expire if the Proposed Rights Issue is not completed within
18 months.

If Ashanti does not complete the Proposed Rights Issue within 18
months then it is obliged to seek to obtain from its
shareholders the necessary approvals to enable the Ashanti
Shares resulting from exchange of the full US$75,000,000 of the
MENs to be issued to Lonmin. The Government has undertaken to
Ashanti and Lonmin to vote in favor of any resolution seeking
such shareholder approvals.

If a change of control of Ashanti occurs prior to the completion
of the Proposed Rights Issue then the MENs will be redeemable,
together with interest at a rate equivalent to that applying
under the Enlarged RCF, immediately following the relevant
change of control. Other than in this event the MENs will only
be redeemed on 30 June 2008 so long as the Proposed Rights Issue
has not occurred by then.

Assuming no dividends are paid to holders of Ashanti Shares
prior to exchange of the MENs, no interest will be payable if
the MENs exchange into Ashanti Shares.

               Shareholding of Lonmin and the Government

Although Lonmin's percentage interest in the share capital of
Ashanti will decrease immediately following implementation of
the Cash Redemption Alternative because of the early exercise of
13,810,440 Warrants, it may increase in due course, depending
upon the take-up in the Proposed Rights Issue and if the Put
Option granted by Lonmin is exercised.

Lonmin has sought and obtained the approval of the Ghana Stock
Exchange for the increase in its shareholding resulting from the
exchange of the MENs and the exercise by the Warrantholders of
the put option referred to above.

                              General

The listing particulars relating to the Ashanti Shares to be
issued pursuant to the exercise of the Warrants will be
published by 12 July 2002 and listing for the Ashanti Shares
resulting from the exercise of the Warrants on the LSE and GSE
is currently being sought.

Ashanti has cancelled US$31,429,000 principal amount of Existing
Notes held by members of the Ashanti Group.

A summary of the principal documents implementing the Cash
Redemption Alternative is set out in Part II of this press
release.

The Directors of Ashanti (excluding Sam Jonah and Ed Haslam who
are both directors of Lonmin), having received advice from its
restructuring advisers, Close Brothers Corporate Finance Limited
and Houlihan Lokey Howard & Zukin Capital, Inc. and from its
financial adviser CIBC World Markets plc, believe that the Cash
Redemption Alternative is in the best interests of Ashanti and
is better, so far as shareholders of Ashanti are concerned, than
the Proposed Restructuring. In providing advice to the Directors
of Ashanti, each of Close Brothers Corporate Finance Limited,
Houlihan Lokey Howard & Zukin Capital, Inc. and CIBC World
Markets plc have placed reliance upon the Ashanti Directors'
commercial assessment.

                         PART II

The following is a summary of the material terms of each of the
principal documents entered into in connection with the
implementation of the Cash Redemption Alternative:

               Warrant Early Exercise Agreement

The Warrant Early Exercise Agreement was entered into on 27 June
2002 between Ashanti, Ashanti Warrants Limited and certain
Warrantholders pursuant to which such Warrantholders agreed to
the early exercise of an aggregate of a minimum of 12,233,223
Warrants with effect from the date of the Warrant Early Exercise
Agreement. Such Warrantholders agreed to pay the subscription
proceeds due in an aggregate amount of at least US$41,431,320.

In consideration of such early exercise, Ashanti has undertaken
to pay to the Exercising Warrantholders a fee. The fee payable
to each such Warrantholder is calculated as the product of:

     (a) US$3.00 (being the exercise price of a Warrant);

     (b) 3-month LIBOR plus 25 basis points;

     (c) the lower of:

          (i) the number of Ashanti Shares arising on early
              exercise of the relevant Warrants certified
              quarterly by each such Warrantholder as still
              being beneficially held by it; and

         (ii) the maximum number of Ashanti Shares into which
              such Warrantholder's relevant holding of Warrants
              converts in respect of the three tranches of
              Warrants, reducing on a cumulative basis; and

     (d) 90 days divided by 360 days.

The fee is payable quarterly to each Exercising Warrantholder
until the earlier of 28 April 2005 and the date a Warrantholder
no longer holds any Ashanti Shares originally issued to it on
early exercise of its Warrants.

In certain circumstances, the Warrantholders agree not to make
disposals of the Ashanti Shares arising on exercise of their
Warrants except in accordance with certain US securities
requirements.

Ashanti has undertaken to procure a listing of the Ashanti
Shares arising on exercise of the Warrants on the Official List
of the UK Listing Authority and admission to trading on the LSE
and the GSE.

          Lonmin/Warrantholders Put Option Agreement

The Put Options fall away upon a takeover offer for Ashanti
becoming unconditional (or a scheme of arrangement becoming
effective).

                       MENs Deed Poll

The MENs are constituted by, and issued subject to, and upon the
conditions and with the benefit of the rights contained in, the
MENs Deed Poll. Pursuant to the MENs Deed Poll, Ashanti Capital
(Second) Limited resolved to create and issue US$75,000,000 of
MENs exchangeable for Ashanti Shares. The MENs are unsecured and
unconditional obligations of ACSL, as the issuer, and will be
issued, credited as fully paid, in registered form, in amounts
and integral multiples of US$1 principal amount.

Ashanti undertakes to issue Ashanti Shares on the exchange of
the MENs and to keep available at all times sufficient Ashanti
Shares for such purpose. Ashanti has also undertaken to procure
admission to listing on the Official List of the UKLA and
admission to trading on the LSE and the GSE promptly after
exchange of the MENs. Ashanti has agreed, following the earliest
to occur of the repayment of the Enlarged RCF, a takeover offer
for Ashanti becoming unconditional (or a scheme of arrangement
proposed by Ashanti becoming effective), the exchange of the
MENs and 29 June 2008, to procure that ACSL meets its
obligations pursuant to the MENs Deed Poll.

The MENs are exchangeable into Ashanti Shares on either of the
following events:

     (a) the completion of the first rights issue by Ashanti
         undertaken following the date of the Deed Poll; or

     (b) Ashanti serving a notice of exchange upon the holders
         of the MENs at any time after the date falling 18
         months after the issue of the MENs.

The MENs are exchangeable into Ashanti Shares at an exchange
price of the lower of US$5.40and the price at which Ashanti
issues Ashanti Shares pursuant to the Proposed Rights Issue.
Ashanti has undertaken that the subscription price of the
Proposed Rights Issue shall not exceed US$5.40. Fractions of
Ashanti Shares will not be issued on exchange and no cash
adjustment will be made in respect thereof. The portion of the
principal amount of a MEN as corresponds to any fraction of an
Ashanti Share not issued as described above shall accrue to the
benefit of ACSL, as the issuer.

The MENs will be redeemable for cash on the earlier of:

     (a) a Takeover Event; or

     (b) the date of maturity, being 30 June 2008.

In the event that (and only if) the MENs are so redeemed,
interest on the MENs is payable at the same margin rate as is
payable under the Enlarged RCF. In the event that Ashanti pays a
dividend at any time prior to exchange of the MENs into Ashanti
Shares, interest will be payable at the time (and only if) such
exchange occurs, equal to the amount which the holders of MENs
would have received had their MENs been exchanged at an exchange
price of US$5.40 on the dividend record date. Otherwise the MENs
are non-interest bearing.

The MENs are, subject to certain conditions, transferable, but
no application is intended to be made for the MENs to be listed
or dealt in on any stock exchange. The MENs have not been
registered under the Securities Act or the securities laws of
any State of the United States and may not be offered, sold,
delivered, assigned, exchanged or otherwise disposed of,
directly or indirectly, in the United States or to or for the
account or benefit of US Persons.

                    MENs Subscription Agreements

Lonmin MENs Subscription Agreement

The Lonmin MENs Subscription Agreement was entered into on 27
June 2002 between Ashanti, ACSL and Lonmin. Pursuant to this
agreement, Lonmin has subscribed for US$46,569,305 of MENs and
ACSL has issued the US$46,569,305 of MENs to Lonmin.

Ashanti has undertaken to use its best efforts to complete the
Proposed Rights Issue within 18 months from the issue date of
the MENs and to ensure that the size of the Proposed Rights
Issue is such that Lonmin would be entitled to subscribe for
such number of Ashanti Shares under the Proposed Rights Issue
which is equal to or greater than the number of Ashanti Shares
which would be issued on exchange of US$46,569,305 of MENs.
Lonmin has undertaken not to take up its rights under the
Proposed Rights Issue unless and only to the extent that the
Ashanti Shares offered to it in connection with the Proposed
Rights Issue exceeds the number of Ashanti Shares that would be
issued upon exchange of US$46,569,305 of MENs.

Ashanti has further undertaken that, in the event that the
Proposed Rights Issue is not completed within 18 months from the
issue date of the MENs, it will:

     (a) within 20 business days after the end of such 18 month
         period, dispatch a notice of extraordinary general
         meeting to its shareholders to consider resolutions to
         approve the exchange of any MENs (whether or not held
         by Lonmin) in accordance with the voluntary exchange
         provisions of the MENs Deed Poll, and to procure that
         such meeting is convened within 60 days of such 18
         month period;

     (b) procure that its Directors (other than those who are
         also directors of Lonmin) recommend shareholders to
         vote in favor of such resolution (subject to each
         Director's fiduciary duties as he understands them upon
         appropriate Ghanaian legal advice) and, if they so
         recommend, to also cast their own votes in favor of
         such resolution; and

     (c) to solicit proxies (where shareholders beneficially
         hold one per cent or more of the total issued share
         capital of Ashanti) to be returned before the deadline
         appointed for such meeting, for so long as the
         recommendation of the Directors to vote in favor of the
         resolution remains current.

Ashanti has no obligation under the undertakings in (a) to (c)
to the extent that any of them shall cause Ashanti or any of its
Directors to be in breach of any rule or regulation of the LSE
(including the Listing Rules of the United Kingdom Listing
Authority), the New York Stock Exchange or the GSE or to be in
breach of their fiduciary duties, any US securities rules or any
rule of law.

Ashanti has also undertaken to Lonmin that it shall not, without
Lonmin's prior written consent, not to be unreasonably withheld
or delayed:

     (a) issue any Ashanti Shares by way of capitalisation of
         profits or reserves or bonus issue or sub-divide or
         consolidate or reclassify any Ashanti Shares;

     (b) issue any new class of share in the capital of Ashanti;
         or

     (c) redeem or purchase any Ashanti Share or reduce its
         share capital, capital redemption reserve or share
         premium account.

Ashanti further undertakes to Lonmin that it will, within 30
days of the passing of the resolution to exchange the MENs,
serve notice under the Deed Poll to effect such exchange. If
such resolution is not passed, Ashanti shall not be entitled to
serve any such notice, except with the prior written consent of
Lonmin.

Ashanti also undertakes that it shall not, without the prior
approval of a special resolution of its shareholders, issue more
than 11,000,000 Ashanti Shares other than pro rata to its
shareholders.

Lonmin has also given undertakings to Ashanti that it shall not
lend, sell, transfer or otherwise dispose of or deal with or
charge, encumber or grant options or other rights over:

     (a) US$46,569,305 of MENs (except with the prior consent of
         Ashanti and ACSL or as is permitted in connection with
         the transfer of its existing ordinary shares (see (b)
         below);

     (b) its existing holding of 36,000,000 Ashanti Shares,
         provided that a sale of any or all of Lonmin's existing
         shares is permitted if Lonmin also sells the same
         proportion of MENs to the same buyer or if it receives
         confirmation from the UKLA that, as a result of such
         sale, shareholder approval for exchange of its MENs is
         not required (in either case, any buyer must enter into
         a deed containing certain restrictions relating to
         related party issues and US securities law). Lonmin is
         also entitled to sell its existing shareholding
         pursuant to a recommended offer for the entire issued
         share capital of Ashanti;

     (c) any MENs issued to Lonmin or Ashanti Shares issued upon
         exchange of such MENs unless in compliance with certain
         US securities requirements.

Lonmin also undertakes that it will not exercise its voting
rights in respect of shares held by Lonmin and its concert
parties in excess of 50 per cent of the entire issued share
capital of Ashanti from time to time, except following a change
of control of Ashanti which has been approved by the Minister of
Mines under the Minerals and Mining Law 1986 of Ghana (as
amended) or is in compliance with the provisions of the Takeover
Code of Ghana. Lonmin has also agreed to vote in favor of
resolutions necessary to implement the Rights Issue, including
resolutions to increase the authorized share capital of Ashanti
and the Directors' authorisation to allot Ashanti Shares.

Ashanti has entered into a separate letter of undertaking with
Lonmin pursuant to which it has agreed that, for so long as any
of the Put Options remain to be exercised, if it seeks to effect
the Proposed Rights Issue at less than US$5.40 per share, it
shall not, without Lonmin's approval (acting reasonably), launch
such Rights Issue at a subscription price of more than a 5%
discount to the then current market value of an Ashanti Share

          Government of Ghana MENs Subscription Agreement

The Government MENs Subscription Agreement was entered into on
27 June 2002 between Ashanti, ACSL, Lonmin and the Government.
Pursuant to this agreement, ACSL offered the Government the
right to subscribe for US$28,430,695 of MENs. The Government
transferred this subscription right to Lonmin in consideration
for Lonmin entering into the Call Option Agreement. Lonmin
subscribed for the US$28,430,695 of MENs and ACSL issued such
MENs to Lonmin.

Ashanti has undertaken to the Government to use its best efforts
to complete the Proposed Rights Issue within 18 months from the
issue date of the MENs and to ensure that the size of the
Proposed Rights Issue is such that the Government would be
entitled to subscribe for such number of Ordinary Shares under
the Proposed Rights Issue which is equal to or greater than the
number of Ordinary Shares which would be issued on exchange of
US$28,430,695 of the MENs. If the Proposed Rights Issue is not
completed within this period, the Government has irrevocably
undertaken to Lonmin to vote in favor of any resolution proposed
by Ashanti seeking independent shareholder approval to enable
the exercise of Ashanti's option under the Deed Poll to exchange
all of the MENs. The Government has undertaken not to take up
its rights under the Proposed Rights Issue unless and only to
the extent that the Ordinary Shares offered to it in connection
with the Proposed Rights Issue exceeds the number of Ordinary
Shares that would be issued upon exchange of US$28,430,695 of
MENs.

Ashanti has further undertaken to the Government that it shall
not, without the Government's prior written consent, such
consent not to be unreasonably withheld or delayed:

     (a) issue any Ordinary Shares by way of capitalisation of
         profits or reserves or bonus issue or sub-divide or
         consolidate or reclassify any Ordinary Shares;

     (b) issue any new class of share in the capital of Ashanti;
         or

     (c) redeem or purchase any ordinary share or reduce its
         share capital, capital redemption reserve or share
         premium account.

Lonmin has agreed that it will not transfer, charge or encumber
its interest in US$28,430,695 of the MENs other than in
accordance with the terms of the Call Option Agreement or
otherwise with Ashanti or ACSL's prior consent. Lonmin and the
Government have also agreed not to amend the Call Option
Agreement unless such amendment would not (in the reasonable
opinion of Ashanti) result in Ashanti breaching any relevant US
securities legislation or result in an issue of Ashanti Shares
upon exchange of the US$28,430,695 MENs where such issue would
require the approval of shareholders.

The Government has also given undertakings to Ashanti and ACSL
that it shall not lend, sell, transfer or otherwise dispose of
or deal with, charge, encumber or grant options or other rights
over:

     (a) its rights under the Call Option, unless in compliance
         with relevant US securities requirements;

     (b) its existing holding of 21,978,104 Ashanti Shares prior
         to the record date for the Proposed Rights Issue,
         except with the consent of Ashanti and ACSL or by way
         of acceptance of an offer for the entire issued share
         capital of Ashanti; or

     (c) any Ashanti Shares into which any of the MENs are
         exchanged unless in accordance with relevant US
         securities requirements.

The Government has further agreed to vote in favor of any
resolutions required to implement the Proposed Rights Issue,
including resolutions to increase the authorized share capital
of Ashanti and the Directors' authorization to allot Ashanti
Shares.

        Government of Ghana/Lonmin Call Option Agreement

The Call Option Agreement dated 27 June 2002 was entered into
between Lonmin and the Government. Pursuant to the Call Option
Agreement the Government has the right to call for Lonmin to
transfer the Ashanti Shares into which US$28,430,695 of MENs are
exchangeable upon the completion of the Proposed Rights Issue.

The purchase price of the Ashanti Shares under the Call Option
Agreement is the price at which the Ashanti Shares are offered
for subscription pursuant to the Proposed Rights Issue.

The Call Option is exercisable at any time during the period
ending on the earlier of (a) the anniversary of 18 months of the
date of the Call Option Agreement and (b) five business days
prior to the close of the subscription period of the Proposed
Rights Issue. The Ashanti Shares which are the subject of the
Call Option may, however, only be delivered and paid for upon
the closing date of the subscription period of the Proposed
Rights Issue.

The Government's rights under the Call Option Agreement are  
capable of assignment in whole or in part or transfer or
mortgage or charge to any person provided that such transfer or
disposal is in accordance with US securities laws and evidence
is produced by the Government to Ashanti and Lonmin that such
sale and transfer was in compliance with such laws.

The Government has also undertaken to vote in favor of the
resolution agreed to be proposed by Ashanti in the event the
Proposed Rights Issue is not completed within 18 months to
enable all the MENs to be exchanged.

                         Enlarged RCF

On 27 June 2002 Ashanti entered into a US$200,000,000 revolving
credit facility to replace the US$100 million revolving credit
facility which was entered in to on 15 May 2002 with a group of
14 syndicate lenders. The Enlarged RCF, was conditional, among
other things, on the completion of the Cash Redemption
Alternative. It will be repaid in eight semi-annual installments
each of US$20,000,000 commencing in 12 months (from today - the
date of the first drawdown) with a further final instalment of
US$40,000,000.

The term of the loan is five years.

The interest rate applicable to the Enlarged RCF increases over
the life of the loan. The interest rate is as follows:

     (a) Years 1 and 2 - US LIBOR plus 1.75 per cent.; and

     (b) Years 3, 4 and 5 - US LIBOR plus 2.00 per cent.

The Enlarged RCF was provided to the Ashanti Group through its
subsidiary Ashanti Finance (Cayman) Limited to pay and refinance
the Existing Notes and US$270,000,000 revolving credit
facility dated 3 December 1998 (as amended and restated)
between, amongst others, the Borrower and several financial
institutions and for general corporate purposes.

Key points of the Enlarged RCF

     -   The Enlarged RCF is guaranteed jointly and severally by
Ashanti, Ashanti Treasury Services Limited, Geita Treasury
Services Limited, Societe Ashanti Goldfields de Guinee and
Ashanti Goldfields (Bibiani) Limited.

     -   The Lenders under the Enlarged RCF have security over
all the hedging contracts entered into by ATS and GTS, certain
gold refining and purchasing agreements, certain insurance
contracts, gold in transit and certain bank accounts.

     -   Security has also been granted over certain of the
         assets and undertaking of Ashanti and Ashanti
         Goldfields (Bibiani) Limited held in Ghana including
         the mining leases relating to the Obuasi and Bibiani
         mines. In addition, Ashanti has effected a political
         risk insurance policy of up to US$140,000,000 in
         relation only to Ghana for the benefit of the Lenders
         who elect to take up the policy.

     -   The cost of such PRI shall be for the account of the
         Borrower. Lenders will have the option to either
         benefit from the PRI or alternatively be paid an annual
         fee of 1.0% by the Borrower. Such PRI shall only be in
         respect of an amount equal to the aggregate amount of
         US$140 million.

     -   There is a commitment fee which increases over the life
         of the loan as follows:

          (a) Years 1 and 2 payable at - 0.75 per cent. on
              available but undrawn amounts; and

          (b) Years 3, 4 and 5 payable - 0.90 per cent. on           
              available but undrawn amounts.

     -   The Enlarged RCF imposes terms and conditions on the
         Ashanti Group which are substantially the same as those
         in the US$100 million revolving credit facility entered
         into on 15 May 2002.

The Events of Default include

     -   cross default in respect of financial indebtedness of
         material group members (excluding certain subsidiaries,
         such as Kimin and ring fenced project finance entities)
         in excess of US$5 million;

     -   insolvency of material group members;

     -   nationalization of certain assets of the Ashanti Group;

     -   reduction of foreign exchange retention levels;

     -   termination of the margin free trading arrangements
         other than in accordance with the terms of the Interim
         Margin Free Trading Letter, or the New Margin Free
         Trading Letter (as the case may be) and termination of
         hedging agreements without the consent of Ashanti and
         its risk management committee; and

     -   change of control of Ashanti which is reasonably likely
         to have a material adverse effect.


AURORA FOODS: Gets Additional Financing & Amends Credit Facility
----------------------------------------------------------------
Aurora Foods Inc. (NYSE: AOR), a producer and marketer of
leading food brands, has reached agreement with its banks and
major investors on a plan to secure $62.6 million of additional
financing and has signed an amendment to the Company's credit
facility. The new financing and amendment will significantly
improve the Company's finances, ensure that the Company is in
compliance with its bank covenants and provide the liquidity it
needs to conduct business and continue its recovery. The Company
expects to close this financing by mid July.

The financing package includes $25 million from entities
affiliated with Aurora's major investors, Fenway Partners, Inc.
and McCown De Leeuw & Co., in the form of unsecured, senior
promissory notes. The Investors will also receive warrants from
Aurora to purchase 2,100,000 shares of Common Stock of the
Company. The remaining $37.6 million of the financing will come
from new term loans under an amendment to Aurora's existing
credit facility with various lenders (the "Bank Financing"). The
credit facility amendment also contains adjustments to certain
financial and other covenants. Aurora plans to use the new
capital to reduce debt and for working capital purposes.

"Securing this financing is an important step forward for our
Company," said James T. Smith, Chairman and Chief Executive
Officer of Aurora Foods. "In the last 18 months we have built an
almost totally new company. Our brands have shown renewed life
and strong share growth, our costs have declined, and we now
have the systems, processes and people that a company our size
needs. The new financing plan demonstrates the strong support of
our banks and major investors, and is in recognition of both our
progress and our commitment to increase shareholder value by
decreasing our leverage going forward."

The Company also said it is pursuing a number of additional
ongoing initiatives to improve liquidity and reduce debt,
including continuing to focus on cost effectiveness, which is
yielding significant benefits. The Company also has retained
Merrill Lynch and JP Morgan to explore strategic alternatives to
further deleverage its balance sheet, including the sale of
certain assets or businesses.

The Notes will accrue interest at the rate of 12% per annum. Any
unpaid interest will accrue at a default rate of the applicable
interest rate plus 2% per annum and will be payable at maturity
on October 1, 2006. The Notes will be purchased by the Investors
at a $750,000 discount. The warrants will be exercisable at any
time during the ten years following issuance at an exercise
price per share of $0.01. The Warrant Shares will be entitled to
registration rights in accordance with the terms provided in the
Company's Securityholders Agreement.

The Bank Financing will be on terms and conditions that are
identical to the Tranche B Term Loans under the Company's
existing senior credit facility. In addition, the Bank Financing
amendment provides additional flexibility under certain
financial covenant ratios through September 30, 2003.

In consideration of the Investors providing the $25 million, the
Revolving Loan Subordinated Participation Agreement entered into
among the Investors and the Company's senior lenders on May 1,
2002 will terminate. Under the Participation Agreement, the
Investors agreed to participate in the Company's senior credit
facility in the amount of $10 million to satisfy requirements of
the Company's senior lenders.

The issuance of the Warrant Shares normally requires approval of
shareholders according to the Shareholder Approval Policy of the
New York Stock Exchange. The Audit and Compliance Committee of
the Board of Directors of Aurora determined that the delay
necessary in securing shareholder approval prior to the issuance
of the Warrant Shares would seriously jeopardize the financial
viability of the Company. As a result, pursuant to an exception
provided in the Exchange's Shareholder Approval Policy for such
a situation, the Committee expressly approved the Company's
intention to seek Exchange approval of such exception. The
Exchange has accepted the Company's application of the
exception.

Aurora is mailing to all shareholders a letter notifying them of
its intention to issue the Warrant Shares without seeking their
approval based on the exception noted above. Ten days after the
notice is mailed, Aurora will proceed to issue the warrants for
the Warrant Shares.

