TCR_Public/020709.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 9, 2002, Vol. 6, No. 134

                          Headlines

5B TECHNOLOGIES: Will File Chapter 7 Liquidation This Week
360NETWORKS: Gets Okay to Set-Up and Fund Replacement Accounts
AAMES FIN'L: Extends Exch. Offer for 5.5% Debentures to July 19
ACME METALS: Files Plan and Disclosure Statement in Delaware
ACORN PRODUCTS: Completes Financial Restructuring Transaction

ADELPHIA COMM: Honoring Certain Prepetition Employee Obligations
AIMGLOBAL TECHNOLOGIES: Violates Covenants Under Credit Pact
AIR CANADA: Revenue Passenger Miles Up By 1.7% in June 2002
AIR CANADA: Adopts Capacity Purchase Model Under New Jazz Pact
AQUILA INC: Completes $780MM Concurrent Equity & Debt Offerings

AQUILA INC: Quanta's Reduced EPS May Hurt Full-Year 2002 Results
BOOTS & COOTS: Larry H. Ramming Resigns as Chairman and CEO
BOUNDLESS CORP: Gets Extension to Meet AMEX Listing Standards
BOUNDLESS: Secures New Working Capital Revolver from CIT Entity
BURNHAM PACIFIC: Doubled Play Discloses 6.39% Equity Stake

CALPINE CORP: WPSC Agrees to Purchase De Pere Energy Center
CASELLA WASTE: Outstanding Debt Level Tops $288MM at April 30
CASTLE DENTAL: Reaches Agreement on $70 Mill. Debt Restructuring
CHART INDUSTRIES: Consolidates Senior Management Positions
CLAXSON INTERACTIVE: Commences Exch. Offer for Unit's 11% Notes

COVANTA ENERGY: Wins Nod to Execute CPPI Restructuring Documents
DLJ MORTGAGE: S&P Cuts Classes B-4 & B-5 Certs. to Junk Level
DOR BIOPHARMA: Restructures 2 Joint Ventures with Elan Entities
DALEEN TECHNOLOGIES: Completes Sale of PartnerCommunity Unit
ENGAGE INC: Fails to Comply with Nasdaq Listing Requirements

ENRON CORP: Wants to Expand LeBoeuf Lamb's Engagement Scope
ENRON: MCI Worldcom Wants to Collect $3MM Admin. Expense Claim
FLAG TELECOM: Creditors' Committee Signs-Up Akin Gump as Counsel
GENSCI REGENERATION: Cease Trading Order Expires as of July 5
GLOBAL CROSSING: Court Okays Coudert Brothers as Special Counsel

GUILFORD MILLS: Hires Rothschild to Render Restructuring Advice
HOMELAND HOLDING: Will Sell All Assets to HAC Under Reorg. Plan
ICG COMM: Seeks Extension of Solicitation Period Until Sept. 2
IT GROUP: Committee Bags Okay to Hire R.J. Pompe as Consultant
IMMUNE RESPONSE: Restructures Contracts with Trinity Medical

INDEPENDENT BANK: Fitch Assigns B Short-Term Rating
INNOVATIVE CLINICAL: Will Make Late Form 10-K Filing with SEC
INTEGRATED HEALTH: Court Okays Integra to Appraise Properties
KAISER ALUMINUM: Sets-Up Uniform Protocol to Settle Small Claims
KMART CORP: Seeking Bank One's Appointment as Indenture Trustee

LTV CORP: Has Until August 31, 2002 to Respond to Trade Claims
MARTIN INDUSTRIES: Lender Waives Loan Covenant Noncompliance
MED-EMERG INT'L: Completes Financing to Pare-Down Debt by C$365K
MERISTAR HOTELS: Sets Special Shareholders' Meeting for July 30
METALS USA: Court Approves AIG Insurance Agreements Assumption

MICROFORUM: Files Damage Recovery Statement Against Ex-Client
MICROFORUM: May 2002 Working Capital Narrows Down to $1.9 Mill.
MPOWER HOLDING: Gets Nod to Retain Arthur Andersen as Auditors
NII HOLDINGS: U.S. Trustee Names Unsecured Creditors' Committee
NEON COMMS: Wants to Maintain Existing Cash Management System

NEOTHEREPEUTICS: Retains A Fin'l Advisor to Review Alternatives
ORBITAL IMAGING: Committee Seeks Approval to Hire Houlihan Lokey
OWENS CORNING: Court Approves Third Party Tolling Agreement
PAC-WEST TELECOMM: Engages KPMG to Replace Andersen as Auditors
PACIFICARE HEALTH: Will Host Q2 2002 Conference Call on August 1

PEGASUS COMMS: Wins Board Approval to Buy-Back $10 Mill. Shares
POLAROID CORP: Committee Has Until July 14 To Challenge Liens
PROLOGIC MANAGEMENT: Auditors Express Going Concern Doubt
PROVELL INC: Gets Nod to Retain Faegre & Benson as ERISA Counsel
SEXTANT ENTERTAINMENT: Files for CCAA Protection in Canada

SOLUTIA INC: Fitch Junks Senior Unsecured Debt Rating
SUMMIT MANUFACTURING: Files for Chapter 11 Reorganization in PA
SWAN TRANSPORTATION: Kinsella Comms. Appointed as Noticing Agent
TELEPANEL SYSTEMS: Posts Improved Results for First Quarter
TELESPECTRUM WORLDWIDE: Fails to Beat Form 11-K Filing Deadline

TERAFORCE TECHNOLOGY: Extends Credit Facilities to July 31, 2002
TESORO PETROLEUM: Receives Offers to Acquire Certain Assets
USG CORP: Asks Court to Name Trafelet as Future Claimants' Rep.
VISKASE COMPANIES: GECC Agrees to Forbear Until Nov. 30, 2002
VIZACOM INC: JPMorgan Extends $1.1MM Bank Facility to Sept. 2003

WARNACO GROUP: Wants to Extend Plan Filing Exclusivity to Aug 30
WEBB INTERACTIVE: Nasdaq Panel Denies Appeal of Delisting Action
XO COMMS: Seeks Approval of Proposed Uniform Voting Procedures

                          *********

5B TECHNOLOGIES: Will File Chapter 7 Liquidation This Week
----------------------------------------------------------
Dow Jones reported that 5B Technologies Corp. furloughed all of
its employees last Friday, July 5, and instructed them not to
return to work, according to a Form 8-K filed on Wednesday with
the Securities and Exchange Commission.  The company said it
intends file for chapter 7 bankruptcy protection "early [this]
week."

5B Technologies said its lender, Connecticut Bank of Commerce,
stopped funding the company after being closed by government
banking authorities, reported the newswire.  CTCB closed on
Thursday, July 4, after the state banking authority determined
it would be unsafe and unsound for the bank to remain open due
to mounting losses. (ABI World, July 5, 2002)


360NETWORKS: Gets Okay to Set-Up and Fund Replacement Accounts
--------------------------------------------------------------
Judge Gropper rules that 360networks inc., and its debtor-
affiliates are authorized to establish and fund the Replacement
Accounts as:

Location                      Lienor                      Amount
--------                      ------                      ------
D&H Corporation             Rohn, Inc.                  $327,090
railroad right of way
Glenmore Ave.
Saratoga Springs,
New York

66 Pratt St                 Rohn, Inc.                   $88,159
Rouses Point,
New York

1 NY State Route 22         Rohn, Inc.                  $113,831
Essex, New York

1 Riverside Dr.             Rohn, Inc.                  $168,999
Whitehall, New York

350 Main Street             Ferguson Electric            $32,760
Buffalo, New York           Construction Co., Inc.

737 Locust Avenue           PSA Advanced                 $27,312
East St. Louis, Illinois    Technology Group

737 Locust Avenue           J.F. Electric, Inc.         $169,276
East St. Louis, Illinois

1045 South St.              Rohn, Inc.                   $48,008
Wesson, Mississippi

143 A Redmond Rd            Rohn, Inc.                   $48,008
Osyka, Mississippi

1007 Northwest Progress     Rohn, Inc.                  $425,434
Parkway Jackson,
Mississippi

30370 County Rd             Rohn, Inc.                   $48,544
#512 Greenwood
Sidon, Mississippi

17 True Vine Church Rd      Rohn, Inc.                   $48,544
Brazil, Mississippi

255 N HWY 3                 Rohn, Inc.                   $48,585
Savage, Mississippi

11350 State Route 4         Brookstone Telecom           $32,665
Marissa, Illinois

11360 Highway 211           Brookstone Telecom, Inc.     $11,459
Newbern, Tennessee

256 Bucris Road             Brookstone Telecom           $25,110
Murphysboro, Illinois

313 Sandusky Rd.            Brookstone Telecom, Inc.     $40,066
Pulaski, Illinois

205 ST RT 1728              Brookstone Telecom, Inc.     $26,631
Clinton, Kentucky

205 ST RT 1728              Rohn, Inc.                   $48,326
Clinton, Kentucky

3291 Lovelace Crossing      Rohn, Inc.                   $46,983
Henning, Tennessee

256 Bucris Road             Rohn, Inc.                   $45,619
Murphysboro, Illinois

3291 Lovelace Crossing      Brookstone Telecom, Inc.      $8,235
Henning, Tennessee

11360 Highway 211           Rohn, Inc.                   $49,100
Newbern, Tennessee

313 Sandusky Rd.            Rohn, Inc.                   $47,405
Pulaski, Illinois

11350 State Route 4         Rohn, Inc.                   $66,146
Marissa, Illinois

650 Poydras                 K. B . Kaufman & Co.        $157,224
New Orleans,
Los Angeles

7340 County Rd 87           Consolidated Networks       $425,000
Alexandria, Minnesota       Corporation

1121 State HWY 55 NW        Consolidated Networks       $425,000
Buffalo, Minnesota          Corporation

23450 260th St              Consolidated Networks       $425,000
Detroit Lakes, Minnesota    Corporation

SE Corner of 59 and CR 10   Consolidated Networks       $425,000
Lake Bronson, Minnesota     Corporation

46650 290th St              Consolidated Networks       $425,000
Ottertail, Minnesota        Corporation

18021 County Rd 130         Consolidated Networks       $425,000
Paynesville, Minnesota      Corporation

Rural Route 1 & HWY 59,     Consolidated Networks       $425,000
NW Corner                   Corporation
Winger, Minnesota

Rural Route 2 & CR 65,      Consolidated Networks       $425,000
NW Corner Thief             Corporation
River Falls, Minnesota

23450 260th St              Kontek Telecommunication      $2,206
Detroit Lakes,              Shelter
Minnesota

23450 260th St              Northern Line Layers, Inc.   $39,420
Detroit Lakes,
Minnesota

7340 County Rd 87           Northern Line Layers, Inc.   $72,529
Alexandria, Minnesota

7340 County Rd 87           Rohn, Inc.                  $477,993
Alexandria, Minnesota

SE Corner of 59 & CR 10     Kontek Telecommunication     $29,706
Lake Bronson, Minnesota     Shelter

SE Corner of 59 & CR 10     Northern Line Layers, Inc.  $309,320
Lake Bronson, Minnesota

46650 290th St              Kontek Telecommunication      $9,021
Ottertail, Minnesota        Shelter

46650 290th St              Northern Line Layers, Inc.   $31,805
Ottertail, Minnesota

18021 County Rd 130         Kontek Telecommunication     $11,798
Paynesville, Minnesota      Shelter

Rural Route 2 & CR 65,      Rohn, Inc.                  $117,171
NW Corner Thief
River Falls, Minnesota

Rural Route 2 & CR 65,      Northern Line Layers, Inc.   $72,195
NW Corner Thief
River Falls, Minnesota

Rural Route 1 & HWY 59,     Kontek Telecommunication      $2,206
NW Corner                   Shelter
Winger, Minnesota

Rural Route 1 & HWY 59,     Northern Line Layers, Inc.   $56,558
NW Corner
Winger, Minnesota

18021 County Rd 130         Northern Line Layers, Inc.   $63,924
Paynesville, Minnesota

1121 State HWY 55 NW        Kontek Telecommunication     $11,653
Buffalo, Minnesota          Shelter

1121 State HWY 55 NW        Northern Line Layers, Inc.   $43,467
Buffalo, Minnesota

The Court further rules that upon the establishment of the
Replacement Accounts by the Debtors, the Purported Liens will be
deemed released from the respective assets against which the
liens are asserted and the funds deposited in the Replacement
Accounts established in favor of each Lienor.

Within five business days after notification to each of the
Lienors of the establishment of the applicable Replacement
Accounts by the Debtors, each of them is directed to take all
action as may be necessary to effect or evidence the release of
the respective Purported Liens from the Assets.  Any costs
incurred by the Lienors to effect the release of the Purported
Liens will be deemed secured by the Replacement Accounts.

Furthermore, unless ordered by the Court or agreed to by the
applicable Lienor and the Debtors, funds in the respective
Replacement Accounts will not be paid to either party pending
agreement.  "Any interest earned on the Replacement Accounts
shall be considered part of the Replacement Accounts and remain
subject to the Purported Liens," Judge Gropper says. (360
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


AAMES FIN'L: Extends Exch. Offer for 5.5% Debentures to July 19
---------------------------------------------------------------
Aames Financial Corporation (OTCBB:AMSF) announced that the
expiration date of its offer to exchange its newly issued 4.0%
Convertible Subordinated Debentures due 2012 for any and all of
its outstanding 5.5% Convertible Subordinated Debentures due
2006 has been extended to 5:00 p.m., New York City time, on
Friday, July 19, 2002.

The Exchange Offer had been scheduled to expire Tuesday, July 2,
2002, at 5:00 p.m., New York City time. The Company reserves the
right to further extend the Exchange Offer or to terminate the
Exchange Offer, in its discretion, in accordance with the terms
of the Exchange Offer.

To date, the Company has received tenders of Existing Debentures
from holders of approximately $42.8 million principal amount, or
approximately 37.6%, of the outstanding Existing Debentures.

As previously announced, Wilmington Trust Company, as successor
indenture trustee with respect to the Company's 9.125% Senior
Notes due 2003, brought an action against the Company seeking to
prevent the Company from consummating the Exchange Offer. On
June 10, 2002, the Supreme Court of the State of New York heard
oral arguments relating to the Trustee's request for an order
preliminarily enjoining the Company from proceeding with the
Exchange Offer. On July 1, 2002, the court denied the Trustee's
request.

The Company is a consumer finance company primarily engaged in
the business of originating, selling and servicing home equity
mortgage loans. Its principal market is borrowers whose
financing needs are not being met by traditional mortgage
lenders for a variety of reasons, including the need for
specialized loan products or credit histories that may limit the
borrowers' access to credit. The residential mortgage loans that
the Company originates, which include fixed and adjustable rate
loans, are generally used by borrowers to consolidate
indebtedness or to finance other consumer needs and, to a lesser
extent, to purchase homes. The Company originates loans through
its retail and broker production channels. Its retail channel
produces loans through its traditional retail branch network and
through the Company's National Loan Centers, which produces
loans primarily through affiliations with sites on the Internet.
Its broker channel produces loans through its traditional
regional broker office networks, and by sourcing loans through
telemarketing and the Internet. At March 31, 2002, the Company
operated 100 retail branches, 5 regional wholesale loan offices
and 2 National Loan Centers throughout the United States.

As reported in Troubled Company Reporter's June 19, 2002
edition, Moody's Investors Service took several rating actions
on Aames Financial Corporation. The investors service lowered
the company's Senior Debt Rating to Caa3 from Caa2. It also
affirmed its Ca rating on Aames' Subordinated Debenture. Rating
outlook stays at negative.

It is Moody's belief that potential loss severity to senior
unsecured bondholders would increase after Aames started its
previously announced exchange offer of its outstanding 5.5%
convertible subordinated debentures due 2006.

The company's liquidity and financial flexibility remain
constrained. It appears that Aames may have difficulty obtaining
the necessary resources to pay for its approximately $150
million unsecured senior debt maturing on November 15, 2003. It
also has short-term warehouse facilities with financial
covenants maturing before October 2003 and which critically
needed to be renewed to maintain its limited financial
flexibility.


ACME METALS: Files Plan and Disclosure Statement in Delaware
------------------------------------------------------------
Acme Metals Incorporates and its debtor-affiliates filed their
Chapter 11 Plan of Reorganization and the accompanying
Disclosure Statement to the U.S. Bankruptcy Court for the
District of Delaware. For a full-text copy of the Plan and the
Disclosure Statement, go to:

   http://www.researcharchives.com/bin/download?id=020701204032

                            and

   http://www.researcharchives.com/bin/download?id=020701204213

The Plan contemplates the Debtors' emergence from chapter 11
with substantially less leverage through the conversion of
Allowed Other Unsecured Claims (comprising approximately $150
million of the Debtors' unsecured claims) to equity interests,
partial pay-out and conversion to a note payable of the Allowed
PBGC Termination Claims.

The proposed Plan provides for the recapitalization of New APC
though:

     i) the payment conversion of unsecured debt held by State
        Street and KeyCorp (if any) to equity,

    ii) the payment of a specified amount of Cash and
        distribution of the PBGC Note in satisfaction of the
        PBGC Termination Claims, and

   iii) the payment of a specified amount of Cash to the holders
        of General Unsecured Claims.

Pursuant to the Bankruptcy Code, Administrative Claims, BABC DIP
Facility Claims and Priority Tax Claims are not classified under
the Plan. Holders of such Allowed Claims will receive payment in
full in Cash

Acme Metals and its debtor-affiliates are engaged in the
business of steel manufacturing and fabricating. The Company
filed for chapter 11 bankruptcy protection on September 28,
1998. Brendan Linehan Shannon, Esq. and James L. Patton, Esq. at
Young, Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts. When the Debtors sought protection from
its creditors, it listed assets of $813 million and liabilities
of $541 million.


ACORN PRODUCTS: Completes Financial Restructuring Transaction
-------------------------------------------------------------
Acorn Products, Inc. (Nasdaq:ACRN) has completed a transaction
where entities representing a majority of the Company's
shareholders invested $18 million for the purpose of repaying
outstanding indebtedness.

Investment funds managed by TCW Special Credits and Oaktree
Capital Management, LLC, which together own approximately 71% of
the outstanding shares of the Company, will receive 36 million
newly-issued common shares, under certain conditions. As
previously described, this investment is part of a broader
transaction that will involve a 1 for 10 reverse stock split and
a rights offering to unaffiliated shareholders wherein such
holders will be entitled to purchase approximately $9 million of
newly-issued common shares of the Company on the same terms and
conditions as the Principal Holders. In conjunction with this
equity investment, the Company also executed a five-year $45
million credit facility, consisting of a $12.5 million term and
a $32.5 million revolving credit component.

The Company believes that the resulting capital structure from
the equity infusion and new credit facility will provide
sufficient resources for the Company to operate and continue the
pursuit of value enhancement and cost reductions during the five
year time horizon. The more conservative capital structure, with
debt ultimately being reduced almost 40%, will allow the Company
to pay less interest and utilize net operating loss
carryforwards to shield cash flow and further pay down debt.

The Company also announced today plans to relocate its sole
distribution facility from Columbus, Ohio into a newly built
customized facility in Louisville, Kentucky. The transition will
occur over the next several months, with Louisville becoming
fully operational in September. The Company expects to take
advantage of a more productive physical environment and lower
wages, as well as, incentives provided at a state and local
level.

A. Corydon Meyer, President and CEO of Acorn Products,
commented: "This recapitalization and new bank agreement is a
turning point for the Company. We feel that we have rewarded the
trust put in us by our customers, vendors and associates, and
now have the resources and capital platform to pursue
opportunities and operational projects that were unavailable to
us in the past three years.

"The moving of our Distribution Center to Kentucky is painful to
many associates in Columbus, but necessary to achieve the
increasing demands of our customers and enhance the
profitability of the Company."

Acorn Products, Inc., through its operating subsidiary
UnionTools, Inc., is a leading manufacturer and marketer of non-
powered lawn and garden tools in the United States. Acorn's
principal products include long handle tools (such as forks,
hoes, rakes and shovels), snow tools, posthole diggers,
wheelbarrows, striking tools, cutting tools and watering
products. Acorn sells its products under a variety of well-known
brand names, including Razor-Back(TM), Union(TM), Yard 'n
Garden(TM), Perfect Cut(TM) and, pursuant to a license
agreement, Scotts(TM). In addition, Acorn manufactures private
label products for a variety of retailers. Acorn's customers
include mass merchants, home centers, buying groups and farm and
industrial suppliers.


ADELPHIA COMM: Honoring Certain Prepetition Employee Obligations
----------------------------------------------------------------
Adelphia Communications, Inc. and its debtor-affiliates sought
and obtained authority to pay certain prepetition obligations
owing to their employees and the employees of certain third
parties whose payroll they administer, including, but not
limited to:

      * accrued prepetition wages,
      * salaries,
      * commissions and other compensation;
      * federal withholding taxes,
      * state and local income taxes,
      * unemployment taxes,
      * social security taxes,
      * Medicare taxes,
      * the employer portion of prepetition payroll taxes;
      * the continuation of all employee benefits;
      * reimbursement of business expenses incurred by employees
        in the ordinary course, such as travel, meals and
        lodging; and
      * other miscellaneous employee expenses and benefits.

"Payment of these obligations is critical to maintaining the
morale and stability of the Debtors' workforce," ACOM tells
Judge Gerber.

Myron Trepper, Esq., at Willkie Farr & Gallagher in New York,
relates that prior to the Petition Date, the ACOM Debtors paid
its employees' wages, salaries and other compensation and
benefits in the ordinary course of business.  As employee
obligations accrue on an ongoing basis, but are paid
periodically in arrears, the intervening chapter 11 filings
signify that there are accrued unpaid prepetition wages,
salaries, commissions, incentive compensation and/or other
compensation owed to ACOM's employees.

"It is axiomatic that continued loyalty of a debtor's employees
is a necessary component to any successful reorganization," Mr.
Trepper says.  "The filing of a chapter 11 petition is a
stressful and uncertain time for a debtor's employees, most of
whom are not schooled in the nuances of bankruptcy that certain
practitioners often take for granted.  Such stress and
uncertainty often dampens employee morale just at that critical
time when a debtor most needs its employees' loyalty.  Such low
morale may be compounded if certain employees perceive
themselves to have received less favorable treatment than
others.  Moreover, many employees would suffer severe adverse
personal economic consequences if they failed to receive full
compensation."

"Honoring the Prepetition Employee Obligations would minimize
the hardship employees otherwise would endure if payroll were
interrupted," Mr. Trepper Continues .  "Honoring such
obligations also would prevent the wholesale loss of employees
if they lose the reasonable expectation they will be compensated
for services rendered."

The Prepetition Employee Obligations that ACOM seeks to pay are
composed of:

A. Wages, Salaries, and Other Compensation:  The Debtors have
   approximately 15,445 employees, 15,355 of whom are employed
   full- time, 90 of whom are part-time employees or temporary
   employees.  The structure of the Debtors' workforce and
   payroll process is as follows:

   a. Senior Managers:  The Debtors' senior management is led by
      Erland Kailbourne, the Debtors' Chief Executive Officer;
      Christopher Dunstan, the Debtors' Chief Financial Officer;
      Steven Teuscher, the Debtors' Controller and Chief
      Accounting Officer; and Randall Fisher, the Debtors'
      Corporate Secretary and General Counsel who are paid
      $710,000, $395,000, $265,000, and $210,000 annually,
      respectively.  As of the Petition Date, the Debtors also
      employed approximately 49 senior managers, who are paid,
      on the average, approximately $127,630 annually.

   b. Salaried Employees:  As of the Petition Date, the Debtors
      employed approximately 3,400 "Salaried Employees" who
      accounted for approximately 22% of the Debtors' aggregate
      workforce.  The average annual salary of Salaried
      Employees is approximately $48,000.

   c. Non-Exempt/Hourly Employees:  As of the Petition Date, the
      Debtors employed approximately 12,044 "Hourly Employees"
      who accounted for approximately 78% of the Debtors'
      aggregate work force.  The average hourly rate paid to
      full-time Hourly Employees is approximately $13.77 per
      hour and the average annual salary of Hourly Employees is
      approximately $28,700 for full-time employees.  In the
      aggregate, Hourly Employees are paid, on average,
      approximately $1,330,000 for overtime per bi-weekly pay
      period.

   d. Commission and Result-Oriented Employees:  As of the
      Petition Date, approximately 5,900 employees have a
      variable component to their compensation in addition to a
      base hourly wage or salary.  The Debtors estimate that
      2,500 Commission Employees earn, in the aggregate, up to
      approximately $2,100,000 per month in respect of
      Commissions.  The Debtors estimate that Result-Oriented
      Employees earn, in the aggregate, up to approximately
      $700,000 per month in Compensation.

   e. Union Employees: As of the Petition Date, approximately
      900 of the Debtors' employees were affiliated with a
      union. Under applicable collective bargaining agreements,
      the Debtors are obligated to withhold certain
      contributions from the Union Employee's paychecks and
      remit such contributions to the applicable union.  On
      average, the Debtors withhold and remit approximately
      $22,016.94 per month in union contributions.

   f. Independent Contractors: As of the Petition Date, the
      Debtors employed approximately 3,549 independent
      contractors who perform technical work in the field.  The
      Debtors estimate that as of the Petition Date an aggregate
      of $2,539,115 was owed to Temporary Agencies in respect of
      prepetition services performed by the Independent
      Contractors.

   g. Adelphia Rewards: Prior to the Petition Date, the Debtors
      instituted a customer-sales and customer-retention plan
      for salespersons in approximately 298 offices and call
      centers. Approximately 3,400 employees participate in
      Adelphia Rewards.  Pursuant to Adelphia Rewards,
      participating employees receive, on average, approximately
      $170 per month per employee.

   h. Bonuses: In the ordinary course and prior to the Petition
      Date, the Debtors instituted various bonus and incentive
      programs for employees.  The Bonus Programs target subsets
      of employees to create appropriate incentives to stimulate
      job performance and the achievement of performance and
      sales goals.  The average monthly cost of the Bonus
      Programs is approximately $951,000 in the aggregate.

   i. Payment-Process:  Historically, the Debtors' employees
      have been paid currently every other Friday for the two
      week period ending on the Saturday after payments are
      issued. The Debtors' approximate gross bi-weekly payroll
      for all non-exempt, hourly employees aggregates
      approximately $13.2 million and for exempt, salaried
      employees aggregates $6.2 million.

