TCR_Public/020716.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 16, 2002, Vol. 6, No. 139

                          Headlines

ANC RENTAL: Wants to Keep Plan Filing Exclusivity Until Nov. 8
ADELPHIA BUSINESS: Sets-Up Uniform Small Equipment Sale Protocol
ADELPHIA COMMS: Brings-In Covington & Burling as Special Counsel
ALLIED HOLDINGS: Wants to De-Register Certain Shares Under Plan
AMES DEPARTMENT: Court Approves $1.7 Million KRC Break-Up Fee

APPLETON PAPERS: Will Publish Second Quarter Results on August 7
APPLIED DIGITAL: Nasdaq Delists Shares from Nat'l Market System
AVADO: S&P Ups Corp. Credit Rating to CC after Interest Payment
AVAYA INC: Appoints Susan Bailer as VP, North American Sales
BGF INDUSTRIES: Defaults on Senior Credit Facility

BELL CANADA: Shareholders Approve Plan of Arrangement in Canada
BIRMINGHAM STEEL: Hires Bradley Arant as Bankruptcy Attorneys
COMDISCO INC: Asks Court to Affirm Asset Sale to Christus Health
COVANTA ENERGY: Secures Nod to Assume 5 Intercompany Agreements
DESA HOLDING: Sec. 341(a) Creditors' Meeting Convenes on July 23

DOANE PET: S&P Assigns B- Rating to Proposed $200MM Senior Notes
EMAGIN CORP: Inks Secured Note Purchase Pact with an Investor
EXIDE: Committee Gets Approval to Retain Akin Gump as Co-Counsel
EXODUS COMMS: Global Crossing Assets $4MM Claim Against Debtors
FAIRCHILD DORNIER: US Trustee Wants to Convert Case to Chapter 7

FRUIT OF THE LOOM: AlixPartners Wants to Continue Engagement
GLOBAL CROSSING: Eschelon Seeking Stay Relief to Set Off Claim
GLOBE-X CANADIANA: CINAR Calls for Liquidation and Winding-Up
GUILFORD MILLS: Files Plan of Reorganization in New York
IMP INC: Terminates KPMG's Engagement as Independent Accountants

INTELLISEC: Court OKs Balfour Capital to Assist in Restructuring
ISPAT INT'L: Mexican Unit Extends Exch. Offer for 10-1/8% Certs.
KEY3MEDIA GROUP: Falls Below NYSE Minimum Listing Requirements
KINETIC SYSTEMS: S&P Rates $210MM Senior Credit Facility at BB
KMART CORP: Court Approves Designation Rights Pact with Kimco JV

LENNOX INTERNATIONAL: S&P Assigns BB- Corporate Credit Rating
MELTRONIX INC: Appoints Scott Weinbrandt to Board of Directors
METROCALL: Delaware Court Fixes August 16, 2002 Claims Bar Date
MICROFORUM: Enters Agreement to Sell CALMS Unit to White Clarke
NII HOLDINGS: Intends to Engage Deloitte & Touche as Accountants

NQL INC: Court to Consider Asset Purchase Agreement on August 7
NAPSTER INC: Gets Court Authority to Engage Jones Day as Counsel
NATIONSRENT: Wins Nod to Settle Certain Ordinary Course Actions
NAVISTAR INT'L: Tentative New Labor Agreement with Autoworkers
NEOTHERAPEUTICS: Raises $1MM+ through Private Equity Placement

NETWORK ACCESS: Seeking Nod to Continue Shaw Pittman Retention
NORTEK INC: S&P Affirms Low-B's Over Definitive Acquisition Pact
ONVIA.COM INC: Shareholders Approve 1-for-10 Reverse Stock Split
OPTICON MEDICAL: Completes Asset Sale to OPMI Funding Corp.
ORBITAL SCIENCES: Fitch Rates $100MM Subordinated Notes at B-

OWENS CORNING: Bank Group Secures Stay Relief to Setoff Claims
PACIFIC GAS: Parent to Announce Q2 2002 Results on Aug. 1, 2002
PARKER DRILLING: S&P Affirms Ratings Over Nixed Acquisition Bid
PLIANT SYSTEMS: Liquidating Agent Wants to Hire Adams Consulting
PROACTIVE COMPUTER: Taps Cor Equity to Assist in Debt Workout

PSINET INC: Court Wants Periodic Status Reports and Other Info.
QSERVE COMMS: US Trustee Appoints Official Creditors' Committee
QWEST COMMS: Applies for Long-Distance Service for 4 More States
QWEST COMMS: Considers Restating Fiscal 2001 Financial Results
R&S TRUCK BODY: Court Okays Anderson Kill as Debtors' Counsel

RIVERWOOD INT'L: Extends Tender Offers for 2 Notes to August 2
SOFTWARE LOGISTICS: Closes Asset Sale to CMGI for $46MM + Debts
STARBAND COMMS: Seeking Nod to Hire Zuckerman Spaeder as Counsel
SUN COUNTRY: Chapter 7 Trustee Wants to Retain Mackall Crounse
SUPERVALU: Plans Vigorous Defense Against Shareholder Complaints

TTR TECHNOLOGIES: Fails to Meet Nasdaq Min. Listing Requirements
THOMSON KERNAGHAN: Canadian Court Names E&Y as Trustee Under BIA
US AIRWAYS: Reaches Tentative Pact with Pilots on Workout Plan
US AIRWAYS: Training Instructors Lend Support to Workout Plan
UNITED AIR LINES: S&P Keeping Watch on B Corporate Credit Rating

VELOCITA CORP: Turns to Impala Partners for Financial Advice
WILLIAMS COMPANIES: Selling Central-U.S. Gas Pipeline System
WORLDCOM: New York Court Stays Conversion of MCI Group Shares
XO COMMS: Vice-Pres. & Gen. Manager Dewayne A. Nelon Jumps Ship

                          *********

ANC RENTAL: Wants to Keep Plan Filing Exclusivity Until Nov. 8
--------------------------------------------------------------
With the consent of Congress Financial Corporation, Lehman
Brothers Inc., Liberty Mutual Insurance Company and the Official
Committee of Unsecured Creditors, ANC Rental Corporation and its
debtor-affiliates ask the Court to extend the deadline to
present a Chapter 11 Plan to November 8, 2002 and the date for
soliciting acceptances to January 7, 2003.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, points to the sheer size and complexity of
the Debtors' cases in asking the Court to grant the requested
extensions.  The Debtors own and operate one of the world's
largest car rental businesses under the brand names Alamo and
National and their Chapter 11 cases are of the biggest in 2001.

Mr. Packel states the Debtors have had to focus their energies
on their business affairs, developing cost saving strategies, a
business reorganization strategy and implementing the business
strategy of consolidating Alamo and National operations at
airports throughout the country as well as obtaining the
vehicles critical to the Debtors' business.  In doing so, the
Debtors have made significant progress, including:

A. Progress toward ensuring a steady supply of vehicles for the
   operation of the Debtors' business.  The Debtors have:

   a. received commitments and court approval for up to
      $3,350,000,000 of financing to be used by certain non-
      debtor special purpose entities to finance the purchase of
      vehicles critical to the Debtors' reorganization efforts;
      and,

   b. entered into an agreement with General Motors and GMAC
      that provides for the Debtors to purchase GM vehicles from
      certain designated car dealers;

B. Obtaining Court approval of the agreement with Liberty Mutual
   Insurance Company, pursuant to which Liberty agreed to
   continue providing surety bonds which are essential to the
   Debtors' ability to operate their businesses and to
   successfully reorganize;

C. Negotiating a consensual longer term cash collateral Order
   with their secured lenders through September 22, 2002;

D. Obtaining Court approval to implement a Key Employee
   Retention Plan;

In addition to the day-to-day demands of running their business,
Mr. Packel states, the Debtors' ongoing legal battle against
their competitors -- Hertz and Avis -- have diverted substantial
attention from formulating a Reorganization Plan.  Although the
disputes have been largely resolved by the Court, Hertz and Avis
nonetheless have appealed the Court's decisions.

Mr. Packel further notes that the Debtors have been making good
faith progress towards a restructuring, another factor that the
Court considers in granting an extension.  Prior to the
commencement of the Chapter 11 cases, the Debtors' focus has
been on restructuring their business and maximizing value for
all of the Debtors' creditors.  The Debtors, indeed, hired
Lawrence J. Ramaekers as Chief Operating Officer and William N.
Plamondon, III as Chief Restructuring Officer to develop a
turnaround restructuring plan for the company.

Since the Petition Date, Mr. Packel maintains that the Debtors
have retained Jay Alix and Associates to assist in the
restructuring of the Debtors' business and the development of a
Reorganization Plan.  Travis Tanner was also hired as Senior
Vice President of Sales and Marketing to help with sales and
marketing as the Debtors begin to gain market share.  To ensure
a fair and open process of restructuring, the Debtors have made
themselves available to address any concerns of the Creditors'
Committee. They have also been timely paying their post-petition
obligations.

Mr. Packel contends that, although the objective of Chapter 11
is to develop, negotiate, and confirm a Reorganization Plan by
agreement, as the Debtors intend to do, the Debtors must be
given additional time to gauge the potential effects the various
contingencies will have on the Debtors' business, explore
additional financing options and meaningfully negotiate with
their creditors.  The Debtors must formulate a Plan that is
feasible in light of their current and potential operating
performance.

In contrast, Mr. Packel deems that, if the exclusive periods
were not extended, the Debtors' negotiations would be seriously
disrupted and their plan process would suffer set back. (ANC
Rental Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ADELPHIA BUSINESS: Sets-Up Uniform Small Equipment Sale Protocol
----------------------------------------------------------------
According to Judy G.Z. Liu, Esq., at Weil Gotshal & Manges LLP
in New York, the Adelphia Business Solutions, Inc., Debtors have
been reevaluating their core business plan, and have been
implementing an overall downsizing of their operations.  As a
result of the downsizing of their operations and consolidation
of certain markets, the ABIZ Debtors identified certain real
property leases that were no longer beneficial or necessary to
their estates.  ABIZ was previously authorized to reject certain
unexpired real property leases. Given those rejections, the ABIZ
Debtors are now holding excess equipment and inventory,
including, but not limited to, desks, chairs, lamps, file
cabinets, computer equipment, and telecommunications equipment.

Because many of these items are of relatively small value, Ms.
Liu believes that the sale of the Equipment will not require
significant marketing efforts by the Debtors.  By way of
example, the Debtors have previously identified a purchaser for
excess Equipment resulting from the closure of the Indianapolis,
Indiana market.  The sale will produce approximately $100,000 in
revenue and will return approximately 40% of the net book value
of that Equipment.  In addition, consistent with the downsized
business plan, certain collocation sites with Incumbent Local
Exchange Carriers have been decommissioned by the Debtors,
resulting in extraneous telecommunications equipment that may be
disposed of. The Debtors and their estates receive no benefit
from the continued storage and disuse of those
telecommunications equipment.

Mr. Liu avers that the Debtors have discussed with counsel for
the unsecured creditors' committee and counsel for the informal
committee of the 12-1/4% Noteholders certain limitations on
sales that would occur pursuant to the Omnibus Sale Order.  No
single transaction would have an aggregate purchase price in
excess of $500,000, and the Debtors would be required to realize
minimum net proceeds of 25% of net book value for the assets
sold.  All of these sales would result from arm's-length
transactions with third party purchasers.  Sales satisfying
these requirements would be consummated without any need to file
a further motion with this Court for approval.  The following
procedures shall be implemented in the sale of the equipment:

A. The Debtors shall provide notice of each proposed sale of
   Equipment to the United States Trustee for the Southern
   District of New York, attorneys for the Committee, attorneys
   for the 12-1/4% Noteholders, attorneys for the Debtors'
   proposed postpetition lenders, the purchaser of the
   Equipment, all parties known to the Debtors who have
   expressed an interest in purchasing the Equipment, the holder
   of any lien, claim, or encumbrance relating to the Equipment
   proposed to be sold, and any applicable taxing authority.
   The Notice shall specify the Equipment to be sold, the
   identity of the seller, the identity of the proposed
   purchaser, and the proposed purchase price.

B. The Notice Parties shall have 5 business days after the
   Notice is served to object to the proposed transaction,
   request additional time to evaluate the proposed transaction,
   or submit a higher and better offer for the Equipment
   proposed to be sold.  All objections, requests for extensions
   of time, and Competing Offers shall be in writing, delivered
   to Weil Gotshal & Manges LLP, 767 Fifth Avenue, New York, New
   York 10153, Attn: Judy G.Z. Liu, Esq., the Debtors' counsel,
   so as to be actually received not later than 5:OO p.m. on the
   date that is 5 business days after the Notice is served.
   Competing Offers must also be delivered to ABIZ, at One North
   Main Street, Coudersport, Pennsylvania, Attn: John Glicksman.
   If Weil Gotshal does not receive a written objection, written
   request for additional time prior to the expiration of the 5-
   day period, or Competing Offer, the Debtors shall be
   authorized to consummate the proposed sale transaction and to
   take those actions as are necessary to close the transaction
   and obtain the sale proceeds.  If a Notice Party provides a
   written request to Weil Gotshal for additional time to
   evaluate the proposed transaction, only that Notice Party
   shall have an additional 5 days to object to the proposed
   transaction or to submit a Competing Offer.

C. Any proposed Competing Offer with respect to each transaction
   must increase the proposed purchase price of that transaction
   by at least 10%.  Any subsequent overbid, to qualify as a
   higher and better offer, must increase the proposed purchase
   price by at least 10% higher than the previous bid.  In the
   event a Competing Offer, which has been accepted by the
   Debtors as the highest and best offer, exceeds $500,000, the
   Debtors shall file a motion with the Court requesting a
   separate order authorizing the sale of that Equipment.

D. If a Notice Party objects to the proposed transaction within
   5 business days after the Notice is sent, the Debtors and the
   objecting Notice Party shall use good faith efforts to
   consensually resolve the objection.  If the Debtors and the
   objecting Notice Party are unable to achieve a consensual
   resolution, the Debtors shall not proceed with the proposed
   transaction pursuant to these procedures, but may seek Court
   approval of the proposed transaction upon notice and a
   hearing.

Ms. Liu contends that sound business reasons exist to justify
selling the Equipment pursuant to the Sale Procedures.  Allowing
the Debtors to sell the Equipment in this manner constitutes the
most efficient and cost-effective means of maximizing the value
realized for the Equipment and, thus, is in the best interests
of the Debtors' estates, creditors, and parties in interest.
Requiring Court approval for each applicable sales transaction
under $500,000 would result in increased attorneys' fees and
administrative expenses, and thereby further deplete the
resources of the estate.  The Debtors believe that the proceeds
that will be generated by the sale of the Equipment do not
warrant the incurrence of those expenses.  Moreover, counsel for
the Committee and the 12-1/4% Noteholders have indicated to
Debtors' counsel that they have no objection to proceeding in
accordance with the proposed Sale Procedures.

In addition, the Debtors often face stringent time constraints
in meeting the closing deadlines established by interested
purchasers.  "The expedited Sale Procedures will permit the
Debtors to be responsive to the needs of interested purchasers,
while providing for a prior review of the proposed transaction
by the U.S. Trustee and the two court-approved committees," Ms.
Liu says.

The Debtors submit that the Sale Procedures satisfy the
requirements of Section 363(f) of the Bankruptcy Code.  If a
holder of a lien, claim, or encumbrance receives the requisite
Notice and does not object within the prescribed time period,
that holder will be deemed to have consented to the proposed
sale, and the Equipment then may be sold free and clear of the
holder's liens, claims, or encumbrances, with any interests to
attach to the net proceeds of the sale.  In addition, because
the Equipment will be sold for fair market value (identified as
no less than 25% of net book value), the holders of any liens
can be compelled to accept money in satisfaction of same,
satisfying the requirement of Section 363(f)(5).

The Debtors further submit that a private sale transaction for
the Equipment is appropriate under the circumstances, and that
the Sale Procedures will ensure that appropriate notice of each
sale will be given.  In accordance with Bankruptcy Rule
6004(f)(I), Ms. Liu tells the Court that sales of property
outside of the ordinary course of business may be by private
sale or public auction.  The Debtors have determined in their
business judgment that the sale of the Equipment by private sale
will enable them to obtain the best offer for the Equipment,
whereas a public auction would only entail delay and attendant
expense with very little benefit to the Debtors.  Moreover, the
estates will be protected by the Sale Procedures, to which the
Debtors must adhere for the sale to be authorized Pursuant to
the Omnibus Sale Order.  Therefore, a private sale is in the
best interests of the Debtors, their estates, creditors, and
other parties in interest.

As further assurance that the sale of the Equipment by private
sale is in the best interests of the Debtors, Ms. Liu accords
that the Equipment to be sold pursuant to Sale Procedures will
be subject to Competing Offers.  For the purpose of seeking
Competing Offers, the Equipment need not be subject to
additional extensive marketing and an auction process, but
rather, it is sufficient that the Notice provided to the Notice
Parties make clear that the sale of any of the Equipment is
subject to higher and better offers, and that the Notice
provides to potential bidders information with respect to the
manner in which any Competing Offer may be communicated to the
Debtors.  In sum, the Sale Procedures will minimize
administrative costs in these cases, speed the liquidation of
miscellaneous non-core assets, and preserve the rights of
interested parties to object. (Adelphia Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADELPHIA COMMS: Brings-In Covington & Burling as Special Counsel
----------------------------------------------------------------
Adelphia Communications and its debtor-affiliates seek to employ
Covington & Burling as special counsel to the Special Committee
of the Board of Directors of Adelphia Communications Corporation
under a general retainer to perform legal services.  The Debtors
believe Covington is well qualified to act as special securities
counsel on behalf of the Debtors in these cases.

Randall D. Fisher, the Debtors' Vice President and General
Counsel, recounts that on May 16, 2002, the ACOM Debtors
announced that the Special Committee of the Board of Directors
consisting of three independent directors would expand its
ongoing investigation into a number of issues, including
transactions between the ACOM Debtors and the Rigas Entities.
Upon its formation, the Special Committee recognized that it
needed sophisticated legal assistance to investigate the
numerous transactions among the Debtors and the Rigas Entities
and analyze the myriad legal issues raised by an investigation.
The Special Committee selected Covington to represent it because
of Covington's expertise in these matters.

Founded more than 80 years ago, Mr. Fisher tells the Court that
Covington is a leading international law firm, with over 500
lawyers practicing in Washington, New York, San Francisco,
London, and Brussels.  Covington's major practice areas include
mergers and acquisitions, finance and taxation, antitrust and
regulatory law, technology and intellectual property law, white
collar defense as well as virtually all types of litigation and
alternative dispute resolution proceedings.  Two of Covington's
specialties are in the areas of "white collar" defense work and
corporate governance.  Covington represents clients in all areas
of white collar representation and civil cases involving
potential allegations of criminal conduct by providing services
that include: defending individuals and corporations in criminal
and parallel civil proceedings before federal and state courts,
the U.S. Department of Justice, the Securities and Exchange
Commission, and other federal and state agencies; and
representing clients in congressional, inspector general, and
independent counsel investigations.  Also Covington will conduct
internal investigations for corporate clients and other
entities, help design corporate compliance programs, and advise
public companies and new issuers on disclosure and related
issues in connection with public offerings.

Mr. Fisher submits that Covington has represented the Special
Committee since March 2002.  In particular, Covington has
represented the Special Committee in the investigation of
certain accounting and disclosure issues relating to the
Debtors; and material relationships and transactions involving
the Debtors and certain of its subsidiaries, on the one hand,
and the Rigas Entities, on the other hand.  As of the Petition
Date, a number of matters being handled by Covington & Burling
were pending.