Aurora Foods Inc., based in St. Louis, Missouri, is a producer
and marketer of leading food brands including Duncan Hinesr
baking mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country
Kitchen(R) syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs.
Paul's(R) frozen seafood; Aunt Jemima(R) frozen breakfast
products; Celeste(R) frozen pizza and Chef's Choice(R) skillet
meals. More information about Aurora Foods Inc. may be found on
the corporate Internet Web site at http://www.aurorafoods.com  

As reported in Troubled Company Reporter's May 06, 2002 edition,
Aurora Foods' March 31, 2002 balance sheet shows that the
company has a working capital deficit of about $23 million.


BURNHAM PACIFIC: Transfers Remaining Assets & Debt to Trustees
--------------------------------------------------------------
The co-trustees of the BPP Liquidating Trust, Scott C. Verges
and Douglas Wilson, announced that Burnham Pacific Properties,
Inc. (formerly NYSE: BPP) transferred its remaining assets to
(and its remaining liabilities were assumed by) the Trustees in
accordance with Burnham's Plan of Complete Liquidation and
Dissolution, and that Burnham was dissolved.  As previously
announced by Burnham, June 27, 2002 was the last day of trading
of Burnham common stock on the New York Stock Exchange, and
Burnham's stock transfer books were closed as of the close of
business on such date.

The Trustees of the BPP Liquidating Trust also announced that
Burnham filed a Form 15 with the Securities and Exchange
Commission to terminate the registration of Burnham common stock
under the Securities Exchange Act of 1934 and that Burnham will
cease filing reports under that act.  However, the Trustees will
issue to beneficiaries of the BPP Liquidating Trust and file
with the Commission annual reports on Form 10-K and current
reports on Form 8-K.

Under the terms of the Liquidating Trust Agreement executed by
Burnham, Scott C. Verges and Douglas Wilson on June 28, 2002,
each stockholder of Burnham on the Record Date (each, a
"beneficiary") automatically became the holder of one unit of
beneficial interest in the BPP Liquidating Trust for each share
of Burnham common stock then held of record by such stockholder.  
All outstanding shares of Burnham common stock are automatically
deemed cancelled, and the rights of beneficiaries in their Units
will not be represented by any form of certificate or other
instrument.  Stockholders of Burnham on the Record Date are not
required to take any action to receive their Units.  The
Trustees will maintain a record of the name and address of each
beneficiary and such beneficiary's aggregate Units in the BPP
Liquidating Trust.  Subject to certain exceptions related to
transfer by will, intestate succession or operation of law, the
Units are not transferable, nor will a beneficiary have
authority or power to sell or in any other manner dispose of any
Units.

The BPP Liquidating Trust was organized for the sole purpose of
winding up Burnham's affairs and the liquidation of its assets.  
It is expected that from time to time the BPP Liquidating Trust
will make distributions of its assets to beneficiaries, but only
to the extent that such assets will not be needed to provide for
the liabilities (including contingent liabilities) assumed by
the BPP Liquidating Trust.  No assurances can be given as to the
amount or timing of any distributions by the BPP Liquidating
Trust.

For federal income tax purposes, stockholders of Burnham on the
Record Date will be deemed to have received a pro rata share of
the assets of Burnham transferred to the BPP Liquidating Trust,
subject to such stockholder's pro rata share of the liabilities
of Burnham assumed by the BPP Liquidating Trust. Accordingly,
each stockholder will recognize gain or loss in an amount equal
to the difference between (x) the fair market value of such
stockholder's pro rata share of the assets of Burnham that were
transferred to the BPP Liquidating Trust, subject to such
stockholder's pro rata share of the liabilities of Burnham that
were assumed by the BPP Liquidating Trust and (y) such
stockholder's adjusted tax basis in the shares of Burnham common
stock held by such stockholder on the Record Date.

The BPP Liquidating Trust is intended to qualify as a
"liquidating trust" for federal income tax purposes.  As such,
the BPP Liquidating Trust will be a complete pass-through entity
for federal income tax purposes and, accordingly, will not
itself be subject to federal income tax.  Instead, for federal
income tax purposes, stockholders of Burnham on the Record Date
will be deemed to have received, and therefore own, a pro rata
share of the assets transferred by Burnham to the BPP
Liquidating Trust, subject to a pro rata share of Burnham's
liabilities assumed by the BPP Liquidating Trust, and will be
subject to the same federal income tax consequences with respect
to the receipt, ownership or disposition of such assets as if
such stockholder had directly received, owned or disposed of
such assets, subject to such liabilities.  Accordingly,
distributions, if any, of the BPP Liquidating Trust's assets to
beneficiaries of the BPP Liquidating Trust will not be taxable
to such beneficiaries, though beneficiaries will be required to
take into account, in accordance with their method of
accounting, a pro rata share of the BPP Liquidating Trust's
items of income, deduction, gain, loss or credit, regardless of
the amount or timing of distributions to beneficiaries. The
Trustees will furnish to beneficiaries of the BPP Liquidating
Trust a statement of their pro rata share of the assets
transferred by Burnham to the BPP Liquidating Trust, less their
pro rata share of Burnham's liabilities assumed by the BPP
Liquidating Trust.  On a yearly basis, the Trustees also will
furnish to beneficiaries a statement of their pro rata share of
the items of income, gain, loss, credit and deduction of the BPP
Liquidating Trust to be included on their tax returns.
Stockholders of Burnham are urged to consult with their tax
advisers as to the tax consequences to them of the establishment
and operation of, and distributions, if any, by, the BPP
Liquidating Trust.


CAMBRIDGE ADVANTAGED: Trien Rosenberg Airs Going Concern Doubt
--------------------------------------------------------------
Cambridge Advantaged Properties Limited Partnership (formerly
Hutton Advantaged Properties Limited Partnership) is a limited
partnership which was formed under the laws of the Commonwealth
of Massachusetts on June 28, 1984. The General Partners of the
Partnership are Assisted Housing Associates Inc. (formerly
Cambridge Assisted Housing Associates Inc.), and Related Beta
Corporation, both of which are Delaware corporations affiliated
with The Related Companies, L.P., a New York limited
partnership, and Cambridge/Related Associates Limited
Partnership (formerly Hutton/Related Associates Limited
Partnership), a Massachusetts limited partnership. The general
partners of Cambridge/Related are the Assisted General Partner
and the Related General Partner. The General Partners manage and
control the affairs of the Partnership.

The Partnership was formed to invest, as a limited partner, in
other limited partnerships, each of which owns or leases and
operates an existing residential housing development which is
receiving some form of local, state or federal assistance,
including, without limitation, mortgage insurance, rental
assistance payments, permanent mortgage financing and/or
interest reduction payments.

The Partnership is now in the process of winding up its
operations as it continues to sell its assets. It is anticipated
that this process will take a number of years. The Partnership
has to date distributed approximately $5,420,000 from sales
transactions and expects to continue to make distributions from
excess sales proceeds, although such aggregate distributions are
not currently anticipated to equal the original investment. The
Partnership will no longer be generating passive losses due to
the sale of properties. However, passive losses previously
allocated (to the extent unused) are available to offset the
income expected to be generated from the sales effort.

The letter to the Partnership dated June 5, 2002 from
independent auditors Trien, Rosenberg, Rosenberg, Weinberg,
Ciullo & Fazzari LLP in New York, states in part:  

     "As discussed in Note 11(a), the consolidated financial
     statements include the financial statements of two
     subsidiary partnerships with significant contingencies and
     uncertainties regarding their continuing operations. These
     uncertainties raise substantial doubt about these
     subsidiary partnerships' abilities to continue as going
     concerns. The auditors of these subsidiary partnerships
     modified their reports due to the uncertainties of these
     subsidiary partnerships' abilities to continue in
     existence. In addition, during the 2001 Fiscal Year two
     subsidiary partnerships adopted plans to sell their
     property and liquidate in lieu of continuing their
     businesses. As a result, the financial statements for these
     two subsidiary partnerships are presented on the
     liquidating basis of accounting. These four subsidiary
     partnerships' net losses aggregated $135,034 for the 2001
     Fiscal Year, and their assets aggregated $3,317,470 at
     March 25, 2002."

The letter continues:  

     "As discussed in Note 7, the principal of and all accrued
     interest on the Purchase Money Notes are due at final
     maturity. The remaining Purchase Money Notes are now
     extended, with maturity dates ranging from September 2002
     to October 2003 and the Partnership is attempting to
     refinance or sell the properties. It is uncertain as to
     whether the proceeds from such sales will be sufficient to
     meet the outstanding balances of the Purchase Money Notes
     and accrued interest thereon."


CHELL GROUP: Will Host Investor Update Conference Call Today
------------------------------------------------------------
Chell Group Corporation, a technology holding company in
business to acquire and grow undervalued technology companies,
will hold a conference call to provide an update to investors.

The Company's delisting from the NASDAQ Small Cap is not the
result of any investigation, accounting irregularity or
impropriety. The Company's operations are not affected by the
NASDAQ action. Further details of this and the Company's ongoing
strategy will be provided in the conference call.

The conference call will be held on today, July 2, 2002, at
4:15pm EST. Investors can access the call by dialing 416-695-
5259 or toll free 1-877-888- 4210 and ask for the "Chell
Investor Update" conference call.

Chell Group Corporation is a technology holding company in
business to acquire and grow undervalued technology companies.
Chell Group's portfolio includes NTN Interactive Network Inc.
www.ntnc.com , Magic Lantern Communications Ltd.
www.magiclantern.ca , GalaVu Entertainment Network Inc.
www.galavu.com, Logicorp www.logicorp.ca , Engyro Inc.
(investment subsidiary) www.engyro.com and cDemo Inc.
(investment subsidiary) www.cdemo.com . For more information on
the Chell Group, visit at http://www.chell.com


CLEARCOMM LP: Working Capital Deficit Tops $122MM at March 31
-------------------------------------------------------------
ClearComm, L.P. is a limited partnership organized on January
24, 1995 under the laws of the State of Delaware. The
Partnership was formed to file applications with the Federal
Communications Commission under personal communications service
frequency Block C, originally restricted to minorities, small
businesses and designated entities, to become a provider of
broadband PCS. The Partnership will terminate on December 31,
2005, or earlier upon the occurrence of certain specified events
as detailed in the Partnership Agreement.

SuperTel Communications Corp., a Puerto Rico corporation, is the
General Partner. Its total share of the income and losses of the
Partnership is 25% in accordance with the Partnership Agreement.
Approximately 1,600 limited partners also invested in the
Partnership through a private placement.

On January 22, 1997, the Partnership was granted the PCS Block C
licenses for Puerto Rico and certain cities in California.  On
February 4, 1999, the Partnership entered into a joint venture
agreement with Telefonica Larga Distancia De Puerto Rico, Inc.
to jointly develop and operate certain PCS licenses in Puerto
Rico.

The Partnership commenced operations in September 1999 and has
incurred operating losses amounting to $6,056,898 million for
the three-month period ended March 31, 2002 and incurred
operating losses of $12,516,558 million for the year ended March
31, 2001. It also has working capital and partners' capital
deficits of $122,647,375 and $60,689,289 million, respectively,
as of March 31, 2002. The Partnership is likely to continue
incurring losses until such time as its subscriber base
generates revenue in excess of the Partnership's expenses.
Development of a significant subscriber base is likely to take
time, during which the Partnership must finance its operations
by means other than its revenues.


COHO ENERGY: Denbury Resources Pitches Best Bid for Oil Hedges
--------------------------------------------------------------
Denbury Resources Inc. (NYSE:DNR), has acquired oil hedges for
2003 and 2004 covering 4,500 barrels of oil per day.

These volumes are approximately equal to the net forecasted oil
production, for those periods, of the COHO Energy Inc.,
properties on which Denbury was named the high bidder Thursday,
based on the Company's internal proved developed reserve
estimates. Closing on this acquisition is scheduled for August,
subject to the completion of title review, field and
environmental inspections, completion of an asset purchase
agreement and final authorization and approval by the U.S.
Bankruptcy Court.

The oil hedges are no-cost swaps with an average fixed price of
$24.27 per barrel during calendar 2003 and an average fixed
price of $22.93 per barrel during calendar 2004. The Company
also supplemented the COHO 2002 oil hedges that the Company
expects to receive as part of the COHO asset purchase, by
acquiring an oil swap for the fourth quarter of 2002 covering
2,750 Bbls/d at a fixed price of $25.50 per barrel. The existing
COHO hedges that are expected to be included in the acquisition
cover 3,750 Bbls/d for the third quarter of 2002 and 1,250
Bbls/d for the fourth quarter of 2002. The COHO third quarter
hedges have an average floor price of $22.80 and an average
ceiling price of $27.38 per barrel while the fourth quarter
hedges have an average floor price of $22.60 and an average
ceiling price of $27.63 per barrel.

Denbury Resources Inc. -- http://www.denbury.com-- is a growing  
independent oil and gas company. The Company is the largest oil
and natural gas operator in Mississippi, holds key operating
acreage onshore Louisiana and has a growing presence in the
offshore Gulf of Mexico areas. The Company increases the value
of acquired properties in its core areas through a combination
of exploitation drilling and proven engineering extraction
practices.


COVANTA ENERGY: Has Until Jan. 4, 2003 to Remove Pending Actions
----------------------------------------------------------------
Judge Blackshear found that, with all objections consensually
resolved and thus overruled, Covanta Energy Corporation will be
afforded more time to decide whether it wants to remove any
prepetition lawsuit against the company to the Southern District
of New York for continued litigation.  The deadline for Covanta
to remove any action is extended until the earlier of January 4,
2003 or 30 days after entry of an order terminating the
automatic stay with respect to the particular action sought to
be removed. (Covanta Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


DYNASTY COMPONENTS: CCAA Protection Extended Until July 29, 2002
----------------------------------------------------------------
Dynasty Components Inc. (TSE:DCI) has obtained a 30 day
extension of its protection under the Companies' Creditors
Arrangement Act in order to continue its restructuring process.
The effect of the Order is to continue the stay of proceedings
in respect of claims existing against the Company as at Friday,
November 30, 2001 until, July 29, 2002. Deloitte & Touche Inc.
continues as the Interim Receiver of DCI so that D&T may, at its
discretion, assist in the operation of the business and, if
required, effect a sale of the assets of the Company.

DCI has refocused its business strategy entirely on its wholly-
owned subsidiary, Parts Logistics Management Corp., which
continues to operate normally. PLM provides web-based B2B e-
procurement and fulfillment logistics solutions. Focused almost
exclusively on the Information Technology industry, PLM provides
logistics solutions to IT outsourcing service providers,
assisting them in managing the procurement, delivery and
tracking of IT parts, as well as parts disposition and logistics
management services to computer original equipment
manufacturers.


ENCOMPASS SERVICES: Board Approves Equity Sale of Up to $72.5MM
---------------------------------------------------------------
Encompass Services Corporation (NYSE:ESR) announced that its
Board of Directors has approved a plan to issue up to $72.5
million in equity, and that Apollo Investment Fund IV, L.P. has
agreed to purchase $35 million of the Equity Offering described
below. The Apollo Investment is subject to majority approval of
Encompass shareholders. Apollo currently holds approximately
$300 million in Mandatorily Redeemable Convertible Preferred
Stock of the Company, the terms of which remain unchanged by the
proposed transactions.

"I believe these transactions will greatly benefit all of our
shareholders, and the rights offering will provide all
shareholders the opportunity to participate," said Joe Ivey,
president and chief executive officer, "I am pleased with the
support and commitment that Apollo has demonstrated, and the
enhanced financial flexibility achieved with the amended credit
agreement. I look forward to personally sharing these positive
developments with our valued customers, vendors and employees,
who are key to our commercial success. These transactions
clearly provide Encompass with the commercial flexibility to
execute our long-term business plan and respond to developing
market opportunities."

                    Proposed Rights Offering

Approval of the Equity Offering and the Apollo Investment was
recommended to the Board by a Special Committee of the Board of
Directors, comprised solely of independent directors and advised
by Lehman Brothers Inc. The Company intends to promptly file
formal documents detailing the proposed transactions and the
proposed rights offering with the SEC for customary review.
Following compliance with SEC requirements, the Company will
then formally present the Apollo Investment to shareholders for
their approval.

The proposed $72.5 million Equity Offering will allow all
shareholders, including Apollo, to effectively purchase shares
of common stock of the Company at a price equal to the average
closing price for the 10 trading days following the date of this
announcement, but not less than $.55 per share nor more than
$.70 per share. In the proposed rights offering, Encompass
shareholders will receive non-transferable rights to purchase
additional shares of common stock of the Company, on a pro-rata
basis, for each common share, or common equivalent share, held
as of a record date to be established. All rights-holders who
fully exercise their subscription rights will also have an over-
subscription right to acquire any shares not purchased by other
rights-holders, subject to a pro-rata allocation in the event
the rights offering is oversubscribed. The rights offering is
expected to commence promptly after registration of the shares
subject to the offering.

Under certain circumstances, it is possible that the Company may
not have an adequate number of authorized common shares to
complete the Equity Offering. In that event, the Company will
issue some of the Apollo Investment in a Series C Convertible
Preferred Stock in order for the Company to receive the full
Apollo Investment. Such newly issued preferred shares will have
the same relative rights as the Common Stock of the Company
including voting rights, receive no preferred dividend, and will
immediately convert into common shares once the Company has
available an adequate number of authorized and unissued shares
of Common Stock.

In connection with the Equity Offering, Apollo has agreed to
purchase $35 million of equity in the Company. Assuming the
rights offering is fully subscribed, the Apollo Investment is
funded and any Series C Convertible Preferred Stock issued is
converted into common, as described above, then considering the
Collar Price Range, Apollo will acquire from 50 to 64 million
common shares (or common share equivalents) representing from 30
to 32 percent of the common shares then outstanding.
Accordingly, on a fully diluted basis, Apollo's effective
ownership in Encompass will increase to a range of 38 to 39
percent after considering the effect of the common equivalent
shares related to the existing convertible preferred stock
Apollo currently owns. In the event Apollo is the only
participant in the rights offering and no other shareholder
chooses to participate, then Apollo will effectively control 53
to 57 percent of the common stock of the Company, after giving
effect to the $35 million Apollo Investment in the Equity
Offering and its existing convertible preferred stock
investment.

Significant conditions related to the rights offering and the
Apollo Investment include shareholder approval, the
effectiveness of a registration statement, compliance with anti-
trust laws and other customary conditions.

Proceeds from the rights offering will be used to reduce senior
indebtedness, as described below, and for general corporate
purposes. This release does not constitute an offer to sell any
of the Company's securities.

            Credit Agreement Successfully Amended

Encompass has successfully reached agreement with its lenders
and amended its credit agreement in order to achieve long-term
covenant modifications through its maturity date. The Company's
newly amended credit agreement provides for a revolving credit
facility of $300 million, of which approximately $153 million
was available for additional borrowing as of June 27, 2002.
Until the Apollo Investment is actually funded, the revolving
credit portion of the credit facility will be temporarily
limited to a maximum of $250 million. The revolving portion of
the credit facility matures in February of 2005. The total
committed amount under the amended credit agreement provides for
maximum senior borrowings of approximately $700 million,
including approximately $400 million in term loans, which mature
in 2006 and 2007. The amendment requires the Company to
permanently reduce the term loans by $31 million immediately
upon receipt of the Apollo Investment. The Company is also
required to apply 50 percent of any proceeds from the Equity
Offering in excess of $35 million, less certain permitted
expenses, toward permanent reduction of the revolver and the
term loans on a pro-rata basis.

The Company has agreed, as part of the amendment, to complete
the rights offering, which includes the Apollo Investment, no
later than Oct. 15, 2002. Management believes this date provides
adequate time to complete regulatory review and approval of the
proposed transactions.

                    Updated 2002 Guidance

Encompass is updating financial guidance based on:

     --  Continued softness in non-residential construction
spending as recently reported by the U.S. Department of
Commerce, particularly in key sectors such as commercial office
buildings, hotels and general industrial facilities

     --  Revised internal forecasts which reflect a continuation
of a very competitive environment and lower margins than
previously expected associated with future job awards

The Company's current outlook for 2002 is as follows:

     --  Revenues are expected to range from $3.4 to $3.6
         billion

     --  EBITDA is expected to range from $130 to $160 million

The Company indicated that its newly amended credit agreement
provides adequate financial covenant flexibility for EBITDA
below the low end of the above guidance.

Encompass Services Corporation is one of the nation's largest
providers of facilities systems and services. Encompass provides
electrical technologies, mechanical services and cleaning
systems to commercial, industrial and residential customers
nationwide. Additional information and press releases about
Encompass are available on the Company's Web site at
http://www.encompass.com  

As reported in Troubled Company Reporter's May 17, 2002 edition,
Standard & Poor's placed its B+ Corporate Credit Rating On Watch
Negative.


ENRON CORP: Court Okays Stipulation on Letter of Credit Proceeds
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Enron
Corporation and its debtor-affiliates obtained Court approval of
its Stipulation and Consent Order in relation to the proceeds of
the Letter of Credit No. 3041002 issued by Bank of America N.A.
in the amount of $47,401,100.

As previously reported, pursuant to certain pre-petition
transactions among Enron, Enron Broadband Services Inc., Enron
Broadband Services LP, Backbone Trust I, and Backbone Trust II,
among others, Backbone I is the beneficiary of the Irrevocable
Standby Letter of Credit.

Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in
New York, explains that Backbone I has the right to demand
payment on the Letter of Credit on and after April 1, 2002.
Backbone I did just that.  On April 1, 2002, Backbone I
presented the Letter of Credit to Bank of America for payment
and Bank of America honored such representation.  The LC
Proceeds are currently in the possession of Backbone I,
according to Mr. Despins.

Pursuant to the Pre-petition Transactions, Backbone I is
obligated to distribute the LC Proceeds in accordance with that
certain trust agreement dated December 20, 2000 and amended as
of September 30, 2001 by and among Wilmington Trust Company, as
owner trustee, and the holders of certificates from time to
time.

Mr. Despins tells the Court that causes of action may exist with
respect to the Backbone Trusts and the Pre-petition Transactions
that may result in the LC Proceeds being treated as property of
the Debtors' estates for the benefit of creditors.  "In order to
eliminate any potential prejudice to the Debtors and their
estates from the disbursement of the LC Proceeds in accordance
with the Trust Agreement, the Committee requested from ABN Amro
Bank N.V., Fleet National Bank, and the Backbone Trusts, and
such parties agreed, prior to the draw on the LC, that the LC
Proceeds be escrowed in order to afford the Committee an
opportunity to investigate the transactions involving the
Backbone Trusts and the Pre-petition Transactions," Mr. Despins
relates.

In a stipulation, the parties agree that:

  (1) The LC Proceeds will be placed in escrow by Backbone I
      with Wilmington Trust Company as escrow agent from the
      date of the approval of the Stipulation and Consent Order
      on which date Backbone I, upon written direction from ABN
      and Backbone II, will place the LC Proceeds in an escrow
      account with the Escrow Agent until and including the
      latest of:

      (a) September 2, 2002,

      (b) such later date as the Backbone Trusts, ABN Amro Bank,
          Fleet National Bank, and the Official Committee of
          Unsecured Creditors may agree in writing, and

      (c) such later date as the Court may determine, which all
          parties specifically reserve their rights to pursue or
          oppose;

      provided however that the Escrow Period will continue
      while any application to the Court to extend the Escrow
      Period or relating to the LC Proceeds is pending, unless
      the Court has neither signed nor entered any order
      in respect of the matter on or before October 17, 2002;

  (2) After the end of the Escrow Period, the Escrow Agent will
      disburse the LC Proceeds in accordance with the written
      direction of Backbone I, ABN, and Backbone Trust II; and

  (3) The terms of this Stipulation and Consent Order are
      without prejudice to:

           (i) the rights of the Committee to request that the
               Escrow Period be extended by the Court, and

          (ii) the rights of the Backbone Trusts, ABN, and Fleet
               to oppose any request by the Committee to extend
               the Escrow Period.