B. Reimbursable Business Expenses:  Prior to the Petition Date,
   the Debtors reimbursed employees for certain business
   expenses, including travel and lodging, cell phone usage, and
   car and gas costs incurred in the scope of their employment.
   Each month, the Debtors reimburse their employees for
   approximately $484,921 in Reimbursable Expenses.

C. Employee Benefits:  In the ordinary course of their
   businesses, the Debtors have established various employee
   benefit plans and policies that provide employees with
   medical, dental, disability and life insurance, employee
   savings, vacation days, sick/personal days, holiday pay,
   employee discounts, and other similar benefits.  The employee
   benefits include:

   a. Employee Health Insurance Plans:  An important element of
      the Employee Benefits is the medical and prescription
      insurance, which the Debtors primarily provide through
      self-insured plans.  The Debtors pay approximately $1.16
      million each week in respect of such claims.  In addition,
      each month the Debtors pay administration fees of
      approximately $662,700,33 which includes, premiums for
      their "stop loss" policies.  The Debtors also provide
      employees with a self-insured prescription plan.
      Historically, the Debtors' pay an average of $1.1 million
      per month in respect of prescription plan claims.  Each of
      the Debtors' employees have the option to participate in
      an employee-funded dental plan.  The Debtors deduct
      between approximately $10.56 and $27.00 per pay period
      from each participating employee's wages.  In the
      aggregate, such deductions approximate $407,636 per month.
      Certain of the Debtors' employees have the option to
      participate in plans offered by one of several health
      maintenance organizations or "HMOs" in lieu of the
      Debtors' Self-Insured Health Plan. Individual employee
      contributions in respect of the HMO Plans range between
      $15.25 and $72.99 per pay period.  The Debtors contribute
      between approximately $137 and $328 per month towards each
      participating employee's HMO Plan premium, which
      aggregated equals approximately $354,000 per month.

   b. Employee Life Insurance/Accidental Death & Dismemberment/
      Short-Term and Long Term Disability/ Business Travel
      Accident Insurance:  The Debtors provide their full- time
      employees and eligible dependents with premium-based group
      term life, short-term disability and long-term disability
      and accidental death & dismemberment insurance.  In an
      average month, the Debtors pay approximately $536,303 on
      account of short-term and long-term disability premiums,
      $45,400 on account of both insurance premiums and $11,940
      on account of business travel accident insurance premiums.
      The Debtors pay an aggregate of approximately $592,643
      monthly for benefit payments for all of the above-
      referenced Life and Disability Insurance Premiums.

   c. Vacation, Personal Days and Holiday Time:  The Debtors
      utilize one vacation policy for all employees.  Under the
      policy, an employee earns a certain number of paid
      vacation days based upon the length of the employee's
      continuous service with the Debtors.  The total amount of
      compensation related to vacation days that have accrued
      but were unused as of the Petition Date is approximately
      $70.6 million. With respect to personal days, the Debtors
      have a policy whereby employees accrue one sick/personal
      day for every 52 working days.  The total number of
      personal day liabilities that have accrued but were unused
      as of the Petition Date is approximately $44.2 million or
      an average of approximately $2,800 per eligible employee.

   d. 401(k) Contributions:  The Debtors' employees may
      contribute between 2-25% of their earnings per year to the
      Debtors 401(k) Plan.  As a benefit to employees, the
      Debtors contribute matching funds to employee 401(k)
      accounts equal to 1.5% of each participating employee's
      monthly gross pay, up to a maximum of $750 annually.  The
      matching contributions aggregate approximately $417,000
      each month.

   e. Miscellaneous Benefits: In the ordinary course of their
      businesses, the Debtors have established various
      additional benefits for employees, including free or
      discounted cable service, discounted internet access,
      tuition reimbursement benefits, relocation costs,
      corporate cars and similar benefits. The substantial
      Miscellaneous Benefits are:

      1. Basic Cable/Internet Access Discount: As a component of
         each employee's compensation, the Debtors provide
         employees with free "basic" cable service and a $14-
         $29.95 per month discount on internet access.  Over
         12,000 of the Debtors' employees currently receive
         these benefits at an aggregate retail value of $622,000
         per month.

      2. Tuition Reimbursement and Scholarships: The Debtors
         reimburse regular full- time employees with at least
         one full year of service for tuition costs incurred in
         connection with a job-related degree, course or
         program. During the 2001 to 2002 academic year,
         approximately 200 employees received tuition
         reimbursement for an estimated aggregate cost to the
         Debtors of approximately $75,000.  When the Debtors
         acquired Century, the Debtors undertook a program
         whereby children of employees of Century could receive
         up to $1,000 of annual awards towards college tuition.
         Currently, there are six students who have been
         promised scholarships of $1,000 each.

      3. Company Cars:  Approximately 580 of the Debtors'
         employees are given access to a company car for
         personal use.  These employees include general
         managers, regional vice-presidents, supervisors and
         certain engineers whose responsibilities require them
         to travel great distances such that use of company
         vehicle is warranted.

      4. Relocation:  In certain limited circumstances, the
         Debtors either pay or reimburse employees for the costs
         associated with job-related relocations.  In the last
         three months, the Debtors have paid approximately
         $155,000 in relocation costs.  The Debtors estimate
         that, as of the Petition Date, unpaid relocation
         reimbursement obligations to employees aggregated
         approximately $165,000.

      5. Residential Real Property: The Debtors own
         approximately 50 homes in Coudersport, Pennsylvania
         that they rent to various current and, in limited
         circumstances, former employees.  Certain employees pay
         the Debtors below-market rent and as such may consider
         these residential arrangements part of their
         compensation.

D. Withholdings From Employee Paychecks:  The Debtors deduct
   various amounts from employees' paychecks under salary
   reduction agreements and/or other arrangements.  Prior to the
   Petition Date, unremitted Employee Deductions totaled
   approximately $7.1 million in connection with services
   rendered prepetition.

E. Workers' Compensation: The Debtors maintain workers'
   compensation policies and programs to provide coverage to
   their employees for injuries sustained during the policy
   year. As is true for all Workers' Compensation Programs,
   however, the insurer may be required to make payments to
   injured employees for months or years beyond the policy year.
   The Debtors are current on all payments relating to their
   workers' compensation coverage.

Absent prompt payment of amounts owed in connection with the
Prepetition Employee Obligations, Mr. Trepper fears that
employee morale and support would be impaired.  Further, as
employees rely on the timely receipt of their paychecks and/or
reimbursement for expenses, any delay in paying amounts owed in
respect of the Prepetition Employee Obligations could cause such
employees serious hardship.  Also, the Debtors' employees rely
on the continuation of Employee Benefits, such as Health
Benefits. Absent the continuation of such benefits, the Debtors'
employees would have to either incur significant expenses or go
without insurance coverage and healthcare for themselves and
their families.

Amounts withheld by the Debtors from employees' paychecks,
represent, in many cases, employee earnings specifically
designated by employees or, in the case of garnishments, by
judicial authorities, to be deducted from employee paychecks and
paid accordingly.  "The failure to make these payments would
result in hardship to certain employees," Mr. Trepper claims.
"Absent the relief requested herein, the Debtors anticipate that
they would receive numerous inquiries from garnishors and other
designated recipients regarding their failure to submit, among
other things, taxes, child support and alimony payments, which
are not the Debtors' property, that have been withheld from
employee paychecks.  Moreover, if the Debtors are unable to
remit certain of these amounts, the employees could face legal
action."

Mr. Trepper asserts that the Debtors' employees are an essential
component of a successful reorganization.  Any deterioration in
employee morale and welfare at this critical time undoubtedly
would have a devastating impact on the Debtors and their ability
to reorganize.  Accordingly, the relief sought is in the best
interests of the Debtors' estates and will enable the Debtors to
continue to operate their businesses with minimal disruption and
proceed with the important task of stabilizing their operations.
(Adelphia Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1),
says DebtTraders, are quoted at a price of 38.625. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


AIMGLOBAL TECHNOLOGIES: Violates Covenants Under Credit Pact
------------------------------------------------------------
AimGlobal Technologies Company Inc. (TSE/AMEX:AGT) announced an
update on the Company and the progress of its restructuring
program, launched in June 2001. The Company reported that much
had been accomplished towards the plan's objective of bringing
the Company to profitability while maintaining a focus on
meeting the needs and expectations of its customers.

The Company identified three primary components of its
restructuring plan: (1) refinancing of its bank debt from the
Canadian Imperial Bank of Commerce, (2) establishing a mechanism
to compromise certain creditor claims (primarily related to the
defaulted order of a former customer, Cell- Loc Corporation) and
(3) rationalizing company manufacturing operations, reducing
overhead and carrying out other cost reduction initiatives.

According to AimGlobal, it accomplished the first of these
elements when an Indianapolis, Indiana based merchant bank,
Valtec Capital Corporation, purchased CIBC's debt. In connection
with this transaction, Valtec secured the right to convert its
debt into controlling equity of the company, subject to
shareholder approval.  Mr. deJaray, Chairman of the Board,
stated, "Valtec has taken the time to gain an intimate
understanding of our business and the industry and the
opportunities the marketplace offers. We greatly appreciate
their commitment to supporting the efforts of management to
bring success to AimGlobal."

AimGlobal stated that its operational restructuring plan focuses
on reaching profitability by reducing costs, reducing inventory,
cutting overhead to lower the breakeven point, improving
capacity utilization and increasing efficiency. As part of this
program, the Company on May 24, 2002 completed the sale of its
west coast operating assets for approximately $1,750,000. This
transaction leaves the Company with North American manufacturing
operations in Kanata, Ontario, Brockville, Ontario and
Ogdensburg, New York. The Company also is in the process of
moving its corporate functions to its eastern facilities.

The Company was pleased to report that operating with a customer
and earnings focus, revenues for the fiscal year ended March 31,
2002 can be expected to reach the $122 Million mark, with
noticeably improved Contribution Margins of approximately 16%
from operations. Revenue declined by approximately 20% while
Contribution Margins improved by 26 points over the previous
year, a valued accomplishment in the face of corporate
difficulty, coupled with persistent marketplace and economic
decline.

AimGlobal also announced the following changes to its board of
directors.  Mr. Sam Fleiser, who until recently served as Chief
Restructuring Officer and interim President of the Company will
be joining the board.  Mr. Fleiser will be replacing Mr. Daniel
Klausner, who is unable to sit as a Director of the Company due
to conflicts with other business interests.  Mr. Mel Gould has
accepted an appointment as President of the Company and will
stand for election as a member of the board at the Company's
next General Meeting of Shareholders.  Mr. Gould has served
AimGlobal as Chief Operating Officer and has played a leading
role in efforts to streamline the business and cut costs.  Mr.
deJaray, stated, "Expanding the breadth of our board and
strengthening the professional guidance and governance of the
Company, particularly with additions such as Mr. Fleiser and Mr.
Gould, are part of next logical steps toward capturing our share
of a considerable potential that exists for AimGlobal in today's
growing market for electronic manufacturing services."

As part of its restructuring, the Company confirmed that its
focus on economic improvement incorporated concentrating its
production, administration and operations in New York, Ontario
and China. The future success of the Company is entirely
dependant upon profitability and its ability to provide high
quality and cost effective electronic products to its customers
through a perfected business model - maximized strategically,
more for efficiency and effectiveness, and globally from the
United States, Canada and overseas. The Company advised that
Management, specialized manufacturing teams and specialists are
completing a total consolidation and reorganization of the
business, its production processes and excess capacity (once
slated for growth) is being divested. The Company added that in
accordance with its strategy and reorganization plans and a
pressing necessity to access capital and promptly divest non-
core assets that the sale of its west coast operations was
completed with the benefit of involvement by the Chairman
excising control, as guarantor/lender to the purchaser where,
given their financial performance the guarantor may be required
to acquire a beneficial interest in the shares of the purchaser,
and as such constitutes a related party transaction. The
transaction is exempt from minority approval and formal
valuation requirements since the fair market value constituted
less than 25% of the market capitalization of the Company.
Independently, the Board reviewed and, in reliance upon a
professional independent evaluation, approved the transaction.
Demand pressure from CIBC and corresponding financial distress
precluded the requisite 21 day advance disclosure of the
completion of the sale.

Additionally, as a matter of record, AimGlobal confirmed that
Mr. deJaray currently now has control over 2,515,600 shares, or
16.5% of the Company and that in additional support of Valtec,
Mr. deJaray has provided voting control under an agreement with
Valtec, and an escrow agreement for 1,046,000 shares of the
Company. The Company confirmed this represents a change and
reduction in Mr. deJaray's controlling share position from that
which was formerly disclosed. Valtec will become the controlling
shareholder upon its conversion.

Finally, the Company issued a Management Discussion and Analysis
for the first Quarter ending June 30, 2001. The Company advised
that in June 2001, new requirements were adopted for quarterly
MD&A's. The Company had announced quarterly results just as the
new requirement took effect and did not include an MD&A. The
Company, in keeping with the requirement, and as a matter of
'housekeeping' is pleased to provide the MD&A for the First
Quarter, ending June 30, 2001 as follows.

              Management's Discussion and Analysis
       (of financial condition and results of operations)

The following discussion and analysis provides a review of the
operating results, financial position and liquidity, risk and
industry trends affecting the financial results of AimGlobal
Technologies Company Inc. for the period ended June 30, 2001.
This commentary should be read in conjunction with the
consolidated financial statements for the year ended March 31,
2001 and their accompanying notes.

The Company prepares its consolidated financial statements in
accordance with accounting principles that are generally
accepted in Canada.

                     Results of Operations

The Company's revenue and margins can vary from period to period
as a result of the level of business volume, seasonality of
demand, component supply availability, and the affects of the
mix and volume of turnkey versus other sales and the mix of
business between full systems assembly and printed circuit
assemblies also affect revenue and margins levels.

AIM's contracts with key customers generally provide a framework
for the Company's overall relationship with the customer. Actual
production volumes are based on purchase orders for delivery of
products. The Company's annual and quarterly operating results
are primarily affected by the level and timing of customer
orders, fluctuations in material costs and relative mix of value
added products and services. The level and timing of the
customer's orders will vary due to their efforts in balancing
inventory and changes in demand for its products.

The Company reported an operating loss of $3.5 million for the
first quarter ended June 30, 2001 and a net loss of $6.9
million. Included in the net loss is a structuring charge of
$2.6 million comprising of employee severance, and provisions
for closure of leased facilities.

                          Sales

Sales for the quarter ended June 30, 2001 were $32.5 million
compared to $36.6 million for the same period ended June 30,
2000. The decrease is a result of an overall slowdown in the
North American economy and electronics- manufacturing sector and
the cancellation of customer orders.

                      Gross Profit

In the quarter ended June 30, 2001, gross profits decreased to
$0.5 million or 1.4% from $4.5 million or 12.2% for the same
period ended June 30, 2000. The decrease is a result of lower
sales and higher operating costs in the period.

For the foreseeable future, gross margin is expected to depend
primarily on product mix, production efficiencies, and
utilization of manufacturing capacity, and pricing with the
electronics industry. Changes in product mix and price erosion
with the electronics industry could adversely effect the
Company's gross margin. Also, the availability of raw materials,
which are subject to lead time, could possibly limit the
Company's revenue growth and gross margins.

          Selling, General and Administration Expenses

Selling, general and administration costs were $3.9 million in
the quarter ended June 30, 2001 compared to $5.4 million in the
same period in fiscal 2001. The decrease is attributed to the
Company's efforts to reduce costs and realign its overall cost
structure to support the level of sales expected for the current
market conditions.

               Amortization of Intangible Assets

Amortization of intangible assets was related to the goodwill
from prior acquisitions. During fiscal 2001 goodwill was written
down as a result of a permanent impairment of these assets.

                     Interest Expenses

Interest expense for the quarter ended June 30, 2001 was
$555,000 compared to $357,000 for the same period ended June 30,
2000. These higher costs are a result of increase draws against
the Company's operating line.

                  Other Income (Expenses)

Other income (expenses) are primarily a result of foreign
exchange gains or losses.

              Liquidity and Capital Resources

For the quarter ended June 30, 2001 cash used by operating
activities was $2.8 million compared to $8.1 million in the same
quarter of the previous year.

Financing activities for the quarter ended June 30, 2001
consisted of the repayment of bank indebtedness of $0.7 million,
repayments of capital lease obligations of $1.1 million, and the
repayment of outstanding long term debt in the amount of $0.3
million, resulting in cash used in financing activities of $2.1
million.

Investing activities for the quarter ended June 30, 2001
consisted of capital expenditures of $252,000.

In the short term the Company will generate the cash flow
required to operate the business by improving its cash cycle.
This will be done by reducing accounts receivable through
improved collections and the reduction of inventory levels.

Terms of the bank loans contain various covenants and
restrictions, including requirements to maintain a minimum debt
to equity ratio, a minimum current ratio, and a minimum debt to
effective equity ratio, maintain a minimum equity dollar amount,
achieve minimum quarterly earnings amounts, and require the
company to obtain the written consent of the bank before
providing for the payment of any dividends or inter-company
distributions, and incurring capital expenditures in excess of
$10,000,000 in any year. At June 30, 2001, the Company was not
in compliance with these covenants.

                     Future operations

The Company's ability to continue ongoing operations is
dependant upon its ability to generate sufficient cash flow,
obtain sufficient financing to fund its business to the point
that it achieves profitable operations and the continued support
of it's suppliers and lenders. The Company has implemented a
restructuring plan to improve efficiency and competitiveness,
and, as a result, profitability, and is actively seeking new
sources of debt and equity financing. The restructuring will
result in staff reductions and a consolidation of office and
manufacturing facilities.


AIR CANADA: Revenue Passenger Miles Up By 1.7% in June 2002
-----------------------------------------------------------
Air Canada flew 1.7% more revenue passenger miles in June 2002
than in June 2001, according to preliminary traffic figures.
Capacity decreased by 0.9%, resulting in a load factor of 76.9%,
compared to 75.0% in June 2001; an improvement of 1.9 percentage
points.

For the second quarter 2002, revenue passenger miles rose 2.6%
compared to the same period in 2001, while capacity was
essentially unchanged year-over-year. The passenger load factor
was 76.0%, an increase of 1.8 percentage points, compared to the
same period in 2001.

"The results for the month indicated again the strength of both
the transatlantic and transpacific markets, especially China and
Japan," said Rob Peterson, Executive Vice President and Chief
Financial Officer. "In addition, while overall seat mile
capacity was reduced by 0.9 per cent, aircraft hours flown were
8.2 per cent below last year's level - the result of a
continuing improvement in productivity reflecting our fleet
renewal and seat reconfiguration programs."

                         *   *   *

As reported in the December 4, 2001, edition of Troubled Company
Reporter, Standard & Poor's downgraded its senior unsecured debt
rating for Air Canada to 'B' from 'B+', reflecting reduced asset
protection for unsecured creditors and application of revised
criteria for "notching" down of such debt ratings based on the
proportion of secured debt in a company's capital structure.

According to the report, the rating actions did not indicate a
changed estimate of default risk, but rather poorer prospects
for recovery on senior unsecured obligations if the affected
airline were to become insolvent.


AIR CANADA: Adopts Capacity Purchase Model Under New Jazz Pact
--------------------------------------------------------------
Air Canada announced a restructuring of its commercial
relationship with Air Canada Jazz that will result in improved
efficiencies, cost reductions and greater value for the
Corporation. Under the new agreement, planned to take effect
August 1, 2002, Air Canada will adopt a capacity purchase model,
replacing its existing revenue sharing arrangement.

Under a new capacity purchase model, successfully adopted by
most major U.S. airlines and their regional carriers, Air Canada
Jazz will be paid on a per flight basis to operate on behalf of
Air Canada. This replaces the current revenue sharing
arrangement, whereby a percentage of ticket revenues from
passengers travelling on both Air Canada and Air Canada Jazz is
allocated to each of the operating carriers. Air Canada will
assume responsibility for all passenger and cargo commercial
activities including scheduling, pricing and network planning.
Air Canada Jazz will continue to be responsible for operations
and customer service including onboard product and service based
on specifications established in co-operation with Air Canada.

"Air Canada is assuming overall commercial responsibility in
order to bring greater discipline to capacity planning,
streamline scheduling activities and improve productivity while
maximizing fleet resources. The new agreement will also ensure
that Air Canada Jazz's main focus will be on its operations
including on-time performance and flight completion rates, cost
effective maintenance and employee training with a view to
improving customer satisfaction and reducing its overall cost
structure," said Calin Rovinescu, Executive Vice President,
Corporate Development and Strategy.

"This decision is consistent with Air Canada's strategic
business plan to maximize the efficiency and illuminate the
value of its business units, in line with similar initiatives
underway at Aeroplan and Air Canada Technical Services. We will
continue to adapt to our changing environment in a timely and
cost effective manner while constantly seeking ways to build
shareholder value," concluded Rovinescu.

Added Joseph Randell, President and Chief Executive Officer, Air
Canada Jazz, "U.S.-based regional carriers that have adopted the
capacity purchase model are able to respond better to changes in
the marketplace such as escalating operating costs within the
short haul sector and greater demand for connecting services via
major hubs - issues that we are experiencing in Canada as well.
Air Canada Jazz has rationalized its network, removed excess
capacity and will continue to move towards a simplified fleet.
Now we will have the opportunity to focus on improving
operational performance, reducing costs and delivering
competitive standards of customer service thereby positioning
Jazz as a leader among the world's largest regional carriers."

Air Canada Jazz, one of the world's largest regional airlines,
plays an important role in providing connecting traffic to the
Air Canada network as well as meeting the needs of local
customers. The airline provides scheduled service to over 75
destinations in Canada and the United States with a fleet of
British Aerospace 146s, Fokker F28s, Dash 8-300/100s, Beech
1900Ds and Canadair Regional Jets. Air Canada Jazz operates 900
flights per day and serves approximately eight million customers
annually.


AQUILA INC: Completes $780MM Concurrent Equity & Debt Offerings
---------------------------------------------------------------
Aquila, Inc. (NYSE: ILA) has closed its concurrent offerings of
37,500,000 primary shares of common stock at $7.50 per share and
$500 million of senior unsecured notes with an adjusted coupon
of 11.875 percent, raising gross proceeds of approximately $780
million prior to any exercise by the underwriters of the 15
percent over-allotment option for the common stock offering.

"This completes our capital markets needs through 2003. We're
very pleased to complete these offerings given the current state
of the market. Now we can move forward to focus on our
business," said Robert K. Green, Aquila's president and chief
executive officer.

Credit Suisse First Boston is the sole book-running manager and
lead underwriter for the 37,500,000 primary common shares and
the senior co-managers are Deutsche Bank Securities and UBS
Warburg, with Credit Lyonnais Securities (USA) Inc. and TD
Securities serving as junior co-managers. The underwriters will
have a 30-day option to purchase up to 5,625,000 million
additional primary shares from Aquila, Inc. to cover any over-
allotments of shares.

Based in Kansas City, Missouri, Aquila operates electricity and
natural gas distribution networks serving more than six million
customers in seven states and in Canada, the United Kingdom, New
Zealand and Australia. The company also owns and operates power
generation, and mid-stream natural gas assets. At March 31,
2002, Aquila had total assets of $12.3 billion. More information
is available at http://www.aquila.com

The senior notes were offered only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933.
The senior notes have not been registered under the Securities
Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from registration
requirements. This press release does not constitute an offer to
sell or the solicitation of an offer to buy the senior notes.
The stock offering will be made by a prospectus only. A copy of
the prospectus may be obtained from the underwriters.

                         *    *    *

As reported in Troubled Company Reporter's June 19, 2002
edition, Aquila has been aggressively focusing its efforts on
reducing costs and pursuing the sale of non-strategic assets as
part of its "Project BBB+/Baa1," which is a program begun early
this year to improve its credit rating and strengthen its
balance sheet and more recently to meet credit rating agencies'
more stringent credit metrics requirements. Aquila's strategic
and financial repositioning plans were fully discussed with each
of its rating agencies on June 14, 2002 and reflect a
significant step towards enhancing the company's credit standing
and future prospects.

As March 31, 2002, Aquila's balance sheet shows that the company
has a working capital deficit of about $1.4 billion.


AQUILA INC: Quanta's Reduced EPS May Hurt Full-Year 2002 Results
----------------------------------------------------------------
Aquila, Inc. (NYSE:ILA) stated it was surprised by the reduced
earnings guidance issued by Quanta Services, Inc. (NYSE:PWR),
which is expected to have a negative impact on Aquila's full-
year 2002 results of approximately $.05 per fully diluted share.

"We don't plan to revise Aquila's full-year guidance as a result
of the Quanta announcement and expect to make up the earnings
through reduced costs as part of our ongoing Project BBB+/Baa1
initiative," said Robert K. Green, Aquila's president and chief
executive officer.

With an approximately 38 percent equity interest, Aquila is
Quanta's largest shareholder.

Based in Kansas City, Missouri, Aquila operates electricity and
natural gas distribution networks serving more than six million
customers in seven states and in Canada, the United Kingdom, New
Zealand and Australia. The company also owns, operates and
contractually controls power generation, natural gas and coal
processing assets. At March 31, 2002, Aquila had total assets of
$12.3 billion. More information is available at www.aquila.com.

As March 31, 2002, Aquila's balance sheet shows that the company
has a working capital deficit of about $1.4 billion.


BOOTS & COOTS: Larry H. Ramming Resigns as Chairman and CEO
-----------------------------------------------------------
The Board of Directors of Boots & Coots International Well
Control, Inc. (AMEX: WEL) announced it has accepted the
resignation of Larry H. Ramming as Chairman and Chief Executive
Officer. The Board elected Jed DiPaolo as interim Chairman, and
appointed Jerry Winchester as interim Chief Executive Officer of
the Company. Mr. DiPaolo and Mr. Winchester assumed their new
responsibilities effective immediately.

Mr. Winchester said "Our Board of Directors and our employees
will work closely together to accomplish our recently announced
restructuring initiatives and to address the financial issues
that confront the Company. We will explore alternatives that
take into account the best interests of our shareholders,
lenders and business partners."