During these cases, Covington & Burling will:

A. investigate the nature and propriety of certain transactions
   between the Debtors and the Rigas Entities;

B. investigate the integrity of the Debtors' books and records,
   including the accuracy and completeness of the Debtors'
   financial accounting;

C. report to the Special Committee on the findings of the
   investigation;

D. advise and counsel the Special Committee with respect to the
   Debtors' compliance with obligations under certain credit
   agreements and other debt instruments;

E. coordinate with other professionals retained by the Debtors;
   and

F. perform other appropriate legal services for the Special
   Committee related to corporate governance.

Based on Covington's overall expertise and the services
performed to date, the Special Committee believes Covington is
well-qualified to serve as special counsel and therefore,
Covington's retention is in the best interests of the estates.

According to Mr. Fisher, the Special Committee recognized that
Covington could not perform all the necessary services by itself
to investigate thoroughly the Debtors' transactions and
relationships with, among others, the Rigas Entities -- an
investigation which would necessitate a review of the Debtors'
financial reporting and accounting.  Accordingly, the Special
Committee authorized Covington to employ the accounting firm of
Urbach Kahn & Welin Advisors, Inc. to perform forensic
accounting services to assist Covington in its investigation.
In addition to seeking approval of Covington's retention, this
Motion also seeks to authorize the implementation of procedures
pursuant to which Covington may employ one or more "Special
Professionals", including Urbach, and provide for their
compensation.

Leonard Chazen, a Partner of the Firm of Covington & Burling,
informs the Court that from March 2002 to the Petition Date,
Covington received $2,500,000 from the Debtors on account of
legal services rendered to the Special Committee.

Post-petition, Covington & Burlington's professionals will bill
for services at their customary hourly billing rates:

       Jonathan D. Blake                $600
       Leonard Chazen                   $600
       Bruce A. Baird                   $550
       Michael St. Patrick Baxter       $525
       Anthony Herman                   $500
       David W. Haller                  $475
       Robert A. Long, Jr.              $450
       Stephen P. Anthony               $425
       R. Laird Hart                    $425
       Elaine W. Stone                  $425

Mr. Chazen adds that other Covington attorneys from time to time
may render services to the Special Committee in connection with
these cases.  The current hourly rates for firm attorneys in
non-bankruptcy matters range from $160 to $600. The current
hourly rate for the services of paraprofessionals in non-
bankruptcy matters is $130 to $210.

Mr. Chazen assures the Court that the principals and
professionals of Covington do not have any connection with the
Debtors, their creditors, or any party-in-interest, or their
respective attorneys; do not hold or represent an interest
adverse to the estate; and are "disinterested persons" within
the meaning of Bankruptcy Code section 101(14).  However, the
Firm currently represents or in the past has represented several
potential parties-in-interests in these cases including ABN Amro
Bank N.V., AXA Financial Inc., Bank of Tokyo Trust Company,
Banque National de Paris, Banque Paribas, Barclays Bank PLC,
Chemical Bank, Citibank N.A., Crestar Bank, Dai-Ichi Kangyo Bank
Ltd., Dresdner Bank A.G., Fifth Third Bank, First National Bank
of Boston, First National Bank of Chicago, First Union National
Bank of North Carolina, Fleet National Bank, Goldman Sachs &
Co., Harris Trust & Savings Bank, Highland Capital Management,
Industrial Bank of Japan, J.P. Morgan Securities Inc.,
Manufacturers and Traders Trust Company, Mellon Bank N.A.,
Merrill Lynch Pierce Fenner, Morgan Guaranty Trust Company of
New York, Nationsbank N.A., PNC Bank Corporation, Protective
Life Insurance Company, Sumitomo Trust & Banking Co. Ltd.,
Travelers Insurance Company, AllFirst Bank, Banc of America
Securities LLC, Bank of America N.A., Bank of New York, Bank One
N.A., Bankers Trust Company, BankBoston Corporation, Chase
Manhattan Bank, Chase Securities Inc., CIBC Mellon Trust
Company, Cooperatieve Centrale Raiffeison-Boerenleenbank B.A.,
Credit Agricole Indosuez, Credit Lyonnais New York Branch,
Credit Suisse First Boston, Deutsche Bank AG, First National
Bank of Maryland, General Electric Capital Corporation, J.P.
Morgan Chase & Co., Lifetime Entertainment Services, Motorola
Inc., Morgan Stanley & Company Inc., Scientific Atlanta Inc.,
Societe-Generale, SunTrust Banks Inc. and USA Networks Inc.

                        *    *    *

Judge Gerber grants the Debtors' application to employ Covington
as special counsel on an interim basis, subject to a final
hearing to be held on July 31, 2002.  Objections to the proposed
retention should be filed no later than July 25, 2002. (Adelphia
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Adelphia Communications' 10.875% bonds due 2010 (ADEL10USR1),
DebtTraders reports, are quoted at a price of 39. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL10USR1
for real-time bond pricing.


ALLIED HOLDINGS: Wants to De-Register Certain Shares Under Plan
---------------------------------------------------------------
Allied Holdings, Inc. has filed a post-effective amendment to
deregister certain shares and plan interests under the Plan
which were registered on a Registration Statement originally
filed with the Securities and Exchange Commission on March 1,
1994. A total of 53,289 shares to which the Registration
Statement relates have not yet been sold under the Plan. The
Company no longer offers the Shares pursuant to the Plan and, as
a result, the participations would be exempt from registration
under Section 3(a)(2) of the Securities Act of 1933, as amended.
Consequently, the Shares and all interests in the Plan remaining
unsold have been deregistered.

                        *   *   *

As previously reported in the March 5, 2002 issue of the
Troubled Company Reporter, Standard & Poor's on February 27,
2002, affirmed its 'B' corporate credit rating on automobile
transporter Allied Holdings Inc., and at the same time, removed
the ratings from CreditWatch. The action reflects Allied
Holdings' announcement that it has refinanced an unrated $230
million revolving credit facility and $40 million in unrated
subordinated debt.


AMES DEPARTMENT: Court Approves $1.7 Million KRC Break-Up Fee
-------------------------------------------------------------
Judge Gerber simultaneously allows Ames Department Stores, Inc.,
and its debtor-affiliates to grant KRC Acquisition Corp., a
$1,770,000 Break-Up Fee to establish an initial overbid of
$3,540,000 as well as Expense Reimbursement on the terms
provided in the KRC Agreement.

                              *   *   *

As previously reported, the Break-Up Fee is equal to 3% of the
Purchase Price or $1,770,000.  The Debtors will also pay the
Expense Reimbursement, which consists of KRC's reasonable and
actual due diligence costs and legal fees.

The Debtors will reimburse KRC for KRC's actual and reasonable
due diligence costs and legal fees incurred both prior to and
after the Debtors' breach (including the costs of collection).
The Break-Up Fee will be paid to KRC from and (and at the time
of) a closing of a competing transaction or transactions from a
successful competing bid offered and accepted at the Auction.
The Expense Reimbursement will be paid to KRC within five days
after receipt of a demand thereof from KRC to the Debtors and
the Committee (accompanied by reasonably detailed supporting
materials). (AMES Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Ames Department Stores' 10% bonds due 2006 (AMES06USR1) are
quoted at a price of 1, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMES06USR1
for real-time bond pricing.


APPLETON PAPERS: Will Publish Second Quarter Results on August 7
----------------------------------------------------------------
Appleton Papers will release its second quarter 2002 financial
results after market close on Wednesday, August 7, 2002.  The
company's chief executive officer, Doug Buth, and chief
financial officer, Dale Parker, will host a teleconference to
discuss those results on Thursday, August 8, 2002, at 1:00 p.m.
CDT.

The call will be broadcast live over the Internet.  Interested
parties may connect to http://www.appletonpapers.com/whatsnewon
the Appleton Papers Web site to access the conference link.  The
call will be archived on the Web for 10 days.

A playback of the teleconference will also be available from
approximately 4:00 p.m. CDT, August 8 through August 17.  To
access, please dial 800-642-1687 and use the access code
4732044.

Appleton Papers creates innovative product solutions for
business, government and consumer applications worldwide through
its unique development and use of coating formulations and
applications and encapsulation technology. Appleton is the
leading producer of substrates used to make multipart carbonless
business forms.  The company also manufactures substrates used
to make point-of-sale, tag, ticket and label products and
develops document and product authentication solutions.
Appleton is headquartered in Appleton, Wisconsin, and has
manufacturing operations in Wisconsin, Ohio and Pennsylvania.
The company employs approximately 2,500 people and is 100
percent employee-owned.

                        *    *    *

As reported in the Dec. 13, 2001, edition of Troubled Company
Reporter, Standard & Poor's assigned its single-'B'-plus rating
to Appleton Papers Inc.'s $250 million senior subordinated notes
due 2008 to be issued under Rule 144A with registration rights.


APPLIED DIGITAL: Nasdaq Delists Shares from Nat'l Market System
---------------------------------------------------------------
Applied Digital Solutions, Inc., (ADSXE) received notification
Friday morning that NASDAQ has delisted the Company's securities
from the National Market System (NMS).

However, the Company's stock continues to trade and the Company
intends to appeal NASDAQ's action and request re-listing.

As previously announced, the Company had sought guidance from
the SEC on the proper accounting related to the merger of one of
its subsidiaries. The Company received the SEC's guidance
yesterday afternoon and will work aggressively to finalize and
file its Form 10-Q, together with the required auditor review,
promptly.

The Company vigorously disagrees with the action that has been
taken by NASDAQ and intends to request re-listing on the NMS
upon the filing.

Applied Digital Solutions is an advanced technology development
company that focuses on a range of life-enhancing, personal
safeguard technologies, early warning alert systems,
miniaturized power sources and security monitoring systems
combined with the comprehensive data management services
required to support them. Through its Advanced Technology Group,
the company specializes in security-related data collection,
value-added data intelligence and complex data delivery systems
for a wide variety of end users including commercial operations,
government agencies and consumers. Applied Digital Solutions is
the beneficial owner of a majority position in Digital Angel
Corporation. For more information, visit the company's Web site
at http://www.adsx.com


AVADO: S&P Ups Corp. Credit Rating to CC after Interest Payment
---------------------------------------------------------------
Standard & Poor's raised its corporate credit and subordinated
notes ratings on casual dining restaurant operator Avado Brands
Inc. to double-'C' from 'D' following the company's payment of
interest to holders of its 11.75% senior subordinated notes. The
interest payment was originally due on June 15, 2002.

At the same time, Standard & Poor's affirmed its double-'C'
senior unsecured debt rating on Avado. The outlook is negative.
Madison, Georgia-based Avado had $236.3 million of funded debt
outstanding as of March 31, 2002.

"The ratings on Avado and its subsidiary reflect the company's
limited liquidity, highly leveraged capital structure, weak
operating performance, and participation in the highly
competitive restaurant industry," said Standard & Poor's analyst
Diane Shand.

Avado has struggled as a multi-concept restaurant company. Weak
operating results at its Don Pablo's concept has overshadowed
good performance at Hops. The company's operating margin dropped
to 10.7% in 2001 from 11.3% in 2000 and 17.7% in 1996, when it
was a successful Applebee's franchisee.

Cash flow protection measures are weak. EBITDA covered interest
expense only about 1.1 times, and leverage is high, with total
debt to EBITDA of about 7.0x. Avado has limited financial
flexibility. Liquidity is poor because the company had only $2.9
million available under its credit facility and $168,000 in cash
and cash equivalents on the balance sheet as of March 31, 2002.

Although management has attempted to improve the operating
performance at Don Pablo's, there is little assurance that it
can succeed in reviving its flagging restaurant operations. The
company's viability is in jeopardy, reflecting doubts that it
will be able to generate sufficient cash flow to meet its debt
obligations during the next 12 months.


AVAYA INC: Appoints Susan Bailer as VP, North American Sales
------------------------------------------------------------
Avaya, Inc. (NYSE: AV), a leading provider of voice and data
networks and applications for businesses, said that Susan Bailey
has been named as Vice President for North American Sales. In
this role, Bailey will lead a team of 1300 direct sales and
sales support employees plus have oversight for an additional
1300 Avaya indirect channel partners -- including distributors,
value-added resellers and solutions providers -- in the U.S. and
Canada.  She will be located at Avaya's Highlands Ranch campus,
in Littleton, Colorado.

Ms. Bailey brings 20 years of sales, marketing and general
management experience in the global information technology
industry to Avaya, including 13 years spent at IBM. Most
recently, she was corporate vice president for North American
Sales and Service, Global Channels and Strategic Alliances for
Storage Technology.

"Susan is acutely focused on serving the needs of customers with
a solutions-oriented delivery model," said Dave Johnson, senior
vice president worldwide sales and marketing for Avaya. "She has
a proven track record of success, and of driving business
results through an effective team approach. We are delighted
that Susan is bringing her skills and talents to Avaya."

Ms. Bailey is a graduate of the University of California - Los
Angeles and the INSEAD Executive Management Institute of
Fontainbleau, France.

Avaya Inc., headquartered in Basking Ridge, N.J., is a leading
global provider of voice and data networks as well as
communications solutions and services that help businesses,
government agencies and other institutions -- including more
than 90 percent of the FORTUNE 500(R) -- excel in the customer
economy.  Avaya offers Customer Relationship Management
Solutions, Unified Communication Solutions, Service Provider
Solutions, MultiService Networking Infrastructure, and Converged
Voice and Data Networks - including the company's no-compromise
Avaya Enterprise-Class IP Solutions (ECLIPS) - all supported by
Avaya Services and Avaya Labs.  Avaya is the worldwide leader in
unified messaging, messaging systems, call centers and
structured cabling systems.  It is the U.S. leader in voice
communications systems and services. Avaya is an Official
Sponsor of the 2002 FIFA World Cup(TM), the FIFA Women's World
Cup 2003 and the 2006 FIFA World Cup(TM) tournaments.  For more
information about Avaya, visit its Web site at
http://www.avaya.com

                         *    *    *

As previously reported in March, Standard & Poor's assigned a
`BB-` rating to Avaya Inc.'s proposed $300 million senior
secured notes due 2009.

The notes are secured by a second priority security interest in
the stock of most of the company's domestic subsidiaries, 65% of
the stock of a foreign subsidiary which holds the company's
foreign intellectual property rights, and substantially all of
the company's domestic non-real property assets. The security
interest in the collateral securing the notes will be
subordinated to the security interest in the collateral securing
the company's obligations to the lenders under its credit
agreement.

The company has about $1.5 billion in debt and capitalized
operating lease obligations.

At the same time, Standard & Poor's affirmed its other ratings
on Basking Ridge, New Jersey-based Avaya, the leading supplier
of enterprise voice communications equipment. The outlook is
negative.

Ratings continue to reflect the company's good position in the
enterprise voice networking industry, ongoing maintenance
revenues from its large installed base, and the company's
conservative financial practices, as well as industry trends
toward an open, combined voice- and data-communications
architecture.


BGF INDUSTRIES: Defaults on Senior Credit Facility
--------------------------------------------------
BGF Industries, Inc., has received notice from its senior
lenders that it is currently in default under the $125,000,000
senior credit facility led by First Union National Bank, due to
a breach of certain financial covenants.

Further, as permitted under the terms of the senior credit
facility, the senior lenders have issued a payment blockage
notice prohibiting BGF from making the required interest payment
on its 10-1/4% Series B Senior Subordinated Notes due 2009 on
July 15, 2002. As a result, BGF is not currently able to make
this required interest payment. Under the terms of the indenture
governing the notes, failure to make required interest payments
constitutes an event of default if not cured within 30 days.

While BGF currently does not have sufficient cash available to
make the interest payment on the notes required on July 15,
2002, it does currently have sufficient cash available to fund
its operations.

BGF has engaged Realization Services, Inc. as its financial
advisor to explore strategic alternatives including, but not
limited to, the capital restructuring of the company.

BGF, headquartered in Greensboro, NC, manufactures specialty
woven and non-woven fabrics made from glass, carbon and aramid
yarns for use in a variety of electronic, filtration, composite,
insulation, construction, and commercial products.


BELL CANADA: Shareholders Approve Plan of Arrangement in Canada
---------------------------------------------------------------
Bell Canada International Inc., announced that BCI shareholders
approved BCI's Plan of Arrangement at a special meeting of
shareholders held Friday afternoon in Montreal.

The Plan of Arrangement was approved by in excess of 99% of the
votes cast in person or by proxy  by BCI shareholders at the
special meeting.  As announced earlier Friday by BCI, holders of
BCI's 11% senior unsecured notes approved the Plan of
Arrangement at a meeting of noteholders held this morning.

A hearing has been scheduled for July 17, 2002 at 10:00 a.m.
before the Ontario Superior Court of Justice at which time BCI
will seek court approval of the Plan of Arrangement.  If court
approval is obtained, BCI intends to complete the sale of its
interest in Telecom Americas on July 24, 2002; thereafter, BCI
will proceed with the disposition of its remaining assets in an
orderly fashion and seek expeditious resolution of claims
against BCI in order to accelerate final distributions to BCI
stakeholders. In addition, shortly after court approval of the
Arrangement, BCI will effect the consolidation of its
outstanding common shares such that, following the
consolidation, BCI would have 40 million common shares
outstanding. BCI confirms that the proposed consolidation ratio
will be approximately one to 120.

BCI, through Telecom Americas, owns and operates 4 Brazilian B
Band cellular companies serving more than 4.3 million
subscribers in territories of Brazil with a population of
approximately 60 million. BCI is a subsidiary of BCE Inc.,
Canada's largest communications company. BCI is listed on the
Toronto Stock Exchange under the symbol BI and on the NASDAQ
National Market under the symbol BCICF. Visit the company's Web
site at http://www.bci.ca


BIRMINGHAM STEEL: Hires Bradley Arant as Bankruptcy Attorneys
-------------------------------------------------------------
Birmingham Steel Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for authority
to sign-up Bradley Arant Rose & White LLP as counsel in their
Chapter 11 proceedings.  Bradley Arant has represented the
Debtors as reorganization and restructuring counsel since 1999
and has become familiar with the Debtors' affairs.

Bradley Arant is expected to:

     a) represent the Debtors in  carrying out their duties
        as debtors-in-possession under the Bankruptcy Code;

     b) prepare on behalf of the Debtors necessary motions,
        applications, answers, contracts, reports and other
        legal documents;

     c) advise and consult with the Debtors for the
        preparation of all necessary schedules, disclosure
        statements and plans of reorganization;

     d) perform any and all legal services for the Debtors in
        the operation of their businesses and the management of
        their assets and financial affairs, including
        securities, litigation, tax, ERISA, corporate, banking,
        intellectual property, commercial, environmental and
        other matters; and

     f) perform all other legal services required by the
        Debtors during their bankruptcy cases.

Bradley Arant lawyers' customary hourly rates are:

          John P. Whittington, Partner         $365
          Virginia C. Patterson, Partner       $300
          J. Patrick Darby, Partner            $290
          Edward J. Peterson, III              $205
          Lloyd C. Peepled, III                $195
          Christopher L. Hawkins               $195
          Ann Marie Smith, Legal Assistant     $105

Birmingham Steel Corporation manufacture and distribute steel.
Without limitation, the Debtors produce steel reinforcing bar
(rebar) for construction industry and merchant steel products
for fabricators and distributors across North America. The
Company filed for chapter 11 protection on June 3, 2002. James
L. Patton, Esq., Michael R. Nestor, Esq., Sharon M Zieg, Esq. at
Young Conaway Stargatt & Taylor, LLP and John Whittington, Esq.,
Patrick Darby, Esq., Lloyd C. Peeples III, Esq. at Bradley Arant
Rose & White LLP represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $487,485,834 in assets and $681,860,489 in
total debts.


COMDISCO INC: Asks Court to Affirm Asset Sale to Christus Health
----------------------------------------------------------------
Out of an abundance of caution, Comdisco, Inc., and its debtor-
affiliates want a so-called "comfort order" affirming the
proposed sale of assets to Christus Health, which they believe
to be in their ordinary course of business.

George N. Panagakis, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, states that the Debtors and Christus
Health entered into an Mutual Settlement and Release Agreement
wherein Christus Health agreed to purchase the Equipment covered
by the MTSA, pay the Debtors for certain services previously
provided under the MTSA, and release each other from claims
under the MTSA.  In sum, Christus has agreed to pay the Debtors
$2,755,493.  "The parties have now finalized the agreement," Mr.
Panagakis says.