      The Committee has advised the Backbone Trusts, ABN, and
      Fleet that it will likely seek an extension of the Escrow
      Period from the Court and the Backbone Trusts, ABN, and
      Fleet have advised the Committee that they will oppose any
      such request.  Any such request to extend the Escrow
      Period will be heard before the Court on August 22, 2002
      at 10:00 a.m., unless rescheduled to an earlier date.  All
      pleadings seeking an extension of the Escrow Period must
      be filed with the Court and served at least 10 days prior
      to the Hearing, and any response to the request must be
      filed with the Court and served at least three business
      days prior to the Hearing. (Enron Bankruptcy News, Issue
      No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Enron Corp.'s 9.125% bonds due 2003
(ENRON2) are quoted at a price of 9 cents on the dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON2for  
real-time bond pricing.


ENRON: Exco Intends to Appeal Milbank Disqualification Order
------------------------------------------------------------
Pursuant to Rule 8006 of the Federal Rules of Bankruptcy
Procedures, Exco Resources Inc. presents these six issues for
review by the U.S. District Court for the Southern District of
New York:

    1. The bankruptcy court abused its discretion in denying
       EXCO's motion to disqualify Milbank, Tweed, Hadley &
       McCloy, LLP, as counsel for Enron Corporation's Official
       Committee of Unsecured Creditors;

    2. The bankruptcy court erred in its findings of fact and
       conclusions of law regarding the adequacy of the
       disclosures by Milbank, Tweed, Hadley & McCloy, LLP,
       pursuant to rule 2014 of the Federal Bankruptcy Rules;

    3. The bankruptcy court erred in its findings of fact and
       conclusions of law regarding whether the firm of Milbank,
       Tweed, Hadley & McCloy LLP was a "disinterested person"
       or had "adverse interests" under Bankruptcy Code Sections
       101(14), 327, 328, and 1103;

    4. The bankruptcy court erred in its findings of fact and
       conclusions of law with respect to whether Milbank,
       Tweed, Hadley & McCloy, LLP, is entitled to compensation
       as counsel for the Official Committee of Unsecured
       Creditors;

    5. The bankruptcy court erred in its findings of fact and
       conclusions of law with respect to the issues raised
       regarding compliance by the law firm of Milbank, Tweed,
       Hadley & McCloy LLP with the canons and disciplinary
       rules of the New York Code of Professional
       Responsibility; and

    6. The bankruptcy court erred in its findings of fact and
       conclusions of law with respect to the issue regarding
       Exco's alleged delay in raising the issues in its
       objection and motion to disqualify. (Enron Bankruptcy
       News, Issue No. 33; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)


ETOYS INC: Files Joint Liquidating Plan and Disclosure Statement
----------------------------------------------------------------
EBC I, Inc., formerly known as eToys, Inc. and its three debtor
affiliates submit their Joint Liquidating Chapter 11 Plan and an
accompanying Disclosure Statement to the United States
Bankruptcy Court for the District of Delaware.  Full-text copies
of the Debtors' Chapter 11 Plan and Disclosure Statement are
available at:

  http://www.researcharchives.com/bin/download?id=020626201951

                         and

  http://www.researcharchives.com/bin/download?id=020626202130

Under the Plan, Claims against and Interests in the Debtors are
divided into Classes. Certain unclassified Claims, including
Administrative Claims and Priority Tax Claims will be paid in
full. All other Claims and Interests will be divided into
classes and will receive the Distributions and projected
recoveries, if any.

The Debtors estimate that the Estates currently have assets that
are readily convertible to Cash of between $41,617,000 and
$42,107,000. The Estates' remaining non-liquid assets consist
principally of Litigation Claims.  The Debtors did not include
the proceeds of such Litigation Claims in their estimates of the
assets that may be available for Distribution to Holders of a
Claim because of the inherently speculative nature of estimating
possible recoveries on the Litigation Claims.

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: Will Supply Batteries for New Ford Fuel Cell Vehicle
-----------------------------------------------------------
Exide Technologies (OTCBB: EXDTQ), the global leader in stored
electrical-energy solutions, has been selected by Ford Motor
Company to supply the 12-volt batteries for the New Ford Focus
Fuel Cell Vehicle.

Fuel cell vehicles provide the quiet, efficient, zero-emissions
characteristics of electric-power vehicles without the
limitations of a vehicle with batteries as the sole power
source. "TH!NK Technologies," the engineering arm of Ford Motor
Company, is developing the new vehicle.  TH!NK, specializing in
advanced electric drive vehicles, is a leader in the development
of fuel cell vehicles.

Ford has specified the Exide Technologies' Marathon" M12V30
battery for these vehicles.  This sealed, valve-regulated lead-
acid battery provides best in class performance in a variety of
energy storage applications, including the telecommunications,
uninterruptible power supply and electric utility markets.  The
Marathon product brand has proven to be a strong performer for
Exide Technologies since its launch in 1996.  The FCV is the
first transportation application for this brand.

Fuel cell vehicles use hydrogen to power their fuel cell stacks,
the most efficient and reliable method today.  The FCV power
unit engages in an electrochemical process in the fuel stack,
combining oxygen from an air compressor and hydrogen from the
fuel tank to generate electricity.  Ford is positioning its FCV
as the next generation of family vehicles that cares for the
environment.

The battery in a FCV serves a different purpose than a battery
in a typical automobile.  In today's standard car with an
internal combustion engine, the battery's primary purpose is to
provide a short, powerful burst of power to start the engine.  
In a FCV, the battery absorbs extra energy generated by the fuel
cells and uses it to power the vehicle's many electronic
features, such as power steering and other accessories.  Each
vehicle will be equipped with one 12-volt battery.

"The Exide Technologies Transportation Business Group has been
an OE supplier of automotive starting batteries to Ford for 30
years.  The Fuel Cell Vehicle marks an important transition for
both of our companies in that it expands our relationship," said
Craig H. Muhlhauser, Chairman and CEO of Exide Technologies.
"Exide's Network Power Business Group, which typically provides
backup batteries to the telecom and other industries, will
supply its Marathon battery for a Ford passenger vehicle.  It's
an illustration of how we can serve one customer with a full
spectrum of stored electrical-energy technologies for different
applications."

The first Ford Focus FCV is scheduled for release in June 2003.  
The Marathon batteries for the vehicles will be manufactured at
the Exide industrial battery manufacturing facility in Columbus,
Georgia. (Exide Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

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


EXODUS COMMS: Wins Nod to Sell LA3 IDC to Disney for $8.6 Mill.
---------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates obtained
Court authority to:

A. Sell certain personal property contained in the Debtors'
   leased internet data center or LA3 located at 1920 Maple
   Avenue, El Segundo, California and

B. Assume and assign the executory lease contract of LA3, which
   was entered originally by the Debtors and Maple Street LLC,
   to Disney Worldwide Services Inc.

David R. Hurst, Esq., at Skadden Arps Meagher & Flom LLP in
Wilmington, Delaware, relates that pre-petition, the Debtors and
Disney engaged in extensive negotiations regarding the sale of
LA3 to Disney.  The negotiations resulted in a Letter of Intent
(LOI) and a definitive Asset Purchase Agreement (APA) that have
two primary components:

A. The Debtors will assume and assign their leasehold interest
   in LA3 to Disney and

B. The Debtors will convey their interest in the Property to
   Disney free and clear of liens, claims and encumbrances for
   $8,640,000. (Exodus Bankruptcy News, Issue No. 20; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)


FEDERAL-MOGUL: Equity Committee Signs-Up Bell Boyd as Counsel
-------------------------------------------------------------
The Official Committee of Equity Security Holders desires to
retain and employ Bell Boyd & Lloyd LLC as its counsel in
Federal-Mogul Corporation's Chapter 11, cases nunc pro tunc to
June 17, 2001.

Committee Chairperson Lawrence A. Spieth claims that the Equity
Committee's selection of Bell Boyd is based on the firm's
expertise in complex bankruptcy matters.  Bell Boyd's bankruptcy
and restructuring department has had extensive experience and
knowledge in the field of debtors' and creditors' rights and
business reorganizations under the Bankruptcy Code.  The firm
has represented numerous parties in interest in major bankruptcy
cases nationwide, including the official committee of equity
security holders in the bankruptcy cases of Imperial Sugar,
Stone & Webster, Continental Airlines, Comdisco, Wang
Laboratories, America West Airlines, Roses Stores, El Paso
Electric Company and others.

In addition, Mr. Spieth relates that Bell Boyd has extensive
financial, litigation, corporate, real estate and tax practices,
among others, that the Equity Committee may utilize from time to
time if and when the need arises.

Mr. Spieth expects Bell Boyd to render, among others, these
professional services:

A. give legal advice with respect to the Equity Committee's
   powers and duties in the context of the Debtors' Chapter 11
   cases;

B. assist, advise and represent the Equity Committee in its
   consultations with the Debtors and other statutory committees
   regarding the administration of the cases;

C. assist, advise and represent the Equity Committee in any
   investigation of the acts, conduct, assets, liabilities and
   financial condition of the Debtors and their affiliates
   (including investigation of transactions entered into or
   completed before the Petition Date), the operation of the
   Debtors' businesses and any other matters relevant to the
   case or to the formulation of a plan or plans of
   reorganization;

D. prepare on behalf of the Equity Committee necessary
   applications, motions, answers, orders, reports and other
   legal papers in connection with the administration of the
   estates in these cases;

E. review and respond on behalf of the Equity Committee to
   motions, applications, complaints and other documents service
   by the Debtors or other parties in interest on the Equity
   Committee in this case;

F. participate with the Equity Committee in the formulation of a
   plan or plans of reorganization; and,

G. perform any other legal services for the Equity Committee in
   connection with these Chapter 11 cases.

According to Mr. Spieth, Bell Boyd will be paid for legal
services on an hourly basis, plus reimbursement of any actual,
necessary expenses, subject to court approval.  The firm's
current standard hourly rates for the legal services of its
professionals:

                 Professionals     Hourly rates
                 -------------     ------------
                 Partners            $278-550
                 Associates           200-275
                 Paraprofessionals    125-175

David F. Heroy, a partner of the law firm of Bell, Boyd & Lloyd,
LLC, assures the Court that his firm stands as a disinterested
person and has no interests adverse to the Debtors' estates in
these bankruptcy proceedings.  Bell Boyd, though, has rendered
services or is related to certain parties in interest of the
Debtors in matters unrelated to the present Chapter 11 cases:

A. Lenders to the Debtor (as of July 17, 2001): ABN AMRO Bank
   N.V., Alliance Capital Funding, L.L.C., Bank of America, Bank
   of Montreal, Bear Stearns & Co. Inc., Chase Manhattan Bank,
   Chase Manhattan Bank USA, NA, Citicorp USA Inc., Credit
   Suisse First Boston, Dai-Ichi Kangyo Bank, Goldman Sachs
   Credit Partners, L.P., HSBC Bank USA, HSBC Bank PLC, Bank
   One/NBD Bank, Nuveen Floating Rate Fund, Nuveen Senior Income
   Fund, Stein Roe Floating Rate LLC, Wachovia Bank N.A.;

B. Top 20 Unsecured Creditors: General Electric Company;

C. Major Customers (OE, Retail, and aftermarket):
   DaimlerChrysler, General Motors, Volvo;

D. Major Insurance Carriers, Reinsurance Carriers, Agents and
   Brokers: American International Group (AIG), AON Risk
   Services, Liberty Mutual, MMC Company,
   TravelersPropertyCasualty (a member of Citigroup);

E. 5% or greater Equity Holders (as of July 24, 2001):
   Dimensional Fund Advisors; and,

F. Other Retained Professionals: Dykema Gossett PLLC, Ernst &
   Young LLP, Ernst & Young Capital Advisors LLC, Pachulski
   Stang Ziehl Young & Jones, R.R. Donnelley & Sons Company,
   Sidley Austin Brown & Wood, Spriggs & Hollingsworth.
   (Federal-Mogul Bankruptcy News, Issue No. 19; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Federal-Mogul Corporation's 8.8% bonds due
2007 (FEDMOG6) are quoted at a price of 21. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FEDMOG6for  
real-time bond pricing.


FLAG TELECOM: Court Okays Gibson Dunn's Continued Engagement
------------------------------------------------------------
In a second Order, Judge Allan L. Gropper directs the continued
employment of Gibson, Dunn & Crutcher LLP as FLAG Telecom
Holdings Limited's counsel on an interim basis pending hearing.

The Order states that the noteholders of FLAG Telecom Holdings
Ltd. may object to the retention of Gibson, Dunn on the grounds
that FTHL requires a separate counsel because its interests are
not aligned with that of the other Debtors.

Reach Ltd. raised that as a ground in its Objection to the
retention of Gibson, Dunn by one of the Debtors, FLAG Asia.
Reach jointly undertakes with the Debtors and other contractors
the creation of a multi-million undersea cable system between
Hong Kong, Seoul, Tokyo and Taipei.

Stephen J. Quine, Esq., at Clifford Chance Rogers & Wells LLP,
says FLAG Asia has historically operated as a stand-alone
entity, with its own offices, books and records and customer
base. It is a separate and distinct operating subsidiary. He
says Gibson, Dunn simply cannot balance its duties owed to FLAG
Asia's estate while at the same time representing the other
Debtors that may owe money to FLAG Asia.

The Order further states that any party may object to the
allocation among the Debtors of fees to employ Gibson, Dunn.
(Flag Telecom Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Court Approves Stipulation with Telco Utilities
----------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates sought and
obtained Court approval of a stipulation with telecommunication
utilities AT&T Corp., Sprint Communications Company LP,
BellSouth Telecommunications Inc., Qwest Communications Corp.
and Qwest Transoceanic Inc., and Citizens Communications
Company, in order to provide the telecommunications utilities
with adequate assurance of payment.

The terms of the stipulation are:

A. Effective May 31, 2002, the Debtors agree to pay on a timely
   basis, in accordance with prepetition practices, the
   undisputed portion of any invoices from telecommunications
   utilities within the lesser of 14 calendar days after receipt
   of any invoice or an earlier time provided in a particular
   preexisting agreement between the Debtors and
   telecommunications utilities.  This is provided, however,
   that if the Payment Date falls on a weekend or holiday, the
   Debtors will make these payments on the business day
   preceding the Payment Date.

B. If the Debtors fail to timely pay any undisputed postpetition
   invoice from telecommunications utilities, the
   telecommunications utilities may send, via facsimile, to the
   Debtors and Debtors' counsel, a notice of default which will
   include the amount outstanding, the billing date and the
   Debtors' account number.  The Debtors will have three
   business days from receipt of the Notice of Default to cure
   any default by wire transfer or similar good federal funds,
   provided, that nothing herein prohibits telecommunications
   utilities from pursuing those remedies available to it under
   the terms of its contracts with the Debtors, so long as the
   terms of those contract afford the Debtors a longer period of
   time to cure the default.

C. In the event the Debtors do not cure the payment default
   within three business days of receipt of the Notice of
   Default, the telecommunications utilities may petition the
   Court, through an Order to Show Cause, for immediate payment
   of any outstanding invoices and the Debtors' objections will
   be returnable within the time as required by the Court,
   including on as little as two business days thereafter.

D. If the Debtors reasonably and in good faith dispute any
   specific charges invoiced by telecommunications utilities,
   these Disputed Charges will be resolved in accordance with
   the expedited dispute resolution procedure (EDR).  If after
   the EDR, the parties are not able to resolve any billing
   disputes, either party may petition the Court for resolution
   of these Disputed Charges.

E. This Stipulation will terminate immediately and without
   further order of the Court upon the giving of notice to the
   Debtors (or a trustee) by the telecommunications utilities
   after the occurrence of any of the following:

   1. Entry of an Order by the Court approving the termination
      of services after a postpetition payment default that is
      not cured by the Debtors in accordance with the terms of
      this Stipulation;

   2. The Debtors' cases, or any one of them, is converted to a
      liquidation case under Chapter 7 and consensual
      arrangements for continued services are not made between
      the parties to the Stipulation, or any one of them, and
      any of the Debtors' Chapter 7 trustee(s);

   3. A Chapter 11 trustee or examiner with expanded powers is
      appointed for the Debtors or any one of them;

   4. The Debtors' cases, or any one of them, is dismissed;

   5. An order is entered confirming a Chapter 11 plan for the
      Debtors, or any one of them, or authorizes a sale of
      substantially all of the Debtors' assets; and

   6. An order is entered by the Court deeming the Debtors'
      Utility and Telecommunications Providers, including AT&T,
      adequately assured of future performance without the need
      for any expedited payment terms. (Global Crossing
      Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


GLOBAL LIGHT: Gets Creditors' Protection Under CCAA in Canada
-------------------------------------------------------------
Global Light Telecommunications Inc. reports that it held its
2002 Annual Meeting Friday in Vancouver, B.C. Three of the five
proposed nominees as announced May 29, 2002 withdrew their names
for election. At the meeting two replacement nominees were
proposed and elected. The four directors elected were Gordon
Blankstein, Paul Witzel, Donald MacFayden, and Robert Gardner,
all of whom, except Mr. Witzel, are incumbent directors.

Following the Annual Meeting the Company filed a Petition with
the Supreme Court of British Columbia and obtained an order
granting it certain relief, including a stay of proceedings and
protection from creditors, under the Companies' Creditors
Arrangement Act ("CCAA"). Pursuant to the order all payments in
respect of any debt obligations existing on or before today are
suspended pending development of a restructuring plan. The order
provides for an initial period of protection for 30 days subject
to further extension by the Court and permits the Company to
operate in the normal course during this period.
PricewaterhouseCoopers Inc. has been appointed by the Court to
act as the Company's Monitor pursuant to the provisions of the
CCAA. The Company will be seeking to obtain debtor-in-possession
financing during the period of the order.

The Company also announces that it will be requesting the
American Stock Exchange to delist its shares.

Gordon Blankstein, Chairman of the Company, stated: "The
deterioration and the continuing uncertainty in the
telecommunications sector has made it impossible to obtain
adequate financing under our current structure for our ongoing
requirements and commitments. As a consequence we have had to
take these steps to ensure that all of our stakeholders are
adequately protected so that we can put together and implement a
reorganization plan which will give us the best opportunity to
maximize the returns for all concerned."

The Company also reports that Manuel Vazquez Arroyo Aldrete,
Chairman of Bestel, S.A. de C.V., died last week. The Company
expresses its sympathies and condolences to the family of Mr.
Vazquez and the employees of Bestel. The Company does not expect
that the death of Mr. Vazquez will cause any interruption or
impact on the operations or affairs of Bestel.

Global Light holds a 49% interest (undiluted) in each of New
World Network Holdings, Ltd. and Bestel, S.A. de C.V. New World
Network is a carrier's carrier that provides advanced, high-
speed bandwidth capacity to telecommunications companies and
Internet Service Providers. New World's network (ARCOS) is an
undersea broadband fiber-optic cable network connecting the
U.S., Mexico, Central America, South America and the Caribbean.
New World owns an approximate 86% interest in ARCOS. Bestel is a
facilities-based telecommunications company in Mexico that
provides domestic and international broadband services to
carriers, wholesalers and corporate customers. Bestel designed,
constructed and operates a next-generation fiber optic network
utilizing Mexican railroad rights of way. The network also
extends into the southern part of the United States and includes
over 500 km of metropolitan rings for local access in the major
cities of Mexico. Bestel also has certain point-to-point and
point-to-multipoint wireless licenses in Mexico.


GRANDETEL TECHNOLOGIES: Auditors Issue Going Concern Opinion
------------------------------------------------------------
GrandeTel Technologies Inc. (OTCBB:GTTIF) released its financial
results for the three months ending April 30, 2002.

For the three months period, the Company had reported a net loss
of C$0.6 million, compared with a net loss of C$1.7 million for
the same period a year ago.

Sales revenue decreased by C$0.14 million from C$0.45 million of
the same period a year ago. The decrease in revenue was due to
reduction in billing rates as the telecommunication industry in
China is preparing to open up as now China has entered the World
Trade Organization. The Company is operating in three major
cities in China, namely Shanghai, Guangzhou and Qingdao. The
overall gross profit margin for the year dropped significantly
as the Company used the transmission facilities of major
carriers in China for IP mode transmission.

Operating, selling and administrative expenses decreased by
C$0.17 million from last year's total of C$.0.64 million to this
year's total of C$0.47 million. The major reductions are about
C$0.04 million in depreciation and amortization expenses, C$0.05
million in salaries and wages and C$0.05 million in audit fee
payment. Other expenses of last year of C$0.15 million was
corporate services and overheads. With the closing of the Hong
Kong operation during last year, such costs were eliminated.

In February 2002, Nakamichi Corporation, a company listed in
Japan and in which the Company holds 8,450,000 shares
(approximately 8% of total shares issued by Nakamichi), applied
to Tokyo District Court for Civil Restructuring Proceeding, this
is similar to a U.S. Chapter 11 Bankruptcy Protection filing.
The Company has made provision for its C$26.4 million investment
in Nakamichi in the year ended January 31, 2002.

In late November last year, the Company announced the acceptance
of put option exercisable by Class A shareholders pursuant to
the settlement of a major class action lawsuit in New York in
1999. The put period commenced from December 1, 2000 and ended
March 30, 2001. The acceptance or put price was US fifty (50)
cents per share. As the Company did not have the financial
resources, in accordance with the terms of the settlement
agreement, The Grande Holdings Limited, a major shareholder
holding about 28% of the Common Shares of the Company at that
time, honored the Put. The settlement agreement provided that,
in the event that Grande was required to honor any such Put, it
should be entitled to the reimbursement from the Company the
costs of honoring such Put. There were 11,098,574 Class A shares
outstanding. The total number of Class A shares tendered and
accepted were 7,060,606 shares. After acceptance of the Class A
shares Put and the conversion of all class A shares into common
shares in accordance with the terms of the settlement, Grande
hold about 42% of the issued and outstanding shares of the
Company. Grande has notified the Company in June 2002 of its
intention to ask the Company for reimbursement of the costs of
honoring such Put. Accordingly, the Company has provided the
cost of honoring the Put of about C$5.65 million in the year
ended January 31, 2002 results.

The Company has renewed its bank loan with Hong Kong Bank of
Canada in December 2001. When Nakamichi Corporation filed for
Civil Restructuring Proceeding in February 2002, Hong Kong Bank
of Canada has asked Grande, and Grande has agreed, to provide
other listed shares in addition to the Company's Nakamichi
shares as securities for the loan. The loan was then renewed for
a period of 5 years from February 1, 2002. The loan is repayable
in quarterly payments of US$250,000 each plus a US$2 million
balloon payment in February 2007.

During the year, under loan agreements with The Alpha Capital
Group Limited, a subsidiary of Grande, the Company was provided
loans totaling C$60 million. The loans are repayable on demand
and carry interest at the Hong Kong prime lending rate plus 2%.

Although two defendants have entered into agreement to settle
the California lawsuit with the plaintiffs. Other defendants,
including the Company, has not yet reached an agreement to
settle with the plaintiffs.

The Company is still facing difficult time ahead as it still has
liquidity problem. The audited financial statements for the year
ended January 31, 2002 are prepared on a going concern
assumption and depends on the outcome of the following events:

     --  The company's long distance fax and voice service
         operations will be turned around and achieve break-even
         in the coming year.

     --  The remaining lawsuit in California will be settled so
         that the Company will be able to raise additional
         financing to strengthen its financial position and to
         take on new projects.

     --  The Company will implement a restructuring to reduce
         its debts, such as a debt to equity conversion program.

     --  The Company will continue to receive financial support
         from Grande.

GrandeTel is a Canadian company with its headquarter in Hong
Kong. The Company holds interests in joint ventures that offer
long distance discount fax and voice services in China.

GrandeTel Technologies Inc.'s April 30, 2002 balance sheet shows
a total shareholders' equity deficit of about C$37 million.