                    Executive Background

Jed DiPaolo is the former Senior Vice President, Global Business
Development of Halliburton Energy Services, having had
responsibility for all worldwide business development
activities.  Mr. DiPaolo was employed at Halliburton Energy
Services from 1976 to 2002.  Mr. DiPaolo has served as a
director of Boots & Coots since May 1999.

Jerry Winchester has served as President and Chief Operating
Officer of Boots & Coots since November 1, 1998. Before assuming
these positions, Mr. Winchester was employed by Halliburton
Energy Services since 1981 in positions of increasing
responsibility, most recently as Global Manager -- Well Control,
Coil Tubing and Special Services. Mr. Winchester has served as a
director of Boots & Coots since July 1997.

Boots & Coots International Well Control, Inc., Houston, Texas,
is a global emergency response company that specializes, through
its Well Control unit, as an integrated, full-service,
emergency-response company with the in-house ability to provide
its expanded full-service prevention, response and restoration
capabilities to the global needs of the oil and gas and
petrochemical industries, including, but not limited to, oil and
gas well blowouts and well fires as well as providing a complete
menu of non-critical well control services.

                         *   *   *

As previously reported, Boots & Coots continues to experience
severe working capital constraints.  As of March 31, 2002, the
Company's current assets totaled approximately $8,717,000 and
current liabilities were $10,219,000, resulting in a net working
capital deficit of approximately $1,502,000 (compared to a
beginning year deficit of $159,000).  The Company's highly
liquid current assets, represented by cash of $773,000  and
receivables and restricted assets of $6,611,000 were
collectively $2,835,000 less than the  amount of current
liabilities at March 31, 2002 (compared to a beginning year
deficit of $1,423,000).  The Company is actively exploring new
sources of financing, including the establishment of new credit
facilities and the issuance of debt and/or equity securities.
During April and May  2002, the Company entered into loan
participation agreements with certain parties under which it
borrowed an additional $1,000,000 under the Senior Secured Loan
Facility. The participation agreements have an initial maturity
of 90 days, which may be extended for an additional 90 days at
the Company's option.  The new borrowings are not sufficient to
meet the Company's current working capital requirements.  Absent
new near-term sources of financing or the generation of
significant operating income, the Company will not have
sufficient funds to meet its immediate obligations and will be
forced to dispose of additional assets or operations outside of
the normal course of business in order to satisfy its liquidity
requirements.


BOUNDLESS CORP: Gets Extension to Meet AMEX Listing Standards
-------------------------------------------------------------
Earlier this year, Boundless Corporation (Amex: BND) received
notice from the American Stock Exchange indicating that the
company is below certain of the Exchange's continued listing
standards.  Boundless was afforded the opportunity to submit a
plan of compliance to the Exchange and on May 29, 2002 presented
its plan to the Exchange.  On July 1, 2002 the Exchange notified
Boundless that it has accepted the Company's plan of compliance
and granted an extension of time to regain compliance with the
continued listing standards.  Boundless will be subject to
periodic review by Exchange Staff during the extension period.
Failure to make progress consistent with the plan or to regain
compliance with the continued listing standards by the end of
the extension period could result in the Company being delisted
from the American Stock Exchange.

In its original notice to the company, AMEX cited shareholders'
equity of less than $2,000,000 and losses from continuing
operations and/or net losses in two of its three most recent
fiscal quarters as set forth in Section 1003(a)(i) of the AMEX
Company Guide and Section 1003(a)(iv) sustained losses which are
so substantial in relation to its overall operations or its
existing financial resources, or its financial condition has
become so impaired that it appears questionable, in the opinion
of the Exchange, as to whether Boundless will be able to
continue operations and/or meet its obligations as they mature.

Joe Gardner, Boundless Corporation VP and CFO said, "The balance
sheet restructuring activities, including our vendor settlements
and the transition to our new lender, as well as our forward
looking operational plan were all part of the plan approved by
AMEX.  Our recent accomplishments have allowed us to make
substantial progress and the next step is to execute the
operational piece of the plan."

Boundless Corporation is a global technology company and is
composed of two subsidiaries: Boundless Technologies, Inc. --
http://www.boundless.com/index-- a desktop display products
company, and Boundless Manufacturing Services, Inc. --
http://www.boundless.com/manufacturing-- an emerging EMS
company providing build-to-order systems manufacturing, printed
circuit board assembly, as well as complete end-to-end solutions
from design through product end-of-life to its customers.


BOUNDLESS: Secures New Working Capital Revolver from CIT Entity
---------------------------------------------------------------
Boundless Corporation (Amex: BND) has completed negotiations and
received a revolving line of credit structured and agented by
CIT Business Credit, a business unit of CIT Group Inc. (NYSE:
CIT), thus concluding a yearlong effort to replace their
previous senior lending syndicate lead by JP Morgan Chase.

Boundless Corporation CEO & President, Joseph V. Joy said, "The
closing of this new financing facility is one of the final steps
in our financial restructuring.  We can now return to focusing
on building our business and those relationships that are
critical to our long-term success.  Our operational
restructuring activities over the past 18 months have resulted
in significant reductions in our operating expenses and
increased efficiencies throughout our organization.  As a result
of overcoming these challenges, we have unquestionably emerged
as a far more efficient operation, dedicated to and focused on
our customers."

Mr. Joy also noted, "We executed our financial restructuring
during a very difficult business climate.  I would like to
personally acknowledge the efforts and sacrifices of our
associates, suppliers, shareholders and other stakeholders,
without whose patience and cooperation this would not have been
possible.  It is also important to recognize the faith and
commitment of our customers who have been extremely supportive
throughout this process.  We remain committed to building upon
the relationships that we have enjoyed with all of our business
partners and customers.  We now have a platform from which we
can execute our operational plans and strengthen the pursuit of
our strategic business goals."

Boundless Corporation is a global technology company and is
composed of two subsidiaries:  Boundless Technologies, Inc. --
http://www.boundless.com/index-- a desktop display products
company, and Boundless Manufacturing Services, Inc. --
http://www.boundless.com/manufacturing-- an emerging EMS
company providing build-to-order systems manufacturing, printed
circuit board assembly, as well as complete end-to-end solutions
from design through product end-of-life to its customers.


BURNHAM PACIFIC: Doubled Play Discloses 6.39% Equity Stake
----------------------------------------------------------
Double Play Partners Ltd. beneficially owns 2,100,000 shares of
the common stock of Burnham Pacific Properties, Inc.,
representing 6.39% of the outstanding common stock shares of the
Company.  Double Play is a Massachusetts limited partnership
holding sole powers over the stock, both as to voting or
directing the voting of, or to disposing of, or directing the
disposition of the stock held.

As previously reported, 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.


CALPINE CORP: WPSC Agrees to Purchase De Pere Energy Center
-----------------------------------------------------------
Wisconsin Public Service Corporation, a subsidiary of WPS
Resources Corporation (NYSE: WPS) has completed an important
step in a transaction with Calpine Corporation (NYSE: CPN) by
signing definitive agreements to purchase the 180-megawatt De
Pere Energy Center and for Wisconsin Public Service to enter
into a power purchase agreement for up to 235 megawatts of
capacity and energy for 10 years from Calpine's proposed Sherry
Energy Center to be located near Marshfield, Wisconsin.

The agreement, originally announced in April, calls for
Wisconsin Public Service to pay Calpine $120.4 million ($72
million at close and $48.4 million near year-end 2003) for the
De Pere transaction that includes termination of the existing
power purchase agreement. The cost of the capacity purchases
from the Sherry Energy Center will be approximately $250 million
over the 10-year period. Wisconsin Public Service will be
responsible for supplying the fuel for the energy it receives
from the Sherry Energy Center.

"Everybody wins in the De Pere deal," said Charlie Severance,
Wisconsin Public Service's Director of Bulk Power Supply. "It's
good for Public Service and its customers, because we'll have a
better mix of resources that will mean lower rates for our
customers. Termination of the existing De Pere Energy Center
power purchase agreement will allow additional flexibility to
acquire future supply that takes advantage of changes in
technology to provide lower-cost options to meet the increasing
demands of Public Service's customers.

"The Sherry Energy Center power purchase agreement helps to
provide continued growth of the competitive generation market in
Wisconsin, which we believe is important. The addition of new
generation in Central Wisconsin will improve the reliability of
the State's electric system. We're very pleased to have the
definitive agreement signed," Severance continued.

The power from the De Pere Energy Center was already under long-
term contract to Wisconsin Public Service. In addition,
Wisconsin Public Service will purchase 150 megawatts of
electricity in 2005, increasing to an estimated 235 megawatts in
2006 through 2015, from Calpine's proposed Sherry Energy Center.
The additional capacity is needed by Public Service to serve
expected growth in northeast Wisconsin.

The acquisition and purchase agreements further strengthen
electric supply to Wisconsin Public Service customers in the
coming years. The agreements are subject to regulatory
approvals, including the Public Service Commission of Wisconsin.
It is expected that the transaction will close during the third
quarter of 2002.

Wisconsin Public Service Corporation is an electric and natural
gas utility serving Northeast and North Central Wisconsin and an
adjacent portion of Michigan's Upper Peninsula. A subsidiary of
WPS Resources Corporation, Wisconsin Public Service serves
approximately 400,000 electric customers and 300,000 natural gas
customers.

As reported in the April 03, 2002 edition of Troubled Company
Reporter, Standard & Poor's lowered Calpine Corp.'s Credit
Rating to BB due to plans of securing $2 billion in new
financing.

                         *    *    *

Calpine Corp.'s 8.25% bonds due 2005 (CPN05USR1) are trading at
about 79, DebtTraders reports. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=CPN05USR1


CASELLA WASTE: Outstanding Debt Level Tops $288MM at April 30
-------------------------------------------------------------
Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, non-
hazardous solid waste services company, reported financial
results for the fourth quarter and its 2002 fiscal year, and
gave guidance on its expected performance for its 2003 fiscal
year.

          Fourth Quarter and Fiscal 2002 Results

For the quarter ended April 30, 2002, the company reported pro
forma earnings before interest, taxes, depreciation and
amortization (EBITDA) of $21.1 million; pro forma revenues for
the quarter were $97.0 million. Pro forma net income for the
quarter was $1.6 million. The company's fully diluted pro forma
earnings per share was $0.03.

For the fiscal year ended April 30, 2002, the company reported
pro forma EBITDA of $92.0 million; pro forma revenues for the
twelve-month period were $419.9 million. Pro forma net income
was $10.1 million; fully diluted pro forma EPS was $0.29.

The company also announced that it had generated $33.0 million
of operating free cash flow for fiscal year 2002; as of April
30, 2002, the company had cash on hand of $4.3 million, and had
an outstanding total debt level of $288.8 million.

"Quarter after quarter, we continue to execute on our top
priorities: strengthening and leveraging our core solid waste
assets; striving for the highest levels of excellence in our
operations in areas like customer service, safety and training;
and positioning the company to capitalize on its emerging
opportunities for responsible growth," John W. Casella, chairman
and chief executive officer, said.

Results for the quarter ended April 30, 2002 are reported pro
forma to reflect the elimination of (i) revenue related to
recyclable commodity hedge contracts; (ii) a loss on the
disposal of discontinued operations; and (iii) the elimination
of a net loss on the sale and impairment of certain assets.
Results for the twelve months ended April 30, 2002 are reported
pro forma to reflect, in addition to the foregoing, (i) the
elimination of gains and losses on the sale of certain assets;
(ii) an equity loss; (iii) losses arising from the bankruptcy of
Enron; and (iv) the elimination of a change in accounting
principle.

                    Fiscal 2003 Outlook

The company also announced its guidance for its fiscal year
2003, which began May 1, 2002.

For the fiscal year 2003, the company believes that its results
will be in the following ranges:

     -- Revenues between $415 million and $435 million;

     -- EBITDA between $87 million and $91 million;

     -- Operating free cash flow between $19 million and $24
        million; and

     -- Capital expenditures between $38 million and $40
        million.

"When comparing the projected range of fiscal 2003 EBITDA with
fiscal 2002 EBITDA performance of $92 million, it's important to
take a number of factors into consideration," Casella said,
"including the following:

     -- "Our strategic divestiture of non-core assets reduced
EBITDA by $1.7 million;

     -- "Our insurance premiums have risen by approximately $6
million for fiscal 2003, reflecting the significant cost of
insurance coverage post the September 11 attacks;

     -- "Our Woburn landfill is expected to close in the first
quarter of fiscal 2003, which we've only partially offset with
an agreement to acquire 700,000 tons of capacity in eastern
Massachusetts.

"It's also important to note the assumptions we have not built
into our EBITDA guidance," Casella said. "First, we've budgeted
for flat volume growth over the next year," Casella said. "To
the extent the economy improves, this represents upside to our
numbers. Also, assuming we are successful in completing the note
offering and bank refinancing that we are also announcing, we
expect to pursue a selective and opportunistic acquisition
program marked by a responsible approach to growth. Our EBITDA
guidance assumes no growth through acquisitions other than a
minimal amount of small tuck-ins.

"In addition, we are not incorporating sustained upside growth
in commodity prices this year," Casella said. "If commodity
prices stay at current levels for the duration of the fiscal
year, they would be above our current budget projection."

       Company Acquires Disposal Capacity in E. Massachusetts

The company also announced it had completed a transaction giving
the company slightly more than 700,000 tons of construction and
demolition disposal capacity over the next three years in its
eastern Massachusetts market. The agreement with New England
Waste Management Corp. allows the company to partially replace
the annual tonnage capacity the company had at the Woburn, Mass.
landfill.

       Impact of Accounting Rule Changes Under SFAS No. 142

The company also said it will be adopting accounting changes
required under SFAS No. 142 eliminating the amortization of
goodwill and requiring an annual assessment of goodwill
impairment. In accordance with this rule, the company's
remaining goodwill will not be amortized going forward and, upon
adoption, it is expected that certain goodwill arising from the
acquisition of KTI, will be impaired in the estimated amount of
$63.0 million, and the amount of the impairment will be charged
to earnings as a cumulative effect of a change in accounting
principles.

Casella Waste Systems, headquartered in Rutland, Vermont,
provides collection, transfer, disposal and recycling services
primarily in the northeastern United States.

For further information, contact Richard Norris, chief financial
officer; or Joseph Fusco, vice president; at (802) 775-0325, or
visit the company's Web site at http://www.casella.com

As reported in Troubled Company Reporter's July 03, 2002
edition, Standard & Poor's assigned a BB- rating to Casella's
$300 million credit facilities.


CASTLE DENTAL: Reaches Agreement on $70 Mill. Debt Restructuring
----------------------------------------------------------------
Castle Dental Centers, Inc. (OTC Bulletin Board: CASL) announced
that it had reached preliminary agreement with its senior
secured and senior subordinated lenders to restructure its debt
totaling approximately $70 million. The restructuring, which is
subject to completion of definitive documentation and
finalization of certain other agreements, calls for the
conversion of approximately $21.6 million of subordinated debt
to equity in the form of newly-issued convertible preferred
stock. Upon the closing of the restructuring, the Company will
receive $1.7 million in new financing from the present holders
of its senior subordinated notes, Heller Financial (a GE Capital
Healthcare Financial Services company) and Midwest Mezzanine
Funds, and its president and chief executive officer, James M.
Usdan. As a result of the conversion of debt and the new
financing, GE Capital Healthcare Financial Services and Midwest
Mezzanine Funds will own the majority voting rights in Castle
Dental.

The new loan agreement with the senior bank group will provide
for a three-year term in the principal amount of approximately
$47 million, with principal payments totaling $2 million in
2003, $4 million in 2004, and with the balance due in July 2005.
Interest will accrue and be payable monthly at prime plus two
percent. The Company will also pay fees and costs incurred by
the senior bank group in connection with the restructuring. The
agreements also require that approximately $3.6 million in
unsecured subordinated debt securities, presently held by the
former owners of dental practices acquired by Castle Dental, be
exchanged for convertible preferred stock. The Company is
currently negotiating this exchange with the holders of these
securities.

The Company also announced that it has agreed to sell three
dental offices to its former chairman of the board, Jack H.
Castle, Jr. in exchange for the release of lease and debt
obligations owed to Mr. Castle. This transaction will close on
or about the date of the restructuring.

James M. Usdan, president and chief executive officer, commented
on the restructuring agreements, "The finalization of our debt
restructuring, which we have been negotiating for over a year,
will provide management the opportunity to focus on accelerating
the improvements that have been made in our operations over the
past several months. GE Capital Healthcare Financial Services
and Midwest Mezzanine Funds, who will become our new majority
owners, have been instrumental in reaching agreement with our
banks and we look forward to working with them as we continue
the turnaround of Castle Dental. We also appreciate the support
we have received from our dentists and employee partners during
this period of uncertainty as we negotiated these agreements."

There can be no assurance, however, that this restructuring will
be consummated since the closing is subject to conditions beyond
the Company's control, including: consummation of the exchange
with the holders of the Company's unsecured subordinated debt
securities; the negotiation, execution and delivery of
definitive documentation for the restructuring by all required
parties; and the absence of any material adverse change
affecting the Company's business.

Castle Dental Centers, Inc. develops, manages and operates
integrated dental networks through contractual affiliations with
general, orthodontic and multi-specialty dental practices in the
U.S. Castle manages 82 dental centers with approximately 200
affiliated dentists in Texas, Florida, Tennessee and California
with annual patient revenues of approximately $96 million.


CHART INDUSTRIES: Consolidates Senior Management Positions
----------------------------------------------------------
Chart Industries, Inc. (NYSE: CTI) has eliminated the separate
position of President and Chief Operating Officer. Arthur S.
Holmes, Chairman and Chief Executive Officer, will assume these
additional responsibilities from James R. Sadowski, who will be
leaving Chart to pursue new opportunities.

"Jim has made many positive contributions to Chart and we wish
him well in his new endeavors. Our decision to consolidate
senior management positions was a difficult one, but it reflects
our commitment to carrying out our restructuring plans at every
level of the Company," said Mr. Holmes.

Mr. Holmes further stated: "This management consolidation
represents another step in Chart's continuing efforts to
restructure and streamline its organization. We anticipate
further significant changes in the next several months as we
pursue plans to eliminate excess capacity, reduce operating and
support costs and make our organization more efficient. We are
in the process of finalizing our restructuring plans and will
then pursue the necessary approvals. Further details will be
announced late in the third quarter of this year. These
initiatives and the related annual savings will contribute to
Chart's long-term financial strength," Mr. Holmes concluded.

Chart Industries, Inc. manufactures standard and custom-built
industrial process equipment primarily for low-temperature and
cryogenic applications. Headquartered in Cleveland, Ohio, Chart
has domestic operations located in 12 states and international
operations located in Australia, China, the Czech Republic,
Germany and the United Kingdom.

                          *    *    *

As previously reported, Chart Industries' Chairman and Chief
Executive Officer Arthur S. Holmes commented on the company's
first quarter results, saying that "[t]he first phase of
[the company's] financial restructuring was completed in the
first quarter of 2002."

Additionally, Mr. Holmes stated that after securing bank
amendments to the company's credit facilities, "[the company is]
now able to focus on methods of paying down debt and reducing
Chart's leverage, ultimately leading to improved shareholder
value."

"Going forward, we are finalizing a review of possible
operational restructuring actions which could result in
substantial future improvements in our earnings. When
implemented, these initiatives could result in additional non-
recurring charges to operations in future quarters, but are
planned to result in rapid paybacks. We also continue to focus
on potential sources of additional capital and are currently in
discussions with several investor groups, including one group
that is at an advanced stage of due diligence, regarding a
potential investment in the Company. Finally, we are pursuing
the sale of certain assets that are non-core."


CLAXSON INTERACTIVE: Commences Exch. Offer for Unit's 11% Notes
---------------------------------------------------------------
Claxson Interactive Group Inc. has commenced an exchange offer
and consent solicitation for all U.S.$80 million outstanding
principal amount of the 11% Senior Notes due 2005 (144A Global
CUSIP No. 44545HHA0 and Reg S Global ISIN No. USP52800AA04) of
its subsidiary, Imagen Satelital S.A.

Claxson is offering U.S.$410 in principal amount of its 7.25%
Senior Notes due 2010 in exchange for each U.S.$1,000 principal
amount of Old Notes. In addition, Claxson is soliciting proxies
from holders of the Old Notes to vote in favor of the proposed
amendments to the indenture governing the Old Notes and is
offering to make a consent payment equal to U.S.$10 per
U.S.$1,000 principal amount of Old Notes to holders who tender
their Old Notes on or prior to the consent payment expiration
date.  The consent payment expiration date is 5:00 p.m. New York
City time on July 18, 2002, unless extended.

The Exchange Offer expires at 5:00 p.m. New York City time on
July 31, 2002, unless extended.  The Exchange Offer is
conditioned upon the receipt of tenders of at least 95% of the
outstanding principal amount of the Old Notes, as well as the
approval by the Argentine Comision de Valores of the public
offering of the New Notes in Argentina and other customary
conditions.

Informational documents relating to the Exchange Offer will only
be distributed to eligible investors who complete and return an
Eligibility Letter that has already been sent to investors.  If
you would like to receive this Eligibility Letter, please
contact Tom Long at D.F. King & Co., the Information Agent for
the Exchange Offer, at (212) 493-6920.

The New Notes will not be registered under the U.S. Securities
Act of 1933, as amended, and will only be offered in the United
States to qualified institutional buyers and accredited
investors in private transactions and to persons outside the
Unites States in off-shore transactions.  The New Notes will be
listed on the Buenos Aires Stock Exchange.

Claxson (Nasdaq: XSON) is a multimedia company providing branded
entertainment content targeted to Spanish and Portuguese
speakers around the world.  Claxson has a portfolio of popular
entertainment brands that are distributed over multiple
platforms through Claxson's assets in pay television, broadcast
television, radio and the Internet.  Claxson was formed in a
merger transaction, which combined media assets contributed by
El Sitio, Inc., and other media assets contributed by funds
affiliated with Hicks, Muse, Tate & Furst Inc. and members of
the Cisneros Group of Companies. Headquartered in Buenos Aires,
Argentina, and Miami Beach, Florida, Claxson has a presence in
all key Ibero-American countries, including without limitation,
Argentina, Chile, Brazil, Spain, Portugal and the United States.

As reported on Jun 10, 2002 in Troubled Company Reporter,
Claxson stated that it has experienced operating losses and
negative cash flows, which have also been negatively affected by
the devaluation and economic situation in Argentina where
Claxson has significant operations.  In an effort to improve its
financial position, Claxson is taking certain steps including
the disposition of non-strategic assets and the restructuring of
some of its subsidiaries' debt including renegotiation of
applicable covenants.  Claxson believes that if these steps are
not successfully completed in a timely manner, it is likely that
its auditors will express a "going concern" opinion in
connection with Claxson's annual report on Form 20-F to be filed
with the Securities and Exchange Commission in June 2002.


COVANTA ENERGY: Wins Nod to Execute CPPI Restructuring Documents
----------------------------------------------------------------
Covanta Energy Corporation and Covanta Energy Americas, Inc.,
obtained Court approval to execute two documents relating to the
restructuring of certain secured obligations of non-debtor
affiliate, Covanta Power Pacific, Inc.

Vincent E. Lazar, Esq., at Jenner & Brock, LLC, in Chicago,
Illinois, reported that Covanta Power is a party to a pre-
petition Loan Agreement dated April 10, 1998 with Bayerische
Hypo-Und Vereinsbank, A.G. as Agent and Lender, and Landesbank
Hessen-Thuringer Girozentrale, New York Branch as Lenders.  To
secure Covanta Power's obligations:

     (a) Covanta Power granted the Lenders liens and security
         interests on and in certain of its assets;

     (b) Covanta Energy Americas pledge its stock interests in
         Covanta Power to the Lenders; and

     (c) Covanta Energy Corp. agreed, through a Tax Credit
         Agreement with Covanta Power, to purchase certain tax
         credits from Covanta Power; and

     (d) a non-debtor Covanta Energy Group, Inc. agreed, through
         a Revolving Note Agreement, to repay to Covanta Power,
         in the event of certain cash deficiencies in the
         amounts necessary to service its holding company level
         debt, up to $10,000,000 that has been transferred
         upstream from Covanta Power to Covanta Energy Group.
         The Note is being held by the Lenders.

Prior to the Petition Date, Mr. Lazar relates, Covanta Power and
the Lenders agreed to restructure certain features of the Loan
Agreement and related documents, particularly:

     (a) both the Tax Credit Agreement and the Revolving Note
         Agreement would be terminated;

     (b) the Loan Agreement and related documents would be
         modified to, among other things, eliminate the
         bankruptcy filing of Covanta Energy Americas and other
         Debtors as events of default under the applicable
         Covanta Power loan documents;

     (c) Covanta Power would be permitted to grant certain
         subordinated liens as adequate protection in connection
         with the Debtors' Chapter 11 cases; and

     (d) a $5,000,000 debt reserve would be created from Covanta
         Power's funds as further security for Covanta Power's
         obligations arising under the Loan Agreement.

However, Mr. Lazar clarified that the termination of the Tax
Credit Agreement and the Revolving Note Agreements, and the
consent of Covanta Energy Americas are conditions to the
effectiveness of the restructuring.

Accordingly, the Court approved the execution of:

     (a) a Termination of Tax Credit Agreement; and

     (b) a Parent Consent, to which Covanta Energy Americas
         would consent to Covanta Power's execution of the
         amendments to the Loan Agreement. (Covanta Bankruptcy
         News, Issue No. 8; Bankruptcy Creditors' Service, Inc.,
         609/392-0900)


DLJ MORTGAGE: S&P Cuts Classes B-4 & B-5 Certs. to Junk Level
-------------------------------------------------------------
Standard & Poor's lowered its ratings on three classes of DLJ
Mortgage Acceptance Corp.'s commercial mortgage pass-through
certificates series 1997-CF2 and removed them from CreditWatch
with negative implications, where they were placed on Dec. 18,
2001. Concurrently, the rating on class B-3TB is affirmed and
removed from CreditWatch with negative implications, where it
was placed on December 18, 2001. In addition, ratings are
affirmed on seven classes of the same series.

The lowered ratings and CreditWatch removals reflect the
appraisal reductions taken to date and the interest shortfalls
that are occurring in various classes as a result of several
delinquent loans. The appraisal reductions and special servicing
fees have resulted in interest shortfalls to classes B-4 and B-
5.