According to Mr. Panagakis, since this agreement constitutes a
sale within the ordinary course of the Debtors' business, the
Debtors do not require an order approving the Proposed Sale.
However, out of abundance of caution, and specifically to
provide comfort to Christus Health, the Debtors are seeking an
order affirming the sale and approving the Proposed Sale
Agreement.

In addition, the Debtors ask the Court that the sale be free and
clear of all liens, claims and encumbrances, with any liens,
claims and encumbrances to attach to the proceeds of the sale.
"The Debtors believe that there are no liens, claims or
encumbrances that attach to the equipment and other assets to be
transferred under the Proposed Sale Agreement," Mr. Panagakis
states. (Comdisco Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


COVANTA ENERGY: Secures Nod to Assume 5 Intercompany Agreements
---------------------------------------------------------------
Covanta Energy Corporation, and its debtor-affiliates, obtained
Court approval to assume five inter-company agreements:

    (1) Operations and Maintenance Agreement between Second
        Imperial Geothermal Company and Covanta SIGC Geothermal
        Operations, Inc. dated November 24, 1992, where Second
        Imperial operates the SIGC project and facilitates its
        continued operations;

    (2) Second Amended and Restated Heber Geothermal Generating
        Plant Operations and Maintenance Contract between Heber
        Geothermal Company and Covanta Imperial Power Services,
        Inc., dated March 27, 1989, operates the Covanta
        Imperial project and facilitates its continued
        operations;

    (3) Operations and Maintenance Agreement between Heber Field
        Company and Covanta Geothermal Operations, Inc. dated
        December 18, 1991, provides that Covanta Geothermal
        operates the Heber Field project and facilitates its
        continued operations;

    (4) Sublease and Geothermal Fluid Agreement among Heber
        Field Company, as Lessor and Heber Field Company, as
        successor in interest to U.S. Trust Company of
        California, N.A. as Field Lessor and Second Imperial
        Geothermal Company, as Lessee, dated November 17, 1992,
        provides that Heber Field sells geothermal fluid to
        Second Imperial; and

    (5) Geothermal Sales Agreement between Heber Field Company,
        as successor in interest to U.S. Trust Company of
        California, N.A., and Heber Geothermal Company, a
        partnership between ERC Energy, Inc., ERC Energy II,
        Inc. and Heber Loan Partners dated December 18, 1991, as
        amended, provides that Heber Field sells geothermal
        fluid to Heber Geothermal.

As previously reported, the terms of the Agreements were
negotiated when Heber Field, Heber Geothermal and SIGC were not
yet 100% owned by the Debtors or its affiliate. (Covanta
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


DESA HOLDING: Sec. 341(a) Creditors' Meeting Convenes on July 23
----------------------------------------------------------------
The United States Trustee will convene a meeting of DESA Holding
Company's creditors on July 23, 2002, at 10:00 a.m., 2nd Floor
Room 2112, J. Caleb Boggs Federal Building, Wilmington,
Delaware.  This is the first meeting of creditors required under
11 U.S.C. Sec. 341(a) in all bankruptcy cases.

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

DESA, a leading manufacturer, distributor and marketer of vent-
free heating appliances, outdoor heaters, motion sensor
lighting, wireless doorbells, lawn and garden electrical
products and consumer fastening systems in the United States,
filed for chapter 11 protection on June 8, 2002. Laura Davis
Jones, Esq. at Pachulski, Stang, Ziehl Young & Jones represents
the Debtors in their restructuring efforts.


DOANE PET: S&P Assigns B- Rating to Proposed $200MM Senior Notes
----------------------------------------------------------------
Standard & Poor's said its ratings on pet food manufacturer
Doane Pet Care Co. remain on CreditWatch with negative
implications, where they were placed April 3, 2002. The
CreditWatch listing reflects credit protection measures that
have fallen below Standard & Poor's expectations and Doane's
limited cushion under its bank loan financial covenants.

At the same time, Standard & Poor's assigned its single-'B'-
minus rating to Doane's proposed $200 million senior unsecured
notes due 2008. This rating is not on CreditWatch. The net
proceeds of the issue will be used to repay a portion of the
company's outstanding indebtedness.

Brentwood, Tennessee-based Doane had about $555 million of total
debt outstanding as of March 31, 2002.

"Currently, the ratings remain on CreditWatch, and could be
lowered at least one notch if the company's proposed partial
refinancing transaction, via the sale of new notes, is not
completed," said Standard & Poor's credit analyst Jean C. Stout.

The sale of the proposed senior unsecured notes is expected to
reduce the company's annual debt amortization requirements and
provide relief under tight bank covenants. The rating on the
proposed notes is two notches below the company's corporate
credit rating, reflecting the unsecured notes' junior position
relative to the firm's secured debt.

Upon closing of the proposed transaction, Standard & Poor's is
expected to remove Doane's ratings from CreditWatch and affirm
the company's single-'B'-plus corporate credit and senior
secured bank loan ratings, as well as its single-'B'-minus
subordinated debt and senior unsecured debt ratings. This
reflects Doane's improved liquidity position and an expected
improvement in financial performance.

Doane is one of the largest domestic producers of dry pet food,
with about a 24% market share by volume, and it is the largest
manufacturer of U.S. private label pet food.


EMAGIN CORP: Inks Secured Note Purchase Pact with an Investor
-------------------------------------------------------------
On June 20, 2002, eMagin Corporation and an Investor entered
into a Secured Note Purchase Agreement whereby Investor agreed
to lend eMagin $200,000 in exchange for (i) $200,000 11.00% per
annum Secured Promissory Note due on August 30, 2002 and (ii)
Warrants exercisable for a period of three (3) years to purchase
300,000 shares of common stock of eMagin.  The Secured Note
Agreement provides for eMagin to issue $200,000 aggregate amount
of Secured  Notes.  The proceeds from the Secured Note were
received by eMagin on June 28, 2002.

Interest is payable on the Secured Note at a rate of 11% per
annum and is payable at maturity or on the effective date of an
early termination.  The full amount of the Secured Note is
secured by (i) a first priority general security interest in the
assets of Virtual Vision, Inc., a wholly owned  subsidiary of
eMagin, pursuant to a Security Agreement dated June 20, 2002
between Virtual Vision,  Inc., Alligator Holdings, Inc. and the
Investor; and (ii) a second priority general security interest
in the assets of eMagin pursuant to a Subordinated Security
Agreement dated June 20, 2002, between eMagin Corporation,
Alligator and the Investor. Upon a change in control of eMagin,
eMagin may call the Secured Note and purchase all of the
aggregate principal amount of the Secured Note at a price equal
to 250% of the principal amount plus accrued and unpaid
interest.  If eMagin does not call the Secured Note within
thirty (30) days of the event of a change in control, the
Investor may put the  Secured Note to eMagin at a price equal to
250% of the aggregate principal amount for a period of  thirty
days following the call period.

In connection with the issuance of the Warrants, eMagin entered
into a registration rights agreement dated June 20, 2002, with
the Investor, providing the Investor with certain registration
rights under the Securities Act of 1933, as amended, to register
for resale the shares to be issued pursuant to an exercise of
the Warrants.

A leading developer of virtual imaging technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. These miniature, high-performance,
modules provide access to information-rich text, data, and video
which can facilitate the opening of new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging
applications.

At December 31, 2001, eMagin's balance sheet shows a total
shareholders' equity deficit of $5 million.


EXIDE: Committee Gets Approval to Retain Akin Gump as Co-Counsel
----------------------------------------------------------------
Exide Technologies' Official Committee of Unsecured Creditors
obtained Court authorization to retain Akin Gump Strauss
Hauer & Feld LLP as its co-counsel in the Debtors' Chapter 11
cases, nunc pro tunc to April 29, 2002

The Committee will look to Akin Gump for, among other things,
the following assistance:

A. advise the Committee with respect to its rights, duties and
    powers in these Cases;

B. assist and advise the Committee in its consultations with the
    Debtors relative to the administration of these 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, if appropriate,
    equity interests;

D. assist the Committee's investigation of the acts, conduct,
    assets, liabilities and financial condition of the Debtors
    and other parties involved with the Debtors, and of the
    operation of the Debtors' businesses;

E. assist the Committee in analyzing inter-company transactions
    and issues relating to the Debtors' non-debtor affiliates;

F. 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;

G. assist and advise the Committee as to its communications, if
    any, to the general creditor body regarding significant
    matters in these Cases;

H. represent the Committee at all hearings and other
    proceedings;

I. review and analyze all applications, orders, statements of
    operations and schedules filed with the Court and advise the
    Committee as to their propriety;

J. assist the Committee in preparing pleadings and applications
    as may be necessary in furtherance of the Committee's
    interests and objectives; and

K. perform other services as may be required and are 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.

The current hourly rates charged by Akin Gump for professionals
and paraprofessionals employed in its offices are provided
below:

       Partners                          $400-$700
       Special Counsel and Counsel       $285-$600
       Associates                        $185-$430
       Paraprofessionals                 $ 55-$165

The names, positions and current hourly rates of the Akin Gump
professionals presently expected to have primary responsibility
for providing services to the Committee are as follows:

  Fred S. Hodara (Financial Restructuring Partner)   - $600/hour
  Susan Cohen    (Corporate Partner)                 - $500/hour
  Mary Masella   (Financial Restructuring Associate) - $350/hour
  Randy Gartin   (Financial Restructuring Associate) - $200/hour
(Exide Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Exide Technologies' 10% bonds due 2005 (EXDT05USR1) are quoted
at about 15, DebtTraders says. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDT05USR1


EXODUS COMMS: Global Crossing Assets $4MM Claim Against Debtors
---------------------------------------------------------------
Global Crossing Ltd. and some of its wholly-owned direct and
indirect subsidiaries assert $4,596,019 in administrative claims
against Exodus Communications, Inc., and its debtor-affiliates.

The administrative claims were incurred on or after September
26, 2001.  The administrative claims include claims for:

A. IP Transit Charges:  An amount not less than $73,973 in
   respect of IP Transit services which were provided by
   Claimant to the Debtors on or after the Petition Date;

B. GCTR Circuits:  An amount not less than $1,254,365 in respect
   of data services sold by the Claimant to the Debtors since
   the Petition Date;

C. Domestic Private Line:  An amount not less than $318,586 in
   for private line connectivity which was leased by the
   Claimant to the Debtors since the Petition Date and co-
   location charges for space in the Claimant's data centers
   which the Claimant leased to the Debtors after the Petition
   Date;

D. Maintenance Charges:  An amount not less than $1,400,426 in
   respect of maintenance charges relating to the various cable
   systems on which the Debtors purchased capacity from the
   Claimant;

E. Conferencing Services:  An amount not less than $156,600 in
   conference service charges resulting from the Claimant's
   efforts to obtain payment from the Debtors for services
   provided on and after the Petition Date; and,

F. Guarantees: An amount not less than $1,392,069 for lease
   payments made by the Claimant on the Debtors' behalf
   pursuant to the guaranty of a lease executed by the
   Claimant in connection with the lease governing the property
   located at 636 11f Avenue, New York, New York.

The bases for Global Crossing's claim are:

A. Any and all claims under applicable law or equity and arising
   from, in connection with or related to any and all
   transactions between or involving the Global Crossing and the
   Debtors occurring since on or after September 26, 2001.  The
   transactions include but are not limited to all written or
   oral contracts, leases, guaranties, indemnities, quasi-
   contract, property, replevin, conversion, misrepresentation,
   set off or fraud;

B. Any rights, claims and remedies the Claimant may have,
   including but not limited to, claims for indemnification,
   contribution, rescission, breach of contract, fraud, specific
   performance, misrepresentation, reimbursement or subrogation,
   related to, arising from any litigations in which the Debtors
   or any of its affiliates, successors, predecessors or assigns
   may become a party-in-interest and any claims asserted in
   connection therewith; and,

C. Any and all claims, rights and remedies the Claimant may
   have for indemnification, contribution, rescission, breach of
   contract, fraud, fraudulent conveyance, specific performance,
   misrepresentation, reimbursement and subrogation, related
   to or arising from postpetition transactions between the
   Claimants and the Debtors. (Exodus Bankruptcy News, Issue No.
   21; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Exodus Communications Inc.'s 11.625% bonds due 2010
(EXDS10USR1), DebtTraders reports, are quoted at 5.75. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDS10USR1
for real-time bond pricing.


FAIRCHILD DORNIER: US Trustee Wants to Convert Case to Chapter 7
----------------------------------------------------------------
W. Clarkson McDow, Jr., the United States Trustee, asks the U.S.
Bankruptcy Court for the Eastern District of Virginia to dismiss
or convert Fairchild Dornier Corporation's chapter 11 case to a
chapter 7 liquidation proceeding.

The U.S. Trustee relates that the Debtor has $639,250,288 in
total assets and $825,383,498 in total liabilities.  All of the
claims listed on Schedule F-Creditors Holding Unsecured
Nonpriority Claims, total amount $825,383,498, are disputed or
unliquidated or both.

The U.S. Trustee asserts that conversion to chapter 7 would
eliminate any conflict between the debtor and its affiliate
Dornier Aviation (North America), Inc., and that the creditors'
interests would be best served by a liquidation in chapter 7.

Fairchild Dornier Corporation's involuntary chapter 7 case was
converted to voluntary chapter 11 proceeding under the U.S.
Bankruptcy Code on May 20, 2002. Dylan G. Trache, Esq. at Wiley
Rein & Fielding LLP represents the Debtor in its restructuring
efforts.


FRUIT OF THE LOOM: AlixPartners Wants to Continue Engagement
------------------------------------------------------------
AlixPartners filed an application to continue its engagement in
the Fruit of the Loom proceedings.  Sheldon S. Toll, Esq., at
Honigman, Miller, Schwartz & Cohen, attorneys for AlixPartners
in Detroit, told Judge Walsh that, effective July 1, 2002, Jay
Alix & Associates transferred its assets and liabilities to the
new entity.

On that date, Jay Alix & Associates, a leading corporate
turnaround and financial advisory consulting firm, announced it
changed its name to AlixPartners, and converted to a limited
liability company to signal the firm's broad array of services
and professionals. "Since our founding in 1981, our
professionals have established Jay Alix & Associates as the
premier turnaround and restructuring firm," said Jay Alix,
founder. "But now our expertise is considerably broader
than that. We have successfully leveraged our turnaround methods
and skills to apply to a much wider set of corporate challenges.
We are working with companies earlier to address situations that
require more than 'business as usual' attention."

Michael Grindfors, president of AlixPartners, said, "We changed
our name to bring more awareness to the unique continuum of
services we offer - from litigation consulting and analytical
expertise, to implementing specific changes to overcome lagging
performance, to a complete operational and financial turnaround.
Regardless of whether we are working side-by-side with the CEO
or assisting a secured lender in a debt negotiation, our brand
stands for creating better outcomes for our clients. We do that
by focusing on implementation and results."

AlixPartners' services comprise four practice areas:

      * Performance Improvement - Helping otherwise healthy
companies identify and overcome specific challenges that hinder
operating and financial performance.

      * Turnaround & Restructuring - Guiding or managing
companies through an operating or financial restructuring,
including out-of-court workouts and formal reorganizations.

      * Financial Advisory Services - Providing analysis,
litigation consulting and expert testimony, valuation for a
variety of purposes and creditor advisory services to address
commercial and legal challenges. The practice also provides
technology-centered case-management administrative and
analytical services.

      * IT Turnaround Services - Analyzing companies'
information technology infrastructures and processes, and
implementing changes to better align the IT function with
business objectives. Implementation includes outsourcing
management, pre-merger due diligence, post-merger or multiple-
platform integration and special project management.

AlixPartners, LLC, a Delaware limited liability company --
http://www.alixpartners.com-- is an internationally recognized
leader in providing hands-on, results-oriented consulting to
solve operational, financial, transactional and legal challenges
for Fortune 1000 companies.  It has more than 170 professionals
in its Detroit, New York, Chicago and Dallas offices. (Fruit of
the Loom Bankruptcy News, Issue No. 57; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GLOBAL CROSSING: Eschelon Seeking Stay Relief to Set Off Claim
--------------------------------------------------------------
Eschelon Telecom, Inc., asks the U.S. Bankruptcy Court in
Manhattan to grant it relief from the automatic stay to permit a
set off what it owes to Global Crossing against what Global
Crossing owes it.  This amount is for access charges for
originating and terminating access to Eschelon's network against
amounts owed prepetition by Eschelon to GC Telecommunications
for long distance telecommunications services purchased by
Eschelon up to the prepetition claim amount of $660,571.30.

David L. Mitchell, Esq., at Robins Kaplan Miller & Ciresi LLP in
Minneapolis, Minnesota, tells the Court that prior to the
Petition Date, Eschelon purchased wholesale long distance
telecommunications services from GC Telecommunications pursuant
to the terms of a Carrier Services Agreement dated as of August
25, 2000 between Eschelon and Global Crossing Bandwidth, Inc.
By its terms, the Carrier Services Agreement is to be governed
by and construed in accordance with the laws of the State of New
York.

Prior to the Petition Date and pursuant to the terms of the
Carrier Services Agreement, Mr. Mitchell submits that GC
Telecommunications was obligated to pay Eschelon access charges
for originating and terminating access to Eschelon's network in
respect of long distance telephone calls made by other customers
of GC Telecommunications and long distance telephone calls made
by customers of Eschelon who have subscribed to Eschelon's long
distance telephone service.  The Carrier Services Agreement
clearly evidences a relationship of "mutual" obligations.
Section 4.13 of the Agreement provides, in pertinent part, that
"Global Crossing agrees to charge Eschelon 's calls at the Tier
A Access Direct rates as long as Eschelon 's access charges as
billed to Global Crossing do not exceed the servicing RBOC's
tariff rates for originating and terminating access.  Eschelon
agrees to begin billing Global Crossing for Access Charges no
later than 30 days following the Effective Date of this
Agreement."

Under applicable state law, Mr. Mitchell contends that Eschelon
has the right to setoff its prepetition claim against GC
Telecommunications against amounts it owed prepetition to GC
Telecommunications under the Carrier Services Agreement.
Eschelon thus has the right of setoff, preserved by Section 553
of the Bankruptcy Code, and is entitled to adequate protection
of its setoff claim. For this reason, Eschelon requests that the
Court grant it relief from the stay to exercise its setoff
rights.

Mr. Mitchell asserts that Eschelon clearly holds a "claim"
against GC Telecommunications that arose before the commencement
of the case.  Pursuant to the Carrier Services Agreement, GC
Telecommunications owes Eschelon at least $660,571.30 for
prepetition access charges.  For the same reason, Eschelon
clearly owed a prepetition "debt" to GC Telecommunications.  As
of the Petition Date, Eschelon owed GC Telecommunications
$1,147,092.77 for telecommunications services provided to
Eschelon under the Carrier Services Agreement.

Mr. Mitchell assures the Court that the claim and the debt are
"mutual" as is required by the provisions of the Bankruptcy Code
for creation of a setoff right under Section 553.  Generally,
debts are considered "mutual" if the claims are "due to and from
the same person in the same capacity."  Clearly, this
requirement is met in the case at bar, as GC Telecommunications
owes Eschelon prepetition amounts pursuant to the Carrier
Services Agreement and Eschelon owed GC Telecommunications
prepetition amounts pursuant to the Carrier Services Agreement.
Furthermore, both the claim and the debt in this case are valid
and enforceable.

According to Mr. Mitchell, it is important to note that while
Section 553 allows the exercise of a setoff right if the above
conditions are satisfied, the Bankruptcy Code does not itself
create a right of setoff, but rather merely preserves any rights
of setoff that exist under federal or state law.  In this case,
Eschelon has an independent contractual right to setoff under
the terms of the Carrier Services Agreement and applicable state
and federal tariffs.  Therefore, given the fact that an
independent right setoff exists outside of the Bankruptcy Code
and the exercise of this right meets all the conditions required
for setoffs preserved under Section 553, the right of Eschelon
to setoff the prepetition unpaid balance of the access charges
is clearly established by the terms of the Bankruptcy Code.