HAYES LEMMERZ: Restructuring Performance Bonus Capped at $37.5MM
----------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
inform the Court that the aggregate amount of Restructuring
Performance Bonuses payable to the Tier One Participants would
be equal to between 0.23% to 2.34% of the Hayes' Total
Enterprise Value as determined by Hayes' financial advisors.  
This amount is calculated as of the Effective Date or the
valuation as may be determined by the Court if different than
the value proffered by Hayes' financial advisors.  This is also
provided that Hayes' Total Enterprise Value as of the Effective
Date equals or exceeds a baseline of $900,000,000.  The
Aggregate Amount of Restructuring Performance Bonuses is:

           ($ in millions)
       Total Enterprise Value        % of Distribution
       ----------------------        -------------------
             $  900 - $  949               0.23%
                950 -    999               0.34%
              1,000 -  1,049               0.45%
              1,050 -  1,099               0.62%
              1,100 -  1,149               0.79%
              1,150 -  1,199               0.96%
              1,200 -  1,249               1.13%
              1,250 -  1,299               1.35%
              1,300 -  1,349               1.58%
              1,350 -  1,399               1.80%
              1,400 -  1,449               2.03%
              1,450 -  1,499               2.20%
              1,500 -  1,549               2.25%
              1,550 -  1,599               2.30%
              1,600 -  1,649               2.34%

The aggregate amount of Restructuring Performance Bonuses will
be capped at $37,500,000.  Restructuring Performance Bonuses
would be paid to Tier One Participants as soon as reasonably
practicable after the Effective Date pursuant to the allocation
which will be confidential and filed under seal with the Court.   
This is provided, however, that the amount of any Restructuring
Performance Bonus for a Tier One Participant is reduced by:

A. the amount of any Retention Bonus received by or owed to that
    Participant, and/or

B. any retention bonus covering the same period that that
    Participant received pursuant to an employment agreement.

In addition, up to 70% of the amount by which a Restructuring
Performance Bonus exceeds a Participant's Retention Bonus may be
paid in restricted shares or units of any Hayes' common stock
that is issued pursuant to a confirmed plan of reorganization.  
This is if, within 20 business days after the Effective Date,
Hayes' Board of Directors, at its sole discretion, selects to
exercise the Equity Conversion Option.  The exact maximum
percentage that may be payable in Restricted Shares are:

       Length of Time from               Maximum Percentage
Petition Date to Effective Date   Payable in Restricted Shares
--------------------------------   ----------------------------
      Less than 24 months                          50%
Less than 24 and more than 30 months               60%
      More than 30 months                          70%

In the event of an election, the amount of Restructuring
Performance Bonus to which a Participant is entitled to receive
in cash will be reduced by the estimated value of any Restricted
Shares distributed to that participant as determined by Hayes'
financial advisors. The aggregate amount of any Restricted
Shares granted to a Participant will vest as follows:

* one-third on the later of 90 days after the Effective Date or
  the first date upon which the average trading price for any
  consecutive 10 trading-day period of any common stock of Hayes
  issued pursuant to a plan of reorganization is 80% or greater
  of the value ascribed to those securities in the plan of
  reorganization,

* one third on the later of the Minimum Valuation Date or the
  first anniversary of the Effective Date, and

* one-third on the later of the Minimum Valuation Date or the
  second anniversary of the Effective Date;

This is provided that any restricted Shares vest on the third
anniversary of the Effective Date to the extent they have not
previously vested.  The Participant must continue to be employed
by Hayes as of those dates.  It is provided further that the
Restricted Shares of Participants who are terminated after the
Effective Date without Cause or who resign with Good Reason, or
who cease to be employed by reason of death, disability or
retirement pursuant to Hayes' existing policies and procedures,
will immediately vest.  The Equity Conversion Option does not
apply to Tier One Participants terminated prior to the Effective
Date. (Hayes Lemmerz Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Hayes Lemmerz Int'l Inc.'s 11.875% bonds due 2006 (HAYES1) are
trading at about 67, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HAYES1for  
real-time bond pricing.


HOLLYWOOD CASINO: S&P Places B Ratings on Watch Developing
----------------------------------------------------------
Standard & Poor's placed its single-'B' ratings of Hollywood
Casino Corp., as well as its single-'B'-minus ratings of
Hollywood Casino Shreveport, on CreditWatch with developing
implications, which means the ratings could be either raised or
lowered. The action follows Hollywood's announcement it has been
exploring strategic alternatives with its financial advisor,
Goldman Sachs, to maximize shareholder value.

Dallas, Texas-based Hollywood Casino owns and operates casino
gaming facilities in Aurora, Illinois, Tunica, Mississippi, and
Shreveport, Louisiana. The company has about $550 million in
consolidated debt outstanding.

Over the past several months, the company has conducted an
extensive sale process that has resulted in several indications
of interest. While the outcome is uncertain, the process is
continuing.

"Standard & Poor's will monitor the ongoing process and will
evaluate the impact on credit quality upon the announcement of
any such transaction," said Standard & Poor's credit analyst
Michael Scerbo.


HOMELIFE CORPORATION: Files Plan and Disclosure Statement in DE
---------------------------------------------------------------
Homelife Corporation and its debtor-affiliates filed their Joint
Liquidating Chapter 11 Plan and an accompanying Disclosure
Statement in the U.S. Bankruptcy Court for the District of
Delaware. Full-text copies of the Debtors' Chapter 11 Plan and
Disclosure Statement are available at:

   http://www.researcharchives.com/bin/download?id=020626201523

                         and

   http://www.researcharchives.com/bin/download?id=020626201836

The Plan provides for distributions to three classes:

   * Allowed Secured Claims of the Bank Group,
   * Allowed Other Secured Claims and
   * Allowed General Unsecured Claims.

Administrative Claims and Priority Claims will receive cash
payments from the Estates.  

The Debtors have determined that the confirmation of the Plan
will provide each creditor and interest holder with a recovery
not less than they would receive under chapter 7 of the
Bankruptcy Code.

Privately-held HomeLife shut down all of its 128 retail
locations before it filed for chapter 11 bankruptcy protection
on July 16, 2001 in the U.S. Bankruptcy Court for the District
of Delaware.  The Debtors listed both assets and liabilities of
over $100 million each in its petition. Laura Davis Jones, Esq.
at Pachulski, Stang, Ziehl, et al represents the Debtors in
their liquidation.


HOST FUNDING: Debt Restructuring Critical to Continue Operations
----------------------------------------------------------------
Host Funding, Inc. was incorporated in the State of Maryland in
December 1994 and was inactive from inception to March 31, 1995.
The Company's Class "A" common stock began trading on the
American Stock Exchange on April 22, 1996, the date of the
Company's initial public offering. Upon closing of the Company's
initial public offering, the Company owned five Super 8 Hotels
located in Somerset, Kentucky; Miner, Missouri; Poplar Bluff,
Missouri; Rock Falls, Illinois; and Mission Bay, California. As
of December 31, 2001, the hotel property portfolio of the
Company consisted of 8 hotels located in 7 states consisting of
approximately 600 rooms. The Company's subsidiary, Crosshost,
Inc. is the owner of hotels in Somerset, Kentucky, Miner
Missouri, Poplar Bluff, Missouri, Rock Falls, Illinois,
Tallahassee, Florida, and Mission Bay, California. The
subsidiary, BH Auburn, L. P. is the owner of a hotel in Auburn,
Indiana.

The Company is engaged in the business of owning limited-service
and full service hotels throughout the United States, which are
affiliated with national or regional hotel chains. Although the
Company was initially structured as a real estate investment
trust, it has not yet elected REIT status under the Internal
Revenue Code. Since the commencement of Company operations and
the acquisition of the Initial Hotels, the Company has formed
wholly-owned subsidiaries for the purpose of financing and
owning the Initial Hotels and acquiring additional hotel
properties.

On January 4, 2001, the Company received notice from the
American Stock Exchange Staff indicating that the Company no
longer complied with the Exchange's continued listing guidelines
and that, as a result, the Exchange intended to file an
application with the Securities and Exchange Commission to
strike the Company's common stock from listing and registration
on the Exchange. The Exchange had indicated that its actions are
in response to the following circumstances.

The Company had fallen below the continued listing guidelines
triggered by losses from continuing operations in each of its
last five most recent fiscal years as set forth in Section
1003(a)(iii) of the Company Guide. In addition, the Company did
not meet the continued listing guidelines due to its
unsatisfactory operating results and an impaired financial
condition for the fiscal year ending December 31, 1999 and the
period ending September 30, 2000 as set forth in Section
1003(a)(iv) of the Company Guide.

The Exchange also took the position that the Company failed to
comply with its listing agreement with the Exchange by effecting
a transaction on June 30, 2000 with Bufete Grupo Internacional
S.A. de C.V. and its U.S. affiliate Hotel International
Advisors, LLC by issuing shares without shareholder approval
which were not listed with the Exchange prior to their issuance
as required in Sections 301, 705 and 712 of the Company Guide.

In view of the above, the Company had fallen below the continued
listing guidelines. The Company appealed this determination and
requested a hearing before a committee of the Exchange. The
Company received notification from the Amex Adjudicatory Council
of the American Stock Exchange Board of Governors that the
Council has affirmed the decision of the Amex Committee on
Securities to strike Host Funding's common stock from listing
and registration on the exchange. Accordingly, the Exchange
filed an application with the United States Securities and
Exchange Commission to strike the company's stock from the
exchange. The Company's common stock was delisted during the
first quarter of 2001.

During the fourth quarter of 2001, the Company terminated its
leases with Buckhead America Corporation and BAC Hotel
Management, Inc., and terminated the Management Agreement with
BAC Hotel Management, Inc. with regard to the Tallahassee hotel,
and subsequently entered into Management Agreements with
Cornerstone Hospitality Group, Inc. to operate all of the
Company Hotels other than Mission Bay, California. As a result,
the only Company Hotel subject to a lease is the Mission Bay,
California Property.

In 2001, the Company Hotels owned by the Company's wholly owned
subsidiary, Host Ventures, Inc. were foreclosed upon by the
lender. Two of the three hotels were transferred in 2001 as a
result of foreclosure sales. The third hotel was transferred in
January, 2002, through a foreclosure sale.

In August of 2001, the lessee of the Destin, FL hotel exercised
a right under the lease agreement to reduce rent due to the
construction of a competitive hotel property in the Destin area.
As a result of the decreased rent, the loan secured by the
Crosshost, Inc. hotels fell into default due to the fact that
cash flow generated from the properties after the competitive
rent adjustment was inadequate to meet debt service.
Negotiations are under way with Lennar Partners, Inc, the
Special Servicer of the lender, to pay to the lender all of the
proceeds generated from the Company Hotels owned by Crosshost,
Inc., with the hope of renegotiating the terms of the loan to
enable Crosshost to continue in an ownership status. If such
negotiations are not successful, one or all of the Company
Hotels will be foreclosed upon. Further, negotiations are under
way with the lessee of the Mission Bay Hotel Property, and
Lennar Partners, Inc., to allow the optionee to consummate the
purchase of the Mission Bay hotel

Host Funding, Inc. has suffered from recurring losses from
operations as well as negative cash flows from operations. These
matters raise substantial doubt about the Company's ability to
continue as a going concern. Furthermore, the loans securing the
Company Hotels are in default. The Company is attempting to
renegotiate the terms of the loans to enable it to continue in
an ownership position of one or more of the properties, but
there is no assurance that it will be successful in doing so.

In view of these matters, recoverability of a major portion of
the recorded asset amounts shown in its recent balance sheet is
dependent upon continued operations of the Company which, in
turn, is dependent upon the Company's ability to continue to
raise capital and generate positive cash flows from operations.  
The ability of the Company to continue to operate its existing
properties depends primarily on management's ability to
restructure current debt service obligations.

The Company property located in Sarasota, Florida was sold in a
foreclosure sale in January, 2002. The Company recorded a
valuation reserve of $1,581,146 in 2001 to reflect the
anticipated transfer.


HUNTSMAN CORP: Obtains Forbearance Pact Extension Until Aug. 15
---------------------------------------------------------------
Huntsman Corporation, the indirect parent of Huntsman Polymers
Corporation, announced that its banks have granted an extension
of its forbearance agreement until August 15, 2002. Under terms
of the agreement, which had been set to expire on June 30, 2002,
the lenders will waive certain defaults of Huntsman Corporation
and forbear from exercising remedies until August 15, 2002.

Huntsman Corporation also is currently in discussions with the
lenders concerning an amendment and restatement of its credit
facilities. Huntsman Corporation and Huntsman Polymers
Corporation announced on June 17 an agreement with the
companies' largest bondholder to restructure their bond debt.

Huntsman Polymers Corp.'s 11.75% bonds due 2004 (HMAN1),
DebtTraders reports, are quoted at 30. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HMAN1for  
real-time bond pricing.


ITC DELTACOM: S&P Cuts 8.875% & 11% Sr. Unsec. Note Ratings to D
----------------------------------------------------------------
Standard & Poor's lowered its ratings on integrated
telecommunications services provider ITC DeltaCom Inc.'s 8.875%
and 11% senior unsecured debt issues to 'D' from single-'C'
following the company's Chapter 11 bankruptcy filing on June 25,
2002. These ratings were also removed from CreditWatch.

The single-'C' senior secured bank loan rating on Interstate
FiberNet Inc. remains on CreditWatch, however, the implications
have been revised to positive from negative.

"Interstate FiberNet is an operating subsidiary of ITC but is
not part of the bankruptcy filing," Standard & Poor's credit
analyst Rosemarie Kalinowski said. "The CreditWatch positive
listing indicates that the rating could be raised subsequent to
the completion of ITC's reorganization plan and review of its
new business plan."

The corporate credit rating on West Point, Ga.-based ITC had
been lowered to 'D' on May 21, 2002, following the company's
missed interest payments on its 9.75% senior unsecured notes and
its 4.50% convertible subordinated notes.

Standard & Poor's said ITC announced that the company and
members of an unofficial committee of noteholders have agreed in
principle to implement a reorganization plan that results in
senior unsecured and convertible note holders receiving equity
or about an 86% interest in the company. The existing common and
preferred shareholders would receive a 1% interest.

C. Lanier III, SCANA Corp., and current shareholders have agreed
to purchase $15 million of a new issue of the reorganized
company's convertible preferred stock, which would be
convertible into 10.5% of the reorganized company's common
stock. These purchasers would also receive warrants to purchase
up to an additional 2% of the company. In consideration for
their financing commitment, Mr. Lanier and SCANA will receive
common shares representing 2% of the company's common stock.

Standard & Poor's said that, on completion of the reorganization
plan and presentation of a new business plan, new ratings will
be assigned to ITC.


ITC DELTACOM: Seeks Poorman-Douglas' Appointment as Claims Agent
----------------------------------------------------------------
ITC Delatacom, Inc. wants the U.S. Bankruptcy Court for the
District of Delaware to give it authority to retain Poorman-
Douglas Corporation as the official Claims and Noticing Agent in
the Company's chapter 11 case.

The large number of creditors and other parties in interest
involved in the Debtors' chapter 11 case may impose heavy
administrative and other burdens upon the Court and the Court
and the Office of the Clerk of the Court. To relieve the Court
and the Clerk's Office of these burdens, the Debtor proposes to
engage Poorman as the claims processing and noticing agent.

Under the Poorman Agreement, Poorman, at the request of the
Debtor or the Clerk's Office, will:

     a) prepare and serve certain required notices in this
        chapter 11 case;

     b) within 5 days after the mailing of a particular notice,
        file with the Clerk's Office a certificate or affidavit
        of service that includes a copy of the notice involved,
        an alphabetical list of persons to whom the notice was
        mailed and the date of mailing;

     c) maintain copies of all proofs of claim and proofs of
        interest filed;

     d) maintain official claims registers by docketing all
        proofs of claim and proofs of interest on claims
        registers;

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

     f) regularly transmit to the Clerk's Office a copy of the
        claims registers requested by the Clerk's Office on a
        more or less frequent basis;

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

     h) provide access to the public for examination of copies
        of the proofs of claim or interest without charge during
        regular business hours;

     i) record all transfers of claims pursuant to Bankruptcy
        Rule 3001(e) and provide notice of such transfers as
        required by Bankruptcy Rule 3001(e);

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

     k) provide temporary employees to process claims, as
        necessary; and

     l) promptly comply with such further conditions and
        requirements as the Clerk's Office or the Court may at
        any time prescribe.

The Debtors agree to pay Poorman-Douglas professionals at their
customary rates:

       Executive Support/Consulting      $125 to $175 per hour
       Technical Support/Programming     $125 per hour
       Case Manager                      $105 per hour
       Associate                         $75 per hour
       Clerical/Analysis Support/
          Customer Service               $40 to 75 per hour

ITC Delatacom, Inc., an exempt telecommunications company and a
holding company, filed for chapter 11 protection on June 25,
2002. Rebecca L. Booth, Esq., Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A. and Martin N. Flics, Esq., and
Roland Young, Esq., at Latham & Watkins represent the Debtors in
their restructuring efforts.  When the Company filed for
protection from its creditors, it listed $444,891,574 in total
assets and $532,381,977 in total debts.


KMART CORP: U.S. Trustee Appoints Official Equity Committee
-----------------------------------------------------------
Ira Bodenstein, the United States Trustee for Region 11,
appoints these seven Kmart shareholders to serve on an Official
Equity Committee in Kmart's chapter 11 cases:

               Softbank Technology Ventures
               200 West Evelyn Avenue, Suite 200
               Mountain View, CA 94061
               Attn: Jason Mendelson

               Ronald Burkle
               c/o Yucaipa Company
               9130 Sunset Boulevard
               Los Angeles, CA 90069
               Attn: Ronald Burkle and Kenneth Abdalla

               Trevor Stores Inc.
               8 Brookwood Drive
               Saratoga Springs, NY 12866
               Attn: Steve Elsey

               Paul Naz
               20502 Harper Avenue
               Harper Woods, MI 48225
               Attn: Paul Naz

               Peter Eide
               5421 Rapid Run Road
               Cincinnati, OH 45238
               Attn: Peter Eide

               Gerald J. Switzer
               17866 Beverly Road
               Beverly Hills, MI 48025
               Attn: Gerald J. Switzer

               Frank J. Howrylak
               3035 Newport Ct.
               Troy, MI 48084
               Attn: Frank J. Howrylak

At its initial meeting on June 14, 2002, the Equity Committee
selected Mr. Burkle as its Chairperson and Softbank as its
Vice-Chairperson. (Kmart Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

Kmart Corp.'s 9.875% bonds due 2008 (KMART18) are trading at 45,
DebtTraders reports. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=KMART18


LAIDLAW INC: Gets Okay to Amend Surety Bond Agreement with FIC
--------------------------------------------------------------
In conjunction with the US Bankruptcy Court's decision, Mr.
Justice Farley in Toronto, Canada, also allows Laidlaw Inc., and
its debtor-affiliates to enter into a First Amendment to Amended
and Restated Underwriting and Continuing Indemnity Agreement,
the First Amendment to Amended and Restated Pledge Agreement and
other related documents with Federal Insurance Company and its
affiliates.

                    *   *   *

As previously reported, Garry M. Graber, Esq., at Hudgson Russ,
LLP, in Buffalo, New York, related that Federal Insurance
provides the Laidlaw Companies the Bonds needed:

    (a) to guarantee their performance under certain service
        contracts;

    (b) to bid on certain contracts; and

    (c) for certain other miscellaneous uses.

The Bonds are covered by two Agreements:

    (a) an Amended and Restated Underwriting and Continuing
        Indemnity Agreement -- Surety Bond Agreement, used for
        Bonds needed for the Education Services Division; and

    (b) an Amended and Restated Pledge Agreement for the Bonds
        needed in the ambulance services businesses.

However, Mr. Graber noted, the Surety Bond Agreement expired on
April 15, 2002.

The parties reached an agreement on these terms:

  (a) Under the Surety Bond Agreement, Federal will:

      -- extend the existing $135,000,000 of Bond availability;

      -- extend Bond availability by an additional $5,000,000;
         and

      -- extend Bond availability by an additional $25,000,000,
         provided there is a dollar for dollar decrease in the
         Bonds outstanding under the Pledge Agreement.
         Accordingly, the cash collateral held under the Pledge
         Agreement will be released in $3,000,000 increments,
         minus 15%, which will be held as collateral to secure
         obligations of the new Bond;

  (b) The Surety Bond Amendment and the
      Pledge Amendment give the Laidlaw Companies the
      flexibility to renew the Bonds outstanding under the
      Pledge Agreement, provided that the Bonds are 100% cash
      collateralized;

  (c) The non-debtor Laidlaw Companies will pay Federal a
      $3,000,000 facility fee in consideration for entering
      into the Surety Bond Amendment and the Pledge Amendment.
      (Laidlaw Bankruptcy News, Issue No. 19; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)  


LERNOUT & HAUSPIE: Secures Sixth Solicitation Period Extension
--------------------------------------------------------------
On behalf of each of Lernout & Hauspie Speech Products N.V. and
L&H Holdings USA, Inc., Gregory W. Werkheiser, Esq., at Morris
Nichols Arsht & Tunnell asks Judge Judith Wizmur for yet another
extension of the exclusive period within which the L&H Debtors
may solicit acceptances of their respective Chapter 11 plans --
through and including August 1, 2002.

Mr. Werkheiser explains that, despite the "considerable
progress" that L&H NV and L&H Holdings have made toward bringing
closure to their Chapter 11 cases, both require an additional
period of time to solicit acceptances of their plan. While
Dictaphone has confirmed its plan, and L&H Holdings' liquidation
plan, as amended, is set for hearing on confirmation on July 16,
2002, L&H NV, while making considerable progress in its
negotiations with the L&H Creditors' Committee and other parties
in interest concerning the terms of its Chapter 11 plan, these
negotiations have not yet come to fruition and additional time
is needed - all without prejudice to the right of the L&H
Debtors to seek further extensions.

Specifically, the Debtors need the requested additional time in
order to (i) provide additional time for this Court to confirm
the liquidation plan proposed by Holdings, and (ii) await the
resolution of certain eents currently transpiring in the Belgian
case that L&H NV and the Creditors' Committee believe should be
resolved in order to complete the terms and conditions of L&H's
plan.

Mr. Werkheiser assures Judge Wizmur that the L&H Debtors have
been working diligently with the L&H Creditors' Committee and
are making substantial progress toward finalizing the terms of
negotiated Chapter 11 plans. Furthermore, the L&H Creditors'
Committee does not oppose the extension requested herein.

Section 1121(b) of the Bankruptcy Code gives a debtor the
exclusive right to file a plan of reorganization for an initial
period of 120 days from the petition date. If the debtor files a
plan within this exclusive period, then the debtor has the
exclusive right for 180 days from the petition date to solicit
acceptances to its plan.  During these exclusive periods, no
other party-in-interest may file a competing plan of
reorganization. Section 1121(d) provides that the Court may
extend the exclusive periods "for cause" upon request of a
party-in-interest and after notice and hearing.

Although the Bankruptcy Code does not define "cause" for an
extension, this Code section grants great latitude to the
bankruptcy judge in deciding, on a case-specific basis, whether
to modify the exclusivity period on a showing of "cause."  
Congress did not intend that the 120- and 180-day periods be
inflexible deadlines, instead Congress intended that the
exclusive periods be of adequate length, given the
circumstances, for the debtor to formulate, negotiate and draft
a consensual plan without the dislocation and disruption to the
business that would occur with the filing of competing plans of
reorganization.

    Ample Cause Exists For Extension Of Solicitation Period

(i) Joint Plan

Since the Petition Date, L&H NV and Holdings have been consumed
both with the exigent administrative matters of their cases
pending simultaneously in the United States and Belgium and the
business complications that accompany any Chapter 11 filing. L&H
NV and Holdings began working in conjunction with their
respective creditor constituencies and the L&H Creditors'
Committee in the summer of 2001 to develop Chapter 11 plans
designed to maximize value for their creditors. These efforts
culminated in the filing of the Joint Plan and Joint Disclosure
Statement in August 2001.

The Joint Plan provided, among other things, for the
reorganization of Dictaphone and the transfer of all of the
assets of the L&H Entities into two new separate entities post-
chapter 11 that would sell or otherwise dispose of assets for
the benefit of the stakeholders of such estates, through either
a joint venture or similar vehicle. It originally was
contemplated that the respective estates of the L&H Debtors
could be maximized by entering into a joint venture or similar
arrangement through a contribution of certain assets into such
joint venture (or similar vehicle); thereafter, post effective
date L&H NV and Holdings would pursue such transaction(s) and
the interests in such joint venture (or similar vehicle) would
be distributed.