Total delinquencies account for 11.20% of the total principal
balance, of which 7.5% is attributable to one large hotel loan
group. The loan group, which is 90 days delinquent, is secured
by five crosscollateralized and crossdefaulted lodging
properties. Four of the properties are located in the Orlando,
Fla. market that serves Disney World and the fifth property is
located in San Antonio, Texas. Appraisal reductions of $11.66
million were taken in April 2002. For the year ended 2001, debt
service coverage (DSC) for these properties ranged from 0.54
times to 1.14x and occupancies ranged from 46% to 59%. The
properties are in very competitive markets and have been
affected by the slowdown in business and leisure travel.

The borrower of the hotel group (Sterling Hospitality) has
recently made up a few of the arrearage payments and mentioned
that more will be made as soon as insurance proceeds from a
claim on the San Antonio property are received. The special
servicer, CRIIMI MAE Services L.P., is waiting to see if it will
receive the monies before it decides on its next course of
action.

Another Orlando property, the Mercado Mediterranean Village
(2.80% of the total principal balance), is 90 days delinquent.
This 116,327-square-foot retail center is also located near
Disney World and is being affected by the decline in tourism. It
has a $16.8 million principal balance and represents 2.7% of the
total principal balance. An appraisal reduction amount is
expected to be calculated shortly by the servicer, Orix Capital
Markets LLC.

Washington Park Shopping Plaza (0.90%) is 60 days delinquent.
The property, which is located in a suburb of Chicago, Ill., is
13% occupied and has been affected by a new center across the
street. An appraisal has been ordered, which most likely will
exhibit a value decline from securitization.

Currently, there is $52.9 million (or 8.8%) on the servicer's
watchlist. Based on discussions with the servicer, Standard &
Poor's has identified three loans (3%) that may end up with an
unfavorable resolution.

There are four loans representing 7.5% of total principal
balance that have Kmart Corp. stores as part of the collateral.
None of the stores are scheduled for closing.

The pool's debt service coverage ratio for the year ended
December 31, 2001 has improved to 1.45x from 1.33x at
securitization. During the same period, the top 10 loans' DSCR
declined to 1.31x from 1.33x.

                 DLJ Mortgage Acceptance Corp.
       Commercial mortgage pass-thru certs series 1997-CF2

     Class       Ratings                  Credit support (%)

               To       From
     B-3OC     B        BB/Watch Neg      6.63
     B-4       CCC+     B/Watch Neg       3.31
     B-5       CCC-     B-/Watch Neg      2.76

      Rating Affirmed and Removed From Creditwatch Negative

               DLJ Mortgage Acceptance Corp.
       Commercial mortgage pass-thru certs series 1997-CF2

     Class       Rating                  Credit Support (%)

               To      From
     B-3TB     BB+     BB+/Watch Neg     9.1

                         Ratings Affirmed

               DLJ Mortgage Acceptance Corp.
       Commercial mortgage pass-thru certs series 1997-CF2

     Class     Rating     Credit Support (%)
     A-1A      AAA        34.2
     A-1B      AAA        34.2
     A-2       AA         28.7
     A-3       A          21
     B-1       BBB        14.9
     B-2       BBB-       12.7
     B-2TB     BBB-       11.6


DOR BIOPHARMA: Restructures 2 Joint Ventures with Elan Entities
---------------------------------------------------------------
DOR BioPharma Inc. (Amex: DOR) has restructured its two joint
ventures with Elan Corporation, plc and its affiliated companies
effective June 29, 2002 and implemented a further fixed cost
reduction program. The restructuring provides an immediate
increase of approximately $11.35 million to stockholders' equity
of DOR for the reporting period ending June 30, 2002. The
increase to DOR's stockholders' equity is attributable to the
elimination of the exchange right of DOR's $10.5 Series C
Preferred Stock and a $850,000 reduction in current payables. As
of June 30, DOR believes that it has regained compliance with
all of the continued listing requirements of the American Stock
Exchange, in particular, the requirement of DOR to maintain
positive stockholders' equity of at least $2 million.
Maintenance of DOR's listing on the AMEX is nevertheless still
subject to the acceptance by AMEX of DOR's continued listing
compliance plan, as previously announced.

The restructuring calls for the termination of the InnoVaccines
Corporation and Endorex Newco, Ltd. joint ventures, settlement
of the $2.05 million joint venture funding obligations owed by
DOR and the elimination of the exchange right of the $10.5
million Series C Preferred Stock. In settlement of the $2.05
million joint venture funding obligations, DOR will pay $524,500
to Elan and will also issue a $580,000 7.5% promissory note to
Elan payable in three installments by DOR on June 29, 2003, June
29, 2004 and December 31, 2004. The Series C Preferred Stock
retains its original conversion rights and will automatically
convert into approximately 1.2 million newly issued shares of
common stock of DOR on October 21st of this year, unless
converted earlier at the option of Elan. Such additional common
shares will represent approximately 5.3% of the total
outstanding shares of DOR.

The board of directors also announced the appointment of Larry
J. Kessel, M.D. to the board to fill the vacancy created by the
resignation of Mr. Richard Dunning.

Larry J. Kessel, M.D., currently is in private practice in
internal and geriatric medicine and has been since 1985. He has
served as medical director at Integrated Health Services, a
conglomerate involved in geriatric care. He has been a clinical
instructor at Jefferson Medical College since 1984. Dr. Kessel
holds a position on the Board of Directors of Cypress
Biosciences, Inc., a publicly traded biotechnology company.

DOR stated, "We would like to thank Mr. Dunning for his input,
guidance and faithful and tireless service as a director over
the last four years."

DOR also announced that it has implemented an additional fixed
cost reduction program through the elimination of 7 full time
research and development and 3 full time general and
administrative positions at its Lake Forest facility. As part of
this further restructuring, DOR has assigned all of its
intellectual property relating to its LPM(TM), LPE(TM) and
PLP(TM) oral delivery systems to a newly formed subsidiary,
Oradel Systems, Inc, for the purpose of exploiting these
technologies in a manner that is cost effective to DOR and non-
dilutive to DOR stockholders. DOR expects to begin the third
quarter with three full time employees and a substantially
reduced burn rate. These cost reduction measures are intended to
preserve DOR's existing working capital, focus resources on the
clinical development of DOR's lead products and avoid the need
for additional financing for the foreseeable future.

DOR BioPharma, Inc. is a drug delivery company developing oral
forms of drugs that are already approved for use via other
routes of delivery. Its lead product, orBec(R), is presently in
separate multicenter human clinical trials for the treatment of
intestinal graft-versus-host disease and other gastrointestinal
inflammatory disorders. For further information regarding DOR
BioPharma, please visit the company's Web site located at
http://www.dorbiopharma.com

As previously reported, DOR Biopharma has submitted a compliance
plan for continued listing of its common stock on the American
Stock Exchange after receiving communication from the AMEX
indicating that the Company is below one of the Exchange's
continued listing standards. Specifically, the delisting process
was commenced because the Company currently has stockholders'
equity of less than $2 million and losses from continuing
operations in two out of the three most recent fiscal years.
Approval of this plan by AMEX is pending; however, DOR
anticipates that it will be back in compliance soon and will be
able to maintain such compliance in the future.


DALEEN TECHNOLOGIES: Completes Sale of PartnerCommunity Unit
------------------------------------------------------------
Daleen Technologies, Inc. (Nasdaq:DALN), a global provider of
high performance billing and customer care software solutions
that manage the revenue chain, has completed the sale of its
subsidiary, PartnerCommunity, Inc., to PartnerCommunity
Acquisition Corp., a newly formed, venture-backed Delaware
corporation. Based in Boca Raton, Florida, PartnerCommunity,
Inc. provides partner management solutions to service providers.
Initially launched as a business unit within the company,
PartnerCommunity was incorporated in July 2000 as a subsidiary
of Daleen Technologies, Inc. with initial funding from Daleen.

The terms of the deal included the payment by the purchaser to
Daleen of a combination of cash, a 30-month promissory note, and
warrants to purchase preferred stock in PartnerCommunity, Inc.
Neither the business of PartnerCommunity nor the purchase price
paid to Daleen was material to Daleen. In conjunction with the
transaction, the purchaser made a capital investment in
PartnerCommunity and has indicated its intention to provide
additional funding. Jim Daleen, president and chief executive
officer of Daleen Technologies, has resigned his positions as
chairman of the board and secretary of PartnerCommunity.
Employees of PartnerCommunity, including Dr. John Yin, its
president and chief executive officer, are expected to remain
with PartnerCommunity under its new ownership.

"I'm proud that Daleen was able to provide a launchpad for
PartnerCommunity. During a time of unprecedented economic
uncertainty, John and his team have made significant progress
with PartnerCommunity's business," says Jim Daleen, president
and chief executive officer of Daleen Technologies. "However, at
this point it is essential that we focus on our core business
and that all of our resources are directed toward our goals of
reaching profitability and becoming cash flow positive. The new
leadership of PartnerCommunity, along with Dr. Yin, will be able
to focus all of their attention solely on the business of
PartnerCommunity."

"We are excited about PartnerCommunity's vision, its recent
business achievements, and talented management team," says David
Portnoy, president of PartnerCommunity Acquisition Corp. I look
forward to helping the company fulfill its potential."

Daleen previously disclosed its intent to sell its ownership
interest in PartnerCommunity in its Annual Report on Form 10-K
for the year ended December 31, 2001, as well as its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2002.

Daleen Technologies, Inc. is a global provider of high
performance billing and customer care software solutions that
manage the revenue chain for traditional and next-generation
communication service providers, retailers and distributors of
digital media, and technology solutions providers. Offering
proven integration with leading CRM and other legacy enterprise
systems, Daleen's RevChain(TM) software and pure Internet
Integration Architecture (IIA(TM)) leverage open Internet
technologies to enable providers to achieve peak operational
efficiency while driving maximum revenue from their product and
service offerings. The company is currently ranked No. 1
worldwide in overall customer satisfaction based on timeliness
of delivery, functionality, delivery within budget, vendor
support and maintenance, system flexibility and
interoperability. Additional information is available at
http://www.daleen.com

PartnerCommunity is a software company providing partner
management solutions to service providers. It helps
communications, content and infrastructure service providers
address two of their key challenges: 1) building and managing
profitable value chains with other service providers; and 2)
streamlining and automating business processes to support a
large number of enterprise customers. Additional information is
available at http://www.partnercommunity.com

As reported in Troubled Company Reporter's May 24, 2002 edition,
Daleen Technologies, Inc. said that on May 16, 2002, it
received a Nasdaq Staff Determination that the company has not
met the minimum bid price requirement set forth in Marketplace
Rule 4450(a)(5) for continued listing on The Nasdaq National
Market, and that it anticipates receiving a similar Nasdaq Staff
Determination this week that it has not met the minimum market
value of publicly held shares requirement set forth in
Marketplace Rule 4450(a)(2).

As a result of each of these determinations, the company's
common stock is subject to delisting from The Nasdaq National
Market.


ENGAGE INC: Fails to Comply with Nasdaq Listing Requirements
------------------------------------------------------------
Engage, Inc. (Nasdaq:ENGA), a leading provider of software
solutions and services for advertisers, marketers and
publishers, announced that on June 26, 2002 it received a letter
from Nasdaq stating that it did not currently comply with the
Nasdaq National Market's independent directors requirement
(Marketplace Rule 4350(c)) and audit committee composition
requirement (Rule 4350(d)(2)). Engage had previously announced
that it had received notices from Nasdaq that it had failed to
comply with the $1.00 minimum bid price requirement (Rule
4450(a)(5)) and the $10,000,000 minimum stockholders' equity
requirement (Rule 4450(a)(3)), and that it had requested a
hearing before a Nasdaq Listing Qualifications Panel to address
these issues. The hearing has been scheduled for July 11, 2002.
All of the deficiencies will be addressed at this hearing.

Engage, Inc. (Nasdaq: ENGA) is a leading provider of software
solutions and services for advertisers, marketers and
publishers. Engage's digital asset management and workflow
automation software enables the creation, production and
delivery of marketing and advertising content more quickly and
efficiently, increasing time-to-market advantages, boosting
productivity and ultimately driving higher ROI from marketing
programs and advertising campaigns. The company's Internet ad
management business platform powers the effective and efficient
design and delivery of online campaigns for web publishers who
are competing for advertising revenue in a rapidly evolving
medium. A majority-owned operating company of CMGI, Inc.
(Nasdaq: CMGI), Engage is headquartered in Andover,
Massachusetts, with European headquarters in London and offices
worldwide. For more information on Engage, please call 877-U
ENGAGE or visit http://www.engage.com


ENRON CORP: Wants to Expand LeBoeuf Lamb's Engagement Scope
-----------------------------------------------------------
Irena M. Goldstein, Esq., at LeBoeuf, Lamb, Greene & MacRae LLP,
in New York, relates that Enron Corporation and its debtor-
affiliates recently requested the LeBoeuf firm to take on an
expanded role in connection with the numerous federal government
energy market investigations relating to the Debtors and their
businesses, including investigations being conducted by the
Commodity Futures Trading Commission, the Department of Justice,
to the extent applicable, the U.S. Congress, and perhaps certain
other federal agencies or authorities, as well as certain state
energy market investigations, like that being conducted by the
Texas Public Utility Commission.

In addition, Ms. Goldstein says, the Debtors have requested (and
have indicated that they may further request from time to time),
that LeBoeuf assist the Debtors and Weil, Gotshal & Manges, LLP
in connection with certain issues and specific proceedings
(primarily administrative or litigation) that involve state and
federal law issues relating to the operation of the electric and
natural gas markets and transactions entered into by the Debtors
in the markets as well as representing certain of the Debtors
(and perhaps certain non-debtor affiliates of the Debtors) in a
lawsuit pending before the Los Angeles Superior Court entitled
Power Partners, LLC et al. v. Southern California Edison.

Ms. Goldstein reports that LeBoeuf has agreed to undertake these
representations.  Because these representations could be
construed as an expansion of the scope of LeBoeuf's retention as
special counsel, Ms. Goldstein explains that the firm has
requested the Debtors to file this Application seeking
authorization to ensure that the parties in the cases are aware
of LeBoeuf's expanded retention and that the Court approves of
the expansion.

The Debtors believe that the various agencies' investigations
into the energy trading market overlap to some extent and that
is logical and more cost-efficient for LeBoeuf to assume a
broader role in connection with the related investigations.

Furthermore, Ms. Goldstein continues, the Debtors have been
informed by Skadden, Arps, Slate, Meagher & Flom that it is
unable to represent the Debtors in the Additional Federal Energy
Market Investigations.  The Debtors believe that it would be
beneficial to, and most efficient for, the estates if LeBoeuf
expanded its representation of the Debtors to include a larger
role in the Additional Federal Energy Market Investigations due
to the natural overlap and interrelationship of the
investigations with the FERC investigation currently being
handled by LeBoeuf.  In this regard, Ms. Gray emphasizes that
LeBoeuf's familiarity with the information and documentation to
be furnished to the various agencies and other governmental
authorities will ensure, among other things, that services are
not being duplicated.

Ms. Gray points out that the Court had already granted a similar
application expanding the scope of retention of Fergus, a Law
Firm in connection with certain specific energy-market related
matters, primarily involving the state of California but also
including some California-based matters pending at FERC, and the
allocation of responsibilities and coordination of efforts as
between the Fergus Firm and LeBoeuf.  Ms. Gray clarifies that
the allocation of responsibility as between the Fergus Firm and
LeBoeuf will not be affected by this Application.

Moreover, Ms. Gray makes it clear that Skadden Arps will
continue to serve as the Debtors' principal outside legal
counsel interface with the CFTC, DOJ and the U.S. Congress in
connection with the governmental bodies' general investigations
of the Debtors and their businesses.  The ongoing investigations
cover much more than the electricity and natural gas markets.
"LeBoeuf, however, will have primary responsibility for
representation of the Debtors in the investigative activities
arising from or relating to the electricity and natural gas
markets," Ms. Gray says.  As with the Fergus Firm, Ms. Gray
relates, LeBoeuf will continue to work closely with Skadden Arps
to coordinate the firms' respective efforts to avoid duplication
of effort and provide efficient and effective representation to
the estates in connection with the Additional Federal Energy
Market Investigations.

Weil Gotshal, as the Debtors' lead bankruptcy counsel, will
continue to have principal responsibility for the majority of
the Additional Energy Market-Related Bankruptcy Matters.
However, Ms. Gray notes that there may be instances where the
Debtors will ask LeBoeuf to take the lead role in certain
proceedings, or with respect to certain energy regulatory or
market-related issues, because of the firm's expertise and
existing representations in this area.  Ms. Gray assures Judge
Gonzalez that LeBoeuf will work closely with Weil, Gotshal to
coordinate the firms' respective efforts to avoid duplication of
effort and provide efficient and effective representation to the
estates in connection with the Additional Energy Market-Related
Bankruptcy Matters.

Because of the time sensitive nature of the Additional Federal
Energy Market Investigations, the Additional State Energy Market
Investigations and the Additional Energy Market Related
Bankruptcy Matters, and the need for the Debtors to respond
quickly to various requests for information and respond to
various other matters, LeBoeuf began providing services as soon
as it was requested to provide the services.

Accordingly, the Debtors ask the Court to modify the Original
Retention Order to approve the expansion of LeBoeuf's employment
as the Debtors' special counsel pursuant to Section 327(e) of
the Bankruptcy Code nunc pro tunc to April 1, 2002.

The Debtors propose to pay LeBoeuf its customary hourly rates in
effect from time to time for services rendered and to reimburse
the firm according to its customary reimbursement policies.

The Debtors maintain that the attorneys of LeBoeuf, Lamb do not
have any connection with, or any interest adverse to, them,
their creditors, or any parties in interest, or their respective
attorneys and accountants. (Enron Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

Enron Corp.'s 9.125% bonds due 2003 (ENRN03USR1), DebtTraders
reports, are quoted at a price of 11.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USR1
for real-time bond pricing.


ENRON: MCI Worldcom Wants to Collect $3MM Admin. Expense Claim
--------------------------------------------------------------
MCI WorldCom Communications Inc. wants to collect its $3,168,012
administrative expense claim for postpetition services provided
to Enron Broadband Services.

Thomas R. Califano, Esq., at Piper Rudnick LLP, in New York,
tells the Court that Enron and WorldCom are parties to the MCI
WorldCom Network Service Agreement.  Under this Agreement,
WorldCom agreed to provide to Enron and Enron agreed to pay
Worldcom for various telecommunications services.

Mr. Califano reports that WorldCom is currently owed $3,168,012
for the provision of postpetition telecommunications services to
Enron Broadband.  Mr. Califano asserts that these services were
actual and necessary expenses of the administration of the
Debtors' Chapter 11 bankruptcy estates.  Thus, pursuant to
Section 503(b) of the Bankruptcy Code, WorldCom asks the Court
for an order:

    (a) allowing an administrative claim to MCI WorldCom; and

    (b) directing prompt payment of $3,168,01 from Enron to
        WorldCom. (Enron Bankruptcy News, Issue No. 35;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)


FLAG TELECOM: Creditors' Committee Signs-Up Akin Gump as Counsel
----------------------------------------------------------------
FLAG Telecom Holdings Limited's Official Committee of Unsecured
Creditors applies to the Court for authority to retain as
counsel Akin Gump Strauss Hauer & Feld LLP effective May 3,
2002.

The committee is composed of Alcatel Submarine Networks, Lucent
Technologies Inc., HSBC Bank USA, The Bank of New York, Cerberus
Capital Management LP, Elliott Management Corp, Varde Partners
Inc., PPM America Inc., and Pacific Investment Management
Company LLC (also known as PIMCO). James Schaeffer of PPM
America, Martin Healey of Lucent Technologies and Gerard F.
Facendola of BNY co-chaired the Committee.

Akin Gump has represented an informal committee of FLAG Ltd.
noteholders in debt-restructuring talks that began in April
2002. The informal committee dissolved after the official
committee was formed on May 3, 2002. Two members of the informal
committee also serve on the official committee.

The informal committee owed Akin Gump $60,000 for its services.

The officials committee will turn to Akin Gump for services,
such as:

  (a) advise the committee with respect to its rights, duties
      and powers in the Chapter 11 cases;

  (b) assist and advise the committee in its consultations with
      the Debtors relative to the administration of the cases;

  (c) assist the committee in analyzing the claims of the
      Debtors' creditors and the Debtors' capital structure and
      in negotiating with holders of claims and equity
      interests;

  (d) assist the committee in its investigation of the acts,
      conduct, assets, liabilities and financial condition of
      the Debtors and of the operation of the Debtors'
      businesses;

  (e) assist the committee in its analysis of and negotiations
      with the Debtors or any third party concerning matters
      related to, among other things, the assumption or
      rejection of certain leases of non-residential real
      property and executory contracts, asset dispositions,
      financing of other transactions and the terms of a plan of
      reorganization for the Debtors;

  (f) assist and advise the committee as to its communications
      to the general creditor body regarding significant matters
      in the cases;

  (g) represent the committee at all hearings and other
      proceedings;

  (h) review and analyze applications, orders, statements of
      operations and schedules filed with the Court and advise
      the committee as to their propriety;

  (i) assist the committee in preparing pleadings and
      applications as may be necessary in furtherance of the
      committee's interests and objectives; and

  (j) perform such other legal services as may be required or
      are otherwise deemed to be in the interests of the
      Committee in accordance with the committee's powers and
      duties as set forth in the Bankruptcy Code, Bankruptcy
      Rules or other applicable law.

                      Disinterestedness

Michael S. Stamer, Esq., a member of Akin Gump, says the Firm
neither holds nor represents interests adverse to the creditors'
committee, the Debtors and their creditors. The Firm has run a
conflicts check through its database of clients and adverse-
party index against names provided by counsel for the Debtors
and other parties.

Mr. Stamer says the Firm represents Cable & Wireless Plc and
certain of its subsidiaries and affiliates, analyzing its past
and future business relationships with various
telecommunications companies.

The Firm has ceased representing Cable & Wireless, specifically
on matters relating to the Debtors, after it was selected as
counsel for the creditors committee. It also obtained a waiver
from Cable & Wireless to represent the committee.

Akin Gump earned $10,000 in connection with work performed for
Cable & Wireless. The amount remains unpaid.

                       Compensation

The current hourly rates for Akin Gump professionals with
primary responsibility for the Debtors' cases are:


Professional                                      Compensation
------------                                      ------------

Michael S. Stamer (Financial Restructuring Partner) $550/hour
David P. Simonds (Financial Restructuring Counsel)  $375/hour
Allan Hill (Financial Restructuring Associate)      $245/hour


Mr. Stamer says Akin Gump intends to apply for compensation for
services rendered to the informal committee from April 12, 2002
to May 2, 2002. The services included reviewing and analyzing
the Debtors' first-day motions, including the Debtors' motions
to obtain a debtor-in-possession financing, appearing at
hearings and participating in negotiations with parties in
interest. (Flag Telecom Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GENSCI REGENERATION: Cease Trading Order Expires as of July 5
-------------------------------------------------------------
The Temporary Management Cease Trade Orders imposed on GenSci
Regeneration Sciences Inc. have been allowed to lapse or expire
as of July 5, 2002.

GenSci Regeneration Sciences Inc. has established itself as a
leader in the rapidly growing orthobiologics market, providing
surgeons with biologically focused products for bone repair and
regeneration.  Its products can either replace or augment
traditional autograft surgical procedures.  This permits less
invasive procedures, reduces hospital stays, and improves
patient recovery.  Through its subsidiaries, the Company
designs, manufactures and markets biotechnology-based surgical
products for orthopedics, neurosurgery and oral maxillofacial
surgery.

For additional information please visit GenSci's new Web site:
http://www.gensciinc.com

At March 31, 2002, the company's total assets exceeded its total
liabilities by about C$16 million.


GLOBAL CROSSING: Court Okays Coudert Brothers as Special Counsel
----------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates, by its Special
Committee on Accounting Matters of the Board of Directors,
obtained Court approval to retain the law firm of Coudert
Brothers LLP in Washington, D.C.  This firm would serve as
special litigation counsel in connection with the Special
Committee's review of issues arising out of the allegations
raised by Mr. Roy Olofson.  These allegations have to do with
the Debtor's accounting practices, financial disclosures, and
related matters, pursuant to Sections 327(e) and 328(a) of the
Bankruptcy Code, nunc pro tunc to April 15, 2002.

Mitchell C. Sussis, the Debtors' Corporate Secretary, related
that in February, 2002, the Debtor's Board of Directors formed
the Special Committee to conduct a review of the Olofson
Allegations.  The Special Committee needs the expertise provided
by Coudert to investigate the Olofson Allegations.  The Special
Committee, on behalf of the Debtor, and Coudert have executed an
engagement letter memorializing this representation.  The
Debtors seek authorization from this Court to approve the
retention of Coudert as special counsel, under the terms
discussed herein and as further described in the Engagement
Letter.  The Debtor submits that, because of the Special
Committee's immediate need for representation with regard to
these matters, Coudert was asked to begin its representation of
the Debtor before the terms of this engagement were finally
memorialized, and that approval of Coudert's retention nunc pro
tunc to April 15, 2002 is fair and equitable.

Mr. Sussis averred that the professional services that Coudert
will render to the Debtor include the investigation into and the
analysis of the certain aforementioned allegations made by Mr.
Roy Olofson, a former employee, and regarding various
transactions and related accounting and financial disclosure
matters.  The Debtor and/or certain directors and officers are
currently defendants in at least 28 class action lawsuits
pending in at least four jurisdictions alleging securities law
violations.  These are subjects of an SEC investigation relating
to the Debtor's accounting practices, as well as an
investigation by the U.S. Department of Justice relating to
these issues.  The Debtor anticipates that additional
investigations may be commenced in the future, and that future
lawsuits may be brought against the directors and officers.