Mr. Mitchell claims that Eschelon's interests have already been
compromised in that it has been forced to pay GC
Telecommunications amounts owed GC Telecommunications
prepetition.  Under Section 6.4 of the Carrier Services
Agreement, "Global Crossing may, upon 48 hours written notice,
immediately terminate this Agreement for Eschelon's failure to
pay any delinquent invoice, or to pay any security or additional
security within the time-frame required under this Agreement
unless Eschelon cures such failure within that 48 hour period."

By letter dated January 10, 2002, addressed to Eschelon, Mr.
Mitchell states that GC Telecommunications demanded payments of
amounts due GC Telecommunications and notified Eschelon that
long distance telecommunications services to Eschelon and
Eschelon's over 15,000 customers would be immediately terminated
unless Eschelon made payment to GC Telecommunications.  Shortly
after the commencement of these Chapter 11 cases, William
Markert, Vice President, Network Financial Management of
Eschelon, advised representative of the Debtor, in a telephone
conference call, of Eschelon's intent to setoff its prepetition
claim against amounts owed by Eschelon to the Debtors.  In its
February 20, 2002, letter responding to Eschelon, GC
Telecommunications denied Eschelon's claimed right to setoff
prepetition obligations and again threatened to exercise its
rights to terminate services as provided in the Carrier Services
Agreement.  In order to prevent GC Telecommunications from
terminating long distance services to thousands of Eschelon's
customers, and avoid the consequent catastrophic impact the
termination would have on Eschelon, Eschelon has been forced to
pay GC Telecommunications for amounts owed GC Telecommunications
prepetition.

Mr. Mitchell submits that the debt owed Eschelon by GC
Telecommunications is immediately due and owing.  The Debtor's
ability to reorganize effectively will not be compromised by a
$660,571.30 setoff.  Eschelon is therefore entitled to relief
from stay under both Sections 362(d)(l) and 362(d)(2) of the
Bankruptcy Code in order to set off the debt owed by GC
Telecommunications to Eschelon for unpaid prepetition access
charges against the prepetition amounts owed by Eschelon to GC
Telecommunications for telecommunications services.  In the
alternative, Eschelon is entitled to adequate protection of its
setoff claim. (Global Crossing Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


GLOBE-X CANADIANA: CINAR Calls for Liquidation and Winding-Up
-------------------------------------------------------------
CINAR Corporation has petitioned the Supreme Court of the
Bahamas for permission to wind-up Globe-X Canadiana Limited and
Globe-X Management Limited and to appoint PricewaterhouseCoopers
as liquidator.  This action is being taken due to the failure by
Globe-X to pay the balance of US$39,368,000 plus interest of
US$4,700,000 still outstanding from an original principal amount
of US$122,000,000 invested with Globe-X.

Under an Agreement dated October 20, 2000, Globe-X had committed
to make weekly payments until August 17, 2001 at which time the
entire amount was required to be paid. Since October 24, 2000, a
total of US $11,600,000 has been repaid, however, as has been
previously advised, Globe-X defaulted in making the contemplated
weekly payments and failed to make the final payment called for
in August 2001.

In addition, despite repeated representations from Globe-X
representatives that they were attempting to raise funds or to
monetize assets to cure the situation, Globe-X has failed to
effect full repayment to CINAR or to make any repayment of
principal during the past two months.

CINAR Corporation is an integrated entertainment and education
company involved in the development, production, post-production
and worldwide distribution of non-violent, quality programming
and educational products for children and families. CINAR's Web
site is http://www.cinar.com


GUILFORD MILLS: Files Plan of Reorganization in New York
--------------------------------------------------------
Guilford Mills, Inc., (OTC Bulletin Board: GFDM) has presented a
plan to emerge from bankruptcy proceedings.

The plan represents the agreement reached in cooperation with
its major lenders.  It requires approvals from the bankruptcy
court, several creditors' groups, and others.  But the Company
expects to emerge from bankruptcy by Sept. 30 -- the end of its
fiscal year.

"I'm very pleased to announce that in accordance with a term
sheet agreed to in March with our senior lenders, we filed with
the bankruptcy court Thursday a plan of reorganization that will
significantly reduce our senior debt, allowing us to focus on
our core operations," said John A. Emrich, Guilford Mills'
President and Chief Executive Officer.  "Quite simply, we are
moving toward a swift and successful reorganization."

The plan's major provisions include:

     * Based on claims filed, the Company's suppliers will be
       paid in full.

     * Ownership of the Company will change: Guilford Mills'
       senior lenders will own 90% of the Company, while its
       existing shareholders will own the remaining 10%.

     * Senior debt facilities, which will consist of a three-
       year revolving credit facility and a three-year term
       loan, will total approximately $150 million -- down from
       $270 million before entering bankruptcy court.

Certain differences between the plan filed Thursday evening and
the term sheet signed in March include two trusts instead of one
to dispose of non-core assets, and elimination of a unanimous
board vote requirement to approve a business combination
transaction in the first year after emergence.

Sales and operating profits continue to exceed Guilford Mills'
expectations.  Because of this strong performance and its solid
relations with its suppliers, the Company is not borrowing on
its court-approved, $30 million debtor-in-possession financing.
The sale of its non-core assets is proceeding according to
schedule.

"We have many people to thank for helping us get to this point:
our suppliers and customers, our lenders and many others,"
Emrich said.  "I'm particularly proud of the extraordinary
efforts of our associates, who have served our customers so well
as demand has accelerated these past few months."

Guilford Mills is an integrated designer and producer of value-
added fabrics using a broad range of technologies.  Guilford
Mills serves a diversified customer base in the automotive,
industrial and apparel markets.


IMP INC: Terminates KPMG's Engagement as Independent Accountants
----------------------------------------------------------------
Effective June 12, 2002, IMP, Inc., dismissed KPMG LLP as the
Company's independent accountants by choosing not to extend KPMG
LLP's engagement as the Company's independent accountants.

The report of KPMG LLP, dated August 6, 2001, on the Company's
financial statements for the fiscal year ended March 31, 2001
contained an explanatory paragraph that stated that "the Company
has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its
ability to continue as a going concern." The Company's financial
statements for the fiscal year ended March 26, 2000 were audited
by PriceWaterhouseCoopers LLP. The audit of the Company's
financial statements for the fiscal year ended March 31, 2002
has not yet been completed, and the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 2002 has not been
filed yet. The decision to change independent auditors was
approved by the Board of Directors and the Audit Committee.

By letter dated September 24, 2001, and verbally thereafter in
connection with SAS #71 reviews of quarterly financial
information, KPMG LLP advised the Company and its Audit
Committee of conditions they believed to be material weaknesses
in the Company's internal controls. KPMG LLP noted that the
Company was not able to produce accurate, reliable and timely
financial statements and that KPMG LLP's procedures identified a
number of significant accounting adjustments that were necessary
in order to present the Company's financial statements in
accordance with accounting principles generally accepted in the
United States and rules and regulations of the Securities and
Exchange Commission for several reasons. The accounting system
used by the Company required a significant amount of manual
intervention in order to capture the Company's accounting
transactions and this manual processing was subject to errors.
At the time of the Company's 2001 audit, the Company was in the
process of implementing replacement software and hardware. KPMG
LLP recommended that the Company continue its efforts to install
this system. Upon completion of the installation, KPMG LLP
recommended that the Company devote resources to processing the
backlog of transactions and producing current financial
information on a timely basis for management's use. The Company
has experienced significant turnover in the accounting
department and, as a result, internal controls have not been
performed consistently in a timely manner over many accounts. As
a result, the Company has not prepared supporting schedules for
many accounts and has experienced difficulty in producing
historical detail for changes in account balances. KPMG LLP
advised the Company that failure to perform timely oversight and
review of account balances increases the risk of errors or
irregularities occurring and remaining undetected. KPMG LLP
discussed each of the material weaknesses identified with
management and with the Audit Committee. KPMG LLP recommended
that the Company review each of its accounts and identify the
nature and timing of oversight and review controls, and the
assignment of these controls to specific individuals. KPMG LLP
advised the Company that these individuals should then perform
an initial review and update of the balances and the historical
detail since the last review for each account under their
responsibility. KPMG LLP further advised the Company that the
defined oversight and review procedures should then be performed
prospectively on a timely basis. KPMG LLP recommended that the
Company ensure that sufficient resources are available to enable
the Company to fulfill its SEC accounting and reporting
obligations. The Company has authorized KPMG LLP to discuss the
subject matter of each material weakness identified with any
successor auditor subsequently engaged as the principal
accountant to audit the Company's financial statements. The
Company's says its management team is in the process of
addressing these material weaknesses.

The Company engaged BDO Seidman, LLP as its new independent
accountants effective June 12, 2002.


INTELLISEC: Court OKs Balfour Capital to Assist in Restructuring
----------------------------------------------------------------
Balfour Capital Advisors, LLC, a New York-based Financial
Advisory firm which specializes in providing operational and
financial restructuring to highly leveraged and distressed
companies, was approved as Financial Restructuring Consultants
for the Intellisec, a California based security integration
firm, on July 10, 2002 by Bankruptcy Judge John Ryan, of the
United States Bankruptcy Court for the Central District of
California.

Joseph E. Sarachek, a principal of Balfour Capital, was
appointed Chief Restructuring Officer.  The retention is
effective as of April 18, 2002.

Intellisec is in the business of installing, servicing, and
monitoring fire, life safety, and security systems and sought
Chapter 11 protection on April 18, 2002.  Examples of products
and services offered by Intellisec include fire alarm systems,
access control systems for parking garages and office buildings,
commercial security systems, 24-hour centralized monitoring of
fire and security systems, electronic video recording services,
police and emergency services dispatching, and maintenance and
repair of fire and security systems.  Intellisec installs and
services fire and security systems nationwide, and conduct their
operations from regional offices located in California, Arizona
and North Carolina.  Intellisec's security and fire monitoring
operations are conducted out of regional offices nearest to the
installation sites.

The lenders to Intellisec include MCG Capital Corporation and
APAX Partners.

Balfour Capital will provide the following types of professional
services:

     * day-to-day operational activity for the California,
       Arizona and North Carolina business units,

     * preparation of bankruptcy documentation as required by
       the court,

     * and day-to-day management of the business.

Balfour is to be paid a $100,000 monthly fee, as well as certain
additional performance-based fees.

Balfour Capital Advisors, LLC provides advisory services to
parties involved with highly leveraged companies and special
situations.  Balfour is able to provide unique capabilities,
including financial and operational restructuring and flexible
compensation structures that focus on success-fee formulas.  The
firm has seasoned professionals that specialize in turnaround
and financial advisory services, crisis management, capital
raising and investments, investment banking / M&A advice,
fairness and valuation opinions, accounts receivables
collections, and liquidations. This expertise spans across
various sectors including telecom, media, technology, food
service, aerospace, and general manufacturing. For more
information, contact Joseph E. Sarachek at Balfour Capital
Advisors, LLC, 620 Fifth Avenue, 7th Floor, New York, NY 10020.
Phone: (212) 489-6342, Fax: (212) 265-8049, or email:
jsarachek@balfournyc.com.  Visit the Balfour Capital Web site at
http://www.balfournyc.com


ISPAT INT'L: Mexican Unit Extends Exch. Offer for 10-1/8% Certs.
----------------------------------------------------------------
Ispat International N.V., (NYSE: IST; AEX: IST NA), announced
that Ispat Mexicana, S.A. de C.V., Ispat's Mexican operating
subsidiary, has extended its exchange offer for all outstanding
10-1/8% Senior Structured Export Certificates due 2003 of Imexsa
Export Trust No. 96-1. The exchange offer will now expire at
5:00 p.m., New York City time, on July 29, 2002, unless
otherwise extended or terminated by Imexsa.

The exchange offer had been scheduled to expire at 5:00 p.m.,
New York City time, on July 12, 2002.  The exchange offer is
being extended to allow for additional time to complete
documentation required under the agreed upon terms of the
exchange.

Under the terms of the exchange offer, Imexsa will offer to
exchange 10-5/8% Senior Structured Export Certificates due 2005
to be issued by Imexsa Export Trust No. 96-1 for Senior
Certificates validly tendered and accepted for exchange.  The
New Senior Certificates will be fully and unconditionally
guaranteed by Ispat, Grupo Ispat International S.A. de C.V., and
certain of the subsidiaries of Imexsa on a senior basis.  The
New Senior Certificates will also be secured on a pro rata basis
with Imexsa's bank loans by liens on certain assets of Imexsa
and by a pledge of the stock of Imexsa and Grupo.

The exchange offer is conditioned upon the holders of not less
than 96% of the outstanding principal amount of Senior
Certificates having validly tendered and not withdrawn their
Senior Certificates prior to the Expiration Date and upon the
other terms and conditions set forth in Imexsa's Supplemental
Offering Memorandum and Consent Solicitation Statement dated
June 17, 2002, which is supplemental to the Offering Memorandum
and Consent Solicitation Statement dated January 24, 2002.

In connection with the exchange offer, Imexsa is also soliciting
consents from holders of Senior Certificates to, among other
things, amend certain agreements governing the Senior
Certificates.  Holders tendering their Senior Certificates in
the exchange offer must also deliver consents.  Consents may
not be following the Expiration Date, unless the exchange offer
is terminated.

Requests for documentation should be made to the Information
Agent for the exchange offer, D.K. King & Co., Inc., at (800)
847-4870.  Questions regarding the transaction should be
directed to financial advisor to Imexsa, Dresdner Kleinwort
Wasserstein at (212) 969-2700.

                         *    *    *

As reported in Troubled Company Reporter's June 24, 2002,
edition, Ispat International N.V., (NYSE: IST; AEX: IST NA)
announced that Ispat Mexicana, S.A. de C.V., Ispat's Mexican
operating subsidiary, has issued a supplemental offering
memorandum, letter of transmittal and other ancillary documents
amending and supplementing its exchange offer for all
outstanding 10-1/8% Senior Structured Export Certificates due
2003 of Imexsa Export Trust No. 96-1.

Imexsa has also reached an agreement in principle with all of
its bank lenders on the proposed terms of a restructuring of its
bank loans. In connection with the bank debt restructuring and
the amended exchange offer, Imexsa's shareholders have agreed to
provide a $20 million loan for working capital purposes.


KEY3MEDIA GROUP: Falls Below NYSE Minimum Listing Requirements
--------------------------------------------------------------
Key3Media Group, Inc., (NYSE: KME) has been notified by the New
York Stock Exchange (NYSE) that its common stock could be
subject to trading suspension and delisting within the next six
months. Key3Media received this notification because the average
share price of its common stock for the 30-day period prior to
the notification was below $1.00. The NYSE's criteria for
continued listing require that a Company's common stock trade at
a minimum average share price of $1.00 over a 30-day period.

Under NYSE guidelines, Key3Media must return to compliance with
the NYSE's criteria for continued listing during the six-month
period following receipt of the NYSE's notification. In the
event that the Company fails to return to compliance during this
time period, the NYSE will commence suspension and delisting
procedures for the Company's common stock. The NYSE also
notified the Company that sustained trading at current levels
with no noticeable price improvement may require the NYSE to
make more immediate qualitative listing assessments.

Key3Media Group, Inc., is the world's leading producer of
information technology tradeshows and conferences, serving more
than 5,300 exhibiting companies and 1.3 million attendees
through 60 events in 17 countries. Key3Media's products range
from the IT industry's largest exhibitions such as COMDEX and
NetWorld+Interop to highly focused events featuring renowned
educational programs, custom seminars and specialized vendor
marketing programs. For more information about Key3Media, visit
http://www.key3media.com


KINETIC SYSTEMS: S&P Rates $210MM Senior Credit Facility at BB
--------------------------------------------------------------
Standard & Poor's assigned its double-'B' corporate credit
rating to Santa Clara, California-based Kinetic Systems Inc., an
engineering, installation, and manufacturer of process piping
systems.

At the same time, Standard & Poor's assigned its double-'B'
senior secured rating to Kinetic's proposed $210 million bank
credit facility. The outlook is stable.

"The ratings reflect Kinetic's position as a leading provider of
design and installation services and critical process
infrastructure, its somewhat aggressive financial policies and
profile, and fair financial flexibility", said Standard & Poor's
analyst Joel Levington.

In the intermediate term, profitability should modestly
strengthen as semiconductor fundamentals improve and as Kinetics
fully integrates its new computer system. Cash flow generation
benefits from fair profitability and modest fixed capital needs,
tempered by meaningful working capital usage. Nonetheless,
Kinetics is expected to generate some free cash flow, which in
the near term is expected to be used for modest but increasing
scheduled debt amortization. However, the firm may use
internally generate funds and additional external funds as it
pursues its growth initiatives. Liquidity benefits from a fair
amount of room under the firm's $60 million revolving credit
facility, a modest amount of cash on hand, satisfactory room
under bank financial covenants, equity sponsors, and discrete
assets, which could be sold, if necessary, tempered by letter of
credit needs, and scheduled term debt amortization.

Leading market positions, good operational flexibility, and
modest fixed capital needs limit downside ratings risk. A
somewhat aggressive financial profile, the potential for debt-
financed acquisitions, and only fair liquidity restrain upside
ratings potential.


KMART CORP: Court Approves Designation Rights Pact with Kimco JV
----------------------------------------------------------------
J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom,
in Chicago, Illinois, tells the Court that Kmart Corporation,
and its debtor-affiliates have been quite successful in
maximizing their leasehold estates' value and minimizing the
carrying costs.  Mr. Ivester relates that the Debtors' efforts
have resulted in four designation rights or non-landlord bids
that are acceptable to the Debtors and their constituents.  Mr.
Ivester notes that one covers 54 leases guaranteeing the Debtors
$43,000,000 with the potential for additional payments and three
other bids each covering one property netting $2,200,000,
$1,000,000 and $350,000, respectively.  In addition, Mr. Ivester
continues, the Debtors have entered into nine leasehold
termination agreements with landlords that provide $1,729,275 in
cash to the estates and waiver of prepetition and postpetition
claims that could exceed $2,000,000.  Mr. Ivester reports that
almost all the remaining Leases were extensively marketed and,
once determined to have no value, 209 were rejected in a manner
that, in most instances, no additional rent was incurred after
conclusion of the store closing sales.  "These efforts saved the
Debtors' estates several millions of dollars per month," Mr.
Ivester notes.

However, several landlords and their lenders opposed the
designation rights sale approval.  According to Mr. Ivester, the
objections fall into three categories:

(1) Some Objectors allege that the debtors' assignment of the
    right to designate leases:

     (a) is outright impermissible,

     (b) impermissibly alters the landlord and tenant
         relationship, or

     (c) constitutes a present lease assumption and assignment.

(2) Some Objectors argue that the Debtors' conduct of the
    bidding process was not designed to maximize value or was
    otherwise improper, including:

    (x) the Debtors' decision to sell Designation Rights for
        certain leaseholds as a package and to conduct bidding
        on a package basis as opposed to lease by lease; and

    (y) the fact that a member of the official committee of
        unsecured creditors is involved with one of the bidders.

(3) Most of the remaining objections contend that specific
    provisions of the Designation Rights Agreement impermissibly
    modify a particular Objector's Lease such as go-dark,
    percentage rent, and other similar provisions.

Mr. Ivester argues that the Bankruptcy Code does not prohibit
the sale of Designation Rights.  In fact, Mr. Ivester says, it
has been approved in a number of other cases.  Mr. Ivester
emphasizes that the Debtors' efforts:

    (a) have at all times been designed to maximize value,

    (b) are an appropriate exercise of their business judgment,
        and

    (c) have the full support of all three statutory committees.

Moreover, Mr. Ivester notes that the objections relating to the
specific provisions of the Designation Rights Agreement and
their effect on various lease provisions miss the mark, either:

    (a) because the Objectors misconstrue a particular provision
        of the Designation Rights Agreement, or

    (b) because they rely on lease provisions that are made
        unenforceable by the Bankruptcy Code.