Shortly after filing the Joint Disclosure Statement, and prior
to the hearing scheduled to consider the adequacy of the Joint
Disclosure Statement, however, a change in circumstances
compelled the three Debtors to decide not to seek approval at
that time of the Joint Disclosure Statement insofar as it
relates to the L&H Debtors. Specifically, the Belgian court
imposed several conditions on L&H NV that (a) might not be
consistent with the Joint Plan and (b) might affect L&H NV's
ability to consummate the Joint Plan. Moreover, insufficient
progress had been made with respect to the sale or other
disposition of the L&H Entities' Speech And Language Technology
Business, impeding the L&H Group's ability to describe
adequately in the Joint Disclosure Statement (i) the prospective
timing of any joint venture or similar transaction, (ii) the
likely consideration to be realized from such transaction, (iii)
the structure of such transaction, and (iv) the likely recovery
to the L&H Entities' creditors as a result of such transaction.

Given the existence of these unresolved matters, the L&H Group
determined that the prudent course of action would be to adjourn
final consideration of the Joint Disclosure Statement insofar as
it relates to the L&H Entities, and to proceed with seeking
approval of a disclosure statement exclusively with respect to
Dictaphone. On January 31, 2002, Dictaphone filed the Dictaphone
Plan relating solely to claims against and equity interests in
Dictaphone. The Bankruptcy Court confirmed the Dictaphone Plan
on March 13, 2002, and the Dictaphone Plan became effective on
March 28, 2002.

(ii) Progress with Plan Development

Since adjourning consideration of the Joint Plan, Holdings and
L&H NV have sold the majority of their assets, including the
Speech And Language Technology Business. Furthermore, Holdings
has filed its chapter 11 plan (which was negotiated with the L&H
Creditors' Committee) relating exclusively to claims against and
equity interests in Holdings, and L&H NV currently is
negotiating the terms of its own Chapter 11 plan with the L&H
Creditors' Committee and certain other creditor constituencies.

Indeed, the L&H Debtors have made, and continue to make,
substantial progress toward finalizing their respective Chapter
11 plans. Until now, a considerable portion of the three
Debtors' efforts and resources have been focused on finalizing
the Dictaphone Plan. With the completion of that process, the
L&H Debtors now require additional time to finalize their own
respective plans, seek approval of their related disclosure
statements, and, following such approval, solicit votes
accepting or rejecting their respective plans.

               L&H Debtors Are Not Using Exclusivity
                     To Pressure Creditors

Not Negotiation Tactic. The L&H Debtors' request for an
extension of the Solicitation Period does not constitute a
negotiation tactic. It merely reflects the fact that an
extension is required to provide sufficient time to complete the
solicitation process with respect to the remaining debtors, L&H
NV and Holdings, with Dictaphone's Plan now having been
confirmed. Throughout these Chapter 11 cases, the three Debtors
have continuously conferred with the Creditors' Committees and
their retained professionals and other parties in interest with
respect to the plan development process for the Joint Plan, the
Dictaphone Plan, the Holdings Plan and any Chapter 11 plan
relating to L&H NV.  Mr. Werkheiser assures Judge Wizmur that in
the event she grants the extension requested herein, this
interaction will not end.

In the absence of any opposition, this Motion is granted.
(L&H/Dictaphone Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


MED DIVERSIFIED: Delays Form 10-K Filing & Will Delist From AMEX
----------------------------------------------------------------
Med Diversified, Inc. (AMEX: MED), is delaying the filing of its
audited financial statements and Annual Report on Form 10-K for
the Fiscal Year Ended March 31, 2002.

Med Diversified entered into several significant transactions
during the past fiscal year, including financing arrangements,
settlement agreements and is involved in significant litigation.
The delay in filing the Form 10-K is due to the time required to
obtain the necessary information, to properly account for and
provide the requisite disclosures regarding those matters in its
annual report.

The Company expects to report that during the year ended March
31, 2002, the Company had net sales of approximately $208
million as compared to reported net sales of approximately $88
million for the year ended March 31, 2001. The Company also
expects to report a net loss for the year ended March 31, 2002
of approximately $330-$360 million as compared to the reported
net loss of $275.3 million for the year ended March 31, 2001.
The increase in loss from the prior year is the result of write-
downs of certain intangible assets resulting from asset
impairments and the costs associated with the Company's
financings and legal settlements.

It is anticipated that the Form 10-K will be filed with the
Securities and Exchange Commission on or before July 15, 2002.

Separately, the Company announced that it has withdrawn its
appeal of the American Stock Exchange (AMEX) delisting
determination and that the AMEX has consented to the Company's
request to voluntarily delist its common shares on the AMEX
effective at the close of trading on July 15, 2002.

The Company received notice from the AMEX last month that the
exchange was going to proceed with filing an application with
the SEC to delist the Company's shares. Although the Company was
confident in its decision to challenge the merits of the AMEX
notification, Management continued to further review the
benefits of appealing the notification and continuing the
listing of its common shares on the AMEX. The Company has
elected to take this action in the delisting based upon
management's analysis that it is unable to meet the AMEX's
continued listing requirements given the Company's financial
performance for Fiscal Year Ended 2002.

The Company is taking steps to facilitate trading on the NASD's
Over the Counter Bulletin Board (OTC:BB) and expects that an
application for quotation of its common stock will be filed by
an NASD member firm as soon as possible. Additional details will
be made known as they become available.

The Company stressed that the decision to voluntarily delist has
no effect on its commitment to continue to provide the highest
level of patient care and operationally, it is business as
usual.

Additionally, the Company continues to work toward resolution of
the debentures that matured Friday with Private Investment Bank
Limited.

Med Diversified operates companies in various segments within
health care industry, including pharmacy, home infusion, multi-
media, management, clinical respiratory services, home medical
equipment, home health services and other functions. For more
information, see http://www.meddiversified.com


NTL INC: Court to Consider Disclosure Statement on July 12, 2002
----------------------------------------------------------------
NTL Incorporated (OTC BB: NTLD; NASDAQ Europe: NTLI), confirmed
that NTL's restructuring plan, with the support of the committee
of its creditors, will provide for the continuation of Barclay
Knapp and his management to lead the newly formed NTL companies
after emergence from the US Chapter 11 cases.

Members of the committee hold in the aggregate over 50% of the
face value of NTL and its subsidiaries' public bonds. As part of
the new management structure, John Gregg, currently CFO of NTL
Incorporated, will become co-Managing Director and CFO of NTL
Euroco upon emergence, and will also serve as CFO of NTL UK and
Ireland until a CFO for NTL UK and Ireland is named.

Brad Eric Scheler, counsel to the creditors' committee and a
senior partner with Fried Frank Harris Shriver & Jacobson,
commented, "During this process we have been working closely
with Barclay Knapp and know him well. His determination to
ensure that NTL continues to prosper and grow is evident in
everything he does and we are confident that he is the right man
to lead the company going forward. NTL's management team has
performed admirably throughout this difficult process, and we
believe they will deliver great things for NTL's future."

Barclay Knapp commented, "I am gratified by the support of the
creditors' committee - the future majority owners of the company
- for my team. We have been working hand in hand with the
committee, our banks, and all of NTL's constituents to complete
a successful recapitalization process as quickly as possible -
and we remain on track.

"John Gregg has been invaluable in the recapitalization process,
and will continue in his normal roles until completion. Upon
emergence, John will be taking his considerable skills to a more
combined operational and financial role as co-Managing Director
and CFO at NTL EuroCo.

"We at NTL all share a passion for the company and our industry,
and we welcome and appreciate the opportunity to lead both
companies going forward."

The continuation of Mr. Knapp and the management team will be
included as an integral part of NTL's joint reorganization plan,
and will therefore be dependent upon overall approval of the
plan pursuant to its terms. In addition, the creditor's
committee is in the process of constituting new Boards of
Directors for each of the reorganized companies. NTL and the
creditors' committee expect to make an announcement regarding
these appointments later this summer.

As announced on May 8, NTL has filed a Chapter 11 'prearranged'
Plan of Reorganization under US law.

On May 2, NTL announced that the Company, a steering committee
of its lending banks and an unofficial committee of its public
bondholders had reached an agreement in principle on
implementing a recapitalization plan. The members of the
bondholder committee hold in the aggregate over 50% of the face
value of NTL and its subsidiaries' public bonds. In addition,
France Telecom and certain other holders of the Company's
preferred stock have also agreed to the plan.

On 24 May, NTL filed an amended plan of reorganization and a
disclosure statement. The court has set 12 July 2002 as a
hearing date to consider approval of the disclosure statement.

On 21 June, an official committee of creditors, comprising the
members of the unofficial committee of public bondholders and
three additional members, was appointed by the US Trustee to
oversee the Chapter 11 cases.

NTL offers a wide range of communications services to homes and
business customers throughout the UK, Ireland, Switzerland,
France, Germany and Sweden.

DebtTraders reports that NTL Incorporated's 11.875% bonds due
2010 (NLI4) are quoted at a price of 42. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NLI4for  
real-time bond pricing.


NATIONAL STEEL: Maintains Plan Filing Exclusivity Until Nov. 5
--------------------------------------------------------------
Judge Squires extends National Steel Corporation and its debtor-
affiliates' Plan Proposal Period -- the time within which to
propose and file a Plan of Reorganization -- through November 5,
2002.  The Solicitation Period -- the Debtors' time to solicit
acceptances of that Plan -- is further extended through January
6, 2003. (National Steel Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


NATIONSRENT INC: Wants More Time to Make Lease-Related Decisions
----------------------------------------------------------------
NationsRent Inc., and its debtor-affiliates ask the Court to
further extend the deadline by which the Debtors are supposed to
decide whether to assume, assume and assign, or reject certain
Leases to October 17, 2002.  The subset of Leases this request
applies to are those with Landlords who came to court and balked
at an open-ended extension through confirmation of a chapter 11
plan.

Michael J. Merchant, Esq., at Richards, Layton & Finger P.A. in
Wilmington, Delaware, informs the Court that, as part of their
review program, the Debtors are working with Keen Realty to
evaluate the fair market rental value of their leases.  The
Debtors have not completed this review, however, and require
more time to evaluate how each of the leases will factor into
the implementation of the business plan and their restructuring
efforts as a whole.

Mr. Merchant relates that, after the Petition Date, the Debtors
initially focused their efforts on completing a smooth
transition to operations in Chapter 11, as well as fulfilling
various administrative and reporting obligations arising in
connection with the commencement of those cases.

"The Debtors are to expect data from Keen Realty related to the
Objectors' Leases in the near future and will aggressively
review this data in conjunction with the implementation of their
business plan and their overall restructuring plan," claims Mr.
Merchant.  "Thus, the Debtors are unable to make a final
determination at this time with respect to the Objectors' Leases
because they have not had the opportunity to review the market
information from Keen Realty."

Mr. Merchant continues, "Without an extension of the deadline
with respect to the Objectors' Leases, the Debtors are at a risk
of prematurely and improvidently assuming the Objectors' Leases
that the Debtors later discover are burdensome -- thus creating
potential administrative claims -- or prematurely and
improvidently rejecting leases that they later on discover as
critical to their reorganization efforts."

According to Mr. Merchant, the Objectors include: 2700
Properties, Inc.; Lloyd Wells Gift Trust Dated November 24,
1987, Wells-CECO, L.P, and Lloyd Wells, as Trustee of the Lloyd
Henry Wells Family Trust Dated August 19, 1980 and Wells
Sherman, L.P., as to a 99% Interest and Janet Williams, Trustee
of the Janet Williams Gift Trust Dated March 3, 1997, Trust A as
to the Remainder; Broland, Inc.; FLT Investments, Inc. and
Family Venture Inc. of Orlando; Triple V Properties, Inc.; W.G.
Loomer, Jr. and Daisy G. Loomer; and James L. Ziegler, R. Nancy
Ziegler, Samco Enterprises, LLC, Garzarelli Investment Company,
LI.C, JR Equipment, Inc., John P. Greene and Diana L. Greene, as
Trustees for the Greene Family Trust Dated March 21, 1991,
Charleigh Davis and Steve Koehler; TS Realty Corporation, Lets
Leasing, 1nc., Elliott Prigozen and Lynn Prigozen,; and, the
Joanne B. Greenbaum 1983 Trust and Carol Greenbaum.

With respect to other objectors, Mr. Merchant further accords
that the Debtors have entered into a separate stipulation with
the Cypress Landlords setting specific dates within which to
decide on the leases.  They have as well filed a motion to
assume the Cypress Lakeworth lease.  In addition, the Debtors
have come into terms with E.O. Hat Real Estate to lease E.O.
Hat's property on a month-to-month basis.  The Debtors have also
obtained authority to reject the lease agreement with Villella
Asset Corp., which lease was succeeded by VAC Enterprises.

A hearing on the motion is scheduled on July 18, 2002.
(NationsRent Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NEWPOWER: Vectren Source to Acquire Ohio Natural Gas Customers
--------------------------------------------------------------
Vectren Source, LLC, a subsidiary of Vectren Corporation (NYSE:
VVC), has reached agreement with The New Power Company(TM), a
subsidiary of NewPower Holdings, Inc. (Pink Sheets: NWPW) to
acquire NewPower's current natural gas customers within the
Columbia Gas of Ohio and Dominion East Ohio Gas territories.  
The estimated purchase price of the approximately 175,000
customer contracts is $4.3 million. The agreement also calls for
the purchase of gas inventory and related contracts with an
estimated value of $12.5 million.  ProLiance Energy, LLC will
provide commodity and risk management services to Vectren Source
and is a joint venture between Vectren and Citizens Gas & Coke
Utility.

"We are very pleased to be in a position to step in and serve
this group of NewPower natural gas customers.  The Ohio natural
gas choice programs are very important to the future of Vectren
Source and we look forward to providing outstanding service to
these customers for many years to come," said Greg Collins,
Vectren Source President.

The acquisition of these customers is a major step in the
expansion of Vectren Source, which was formed during 2001 and
has built an experienced team that understands the Ohio gas
choice markets. This move allows Vectren Source to optimize its
existing infrastructure to efficiently service customer groups
of this size.  Additionally, the scale added by this transaction
better positions Vectren Source to participate in the planned
Vectren Energy Delivery of Ohio customer choice program in
Dayton and western Ohio later this year.

The agreement is subject to approval by the U.S. Bankruptcy
Court for Atlanta, Georgia. The Court approval process includes
a time period in which other entities may submit higher and
better offers.

Vectren Source is a non-regulated subsidiary of Vectren
Corporation concentrating its efforts on residential and small
business customers. Vectren Source's mission is to search out
and provide innovative energy-related products and services that
save customers money and make them more comfortable and secure.  
To learn more about Vectren Source, visit
http://www.vectrensource.com  

Vectren Corporation is an energy and applied technology holding
company headquartered in Evansville, Indiana. Vectren's energy
delivery subsidiaries provide gas and/or electricity to nearly
one million customers in adjoining service territories that
cover nearly two-thirds of Indiana and west central Ohio.
Vectren's non-regulated subsidiaries and affiliates currently
offer energy-related products and services to customers
throughout the surrounding region. These include energy
marketing and related services; coal production and sales;
utility infrastructure services; and broadband communication
services. To learn more about Vectren, visit www.vectren.com .

ProLiance is jointly owned by affiliates of Citizens Gas & Coke
Utility, a public charitable trust delivering natural gas to
Marion County Indiana residents and businesses, and Vectren.


NEWPOWER: Seeking Court Approval of Asset Sale Pact with Vectren
----------------------------------------------------------------
NewPower Holdings, Inc. (PINK SHEETS:NWPW), parent of The New
Power Company, has signed an agreement with Vectren Source, a
subsidiary of Vectren Corporation (NYSE:VVC) for the sale of its
natural gas customers in Ohio.

Vectren Source will pay $25 for each customer contract subject
to an adjustment based primarily on natural gas price movements.
In addition, Vectren Source will pay $12.5 million for natural
gas inventory. The transaction will be subject to Bankruptcy
Court and regulatory approvals. NewPower provides natural gas to
approximately 175,000 residential and small commercial customers
in Ohio.

NewPower filed Friday last week the Vectren Source asset
purchase agreement for the review and approval of the Bankruptcy
Court under the proposed sales and bidding procedures. Upon
completion of the Vectren Source transaction, NewPower expects
the cash collateral posted with the local utility Columbia Gas
of Ohio, Inc. which ensured NewPower's fulfillment of
obligations in that market, to be released. On June 11, 2002,
NewPower filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the U. S. Bankruptcy
Court for the Northern District of Georgia, Case Number 02-
10835.

Vectren Corporation is an energy and applied technology holding
company headquartered in Evansville, Indiana. Vectren's energy
delivery subsidiaries provide gas and/or electricity to nearly
one million customers in adjoining service territories that
cover nearly two-thirds of Indiana and west central Ohio.
Vectren's non-regulated subsidiaries and affiliates currently
offer energy-related products and services to customers
throughout the surrounding region.

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


NEXTCARD: S&P Lowers Asset-Backed Ser. 2000-1 & 2001-1 Ratings
--------------------------------------------------------------
Standard & Poor's lowered its ratings on all classes of NextCard
Credit Card Master Note Trust's asset-backed notes series 2000-1
and 2001-1.

All classes remain on CreditWatch with negative implications,
where they were placed on June 7, 2002.

The lowered ratings reflect Standard & Poor's expectation that
the performance associated with the underlying pool of credit
card receivables will deteriorate further if the base-rate
trigger associated with each series is breached and cardholder
collections are passed through to investors, making them
unavailable to finance new receivables. If the base-rate
triggers are breached, according to transaction documents, both
series' revolving periods will cease, and principal collections
will be passed through to the certificateholders in sequential
order. Consequently, these collections would be unavailable to
fund new purchases made by the cardholders. In light of this
expectation, and in conjunction with the fact that there has
been no announced sale of the trust portfolio, the underlying
credit card accounts are likely to be closed unless the NextBank
NA receivership can obtain additional capital to fund future
purchases by cardholders. The FDIC has indicated to Standard &
Poor's that it would recognize the validity of performance-
related trigger events that occur with respect to each series in
the NextCard Credit Card Master Note Trust, including a breach
to the base rate.

Despite a static yield curve and declining base rate, the excess
spread rate displayed by both series has continued to fall
precipitously during the past six months, and is currently at
negative 0.76% for series 2000-1 and negative 0.81% for series
2001-1. The excess spread decline is mainly the result of rising
gross charge-offs (currently 16.61% as of the June 2002
distribution date). Losses may also increase further as the
percentage of the collateral pool, which is greater than 90 days
past due, displays an increasing trend and is currently at
4.50%.

In light of these adverse performance trends, as indicated
above, Standard & Poor's believes that the probability that both
series will breach their base-rate triggers (when each series'
three-month average excess spread rate falls below zero) on the
July 2002 distribution date is very likely. As of the June 2002
distribution date, the three-month average excess spread rate is
0.96% for series 2000-1 and 0.92% for series 2001-1. Early
redemption events are viewed as structural forms of credit
enhancement that will accelerate note repayment under certain
adverse conditions. On a more positive note, the current total
and principal payment rates for these two series in the trust
remain relatively static (12.37% and 10.70%, respectively)
compared to historical figures. The trust's payment rates are
key risk indicators because payment collections will dictate how
quickly investors will be paid out in the event that an early
amortization trigger is breached.

The original CreditWatch developing placements followed the
announcement by the Office of the Comptroller of the Currency
(OCC) that NextBank, located in Phoenix, Ariz., was closed on
Feb. 7, 2002 by the OCC, at which time the FDIC was appointed
the receiver. This receivership constituted a redemption event.
However, the FDIC indicated that an early amortization, based
solely on insolvency or appointment of the FDIC as receiver, is
not enforceable against the FDIC. Consequently, the transactions
continue to revolve as new receivables continue to be
transferred into the master trust and the certificates within
each series remain at their original invested amounts.

In line with its role as NextBank's receiver, the FDIC had
requested and received bids on the bank's and the trust's
portfolio of credit card receivables, in an attempt to liquidate
the bank's assets. On June 7, 2002, Standard & Poor's revised
its CreditWatch status on all classes of NextCard Credit Card
Master Note Trust's asset-backed notes series 2000-1 and 2001-1
to CreditWatch with negative implications from CreditWatch with
developing implications. The revised CreditWatch status
reflected the continued deterioration of the master trust's
underlying collateral performance, as well as Standard & Poor's
concern regarding the uncertainty surrounding the potential sale
by the FDIC of the trust's receivables. Standard & Poor's has
remained in close contact with the FDIC throughout this process.

As of the May 2002 distribution date, given the significant
decline in the excess spread rate experienced by both series
2000-1 and series 2001-1, the spread account requirement for
both series has increased to its maximum rate of 7% ($35 million
and $49 million) of the respective series' initial aggregate
invested amounts. Excess spread is currently being trapped, but
the spread accounts for both transactions are currently below
their required amounts. Currently, the spread accounts are
funded at $25.2 million and $35.3 million, respectively, which
represents 5.04% of each of the series' total invested amounts.

Based on the risk that portfolio performance will deteriorate if
the underlying credit card accounts open to buy are closed
subsequent to the series' base-rate triggers being breached,
Standard & Poor's has revised its performance assumptions for
the trust receivables. Consequently, the available credit
support for each class is insufficient to support the ratings at
their original levels. Standard & Poor's will continue to
monitor the performance of the key risk indicators associated
with the aforementioned transactions, including the trust's
ability to maintain a stable yield and total payment rate.
Standard & Poor's will continue to advise the market as
developments become available.

     Ratings Lowered and Remain On Creditwatch Negative
          NextCard Credit Card Master Note Trust
             Asset-backed notes series 2000-1

                    Rating
     Class    To                From             Amount ($ mil)
     A        AA/Watch Neg      AAA/Watch Neg    357.5
     B        BBB/Watch Neg     A/Watch Neg      67.5
     C        BB/Watch Neg      BBB/Watch Neg    57.5
     D        B/Watch Neg       BB/Watch Neg     17.5

          NextCard Credit Card Master Note Trust
             Asset-backed notes series 2001-1

                    Rating
     Class    To                From             Amount ($ mil)
     A        AA/Watch Neg      AAA/Watch Neg    521.5
     B        BBB/Watch Neg     A/Watch Neg      87.5
     C        BB/Watch Neg      BBB/Watch Neg    66.5
     D        B/Watch Neg       BB/Watch Neg     24.5


NOMURA CBO: S&P Slashes 1997-1's Class A-2 Notes Rating to BB-
--------------------------------------------------------------
Standard & Poor's lowered its rating on the class A-2 notes
(current balance of $274.554 million) issued by Nomura CBO 1997-
1 Ltd., an arbitrage CBO transaction, to double-'B'-minus from
single-'A'-minus, and removed it from CreditWatch with negative
implications, where it was placed on May 20, 2002.

The lowered rating reflects factors that have negatively
affected the credit enhancement available to support the notes
since the transaction was originated in June 1997. These factors
include par erosion of the collateral pool securing the rated
notes and a downward migration in the credit quality of the
performing assets within the pool.

As a result of asset defaults, Nomura CBO 1997-1 Ltd.'s
overcollateralization ratios have deteriorated. According to the
most recent monthly trustee report (June 2, 2002), the class A-2
overcollateralization ratio was at 114.4%, versus the current
required minimum ratio of 126%. Currently, $58 million (or
16.6%) of the assets in the collateral pool come from defaulted
obligors rated 'D' or 'SD' by Standard & Poor's, and another
$11.75 million (or 3.4%) come from obligors rated double-'C',
considered highly vulnerable to default.

The credit quality of a number of the performing assets within
the collateral pool has also migrated downward. Currently,
$17.74 million (or 6.35% of the performing assets in the
portfolio) come from obligors with Standard & Poor's ratings in
the triple-'C' range, and $30.685 million (or 10.98% of the
performing assets) come from obligors with ratings that are on
CreditWatch negative.

Standard & Poor's has reviewed the results of current cash flow
runs generated for Nomura CBO 1997-1 Ltd. to determine the level
of future defaults the class A-2 notes can withstand under
various stressed default timing scenarios while still paying all
of the rated interest and principal due on the notes. The
results of these cash flow runs were compared with the projected
default performance of the current collateral pool and it was
determined that the rating previously assigned to the class A-2
notes was no longer consistent with the credit enhancement
available to support the tranche, resulting in the lowered
rating.