According to Mr. Sussis, the Special Committee is undertaking
its investigation as a result of receipt by the Debtor of a
letter from the former employee, Mr. Olofson, alleging that
certain of the Debtor's business practices were improper.
Debtors provided the Olofson letter to Arthur Andersen, LLP, who
notified the Debtor that, pursuant to Section 10(a) of the 1934
Securities and Exchange Act, it was required to undertake an
audit of issues related to the Olofson Allegations, including
the Debtor's initial attention to and treatment of the issues.
Subsequently, the SEC initiated an investigation into the
Olofson Allegations. The SEC has requested and expects the
Special Committee to undertake an independent investigation in
parallel with, and to supplement and verify, the 10(a) audit
undertaken by Andersen. Further, Mr. Sussis submits that the
Debtora cannot issue its audited financial statements until the
10(a) audit is completed; the 10(a) audit cannot be adequately
completed without the Special Committee investigation.  Thus, to
comply with the SEC mandate and for the Debtor to issue its
audited financial statements, the Special Committee must
complete its independent investigation.  To do this, Debtor must
retain special counsel to assist the Special Committee with
specific legal expertise in corporate investigations to conduct
the required independent legal investigation.

The hourly rates proposed to be charged by Coudert for the
primary attorneys involved in this representation range from:

       Partners              $400 to $495
       Counsel               $350
       Associates            $165 to $350
       Legal Assistants      $105 to $130

These rates are subject to periodic adjustments in the ordinary
course of Coudert's operations to reflect economic and other
conditions. (Global Crossing Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders says that Global Crossing Holdings Ltd.'s 9.625%
bonds due 2008 (GBLX3) are quoted at a price of 1.25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX3for
real-time bond pricing.


GUILFORD MILLS: Hires Rothschild to Render Restructuring Advice
---------------------------------------------------------------
Guilford Mills, Inc. and its debtor-affiliates obtained court
approval from the U.S. Bankruptcy Court for the Southern
District of New York to retain Rothschild Inc. as restructuring
advisor and investment banker.

Rothschild has provided prepetition service to the Debtors in
connection with their restructuring efforts and is familiar with
the Debtors' businesses. The Debtors have determined that the
services provided by Rothschild are necessary and will be
beneficial to the Debtors' estates.

Rothschild will be employed to:

     a) review and analyze the operating and financial
        strategies of the Debtors, as it deems necessary,
        appropriate and feasible,;

     b) review and analyze the business plans and financial
        projections prepared by the Debtors including testing
        assumptions and comparing those assumptions to the
        Debtors' historical and industry trends;

     c) evaluate the Debtors' debt capacity in light of the
        projected cash flows and assist in the determination of
        an appropriate capital structure for the Debtors;

     d) assist the Debtors and their other professionals in
        developing the terms of proposal regarding a
        Restructuring Transaction;

     e) determine a range of values for the Debtors and any
        securities that the Debtors offer in connection with a
        Restructuring Transaction;

     f) in connection with advising the Debtors regarding their
        intermediate and long-term business prospects and
        strategic alternatives that may be available to the
        Debtors to maximize the business enterprise value of the
        Debtors, advise the Debtors on the risks and benefits of
        considering a Restructuring Transaction;

     g) assist or participate in negotiations with the Debtors
        and/or any other parties in interest regarding a
        Restructuring Transaction;

     i) advise and attend meetings of the Debtors' Board of
        Directors, as necessary;

     j) assist in obtaining debt and equity financing and in
        negotiation with prospective providers of such
        financing, if requested by the Debtors;

     k) assist in the plan of reorganization, negotiation and
        confirmation process, including preparation and delivery
        of expert testimony relating to financial matters, if
        required; and

     l) render such other financial advisory and investment
        banking services as may be agreed upon by as Rothschild
        and the Debtors.

As provided in the Rothschild Agreement, Rothschild will
receive:

     a) A monthly cash advisory fee equal to $150,000 per month

     b) A recapitalization fee payable upon the consummation of
        the Restructuring Transaction equal to $3,000,000
        (1.125% of the approximately $270 million of funded debt
        outstandings) provided that the Debtors may elect to pay
        any Recapitalization Fee in installments;

     c) A new capital fee payable upon closing of new financing
        provided that such financing is raised from third
        parties not involved in the Restructuring Transaction,
        equal to the excess of:

        A) the sum of
            i) 1% of the face amount of any secured debt
           ii) 3.5% of the face amount of any junior secured or
               senior or subordinated unsecured debt and
          iii) 6% of the gross proceeds of any equity or hybrid
               capital over

        B)  i) $1,500,000 if the sum of the amounts in (A) is
               equal to or greater than $3,000,000 or
           ii) of the sum of the amount in (A) if its less
               than $3,000,000.

Guilford Mills, Inc., a worldwide producer and seller of warp
knit, circular knit, flat-woven and woven velour fabric filed
for chapter 11 protection on March 13, 2002. Albert Togut, Esq.
at Togut, Segal & Segal LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed $551,064,000 in total assets and
$409,555,000 in total debts.


HOMELAND HOLDING: Will Sell All Assets to HAC Under Reorg. Plan
---------------------------------------------------------------
On June 24, 2002, Homeland Holding Corporation and Homeland
Stores, Inc., filed with the United States Bankruptcy Court for
the Western District of Oklahoma the Joint Plan of
Reorganization of Homeland Stores, Inc. and Homeland Holding
Corporation and Homeland executed an Asset Purchase Agreement
with HAC, Inc., an affiliate of Associated Wholesale Grocers,
Inc.

The Plan contemplates that, on the effective date, Homeland will
sell substantially all of its assets to HAC, Inc. pursuant to
the Asset Purchase Agreement and that, in exchange for the
assets being purchased from Homeland, HAC will pay or otherwise
provide consideration to Homeland in the sum of
$47,195,000, subject to any adjustments required under the Asset
Purchase Agreement.  The Plan also contemplates that Homeland
will liquidate its other remaining assets and will use the funds
from such transactions to satisfy claims against Homeland as
provided in the Plan.

The Plan contemplates that the holders of shares of common stock
of Holding will not receive any distribution and the shares of
common stock of Holding will be cancelled on the effective date.

The Plan and the transactions contemplated thereby are subject
to the receipt of the approval of the Bankruptcy Court and
certain other approvals and conditions, as well as other
customary closing conditions.


ICG COMM: Seeks Extension of Solicitation Period Until Sept. 2
--------------------------------------------------------------
ICG Communications, Inc. and its debtor-affiliates ask Judge
Peter J. Walsh to further extend the exclusive period during
which the Company may solicit acceptances of a reorganization
plan.  They ask to extend the Solicitation Period for
approximately two months, through and including September 2,
2002.

Section 1121(b) of the Bankruptcy Code provides for: (a) an
initial 120-day period after the Petition Date within which the
Debtors have the exclusive right to file a reorganization plan
or plans in their cases; and (b) an initial 180-day period after
the Petition Date within which the Debtors have the exclusive
right to solicit and obtain acceptances of any reorganization
plan or plans the Debtors file during the Plan Proposal Period.

                       Problems With Cerberus

On May 20, 2002, Marian M. Quirk, Esq., at Skadden Arps Slate
Meagher & Flom in Wilmington, Delaware, recalls, the Court
entered an order confirming the Plan.  However, the Plan
contained certain conditions precedent to consummation,
including obtaining certain exit financing from Cerberus Capital
Management, L.P.  Prior to the closing with respect to this
financing, CCM insisted on the addition of certain provisions
that the Debtors rejected because, among other things, the
Debtors believed such changes would fundamentally alter the
terms of the commitment letters included in the Plan.

To date, CCM has refused to close the Plan's transactions.
Negotiations for modifications that may require re-solicitation
of the Plan are ongoing.  Accordingly, by this Motion, the
Debtors request to further extend the Solicitation Period for
approximately two months, through and including September 2,
2002. During the Solicitation Period, pursuant to section
1121(d) of the Bankruptcy Code, no party other than the Debtors
would be permitted to file or solicit acceptances of a
reorganization plan for the Debtors.  The Debtors explain that
they believe that by filing the Plan within the Plan Proposal
Period, the Bankruptcy Code prohibits any party from filing a
competing plan within the Solicitation Period.  However, the
Debtors bring this Motion as a cautionary action.

Under section 1121(d) of the Bankruptcy Court, this Court may
extend the Exclusive Periods for cause.  In determining whether
cause exists to extend the Exclusive Periods, this Court should
examine, among others, the following factors:

     (a) The size and complexity of the Debtors' cases;

     (b) The Debtors' progress in resolving issues facing their
         estates; and

     (c) Whether an extension of time will harm the Debtors'
         creditors.

In evaluating these factors, bankruptcy courts are afforded
maximum flexibility to review the particular facts and
circumstances of each case.  The Debtors submit that an
additional two month extension of the Solicitation Period is
fully justified in these cases, because, among other things:

     (a) The Debtors' cases are large and complex;

     (b) The Debtors have made significant progress in resolving
         the many complex issues facing their estates; and

     (c) Extension of the Solicitation Period will facilitate
         reorganization of the Debtors and not prejudice any
         party in interest.

            The Debtors' Cases are Large and Complex

The size and complexity of the Debtors' Chapter 11 cases alone
constitutes sufficient cause to further extend the Solicitation
Period. The Debtors are one of the largest competitive
telecommunications companies in the United States. One of the
largest cases filed in 2000, the Debtors' petitions for relief
list assets totaling over $2.7 billion and total debts of over
$2.8 billion. As of year-end 1999, the Debtors' extensive
network assets provided nationwide data services to an estimated
700 cities, and had in service over 730,000 customer lines and
data access ports. As of year-end 1999, the Debtors had over
10,000 business customers and approximately 550 Internet service
provider customers.

In light of the sheer size and enormous complexity of these
cases, the Debtors submit that their request for a further two
month extension is modest and consistent with extensions granted
in other large reorganization cases.

             The Debtors Have Made Good Faith Progress
                Toward Proposing a Successful Plan

The Debtors' reorganization efforts proceeded aggressively
toward the plan filing and solicitation process. The Debtors
filed the Plan and accompanying Disclosure Statement. This Court
approved of the adequacy of the Disclosure Statement on May 20,
2002.

            Extension of the Solicitation Period Will
         Facilitate Reorganization of the Debtors And Not
                Prejudice Any Party In Interest

A further extension of the Solicitation Period will facilitate
the Debtors' restructuring efforts.  It will afford the Debtors
the time needed to complete settlement discussions with CCM and
potentially re-solicit votes for the Plan in a matter that
fairly and efficiently treats the claims of the estates'
creditors and provides for the greatest possible distributions
of value on account of the claims. In contrast, termination of
the Exclusive Periods and the uncertainty that would result from
the prospect of competing reorganization plans undoubtedly would
result in lesser values available for distribution to creditors.

Finally, the requested extension of the Solicitation Period will
not prejudice the interests of any creditor.  The Debtors have
timely met, and continue to timely meet, their postpetition
obligations in these cases. This fact, alone, strongly militates
in favor of the Court granting the Debtors' requested extension
of the Solicitation Period.

By Delaware Local Rule, the Debtors' solicitation period is
automatically extended through the conclusion of the hearing on
this motion, which is currently scheduled for August 29, 2002.
(ICG Communications Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IT GROUP: Committee Bags Okay to Hire R.J. Pompe as Consultant
--------------------------------------------------------------
The Official Committee of Unsecured Creditors, in the chapter
cases of The IT Group, Inc., and its debtor-affiliates, obtained
Court authority and permission to employ Raymond J. Pompe as
Committee consultant.

Murray H. Hutchison, Co-chairman of the Unsecured Creditors
Committee, believed that the employment of Mr. Pompe is critical
for a successful investigation and evaluation of the Debtors'
businesses.  Mr. Pompe was previously employed by the Debtors
for 11 years serving as Vice President of the Construction and
Remediation Services division, Senior Vice President of Project
Operations, Senior Vice President and President of the
Engineering and Construction division and is familiar with the
Debtors and their businesses.

Ms. Hutchison said that Mr. Pompe will:

A. work at the direction of the Committee, and in conjunction
     with other advisors retained by the Committee;

B. provide advice and assistance to the Committee concerning any
     and all aspects of investigating the acts, conduct assets,
     liabilities, and financial conditions of the Debtors; and,

C. provide advice and assistance to the Committee concerning the
     Debtors' business, and any other matter relevant to the
     cases or to the formulation of the Debtors' plan of
     reorganization.

As agreed, Mr. Pompe's compensation will be a flat $1,000 per
day. (IT Group Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IMMUNE RESPONSE: Restructures Contracts with Trinity Medical
------------------------------------------------------------
The Immune Response Corporation (Nasdaq: IMNR) announced a
significant restructuring of its REMUNE(R) license and
collaboration contract with Trinity Medical Group USA, Inc. (OTC
Bulletin Board: TMGU).

The amended contract provides for manufacturing costs and mark-
up plus $50.00 per unit to be paid to Immune Response, which
obligation would expire upon the earlier of the first one
million doses of REMUNE(R) purchased by the Trinity Medical
Group or December 31, 2007.  As consideration for the increased
purchase price to be paid to Immune Response, Trinity Medical
Group will receive shares of Immune Response common stock and a
waiver of the final $5 million common stock purchase obligation,
which would have applied in the event of the optional technology
transfer of REMUNE(R) manufacturing rights in Trinity Medical
Group's licensed territory.

Trinity Medical Group will receive four million shares of
restricted Immune Response common stock immediately and up to
another three million shares upon the occurrence of certain
sales milestones.  All of the restricted shares are subject to
registration rights.  If REMUNE(R) is approved for use by the
Thai government, Trinity Medical Group will be obligated to
purchase two million shares of common stock in exchange for a $5
million payment. Under the terms of the original agreement,
Trinity Medical Group would have been obligated to purchase
333,333 shares of Immune Response stock in exchange for a $5
million payment upon Thai government approval.

"This is a win-win situation for both companies and concludes an
ongoing effort to improve both companies' position in marketing
and distributing REMUNE(R) throughout Southeast Asia," said Dr.
Dennis Carlo, president and chief executive officer of The
Immune Response Corporation.

The previous supply contract with Trinity Medical Group, dating
back to 1995, called for Immune Response to receive the unit
cost of production plus an agreed upon mark-up percentage, which
would have resulted in significantly less revenues than the
just-completed agreement.

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

                         *   *   *

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

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

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


INDEPENDENT BANK: Fitch Assigns B Short-Term Rating
---------------------------------------------------
Fitch Ratings affirms its current long-term rating for
Independent Bank Corp. at 'BB+' and assigns a short-term rating
of 'B', all other ratings are affirmed. INDB's Rating Outlook is
Stable. Fitch also assigned new ratings to Rockland Trust
Company.

The affirmation reflects INDB's relatively consistent financial
profile. The acquisition of 16 former FleetBoston branches
during late 2000 deepened the company's foothold in southeastern
Massachusetts, and somewhat enhanced INDB's 2001 performance
metrics. The branch acquisition expanded the company's deposit
funding base by adding low cost core deposits and boosted loan
yields by adding higher yielding commercial loans. Offsetting,
the branch acquisition compressed the company's tangible equity
position (tangible equity/tangible assets was 4.68% at 3/31/02),
and expanded the company's cost base, specifically related to
the additional staffing and infrastructure support expenses.

Although INDB's loan portfolio is heavily weighted in higher
yielding commercial real estate and indirect automobile loans,
which are generally considered riskier loan categories, the
company has kept portfolio credit costs low and asset quality
sound. However, the company's modestly sized and somewhat
concentrated corporate securities portfolio (currently
investment grade, excluding WorldCom) evidenced increased market
risk and reflected a material decline in value, due specifically
to the diminishing value of one of its holdings. INDB recently
announced that it would take a 2Q02 $4.4mln (pre-tax) charge
related to its distressed $5.1mln WorldCom bond investment. That
said, overall market risk remains modest as the corporate
securities portfolio represents only a minor component
(approximately 2%) of INDB's total investment portfolio, which
consists overwhelmingly of agency MBS, bullets and CMOs. In the
intermediate term, as with other financial institutions, Fitch
does not expect asset quality metrics to remain at their current
strong levels and would anticipate some modest deterioration in
asset quality. INDB's capital position is adequate, although
INDB's level of tangible common equity is somewhat limiting.
That said, future earnings generation and retention should
expand tangible common equity to a more comfortable level going
forward.

                     Independent Bank Corp.

                       --Short-term 'B';

                       --Long-term 'BB+';

                       --Individual 'B/C';

                       --Support '5';

                       --Rating Outlook Stable.

                    Rockland Trust Company

                       --Short-term 'B';

                       --Short-term deposit 'F3';

                       --Long-term 'BB+';

                       --Long-term deposit 'BBB-';

                       --Individual 'B/C';

                       --Support '5';

                       --Rating Outlook Stable.


INNOVATIVE CLINICAL: Will Make Late Form 10-K Filing with SEC
-------------------------------------------------------------
Innovative Clinical Solutions Ltd. will delay the filing of its
annual report for the period ended January 31, 2002 because the
Company completed the merger of its principal operating
subsidiary, Clinical Studies, Ltd., with Comprehensive
Neuroscience, Inc., a privately held company on February 7,
2002.  In addition, in January 2002, Innovative Clinical
Solutions determined to discontinue its network management
business. Delays due to complexities of the accounting treatment
of these events have resulted in its inability to timely file
its annual report.

Innovative Clinical Solutions, Ltd., headquartered in
Providence, Rhode Island, provides services that support the
needs of the pharmaceutical and managed care industries.
Innovative Clinical Solutions is trying to reposition itself
after filing for Chapter 11 bankruptcy protection and
restructuring. The company has sold its physician practices and
medical service businesses; it also sold its clinical trial
support division, which served pharmaceutical and biotechnology
companies, to IMPATH. The company is now focused on its network
management services, which include managed care contracting and
disease management, although it may sell this division as well.


INTEGRATED HEALTH: Court Okays Integra to Appraise Properties
-------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates
obtained Court approval to employ and retain of Integra Realty
Resources -- Washington D.C., nunc pro tunc to May 29, 2002, for
the purpose of appraising and estimating the market value of the
Debtors' fee-simple interests in certain nonresidential real
property and improvements:

(a) three nursing homes located in the State of New Mexico;

(b) one nursing home located in the State of Ohio;

(c) one nursing home located in the State of North Carolina, and

(d) one administrative facility located in the state of South
    Carolina, which incorporates a laundry facility.

Integra began the Appraisal on the May 29, 2002, and expects to
complete the Appraisal by mid-July.  Upon completing the
Appraisal, Integra will be entitled to a fee of $38,500.00 (the
Appraisal Fee), one-half of which will be paid to Integra on or
about the Engagement Date, as a retainer. The Debtors submit
that the payment of such a retainer is customary in the
commercial real estate appraisal industry. (Integrated Health
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


KAISER ALUMINUM: Sets-Up Uniform Protocol to Settle Small Claims
----------------------------------------------------------------
Patrick M. Leathem, Esq., at Richards, Layton & Finger P.A. in
Wilmington, Delaware, states that, in the ordinary course of
their businesses, Kaiser Aluminum Corporation and its debtor-
affiliates have become and likely will become parties to a
number of actions, many of which involve relatively small
amounts.  In view of the number of the actions, many of which
ordinarily would be resolved consensually, the process of
drafting, filing, serving and conducting hearings on each
individual settlement of an action, as otherwise required under
Bankruptcy Rule 9019(a), would be impractical and
administratively burdensome for the Debtors' estates and the
Court.

Accordingly, the Debtors request the Court to grant them ongoing
authority, in their sole discretion, to settle and pay certain
claims and controversies arising in the ordinary course of the
Debtors' businesses without further court approval.  The Debtors
also seek approval of the proposed Settlement Procedures to
settle these actions in a cost-effective and streamlined manner.

Mr. Leathem tells the Court that these actions fall within the
following categories:

A. Disputes with customers, vendors or other third parties
   involving breach of contract and related tort and other
   claims;

B. Disputes with current and former employees involving terms
   and conditions of employment, including grievances and
   arbitration awards under collective bargaining agreements;
   and,

C. Claims (excluding asbestos claims) brought by customers or
   other third parties seeking damages for personal injury or
   property loss allegedly caused by or in connection with the
   tortuous acts of the Debtors' employees or other agents, the
   condition of the Debtors' premises or the services provided
   or products sold by the Debtors.

Mr. Leathem also clarifies that the Debtors are not seeking
authority to settle or compromise any claims relating to
asbestos or occupational diseases, in this Motion.

According to Mr. Leathem, pursuant to the Settlement Procedures,
the Debtors would be authorized in the settlement of any action
to agree to:

A. In the instance of an action against one or more of the
   Debtors:

   a. if the action is covered by the Debtors' insurance
      policies, permit the party or parties to recover the
      settlement amount from available insurance proceeds;

   b. the allowance of a general unsecured claim against the
      applicable Debtor or Debtors;

   c. make an Authorized Payment upon the parties' entry into
      the settlement; or,

   d. a combination of these settlements;

B. In the instance of an action by one or more of the Debtors
   against a third party, accept one or more payments after the
   parties' entry into the settlement.

In either instance, Mr. Leathem states that the total settlement
amount for the action and the amount of any Authorized Payment
will be within the sole discretion of the Debtors.   This is
excepting that, in an action against one or more of the Debtors,
including actions based on claims covered by insurance:

A. The Settlement Amount as it pertains to claims against one or
   more of the Debtors may not exceed $100,000; and,

B. The amount of any Authorized Payment may not exceed $50,000;

In addition to the limitations per action imposed by these
Settlement Authorities, the aggregate amount of Authorized
Payments under the Settlement Procedures will be limited to a
maximum of $3,000,000.  Mr. Leathem explains that these
limitations per action and in the aggregate will place
reasonable parameters on the proposed settlement program, while
permitting the Debtors, based on their historical experience, to
settle a significant percentage of the actions without further
Court involvement.

The Settlement Procedures further provides that:

A. For each settlement entered into in accordance with the
   Settlement Procedures, the Debtors will be authorized,
   without further notice or Court approval, to take all actions
   as are necessary or appropriate to effectuate the settlement
   and, if the settlement contemplates the payment of an
   Authorized Payment, to make the Authorized Payment, in full
   in cash, upon the consummation of the settlement.

B. The Settlement Procedures will not apply to any compromise
   and settlement of an action that involves an "insider," as
   that term is defined in Section 101(31) of the Bankruptcy
   Code.

C. Within 30 days after the end of each calendar quarter, the
   Debtors will prepare a Settlement Report itemizing each
   settlement consummated pursuant to the Settlement Procedures
   during the prior calendar quarter.  The Settlement Report
   will set forth for each settlement:

   a. the names of the settling parties;

   b. whether the Action was by or against the applicable Debtor
      or Debtors;

   c. the Settlement Amount;

   d. the general unsecured claim, if any, allowed in connection
      with the settlement; and,

   e. the Authorized Payment, if any, made in connection with
      the settlement.

D. The Debtors will serve each Settlement Report to:

    a. the U.S. Trustee;
    b. counsel to the Creditors' Committee;
    c. counsel to the Asbestos Committee; and,
    d. counsel to the Debtors' postpetition lenders.

Mr. Leathem expects the Settlement Procedures to yield
significant administrative savings to the Debtors' estates
because a significant portion of the actions currently pending
as well as future actions may be resolved through the use of the
Settlement Procedures.  He further believes that making
Authorized Payments will encourage parties to resolve as many of
the actions as possible, thereby further eliminating unnecessary
expenditures of time and estate assets with respect to those
claims.  It will also eliminate the need to address these
settled claims during the claims resolution and plan
distribution process -- further resulting to administrative
savings for these estates. (Kaiser Bankruptcy News, Issue No.
11; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Kaiser Aluminum & Chemicals' 12.75% bonds due 2003 (KAISER2) are
trading at about 17, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KAISER2for
real-time bond pricing.


KMART CORP: Seeking Bank One's Appointment as Indenture Trustee
---------------------------------------------------------------
J.P. Morgan Trust Company N.A. is the current Indenture Trustee
under 35 outstanding public bond indentures.

Keith H. Wofford, Esq., at Kelley Drye & Warren LLP, in New
York, explains that the Bonds issued under each of the
Indentures financed construction or improvement of individual
Kmart stores or the proceeds were used to refinance construction
debt.

Each Indenture was part of a project financing that involved
four parties:

    (1) the Issuer of the Bonds for the particular project;

    (2) the Investor or owner of the real estate where the Kmart
        store was to be located;

    (3) Kmart or a Kmart affiliate which:

         (i) executed a lease with the Investor obligating Kmart
             to occupy the financed store location and to pay
             rent under the lease, and

        (ii) often also executed a guaranty of the payment of
             the principal and interest on the related series of
             Bonds; and

    (4) the Indenture Trustee under the particular Indenture,
        which collects rent payments under the relevant lease
        directly from Kmart.  These payments had been assigned
        by the Investor to the Indenture Trustee in order to pay
        the debt service on the related Bonds.

According to Mr. Wofford, the issuer of the Bonds under each
Indenture is a government economic development agency or
municipality.  Thus, Mr. Wofford says, the Issuers are not
liable to pay on the Bonds, nor is any Issuer a guarantor of the
Bonds. "The primary, if not sole, contribution of each Issuer to
the respective Kmart development projects was that, through the
involvement of the Issuer, each series of Bonds was entitled to
tax-exempt status," Mr. Wofford explains.  Due to the status,
Mr. Wofford says, the interest rate on each series of Bonds is
typically lower than other competing, taxable bonds, providing a
major financial benefit to Kmart by reducing Kmart's payment
obligations.

Similarly, with limited exceptions, Mr. Wofford points out that
the Bonds are also non-recourse to the Issuer, which in most
cases is a special purpose entity with few assets other than the
particular Kmart location owned.  Thus, Mr. Wofford notes, the
primary sources of repayment of each respective series of Bonds
are:

    (i) the lease executed by Kmart for the relevant store
        location,

   (ii) the guarantee of the Bonds, if any, executed by Kmart,
        and

  (iii) in the case of a payment default, by foreclosure on the
        collateral, generally, the fee or the leasehold interest
        where the store is located.

Mr. Wofford tells the Court that the lease for the related Kmart
store and the rents have been assigned to the Indenture Trustee
as collateral or direct payment rights under the terms of each
Indenture, and the Indenture Trustee has the right to enforce
both the Kmart lease and any Kmart guarantee of the Bonds.