Mr. Ivester informs Judge Sonderby that most of the Objectors
are landlords, many of whom have been unsuccessful in their
attempts to recapture their leases.  Their motives are
transparent, which are:

   (1) to prevent the sale of Designation Rights with respect to
       their leaseholds so that the economic benefits to which
       the Debtors are entitled inure to the landlords and not
       to the estates; and

   (2) to wrest concessions from the Debtors and the Designation
       Rights purchasers.

But Mr. Ivester acknowledges that there are also several
Objectors who merely want to be assured that the Debtors will
still be required to fulfill their lease obligations during the
Designation Period.  "The Debtors are willing to make assurances
to the extent that they have not already done so," Mr. Ivester
says.  As to the differently motivated objections, Mr. Ivester
relates that the Debtors have been hard at work negotiating
resolutions with the landlords' concerns.

                         *   *   *

The Court authorizes the Debtors to enter into the Lease
Designation Rights Agreement with a joint venture comprised of
Kimco Realty Corporation, Schottenstein Stores Corporation, and
Klaff Realty LP.  Accordingly, the Debtors are permitted to sell
the Designation Rights to the Joint Venture.

In connection with the opening and operating of a retail store
at the Property located at Marquette, Michigan, Judge Sonderby
authorizes the Joint Venture's designees to expand and to
perform alterations and remodeling necessary to start their
retail operations and to replace and modify existing signage.

As previously reported, the salient terms of the Designation
Rights Agreement between the Debtors and a Joint Venture
comprised of Kimco Realty Corporation, Schottenstein Stores
Corporation, Klaff Realty LP are:

  (a) The Joint Venture will purchase from the Debtors and the
      Debtors will sell the Designation Rights for all of the
      Properties free and clear of all Liens, subject to
      Permitted Exceptions;

  (b) To the extent any of the Joint Venture's designees fail to
      close on the assignment of any Lease, the Joint Venture
      shall have the right to direct the Debtors to assume and
      assign or sublease in connection with an assumption and
      assignment the Lease directly to an alternate designee,
      and the Joint Venture will retain all of its respective
      Designation Rights under this Agreement;

  (c) Whether or not the Closing has occurred, the Joint Venture
      will have the right to exclude any Property from this
      transaction at any time after June 28, 2002 by providing
      written notice to the Debtors and the Committee of the
      Joint Venture's exercise of such right;

  (d) The purchase price for the Designation Rights shall be
      paid by the Joint Venture all in cash:

      -- Within one day after the execution and delivery of this
         Agreement by the Joint Venture and the Debtors, the
         Joint Venture must deposit $2,000,000 by certified
         check or by wire transfer to First American Title
         Insurance Company who will act as escrow agent for the
         Deposit;

      -- At the Closing:

         (1) The Debtors will be entitled to receive the Deposit
             from the escrow agent, and

         (2) The Joint Venture will pay to the Debtors an
             additional amount of $8,000,000;

      -- From and after the first day following the First
         Payment Date, the Joint Venture will collect and
         receive all proceeds of sale or assignment paid by the
         Joint Venture's designees for the Properties, shall
         deduct the Deductions and will then distribute
         additional cash payments of Net Proceeds, if any, on
         each Property Closing Date in this sequence of
         priority:

         (1) first, a payment or payments to Seller in an amount
             equal to $34,000,000 -- Threshold Amount; and

         (2) then any additional Net Proceeds will be subject to
             Net Proceeds Sharing;

      -- Should the total amount of the total Net Proceeds as of
         December 31, 2002 be less than the Threshold Amount,
         then on December 31, 2002, the Joint Venture will pay
         to the Debtors an amount equal to the difference
         between the Prior Received Amount and the Threshold
         Amount;

      -- Net Proceeds Sharing will mean that the applicable Net
         Proceeds shall be shared and distributed as:

         (1) first, with respect to the first $1,000,000 of Net
             Proceeds, which are subject to sharing:

             (a) the Debtors will receive 50% share of Net
                 Proceeds, and

             (b) the Joint Venture will receive 50% share of Net
                 Proceeds;

         (2) then, with respect to the next $2,000,000 of Net
             Proceeds thereafter, 100% of the Net Proceeds will
             be received by the Debtors;

         (3) then, with respect to the next $5,500,000 of Net
             Proceeds thereafter:

             (a) the Debtors will receive a 50% share of Net
                 Proceeds, and

             (b) the Joint Venture will receive 50% share of Net
                 Proceeds;

         (4) then, with respect to the next $5,500,000 of Net
             Proceeds thereafter:

             (a) the Debtors will receive 30% share of Net
                 Proceeds, and

             (b) the Joint Venture will receive a 70% share of
                 Net Proceeds; and

         (5) then, with respect to any additional Net Proceeds
             thereafter:

             (a) the Debtors will receive 60% share of Net
                 Proceeds, and

             (b) the Joint Venture will receive 40% share of Net
                 Proceeds;

      -- Irrespective of the Net Proceeds actually received by
         the Debtors, the Joint Venture guarantees that the
         Debtors will receive no less than an amount equal to
         the sum of the First Payment and the Threshold Amount
         with respect to the disposition of the Properties;

      -- The term "Preferred Return Rate" will mean a rate of
         return equal to 10% per annum.  The term "Net Proceeds"
         shall mean the total cash consideration paid by the
         Joint Venture's designees for assignments of the Leases
         less deductions for:

         (1) Carrying Costs incurred by the Joint Venture for
             the Properties,

         (2) actual, necessary and reasonable closing costs, for
             any Properties sold or assigned,

         (3) any Investment to the extent made by the Joint
             Venture, and

         (4) a preferred return on the amount of any Investments
             made by the Joint Venture calculated at the
             Preferred Return Rate;

      -- The Joint Venture will establish and maintain a
         separate bank account with respect to any proceeds or
         funds relating to the transactions contemplated under
         this Agreement;

      -- During the Designation Period, within 15 days after the
         end of each quarter, the Joint Venture will provide a
         written accounting to the Debtors and the Committee,
         which will set in detail the Properties sold, assigned
         or excluded, the total consideration paid by each
         designee for the sales or assignments, a detailed
         schedule of Deductions and Carrying Costs for all
         Properties, etc;

      -- The payment of the Purchase Price and the performance
         of all obligations of the Joint Venture under this
         Agreement will be absolutely and unconditionally
         guaranteed, without setoff or deduction for any
         purpose, by Kimco Realty Corporation, Schottenstein
         Stores Corporation and Klaff Realty LP; etc. (Kmart ]
         Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
         Service, Inc., 609/392-0900)

Kmart Corp.'s 9.875% bonds due 2008 (KMART18) are quoted at a
price of 39, DebtTraders says. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=KMART18


LENNOX INTERNATIONAL: S&P Assigns BB- Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's has assigned its double-'B'-minus corporate
credit rating to air conditioning and heating equipment
manufacturer Lennox International Inc. The outlook is stable.

At the same time, Standard & Poor's said that it assigned its
single-'B' rating to the company's $143.8 million convertible
subordinated notes. Proceeds from the notes were used to
partially repay amounts on the company's revolving credit
facility. Total debt is about $820 million.

"The ratings reflect the company's leading positions in air
conditioning and heating equipment markets for residential and
light commercial applications, offset by a challenging
residential retail business and an aggressive financial
profile", said Standard & Poor's credit analyst Pamela Rice. She
added, "The company's leading market positions and the fact that
a substantial portion of its sales are derived from less
volatile repair and replacement markets support rating
stability. However, weak retail business performance limits
upside ratings potential".

Dallas, Texas-based Lennox manufactures and distributes a broad
range of products for the heating, ventilation, air
conditioning, and refrigeration markets. In addition, the
company owns about 200 retail centers that provide installation,
maintenance, repair and replacement services directly to
consumers.


MELTRONIX INC: Appoints Scott Weinbrandt to Board of Directors
--------------------------------------------------------------
MeltroniX, Inc. (OTC Bulletin Board: MTNX), a leader in high-
density semiconductor interconnect solutions, announced that
Scott Weinbrandt has joined the company's Board of Directors.

Robert Czajkowski, MeltroniX CEO stated, "Scott Weinbrandt is a
seasoned marketing and management executive, bringing 15 years
of experience launching, marketing and accelerating market share
growth for technology products from Dell Computer, AT&T, and AST
Research.  Scott's experience and track record add major
strength to our marketing efforts."

Scott Weinbrandt spent eight years with Dell in senior marketing
executive roles for servers, enterprise systems, and storage
products divisions.  During this time he was Dell's North
American director of brand marketing for its server and storage
brands, Weinbrandt drove Dell's server market share from 2%
to 20%, taking it to the number two-market share position in the
US.

Weinbrandt was director of marketing for the K-12 Education
division as well as serving as the director for Dell's Public
Sector client brand marketing organization.  During this period,
Dell's K-12 Education division market share position moved from
number three to number one, surpassing Compaq and Apple. In
addition, Scott was a major figure in the founding and
development of Dell Ventures during his tenure as an executive
of the company.

Beyond nine years of experience with Dell, Weinbrandt has five
years of experience operating in senior marketing management
roles at AT&T Global Information Solutions and at AST Research.

MeltroniX (OTC Bulletin Board: MTNX), founded in 1984, is a
premier provider of Advanced Electronic Manufacturing Services,
Products, Design, and Testing to high growth industries and
applications including: Internet equipment;
wireless/telecommunication; medical; satellites and military
systems; and broadband communication and other electronic
systems manufacturers.  MeltroniX is placing renewed emphasis on
military and space applications by leveraging its capabilities
in offering devices which are radiation tolerant and qualified
to military specifications.  The company provides design,
assembly and test services based on advanced electronic
manufacturing technologies, including BGA, flip chip, and multi-
chip modules (MCMs).  Headquartered in San Diego, MeltroniX has
on-site manufacturing facilities, including a class 10,000 clean
room.  Please visit the company's Web site at
http://www.meltronix.com

At December 31, 2001, MeltroniX reported a total shareholders'
equity deficit of about $8 million.


METROCALL: Delaware Court Fixes August 16, 2002 Claims Bar Date
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has fixed
the Bar Dare for the creditors of Metrocall Inc., and its
debtor-affiliates to file their proofs of claim or be forever
barred from asserting that claim against the Debtors' estates.
The Court sets the Claims Bar Date for August 16, 2002 at 4:00
p.m. Eastern Time. The Governmental Units Claims Bar Date is
fixed on December 2, 2002.

Excluded Claims or claims that are not anymore required to be
filed are:

     a) claims listed in the Schedules as contingent,
        unliquidated or disputed;

     b) claims already properly filed with this Court; or

     c) administrative expenses claims

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

Metrocall Inc.'s 10.375% bonds due 2007 (MCALL2), DebtTraders
says, are trading at about 4. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=MCALL2


MICROFORUM: Enters Agreement to Sell CALMS Unit to White Clarke
---------------------------------------------------------------
Microforum Inc., (TSE: MCF) has entered into a conditional
agreement to sell substantially all of the assets of its CALMS
Services unit to White Clarke North America Inc., a wholly-owned
subsidiary of White Clarke and Partners Limited (U.K.) for net
cash proceeds of $210,000 plus a two-year earn-out based on net
profitability.

As part of the transaction, Microforum will retain co-ownership
of the CALMS software solution and will enter into a non-
competition agreement with White Clarke in respect of certain
businesses. Microforum will retain for its own account certain
accounts receivable relating to the business. White Clarke
agrees to assume all contractual obligations associated with any
work-in-process as well as of the continued employment of
approximately 25 CALMS employees.

This transaction is subject to a number of conditions including
the receipt of certain third party consents, closing
documentation and CCAA Court approval. Microforum anticipates
that this transaction will close on or before July 19, 2002.

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).

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


NII HOLDINGS: Intends to Engage Deloitte & Touche as Accountants
----------------------------------------------------------------
NII Holdings, Inc., and its debtor-affiliate ask for permission
from the U.S. Bankruptcy Court for the District of Delaware to
employ and retain Deloitte & Touche LLP as their Independent
Accountants and Auditors.  Deloitte & Touche will also serve as
tax consultants.

Since approximately 1995, Deloitte & Touche has served as
independent accountants and auditors, and tax consultants to the
Debtors. Deloitte & Touche's prior engagement with the Debtors
afforded the firm a familiarity with the books, records,
financial information and other data maintained by the Debtors
and, as such, is well qualified to provide the independent
accounting and auditing, and tax consulting services.

In connection with its retention, Deloitte & Touche may provide
services at the Debtors' request in relation to:

     a) performing interim reviews of the Debtors' quarterly
        condensed consolidated financial statements;

     b) preparation of the 2001 Forms 5471 - Information Return
        of U.S. Persons with Respect of Certain Foreign
        Corporations for NII;

     c) reviewing federal, state and local tax returns for the
        Debtors and providing tax return preparation,
        consultation assistance and formal tax opinions, as
        requested;

     d) to the extent agreed upon by Deloitte & Touche, and
        pursuant to separate engagement letters, assisting with
        such other accounting and tax matters, and
        reorganization advisory services as the Debtors, its
        attorneys or financial advisors may, from time to time,
        request.

Deloitte & Touche will bill the Debtors its regular hourly
rates, but with a 25% discount:

          Partners               $450 to $480
          Senior Managers        $270 to $375
          Managers               $210 to $310
          Senior Accountants     $165 to $230
          Staff Accountants      $110 to $175

Mr. Mark E. Wallis, audit partner of Deloitte & Touche,
discloses that Deloitte & Touche anticipates a relatively brief
period of engagement and that compensation with a Fixed Fee
basis is more costly than providing services on an hourly fee
basis.

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.


NQL INC: Court to Consider Asset Purchase Agreement on August 7
---------------------------------------------------------------
As of May 31, 2002, NQL Inc., and its wholly-owned subsidiary,
Delta Computec Inc., entered into an Asset Purchase Agreement
with a publicly traded developer of video products and services.

Under the terms of the Agreement, the acquirer will purchase
substantially all of DCI's operating assets, property, contracts
and customer lists, and will assume the obligation to pay
certain of DCI's liabilities, including liabilities of DCI to
the organization which provides financing to DCI. NQL is a
guarantor of that financing arrangement. If the transaction
closes, both DCI and NQL will be relased from liability with
regard to that financing arrangement.

In addition to the assumption of the stated DCI liabilities, the
acquirer will also pay a purchase price consisting of a
combination of cash and the issuance to DCI of a class of the
acquirer's redeemable and convertible preferred stock. The
transaction is subject to compliance with the Agreement's terms
and conditions, including approval of the Bankruptcy Court in
the Company's bankruptcy case. A motion to approve the
transaction has been made in the Company's bankruptcy
proceeding, and, at a hearing held on June 27, 2002, the motion
was scheduled to be heard by the Bankruptcy Court in NQL's
bankruptcy case on August 7, 2002.

NQL, through its DCi division, provides professional services
including Internet and intranet consulting, network design,
installation and maintenance as well as onsite support for
customers located primarily in the northeastern U.S.

NQL file for Chapter 11 reorganization on February 15, 2002, in
the U.S. Bankruptcy Court for teh District of New Jersey
(Newark).


NAPSTER INC: Gets Court Authority to Engage Jones Day as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Napster, Inc., and its debtor-affiliates' application to employ
Jones, Day, Reavis & Pogue as its bankruptcy counsel.

Jones Day is expected to:

     a) advise the Debtors of their rights, powers and duties as
        debtors and debtors in possession continuing to operate
        and manage their businesses and properties under the
        chapter 11 of the Bankruptcy Code;

     b) prepare on behalf of the Debtors all necessary and
        appropriate applications, motions, draft orders, other
        pleadings, notices, schedules and other documents, and
        review all financial and other reports to be filed in
        these cases;

     c) advise the Debtors concerning, and prepare responses to,
        applications, motions, other pleadings, notices and
        other papers that may be filed and serve in these
        chapter 11 cases;

     d) review the nature and validity of any liens asserted
        against the Debtors' property and advise the Debtors
        concerning the enforceability of such liens;

     e) advise the Debtors regarding their ability to initiate
        actions to collect and recover property for the benefit
        of their estates;

     f) advise the Debtors concerning executory contract and
        unexpired lease assumptions, assignments and rejections
        and lease restructurings and recharaterizations;

     h) counsel the Debtors in connection with the formulation,
        negotiation and promulgation of any plans or plan of
        reorganization and related documents;

     i) assist the Debtors in reviewing, estimating and
        resolving claims asserted against the Debtors' estates;

     j) commence and conduct any and all litigation necessary or
        appropriate to assert rights held by the Debtors,
        protect asset of the Debtors' chapter 11 estates or
        otherwise further the goal of completing the Debtors'
        chapter 11 cases;

     k) provide general corporate, employee benefits, litigation
        and other nonbankruptcy services for the Debtors to the
        extent as requested by the Debtors; and

     l) perform all other necessary or appropriate legal
        services in connection with these chapter 11 cases for
        or on behalf of the Debtors.

The customary hourly rates of Jones Day's professionals are:

    Name                   Position           Location     Rate
    ----                   --------           --------     ----
    Richard M. Cieri       Partner            Cleveland    $635
    Paul M. Pohl           Partner            Pittsburgh   $550
    Christopher J. Kelly   Partner            Cleveland    $520
    Robert J. Graves       Partner            Chicago      $515
    Daniel R. Mitz         Partner            Menlo Park   $420
    Sean M. McAvoy         Partner            Menlo Park   $395
    Michelle M. Harner     Associate          Chicago      $325
    S. Todd Brown          Associate          Washington   $250
    Adam D. Munson         Associate          Cleveland    $155
    Mathew Bradford        Associate          Cleveland    $155
    Ronald Cappallazzo     Staff Attorney     Cleveland    $150
    Marcia L. Burston      Legal Assistant    Cleveland    $110
    Gail Nash              Project Assistant  Cleveland     $52

Napster, Inc., and its debtor-affiliates own and operate the
peer-to-peer music service known as Napster. The Napster service
has provided music enthusiasts with an easy-to-use, high quality
service for finding and discovering music and communicating
their interests with other members of the Napster community. The
Company filed for chapter 11 protection on June 6, 2002. Daniel
J. DeFranceschi, Esq., Russell C. Silberglied, Esq. at Richards,
Layton & Finger and Richard M. Cieri, Esq., Michelle Morgan
Harner, Esq. at Jones, Day, Reavis & Pogue represent the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, it listed debts of more than $100
million.


NATIONSRENT: Wins Nod to Settle Certain Ordinary Course Actions
---------------------------------------------------------------
Judge Walsh gives NationsRent Inc., and its debtor-affiliates
sole discretion to settle and accept payment in connection with
any Action by one or more of the Debtors against a third party
if the applicable Debtor or Debtors will receive not less than
60% of the amount that they believe is due to them, as reflected
on the Debtors' books and records.

In addition, Judge Walsh instructs the Debtors that, prior to
the consummation of any proposed settlement pursuant to the
Settlement Procedures, they will serve a notice of the Proposed
Settlement by overnight delivery, facsimile or e-mail to the
Interested Parties.  The Settlement Notice will include:

A. The name of the other party to the Proposed Settlement;

B. Summary of the dispute (including the positions asserted by
    both the Debtors and the other party);

C. Summary of the major economic terns and conditions of the
    Proposed Settlement;

D. An explanation as to why the Proposed Settlement is in the
    best interest of the Debtors' respective estates and
    creditors;

E. Copy of the Proposed Settlement agreement; and,

F. Instructions regarding the procedures to assert objections to
    the Proposed Settlement.

Judge Walsh gives Interested Parties until the 7th business day
after the date of the Settlement Notice to object or otherwise
respond to a proposed settlement pursuant to the objection
procedures.  If no Objections are properly asserted until this
time, the applicable Debtor will be authorized, without further
notice and without further Court approval, to consummate a
Proposed Settlement.