OLYMPUS HEALTHCARE: Court Confirms Amended Joint Chapter 11 Plan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
the Second Amended Joint Plan of Reorganization proposed by
Olympus Healthcare Group, Inc., and its debtor-affiliates.

On the Effective Date or as soon as practicable, the Debtors
shall:

     i) pay the full amount of all allowed Administrative
        Claims, or if a Final Order allowing an Administrative
        Claims is entered after the Effective Date, within 30
        days of the date of such Final Order;

    ii) provide for the payment in full of all allowed Priority
        Tax Claims;

   iii) pay the full amount of all allowed Priority Claims as
        provided in the Plan.

Pursuant to the Plan, the Liquidating Supervisor will be
appointed and shall have the authority to investigate, prosecute
and, if necessary, litigate, any Cause of Action on behalf of
the Debtors and shall have standing as an Estate representative
to pursue any Cause of Action and objection to Claims.  The
Debtor or the Liquidating Supervisor is given authority to take
actions and execute documents, which is necessary or appropriate
to carry out the purpose and intent of the Plan.

Olympus Healthcare Group, Inc. filed for chapter 11 protection
on May 25, 2001. Michael Lastowski, Esq., at Duane, Morris &
Hecksher represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed estimated assets of not more than $50,000 and estimated
debts of $10 million to $50 million.


OREGON STEEL MILLS: S&P Assigns BB- Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's has assigned its double-'B'-minus corporate
credit rating to Portland, Oregon-based Oregon Steel Mills Inc.
(OSM). The outlook is stable.

Standard & Poor's said that it has also assigned its double-'B'-
minus rating to OSM's proposed $300 million first mortgage notes
due 2009 and its double-'B' bank loan rating to OSM's secured
credit facility.

"The ratings reflect OSM's diversified product mix, improved
cost structure from capital expenditure programs, and good
market position", said Standard & Poor's credit analyst Thomas
Watters. "The ratings also reflect its aggressive capital
structure and volatile operating performance due to exposure to
cyclical industries, particularly the oil and gas transmission
pipeline business".

Standard & Poor's said that in the medium term, OSM is expected
to benefit from the recently imposed section 201 tariff
protection, high utilization rates, and an improved pricing
environment. However Standard & Poor's remains concerned about
the prospects for improved market conditions in the long term.
In addition, a large financial finding against the company in
relation to a long-running labor dispute could affect the
company's credit quality.


PACIFIC GAS: Wants to Acquire IT Equipment for New Entities
-----------------------------------------------------------
Pacific Gas and Electric Company anticipates that the three New
Entities -- ETrans LLC, GTrans LLC and Gen -- contemplated under
the Plan will require various information technology computer
and network hardware, software and miscellaneous components
(collectively, the IT Equipment) in order to support their
business operations. The lines of business currently use over
400 applications that must be separated from PG&E in order for
the New Entities to operate independently. PG&E does not have
sufficient hardware to implement a separate network to support
the New Entities; although PG&E will be transferring
approximately 63 servers to the New Entities, additional IT
Equipment will be needed by the New Entities.

Thus, PG&E requests an order authorizing PG&E to acquire
information technology equipment for the New Entities, outside
of the ordinary course of business pursuant to Bankruptcy Code
Section 363(b)(1). PG&E is requesting approval for all of the IT
Equipment that must be acquired by lease or purchase for the
period ending December 31, 2002, at total estimated maximum
costs of $4.4 million for the Leased Items and $2 million for
the Purchased Items. PG&E will seek further approval for any
costs to be incurred after December 2002 in excess of the amount
requested in this motion if the Effective Date (as defined in
the Plan) has not occurred by that time. By separate motion,
PG&E will be seeking Court approval for consulting services
related to the installation, configuration and testing processes
for the IT Equipment.

PG&E has decided that the IT Equipment should be acquired by
lease or purchase on a consolidated basis through a competitive
bid process. Obtaining approval for all the Acquisition in one
motion will allow PG&E to enter into leases or contracts for the
IT Equipment once bids have been accepted, without obtaining
Court orders for each acquisition. PG&E believes this will
facilitate consolidated purchasing.

PG&E has decided that the IT Equipment should be acquired by
lease or purchase on a consolidated basis because this will: (i)
reduce overall cost through acquisition in larger lots; (ii)
reduce maintenance costs by procuring hardware based on a common
standard; and (iii) minimize time and complexity by dealing with
a limited number of lessors and vendors.

PG&E intends that the bid proposal will include clauses to allow
PG&E the flexibility needed if the separation of the lines of
business under the Plan does not occur. For example, PG&E will
be able to retain the IT Equipment for its use, or
alternatively, PG&E will be able to transfer the IT Equipment to
the New Entities once the separation becomes effective.

                    Estimated Maximum Costs

In this motion, PG&E requests approval for acquiring:

1. Items to Be Leased including:

   (a) 97 Servers.

   (b) 75 Switches and Routers.

   (c) Two Storage Area Networks and One Tape Library as back-up
       and recovery system for the Data Center.

   Total maximum cost for the items is estimated at $4.4 million
   for the period ending December 31, 2002.

2. Items to Be Purchased

   Certain components of the IT Equipment cannot be leased, such
   as software and miscellaneous equipment.

   Therefore, PG&E requests approval to purchase:

   (a) Data Center Components for the site preparation at the
       facilities for the New Entities and to support the
       segregation of components within PG&E's existing data
       center for the co-located Data Center:

       (i) security cages for component isolation in the Data
       Center;

       (ii) component racks and wiring for new equipment; and

       (iii) environmental support equipment to maintain proper
       environmental conditions (such as temperature, surge
       protection and fire control) for all computer hardware.

   (b) Software Licenses for software tools that are required by
       the New Entities, including: (i) anti-virus software for
       servers; (ii) anti-virus software for workstations; (iii)
       desktop management tools; (iv) user account migration
       tools; (v) help desk management and support tools; (vi)
       server operating systems; and (vii) back-up software.

   (c) Miscellaneous Components including: (i) back-up tapes;
       (ii) voice communication circuits; (iii) Internet access
       fees and software components to facilitate Internet
       functioning (such as firewalls and security systems); and
       (iv) data communication circuits.

  The total estimated cost for purchasing the above software and
  equipment for the period ending December 31, 2002 is $2
  million.

The anticipated costs represent the maximum amounts that PG&E
anticipates spending on the IT Equipment; PG&E will attempt to
obtain the lowest possible price through the bidding process.

          Time Frame and Necessity for Current Approval

PG&E points out that, if granted, this Motion will allow it to
enter into leases or contracts for the IT Equipment once bids
have been accepted. Therefore, it has brought this Motion in
advance of the bidding process.

PG&E tells Judge Montali that it could take several months to
complete the bidding process, accept bids, negotiate contracts
and obtain the IT Equipment. It could then take several more
months to complete the physical installation of hardware,
installation of software, configuration of specific functions
and settings, and system testing for functionality and
reliability.

Therefore, PG&E believes that the IT Equipment must be acquired
promptly in order for the New Entities to be prepared for a
timely implementation of the Plan once it has been confirmed.

In the event that separation of PG&E's business lines does not
occur as contemplated by the Plan, the IT Equipment could be
used by PG&E to update its existing hardware and software, the
Debtor says.  The equipment could be used to both replace aging
hardware and software and to accommodate the normal replacement
process whereby approximately 20 to 30% of PG&E's equipment is
replaced each year as equipment reaches the end of its
lifecycle. PG&E also believes that any IT Equipment that is not
needed could be sold to recover a major portion of the costs
incurred. PG&E will have the right to purchase any leased
equipment (at a reduced price based on the number of lease
payments already received) and estimates that most of the IT
Equipment could be sold for 60 to 70% of  its original value.
Nonetheless, PG&E believes that most, if not  all, of the IT
Equipment could be used by the New Entities as contemplated.

PG&E seeks approval for the acquisition costs for the IT
Equipment as a use of estate property that is outside of the
ordinary course of business under Bankruptcy Code Section
363(b)(l).

PG&E says that sound business justifications exist for approval
of the IT Equipment acquisitions considering that:

-- PG&E does not have sufficient capacity with its existing
   hardware to support the New Entities' hardware requirements;

-- The acquisitions described in this Motion represent the
   minimum necessary to allow the New Entities to commence
   business operations.

-- The acquisition cannot be delayed until after Plan
   confirmation without jeopardizing PG&E's ability to timely
   implement the Plan.

-- PG&E would be able to utilize the IT Equipment to replace its
   own outdated equipment in the event that the business lines
   are not separated into the New Entities as contemplated by
   the Plan. PG&E could also recover a significant portion of
   its costs by selling any IT Equipment that is not needed.

-- PG&E is solvent and has sufficient cash to acquire the IT
   Equipment without causing any detriment to its creditors. (As
   reflected in PG&E's April 2002 Monthly Operating Report, PG&E
   held more than $4.5 billion in cash reserves as of April 30,
   2002.) (Pacific Gas Bankruptcy News, Issue No. 39; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)   


PACIFIC SYSTEMS: March 31 Balance Sheet Upside-Down by $303K
------------------------------------------------------------
Pacific Systems Control Technology, Inc. was formed in February
1997 and has a wholly owned subsidiary, ABK, which had no
activities in the year 2001 nor the three-month period ended
March 31, 2002. ABK wholly owned AC Media until February 8, 2002
when AC Media was effectively spun-off and became an independent
entity with its name changed to PeopleNet International
Corporation. In March 2000, the Company signed a Stock Exchange
Agreement with BA Networks for the acquisition of 80% of the
common stock of BA Networks. The Company's shareholders approved
of the acquisition at the Company's Annual Meeting of
Shareholders held on September 27, 2000. The owners of BA
Networks have agreed to sell an 80% interest in BA Networks to
the Company. According to commerce regulation of China, such
exchange of ownership needs to be incorporated into a co-
operative joint venture.  On October 28, 2000 BA Network signed
a letter of intent with the Company to set up a co-operative
joint venture in China into which all of BA Networks' assets
will be transferred. The CJV will be owned 80% by the Company
and 20% by BA Networks. The establishment of CJV was approved by
the Beijing Municipal Government on December 1, 2000 and the
business license was granted on December 20, 2000. As of March
31, 2002, the transfer of assets from BA Networks has not yet
been made. Since the Company does not have control of BA
Networks until the transfer of assets occurs, the investment in
BA Networks is accounted for as a deposit under the cost method
of accounting as of December 31, 2001 at the original purchase
price of $450,000. Upon completion of the transfer of assets the
acquisition will be accounted for under the purchase method of
accounting. The operations of BA Networks are conducted
exclusively in the People's Republic of China. It is at least
reasonably possible that the activities of BA Networks, which
are conducted in the People's Republic of China, may be
disrupted in the near term from factors outside the control of
the Company such as from negative effects of economic and
political forces.

Currently, the company focuses on working with U.S. vendors to
supply the Chinese market with the latest metering products. It
has engaged a company in California, since August 2001, for the
design of an advanced electric meter to particularly suit the
needs of Holley's customers in China. During the three-month
period ended March 31, 2002, the Company's main focus was on the
spin-off of its subsidiary, PeopleNet International Corporation,
which was effectively completed as of February 8, 2002. Upon the
spin-off, shareholders received one share of PeopleNet
International Corporation common stock for every seventeen
shares of Pacific Systems common stock held as of the record
date of January 16, 2002. The Company had an insignificant
amount of revenues for this three-month period.

Its net loss was $92,175 for the three-month period ended March
31, 2002 as compared to the net loss of $65,485 for the same
period in 2001. Net loss per share was unchanged at $0.003 for
this period as compared to the same period in 2001, while
weighted average number of shares increased to 27,574,371 from
25,578,706 of the same period last year.

Stockholders' equity decreased to a negative $303,778 at March
31, 2002 due to the spin-off distribution of PeopleNet from the
Company as of February 8, 2002.  Cash decreased for the three
months ended March 31, 2002 by $491,256 primarily due to a loan
to another company that is owned by Pacific System's largest
shareholder Holley Holdings USA. Cash utilized for operations
for the three months ended March 31, 2002 was $129,589. Cash  
from financing activities was an increase of $31,333.

The Company has historically financed its operating and capital
outlays primarily through sales of common stock, loans from
stockholders and other third parties and bank financing.  The
Company's largest shareholder, Holley Holding USA, has provided
the funds to the Company in terms of an unsecured loan with no
interests, for the Company operational needs, and management
expects continued support until such time as the Company begins
to generate revenues. However, there is no assurance that Holley
Holding USA will continue to assist the Company in the future.

A payable in the amount of $332,954 was set up to account for
payables that were included in the financial statements of
PeopleNet International Corporation as a result of the spin-off
transaction. As part of the spin-off the Company agreed to
reimburse PeopleNet for these liabilities.

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


PAPER WAREHOUSE: Nasdaq SmallCap Delists Shares Effective Today
---------------------------------------------------------------
Paper Warehouse, Inc., (Nasdaq:PWHS) announced that on June 25,
2002 the Nasdaq Listing Qualifications Department notified the
company that it had denied the company's request for continued
listing on The Nasdaq SmallCap Market and that the company's
common stock will be delisted from The Nasdaq SmallCap Market as
of the opening of business on July 2, 2002. The company has
failed to comply with either the minimum $2,000,000 net tangible
assets or the minimum $2,500,000 stockholder's equity
requirement for continued listing as set forth in Marketplace
Rule 4310(C)(2)(B).

The company expects its common stock will trade on the Over-the-
Counter Bulletin Board (OTC BB) under the same symbol following
its delisting from The Nasdaq SmallCap Market. Shareholders will
still be able to get current trading information on the
company's common stock, including the last trade bid and ask
quotations and share volume.

"We do not expect the change in trading venue for our common
stock to have any impact on how we do business or our business
operations," said Yale Dolginow, Paper Warehouse president and
chief executive officer. "We have taken pro-active steps to
begin to return Paper Warehouse to profitability and build the
shareholder value we feel is inherent in the company. Speaking
for all of the employees of Paper Warehouse, we will continue
our work to build trust and reward our shareholders."

Paper Warehouse specializes in party supplies and paper goods
and operates under the names Paper Warehouse, Party Universe,
and PartySmart.com, which can be accessed at
http://www.PartySmart.com Paper Warehouse stores offer an  
extensive assortment of special occasion, seasonal and everyday
party and entertainment supplies, including paper supplies, gift
wrap, greeting cards and catering supplies at everyday low
prices. As of May 3, 2002, the company had 141 retail locations
(87 company-owned stores and 54 franchise stores) conveniently
located in major retail trade areas to provide customers with
easy access to its stores. The company's headquarters are in
Minneapolis.


PENN SPECIALTY: Has Until July 9 to Decide on Unexpired Leases
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Penn Specialty Chemicals, Inc., obtained an extension
of their lease decision period.  The Court gives the Debtors
until July 9, 2002 to determine whether they want to assume,
assume and assign, or reject their unexpired nonresidential real
property leases.

Penn Specialty, one of the world's largest suppliers of
specialty chemicals THF and PTMEG, filed for chapter 11
protection on July 9, 2001, in the U.S. Bankruptcy Court for the
District of Delaware.  Deborah E. Spivack, Esq., at Richards,
Layton & Finger, in Wilmington, Delaware, represents the company
in its restructuring effort.


PILLOWTEX: Duke Energy Wants Collateral Value Determination
-----------------------------------------------------------
Duke Energy Royal LLC, successor-in-interest to DukeSolutions
Inc., seeks the Court's authority to determine the value of the
collateral securing their claim.

Brett D. Fallon, Esq., at Morris, James, Hitchens & Williams, in
Wilmington, Delaware, relates that Pillowtex Corporation, its
debtor-affiliates and Duke are parties to a Master Energy
Services Agreement.  As part of the Agreement, Duke prepared an
Energy Solutions Report for the Debtors.  The Master Energy
Services Agreement and the Energy Solutions Report together
comprise the Project Contract.

Mr. Fallon explains that under the Project Contract, the Debtors
contracted Duke for the provision of energy-related and energy-
intensive services.  Duke would from time to time acquire and
lease certain equipment to the Debtors for the purpose of
improving the efficiency of energy consumption at the Debtors'
plants.  The projects included proposals as:

  (a) lighting projects that called for Duke to install and
      lease lighting fixtures, T8 lamps and electronic ballasts
      to the Debtors;

  (b) a wastewater heat recovery system that called for Duke to
      install and lease a heat exchanger, two water heaters and
      certain associated piping, wiring, insulation, pumps,
      valves, gauges and other equipment; and

  (c) production or manufacturing equipment to be leased to the
      Debtors.

Mr. Fallon states that after the execution of the Project
Contract, Duke filed financing statements to ensure that if the
transaction were treated as financing, then their security
interest in the Lighting Equipment, the Heat Recovery Equipment
and the Manufacturing Equipment would be perfected.  In
addition, SouthTrust Bank also claims an interest in some of the
Lighting Equipment under a Master Lease that was entered into
between Duke and General Electric Credit Corporation and later
assigned to SouthTrust by General Electric.

Accordingly, both Duke and SouthTrust asserted motions in this
Court, seeking to compel postpetition rent under personal
property leases or payment of adequate protection.  However, the
Debtors defended against the motions asserting that the Master
Agreement and related agreements were de facto financing
arrangements rather than true leases.  Mr. Fallon reminds the
Court of a previous order in favor of the Debtors, holding that
the Agreement are not true leases but instead constitute
financing arrangements.

"On the basis of the Court's ruling, then Duke's claim will be a
secured claim rather than a claim upon an executory lease which
would require payment of all outstanding amounts in full," Mr.
Fallon adds.  Duke holds a claim against the Debtors in the
approximate amount of $13,700,000, which is secured by the
collateral.

Mr. Fallon states that under the Debtors' Plan, the Debtors will
continue to use the collateral and will pay Duke in cash an
amount equal to the value of the collateral in satisfaction of
their secured claim.  "The confirming Order also provides that
if the Master Agreement is determined to be a financing
arrangement, then unless both parties agree as to the value of
the collateral, the Court will determine the allowed amount of
the secured claim," Mr. Fallon says.  Since the parties have not
agreed as to the value of the collateral, the Court must now
determine the Collateral Value.

"Unless the Court determines the value of the collateral
securing Duke's claim, the parties will be unable to determine
the amount Duke will need to be paid in cash under the Plan upon
its Class 4 Division 4G secured claim," Mr. Fallon explains.
(Pillowtex Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    


POLAROID: Court Approves One Equity Partners' Asset Purchase
------------------------------------------------------------
Polaroid Corporation announced that the U.S. Bankruptcy Court
has approved the purchase of substantially all of its business
by One Equity Partners.

The agreement with 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.  Both the
unsecured creditors committee and the company's secured lenders
supported the proposed sale at a hearing Friday before the U.S.
Bankruptcy Court in Wilmington, Delaware.

In a joint statement, Polaroid Executive Vice Presidents William
L. Flaherty and Neal D. Goldman said, "We are pleased the court
approved the agreement with One Equity Partners.  We look
forward to finalizing the purchase and to seeing the Polaroid
business emerge from Chapter 11 under new ownership."

Completion of the transaction remains subject to certain
conditions with a final closing expected 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 manages $3.5 billion of investments and
commitments for Bank One Corporation in direct private equity
transactions as well as venture and management buyout funds.  
Bank One Corporation is the nation's sixth-largest bank holding
company in the United States.  More information can be found on
the Internet at http://www.bankone.com  

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


PRINTING ARTS: Has Until July 31 to File Chapter 11 Plan
--------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Printing Arts America, Inc., and its debtor-affiliates
obtained an extension of their exclusive periods.  The Court
gives the Debtors, until July 31, 2002, the exclusive right to
propose and file their plan of reorganization.  The Company
maintains the exclusive right, until September 30, 2002, to
solicit acceptances of that Plan from creditors.

Printing Arts America, Inc. filed for chapter 11 protection on
November 1, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. Teresa K.D. Currier, Esq. and William H. Schorling,
Esq. at Klett Rooney Lieber & Schorling represent the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated assets and
debts of over $100 million.


RANOR INC: Wants Schedule Filing Deadline Moved to July 30
----------------------------------------------------------
Ranor Inc., asks the U.S. Bankruptcy Court for the Southern
District of New York to give it more time to file its schedules
and statements.  The Debtor needs until July 30, 2002 to file
its schedules of assets and liabilities, schedules of current
income and expenditures, statement of financial affairs,
schedules of executory contracts and unexpired leases, and lists
of equity security holders.

The Debtor tells the Court that to prepare comprehensive
Schedules and Statements, it must gather information from books,
records and documents in locations throughout the United States.
Although the Debtor has mobilized its employees to prepare the
Schedules and Statements, the amount of work entailed in the
project and the demands upon the employees to assist in efforts
to stabilize business operations makes it impracticable for the
Debtor to complete the Schedules and Statements on time.

Ranor Inc. specializes in the fabrication and precision
machining of large metal components that exceed one hundred tons
for the aerospace, nuclear, military, shipbuilding and power
generation markets as well as national laboratories. The Company
filed for chapter 11 protection on June 25, 2002. J. Andrew Rahl
Jr., Esq. at Anderson Kill & Olick, P.C. represent the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $18,211,284 in assets and
$7,655,775 in debts.


SAFETY-KLEEN: Sues Skowf Inc. to Recoup $1.3 Million Preference
---------------------------------------------------------------
Safety-Kleen Services, represented by Jeffrey C. Wisler, Esq.,
at Connolly Bove Lodge & Hutz in Wilmington, brings suit against
Skowf Inc. 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 Skowf on
dates in March, April, May and June, 2000, within 90 days of the
Petition Date, in at least amounts totaling $1,357,089.  These
transfers were on account of an antecedent debt owed by one or
more of the Debtors to Skowf, and the transferring Debtors were
insolvent at the times of the transfers.  As a result of these
transfers, Skowf 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 Skowf
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 Skowf in the amount of $1,357,089, plus
pre- and post-judgment interest, and their costs.  Further, the
Debtors want Skowf's claims against these estates disallowed if
Skowf refuses to return the transfers. (Safety-Kleen Bankruptcy
News, Issue No. 40; Bankruptcy Creditors' Service, Inc.,
609/392-0900)    


SAFETY-KLEEN: 10-Day Appeal Period for Asset Sale Order Expires
---------------------------------------------------------------
Clean Harbors, Inc. (NASDAQ: CLHB), a leading provider of
environmental services throughout the United States and Puerto
Rico, announced that the 10-day appeal period following the U.S.
Bankruptcy Court's June 18 approval of the sale of Safety-
Kleen's Chemical Services Division to Clean Harbors expired
without contest on Friday. The Court's June 18 sale order thus
became final on June 28. The transaction is expected to close in
the third quarter of 2002.

The purchase of the Chemical Services Division will make Clean
Harbors the largest operator of hazardous waste facilities in
North America, including a significant presence in Canada. The
combined company is expected to have annualized revenue of
approximately $750 million, approximately 4,400 employees and
38,000 customers including a vast majority of the Fortune 500.

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


SONTRA MEDICAL: Falls Short of Nasdaq Listing Requirements
----------------------------------------------------------
Sontra Medical Corporation (Nasdaq SmallCap: SONT), a
development stage medical device company engaged in the research
and development of transdermal diagnostic and drug delivery
products, received a notification from Nasdaq on June 24, 2002
that the Company's common stock failed to comply with the $4.00
minimum bid price requirement and the $5,000,000 shareholders'
equity requirement for initial listing and that, as a result,
its common stock is subject to delisting from the Nasdaq
SmallCap Market. Although the Company is currently in compliance
with the continued listing standards of the Nasdaq SmallCap
Market, the Nasdaq staff determined that the consummation of the
merger, announced on June 24, 2002, between the Company
(formerly ChoiceTel Communications, Inc.) and Sontra Medical,
Inc. constituted a reverse merger under Marketplace Rule 4330(f)
and, therefore, the post-transaction company would be required
to meet the more stringent initial listing requirements of the
Nasdaq SmallCap Market.