When the Debtors filed for bankruptcy, JP Morgan was concerned
that there might exist potential or perceived disqualifying
conflicts of interest between its role as Indenture Trustee
under the Indentures and either:

    (i) its role as trustee for other secured or unsecured bonds
        issued by or supported by the Debtors,

   (ii) its position as a direct holder of secured or unsecured
        claims against the Debtors, or

  (iii) both.

So JP Morgan immediately sought out an appropriate successor
Indenture Trustee, in order that JP Morgan might resign and
another institution could succeed as Indenture Trustee under the
Indentures.

Due to the size and complexity of the Debtors' cases, Mr.
Wofford says, JP Morgan quickly realized that the number of
financial institutions that are of appropriate size and
sophistication to serve as successor Indenture Trustee is very
small.  Further, some appropriate successors are unwilling.

After consulting with numerous banks with corporate trust
departments, Mr. Wofford says that Bank One Trust Company is the
only institution that JP Morgan has been able to identify that:

    (i) meets the criteria for a successor Indenture Trustee set
        forth in the Indentures,

   (ii) is otherwise an appropriate candidate to serve as
        successor Indenture Trustee, and

  (iii) is willing and able to serve as successor Indenture
        Trustee.

Harold L. Kaplan, Esq., at Gardner, Carton & Douglas, in
Chicago, Illinois, confirms that Bank One Trust Company has no
disqualifying conflict of interest with respect to the Bonds and
serving as Indenture Trustee based on pre-existing banking or
trustee relationships.  Out of an abundance of caution, Mr.
Kaplan discloses that:

  (a) Bank One Trust Company is affiliated with Bank One, N.A.,
      a member of an unsecured, prepetition lending group. Bank
      One, N.A., was listed as a top-50 creditor by Kmart in its
      petitions with a scheduled debt of $65,704,000. In
      addition, Bank One, N.A., and a number of affiliates
      continue to serve depository and cash management
      functions, or in other similar capacities, for Kmart
      stores and entities. In those capacities, Bank One may
      undertake certain actions as an unsecured creditor like
      assigning its prepetition unsecured debt to one or more
      third parties in one or more arms-length transactions or,
      in its cash management capacity, enforcing its rights to
      collateral, in the form of a right of setoff against cash
      collateral in the event that Kmart overdraws on an account
      held at Bank One, arising under the DIP Financing Order
      entered on March 6, 2002; and

  (b) Bank One Trust Company already serves as trustee under a
      large number of indentures and pooling agreements where
      similar series of bonds were issued by municipalities,
      governmental agencies, or other parties to finance Kmart
      stores.

Mr. Kaplan explains that the existing Bank One bond financings
are structurally similar to the project financings relating to
the Bonds, and the holders of the existing bonds for which Bank
One Trust Company presently acts as trustee share common
interests with the holders of the Bonds.  "Keeping all of the
financings together under one 'roof' should also reduce
expenses, by spreading common costs among a number of bond
issues and eliminating duplicative administration by two (or
more) Indenture Trustees," Mr. Kaplan says.

Over two months ago, JP Morgan and Bank One Trust Company agreed
to assign all of JP Morgan's right, title and interest in the
trusteeship under each Indenture to Bank One Trust Company
pursuant to a certain Irrevocable Assignment of Kmart Related
Trusteeships.

JP Morgan officially tendered its resignation as Indenture
Trustee under each Indenture to each respective Issuer on May
16, 2002, to the holders of Bonds, and where appropriate or
required, to the Investor and Kmart.  But the resignation will
only become effective upon appointment of a successor Indenture
Trustee.

According to Mr. Wofford, each of the Indentures has specific
provisions governing the process of the appointment of a
successor Indenture Trustee following a resignation by the
Indenture Trustee.  "About 31 of the Indentures provide that the
successor Indenture Trustee is to be chosen by the majority of
the holders of the Bonds," Mr. Wofford relates.  Those 31
Indentures all grant the Issuer the right to select an interim
successor Indenture Trustee until a permanent successor is
selected by the Majority Holders.  "The remaining four
Indentures provide that the Issuer shall choose the successor
Indenture Trustee, with the consent of the Investor," Mr.
Wofford says.

Mr. Wofford contends that the selection of the successor
Indenture Trustee by the Majority Holders or the Issuer may be
appropriate under normal circumstances.  However, Mr. Wofford
notes, the small number of financial institutions:

    (i) that are permitted to serve under the terms of each
        Indenture,

   (ii) that are appropriate to serve, and

  (iii) that are willing to serve,

make the selection process impractical in the context of Kmart's
bankruptcy case.  "It is extremely difficult for dispersed
Bondholders or municipal agencies to determine which financial
institutions are available, competent, and willing to serve,
given the size and complexity of the Debtors' bankruptcy cases,"
Mr. Wofford observes.  If the process in the Indentures were
allowed to go forward indefinitely, without the benefit of JP
Morgan's recommendation of a successor Indenture Trustee and the
supervision of the Bankruptcy Court, Mr. Wofford anticipates
that the likely outcome would be that the Issuer or the
Bondholders would attempt to select one financial institution
after another, only to find that each one was unwilling or
unable to accept an appointment as Indenture Trustee.  Given the
time required for the Bondholders to vote on each potential
successor Indenture Trustee, Mr. Wofford says, this selection
process could continue for several months before an appropriate
successor Indenture Trustee was in place.

In order to avoid this problem, JP Morgan assigned the
trusteeships to Bank One Trust Company, while preserving the
right of Majority Holders to select a different successor
Indenture Trustee if they so desire, and sent out a notice of
the assignment to Bondholders describing the assignment.
However, Mr. Wofford notes, since the average Bondholder may not
have the time, interest or wherewithal to select an Indenture
Trustee, the selection process could, and likely would, languish
due to the fact that JP Morgan's resignation would not become
effective until a successor is appointed by the Bondholders and
accepted its new position.  If and until that occurred, Mr.
Wofford relates, JP Morgan would remain as Indenture Trustee
under each Indenture, with its potential or perceived
disqualifying conflicts unresolved.

As of June 14, 2002, the Majority Holders have not selected a
proposed successor Indenture Trustee under any of the
Indentures.

In order to provide for the circumstance where the Majority
Holders cannot or do not timely appoint a successor Indenture
Trustee, Mr. Wofford informs Judge Sonderby that 29 of the
Indentures expressly provide that a court of competent
jurisdiction may appoint a successor Indenture Trustee.  "The
remainder of the Indentures is silent as to the outcome if the
Issuer or Majority Holders do not select a successor Indenture
Trustee, or if the successor Indenture Trustee selected by the
Issuer or Majority Holders is unwilling or unable to serve," Mr.
Wofford says.

Under these circumstances, JP Morgan and Bank One jointly ask
the Court to appoint Bank One Trust Company as successor
Indenture Trustee under each of the Indentures, effective
immediately. (Kmart Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

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


LTV CORP: Has Until August 31, 2002 to Respond to Trade Claims
--------------------------------------------------------------
LTV Steel Company asks Judge Bodoh to further extend the date by
which it must object or otherwise respond to the trade claims
filed against its estate to and including August 31, 2002.

LTV notes that since receiving notice of Judge Bodoh's order
directing the filing of administrative trade claims, a
"substantial number" of parties have filed claims requesting, in
whole or part, allowance and in some instances, immediate
payment of administrative expense claims. Indeed approximately
1000 administrative claims appear to have been filed.  LTV has,
as of this date, only completed an initial review of
approximately 200 of those claims, leaving the monumental task
of fully reviewing and reconciling the remaining claims not
possible before the present deadline.

LTV Steel only began to receive copies of the trade claims
during the week of May 13, 2002.  In addition, although all of
the timely-filed administrative trade claims have been docketed,
Logan & Company, the Debtors' claims and noticing agent, must
retrieve copies of the administrative trade claims from
Uniscribe, the Debtors' official copy service since the Debtors
cannot remove original docketed pleadings from the Court.  These
copies must then be transmitted to LTV Steel for review, which
cases another week or two of delay.  Accordingly, under the very
best of circumstances, LTV Steel does not expect to have the
entire universe of trade claims in hand and reviewed by the
present bar date.

The actual time that will be allotted to LTV Steel to review and
respond to the multitude of administrative trade claims will
amount to, at best, one month, which is an inadequate amount of
time for LTV Steel to complete such a monumental undertaking.
LTV Steel simply does not have the personnel and data management
resources to review, analyze and reconcile the administrative
trade claims before the present deadline. Currently, three
employees out of the approximately 60 total employees remaining
at LTV Steel are dedicated full time to the administrative trade
claims reconciliation process.  A substantial number of former
LTV Steel employees that were involved in the transactions
underlying the administrative trade claims are not available to
explain the transactions and ass9st with the reconciliation
process.  The remaining LTV Steel personnel do not possess the
expertise to reconcile these claims in an expeditious manner
with the limited data resources available.  LTV Steel simply
cannot dedicate more employees to this process because it has
reduced its staff to the bare minimum required to implement the
APP and conserve the scarce resources of this estate.

In addition to LTV Steel's dearth of personnel, LTV Steel
currently is not supported by data management system resources
to facilitate and expedite the reconciliation process.  As part
of implementing the APP, LTV Steel currently is in the process
of dismantling its data management system, including its client
servers that contain electronic records of trade invoices,
accounts payable information, inventory and other information
that likely will support the administrative trade claims
reconciliation process.  In particular, as of May 24, 2002, LTV
Steel discontinued its very costly SAP system, which was its
centralized financial and accounting records system.  Its
efforts to reconcile the trade claims have been and will
continue to be hampered significantly by LTV Steel's inability
to access these electronic records through SAP, and will involve
a tedious and time-consuming review of an Access database and
LTV Steel's paper records.  LTV Steel currently estimates that,
if the foregoing timetable of receiving claims can be realized
and no unforeseen problems arise, it potentially could complete
the enormous task of reviewing and reconciling all of the
administrative trade claims by the proposed August deadline.
However, LTV Steel warns that much may occur to hinder the
process in the interim, and it reserves the right to seek a
further extension of the proposed response deadline.

Judge Bodoh grants the requested extension to August 31, 2002.
(LTV Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-00900)


MARTIN INDUSTRIES: Lender Waives Loan Covenant Noncompliance
------------------------------------------------------------
Martin Industries, Inc. (OTCBB: MTIN), a manufacturer of premium
gas fireplaces and home heating appliances, has received an
extension of its current line of credit from its primary lender
through August 31, 2002. The $7.5 million line was scheduled to
expire on July 1, 2002. The Company's primary lender has agreed
to waive the Company's noncompliance with certain loan covenants
through the end of the second quarter. Also extended to August
31, 2002 were fees of $100,000, which are waived if the full
amount outstanding on the line is paid by July 31, 2002. If the
full amount on the line is paid after July 31, 2002, but on or
before August 15, 2002, Martin is only obligated to pay one-half
of the fees. In addition, the Company's previously announced
agreement to issue to its primary lender a warrant to purchase
common stock in the Company in the event the Company did not
repay the line in full by July 1, 2002 was extended to July 31,
2002.

As previously reported, the Company is currently in negotiations
with a prospective lender and has received a non-binding
proposal for a new asset-based, secured line of credit to
replace its existing credit facility. In addition to the
completion of the prospective lender's due diligence and
negotiations with the Company, as a condition to providing
financing the prospective lender will require the Company to
have in place approximately $4.5 million of other financing. The
Company expects that $2.0 million of this required additional
financing will be met by the $1.5 million term loan and $500,000
line of credit that the Company secured from M-TIN, LLC. The
Company is pursuing other sources for the remaining $2.5
million. However, there can be no assurance that the Company
will be able to consummate the transaction with the prospective
lender, or that other sources will be identified or agree to
provide the necessary financing.

Martin Industries designs, manufactures and sells high-end, pre-
engineered gas and wood-burning fireplaces, decorative gas logs,
fireplace inserts and gas heaters and appliances for commercial
and residential new construction and renovation markets in the
U.S. Additional information on Martin Industries and its
products can be found at its Web site at
http://www.martinindustries.com


MED-EMERG INT'L: Completes Financing to Pare-Down Debt by C$365K
----------------------------------------------------------------
Med-Emerg International Inc. (OTC BB: MDER-MDERW) (OTC Bulletin
Board:MDER) (OTC Bulletin Board: MDERW) has completed a
financing arrangement with Morrison Financial Services Limited.

Morrison Financial Services Limited paid the HSBC Bank of Canada
CAN $750,000 which was the balance owing under a forbearance
agreement. Med-Emerg International Inc. has no further loan
obligations to the HSBC Bank of Canada.

The completion of the current financial transactions has the
effect of reducing the company's total debt by C$365,000 since
the obligation to the HSBC Bank of Canada was eliminated at a
discounted value.

Dr. Ramesh Zacharias CEO said, "We have enjoyed a good working
relationship with Morrison Financial Services Limited who have
financed the working capital requirements from the commencement
of the Department of National Defence contract in March 2001.
Their decision to take on the role of senior lendor to the
corporation will allow us to pursue other financial and business
development opportunities. "


MERISTAR HOTELS: Sets Special Shareholders' Meeting for July 30
---------------------------------------------------------------
A special meeting of the stockholders of Interstate Hotels
Corporation, a Maryland corporation, will be held at 10:00 a.m.,
Eastern Time, on July 30, 2002, at the Radisson Hotel Pittsburgh
-- Greentree, located at 101 Radisson Drive, Pittsburgh,
Pennsylvania, for the following purposes:

     1.  To approve the merger of Interstate with and into
MeriStar Hotels & Resorts, Inc. on the terms and conditions set
forth in the Agreement and Plan of Merger between Interstate and
MeriStar and the other transactions contemplated by that merger
agreement.

     2.  To act upon any other business that may properly come
before the special meeting or any postponements or adjournments
of the special meeting.

Approval of the merger requires the affirmative vote of the
holders of two-thirds of the outstanding shares of Interstate
common stock. If the merger proposal is not approved by the
required vote of stockholders at the special meeting, or if the
stockholders of MeriStar do not approve the adoption of the
merger agreement or related proposals at MeriStar's annual
meeting, both Interstate and MeriStar will be entitled to
terminate the merger agreement without the consent of the other.

Holders of approximately 56.2% of the outstanding shares of
Interstate common stock have agreed to vote in favor of the
merger proposal.

The consent and approval of a majority of the combined aggregate
principal amount of the 8.75% convertible notes plus the stated
amount of the Series B preferred stock is also required for
approval of the merger and has been obtained.

Only stockholders of record at the close of business on June 26,
2002, are entitled to notice of, and to vote at, the special
meeting or any postponements or adjournments of the special
meeting.

MeriStar Hotels & Resorts leases and manages more than 275
hotels and resorts throughout Canada, Puerto Rico, and the US.
About half the company's locations are owned by MeriStar
Hospitality, an affiliated real estate investment trust (REIT).
The company also leases and manages almost a dozen golf courses.
MeriStar focuses on upscale, full-service, and limited-service
hotels including most of the top North American brands, such as
Hilton, Holiday Inn, and Sheraton. The company's BridgeStreet
Accommodations unit offers about 3,200 corporate extended stay
apartments. Texas tycoon Robert Bass' Keystone, Inc., investment
firm owns almost 18% of the company.

MeriStar Hotels & Resorts has a working capital deficit of
abouty $100 million at March 31, 2002.


METALS USA: Court Approves AIG Insurance Agreements Assumption
--------------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates obtained authority
to assume certain insurance agreements under existing insurance
programs with the National Union Fire Insurance Company of
Pittsburgh, Pa., on behalf of itself and certain entities
related to American International Group, Inc. (collectively
known as AIG).  The insurance agreements cover the policy years
from October 1, 2001 through October 1, 2002.

Zack A. Clement, Esq., at Fulbright & Jaworski LLP in Houston,
Texas, informed the Court that the Debtors have provided a
$5,335,000 letter of credit to AIG, which was required as
collateral to secure the Debtors' obligations to AIG under the
2001-2002 insurance agreements.  AIG, as a condition to
adjusting the said collateral and avoid drawing on it, has
required for the Debtors to assume the agreements and to cure
all past due defaults owing.

Mr. Clement said that although the Debtors previously assumed
certain insurance policies through their agent, John L. Wortham
& Son, AIG has requested the Debtors to assume certain
additional agreements related to the existing policies, which
form the basis of the Debtors' current insurance program.

Mr. Clement explained that, upon assumption of the agreements,
AIG will return and release a bond in the amount of $2,050,000
million.  The yearly premiums for the Insurance Program were
paid through a combination of a 35% deposit and eleven monthly
installments.  AIG, meanwhile, will not seek any additional
collateral from the Debtors during the actual 2000-2002 policy
year but may make adjustments to the present collateral after
October 1, 2002. (Metals USA Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


MICROFORUM: Files Damage Recovery Statement Against Ex-Client
-------------------------------------------------------------
Microforum Inc. (TSE: MCF) announced that it has filed a
Statement of Claim against Security Service Federal Credit Unit,
a former client, for recovery of damages in the amount of U.S.
$635,334.

This claim was filed by Microforum in response to SSFCU's
unilateral termination of its contract and demand that
Microforum return US$467,840 previously paid. SSFCU's claim
relates to deficiencies in the software developed by Microforum
under a specific work order in accordance with a Master
Development and License Agreement dated July 10, 2000 between
Microforum and SSFCU.

Microforum believes that SSFCU's claim is largely without merit
and intends to defend this matter vigorously and to enforce its
own claim for damages.

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

As previously reported, Microforum has recently obtained
creditors' approval of its proposed Plan of Arrangement and
Compromise under the Companies' Creditors Arrangement Act.


MICROFORUM: May 2002 Working Capital Narrows Down to $1.9 Mill.
---------------------------------------------------------------
Microforum Inc. (TSE: MCF) announced its financial results for
the first quarter ended May 31, 2002.

The Company also warned that it has incurred significant
operating losses over the past twenty-four months and its
ability to continue as a going concern is dependent upon
achieving and maintaining profitable operations. The outcome of
these matters cannot be accurately predicted at this time. The
Operating Highlights provided have been prepared on an going
concern basis and do not include any adjustments to the amounts
that might be necessary should the Company be unable to continue
business.

                   Results of Operations

The Company reported a loss of $2.9 million during the quarter
ended May 31, 2002 (the "first quarter fiscal 2003") compared to
a loss of $8.2 million in the quarter ended May 31, 2001. Of the
loss for the first quarter of the previous fiscal year, $3.1
million related to the combined amortization of capital assets
and goodwill.

Revenues were $0.8 million during the current quarter compared
to $4.8 million in the same quarter of one year ago reflecting
the reorganization of the Company and the divestitures of all
but one business unit of the Company.

The Company recorded a gross loss of $0.8 million during the
quarter ended May 31, 2002 compared to a gross profit of $1.4
million during the same quarter of fiscal 2002 again as a result
of the divestiture of most of the business units in the quarter.

Operating expenses during the current quarter were $1.2  million
and included $0.3 million of professional fees related to the
Company's filing under the Companies Creditors Arrangement Act
("CCAA"). Other expenses for $0.9 million reflected the reduced
operating cost structure of the Company as a result of the
disposition of most of its business units and the reorganization
of the office lease at the Company's facility in Toronto.
Operating expenses during the quarter ended May 31, 2001 were
$6.5 million including $2.3 million related to provision taken
by the Company as part of an earlier reorganization strategy.

The Company recorded an investment loss of $606,064 during the
current quarter to reflect the lower market value as at May 31,
2002, in connection with the 196,329 restricted shares of
Cognicase Inc. it received and continues to hold as part of the
sale of the Deployed Consulting Services ("DCS") business unit.

                 Liquidity and Capital Resources

As at May 31, 2002, the Company had positive working capital of
$1.9 million compared to working capital of $4.6 million as at
February 28, 2002.

Cash on hand at May 31, 2002 was $4.0 million compared to $5.9
million as at February 28, 2002. Cash on hand at May 31, 2002
will be used in part to settle the compromised creditors claims
under CCAA for approximately $835,000 and to make the payment
under the agreement between the Company and the landlord at the
Ferrand Drive premises.

Marketable securities of $1.4 million represent the market value
as at May 31, 2002, from the proceeds from the sale by the
Company of its DCS business unit in the form of 196,329 common
shares of Cognicase Inc., which are restricted as to their re-
sale until July 20, 2002.

Accounts receivable of $1.4 million at May 31, 2002 represent a
reduction of $2.5 million from the accounts receivable reported
at February 28, 2002. This reduction is the combined effect of
actual cash collections combined with the reclassification of
the proceeds from the sale of the DCS business unit for $2.0
million, which were accrued under this heading by the Company as
at February 28, 2002 and received, in the form of common shares
in Cognicase Inc. subsequent to the end of the year and re-
classified as Marketable Securities.

Work in progress at May 31, 2002 was $1.1 million compared to
$1.2 million at February 28, 2002 reflecting the advancement of
remaining projects within the CALMS business group combined with
the termination of another project.

Accounts payable and accrued charges were $4.7 million as at May
31, 2002, a decrease of $0.2 million from the $4.9 million
reported at February 28, 2002. The smaller than expected
decrease is due in part because the compromised claims of the
Company under the CCAA Plan of Arrangement and Compromise (the
"Plan") and will only be settled subsequent to the sanction of
the Plan scheduled for July 12, 2002.

Deferred revenue of $1.3 million is similar to the amount
reported at February 28, 2002 reflecting progress payments on
certain CALMS contracts under continued development offset by
the termination of another project.

Established in 1987, Microforum sells software solutions to
organizations that seek a competitive edge. The company is
listed on The Toronto Stock Exchange (TSE: MCF). For more
information, please visit  http://www.microforum.com


MPOWER HOLDING: Gets Nod to Retain Arthur Andersen as Auditors
--------------------------------------------------------------
Mpower Holding Corporation and its debtor-affiliates sought and
obtained authority from the U.S. Bankruptcy Court for the
District of Delaware to retain Arthur Andersen LLP as their
auditors.

The Debtors employ Arthur Andersen to provide necessary
quarterly review and year-end auditing services. The Debtors
tell the Court that the services of Arthur Andersen are not
duplicative to the proposed financial advisors, Deloitte &
Touche LLP. The Debtors clarify that Arthur Andersen will not be
providing any traditional financial advice relating to the
chapter 11 filing.

Among other things, the Debtors need Arthur Andersen to:

     -- review the quarterly financial information to be
        included in the Debtors' reports filed with the
        Securities and Exchange Commission for the quarter ended
        March 31, 2002;

     -- perform the audit of the Debtors' consolidated balance
        sheet as of December 31, 2001 and the related
        consolidated statement of operations and cash flow for
        the year then ended; and

     -- assist in the filing with the SEC of the annual report
        on Form 10-K

The Debtors will pay Arthur Andersen:

     a)  i) a fee estimated to be between $225,000 and $250,000,
            plus secretarial, communication and out-of-pocket
            expenses, and

        ii) a fee estimated to be between $5,000 and $6,000,
            plus secretarial, communication and out-of-pocket
            expenses;

     b) a fee estimated to be between $15,000 and $25,000 per
        quarter, plus secretarial, communication and out of
        pocket expenses for Arthur Andersen's review of
        quarterly financial information to be included in
        reports filed with the SEC.

Mpower Holding Corporation and its affiliates are a facilities-
based communications company offering local dial tone, long
distance, Internet access via dial-up or dedicated Symmetrical
Digital Subscriber Line technology, voice over SDSL, Trunk Level
1. The Debtors filed its pre-negotiated chapter 11 plan of
reorganization and disclosure statement simultaneously with
their chapter 11 bankruptcy protection on April 8, 2002. Pauline
K. Morgan, Esq., M. Blake Cleary, Esq., Timothy E. Lengkeek,
Esq. at Young, Conaway, Stargatt & Taylor and Douglas P.
Bartner, Esq., Jonathan F. Linker, Esq. at Shearman & Sterling
represent the Debtors in their restructuring efforts. When
Mpower Holding filed for protection from its creditors, it
listed $490,000,000 in total assets and $627,000,000 in total
debts. Its debtor-affiliates, Mpower Communications listed
$831,000,000 in assets and $369,000,000 in debts; Mpower Lease
listed $242,000,000 in assets and $248,000,000 in debts.


NII HOLDINGS: U.S. Trustee Names Unsecured Creditors' Committee
---------------------------------------------------------------
The U.S. Trustee appoints creditors of NII Holdings, Inc. and
debtor-affiliates who are willing to serve the Unsecured
Creditors Committee of these cases. The designated creditors
are:

     1. The Bank of New York, as Trustee
        Attn: Gerard F. Facendola
        101 Barclay Street
        New York, NY 10286
        Phone: (212) 896-7224, Fax: (212) 328-7302

     2. Cordillera Communications Corp.
        Attn: Christopher Richardson
        c/o Davis Graham & Stubbs LLP
        1550 17th Street, Suite 500
        Denver, CO 80202
        Phone: (303) 892-9400, Fax: (303) 892-7400

     3. SchlumbergerSema Telecoms, Inc.
        f/k/a LHS Communications Systems, Inc.
        Attn: Randolph Houchins
        30000 Mill Creek Road, Apharotta, GA 30022
        Phone: (678) 258-1500, Fax: (678) 258-1686

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


NEON COMMS: Wants to Maintain Existing Cash Management System
-------------------------------------------------------------
NEON Communications, Inc. and NEON Optica, Inc. wants the Court
to give them permission to continue using existing bank
accounts, business forms, cash management system, and investment
practices.

The United States Trustee for the this region has established
certain operating guidelines for debtors in possession. One of
the guidelines requires a chapter 11 debtor in possession to
close all existing accounts and open new bank accounts in
certain financial institutions designated as authorized
depositories by the United States Trustee.

Before the Petition Date, the Debtors maintained in the ordinary
course of business approximately 4 operational bank accounts
located at financial institutions designated as an authorized
depositories by the United States Trustee. The Debtors wish to
seek a waiver of the United States Trustee's requirement that
the Bank Accounts be closed and that new postpetition bank
accounts be opened. The Debtors believe that this would cause
disruption in the Debtors' business and impair the Debtors'
efforts to reorganize.

To minimize expense to their estates, the Debtors also request
authority to continue to use all correspondence and business
forms as well as checks existing immediately before the Petition
Date, without reference to the Debtors' status as debtors in
possession.

The Debtors hereby seek authority to continue utilizing the
current centralized cash management system. Given the
preservation and enhancement of their going concern values, a
successful reorganization of the Debtors' business simply cannot
be accomplished if there is substantial disruption in the
Debtors' cash management procedures.