Judge Walsh makes it clear that any Objections to a Proposed
Settlement must be in writing and must specify the grounds for
objection.  Any Objections may be resolved without a hearing by
an order of this Court submitted on a consensual basis by the
applicable Debtor and the objecting party. (NationsRent
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

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


NAVISTAR INT'L: Tentative New Labor Agreement with Autoworkers
--------------------------------------------------------------
International Truck and Engine Corporation and the Canadian Auto
Workers (CAW) have reached tentative agreement on a new two-year
labor contract.

The new contract covers approximately 645 CAW-represented
production and maintenance employees at the company's Chatham,
Ontario heavy truck assembly plant. International Truck and
Engine is the operating company of Navistar International
Corporation (NYSE: NAV).

Negotiations towards a new labor agreement began on April 26.
The CAW went on strike on June 1. Most recent negotiations began
July 13 and lasted through the night.

Production at Chatham has been averaging 39 trucks per day on
one shift.

In addition to heavy trucks, International Truck and Engine is a
leading producer of mid-range diesel engines, medium trucks,
severe service vehicles, and a provider of parts and service
sold under the International(R) brand. IC Corporation, a wholly
owned subsidiary, produces school buses.  The company also is a
private label designer and manufacturer of diesel engines for
the pickup truck, van and SUV markets.

                           *    *    *

As reported in Troubled Company Reporter's March 18, 2002,
edition, Fitch Ratings has downgraded the senior unsecured debt
rating for Navistar International Corporation to 'BB+' from
'BBB-' and the senior subordinated debt rating to 'BB-' from
'BB'. The Outlook remains Negative.

In conjunction with the downgrade of Navistar, Fitch has
downgraded the senior unsecured debt ratings of Navistar
Financial Corporation to 'BB+' from 'BBB-' and its senior
subordinated debt rating to 'BB-'from 'BB'. The downgrade is a
result of the close link between the parent and NFC. The
declining trends in capitalization and asset quality over the
past few years have resulted in NFC's financial strength to be
more closely aligned with parent Navistar's debt rating. NFC's
Rating Outlook remains Negative, reflecting Navistar's Rating
Outlook.

The ratings downgrade reflects the ongoing industry downturn in
Navistar's core medium and heavy-duty truck markets in North
America.


NEOTHERAPEUTICS: Raises $1MM+ through Private Equity Placement
--------------------------------------------------------------
NeoTherapeutics, Inc., (Nasdaq: NEOT) raised a total of
$1,100,000 through the sale of 6,470,588 shares of its common
stock to four institutional investors. The sales price of $.17
per share was at a slight premium to the market on the closing
date and excluded warrant coverage for the investors.

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. Neotrofin(TM) 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

                          *    *    *

As previously reported, NeoTherapeutics, Inc., 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 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.

Also, NeoTherapeutics, Inc. has been notified by Nasdaq that it
is not in compliance with Nasdaq's minimum bid price per share
($1.00) requirements for continued listing on the Nasdaq
National Market.

The Company has until September 10, 2002 to regain compliance
with Nasdaq's minimum bid requirement. Under Nasdaq rules,
NeoTherapeutics may demonstrate compliance by maintaining a
$1.00 minimum closing bid price per share for a minimum of 10
consecutive trading days by that date. If the Company is unable
to demonstrate compliance by that date, the Company may appeal a
determination that it be delisted from the Nasdaq National
Market, or it may decide to file an application to be
transferred to the Nasdaq Small Cap Market prior to September
10, 2002. If such an application were filed and accepted, the
Company would have another 90 days, or until December 9, 2002,
to comply with the minimum bid requirement. In addition to the
minimum bid requirement, the Company must maintain compliance
with certain other quantitative standards for continued listing.
The Company is currently not in compliance with some of these
standards.


NETWORK ACCESS: Seeking Nod to Continue Shaw Pittman Retention
--------------------------------------------------------------
Network Access Solutions Corporation and NASOP, Inc., ask for
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Shaw Pittman LLP as its general corporate and
litigation counsel, nunc pro tunc to the Company's chapter 11
Petition Date.

The Debtors relate that they have turned to Shaw Pittman since
1999 for advice in the fields of corporate and securities law
and other areas of business and commercial law. Shaw Pittman has
represented Debtor Network Access Solutions Corporation in its
capacity as a plaintiff in a commercial arbitration action
captiones Network Access Solutions Corporation v. Lucent
Technologies, Inc.

The professional services that Shaw Pittman will render to the
Debtors include representation in commercial transactions,
securities law and merger and acquisition matters, and the
continued pursuit of the Lucent Litigation.

The hourly rates of Shaw Pittman's professionals range from:

          attorneys     $160 to $560 per hour
          paralegals    $75 to $175 per hour

The attorneys who will provide services to the Debtors and their
billing rates are:

          Sylvia Mahaffey (Partner, Corporate)     $425
          Thomas Catliota (Partner, Bankruptcy)    $375
          Maureen Beahn (Counsel, Litigation)      $315
          Andrew Love (Associate, Bankruptcy)      $255
          Peter Freeman (Associate, Corporate)     $205
          Jennifer Cannon (Associate, Litigation)  $180
          Luis Marini (Associate, Bankruptcy)      $170
          Nancy Sherbow (Legal Assistant)          $135

Network Access Solutions Corporation, provider of broadband
network solutions and internet service to business customers,
filed for chapter 11 protection on June 4, 2002. Bradford J.
Sandler, Esq. at Adelman Lavine Gold and Levin, PC represent the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $58,221,000 in
assets and $84,946,000 in debts.


NORTEK INC: S&P Affirms Low-B's Over Definitive Acquisition Pact
----------------------------------------------------------------
Standard & Poor's has affirmed its single-'B'-plus corporate
credit rating on building products manufacturer and distributor
Nortek Inc. following announcement of a definitive agreement for
Kelso & Co. L.P., to acquire Nortek in partnership with Richard
Bready and other members of Nortek management for $46 per Nortek
share.

Standard & Poor's said that at the same time it has affirmed its
single-'B'-plus senior unsecured debt and single-'B'-minus
subordinated debt ratings on the Providence, Rhode Island-based
company. The outlook is stable.

Standard & Poor's noted that although it is not a condition to
the transaction, Kelso plans to seek confirmation from holders
of Nortek's publicly traded debt securities that the company
would not be required to purchase the securities as a result of
the proposed transaction. "Key credit quality measures should
remain appropriate for the ratings, as the deal will not lead to
any increase in debt," said Standard & Poor's credit analyst
Wesley E. Chinn.

Standard & Poor's said that its ratings on Nortek reflect the
company's significant portfolio of building products with
leading market shares, offset by competitive, cyclical markets
and weak cash flow protection measures primarily because of
aggressive use of debt. Standard & Poor's said that the earnings
diversity of Nortek's business mix is a major plus for ratings
stability. However, management's growth strategy could limit
improvement of credit quality ratios to levels appropriate for
the next higher rating category.


ONVIA.COM INC: Shareholders Approve 1-for-10 Reverse Stock Split
----------------------------------------------------------------
Onvia.com, Inc., (Nasdaq: ONVI) announced that at the annual
shareholders meeting on July 11, 2002, its shareholders approved
a 1-for-10 reverse stock split of all outstanding shares of
common stock.

The reverse split will be effective following the close of
business on July 16, 2002, and it is anticipated that the shares
will begin trading on a post-split basis effective at the
beginning of trading on July 17, 2002.  For ten consecutive
trading days following July 17, 2002, Nasdaq will monitor the
price of the Company's common stock to see if it will comply
with the Nasdaq National Market's continued listing requirement
of a minimum of $1.00 per share bid price.

"We anticipate that by July 31 the issue of being de-listed on
Nasdaq will be resolved assuming that the stock maintains a
closing bid price of at least $1 per share on or before July 17
and for ten consecutive trading days thereafter," stated Mike
Pickett, chairman and chief executive officer.

In the past 18 months, Onvia has emerged as the leader in the
Business-to-Government bid notification market and implemented
significant operational changes for long-term shareholder value.
These changes include:

     -- Acquiring and integrating B2G leaders DemandStar and
        Project Guides;

     -- Increasing B2G revenues from $282,000 in Q1 2002 to $1.6
        million in Q1 2002 and reducing recurring operating
        expenses (which excludes amortization of goodwill,
        restructuring charges and non-cash compensation) from
        $15.4 million to $4.6 million during the same period;

     -- Growing its subscriber base from 17,600 in Q1 2001 to
        25,800 businesses in Q1 2002;

     -- Building a strong balance sheet for future growth
        including over $40 million cash on hand.

Onvia.com, Inc., helps businesses secure government contracts
and government agencies find suppliers online.  Onvia assists
businesses in identifying and responding to bid opportunities
from more than 43,000 government purchasing offices in the $600
billion federal, state, and local government marketplace.  Onvia
also manages the distribution and reporting of requests for
proposals and quotes from more than 400 government agencies
nationwide.  The size and strength of Onvia's network allows
suppliers and agencies to find better matches quickly, saving
time and money. For more information, contact Onvia.com, Inc.:
1260 Mercer St., Seattle, WA 98109. Tel:  206-282-5170, fax:
206-373-8961, or visit http://www.onvia.com


OPTICON MEDICAL: Completes Asset Sale to OPMI Funding Corp.
-----------------------------------------------------------
Opticon Medical, Inc., (OTC: OPMI) has completed the sale of
substantially all of the Company's assets to OPMI Funding
Corporation pursuant to a court-approved sale procedure.  Since
its voluntary petition in March, Opticon has continued to
operate under court protection from creditors through debtor in
possession financing provided by OPMI Funding Corporation.
Proceeds for the asset sale are expected to provide a
substantial distribution, if not payment in full, to Opticon's
creditors, and to fund the completion of the Chapter 11
proceedings.

Opticon also announced the election of Keith A. Mazer to the
company's Board of Directors, following the resignation of
President and Director, Glenn D. Brunner.  Mr. Mazer is the
Managing Partner of World Capital Funding, Inc. and was
instrumental in the Company's previous financing efforts.  He
will be responsible for directing the management of the
company's activities, which will focus upon the confirmation and
execution of a plan of reorganization under Chapter 11 of the
Federal Bankruptcy Code.


ORBITAL SCIENCES: Fitch Rates $100MM Subordinated Notes at B-
-------------------------------------------------------------
Orbital Sciences' senior secured bank debt remains at 'B+',
according to Fitch Ratings. In addition, Fitch has assigned a
'B-' rating to ORB's convertible subordinated notes.

ORB remains on Rating Watch Negative due to concerns about
liquidity ($100 million in convertible subordinated notes due in
October) and weak near-term cash flow from operations (est.
negative $70 million in 2002), according to Fitch Ratings. Other
than these near-term concerns, Fitch believes ORB's overall
situation is solidifying due to ORB's strong position in missile
defense applications, improving satellite manufacturing
performance, significant debt reduction, and solid backlog. ORB
has potentially valuable assets and technology, and credit
quality could substantially improve if the company executes its
operating plan and gets past the challenges it faces in the near
term.

At March 31, 2002, ORB's liquidity position included
unrestricted cash of $61 million and availability of $24.5
million under its credit facility, offset by current maturities
of $101.8 million, for a net liquidity shortfall of $16.3
million. ORB's $60 million working capital credit facility and
its cash on hand should be sufficient to cover the projected
cash use from operations in 2002. However, with $100 million of
notes maturing in October, ORB still faces a liquidity
challenge. As a result of asset sales in 2001, ORB was able to
reduce debt by $134 million, lowering debt-to-capital to 56% as
of March 31 from 84.6% at December 31, 2000. Interest coverage
for the last twelve months ending March 31, 2002 improved to 1.8
times from 0.9x in 2001. Leverage (debt-to-EBITDA) of 4.6x,
excluding operating leases, also improved compared to leverage
of 5.4x in 2001.

ORB projects negative operating cash flow of $70 million for the
year, mainly from the payment of a $50 million vendor payable
and the reduction of $20 million in deferred revenue. ORB also
has two cash-negative satellite projects (OrbView-3 and N-Star),
both of which should be launched by year-end (N-Star was
launched on July 6). As discussed above, cash on hand and
proceeds from the credit facility should allow ORB to fund
operations and capital expenditures for the year, but failure to
meet operating cash projections could not only pressure ORB's
resources, but also could affect the refinancing of the
convertible subordinated notes.

ORB's position in various missile defense projects is one of the
key factors in the company's improving performance. ORB plays
several roles in missile defense. First, it provides targets for
missile defense elements such as Ground-based Midcourse Defense,
Navy Sea-based Midcourse, PAC-3, and THAAD. Second, ORB recently
received a contract from Boeing, the GMD prime contractor, to
provide boosters for GMD interceptors. The contract will have
two phases: a $400 million development and test phase from 2002
to 2006, and a production phase that could be worth more than
$500 million if ORB wins the production contract. ORB will
compete with Lockheed Martin for the production phase of the
contract, although Department Of Defense officials have
indicated that both boosters could be funded. The boost vehicle
will be based on ORB's Pegasus and Taurus vehicles, and a total
of 70 boost vehicles could be delivered over the life of the
contract. The contract should provide approximately $325 million
in revenues in the next three years, giving a well-needed boost
to ORB's credit quality.

ORB's firm backlog stood at $850 million as of March 31st, while
total backlog, which also includes options and ID/IQ contracts,
stood at $2.63 billion. Management estimates that the backlog is
of higher quality than current contracts (higher margins), and
lower risk, as the percentage of cost-plus contracts is
approaching 50%. New orders in 2001 were $785 million, of which
$615 million were firm, and new orders in the first quarter of
2002 were $960 million.


OWENS CORNING: Bank Group Secures Stay Relief to Setoff Claims
--------------------------------------------------------------
Judge Fitzgerald allows the modification of the automatic stay
to the extent necessary to permit Credit Suisse First Boston, as
Agent and the other banks to exercise their rights of setoff
pursuant to the Settlement Agreement against Owens Corning's
Frozen Funds.

The balances of each of the Frozen Accounts with the banks
totaled about $36.7 million.

Judge Fitzgerald rules that the Debtors Portion will be
$18,953,325 plus 51.532% of any and all interest accrued on the
Frozen Accounts from the Petition Date to June 20, 2002, the
date of the Order.  The Banks' Portion will be $17,826,395 plus
48.468% of any and all interest accrued on the Frozen Funds from
the Petition Date to June 20, 2002.

With respect to Owens Corning's account at The Northern Trust
Company, Account No. 68446, Owens Corning maintains that the
actual balance of the account is $4,174,478, as opposed to the
amount of $4,109,071, a discrepancy of $65,407 (the excess
amount).  The Banks waive any claims or rights of setoff against
the Excess Amount, and Owens Corning will retain the right to
seek to compel The Northern Trust Company to turn over the
Excess Amount to Owens Corning.  This is subject to any defenses
that the Northern Trust Company may have in its own right but
not under the Credit Agreement. (Owens Corning Bankruptcy News,
Issue No. 34; Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


PACIFIC GAS: Parent to Announce Q2 2002 Results on Aug. 1, 2002
---------------------------------------------------------------
PG&E Corporation (NYSE: PCG) will announce its Second Quarter
2002 Earnings live over the Internet on Thursday, August 1, 2002
at 8:00 a.m. PDT/ 11:00 a.m. EDT.

     What:      2002 Second Quarter Earnings Release

     When:      Thursday, August 1, 2002
                8:00 a.m. PDT/ 11:00 a.m. EDT

     Where:     http://www.pgecorp.com/financial/news/conference_calls.html

     How:       Live over the Internet -- Simply log on to the
                web at the address above.

     Contact:   Investor Relations, +1-415-267-7080

The call will be archived at http://www.pge-corp.comfor 90
days.  Alternatively, a toll-free replay of the conference call
may be accessed shortly after the live call through 9:00 p.m.
EDT, August 8 by dialing 877-690-2090.

PG&E Corporation is a national energy-based holding company,
headquartered in San Francisco, California.  It markets energy
services and products throughout North America through its
National Energy Group.  It is also the parent of Pacific Gas and
Electric Company, the Northern and Central California utility
providing natural gas and electricity service to one in every 20
Americans.


PARKER DRILLING: S&P Affirms Ratings Over Nixed Acquisition Bid
---------------------------------------------------------------
Standard & Poor's affirmed its ratings on oil and gas contract
driller Parker Drilling Co., (single-'B'-plus corporate credit
rating) and removed them from CreditWatch with negative
implications where they were placed on June 6, 2002. The outlook
is stable.

Tulsa, Oklahoma-based Parker has about $600 million in
outstanding debt.

"The ratings affirmation and withdrawal from CreditWatch reflect
the termination of Parker's bid to acquire Australian Oil & Gas
Corp. Ltd.," said Standard & Poor's credit analysts Bruce
Schwartz, CFA.

Parker Drilling's ratings reflect its participation in the
highly competitive, cyclical, and volatile oil and gas contract
drilling industry in areas of high political risk and its
aggressive debt leverage. These weaknesses are mitigated by a
diversified rig fleet and adequate near-term liquidity for
capital spending and debt service.


PLIANT SYSTEMS: Liquidating Agent Wants to Hire Adams Consulting
----------------------------------------------------------------
Craig A. Adams, the Liquidating Agent winding-up Pliant Systems,
Inc.'s financial affairs, seeks permission from the U.S.
Bankruptcy Court for the Eastern District of North Carolina to
employ Adams Consulting Group, PA as his accountant.

Adams Consulting will be assisting by:

     a) giving accounting and tax advice to the Liquidating
        Agent;

     b) preparing any and all required State and Federal tax
        returns; and

     c) performing any other accounting services for the
        Liquidating Agent as may be necessary in this
        proceeding, including payroll taxes.

Adams Consulting's compensation is not disclosed. The
Liquidating Agent clarifies that it will be in accordance with
the provisions of the Order Confirming Pliant's Chapter 11 Plan
of Liquidation.

Pliant Systems, Inc., designs, engineers, manufactures, and
markets electronics hardware and software for operators of local
exchange telephone networks. The Company filed for chapter 11
protection on May 1, 2001. Gerald A. Jeutter, Esq. at Kilpatrick
Stockton LLP represents the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $27,395,844 in assets and $123,919,915 in liabilities.


PROACTIVE COMPUTER: Taps Cor Equity to Assist in Debt Workout
-------------------------------------------------------------
ProActive Computer Services Inc. (OTC:PAVP), an Internet-based
"business process outsourcing" service provider and aggregator
for small and midsized businesses, further announced the details
of its engagement of Cor Equity Management Corporation of Tampa,
Fla., for corporate financial services. Cor Equity is assisting
ProActive in refining the company's business plan, restructuring
its corporate debt and raising the necessary capital to enable
the company to reach its long-term objectives. Cor Equity is
also assisting ProActive in identifying and creating strategic
alliances with other outsourcing companies to broaden
ProActive's business solutions offering.

Matthew Roy, Cor Equity Management CEO, commented, "We have
studied the outsourcing industry and believe that significant
growth opportunities are present. After reviewing ProActive's
business model, we believe that ProActive has the key
ingredients to be successful in this industry and we are excited
to be working with them."

Founded in 1994 and based in Houston, ProActive Computer
Services Inc. is an Internet-based business process outsourcing
service provider for small and midsized businesses. ProActive
offers technology services designed to get businesses on the
Internet and help them leverage Web technologies to increase
their visibility, client base and revenue stream while
streamlining their internal administrative, collaborative and
communication processes. ProActive also offers Web site design
and Web hosting through its WebTwister(TM) division. ProActive
is a publicly held company (OTC:PAVP). For more information,
please call 713/784-3445, or visit http://www.pacsi.com

Cor Equity Management is an investment banking firm that
specializes in public and private middle market growth
companies, providing a broad array of services including
business plan development, debt restructuring and mergers and
acquisitions. For more information, please call 813/261-5039, or
visit http://www.corequity.com


PSINET INC: Court Wants Periodic Status Reports and Other Info.
---------------------------------------------------------------
Judger Gerber, in a Post Confirmation Order and Notice, directs
PSINet, Inc. Debtors or the Liquidating Manager, as applicable,
to provide the Court with:

   (1) Periodic Status Reports.