The Company has requested an oral hearing with the Nasdaq
Listing Qualifications Panel and its common stock will continue
to trade on the Nasdaq SmallCap Market pending the outcome of
the hearing though there can be no assurance that the panel will
grant the Company's request for continued listing. The closing
price of the Company's common stock on the Nasdaq SmallCap
Market on June 27, 2002 was $4.17 per share. In the event that
the Company's shares of common stock are delisted from the
Nasdaq SmallCap Market, the Company would apply to list its
common stock on OTC Bulletin Board or another quotation system
or exchange on which the Company would qualify.

Thomas W. Davison, Sontra's chief executive officer and
president, stated "We are taking actions to rectify this
situation and we intend to pursue and implement a plan to meet
these requirements in the future. Although there can be no
guarantee that we will persuade Nasdaq, we are looking forward
to the hearing at which time we hope to end the current
delisting proceedings initiated against the Company."

On June 24, 2002, ChoiceTel Communications, Inc. announced the
consummation of its merger with Sontra Medical, Inc. As a result
of the merger, ChoiceTel Communications changed its name to
Sontra Medical Corporation and began operating in Sontra's line
of business.

Sontra Medical Corporation is a development stage life sciences
company engaged in the research and development of transdermal
diagnostic products, including transdermal transport of
interstitial fluid for diagnostic purposes. Sontra also is
developing technology for the transdermal delivery of
therapeutics and topical components for pharmaceutical and
cosmetics applications. Sontra believes that its ultrasound-
mediated skin permeation technology will provide a platform for
the development of products that offer less painful and more
convenient alternatives to blood tests and needle-free delivery
of biopharmaceutical drugs, thereby improving patient compliance
to therapy, improving their quality-of-life, and reducing health
care costs.


TANDYCRAFTS: Seeking Fourth Extension of Lease Decision Period
--------------------------------------------------------------
For the fourth time, Tandycrafts, Inc. and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware for a
further extension of their time to decide what to do with their
unexpired leases.  The Debtors want their time to assume, assume
and assign, or reject unexpired nonresidential real property
leases to run through September 12, 2002.

The Debtors tell the Court that since obtaining the Third
Extension, they have undertaken considerable efforts to advance
these cases toward confirmation of a plan of reorganization.
Particularly, the Debtors engaged in extensive discussions with
their pre-petition secured lenders in an effort to negotiate a
consensual stand-alone plan of reorganization. Since these
negotiations are still ongoing, the Debtors have not yet been
able to complete their examination of the Leases and their
alternatives.

Without an extension of time, the Debtors would be forced to
assume Leases that could later be burdensome--possibly creating
uncapped administrative claims against the their estates.

Tandycrafts, a leading manufacturer and marketer of picture
frames, mirrors and other wall decor products, filed for chapter
11 protection on May 15, 2001.  Mark E. Felger, Esq., at Cozen
and O'Connor, represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed assets of $64,559,000 and debts of
$56,370,000.


TUTOR TIME: Childtime Learning Pitches Best Bid for Assets
----------------------------------------------------------
Childtime Learning Centers, Inc. (Nasdaq: CTIM) is pleased to
announce that it has been confirmed as the successful bidder for
the assets of Tutor Time Learning Systems, Inc. of Boca Raton,
FL. As the nation's second largest publicly traded child care
provider, Childtime currently employs over 5,500 professional
educators and child care providers that perform a vital service
to more than 26,000 children and their parents in 23 states and
the District of Columbia. Tutor Time currently has 198 company
operated and franchise owned centers serving over 25,000
children daily in 23 states and is a perfect match for
Childtime. Tutor Time filed for chapter 11 bankruptcy protection
in May. The bidding for its assets was held June 27, 2002.

James Morgan, Chairman of Childtime and interim President and
Chief Executive Officer is pleased with this merger. Morgan
stated, "Both companies will benefit by the synergies involved.
This merging will bring financial stability and long term growth
as well as outstanding child care in a very fragmented
industry."

Bill Davis, CEO/President of Tutor Time will be working
diligently on the restructuring of the two companies. Davis
said, "I am excited about the opportunity to enhance and
strengthen two very strong child care systems."

Childtime has recently taken strategic actions to hone their
infrastructure, including upgrading their information systems
and improving the quality of operating data.

Tutor Time has both company and franchise owned schools and will
be an attractive addition to the Childtime model.


VECTOUR INC: Exclusive Plan Filing Period Extended to August 29
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Vectour, Inc., and its debtor-affiliates obtained a
second extension of their exclusive periods.  The Court gives
the Debtors, until August 29, 2002, the exclusive right to file
their plan of reorganization and until December 31, 2002 to
solicit acceptances of that Plan.

VecTour, Inc. is a leading nationwide provider of ground
transportation for sightseeing, tour, transit, specialized
transportation, entertainers on tour, airport transportation and
charter services. The Company filed for chapter 11 protection on
October 16, 2001. David B. Stratton, Esq. and David M. Fournier,
Esq. at Pepper Hamilton LLP represent the Debtors in their
restructuring effort.


VENTAS INC: John C. Thompson Resigns as Executive Vice President
----------------------------------------------------------------
Ventas, Inc. (NYSE:VTR) announced the resignation of its
executive vice president John C. Thompson.

"John has been a valued member of our management team as we have
worked through the extraordinary events over the past three
years," President and CEO Debra A. Cafaro said. "I want to thank
John for his hard work and commitment to achieving our goals."

Cafaro will continue to lead the Company's acquisition team as
they implement its diversification and growth strategy. In
addition, the Company has initiated a search for a new
investment executive.

"Since completing our refinancings in April 2002, my attention
has been completely focused on our organizational needs and our
efforts to diversify our portfolio," Cafaro said. "We have
already made significant progress toward these objectives as we
actively examine opportunities to invest in quality healthcare
and senior housing assets, and remain confident that we will
systematically achieve our corporate goals."

As previously announced, the Company intends to issue its second
quarter earnings on Tuesday, July 23. A conference call to
discuss those earnings will be held that morning at 10:00 a.m.
Eastern Time (9:00 a.m. Central Time.) The call will be webcast
live by CCBN and can be accessed at the Ventas Web site at
http://www.ventasreit.comor at http://www.companyboardroom.com  

Ventas, Inc. is a healthcare real estate investment trust whose
properties include 43 hospitals, 215 nursing facilities and
eight personal care facilities in 36 states. More information
about Ventas can be found at its Web site at
http://www.ventasreit.com  

Ventas Inc.'s March 31, 2002 balance sheet shows a total
shareholders' equity deficit of about $94 million.


WARNACO GROUP: Court OKs Settlement with HIS Equipment & Liberty
----------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates obtained
Court approval of its Settlement Agreement with HIS Equipment
and Liberty Mutual Insurance Company. Additionally, the Court
allowed the Debtors to execute the Settlement Agreement.

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

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

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

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

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

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

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

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

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

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

        -- Calvin Klein Jeanswear Company, in the amount of
           $250,000. (Warnaco Bankruptcy News, Issue No. 27;
           Bankruptcy Creditors' Service, Inc., 609/392-0900)  


WILLIAMS COMM: Agrees to Produce Documents as Committee Requests
----------------------------------------------------------------
The Official Committee of Unsecured Creditors urges the Court to
approve a stipulation with Williams Communications Group, Inc.,
and its debtor-affiliates.  Both parties want to avoid a
contested hearing on the matter and settle their differences
through negotiation and compromise.  Both parties agree that:

A. The Debtors will produce the documents responsive to the
   document request as promptly as practicable and on a rolling
   basis, keeping in mind the Debtors' main objective is to
   continue to successfully operate their respective businesses.
   The Debtors will engage in a good faith effort to produce all
   responsive documents by August 12, 2002;

B. The Committee agrees that all documents previously produced
   for it or for the Ad Hoc Committee or made available to the
   Committee or the Ad Hoc Committee in data rooms will be
   deemed to have been received by the Committee.  Accordingly,
   the Debtors will not be required to again produce any of
   those documents. Notwithstanding the foregoing, the Debtors
   agree to allow the Committee continued access to the data
   rooms upon reasonable notice to counsel to the Debtors;

C. This Stipulation will not prejudice the Committee's right to
   renew any portion of the Motion not covered by this
   Stipulation or to seek additional documents or depositions
   pursuant to Rule 2004 of the Bankruptcy Rules or through any
   other means;

D. All documents produced hereunder are subject to a
   protective order.  The terms of the Order will be reasonably
   acceptable to the Committee and the Debtors.

Accordingly, Michael A. Cohen, Esq., at Kirkland & Ellis in New
York, New York, tells the Court that the Debtors have agreed to
produce these documents:

a. All documents concerning the reasons for, or analysis of,
   each step in the process of Williams Communications Group's
   (WCG) separation from The Williams Companies (TWC), including
   WCG's bank loans, WCG's IPO, WCG's issuance of notes, any
   agreements between WCG and TWC regarding separation and TWC's
   spin off of WCG stock;

b. All documents concerning WCG's 1998 $750,000,000 sale and
   lease-back of WCG's assets, including TWC's guarantee of
   WCG's obligations;

c. All transactional documents, and all documents that reflect
   executive level analysis of or policymaking, concerning the
   October 1999 initial public offering of WCG stock;

d. All transactional documents, and all documents that reflect
   executive level analysis of or policymaking, concerning the
   April 2001 spin off of WCG, including any documents generated
   by Lehman Brothers (including the "viability opinion"), Davis
   Polk & Wardwell, White & Case and PricewaterhouseCoopers;

e. All documents concerning WCG that were presented to or
   created by the WCG board of directors, or any committee
   thereof, including memoranda, presentations, agendas, meeting
   minutes, consents and resolutions;

f. All memoranda, letters, reports, notes, emails and lists
   related to the spin off negotiations between WCG and TWC,
   including the "hot issues" lists;

g. All documents concerning JP Morgan's analysis of the
   conversion of debt to equity, including the fairness opinion
   concerning the conversion of TWC debt to equity;

h. All documents that reflect analysis of or policymaking
   concerning WCG's capital needs, network expenditures, or the
   impact WCG had on TWC's finances and reported results;

i. All documents concerning WCG's issue of notes in October 1999
   and August 2000;

j. All documents concerning the February 2001 transaction
   between TWC and WCG involving the conversion of the
   $1,000,000,000 note to paid-in capital;

k. All documents concerning TWC's guarantee of WCG's March 2001
   $1,400,000,000 secured notes;

l. All documents concerning the September 2001, $276,000,000
   purchase and lease-back of WCG assets;

m. All documents concerning analysis of actual or potential
   liabilities relating to the separation of WCG from TWC, the
   September 2, 1998 State Street Bank & Trust lease, the
   October 1999 initial public offering, the October 1999 WCG
   notes, the August 2000 WCG notes, the February 2001
   $1,000,000,000 note transaction, the March 2001 guarantee of
   WCG's $1,400,000,000 secured notes, the April 2001 spin off
   or the September 2001, $276,000,000 purchase and lease-back;

n. Documents sufficient to identify all transfers (as defined in
   Section 548 of the Bankruptcy Code and under the Uniform
   Fraudulent Transfer Act) of $1,000,000 or more, from WCG
   (including subsidiaries and affiliates) to TWC (including
   subsidiaries and affiliates);

o. All documents concerning the Tax Sharing Agreement, including
   all documents reflecting the tax benefits that accrued to TWC
   as a result of WCG's net operating losses;

p. All documents concerning the tax implications of the WCG spin
   off, including all communications with the Internal Revenue
   Service;

q. WCG director and officer insurance policies;

r. All documents concerning analysis of WCG's industry and
   markets, including the telecommunications industry and the
   broadband market;

s. Documents sufficient to identify which WCG officers and
   directors ever owned WCG stock, whether those officers ever
   sold the stock, and the details (time, amount sold, and
   proceeds received) from any the sale;

t. Documents sufficient to show WCG's document retention
   policies and procedures from January 1997 to the present;

u. Documents sufficient to identify all compensation and
   benefits provided to WCG directors and officers by WCG and
   its affiliates during the year preceding bankruptcy;

v. Documents sufficient to identify any changes in compensation
   and benefits provided to WCG directors and officers by WCG
   and its affiliates during the year preceding bankruptcy;

w. All documents concerning WCG's forgiveness of executive
   loans; and,

x. All documents concerning any trust created by WCG for the
   purpose of awarding retention bonuses, including all
   documents concerning any retention bonuses actually awarded.

                  Stipulation With J.P. Morgan

In similar manner, J.P. Morgan Securities Inc. and the Official
Committee Unsecured Creditors desire to avoid a contested
hearing regarding the Committee's motion and to resolve their
differences regarding the motion through negotiation and
compromise. Accordingly, the Committee and J.P Morgan sought and
obtained Court approval of their stipulation, which provides
that:

A. The Committee is authorized, pursuant to Rule 2004, to seek
   documentary and deposition discovery of J.P. Morgan,
   including the issuance of subpoenas pursuant to Rule 2004(c);

B. This Stipulation will not prejudice J.P. Morgan's right to
   object to any subpoena issued by the Committee; and,

C. This Stipulation will not prejudice the Committee's right to
   seek authority to conduct additional discovery from any
   entity related to J.P. Morgan pursuant to Federal Rule of
   Bankruptcy Procedure 2004, nor shall it prejudice the right
   of that entity to object to additional requests under Rule
   2004.

              Stipulation With Boston Consulting

Seeking to avoid a contested hearing regarding the Committee's
motion, Boston Consulting Group and the Unsecured Creditors'
Committee also gained approval of a stipulation to resolve their
differences regarding that motion through negotiation and
compromise.  The parties agree that:

A. The Committee's request to conduct discovery of Boston
   Consulting is hereby granted;

B. The Committee is authorized to serve Boston Consulting with
   one or more subpoenas seeking the documentary and deposition
   discovery;

C. This Stipulation will not prejudice Boston Consulting's right
   to object to any subpoena issued by the Committee.  The
   procedures contained in Fed. R. Civ. P. 45 will apply with
   respect to any subpoena issued by the Committee and served
   upon Boston Consulting; and,

D. This Stipulation will not prejudice the Committee's right to
   seek authority to conduct additional discovery from Boston
   Consulting pursuant to Federal Rule of Bankruptcy Procedure
   2004. (Williams Bankruptcy News, Issue No. 6; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)

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


WINFIELD CAPITAL: Fails to Meet Nasdaq Listing Guidelines
---------------------------------------------------------
Winfield Capital Corp. (WCAP-Nasdaq National Market) announced a
net loss of $14,367,075 for the fiscal year ended March 31, 2002
versus a net loss of $70,593,176 for the fiscal year ended March
31, 2001.

The net loss in fiscal year 2002 was primarily attributable to
unrealized depreciation in the value of loans and investments
totaling $8,492,858 compared with a decrease in fiscal year 2001
in the value of loans and investments totaling $69,828,667.
Unrealized depreciation in 2002 principally reflected the
decreased market price of investments in six publicly traded
portfolio companies and the decreased fair value of investments
in six privately held portfolio companies. The loss included a
realized net loss on investments of $3,289,935 for the fiscal
year 2002 which reflected long-term capital losses on securities
of $1,039,442 and write-offs of $2,337,716 offset by an equity
recovery of $87,223 as compared to a realized net gain of
$1,282,344 for the fiscal year 2001.

The Company's investment income decreased by $128,395, or a
decrease of 10.8%, from $1,185,799 for the year ended March 31,
2001 to $1,057,404 for the year ended March 31, 2002. This
reflected principally a $263,447 decrease in interest from small
business concerns due to loans being repaid, which was offset by
a $147,020 increase in interest from temporarily invested funds
as a result of the Company's decreased level of investment
activity. Operating expenses increased from $1,473,397 for the
year ended March 31, 2001 to $1,731,292 for the year ended March
31, 2002 as a result of increases in payroll and payroll-related
expenses of $133,985 in connection with increased officer
salaries and the implementation of a Company 401(k) Plan in
fiscal year 2002, professional fees of $74,830 due primarily to
increased tax advisory and audit-related fees and general and
administrative costs of $79,280 due primarily to a full year of
directors' fees (first paid in the last quarter of fiscal year
2001). Partially offsetting these increases were decreases in
other operating costs that netted to $30,200. Interest expense
increased by $151,139 from $1,759,255 for the year ended March
31, 2001 to $1,910,394 for the year ended March 31, 2002 due to
additional borrowings of $5,000,000 from the Small Business
Administration incurred in March 2001.

According to the SBA Regulations, the Company is required to be
in compliance with the capital impairment rules, as defined by
regulation 107.1830 of the SBA regulations. As of March 31,
2002, the Company was below the capital impairment threshold by
approximately $900,000. In light of the continuing decline in
the market for public and private securities after March 31,
2002, impairment may occur in the next fiscal year. If the
Company became subject to the capital impairment rules, the SBA
may declare the entire indebtedness including accrued interest
immediately due and payable. In addition, the SBA could avail
itself of any remedy available to the SBA. As such, impairment
could have a material adverse effect on the Company's financial
position and operations.

The Company also announced that on June 17, 2002, the Company
received notice from the Nasdaq Stock Market, Inc. that for the
preceding 30 consecutive trading days, the Company's common
stock had not maintained the minimum Market Value of Publicly
Held Shares of $5,000,000 as required for continued inclusion by
Marketplace Rule 4450(a)(2) on the Nasdaq National Market.
Therefore, in accordance with Marketplace Rule 4450(e)(1),
subject to appeal, the Company has 90 calendar days, or until
September 16, 2002, to regain compliance. If compliance with the
Rule cannot be demonstrated by September 16, 2002, the Company's
securities will be delisted from the Nasdaq National Market. If
the Company's securities are delisted, the Company will seek to
list its securities on the Nasdaq SmallCap Market which the
Company had previously listed on prior to listing on the Nasdaq
National Market. The Company cannot predict what effect, if any,
such delisting would have on the trading of its securities.

Winfield Capital is a small business investment company that
makes equity investments and loans pursuant to funding programs
sponsored by the SBA and is a non-diversified, closed-end
investment company that is a business development company under
the Investment Company Act of 1940. The Company's common stock
is traded on the Nasdaq National Market under the symbol "WCAP".
For more information, visit Winfield Capital's Web site at
http://www.winfieldcapital.com/


WORLDCOM: Taps William McLucas to Conduct Independent Inquiry
-------------------------------------------------------------
WorldCom, Inc. president and CEO John Sidgmore sent a reply
letter to U.S. President George W. Bush, saying:

                                       June 27, 2002

The Honorable George W. Bush
The White House
Washington, D.C. 20036

Dear Mr. President:

     [Thurs]day you rightly expressed outrage and concern about
past accounting irregularities at WorldCom. I want you to know
that we, the current management team, are equally surprised and
outraged. That is why we immediately brought this matter to the
attention of the SEC and the public. I am proud that our own
people discovered these irregularities and had the courage and
professionalism to act quickly.

     In that spirit, this letter reaffirms our commitment to
working with you and the appropriate agencies to investigate
this serious matter, and to set an example by accepting
responsibility and taking decisive action, including:

     - We have retained William McLucas, former Chief of the
       Enforcement Division of the Securities and Exchange
       Commission, to conduct a rigorous, independent
       investigation of these irregularities.

     - We have dismissed our chief financial officer and
       accepted the resignation of our controller. We will take
       further action as the investigation warrants.

     - We are in close consultation with our banks to secure
       additional lines of credit to preserve our ability to
       finance our debt.

     - We are selling our non-core businesses and taking other
       actions to raise more than $1 billion. We are also
       trimming $1 billion in expense by refocusing on our core
       businesses.

     We are dedicated to preserving the value of our company and
its long-term viability for our employees, our customers,
lenders, suppliers and shareholders in the wake of our findings.
We feel a tremendous sense of responsibility to these groups,
and to the general public.

     Seven weeks ago, as I assumed the position of CEO of
WorldCom, Bert Roberts, our Chairman, and I pledged to restore
trust in this great company. Never did we imagine it would be
put to such a test. However, part of restoring trust means being
straight about problems as we discover them -- and aggressively
solving them. This is the only way we will rebuild our company's
credibility. You have our commitment that we will continue to do
this.

                                       Sincerely,

                                       John Sidgmore
                                       President and CEO

                                       Bert Roberts
                                       Chairman of the Board

WorldCom, Inc. (NASDAQ: WCOM, MCIT) is a pre-eminent global
communications provider for the digital generation, operating in
more than 65 countries. With one of the most expansive, wholly-
owned IP networks in the world, WorldCom provides innovative
data and Internet services for businesses to communicate in
today's market. In April 2002, WorldCom launched The
Neighborhood built by MCI - the industry's first truly any-
distance, all-inclusive local and long-distance offering to
consumers for one fixed monthly price. Effective as of the close
of regular trading on July 12, 2002, WorldCom will eliminate its
tracking stock structure and have one class of common stock with
the NASDAQ ticker symbol WCOM. For more information, go to
http://www.worldcom.com  


WORLDCOM INC: UICI Discloses $7.5 Million Bond Position
-------------------------------------------------------
In the wake of announced accounting irregularities at WorldCom
Inc., UICI (NYSE: UCI) announced that its insurance company
subsidiaries hold an aggregate of $7.525 million principal
amount of WorldCom bonds (with a carrying value on the Company's
books of $7.3 million), of which $4.0 million principal amount
matures in 2005 and $3.525 million principal amount matures in
2031. In accordance with Financial Accounting Standards Board
Statement No. 115, the Company is currently in the process of
evaluating the magnitude of the other-than-temporary decline in
fair value of the WorldCom bonds. The amount of such decline
will be reflected as a realized loss and charged to income in
the quarter ending June 30, 2002.

UICI (headquartered in Dallas, Texas) through its subsidiaries
offers insurance (primarily health and life) and selected
financial services to niche consumer and institutional markets.
Through its Self Employed Agency Division, UICI provides to the
self-employed market health insurance and related insurance
products, which are distributed primarily through the Company's
dedicated agency field forces, UGA-Association Field Services
and Cornerstone Marketing of America. Through its Group
Insurance Division, UICI provides tailored health insurance
programs for students enrolled in universities, colleges and
kindergarten through grade twelve and markets, administers and
underwrites limited benefit insurance plans for entry level,
high turnover, hourly employees. Through its Life Insurance
Division, UICI offers life insurance products to selected
markets, and the Company's Senior Markets Division provides
long-term care insurance and Medicare supplement insurance
products to the senior age market. The Company's Academic
Management Services Corp. unit (headquartered in Swansea, MA)
seeks to provide financing solutions for college and graduate
school students, their parents and the educational institutions
they attend by marketing, originating, funding and servicing
primarily federally guaranteed student loans and by providing
student tuition installment payment plans. In 2002, UICI was
added to the Standard & Poor's Small Cap 600 Index. For more
information, visit http://www.uici.net


WORLDCOM: Fitch Says No Material Claims Expected by Guarantors
--------------------------------------------------------------
Fitch Ratings has surveyed the financial guarantors it rates to
determine their exposure to WorldCom. Fitch has determined that
four of the six primary financial guarantors whose financial
strength Fitch rates 'AAA' (Ambac Assurance Corp., Financial
Security Assurance Inc., MBIA Insurance Corp., and XL Capital
Assurance Inc.) have a total of approximately $600 million of
indirect exposure to WorldCom through collateralized debt
obligations and pooled credit default swap vehicles. The vast
majority of these transactions would have substantial
subordination remaining even assuming a total loss on the
WorldCom exposure. Two other 'AAA' rated bond insurers,
Financial Guaranty Insurance Co. and CDC IXIS Financial
Guaranty, have no exposure to WorldCom. Therefore, insured
claims related to WorldCom are not expected to be material and
Fitch does not expect any rating impact for these six financial
guarantors.

Fitch is still gathering and analyzing WorldCom exposure at the
niche financial guarantors and monoline reinsurers it rates: ACA
Financial Guaranty Corp., ACE Guaranty Re Inc., AXA Re Finance
S.A., Commercial Guaranty Assurance, Ltd., Radian Asset
Assurance Inc., Radian Reinsurance Co. Inc., and XL Financial
Assurance Ltd. Fitch will report upon these companies' exposures
when it has completed its findings.


WORLDCOM INC: Everest Re Group Discloses $30 Million Exposure
-------------------------------------------------------------
Everest Re Group, Ltd (NYSE: RE) has made a preliminary estimate
that its loss exposure arising from the severely deteriorated
financial condition of the WorldCom Corporation is approximately
$30 million after tax recoveries, with a resulting impact on its
2nd Quarter 2002 Operating Earnings and Net Income of
approximately $.10 and $.60 per diluted share, respectively.