The Debtors also seek grant them superpriority status to
postpetition intercompany claims and loans. The Debtors tell
that Court that in the ordinary course of their businesses, they
maintain business relationships among themselves. Such business
relationships include payables for purchases and services among
them and are normally paid in the ordinary course of business.
To ensure that each individual Debtor will not fund the
operations of another entity at the expense of its respective
creditors, the Debtors request that all postpetition
intercompany claims owed by an individual Debtor to another
individual Debtor arising after the Petition Date be accorded
superpriority status. If postpetition intercompany claims
between the respective Debtors are accorded superpriority
status, the Debtors will continue to bear the ultimate repayment
responsibility for their respective obligations, the Debtors
pointed out.

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


NEOTHEREPEUTICS: Retains A Fin'l Advisor to Review Alternatives
---------------------------------------------------------------
NeoTherapeutics, Inc. (Nasdaq: NEOT) has retained an investment
banker and financial advisor to assist in searching out
strategic alternatives, including the sale or merger of the
company or any of its divisions.

NeoTherapeutics also announced that it has substantially
completed the internal restructuring of its neurology and
oncology divisions and has undertaken additional cost saving
measures at its functional genomics division. The Company
expects its average consolidated cash burn rate to be reduced to
approximately $800,000 per month, commencing in July 2002.

"We have lowered our workforce by 43 percent since April 2002,
including officers. In addition, all management personnel have
deferred or reduced their salaries effective [July 2, 2002].
Looking ahead, we expect to see our expenses leveling off to an
average of approximately $800,000 per month or less through the
end of 2002," said Samuel Gulko, Senior Vice President, Finance
and Chief Financial Officer.

"The investment banker that we have engaged is an east coast
firm specializing in healthcare. We are confident that they will
bring to us opportunities that will reflect the true value of
our various technology assets.  Notwithstanding the
aforementioned reduction in force, the essential research and
business activities of the Company are functional and moving
forward," stated Dr. Rajesh Shrotriya, President and Chief
Operating Officer.

NeoTherapeutics seeks to create value for stockholders through
the discovery and out-licensing of drugs for central nervous
system disorders, the in-licensing and commercialization of
anti-cancer drugs, and the out-licensing of new drug targets
discovered through genomics research. NeotrofinT is in clinical
development in Parkinson's disease, spinal cord injury and
chemotherapy-induced neuropathy. The Company's lead oncology
drug, satraplatin, is being prepared for a phase 3 study in
prostate cancer. Additional anti-cancer drugs are in phase 1 and
2 human clinical trials, and the Company has a rich pipeline of
pre-clinical neurological drug candidates. For additional
information visit the Company's Web site at http://www.neot.com


ORBITAL IMAGING: Committee Seeks Approval to Hire Houlihan Lokey
----------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks permission
from the U.S. Bankruptcy Court for the Eastern District of
Virginia to engage Houlihan Lokey Howard & Zukin Capital as its
financial advisor, nunc pro tunc to April 24, 2002.

The Committee relates its pressing need to retain a financial
advisor to assist it in the critical tasks associated with
analyzing and implementing restructuring alternatives and to
help guide it through the Debtor's reorganization efforts.

The Committee asserts that Houlihan Lokey's retention should be
approved effective April 24, 2002. The Committee contends that
this is appropriate because, since that time, Houlihan Lokey has
been providing services to the Committee, including reviewing
operating information, meeting with the Debtor's management and
analyzing various issues confronting the Committee.

As the financial advisor to the Committee, it is expected that
Houlihan Lokey will:

     a. evaluate the Debtor's business plan and strategic
        options;

     b. advise the Committee as to the Debtor's proposals
        regarding any potential mergers or acquisitions, or
        sales or other dispositions of any of the Debtor' assets
        or businesses;

     c. advise the Committee regarding the Debtor's proposals as
        to available financing and capital restructuring
        alternatives, including recommendations of specific
        courses of action;

     d. assist the Committee with the analysis, consideration,
        and implementation of the Debtor's plan of
        reorganization, including participation as an advisor to
        the Committee in negotiations with the Debtor and other
        parties involved in a restructuring;

     e. assist the Committee in the analysis and consideration
        of and negotiations regarding any debt and equity
        securities or other consideration to be issued in
        connection with a plan of reorganization proposed by the
        Debtor;

     f. provide Bankruptcy Court testimony, if required, with
        respect to any matter as to which Houlihan Lokey is
        rendering services; and

     g. render such other financial advisory services as may be
        requested by the Committee or its counsel and agreed to
        by Houlihan Lokey.

Pursuant to the Letter Agreement, as compensation for its
services, Houlihan Lokey shall receive:

     a. a monthly fee of $125,000.00, payable in cash on the
        first day of each calendar month effective as of May 1,
        2002;

     b. a transaction fee equal to 1% of the gross proceeds
        received by the Creditors pursuant to a Transaction,
        payable in-kind upon the consummation of a Transaction,
        provided that there shall be a credit against the
        Transaction Fee of 50% of any Monthly Fees paid to
        Houlihan Lokey following the month in which the
        Committee and the Debtor have entered into a
        Restructuring Agreement; and

     c. the reimbursement of all reasonable out-of-pocket
        expenses incurred during the term of Houlihan Lokey's
        retention.

Orbital Imaging Corporation filed for chapter 11 protection on
April 5, 2002 in the U.S. Bankruptcy Court for the Eastern
District of Virginia. Geoffrey A. Manne, Esq., Shari Siegel,
Esq. and William Warren, Esq. at Latham & Watkins represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed assets and debts of
over $100 million.


OWENS CORNING: Court Approves Third Party Tolling Agreement
-----------------------------------------------------------
Owens Corning and its debtor-affiliates obtained the Court's
approval of a standard Tolling Agreement form that the Debtors
may have to sign with certain third parties for the delay in
commencement of litigation of avoidance actions.  The Debtors
also received approval of certain notice procedures by which the
Court and the Debtors' key creditor constituencies will be
informed of the Debtors' execution of the Tolling Agreements.

J. Kate Stickles, Esq., at Saul Ewing LLP in Wilmington,
Delaware, informs the Court that in accordance with their duties
as debtors-in-possession, the Debtors are undertaking a
comprehensive analysis of potential avoidance actions and other
prospective litigation against, among others, third parties.
This analysis is expected to be completed before the two-year
anniversary of the Debtors' bankruptcy filing.  By that time,
the Debtors are expected to be prepared to commence litigation
against appropriate parties within the applicable statutes of
limitations.

With that, Ms. Stickles anticipates various circumstances in
which a delay in the commencement of litigation will be in the
best interests of the Debtors and all parties-in-interest.  A
delay in the commencement of litigation will permit the Debtors
to hold settlement discussions with targeted defendants to save
the expense and risk of litigation and to avoid unnecessary
disputes with what are expected to be -- at least in part -- key
vendors of the Debtors.  The Debtors would also like to delay
the commencement of avoidance actions until their disposition is
already determined in the Debtors' Reorganization Plan.

The Tolling Agreement provides, in pertinent part:

A. Any and all limitation periods applicable, by virtue of 11
   U.S.C. Section 546(a) or otherwise, to bar any claim or
   remedy or the bringing of any action or proceeding that could
   be brought under any applicable law to avoid or recover all
   or any portion of transfers of property recoverable by the
   Debtors under applicable law or the value thereof are to be
   tolled and extended through and including the later of
   October 5, 2003 or 30 days after the Effective Date of a
   confirmed Reorganization Plan for the Debtors' cases;

B. The tolling/extension provided for does not prevent the
   commencement of litigation with respect to avoidance actions,
   within the time frame set forth in the Tolling Agreement;
   and,

C. The Tolling Agreement binds and inures to the benefit of the
   parties thereto, their successors and assigns, the Debtors'
   estates and creditors, and any agent or authorized
   representative of any of the foregoing appointed in any of
   the Debtors' cases or in connection with any Reorganization
   Plan or Liquidation.

The Debtors intend to provide a copy of all executed Tolling
Agreements with the Court to:

    a. the Office of the United States Trustee,

    b. counsel for the Creditors' Committee,

    c. counsel for the Asbestos Committee,

    d. Bank of America, N.A., as the Debtors' Post-Petition
       Lender;

    e. Credit Suisse First Boston, as agent with respect to that
       $2,000,000,000 Credit Agreement dated June 26, 1997;

    f. special counsel to the Creditors' Committee; and

    g. the Futures Representative and his counsel. (Owens
       Corning Bankruptcy News, Issue No. 34; Bankruptcy
       Creditors' Service, Inc., 609/392-0900)

Owens Corning's 7.70% bonds due 2008 (OWENC4) are quoted at a
price of 38.75, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=OWENC4for
real-time bond pricing.


PAC-WEST TELECOMM: Engages KPMG to Replace Andersen as Auditors
---------------------------------------------------------------
Pac-West Telecomm, Inc. (Nasdaq: PACW), a provider of integrated
communications services to Internet service providers (ISPs) and
business customers in the western U.S., has engaged the services
of KPMG LLP as its new independent auditors for its current
fiscal year ending December 31, 2002.

Arthur Andersen provided auditing services to Pac-West Telecomm
from 1996 to present.  During this time, there were no
disagreements between Pac-West and Arthur Andersen on any
matters of accounting principles or practices.

Ravi Brar, Pac-West's Acting CFO, commented, "As a public
company, the transition to KPMG is a necessary move due to
Arthur Andersen's current inability to issue audit opinions on
financial statements filed with the SEC. In addition, to limit
the involvement of our auditors in other areas of our business,
we have transitioned our tax work to Deloitte and Touche."

Founded in 1980, Pac-West Telecomm, Inc. supplies Internet
access services to Internet and other types of service
providers, and integrated voice and data communications services
to small and medium-sized businesses.  The Company estimates
that its network carries over 20% of the Internet traffic in
California.  Pac-West currently has operations in California,
Nevada, Washington, Colorado, Arizona, and Oregon.  For more
information, please visit the company's Web site at
http://www.pacwest.com

                         *    *    *

As reported in Troubled Company Reporter's January 25, 2002
edition, Standard & Poor's lowered its corporate credit and
senior secured bank loan ratings on Pac-West Telecomm Inc. to
triple-'C' from single-'B'-minus. The rating on the $150 million
senior unsecured notes due 2009 was also lowered to double-'C'
from triple-'C'. The ratings remain on CreditWatch with negative
implications.

The downgrade is based on Standard & Poor's increased concerns
that Pac-West may be challenged to have adequate funding for its
business plan beyond 2002 despite having taken measures to
reduce capital spending and overhead over the past year to
conserve capital.


PACIFICARE HEALTH: Will Host Q2 2002 Conference Call on August 1
----------------------------------------------------------------
PacifiCare Health Systems Inc. (Nasdaq:PHSY) announced that it
will host a conference call and webcast on Thursday, Aug. 1,
2002 at 9 a.m. Pacific time to discuss the company's earnings
for the second quarter of 2002, which will be released after the
close of the market on Wednesday, July 31.

Investors, analysts and other interested parties will be able to
access the live conference by calling 888/950-9406, password
"PacifiCare" and leader "Howard Phanstiel."

A replay of the call will be available through Aug. 21, 2002 at
800/695-3946. Additionally, a live webcast of the call will be
available on PacifiCare's Web site at http://www.pacificare.com
Click on Investor Relations, and then Conference Calls, to
access the link.

Beginning Monday, July 8, PacifiCare's Investor Relations
department can be reached at new phone numbers. Vice president
of investor relations, Suzanne Shirley, can be reached at
714/226-3470, and Dan Yarbrough, manager of investor relations,
can be reached at 714/226-3540.

Dedicated to making people's lives better, PacifiCare Health
Systems is one of the nation's largest health and consumer
services companies. Primary operations include health insurance
products for employer groups and Medicare beneficiaries in eight
western states and Guam.

Other specialty products and operations include behavioral
health services, life and health insurance, dental and vision
services and pharmacy benefit management. More information on
PacifiCare Health Systems can be obtained at
http://www.pacificare.com

                         *    *    *

As previously reported, Fitch Ratings has upgraded PacifiCare
Health System, Inc.'s existing bank and senior secured debt
ratings to 'BB' from 'BB-'. Concurrently, Fitch upgraded
PacifiCare's senior unsecured debt rating to 'BB-' from 'B+'.
The Rating Outlook is Stable. The rating action affects
approximately $860 million of debt outstanding.

The rating action reflects the significant improvement in
PacifiCare's capital structure following the successful sale of
$500 million 10.75% senior notes due June 2009, the reduction in
outstanding bank debt, and the extension in the maturity of the
company's remaining bank debt. The sale of the notes settled on
May 21, 2002 at 99.389 to yield proceeds of $497 million.


PEGASUS COMMS: Wins Board Approval to Buy-Back $10 Mill. Shares
---------------------------------------------------------------
Pegasus Communications Corporation (NASDAQ:PGTV) announced that
the board of directors of Pegasus has authorized the purchase up
to $10,000,000 of Pegasus Communications Corporation's Class A
Common Stock.

Pegasus' repurchase program is part of Pegasus' overall efforts
to acquire debt and equity securities issued by Pegasus
Communications Corporation, Pegasus Satellite Communications,
Inc. and Pegasus Media & Communications, Inc. Such transactions
may be made in the open market or in privately negotiated
transactions and may involve cash and/or the issuance of
securities. The amount, timing and occurrence of such
transactions will depend upon market conditions and other
corporate considerations.

Pegasus provides digital satellite television to rural
households throughout the United States. Pegasus owns and/or
operates television stations affiliated with CBS, FOX, UPN and
The WB networks.

Pegasus, at March 31, 2002, has a working capital deficit of
about $68 million.


POLAROID CORP: Committee Has Until July 14 To Challenge Liens
-------------------------------------------------------------
For the fourth time, the Prepetition Agent and the Official
Committee of Unsecured Creditors of Polaroid Corporation and its
debtor-affiliates agree to further extend the time to file an
adversary proceeding or contested matter challenging the
validity, enforceability, priority or extent of the Pre-
petition Agent's or the Pre-petition Secured Lenders' liens on
the Debtors' real properties commonly known as the Principal
Properties in New Bedford and Waltham, Massachusetts.  The
deadline is extended to July 14, 2002. (Polaroid Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


PROLOGIC MANAGEMENT: Auditors Express Going Concern Doubt
---------------------------------------------------------
Prologic Management Systems, Inc. is an Arizona corporation
founded in 1984. The Company is a commercial systems
integration, professional services and software development
firm, specializing in high-availability, fully integrated
systems. The Company's BASIS, Inc. subsidiary, headquartered in
Emeryville, California, provides systems integration services,
networking services, security and database software for the
commercial market. The Company's Tucson office, which also
serves as its corporate headquarters, provides professional
services, including process improvement consulting services,
software development services, and support services for its
clients in the manufacturing industry.

The Company offers clients a wide range of professional services
from consulting to implementing custom business solutions,
including the integration of web storefronts with back-end e-
commerce systems, developing complete e-business strategies, web
design and security. The Company specializes in open systems
integration and related services, primarily utilizing UNIX
operating systems to deploy powerful computing solutions.
Professional services include enterprise and workgroup
client/server design and optimization, relational database
integration, LAN/WAN and workgroup solutions, and offers
consulting and software development expertise in manufacturing,
distribution and resource tracking for commercial clients.

Total revenue decreased by 48.5% for the fiscal year ended March
31, 2002 to $19,451,541 from $37,756,351 for the previous fiscal
year. Sales of third party hardware decreased by 52.7% to
$11,740,946 from $24,842,295 for the fiscal year ended March 31,
2001; sales of third party software licenses decreased by 63.4%
to $3,140,390 from $8,581,053 for the fiscal year ended March
31, 2001; and sales of professional services increased by 5.5%
to $4,570,205 from $4,333,003 for the prior fiscal year. The
sales decrease was due primarily to the continuing economic
downturn that caused clients to reduce and/or defer hardware and
software purchases during the year, and was further aggravated
in response to the terrorist attacks and threats on the United
States which began in September 2001. The Company continues to
concentrate on sales of services, which carry higher margins
than hardware and third party software sales.

The Company's loss from operations was $1,856,449, or a loss of
9.5% of total revenue, for the fiscal year ended March 31, 2002,
as compared to a loss of $1,268,702, or a loss of 3.4% of total
revenue, for the same period of the prior fiscal year. Once
again the Company state that operating loss resulted from the
continuing economic downturn that caused clients to reduce
and/or defer hardware and software purchases.

Including charges related to the discontinuance of the Great
River Systems subsidiary, the Company had a net loss of
$2,517,807 for the fiscal year ended March 31, 2002, as compared
to a net loss of $1,912,971 for the same period of the prior
fiscal year.

                 Liquidity and Capital Resources

At March 31, 2002, the Company had a working capital deficit of
approximately $1,982,000 versus a deficit of approximately
$1,876,000 at March 31, 2001. The cash balance at March 31, 2002
was $81,280. As a result of the working capital deficit and
recurring losses, the Company's independent certified public
accountants have expressed substantial doubt about the Company's
ability to continue as a going concern.

Historically the Company has been unable to generate sufficient
internal cash flows to support operations, and has been
dependent upon capital reserves and outside capital sources to
supplement cash flow. New equity investments, lines of credit
and other borrowings, and credit granted by its suppliers have
enabled the Company to sustain operations over the past several
years. In August 1998, the Company had failed to meet the
"continued listing criteria" established by NASDAQ and the
Company's securities were delisted from the NASDAQ Small Cap
Market. The subsequent lack of liquidity in the Company's
securities has materially adversely affected the Company's
ability to attract equity capital. Additionally, the lack of
capital resources has precluded the Company from effectively
executing its strategic business plan. The ability to raise
capital and maintain credit sources is critical to the continued
viability of the Company.


PROVELL INC: Gets Nod to Retain Faegre & Benson as ERISA Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gives Provell, Inc. and its debtor-affiliates an authority to
continue the employment of Faegre & Benson LLP as special
corporate counsel.

Before the Petition Date, the Debtors employed Faegre & Benson
as their outside general counsel including ERISA and general
labor matters, real estate matters, financing matters and
general corporate and regulatory matters. As a result,
Faegre & Benson gained unique knowledge of the Debtors' legal
needs with respect to such matters.

Faegre & Benson will provide these services in conjunction with
Proskauer Rose LLP:

     a. Compliance with data-protection requirements
     b. Compliance with federal securities laws
     c. Meetings and actions of board of directors
     d. Equipment-leasing matters
     e. Inquiries by attorney general of Minnesota
     f. Articles, by-laws and corporate governance
     g. Employment-related claims
     h. Compliance with unclaimed property acts
     i. Issuance and terms of preferred stock

According to Mr. William R. Busch's Affidavit, Faegre & Benson's
current customary hourly rates are:

          partners             $255 to $400
          associates           $135 to $250
          paraprofessionals    $85 to $130

Provell, Inc. develops, markets and manages an extensive
portfolio of membership and customer relationship management
programs that provide discounts and other benefits to members in
the areas of shopping, travel, hospitality, entertainment,
health/fitness, finance, cooking and home improvement.  The
company filed for chapter 11 protection on May 9, 2002.  Alan
Barry Hyman, Esq., Jeffrey W. Levitan, Esq., David A. Levin,
Esq. at Proskauer Rose LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for protection
from its creditors, they listed $40,574,000 in total assets and
in $82,964,000 total debts.


SEXTANT ENTERTAINMENT: Files for CCAA Protection in Canada
----------------------------------------------------------
Sextant Entertainment Group Inc. and several of its
subsidiaries, announced that in order to implement a new
strategic plan and restructure its debt load, the Board of
Directors has authorized the application for creditor protection
under the Companies' Creditors Arrangement Act in the Supreme
Court of British Columbia.

The Company believes that it will be able to maintain
production, visual effects and distribution operations in the
short term with its schedule of contracted revenues and tax
rebates and debtor in possession financing.  Hearthstone
Investments Ltd., Sextant's controlling shareholder, has
provided a $150,000 DIP Financing Facility to finance the
operational requirements of the Company during the restructuring
period, including the payment of professional fees associated
with CCAA application.  The ability of the Company to continue
operations in the longer term is subject to securing additional
DIP Financing and the Company's ability to attract strategic
investment.

The strategic plan includes the elimination of all non-essential
overhead and an increase in production and distribution service
volumes.  The Company is currently in discussions with strategic
investors concerning a possible investment in the Company but,
at present, there is no assurance that an agreement will be
concluded.

"We have filed the application in order to restructure our
operations and focus on the company's core businesses of quality
television production, visual effect and distribution services"
said Matthew O'Connor, President Corporate & Production.  "The
Board and Management believe that taking these steps will
provide the company the tools and the time to implement the
Company's strategic plan".

Sextant Entertainment Group Inc. (TSX: YSX.u) is a fully
integrated network television production, post-production
(visual effects) and distribution services company.  Built
through acquisition, the company has an extraordinary history of
producing and distributing award winning premium entertainment.


SOLUTIA INC: Fitch Junks Senior Unsecured Debt Rating
-----------------------------------------------------
Fitch Ratings has lowered Solutia Inc.'s senior secured bank
facility rating to 'B' from 'BB' and lowered the senior
unsecured debt rating to 'CCC+' from 'B+'. The senior unsecured
rating applies to the existing notes as well as the newly priced
notes. The ratings remain on Rating Watch Negative.

The ratings downgrade is based on a number of factors including
near-term liquidity issues, compounded by delays in refinancing
debt, and difficulties faced in completing the refinancing at
the terms and amounts originally anticipated. Solutia recently
priced $223 million senior secured notes due 2009 and warrants
to purchase Solutia's common stock. The new notes have an 11.25%
coupon and were priced at a discount with a yield-to-maturity of
13.5%. In addition, warrants will be issued to new bondholders
to purchase 5,533,503 shares of Solutia stock. The downgrade
also considers that the bond deal raised less than the desired
amount. Gross proceeds from the deal are expected to be
approximately $200 million.

Although the private placement issuance has priced and is
scheduled to close by July 9, 2002, continued refinancing risk
exists with respect to the $150 million bond maturity due
October 2002 and the $800 million credit facility that is up for
renewal in August 2002. The $200 million proceeds from the new
issuance will primarily be used to repay the $150 million bond
maturity and will be placed in escrow, pending an extension of
the current bank agreement.

The Rating Watch Negative status reflects continuing concerns
surrounding the company's ability to refinance its bank debt.
The risk related to the polychlorinated biphenyls (PCBs)
contamination litigation in Anniston, Alabama may continue to
hinder Solutia's refinancing efforts.

Solutia is a specialty chemical company with $2.8 billion in
sales in 2001. This diverse company produces films, resins, and
nylon plastics and fibers for domestic and international
markets. Some of Solutia's products are name brands, such as
Saflex plastic interlayer for windows and Wear-Dated carpet
fibers. End-use markets for Solutia's products include
construction and home furnishings, automotive,
aviation/transportation, electronics, and pharmaceuticals.


SUMMIT MANUFACTURING: Files for Chapter 11 Reorganization in PA
---------------------------------------------------------------
Summit Manufacturing, LLC and its subsidiary, Summit Alabama,
LLC, have filed voluntary petitions under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the
Middle District of Pennsylvania, Northern Tier. The cases have
been assigned to the Honorable John J. Thomas who sits in Wilkes
Barre, PA (Case Nos. 02-02811 and 02-02812, respectively). It is
anticipated that Summit Manufacturing will continue in operation
without interruption; Summit Alabama ceased operations in March,
2002.

Summit is in the business of manufacturing and selling custom
tubular steel monopoles with primary product offerings of power
transmission poles, wireless antenna support structures and
their associated mounting components, cable assemblies and wire
harnesses. Although Summit's reputation for superior
manufacturing, innovative engineering and dedication to customer
service has made it one of the world's premier suppliers of
tubular steel poles, the extraordinary downturn in the
telecommunications industry has led to drastically falling
demand for its products.

Recognizing the serious cash flow problems arising from the
industry decline, Summit has worked cooperatively with its
lenders, led by IBJ Whitehall Bank & Trust Company, as Agent, to
control operating expenses and maintain a solid customer base
while engaging during the past three months in an effort to
identify parties willing to purchase the business, since it is
unable to bootstrap its way back to health on a free-standing
basis. That effort has led to the Chapter 11 filing with the
likely sale of Summit's assets, through the Bankruptcy Code
procedures, free and clear of Summit's bank debt as well as
other liabilities. The Lenders have entered into an agreement
with Summit to support its cost of operations during the Chapter
11 until a sale can be consummated which Summit anticipates will
be in approximately ten to twelve weeks.

According to Richard M. Gavinski, Summit's Chief Financial
Officer, "The Chapter 11 filing is a very responsible step in
working towards an outcome that saves over 130 jobs in our
community, keeps our customers' needs fulfilled and offers the
prospect of vendor relations being stabilized and fully
satisfied from today going forward. Although we are not, today,
in a position to identify a purchaser of Summit as a going
concern, we expect to be filing papers with the Court within the
next week setting procedures for a sale of the business under a
definitive agreement."


SWAN TRANSPORTATION: Kinsella Comms. Appointed as Noticing Agent
----------------------------------------------------------------
Upon Order of the U.S. Bankruptcy Court for the District of
Delaware, Swan Transportation Company gets authority to employ
Kinsella Communications, Ltd. as notice consultants.

In this particular case, Kinsella has agreed to charge the
Debtor a $25,000 flat fee, plus $100 per day for Court or
deposition testimony, plus expenses.

As Claims Agent, Kinsella will be required to:

     1) update the notice plan, as needed;

     2) produce the actual TV, radio, and printed ad content;

     3) place the ads;

     4) monitor the ads;

     5) testify in Court regarding all these matters; and

     6) perform such other steps as necessary and helpful to
        accomplishing the notice campaign.

Swan Transportation Company filed for chapter 11 protection on
December 20, 2001. Tobey Marie Daluz, Esq., Kurt F. Gwynne, Esq.
at Reed Smith LLP and Samuel M. Stricklin, Esq. at Neligan,
Tarpley, Stricklin, Andrews & Folley, LLP represent the Debtor
in its restructuring efforts. When the Company filed for
protection from its creditors, it listed assets and debts of
over $100 million.