The Responsible Party must file, within 120 days after the
Effective Date, a status report detailing the actions taken by
the Responsible Party and the progress made toward the
consummation of the Plan.  Reports must be filed thereafter
every 120 days until a final decree has been entered.

   (2) Notices.

The Responsible Party must mail a copy of the Confirmation Order
and the Post Confirmation Order to the Debtors, counsel for the
Debtors, the Committee, counsel for the Committee, and all
parties who filed a notice of appearance and request for
documents in these Chapter 11 Cases.

   (3) Clerk's Charges and Report Information.

Within 15 days of the date of the Post Confirmation Order, the
Responsible Party must submit a written request to the Clerk to
obtain the amount of any notice and excess claim charges. The
amount must be paid in full not later than 90 days from the
Effective Date.

   (4) Closing Report and Final Decree.

Within 15 days following the Termination Date (as the term is
defined in Section 8.3(c) of the Plan), the Responsible Party
must file a closing report in accordance with Local Bankruptcy
Rule 3022-1 and an application for a final decree closing the
Debtors' Chapter 11 Cases.

   (5) Case Closing.

The Responsible Party must submit an application for a final
decree closing the Chapter 11 Cases, within one year from the
date of the Confirmation Order.  If the Responsible Party fails
to comply with this Order, following its anniversary (and any
subsequent anniversary occurring prior to submission of the
Closing Report and Final Decree), the Responsible Party must
file a statement of the progress made toward the Termination
Date. This statement may be included as part of a status report
submitted pursuant to Paragraph 1 above. The Court may issue an
order to show cause, schedule a post-confirmation status
conference or take other action that the Court finds
appropriate. (PSINet Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that PSINET Inc.'s 11% bonds due 2009
(PSINET2) are trading at about 9.125. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PSINET2for
real-time bond pricing.


QSERVE COMMS: US Trustee Appoints Official Creditors' Committee
---------------------------------------------------------------
The United States Trustee appointed a seven-member Official
Unsecured Creditors' Committee in qSERVE Communications, Inc.'s
chapter 11 cases.  The creditors are:

     1) Lucy L. Wineman
        Hutton Communications, Inc.
        2520 Marsh Lane
        Carrollton, TX 75006
        Tel: (972) 417-0104
        Fax: (800) 725-5264
        winemanl@huttoncom.com

     2) William P. Crocitto, Jr.
        Galaxy Tri-State Electric, Inc.
        1200 Hempstead Turnpike
        Franklin Square, NY 11010
        Tel: (516) 488-6080
        Fax: (516) 488-8176
        wcrocittoJr@GalaxyTristate.com

     3) Thomas Costello
        Costello and Associates
        3713 Alamo Street, 2nd Floor
        Simi Valley, CA 93063
        Tel: (805) 520-4997
        Fax: (805) 520-0062
        tom@costello-assoc.com

     4) James R. Schumacher
        31511 E. LJLS Road
        Lee's Summit, MO 64086
        Tel: (816) 697-2649
        JNJZDogs@earthlink.net

     5) Robert Jarett
        Radio Frequency Systems, Inc.
        200 Pondview Dr.
        Meriden, CT 06450
        Tel: (203) 630-3311
        Fax: (203) 634-2145
        bob.jarett@rfsworld.com

     6) Craig J. Steinmetz
        Diversified Thermal Services, Inc.
        10842 Noel St., Suite 108
        Los Alamitos, CA 90720
        Tel: (714) 761-9771
        Fax: (714) 761-9773

     7) James W. Eckert, Jr.
        Site Design Services, Inc.
        14 Sunnybrook Drive, Suite A
        McDonough, GA 30253
        Tel: (770) 898-0096
        Fax: (770) 898-0098
        billeckert@civilsurvey.com

The Trustee names Lucy L. Wineman to act as chairman of the
Committee.  At its initial meeting, the Committee chose Frank
Wendt, Esq., and Vincent F. O'Flaherty, Esq., at Niewald Waldeck
& Brown P.C., 120 W. 12th St., Suite 1300, Kansas City, MO
64105-1932 as counsel.

qServe Communications, Inc., is an engineering and construction
firm serving the wireless and broadband industries offering
management, installation, erection, inspection, testing and
maintenance services to the communications industry. The Company
filed for chapter 11 protection on June 21, 2002. John Joseph
Cruciani, Esq. at Lentz & Clark, PA represents the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed an estimated debt of over $10
million.


QWEST COMMS: Applies for Long-Distance Service for 4 More States
----------------------------------------------------------------
Qwest Communications International Inc., (NYSE: Q) filed an
application with the Federal Communications Commission for
authority to provide long-distance service to more than 4.3
million customer lines in Washington, Utah, Montana and Wyoming.
With Friday's filing, applications are pending at the FCC for a
total of nine Qwest states.  Qwest plans to file similar
applications for long-distance authority in its remaining five
states in the summer and fall.

Qwest filed with the FCC after regulators in the four states
completed extensive hearings by finding that Qwest met all
applicable requirements of the Telecommunications Act of 1996.
The state commissions are scheduled to make formal
recommendations to the FCC supporting Qwest's application in
approximately 20 days.

"The benefits of real long-distance competition will soon be
coming to customers in Washington, Utah, Montana and Wyoming,"
said Steve Davis, Qwest senior vice president of policy & law.
"A total of nine states have found that our local markets are
open to competitors and that we've complied with the
Telecommunications Act.  Now it's time to open up the long-
distance market to Qwest."

On June 13, 2002, Qwest filed an application for authority to
provide long-distance service to customers in Colorado, Idaho,
Iowa, Nebraska and North Dakota.  Last week, regulators in those
states filed formal recommendations with the FCC in support of
Qwest's application.  A decision on the application is expected
in mid-September, 2002.  Qwest has spent more than $3 billion to
open its markets to competitors and comply with the act.
Friday's filing contains extensive evidence that Qwest has met
all the requirements of the act.

Qwest currently provides long-distance services outside of its
14 Western states.  However, when Qwest acquired U S WEST on
June 30, 2000, Qwest had to divest itself of its long-distance
business in those states.  Under the act, Qwest can re-enter the
long-distance business in a state once its application to the
FCC has been approved.

                        Systems Tests

The FCC application includes data from an extensive third-party
test of Qwest's systems and performance that demonstrates
Qwest's excellence in providing wholesale services.  The test
covered 13 of the 14 states in Qwest's local service territory
and was conducted by regulators from throughout those states.
During the test, tens of thousands of transactions were
monitored to confirm Qwest's ability to facilitate orders,
installation, repair, billing and other services ordered by
competitive local telephone companies.  Qwest has also passed a
separate and comparable systems test in Arizona.

           Consumer Savings, Performance Assurance

Residential and business customers in Qwest's region could save
more than $1 billion annually with Qwest's re-entry into the
regional long-distance business, according to a study by
Professor Jerry A. Hausman, director of the Massachusetts
Institute of Technology Telecommunications Research Program.
Qwest's long-distance service offering will save customers in
Washington, Utah, Montana and Wyoming more than $286 million
annually, according to the study.

Qwest is supporting its application with comprehensive
performance monitoring and enforcement plans to ensure the
service standards for its wholesale customers remain strong.
The plans provide individual competitors with damages if Qwest
does not provide competitive local exchange carriers the same
level of service that it provides its own retail operations or
if Qwest fails to meet applicable benchmark standards.  Those
damages could total as much as 48 percent of the net local
service revenue that Qwest derives from local exchange services,
depending on the state.

             Local and Long-Distance Competition

Local phone service competition in Qwest's territory is strong,
underscoring that Qwest has met FCC requirements for its
application.  In most Qwest states, competitors have captured a
far greater percentage of customers than they had in New York
and Texas -- eight and 12 percent respectively -- at the time
local phone companies there received FCC approval to offer
long-distance service.

Customers have responded positively to increased competition in
the long-distance market in the states where the FCC has
approved long-distance applications.  In the first 12 months
after Verizon received long-distance approval in New York,
approximately 20 percent of customers switched to a Verizon
long-distance plan.  In Texas, more than 20 percent of local
customers switched to an SBC long-distance calling plan in the
first nine months the company was authorized to provide service.

Qwest Communications International Inc. (NYSE: Q) is a leader in
reliable, scalable and secure broadband data, voice and image
communications for businesses and consumers.  The Qwest Macro
Capacity(R) Fiber Network, designed with the newest optical
networking equipment for speed and efficiency, spans more than
190,000 miles globally. For more information, please visit the
Qwest Web site at http://www.qwest.com

                         *    *    *

As reported in Troubled Company Reporter's July 12, 2002,
edition, Fitch Ratings has downgraded the senior unsecured debt
ratings for Qwest Communications International, Inc., Qwest
Capital Funding, Inc., and LCI International to 'B' from 'BBB-'.
Additionally, the senior unsecured debt rating for Qwest
Corporation has been downgraded to 'B' from 'BBB'. The
commercial paper ratings of Qwest Capital Funding and Qwest
Corporation have been lowered to 'B' from 'F3'. All of the
ratings have been placed on Rating Watch Negative.

The rating action follows the company's announcement that the
U.S. Attorney's office in Denver has launched a criminal
investigation of Qwest. Given the current industry climate,
Fitch believes the company's financial flexibility, including
access to capital markets, will be limited. As part of the
company's plan to de-lever its balance sheet and increase
financial flexibility, Qwest had been in the midst of evaluating
bids for the proposed sale of its directory and wireless
businesses. While Qwest has no additional information on the
investigation or its impact on the asset sales, Fitch believes
that the criminal investigation coupled with ongoing SEC
investigations will significantly diminish the company's ability
to sell assets in the timeframe previously contemplated. Absent
assets sales, Fitch anticipates that the 4.0 times debt to
EBITDA covenant for 4Q/02 contained in the company's $4.0
billion bank facility could be violated.

It was also reported that Moody's Investors Service's recent
lowered rating actions on Qwest Communications International and
wholly guaranteed Qwest Capital Funding remain on review for
further possible downgrade.

The affected ratings are:

   Action                                         To        From
   ------                                         --        ----
* Qwest Communications International senior
  unsecured rating                                Ba2        B2

* Qwest Capital Funding senior unsecured rating   Ba2        B2

* Qwest Corporation senior unsecured rating       Baa3       Ba3

* LCI International Inc. senior unsecured
  rating                                          Ba2        B2

* Pacific Northwest Bell Telephone Company
  senior unsecured rating                         Baa3       Ba3

* Northwestern Bell Telephone Company
  senior unsecured rating                         Baa3       Ba3

* Mountain States Telephone and Telegraph
  Company senior unsecured rating                 Baa3       Ba3


QWEST COMMS: Considers Restating Fiscal 2001 Financial Results
--------------------------------------------------------------
DebtTraders reports that Qwest Communications International
Inc., is considering restating its financial results for fiscal
2001, by $1.0 billion in revenue, according to sources close to
the matter.

The Company is currently under investigation by the SEC for its
accounting practices. In addition, the FBI has launched a
criminal investigation into the Company.


R&S TRUCK BODY: Court Okays Anderson Kill as Debtors' Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved R&S Truck Body Company and its debtor-affiliates'
application to retain Anderson Kill & Olick, P.C., as counsel
nunc pro tunc to June 3, 2002.

Anderson Kill is employed to:

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

     b) prepare on behalf of the New Debtors, as debtors in
        possession, all necessary or appropriate motions,
        applications, answers, orders, reports and other papers
        in connection with the administration of the New
        Debtors' estates;

     c) take all necessary or appropriate actions in connection
        with the negotiation and preparation of a plan of
        reorganization and a related disclosure statement and
        all related documents and such further actions as may be
        required in connection with the administration of the
        New Debtors' estates; and

     d) perform all other necessary or appropriate legal
        services in connection with these Chapter 11 cases.

Anderson Kill's customary rates are:

          Senior Shareholders      $310 - $630 per hour
          Junior Shareholders      $165 - $310 per hour
          Paraprofessionals        $90 - $145 per hour

The attorneys who will be primarily responsible in these cases
are:
          J. Andrew Rahl, Jr.      $580 per hour
          Larry D. Henin           $430 per hour
          Gloria J. Frank          $400 per hour
          Paul A. Rachmuth         $260 per hour

R&S is a wholly-owned subsidiary of Barclay Investments, Inc.,
which is a wholly owned subsidiary of Standard Automotive
Corporation, both of which filed for Chapter 11 relief on March
19, 2002. R&S designs, manufactures and sells customized, high
end, steel and aluminum dump truck bodies, platform bodies,
custom large dump trailers, specialized truck suspension systems
and related products and parts. The Company filed for chapter 11
protection on June 3, 2002. J. Andrew Rahl Jr., Esq. at Anderson
Kill & Olick, P.C. represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $27,093,513 in assets and $6,999,464 in
debts.


RIVERWOOD INT'L: Extends Tender Offers for 2 Notes to August 2
--------------------------------------------------------------
Riverwood International Corporation has extended the tender
offer expiration dates of its pending cash tender offers to
purchase any and all of its outstanding 10-7/8% Senior
Subordinated Notes due 2008 (CUSIP No. 769507AJ3), 10-5/8%
Senior Notes due 2007 issued in July 1997 (CUSIP No. 769507AM6)
and 10-5/8% Senior Notes due 2007 issued in June 2001 (CUSIP No.
769507AQ7).

Each tender offer, which had been set to expire at 5:00 p.m.,
New York City time, on Friday, July 12, 2002, unless extended,
was extended to 5:00 p.m., New York City time, on Friday, August
2, 2002, unless further extended by Riverwood.

As of the close of business on July 11, 2002, the following
principal amounts of Notes had been tendered:

     * approximately $306.0 million of the $400.0 million
outstanding principal amount of the 10-7/8% Senior Subordinated
Notes due 2008;

     * approximately $200.6 million of the $250.0 million
outstanding principal amount of the 10-5/8% Senior Notes due
2007 issued in July 1997; and

     * approximately $206.2 million of the $250.0 million
outstanding principal amount of the 10-5/8% Senior Notes due
2007 issued in June 2001.

On May 30, 2002, Riverwood commenced the cash tender offers to
purchase any and all of its outstanding Notes of each issue, as
well as the related consent solicitations, from holders.  The
purpose of each consent solicitation was to amend the applicable
indenture to eliminate substantially all of the restrictive
covenants, certain repurchase rights and certain events of
default and related provisions contained in such indenture.  The
consent solicitations expired at 5:00 p.m., New York City time,
on Friday, June 28, 2002.  As Riverwood received requisite
consents in each of the consent solicitations, Riverwood and the
trustee under each indenture executed a supplemental indenture
relating to each such indenture as of July 1, 2002.

Riverwood is making a separate offer with respect to each issue
of Notes, and no offer is conditioned on the consummation of any
other offer. Consummation of each offer is subject to certain
conditions, including the consummation of the proposed initial
public offering of common stock by Riverwood's parent, Riverwood
Holding, Inc., and the consummation of certain other anticipated
financing transactions, in each case on terms satisfactory to
Riverwood.  Subject to applicable law, Riverwood may, in its
sole discretion, waive or amend any condition to any offer or
solicitation, or extend, terminate or otherwise amend any offer
or solicitation.

Deutsche Bank Securities Inc., and J.P. Morgan Securities Inc.,
are the dealer managers for the offers and solicitation agents
for the solicitations. MacKenzie Partners, Inc., is the
information agent and State Street Bank and Trust Company is the
depositary in connection with the offers and solicitations.  The
offers are being made pursuant to an Offer to Purchase and
Consent Solicitation Statement, dated May 30, 2002, and the
related Consent and Letter of Transmittal (as each may be
amended from time to time), which together set forth the
complete terms of the offers and solicitations.  Copies of the
Offer to Purchase and Consent Solicitation Statement and related
documents may be obtained from MacKenzie Partners, Inc., at
(800) 322-2885. Additional information concerning the terms of
the offers and the solicitations may be obtained by contacting
Deutsche Bank at (212) 469-7772 or JPMorgan at (800) 831-2035.

Riverwood, headquartered in Atlanta, Georgia, is a leading
provider of paperboard packaging solutions and paperboard to
multinational beverage and consumer products companies.

                         *    *    *

As reported in Troubled Company Reporter's June 13, 2002,
edition, Standard & Poor's said that its ratings on paperboard
producer Riverwood International Corp., including its single-'B'
corporate credit rating, remain on CreditWatch with positive
implications where they were placed on May 9, 2002, following
the company's announcement of a planned initial public offering
(IPO) of $350 million of common stock.

Following a review of Riverwood's refinancing plans, Standard &
Poor's has determined that it would raise Riverwood's corporate
credit rating to single-'B'-plus and assign a stable outlook
following the IPO and related debt refinancing if they are
completed as currently structured.

"Proceeds from the offering are expected to be used to reduce
debt, which would improve credit measures to levels
corresponding to the higher rating", said Standard & Poor's
credit analyst Pamela Rice. "However, the company still faces
meaningful term loan amortization beginning in 2003, which
Standard & Poor's expects will be met primarily from free
operating cash flow". Following this transaction, total debt
outstanding will be about $1.3 billion.

Standard and Poor's said that it also expects to assign its
single-'B'-plus bank loan rating to Riverwood's proposed $250
million term loan C due 2008, and its single-'B'-minus rating to
the proposed $400 million senior unsecured notes due 2012. These
transactions are expected to be completed at the same time as
the IPO. Proceeds from the new term loan and senior notes, in
addition to the equity proceeds, are expected to be used to
redeem the company's $500 million senior notes due 2007, its
$400 million subordinated notes due 2008, and a portion of the
amount outstanding under the company's revolving credit
facility.


SOFTWARE LOGISTICS: Closes Asset Sale to CMGI for $46MM + Debts
---------------------------------------------------------------
CMGI, Inc., (Nasdaq:CMGI) announced that, following approval by
the United States Bankruptcy Court and the administrator in The
Netherlands, it has acquired substantially all of the worldwide
assets and operations of Software Logistics Corporation, a
California corporation doing business as iLogistix. Under the
terms of the purchase agreement, CMGI, through a wholly-owned
subsidiary, paid approximately $46 million cash for the assets
of iLogistix and assumed certain operating liabilities.

iLogistix -- http://www.ilogistix.com-- provides a
comprehensive suite of traditional and e-commerce supply chain
services including procurement, inventory management, assembly,
fulfillment and distribution services through its global
network. iLogistix' blue chip customer base, including Hewlett-
Packard, Microsoft and Adobe, is serviced by operations centers
in the United States, The Netherlands, Singapore and Taiwan.
iLogistix joins CMGI's eBusiness and Fulfillment segment,
complementing and extending the supply chain management programs
currently provided by the company's SalesLink subsidiary --
http://www.saleslink.com

"iLogistix is CMGI's first significant acquisition in more than
2 years and illustrates our commitment to achieve market
leadership in one of the sectors defined by our new strategy.
This strategy helps build a solid platform for revenue growth in
future quarters. The successful integration of iLogistix into
our eBusiness and Fulfillment segment is an important step
forward, providing important new customers and associated
revenue, as well as a critical international base from which to
expand our share of the supply chain and fulfillment market
space," said George McMillan, Chief Executive Officer of CMGI.

Bryce C. "Skip" Boothby Jr., SalesLink's President and CEO,
added, "We're obviously delighted by this event. The acquisition
of iLogistix is a superb strategic fit and highly complementary
to our existing product and service offerings. We believe that
together, SalesLink and iLogistix have unmatched capabilities
within this industry."

SalesLink Corporation, a majority-owned operating company of
CMGI, Inc., is a leading provider of supply chain and outsourced
operations support services. Together, SalesLink and iLogistix
provide a broad range of demand-through-distribution services,
supporting customer requirements for accessory kits, software
manufacturing, literature and promotional products. Available
services include global supply chain management and coordination
of media replication, product packaging and assembly, print
management, electronic order processing, direct fulfillment, and
inventory management. For additional information, see
http://www.saleslink.comand http://www.ilogistix.com

CMGI, Inc., (Nasdaq: CMGI) is comprised of CMGI operating
businesses and investments made through its venture capital
affiliate, @Ventures. CMGI companies span a range of vertical
market segments including e-business and fulfillment; enterprise
software and services; and managed application services.