This estimated unusual loss principally reflects the impairment
of the Company's WorldCom fixed maturity investment holdings
although the Company's credit default and underwriting exposures
have also been considered. The effect on Net Income for the
quarter will be partially mitigated by net realized gains
arising from unrelated investment portfolio actions.

As of March 31, 2002, Everest Re Group, Ltd had total assets in
excess of $8.3 billion and shareholders' equity of $2.1 billion.

Everest Re Group, Ltd. is a Bermuda holding company that
operates through the following subsidiaries: Everest Reinsurance
Company provides reinsurance to property and casualty insurers
in both the US and international markets. Everest Reinsurance
(Bermuda), Ltd. provides reinsurance to property and casualty
and life insurers in both the Bermuda and international markets.
Everest National Insurance Company and Everest Security
Insurance Company provide property and casualty insurance to
policyholders in the United States. Everest Indemnity Insurance
Company offers excess and surplus lines insurance in the United
States. Additional information on Everest Re Group companies can
be found at the Group's Web site at http://www.everestre.com


WORLDCOM: S&P Junks Ratings on 4 Related Synthetic Transactions
---------------------------------------------------------------
Standard & Poor's lowered its rating on four synthetic
securities related to WorldCom Inc. to triple-'C'-minus from
single-'B'-plus. At the same time, the ratings remain on
CreditWatch with negative implications, where they were placed
on April 17, 2002.

The rating actions follow the downgrade of WorldCom Inc.'s long-
term corporate credit and senior unsecured debt ratings on June
26, 2002.

These synthetic securities are weak-linked to the underlying
collateral, WorldCom Inc. debt. The lowered ratings reflect the
credit quality of the underlying securities issued by WorldCom
Inc.

             RATINGS LOWERED AND REMAIN ON CREDITWATCH

    Corporate Backed Trust Certificates, Series 2001-17 Trust
         $25.000 million corporate-backed trust certs


                      Rating
          Class     To                From
          A-1       CCC-/Watch Neg    B+/Watch Neg


                 PreferredPLUS Trust Series WCM-1
       $80.703 million corporate bond backed trust certs

                      Rating
          Class     To                From
          Certs     CCC-/Watch Neg    B+/Watch Neg

                CorTS Trust For WorldCom Notes
       $57.156 million corporate-backed trust securities

                      Rating
          Class     To                From
          Certs     CCC-/Watch Neg    B+/Watch Neg

                  SATURNS Trust No. 2001-5
          $26.023 million debenture backed securities

                      Rating
          Class     To                From
          Units     CCC-/Watch Neg    B+/Watch Neg

DebtTraders reports that Worldcom Inc.'s 11.25% bonds due 2007m
(WCOM07USR4) are quoted at a price of 31. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USR4
for real-time bond pricing.


WORLDCOM: Delivers Explanation of What Went Wrong to SEC
--------------------------------------------------------
WorldCom, Inc. (Nasdaq:  WCOME, MCITE) delivered to the
Securities and Exchange Commission a detailed explanation of the
events that led to its notifying the agency of its intent to
restate its financial results for 2001 and the first quarter of
2002.  The company explains that as a result of an internal
audit of the company's capital expenditure accounting, it
determined that certain transfers from line cost expenses to
capital accounts during this period were not made in accordance
with generally accepted accounting principles.

"Today's filing is consistent with our pledge to be forthright
and open, and to cooperate fully with both internal and external
investigations," said John Sidgmore, who became WorldCom
president and CEO two months ago.  "We will continue to be
proactive in reviewing our operations and reporting our
findings.  This company is absolutely committed to operating in
accordance with the highest ethical standards."

The full text of WorldCom's explanation reads:

                 Re: WorldCom, Inc., HO-09440

         Sworn Statement Pursuant to Section 21(a)(1)
            of the Securities Exchange Act of 1934

     1. This statement is submitted by WorldCom, Inc. (the
"Company") in response to the Commission's June 26, 2002 Order
(the "Order") directing the Company to describe in detail the
facts and circumstances underlying the events described in and
leading to the Company's June 25, 2002 press release (the
"Release") regarding its intention to restate its 2001 and first
quarter 2002 financial statements. The information provided in
this Statement reflects the Company's best understanding as of
this date. However, in light of the Company's prompt
determination, disclosed in the Release, that a full
investigation of the circumstances giving rise to the need for
the restatement should be performed by a party independent of
the Company (see paragraph 20 below), which investigation
commenced on June 24, 2002, and the short amount of time
available, the Company's own review of those circumstances
necessarily has been limited. Thus, the majority of the
information set forth in this Statement is based on the
Company's information and belief and does not reflect
information as to which the undersigned has personal knowledge.
This Statement is not intended to be exhaustive but rather a
summary of key events.

                Preparation of the Company's
             2001 and 2002 Financial Statements

     2. The Company's financial statements for 2001 and for the
first quarter of 2002 were prepared under the direction of Scott
D. Sullivan, the Company's Chief Financial Officer and
Secretary. David F. Myers, Senior Vice President and Controller
of the Company, reported to Mr. Sullivan and assisted in the
preparation of these financial statements. The Company's SEC
filings during this period were prepared under the direction of,
and signed by, Mr. Sullivan.

     3. Prior to May 16, 2002, Andersen LLP ("Andersen") was the
Company's external auditor. Andersen audited the Company's 2001
financial statements and reviewed the Company's first quarter
2002 financial statements. During this period, Andersen's
engagement partner on the Company's audits was Mel Dick.
Andersen gave an unqualified opinion on the Company's 2001
financial statements following its audit.

     4. On May 16, 2002, KPMG LLP was appointed as the Company's
external auditors. KPMG assigned Farrell Malone as the
engagement partner on this audit.

                  Discovery of the Transfers

     5. During May 2002, Cynthia Cooper, Vice President -
Internal Audit, began an investigation of certain of the
Company's capital expenditures and capital accounts. Ms. Cooper
determined that a number of questionable transfers had been made
into the Company's capital accounts during 2001 and the first
quarter of 2002. The transfers involved a portion of the costs
associated with network services and facilities provided by
third parties, designated "line costs" by the Company, that
previously had been treated as expenses in the Company's
financial statements. Ms. Cooper discussed these entries with
Mr. Sullivan and with Mr. Myers.

     6. On or about June 12, 2002, Ms. Cooper and Glyn Smith,
another member of the Company's Internal Audit staff who had
assisted Ms. Cooper's investigation, contacted Max E. Bobbitt,
Chairman of the Audit Committee of the Board of Directors of the
Company, and discussed the line cost transfers. Thereafter, Mr.
Bobbitt asked Ms. Cooper to contact Mr. Malone, and the three
spoke later that day.

     7. On or about June 13, 2002, Ms. Cooper met with Mr.
Bobbitt and Mr. Malone in Clinton, Miss. to discuss her
investigation. It was agreed that the transfers required further
discussion with Mr. Sullivan and Mr. Myers.

     8. On or about June 17, 2002, Ms. Cooper and Mr. Smith
interviewed Mr. Myers in Clinton, Miss. Ms. Cooper briefed Mr.
Malone and then they jointly called Mr. Bobbitt. The three
agreed that Mr. Malone should interview Mr. Sullivan and Mr.
Myers as soon as possible.

     9. On or about June 18, 2002, Mr. Malone interviewed Mr.
Myers in Clinton, Miss. regarding the transfers and then briefed
Mr. Bobbitt. Thereafter, it was agreed that Mr. Malone, Ms.
Cooper, Mr. Bobbitt, and Mr. Smith would travel to Washington,
D.C. and that Mr. Malone would interview Mr. Sullivan there.

     10. On or about June 19, 2002, Mr. Bobbitt contacted Judith
Areen, another member of the Audit Committee, and briefed her on
the situation. Mr. Bobbitt and Ms. Areen contacted outside
counsel for the Audit Committee, Simpson Thacher & Bartlett, to
inform them that KPMG was looking into accounting issues for the
period commencing during 2001 and the first quarter of 2002 and
to seek legal advice.

     11. On or about June 19, 2002, Mr. Malone interviewed Mr.
Sullivan in Washington, D.C. regarding the transfers and then
briefed Mr. Bobbitt.

                 The Audit Committee's Review

     12. On or about June 20, 2002, Mr. Bobbitt met with Mr.
Sullivan and advised him that the Audit Committee was reviewing
the propriety of transferring line costs to capital accounts.

     13. On June 20, 2002, Ms. Areen and Mr. Bobbitt consulted
with Simpson Thacher & Bartlett. It was agreed that Mr. Bobbitt
would schedule an Audit Committee meeting in Washington, D.C.
that afternoon.

     14. On June 20, 2002, Mr. Bobbitt also notified John W.
Sidgmore, Chief Executive Officer of the Company, of the Audit
Committee's review. Mr. Bobbitt asked that Mr. Sidgmore brief
Michael H. Salsbury, General Counsel of the Company, on the
situation and that both of them attend the Audit Committee's
meeting later that day. Upon learning of the situation, Mr.
Salsbury caused a notice to be sent to Mr. Sullivan and persons
who reported to him, including Mr. Myers, to preserve all
documents and records relating to the capitalization of line
costs by the Company.

     15. The June 20 Audit Committee meeting was attended by Mr.
Bobbitt, Ms. Areen, and Francesco Galesi, members of the
Committee, by Mr. Sullivan and Mr. Myers, by Ms. Cooper and Mr.
Smith, by Mr. Malone and Stanley Kroll of KPMG, by Mr. Sidgmore,
Mr. Salsbury, and Ronald R. Beaumont, Chief Operating Officer of
the Company, and by attorneys from Simpson Thacher & Bartlett.
Mr. Malone described the circumstances underlying the transfer
of line costs to the Company's capital accounts at the end of
each of the second, third, and fourth quarters of 2001 and the
first quarter of 2002. Mr. Malone stated that the transfers, in
his view, did not comply with generally accepted accounting
principles (GAAP), and, in particular, Mr. Malone noted the
absence of documentation supporting the transfers. Mr. Sullivan
presented his reasoning regarding the appropriateness of the
transfers in light of economic conditions in 2001 and early
2002. Mr. Sullivan stated that there may have been a transfer of
line costs to capital accounts in the first quarter of 2001 as
well. He requested additional time to support and document the
transfers. Mr. Sullivan also indicated that in light of the
decline in the Company's revenues in the first quarter of 2002,
he believed the transfers no longer could be supported and had
planned an appropriate writedown of the Company's capital
accounts in the second quarter of 2002. Mr. Malone disagreed
that such a writedown could be taken in the second quarter of
2002. Later in the meeting, Mr. Malone indicated that KPMG had
not reached a final conclusion as to restatement. It was agreed
that the Audit Committee would reconvene at 5 p.m. on June 24,
2002, to make a final determination on these issues.

     16. On the afternoon of June 21, 2002, Mr. Sidgmore met
with the Board of WorldCom, attorneys from Simpson Thacher &
Bartlett and from Weil, Gotshal & Manges LLP (additional outside
counsel for the Company) to brief them on the issues being
reviewed by the Audit Committee. Mr. Salsbury advised that if it
were concluded that the transfers were inappropriate and that as
a result the Company's financial statements for 2001 and the
first quarter of 2002 would have to be restated, a full
investigation of the facts and circumstances underlying the
transfers would have to be conducted. To ensure completeness and
accuracy, a committee of the Board rather than the Company's
management would need to arrange and direct an independent
investigation.

     17. On or about June 21, 2002, Mr. Bobbitt contacted Steve
Rodgers of Andersen, and on or about June 22, 2002, Mr. Bobbitt
contacted Mark Schoppet, a former Andersen partner who had been
the audit engagement partner in connection with Andersen's audit
of the Company's financial statements for 2000 and prior years,
and briefed them on the situation. Ken Avery, another former
Andersen partner who had been involved in audits of the
Company's financial statements, also was contacted.

     18. During June 21-24, 2002, Mr. Sullivan prepared a short
memorandum outlining his position on the transfers. On or about
June 24, 2002, Mr. Sullivan met with Mr. Schoppet and Mr. Avery
to discuss why he believed the transfers had been appropriate
and why a writedown should be permitted in the second quarter of
2002, rather than a restatement. Mr. Malone also attended this
meeting.

     19. On June 24, 2002, the Audit Committee conducted an
expanded Audit Committee meeting with senior management and a
number of additional directors, attorneys from Simpson Thacher &
Bartlett, attorneys from Weil, Gotshal & Manges LLP, and
representatives from KPMG. Mr. Rodgers and Richard Howell
attended the meeting by telephone on behalf of Andersen.
Andersen informed the Company that in light of the transfers of
line costs during 2001 and the first quarter of 2002, Andersen's
opinion regarding the Company's 2001 financial statements no
longer could be relied upon. They stated that Andersen had not
known of the transfers, but declined to respond to questions
regarding how Andersen's audit activities could have failed to
discover the transfers. While noting that KPMG had neither
audited nor formally reviewed any of the financial statements in
question, Mr. Malone and Teresa Iannaconi of KPMG observed that
they agreed with Andersen's conclusion that the transfers in
question could not be supported by GAAP. In light of the
positions of Andersen and KPMG, the Committee concluded that
they should report to the Board that a restatement of the
Company's financial statements for 2001 and first quarter 2002
would be necessary. The amounts of the transfers by quarter were
$771 million in the first quarter of 2001, $610 million in the
second quarter of 2001, $743 million in the third quarter of
2001, $931 million in the fourth quarter of 2001, and $797
million in the first quarter of 2002. A full Board meeting was
scheduled for the morning of June 25, 2002. Mr. Sullivan and Mr.
Myers were advised that if they did not resign from their
positions with the Company before the Board meeting, they would
be terminated.

     20. Later on June 24, 2002, the Audit Committee met with
William McLucas of Wilmer, Cutler & Pickering and retained him
to investigate the facts and circumstances leading up to the
Company's misstatement of its financial results in 2001 and in
the first quarter of 2002 in the amount and manner subsequently
announced by the Company in the Release. The investigation is
underway and is expected to continue for approximately eight to
twelve weeks.

                The Company's Recent Actions

     21. At the Board's June 25, 2002 meeting, following a
report by the Audit Committee, the Board determined to (i)
restate the Company's financial statements for 2001 and first
quarter 2002 and request KPMG to undertake a full audit of the
Company's 2001 financial statements, (ii) inform the SEC of the
Board's decision and the events leading up to it, (iii)
terminate Mr. Sullivan without severance, (iv) accept the
resignation of Mr. Myers without severance, and (v) after
meeting with the SEC, publicly announce the Board's actions.

     22. After the Board meeting, the Company requested a
meeting with the staff of the SEC as promptly as possible. The
meeting occurred at 3:30 p.m. on June 25, 2002. During the
meeting, the SEC staff was given an overview of the information
set forth in this Statement, to the extent it was then known by
the Company.

     23. As promptly as practicable after meeting with SEC
staff, the Company issued the Release.

     24. The Audit Committee is reviewing the Company's
financial records for 2001, 2000, and 1999 and has requested
KPMG's assistance in this review. In particular, questions have
been raised regarding certain material reversals of reserve
accounts during 2000 and 1999. No conclusion has been reached
regarding these entries. If, after review, the Company believes
additional actions are required, it will make an announcement
promptly.

                            Affirmed as accurate:

                            WorldCom, Inc.
   
                            /s/ Michael H. Salsbury        
  
                            By: Michael H. Salsbury
                                General Counsel

     Date: June 30, 2002


WORLDCOM: Bank Lenders Formally Declare Events of Default
---------------------------------------------------------
WorldCom, Inc. (Nasdaq: WCOME, MCITE) disclosed yesterday, as
expected, that it received a notice of termination of its $1.5
billion accounts receivable securitization program.  The company
now cannot sell any new accounts receivable into the program,
and collections on accounts receivable in the program will be
used to pay down the approximately $1.2 billion outstanding
under the program.  The company believes that the receivables in
the program are sufficient to repay the amounts outstanding.

Also, as expected, WorldCom's lenders under its $2.65 billion
and $1.6 billion senior unsecured credit facilities have
notified the company that events of default had occurred and
that they have reserved their rights and remedies under the
facilities.  These events permit lenders holding 51 percent of
the loans under the $2.65 billion facility to vote to accelerate
the date for repayment of the loans, which would then become
immediately due and payable if the lenders chose to do so.

"These notifications were anticipated," said Sidgmore.  "We are
engaged in discussions with lenders regarding replacement
facilities and remain optimistic that our good working
relationships will ultimately reach a positive resolution."


WORLDCOM: Fails to Comply with Continued Nasdaq Listing Criteria
----------------------------------------------------------------
WorldCom, Inc. (Nasdaq: WCOME, MCITE) received notice from
Nasdaq stating that the company has failed to comply with
certain filing and fee requirements for continued listing set
forth in Marketplace Rules 4310(C)(13) and 4310(C)(14) and that
its securities are, therefore, subject to delisting from The
Nasdaq National Market.  The notice said that the company's
securities will be delisted at the opening of business on
July 5, 2002 but that the delisting will be stayed if the
company requests a hearing, in accordance with Nasdaq rules.


XO COMMS: Will Continue Using Existing Cash Management System
-------------------------------------------------------------
Wayne M. Rehberger, XO's Chief Financial Officer & Senior Vice
President, tells Judge Gonzalez that XO Communications, Inc.,
uses a comprehensive cash management system to consolidate funds
and disburse them as and when necessary.  At the First Day
Hearing, Mr. Rehberger stepped the Court through the structure
of the Company's Cash Management System:

                          Incoming Cash

The operations of the non-debtor Operating Subsidiaries generate
cash from two principal sources:

(a) remittances from end-user customers for bills invoiced by
    the Company; and

(b) receipts from non-end-user customers (such as other
    carriers) in connection with charges for services provided
    by the Company.

Customer payments generally are in the form of checks,
automatically deposited the same day into one of various
Depository Accounts.  The Company also receives certain customer
payments via credit cards and electronic funds transfer (either
via federal wire or National Automated Clearing House
Association (ACH)), which are automatically deposited into one
of the Depository Accounts.

Previously, the Company also received funds from advances under
XO's prepetition Senior Credit Facility.  However, since July
27, 2001, XO has fully drawn on the Senior Credit Facility.

                       Cash Concentration

Each day, funds from five Bank of America Depository Accounts
are swept into the main Concentration Account.  The funds in a
Bank One Depository Account automatically are transferred via
standing wire instructions by the Company to the Concentration
Account four times per month leaving only a de minimis balance
of approximately $10,000 to cover customers' checks that are
returned for insufficient funds.  Another Depository Account, at
PNC Bank, has standing instructions to wire transfer amounts in
excess of $50,000 to the Concentration Account the next business
morning. Any non-customer miscellaneous funds received by the
Company generally are deposited directly into the Concentration
Account.

Funds in the Concentration Account are used to fund the
Company's Disbursement Accounts and Operating Accounts.  These
five accounts are at Bank of America.

                        Outgoing Cash

On a daily basis, the Company's cash needs are determined and
sufficient funds are transferred manually from the Concentration
Account to the appropriate Disbursement Accounts or Operating
Account.  The Company maintains an intercompany accounting
system to record payments received or paid by one entity on
behalf of another entity.

XO Management owns the Concentration Account and is the non-
debtor Operating Subsidiary that funds and issues most of the
checks for payment to third parties on behalf of the Company.  
The Debtor holds no funds in its own name.  The Company's cash
management practice is for an affiliate to pay obligations on
behalf of the Debtor, or to fund the Debtor on an "as needed"
basis, and record such transaction on their intercompany
accounting system. Similarly, to the extent funds are received
by an affiliate on behalf of the Debtor, such transaction is
recorded on their intercompany accounting system.

In the Company's cash management system, the only account of the
Debtor is Operating Account #9030 (the Parent Account). This
account is used to facilitate electronic payments on behalf of
the Debtor in connection with their prepetition Senior Credit
Facility, other secured debt obligations and certain trade
creditors. The Senior Credit Facility is secured by
substantially all of the assets of XO's subsidiaries that are
guarantors under such facility, up to a maximum of $125 million.
XO also maintains two other accounts: (a) a money market mutual
fund (holding approximately $13 million), which is collateral
for XO's outstanding letters of credit issued by Bank of
America; and (b) a $600,000 certificate of deposit, which is
collateral for XO's outstanding letter of credit issued by
National City Bank in Michigan.

Thus, XO sought and obtained permission to continue using its
pre-petition cash management system.  To the extent XO
Management, or another Operating Subsidiary makes a payment on
the Debtor's behalf with respect to a prepetition claim, that
Operating Subsidiary will hold a prepetition intercompany claim
against the Debtor.  To the extent an Operating Subsidiary makes
a payment on the Debtor's behalf with respect to a postpetition
obligation, the Operating Subsidiary will be afforded an
administrative claim against the Debtor.

         Waiver of Investment and Deposit Requirements

Section 345(a) of the Bankruptcy Code authorizes a debtor to
make deposits or investments that will "yield the maximum
reasonable net return on such money, taking into account the
safety of such deposit or investment." For deposits and
investments not "insured or guaranteed by the United States or
by a department, agency or instrumentality of the United States
or backed by the full faith and credit of the United States,"
section 345(b) requires that the entity with which such money is
deposited or invested post a bond "in favor of the United
States" that is "secured by the undertaking of a corporate
surety approved by the United States trustee for the district in
which the case is pending."

The Debtor believes that its three accounts substantially
conform with approved practices as outlined by section 345 of
the Bankruptcy Code. Mr. Rehberger, the Debtor's Chief Financial
Officer, notes that the $600,000 certificate of deposit
maintained by National City Bank in Michigan arguably may not
conform to the strict requirements of section 345. Although
these funds are technically property of XO's estate, Mr.
Rehberger says, the certificate of deposit is actually
controlled by National City Bank as collateral for outstanding
letters of credit. Mr. Rehberger tells Judge Gonzalez that,
during the next 60 days, the Debtor will work with National City  
Bank to move the funds to an account conforming to section 345
and will report back to Court and the U.S. Trustee. (XO
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ZAMBA SOLUTIONS: Commences Trading on OTCBB Effective July 1
------------------------------------------------------------
ZAMBA Solutions (Nasdaq:ZMBA), a customer relationship
management consulting and systems integration company for Global
2000 organizations, elected not to pursue its right to appeal
the decision by Nasdaq to delist the Company's securities from
the Nasdaq National Market. The company's shares were then
delisted from the Nasdaq market at the close of business on June
28, 2002. Effective July 1, 2002, ZAMBA Solutions common stock
will be quoted and traded on the Over The Counter Bulletin Board
-- http://www.otcbb.com-- under the symbol "ZMBA."  

"Right now, we believe it is most important for ZAMBA to focus
on strengthening our core business using the new blended shore
model, with a long-term goal of re-gaining our Nasdaq listing,"
said Michael Carrel, executive vice president and chief
financial officer of ZAMBA Solutions.

The OTC Bulletin Board(R) (OTCBB) is a regulated quotation
service that displays real-time quotes, last-sale prices, and
volume information in over-the-counter (OTC) equity securities.

ZAMBA Solutions is a CRM consulting and systems integration
company for Global 2000 organizations. Having served over 300
clients, ZAMBA is focused exclusively on customer-centric
services that help clients profitably acquire, retain and grow
customers by leveraging best practices and best-in-class
technology to enable insightful, consistent interactions across
all customer touchpoints. Based on the Company's expertise and
experience, ZAMBA has created an end-to-end CRM Blueprint - a
framework of interdependent processes and technologies that
addresses each aspect of CRM, including strategy, analytics and
marketing, contact center, content and commerce, field sales,
field service and enterprise integration. ZAMBA's clients have
included ADC, Aether Systems, Best Buy, Canon ITS, GE Medical
Systems, Enbridge Services, Hertz, General Mills, Microsoft
Great Plains, Northrup Grumman, Symbol Technologies, Towers
Perrin and Volkswagen of America. The company has offices in
Denver, Minneapolis, San Jose and Toronto. For more information,
contact ZAMBA at http://www.ZAMBAsolutions.comor (800) 677-
9783.

                          *********

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
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                     *** End of Transmission ***