TELEPANEL SYSTEMS: Posts Improved Results for First Quarter
-----------------------------------------------------------
Telepanel Systems Inc. (OTCBB:TLSXF) (TSX:TLS) announced its
results for the year ended January 31, 2002.

For the first quarter ended April 30, 2002 product sales were
C$454,886, compared to the same period last year of C$819,831,
with the contribution from sales remaining relatively flat at
C$265,480 compared to C$280,330 for the same period last year.
Reductions in the selling, general and administration expenses
were the main reason for the decrease in the operating loss for
the period to C$269,336 from C$652,070 last period. The loss for
the period decreased to C$1,057,901 from C$1,232,740.

Garry Wallace, President & CEO said, "As planned, we have
focused our resources on a few main accounts and are engaging
additional resellers and partners to further our sales and
servicing capability. Despite the drop in product sales, we have
focused on higher margin products, and as such our contribution
from sales remained relatively flat.

"Our contribution on a per employee basis has increased to over
C$13,000 for the quarter, compared to approximately C$7,800 per
person in the corresponding period last year. This is a strong
indicator that our business strategy of sizing the company to
better fit the current opportunities is very successful,"
Wallace added, "The decrease in the operating loss of
approximately C$383,000 for the quarter, to C$269,336
demonstrates the success we have had in decreasing expenditures
through trimming operating expenses, while maintaining our
commitment to opening the potential of this huge ESL market."

"We are convinced that this market will respond with a rollout
order in the coming year, and by levering the strengths of IBM
and other current and future partners, we believe that we are
well positioned to take advantage of this promising market,"
said Garry Wallace. He added, "We continue to work on both
longer and shorter financing to see us through until we are in a
position to take advantage of larger market opportunities."

Telepanel is a leader in developing wireless electronic shelf
labelling systems for retail stores. Telepanel ESLs are placed
on the edge of store shelves to show a product's price and other
information. Prices are changed by a radio communications link
from the store's product database, to provide rapid, accurate
pricing updates.

Telepanel's systems are integrated with the leading 2.4 GHz RF
LANs which allows retailers to take advantage of their
investment in IEEE-standard in-store RF networks and extend
their use to electronic shelf labels.

Telepanel wireless ESLs are installed throughout the United
States, Canada, and Europe, with such premier supermarket chains
as Adam's Super Food Stores, A & P, Stop & Shop, Big Y,
Reasor's, Doll's, Brown's, Stew Leonard's, Grand Union,
Wakefern, Berks, Ellington, Port Richmond, Champion, Leclerc,
Intermarche, SPAR, and Super U, and at Universal Studios,
Hollywood.

As previously reported, Telepanel Systems' January 31, 2002
balance sheet shows that the company has a total shareholders'
equity deficit of about C$11 million.


TELESPECTRUM WORLDWIDE: Fails to Beat Form 11-K Filing Deadline
---------------------------------------------------------------
In connection with the recent recapitalization of its balance
sheet, Telespectrum Worldwide Inc., the sponsor of the
Telespectrum Worldwide Inc. 401(k) Retirement Savings Plan,
implemented a corporate restructuring plan pursuant to which
Telespectrum's finance department moved to the executive
offices of the Company. As a result of such move, the finance
department and its auditors did not receive the trustee
statements in a timely manner and, accordingly, were unable to
begin the preparation of the Annual Report on Form 11-K until a
recent date. Consequently the Company will not meet timely
filing of such financial information.

Once filed the Company expects that that its 401(k) Retirement
Savings Plan market value for fiscal year 2001 will differ
substantially from its fiscal year 2000 value. Net assets for
2001 are expected to decrease to $5.9 million from $7.8 million
for 2000. This decline in market value is due to decreased stock
values resulting from the weakening U.S. economy in 2001.

TeleSpectrum Worldwide Inc. is a leading full-service provider
of multi-channel customer relationship management (CRM)
solutions for Global 1,000 companies in diverse industries,
including financial services, telecommunications, technology,
insurance, healthcare, pharmaceuticals and government.


TERAFORCE TECHNOLOGY: Extends Credit Facilities to July 31, 2002
----------------------------------------------------------------
TeraForce Technology Corporation (OTCBB:TERA) announced that its
guaranteed bank credit facilities are being extended to July 31,
2002. The maturity of the facilities was previously extended
from May 31, 2002 to June 30, 2002.

Herman M. Frietsch, Chairman and CEO of TeraForce, commented,
"We are making progress to accomplish a restructuring of our
finances in support of our defense electronics business and its
growth opportunities. The extensions of our existing credit
facilities are providing the framework and time to work with our
investors and other parties expected to participate in the final
arrangements."

Based in Richardson, Texas, TeraForce Technology Corporation
(OTCBB:TERA) designs, develops, produces and sells high-density
embedded computing platforms and digital signal processing
products, primarily for applications in the defense electronics
industry. TeraForce's primary operating unit is DNA Computing
Solutions, Inc., http://www.dnacomputingsolutions.com


TESORO PETROLEUM: Receives Offers to Acquire Certain Assets
-----------------------------------------------------------
Tesoro Petroleum Corporation (NYSE:TSO) gave an update on its
asset divestiture initiative that is part of the Company's
recently announced $500 million debt reduction goal.

"[Three] weeks ago, I announced that we were immediately taking
actions to strengthen our balance sheet -- and we have," said
Bruce A. Smith, Chairman, President and CEO of Tesoro. "We have
now delivered the bid packages for the assets that have been
identified as divestiture candidates and the initial expressions
of interest have been encouraging. Over the next several weeks,
potential buyers will be invited to review more detailed
operating and financial data," added Smith.

"We are pleased to confirm that at the end of the second
quarter, the Golden Eagle refinery throughput was around 160,000
barrels per day after completing its planned turnaround ahead of
schedule. Also, the CARB III project is proceeding on schedule
and within budget. After scheduled debt payments of $15 million
and June's capital program, we still had over $54 million of
cash invested at the end of June," said Smith. With the
exception of $3.7 million of letters of credit that have been
outstanding for the past three quarters, there was no usage of
the company's $225 million revolving credit agreement at the end
of the quarter.

Tesoro Petroleum Corporation, a Fortune 500 Company, is an
independent refiner and marketer of petroleum products and
provider of marine logistics services. Tesoro operates six
refineries in the western United States with a combined capacity
of nearly 560,000 barrels per day. Tesoro's growing retail
marketing system includes more than 750 branded retail stations,
of which approximately 250 are company owned and operated under
the Tesoro(R) and Mirastar(R) brands.

                         *    *    *

As reported in Troubled Company Reporter's May 16, 2002 edition,
Fitch Ratings has revised the Rating Outlook on the debt of
Tesoro Petroleum Corporation to Negative from Stable. Fitch
rates Tesoro's senior secured credit facility 'BB' and
subordinated debt 'B+'. Although Fitch remains comfortable with
Tesoro's current ratings, the unexpected changes in the terms of
the Golden Eagle acquisition combined with weaker forecasts by
Tesoro have raised Fitch's concerns with Tesoro's liquidity and
prompted the change in Rating Outlook. Management anticipates
closing on the acquisition of Valero's 168,000-bpd Golden Eagle
refinery and 70 associated marketing sites by the end of this
week.

On April 2, 2002, Fitch downgraded the ratings on Tesoro's debt
due to the significant debt required to finance the Golden Eagle
acquisition combined with Fitch's expectations for Tesoro and
the oil industry over the next several quarters. At the time of
the downgrade, Fitch's forecasts were significantly more
conservative than those of Tesoro and have not changed. Although
the change in terms will significantly improve Tesoro's expected
liquidity at closing, any additional unexpected issues for
Tesoro or a significant draw on Tesoro's revolver could result
in a downgrade.


USG CORP: Asks Court to Name Trafelet as Future Claimants' Rep.
---------------------------------------------------------------
Paul N. Heath, Esq., at Richards, Layton & Finger asks Judge
Newsome to appoint Dean M. Trafelet as the legal representative
for future asbestos claimants in connection with USG
Corporation's Chapter 11 cases, nunc pro tunc to June 6, 2002.

Mr. Heath explains that U.S. Gypsum faces asbestos liability
that derives from its sales of asbestos-containing products.
The sales began in the 1930's.  In most cases, the products were
discontinued or asbestos was removed from product formulations
by 1972.  No asbestos-containing products were produced after
1978. Since 1994, U.S. Gypsum has been named in more than
250,000 asbestos-related personal injury claims arising out of
the manufacture and sale of asbestos-containing materials, and
made $575 million (before insurance recoveries) to manage and
resolve asbestos-related litigation.  And more claims will be
asserted for years to come.

Mr. Heath reminds the Court that the Debtors sought relief under
Chapter 11 to resolve asbestos-related claims in a fair and
equitable manner, to protect the long-term value of their
businesses, and maintain market leadership.  One of the Plan of
Reorganization's key elements, proposed by the Debtors, may be a
channeling injunction to funnel all current and future asbestos-
related claims and demands into a trust established to assume
the Debtors' liabilities with respect to asbestos-related claims
and demands.  Section 524(g) of the Bankruptcy Code contains a
special provision for a channeling injunction to direst
asbestos-related claims and demands to a trust if certain
conditions are met.  One condition is that the court must
appoint a legal representative to protect the rights of future
claimants -- people who might subsequently assert asbestos-
related demands against the Debtors.

The Debtors, the Commercial Committee, the Asbestos PI
Committee, and their respective advisors discussed the Futures
Representative appointment and evaluated several potential
candidates.  Dean M. Trafelet -- well-qualified to represent
Future Claimants' interest as Futures Representative -- is the
unanimous choice.

Mr. Trafelet served as a trial judge in the Circuit Court of
Cook County, Illinois from 1984 to 1998. He presided over all
asbestos-related product liability and property damage cases. He
was responsible for the supervision of the entire asbestos
docket and disposed of more than 35,000 asbestos product
liability cases by verdict or settlement. Mr. Trafelet possesses
more than 25 years' experience dealing with asbestos-related
claims and issues, as well as other mass tort, product liability
and environmental matters.

He is one of the early creators of the Asbestos Pleural
Registry, which became a model for jurisdictions around the
country, has lectured nationally on its benefits and effects.
From 1989 to 1990 he served as a special Federal Mediator to
assist the Honorable Barry S. Schermer, United States Bankruptcy
Judge for the Eastern District of Missourri, in the disposition
of thousands of asbestos related Jones Act claims arising from
worldwide seamen's asbestos exposure they experienced while on
board U.S. flagged ships.

Since 1988, Mr. Trafelet has served as a Trustee for the Amatex
Asbestos Settlement Trust established under the Amatex Plan of
Reorganization to process and pay asbestos claims of exposed
workers throughout the United States.  He has been a member of
the National Center for State Court Mass Tort Litigation
Committee and is listed in five categories in the National
Judicial College's 'A Judicial Directory of Judges: Managing
Mass Torts.'

Currently, Mr. Trafelet serves as a Futures Representative in In
re Armstrong World Industries, Inc. et al, Chapter 11 Case No.
00-4471 (RJN) (Bankr. D.Del. December 6, 2000). Mr. Trafelet is
also an arbitrator and mediator and is a Trustee of the American
Home Products Diet Drug (Fen-Phen) Settlement Trust and the
Amatex Asbestos Settlement Trust.

Mr. Trafelet is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.

The Debtors propose that Mr. Trafelet be appointed on these
terms:

  (a) Appointment:    Mr. Trafelet shall be appointed as the
                      Futures Representative for the Future
                      Claimants.

  (b) Standing:       Mr. Trafelet shall have standing under
                      Section 1109(b) of the Bankruptcy Code
                      to be heard as a party in interest in all
                      matters related to the Debtors' Chapter 11
                      cases and shall have powers and duties of
                      a committee as set forth in Section 1103
                      of the Bankruptcy Code as are appropriate
                      for a Futures Representative.

  (c) Engagement of
      Professionals:  Mr. Trafelet may employ attorneys, and
                      other professionals, consistent with
                      Sections 105, 327 and 524(g) of the
                      Bankruptcy Code, subject to prior approval
                      of this Court and pursuant to the
                      Administrative Order, pursuant to Sections
                      105(a) and 331 of the Bankruptcy Code, the
                      Administrative Compensation and the Fee
                      Auditor Order.

  (d) Compensation:   Compensation, including professional fees
                      and expenses shall be payable to Mr.
                      Trafelet and his professionals from the
                      Debtors' estates, as appropriate under the
                      Administrative Compensation Order, the Fee
                      Auditor order, etc.  The Debtors and Mr.
                      Trafelet have agreed he shall be
                      compensated at the rate of $550 per hour.

  (e) Liability and
      Indemnity:      The Debtors shall indemnify, defend and
                      hold Mr. Trafelet harmless from any claims
                      against him by any party, providing that a
                      court determines that he is liable upon a
                      claim as a result willful misconduct or
                      gross negligence. Mr. Trafelet has the
                      right to choose his own counsel.

  (f) Futures Rep
      Liability
      Insurance:      The Debtors will provide Mr. Trafelet with
                      errors and omissions liability insurance
                      coverage, not to exceed $15 million. The
                      Debtors anticipate the yearly premium will
                      be approximately $120,000 per year.

  (g) Right to
      Receive
      Notices:        Mr. Trafelet and any court approved
                      professionals he retains shall be deemed
                      members of the "Core Group Service List"
                      for purposes of the Revised Case
                      Management Order.

  (h) Termination:    Mr. Trafelet's appointment will end upon
                      the effective date of a plan of
                      organization in these Chapter 11 cases,
                      unless the Court specifies otherwise. (USG
                      Bankruptcy News, Issue No. 27; Bankruptcy
                      Creditors' Service, Inc., 609/392-0900)


VISKASE COMPANIES: GECC Agrees to Forbear Until Nov. 30, 2002
-------------------------------------------------------------
Viskase Corporation, a wholly-owned subsidiary of Viskase
Companies, Inc., executed a Forbearance and Consent Agreement
between Viskase and General Electric Capital Corporation,
whereby GECC, Viskase's equipment lessor, has agreed to forbear
until November 30, 2002, subject to certain conditions, from
exercising its rights and remedies because of any default or
event of default under any lease documents arising from (i)
Viskase's failure to meet the Fixed Charge Coverage Ratio for
the fiscal quarters ended March 31, 2002, June 30, 2002 and
September 30, 2002 and (ii) the Company being a debtor under
Chapter 11 of the Bankruptcy Code.

Viskase Companies, Inc. has its major interests in food
packaging. Principal products manufactured are cellulosic and
nylon casings used in the preparation and packaging of processed
meat products.


VIZACOM INC: JPMorgan Extends $1.1MM Bank Facility to Sept. 2003
----------------------------------------------------------------
Vizacom Inc. (Nasdaq: VIZY), a provider of comprehensive
information technology product and service solutions, announced
various debt restructuring initiatives relative to its PWR
subsidiary including: a commitment from Keltic Financial
Partners, LP for a $2,500,000 line of credit for PWR; the
restructuring of PWR'ss existing $1,100,000 bank debt facility
with JPMorgan Chase; and, the addition of a new flooring
facility with IBM Credit Corp. for PWR.

Under the terms of the Company's new asset-based revolving
credit facility, Keltic will lend PWR up to $2,500,000 on 85% of
its eligible accounts receivable. The Company expects to close
this facility in the next three weeks and utilize the facility
to finance the growth of PWR. The agreement with Keltic is
subject to the completion of the sale of a certain non-strategic
asset, negotiation of definitive documentation, and customary
closing conditions.

Under the terms of the modified agreement with JPMC, PWR's debt
of approximately $1,100,000, which was due May 31, 2002, will be
extended until September 2003.

Under the terms of PWR's new flooring line with IBM Credit Corp.
PWR will receive inventory financing on a revolving monthly
basis.

Commenting on these new financing initiatives, Alan W.
Schoenbart, CFO stated: "This is a long awaited and necessary
step in our business finance strategy. The main obstacle to the
implementation of our sales strategy has been the lack of
necessary capital for PWR to capitalize on the customer
opportunities it has been presented. We believe these various
debt restructuring and financing initiatives should position PWR
with sufficient capital for the Company to execute on its sales
strategy."

Vizacom Inc. is a provider of comprehensive information
technology product and service solutions. Vizacom develops and
provides to leading global and domestic companies a range of
solutions, including: multimedia products; systems and network
development and integration; state-of-the-art managed and co-
location services; and data security solutions. Vizacom attracts
top, established companies as clients, including: Martha Stewart
Living, Verizon Communications, WPP Group, and Viacom. Visit
http://www.vizacom.com


WARNACO GROUP: Wants to Extend Plan Filing Exclusivity to Aug 30
----------------------------------------------------------------
J. Ronald Trost, Esq., at Sidley Austin Brown & Wood, in New
York, reports that The Warnaco Group, Inc., and its debtor-
affiliates intend to file a consensual plan of reorganization on
or before July 31, 2002.  However, the Debtors believe that it
would be prudent to afford them some flexibility by extending
their exclusive periods:

  (a) until August 30, 2002 to file the plan of reorganization;
      and

  (b) until October 31, 2002 to solicit acceptances of the plan.

Mr. Trost asserts that cause exists to extend the exclusive
periods in these cases because:

  (a) these 38 Chapter 11 cases are extremely large and complex
      with thousands of creditors and debts exceeding
      $2,000,000,000;

  (b) since the filing of these cases, the Company has
      successfully stabilized and improved its businesses;

  (c) since the filing, the Debtors have maintained more than
      adequate liquidity to fund operations while consistently
      reducing and, at present, having paid completely down all
      outstanding under the Debtors' $600,000,000 DIP Facility;

  (d) the Debtors have made significant progress in executing
      their business plan to facilitate the filing of a
      consensual plan or plans of reorganization; and

  (e) to date, the Debtors have worked cooperatively and
      constructively with their key constituencies with the
      goal of achieving a consensual resolution of these cases.

Given these achievements, Mr. Trost contends, the request should
be granted pursuant to Section 1121(d) of the Bankruptcy Code.
(Warnaco Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WEBB INTERACTIVE: Nasdaq Panel Denies Appeal of Delisting Action
----------------------------------------------------------------
Webb Interactive Services, Inc. (OTCBB:WEBB) indicated that the
Nasdaq Listing and Hearing Review Council has denied the
company's appeal of the delisting of its common stock from the
Nasdaq National Market. The company further indicated that it
will not appeal this decision but will request an audit of its
June 30, 2002, balance sheet in order to remove the company's
common stock from the rules of the Securities and Exchange
Commission applicable to penny stocks as defined in Exchange Act
Rule 3a51-1.

Webb Interactive Services (OTCBB:WEBB) located in Denver,
Colorado, is the parent company of Jabber, Inc., the provider of
the world's most widely used open source platform for extensible
Instant Messaging and presence management applications. Jabber's
investors also include France Telecom Technology
Investissements, which owns 21.5% of Jabber.


XO COMMS: Seeks Approval of Proposed Uniform Voting Procedures
--------------------------------------------------------------
For purposes of voting on the Plan and tabulation of acceptances
and rejections of the Plan, XO Communications, Inc. asks the
Court to order that:

(a) Holders of Other Secured Claims (Class 2), Non-Tax Priority
    Claims (Class 3), and Convenience Claims (Class 4), are
    unimpaired and will be deemed to have accepted the Plan and
    are not entitled to vote.

(b) Holders of Subordinated Note Claims (Class 7), Securities
    Claims (Class 8), Old Preferred Stock Interests (Class 9),
    Old Common Stock Interests (Class 10) and Other Old Equity
    Interests in XO (Class 11), are deemed to have rejected the
    Plan and are not entitled to vote.

(c) With respect to Senior Secured Lender Claims (Class 1),
    General Unsecured Claims (Class 5), and Senior Note Claims
    (Class 6):

   (1) Each holder is impaired and entitled to vote in the
       amounts set forth in the Debtor's Schedules of Assets and
       Liabilities, to the extent the claim is listed in an
       amount greater than zero dollars and is not listed as
       contingent, unliquidated, undetermined or disputed;

   (2) To the extent a proof of claim has been filed timely for
       a liquidated, non-contingent claim in an amount greater
       than zero dollars, the holder will be entitled to vote in
       the amount specified in the claim, provided that the
       claim is not the subject of a pending objection prior to
       August 12, 2002.  In this case, the claim will be treated
       as a disputed claim for voting purposes, unless otherwise
       ordered by the Court;

   (3) To the extent that a proof of claim has been filed timely
       for a contingent, unliquidated or undetermined claim, the
       holder will be entitled, solely for voting purposes, to
       vote the claim in an amount equal to one dollar and one
       vote, unless otherwise ordered by the Court;

   (4) In the event a claim is in dispute and has not been
       determined by the Bankruptcy Court as of the deadline for
       receipt of ballots by the Balloting Agent (the Voting
       Deadline), the claim will not be counted for voting
       purposes, except to the extent and in the manner
       indicated in the Debtor's objection.

The Debtor asks the Court to set a deadline for the Balloting
Agent to receive ballots from claimants (the Voting Deadline).

                     Other Voting Procedures

In addition, the Debtor proposes that the Court approve the
following rules and standards:

(a) Any ballot that does not indicate an acceptance or rejection
    of the Plan or indicates both an acceptance and rejection of
    the Plan will be deemed to be a vote to accept the Plan.

(b) Any ballot which is unsigned or does not contain an original
    signature will not be counted.

(c) Any ballot postmarked prior to the deadline for submission
    of ballots but received afterward will not be counted,
    unless otherwise ordered by the Court.

(d) Except as otherwise directed by the Court, the last
    properly completed ballot sent and received prior to the
    voting deadline will be deemed to reflect the voter's intent
    and thus to supersede any prior ballots.

(e) A holder of a claim or interest must vote all of its claims
    or interests within a particular class under the Plan either
    to accept or reject the Plan and may not split its vote. A
    ballot that partially rejects and partially accepts the
    Plan, or that both accepts and rejects the Plan will not be
    counted. This provision will not apply to summary ballots,
    completed by intermediaries acting on behalf of groups of
    beneficial holders of claims.

(f) If a creditor casts simultaneous or duplicate ballots that
    reflect votes inconsistently, the ballots will count as one
    vote accepting the Plan.

(g) Each creditor will be deemed to have voted the full amount
    of its claim.

(h) Any Ballot received by the Balloting Agent by telecopier,
    facsimile or other electronic communication will not be
    counted.

(i) Unless otherwise ordered by the Bankruptcy Court, questions
    as to the validity, form, eligibility (including
    timeliness), acceptance and revocation or withdrawal of
    ballots will be determined by the Balloting Agent and the
    Debtor in its sole discretion, and this determination will
    be final and binding.

A claimant may seek to have its claim allowed for voting
purposes in an amount different from the scheduled amount.
Likewise, a holder of an unliquidated, contingent, and/or
undetermined claim may wish to challenge the determination of
its voting right at one dollar and one vote. XO asks the Court
to require any of these claimants to file a motion setting forth
the amount and classification at which the claimant believes its
claim should be allowed for voting purposes and the evidence in
support of that belief. If a claimant and the Debtor
subsequently reaches agreement as to the treatment of the claim,
the parties may stipulate accordingly and present the
stipulation to the Court for approval.

The Debtor asks the Court to set the date and time for a hearing
on any Claimant Voting Motion that is timely filed (the Voting
Estimation Hearing Date).

The Debtor asks the Court to authorize it not to count any claim
that is not temporarily or otherwise allowed for voting purposes
on or before the Voting Deadline.

                  Form and Distribution of Ballots

In accordance with Bankruptcy Rule 3017(d), the Debtor proposes
for the Court's approval five forms of ballots to be distributed
to the holders of claims or interests in classes of impaired
claims against the Debtor which are entitled to vote on the
Plan:

   * Ballot for Senior Secured Lender Claims - Class 1
   * Ballot for General Unsecured Claims - Class 5
   * Ballot for Senior Note Claims (Beneficial Holder) - Class 6
   * Ballot for Senior Note Claims (Record Holder) - Class 6
   * Ballot for Senior Note Claims (Master Ballot) - Class 6

The Debtor requests authority to send ballots to transfer
agents, registrars, servicing agents, or other Intermediaries
holding claims for or acting on behalf of record holders of
claims. Each Intermediary, the Debtor proposes, will distribute
to the beneficial owners of the claims for which it is an
Intermediary and will receive returned ballots and tabulate and
return the results to the Debtor's Balloting Agent, Bankruptcy
Services LLC (BSI), in a summary ballot by the applicable voting
deadline.

The Debtor will be responsible for and pay each Intermediary's
reasonable costs and expenses associated with the distribution
and tabulation of the ballots.

The Intermediaries must certify that each beneficial holder has
not cast more than one vote for any purpose, even if the holder
holds securities of the same type in more than one account.

            Approval of Notice of Non-Voting Status

The Debtor proposes to provide notice to (i) parties holding
unimpaired or reinstated claims that are deemed to accept the
plan pursuant to section 1126(f) of the Bankruptcy Code; and
(ii) parties not entitled to receive a distribution under the
plan and are deemed to reject the plan pursuant to section
1126(g) of the Bankruptcy Code. The Debtor asks the Court to
approve the respective proposed forms of the Notices that they
present with the motion.

           Approval of Notice to Holders of Contingent,
         Unliquidated and/or Wholly Undetermined Claims

The Debtor further proposes to provide notice to all holders of
claims recorded as wholly unliquidated, contingent and/or
undetermined with a notice setting forth the procedures and
deadlines specific to its claims, by first class mail, no later
than five days after the entry of this Order. The Debtor asks
the Court to approve the form of the notice that they present
for this purpose.

The Debtor and its Bankruptcy Counsel Willkie Farr & Gallagher
ask the Court to grant the motion pursuant to Sections 105, 363,
1125, and 1126 of the Bankruptcy Code, as supplemented by
Bankruptcy Rules 3017, 3018, and 3020. (XO Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable.  Those sources may
not, however, be complete or accurate.  The Monday Bond Pricing
table is compiled on the Friday prior to publication.  Prices
reported are not intended to reflect actual trades.  Prices for
actual trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

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

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

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

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

                          *********

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

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

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

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

The TCR subscription rate is $625 for 6 months delivered via e-
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are $25 each.  For subscription information, contact Christopher
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                     *** End of Transmission ***