CMGI's nine operating companies include Engage (Nasdaq: ENGA),
NaviSite (Nasdaq: NAVI), AltaVista, Equilibrium, ProvisionSoft,
SalesLink, Tallan, uBid and Yesmail.

CMGI's corporate headquarters is located at 100 Brickstone
Square, Andover, MA 01810. @Ventures has offices there, as well
as at 3000 Alpine Road, Menlo Park, CA 94028. For additional
information, see http://www.cmgi.com and
http://www.ventures.com


STARBAND COMMS: Seeking Nod to Hire Zuckerman Spaeder as Counsel
----------------------------------------------------------------
Starband Communication, Inc., seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to retain
Zuckerman Spaeder LLP as co-counsel, nunc pro tunc to May 31,
2002.

Zuckerman Spaeder will:

     a) advise the Debtor with respect to its powers and duties
        as a debtor and debtor-in-possession in the continued
        management and operation of its business and affairs;

     b) attend meetings and negotiate with representatives of
        creditors and other parties in interest and advise and
        consult on the conduct of the case, including all of the
        legal and administrative requirements of operating in
        chapter 11;

     c) take all necessary action to protect and preserve the
        Debtor's estate, including the prosecution of actions on
        its behalf, the defense of any actions commenced against
        the estate, negotiations concerning all litigation in
        which the Debtor may be involved and objections to
        claims filed against the estate;

     d) prepare on behalf of the Debtor all motions,
        applications, answers, orders, reports and papers
        necessary to the administration of the estate;

     e) negotiate and prepare on the Debtor's behalf a plan of
        reorganization, a disclosure statement and all related
        agreements/documents and take any necessary action on
        behalf of the Debtor to obtain confirmation of such
        plan;

     f) advise the Debtor in connection with any sale of assets;

     g) appear before this Court, any appellate courts, and the
        U.S. Trustee, and protect the interests of the Debtor's
        estate before such courts and the U.S. Trustee; and

     h) perform all other necessary legal services and provide
        all other necessary legal advice to the Debtor in
        connection with this chapter 11 case.

Zuckerman Spaeder's customary billing rates range from:

          Partners               $290 to $500
          Associates             $190 to $260
          Legal Assistants       $75 to $150

StarBand Communications Inc. currently provides two-way, always-
on, high-speed Internet access via satellite to residential and
small office customers nationwide. The Company filed for chapter
11 protection on May 31, 2002. Thomas G. Macauley, Esq. at
Zuckerman and Spaeder LLP represents the Debtor in its
restructuring efforts. When the Company filed for protection
form its creditors, it listed $58,072,000 in assets and
$229,537,000 in debts.


SUN COUNTRY: Chapter 7 Trustee Wants to Retain Mackall Crounse
--------------------------------------------------------------
Timothy D. Moratzka, the chapter 7 trustee overseeing Sun
Country Airlines, Inc.'s liquidation, seeks authority to employ
Mackall, Crounse & Moore as attorney.  Mr. Moratzka tells the
U.S. Bankruptcy Court for the District of Minnesota that he
needs legal counsel to represent or assist him in carrying out
his duties as Trustee.  Specifically, the Firm will:

     -- Review Sun's 401K Plan and a pending DOL audit, draft
        and direct responses to that audit and implement
        compliance actions;

     -- Terminate Sun's 401K Plan, distribute benefits to plan
        participants, supervise all accounting tasks and prepare
        a final tax filing; and

     -- Review actions of prior plan fiduciaries.

Mackall, Crounse & Moore regular hourly rates are:

          Members        $165 to $300 per hour
          Associate      $90 to $160 per hour
          Law Clerk      $110 to $155 per hour
          Paralegals     $60 to $125 per hour

Professionals anticipated to work on file are:

     Attorneys     Timothy D. Moratzka
                   Patrick C. Summers
                   Glenn Drury

     Law Clerk     Erin Shields

     Paralegals    Lorraine D. Jacobson
                   Jamie Dickinson


SUPERVALU: Plans Vigorous Defense Against Shareholder Complaints
----------------------------------------------------------------
SUPERVALU Inc., (NYSE: SVU) learned of two class action lawsuits
recently filed against the company in the United States District
Court for the District of Minnesota. The complaints allege
certain violations of the federal securities laws by the
company.

SUPERVALU management believes that the company has always acted
with integrity and in compliance with its legal disclosure
obligations.

SUPERVALU believes the lawsuits are completely without merit and
intends to vigorously defend the actions.

SUPERVALU is one of the largest companies in the United States
grocery channel. With annual revenues in excess of $20 billion,
SUPERVALU holds leading market share positions with its 1,330
retail grocery and extreme value retail locations, including
licensed locations. In addition, through SUPERVALU's
geographically diverse distribution centers, the company
provides distribution and related logistics support services
across the nation's grocery channel. At year-end, SUPERVALU had
approximately 57,800 employees.

As previously reported, SUPERVALU's February 28, 2002, balance
sheet shows a working capital deficit of about $100 million.


TTR TECHNOLOGIES: Fails to Meet Nasdaq Min. Listing Requirements
----------------------------------------------------------------
TTR Technologies, Inc., (Nasdaq NM: TTRE) has been notified by
The Nasdaq Stock Market, Inc., that the Company's common stock
will be delisted from the Nasdaq National Market unless, at any
time before October 7, 2002, the Company's bid price with the
minimum requirement of $1.00 per share common stock for a
minimum of 10 consecutive trading days.

The Company received notice because its common stock has closed
below the minimum $1.00 per share requirement for a period of 30
consecutive trading days. If compliance with the minimum $1.00
per share bid price cannot be demonstrated by October 7, 2002,
Nasdaq will provide the Company with written notification that
it is no longer in compliance with Nasdaq requirements for
inclusion in the Nasdaq National Market.

At that time, the Company may appeal the Nasdaq staff's
determination, or if the Company meets the requirements for
inclusion in the Nasdaq SmallCap Market and applies for transfer
to that Market before October 7, 2002, Nasdaq delisting
proceedings will be stayed pending review of the transfer
application. If the transfer application is approved, the
Company will have the SmallCap Market's grace period until
January 6, 2003 to regain compliance with the minimum $1.00 per
share bid price, and if it meets certain listing criteria may be
eligible for an additional 180 day grace period. If the
Company's bid price meets the $1.00 per share requirement for 30
consecutive trading days and the Company complies with the other
requirements for continued listing by or before July 30, 2003,
it may be eligible for transfer back to the Nasdaq National
Market.

TTR -- http://www.ttrtech.com-- designs, markets and sells
proprietary anti-piracy products. The company has developed and
commercialized products for the software and entertainment
industries and is expanding its product range and reach through
in-house development and joint ventures. In addition to
developing SafeAudio, TTR is investing in infrastructure and
security solutions for the DVD-ROM market. TTR has a joint
development and marketing agreement for music CD copy protection
with Macrovision Corporation (Nasdaq: MVSN). TTR's shares are
listed on the Berlin Stock Exchange (TEJ) and the Nasdaq
National Market (TTRE).


THOMSON KERNAGHAN: Canadian Court Names E&Y as Trustee Under BIA
----------------------------------------------------------------
The Canadian Investor Protection Fund has obtained an order from
the Ontario Superior Court of Justice appointing Ernst & Young
Inc., as Trustee in Bankruptcy of Thomson Kernaghan & Co.,
Limited under the Bankruptcy and Insolvency Act (Canada). This
action was taken by CIPF following the suspension of the firm by
the Investment Dealers Association of Canada.

Thomson Kernaghan was suspended by the IDA on July 11, 2002.
Efforts by the company to transfer client accounts to other IDA
firms, have been unsuccessful due to inadequate financial
resources.

The appointment of a Trustee will permit CIPF to provide the
necessary funding to facilitate the continuation of the client
account transfer process under the supervision of the Trustee.

CIPF is a customer compensation fund that is financed by the
Members of the securities industry through the sponsoring Self
Regulatory Organizations: the Investment Dealers Association of
Canada, the Toronto Stock Exchange Inc., the TSX Venture
Exchange Inc. and the Bourse de Montreal Inc.

CIPF covers customers' losses of securities, cash balances and
certain other property such as segregated funds, within
prescribed limits. The CIPF coverage limit is $1 million for
aggregate losses in each customer's general account (defined as
the combination of all cash, margin, short sale, options,
futures and foreign exchange accounts). CIPF also provides
separate coverage for registered retirement accounts of a
customer, such as RRSPs, LIRAs, RRIFs and LIFs, which are
combined and aggregated as a single separate account. CIPF does
not cover customers' losses that result from other causes such
as changing market values of securities, unsuitable investments
or the default of an issuer of securities. Further information
concerning CIPF including its brochure and polices is available
on the Web site http://www.cipf.ca


US AIRWAYS: Reaches Tentative Pact with Pilots on Workout Plan
--------------------------------------------------------------
US Airways and the Air Line Pilots Association have reached a
tentative agreement on the company's restructuring plan.

"From the onset, we believed that our pilot leadership would
work with us on a restructuring agreement that took into account
the best interests of the company, all of our employees and the
communities we serve," said Jerry A. Glass, US Airways senior
vice president of employee relations. "This landmark agreement
will contribute significantly to the revival of US Airways and
will protect the core priorities of the company and of ALPA's
rank-and-file membership. We thank them for their enormous
sacrifices which will help US Airways chart a new course as a
vibrant successful carrier."

"The ALPA-US Airways restructuring tentative agreement
represents profound changes to the pilots' working agreement,
which will have far-reaching effects on our careers, our
families, and our airline. The tentative agreement will be sent
to our pilots for a membership ratification vote," said Capt.
Chris Beebe, Master Executive Council chairman of the US Airways
unit of the ALPA.

ALPA's MEC, on behalf of its membership, has ratified a
component of the agreement that would allow US Airways to enter
into an expanded domestic and international codeshare.

US Airways has reached tentative agreements on its restructuring
plan with the Association of Flight Attendants (AFA), and the
TWU's dispatchers and assistant dispatchers, simulator
engineers, and flight crew training instructors. US Airways
continues discussions with its other unions, comprising the
International Association of Machinists (IAM), representing
separate mechanic and related positions, and fleet-service
worker units, and the Communications Workers of America (CWA).

DebtTraders says that US Airways Inc.'s 10.375% bonds due 2013
(USAIR3) are quoted at a price of 81.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=USAIR3for
real-time bond pricing.


US AIRWAYS: Training Instructors Lend Support to Workout Plan
-------------------------------------------------------------
US Airways, Inc., and the Transport Workers Union of America
(TWU) Flight Crew Training Instructors Local 547 today have
reached a tentative agreement on the company's plan to
restructure.

The agreement covers the union's approximately 114 flight crew
training instructors located in Charlotte, N.C., and Pittsburgh.

"We applaud the TWU's leadership for reaching this agreement,
which underscores their commitment to the future prosperity of
our company," said US Airways Senior Vice President of Employee
Relations Jerry A. Glass. "We are grateful for their cooperation
during this process."

"The negotiating committee will send this tentative agreement
out for ratification recommending a vote in favor, as we
recognize how important it is for US Airways to proceed with a
successful restructuring at this time," said Bill Gray,
president of Local 547 TWU of America.

US Airways has reached tentative agreements on its restructuring
plan with the Association of Flight Attendants (AFA), and the
TWU's dispatchers and assistant dispatchers, and simulator
engineers. US Airways continues discussions with its other
unions, comprising the Air Line Pilots Association (ALPA),
International Association of Machinists (IAM), representing
separate mechanic and related, and fleet-service worker units,
and the Communications Workers of America (CWA).


UNITED AIR LINES: S&P Keeping Watch on B Corporate Credit Rating
----------------------------------------------------------------
The International Association of Machinists (IAM) of UAL Corp.,
(B/Watch Dev) unit United Air Lines Inc., (B/Watch Dev)
announced on July 9, 2002, that it formally rejected
management's proposal for a 10% wage reduction. Standard &
Poor's ratings for both entities, which were lowered to their
current level June 28, 2002, remain on CreditWatch with
developing implications.

"The IAM action represents a serious setback for United's effort
to cut its operating costs and seek a $1.8 billion federal loan
guaranty," said Standard & Poor's credit analyst Philip
Baggaley. Although United, the second-largest airline in the
world, has reached a tentative concessionary agreement with its
pilots union, that agreement is contingent on a pilot member
vote, receiving a federal loan guaranty, "equitable and
meaningful participation.by UAL's other labor groups," and other
conditions. Although noncontract employees are to make
concessions as part of the cost-cutting program, it appears that
the pilots would expect one or both of the two employee groups
(mechanics and ground service employees) represented by the IAM
to participate in wage concessions, as well (the flight
attendants have, from the beginning, indicated no willingness to
discuss concessions). The IAM stated that it was "unwise to
begin discussions" with outgoing interim CEO Jack Creighton,
implying a further, possibly lengthy, delay in addressing this
part of United's operating cost problem.

The IAM position provides further evidence that the ownership
and governance structure put in place with UAL's 1994 employee
buyout (which established majority employee ownership, with all
groups except the flight attendants participating) has not
solved longstanding labor relations problems, nor tensions
between labor groups. Although UAL has adequate near-term
liquidity (with $2.9 billion of cash at March 31, 2002), it also
faces large upcoming debt payments of about $1.5 billion through
March 31, 2003; it has not raised any debt or equity in the
public capital markets since Sept. 11, 2001; and it continues to
incur heavy, albeit narrowing, losses. Ratings could be lowered
if UAL's financial condition deteriorates further as a result of
an inability to stem losses or dwindling liquidity.
Alternatively, ratings could be raised if the company is able to
secure material labor concessions and a federal loan guaranty.

United Air Lines' 10.25% bonds due 2021 (UAL1), DebtTraders
says, are quoted at a price of 76. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL1for
real-time bond pricing.


VELOCITA CORP: Turns to Impala Partners for Financial Advice
------------------------------------------------------------
Velocita Corp., and its affiliated debtors want to employ and
retain The Impala Partners, LLC as Financial Advisors. The
Debtors tell the U.S. Bankruptcy Court for the District of New
Jersey that they need the assistance of Impala Partners to
explore all options available with regard to formulating their
business plan.

The Debtors intend to engage Impala Partners to:

     a) assist in the evaluation of the Debtors' business and
        prospects;

     b) assist in the development of the Debtors' long-term
        business plan;

     c) assist in the development of financial data and
        presentations to the Debtors' board of directors,
        various creditors, the statutory committees formed in
        these chapter 11 cases, and other third parties;

     d) analyze the Debtors' financial liquidity and evaluate
        alternatives to improve such liquidity;

     e) analyze various restructuring scenarios and the
        potential impact of these scenarios on the value of the
        Debtors and the recoveries of those stakeholders
        impacted by the restructuring;

     f) provide strategic advice with regard to restructuring or
        refinancing the Debtors' obligations;

     g) evaluate the Debtors' debt capacity and alternative
        capital structures;

     h) participate in negotiations among the Debtors and their
        creditors, suppliers, lessors, and other interested
        parties with respect to any of the transactions
        contemplated in the Impala Agreement;

     i) advise the Debtors and negotiate with lenders with
        respect to potential waivers or amendments of various
        credit facilities;

     j) assist in the arranging of financing (including a DIP
        financing), including identifying potential sources of
        capital, assisting in the due diligence process, and
        negotiating the terms of any proposed financing, as
        requested;

     k) provide testimony concerning any of the subjects
        encompassed by Impala's financial advisory services;

     l) assist and advise the Debtors concerning the terms,
        conditions, and impact of any transaction proposed by
        Impala; and

     m) provide such other advisory services as are customarily
        provided in connection with the analysis and negotiation
        of any transactions.

Impala Partners will be paid a flat fee of $200,000 per month
for its services plus an additional fee equal to 0.75% of the
original value of the liabilities restructured upon the earlier
of:

     i) the consummation of a strategic investment;

    ii) the sale or other disposition of all or substantially
        all of the assets, business, or securities of the
        Company; or

   iii) the confirmation of a plan under or other emergence from
        chapter 11 of the Debtors or their successor.

Velocita Corp., is in the business of building a nationwide
broadband fiber-optic network aimed at serving communications
carriers, internet service providers, data providers, television
and video providers, as well as corporate and government
customers. The Company filed for chapter 11 protection on May
30, 2002. Howard S. Greenberg, Esq., Morris S. Bauer, Esq. at
Ravin Greenberg PC and Gary T. Holtzer, Esq. at Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
As of March 31, 2002, the Company listed $482,807,000 in total
assets and $827,000,000 in total debts.


WILLIAMS COMPANIES: Selling Central-U.S. Gas Pipeline System
------------------------------------------------------------
Williams (NYSE: WMB) is considering selling its interstate
natural gas pipeline system in the central United States in
another definitive step toward strengthening its financial
flexibility and developing a more tightly focused portfolio of
energy businesses.

The company said that parties have expressed strong interest in
the business.  The potential buyers for the system, known as
Central, were not disclosed and terms of a potential sale are
not known at this time.

"This would mark another major accomplishment toward enhancing
Williams' financial strength and flexibility, allowing us to
more tightly focus our future capital investments," said Steve
Malcolm, chairman, president and CEO of Williams.  "We remain
committed to the interstate natural gas pipeline industry and
will focus our efforts there in systems that serve faster-
growing markets."

Doug Whisenant, president and CEO of Williams' interstate
natural gas pipeline unit, said, "We are focusing our future
capital investment in our Northwest Pipeline, Texas Gas and
Transco pipeline systems, which serve some of the largest and
fastest-growing markets in North America.  The markets served by
Central are stable and growing at a steady, but slower, pace.
The stable performance of this business would be ideal for
certain potential buyers."

Williams' 6,000-mile Central system transports natural gas from
Kansas, Oklahoma, Texas, Wyoming and Colorado to markets in the
Midcontinent.  The system's design capacity is 2.3 billion cubic
feet per day, with an annual throughput of 337.5 trillion
British thermal units.  The line has a seasonal storage capacity
of 43 Bcf.  Central has headquarters in Owensboro, Ky., and
has 368 employees located across its office and field locations.

Williams moves, manages and markets a variety of energy
products, including natural gas, liquid hydrocarbons, petroleum
and electricity.  Based in Tulsa, Okla., Williams' operations
span the energy value chain from wellhead to burner tip.
Company information is available at http://www.williams.com


WORLDCOM: New York Court Stays Conversion of MCI Group Shares
-------------------------------------------------------------
WorldCom, Inc. (Nasdaq: WCOME, MCITE), announced that at the
request of the Securities and Exchange Commission, the United
States District Court of the Southern District of New York has
entered an order staying for seven business days the previously
announced conversion of each outstanding share of MCI Group
Common Stock into 1.3594 shares of WorldCom Group Common Stock.

WorldCom, Inc. (Nasdaq: WCOME, MCITE), is a pre-eminent global
communications provider for the digital generation, operating in
more than 65 countries.  With one of the most expansive, wholly-
owned IP networks in the world, WorldCom provides innovative
data and Internet services for businesses to communicate in
today's market.  In April 2002, WorldCom launched The
Neighborhood built by MCI -- the industry's first truly any-
distance, all-inclusive local and long-distance offering to
consumers for one fixed monthly price.  For more information, go
to http://www.worldcom.com

Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USA1), DebtTraders
says, are trading at about 27.5. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USA1


XO COMMS: Vice-Pres. & Gen. Manager Dewayne A. Nelon Jumps Ship
---------------------------------------------------------------
DeWayne A. Nelon, formerly vice president and general manager at
XO Communications, Inc., has been named president, North America
at CMG Wireless Data Solutions, the global leader of competitive
edge messaging solutions.

Prior to joining XO, where he played a key role in building
the company from its early days as Nextlink Communications,
Nelon spent several years with Northern Telecom (Nortel). He
holds a Masters Degree in Business Administration from the
University of Texas - Dallas. (XO Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

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

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

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

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

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

                          *********

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

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

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

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

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

                     *** End of Transmission ***