TCR_Public/020729.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Monday, July 29, 2002, Vol. 6, No. 148

                           Headlines

8X8 INC: Gets Approval to Transfer Listing to Nasdaq SmallCap
AEROVOX: Sells Unit's Mexico City Operations to NGM for $2.6MM
ALLIANT TECHSYSTEMS: S&P Says Outlook of BB Rating is Positive
AMRESCO RESIDENTIAL: Fitch Junks 1997-3 Class B2F Certificates
ATLANTIC EXPRESS: S&P Further Junks Debt Ratings to CC from CCC

ATLANTIC EXPRESS: Needs Added Funding to Avert Chapter 11 Filing
BAC SYNTHETIC: Fitch Downgrades Three Classes of Notes
BCE INC: Achieves Second Quarter Results Expectations as Planned
BELL CANADA: Closes $366MM Sale of Interests in Telecom Americas
BCI INC: Obtains Necessary Approvals for Plan of Arrangement

BERRY PLASTICS: S&P Affirms B+ Rating After GS-Led Acquisition
BIG V SUPERMARKETS: Wakefern Acquires Assets for $185MM + Debts
BROADWING INC: Posts Improved Operating Results for 2nd Quarter
BROADWING INC: Fitch Junks 12.5% Series B Preferred Stock Rating
CALPINE CORP: Freestone Energy Center in Texas Enters Operations

CARAUSTAR: Signs $79.8M Pact to Acquire Smurfit Unit's Business
COMDISCO: Retains Huron as Financial Advisor Replacing Andersen
COMPUTONE: Board Approves Corporate Name Change to Symbiat Inc.
CONDOR TECH: Special Shareholders Meeting Aug. 15 in Baltimore
CONNECTICARE: S&P Affirms BB Ratings Over Good Market Position

COVANTA: Travelers Wants to Pay Yuba Heat Half of Coverage Claim
DYNEGY INC: S&P Downgrades Corporate Credit Rating to B+ from BB
DYNEGY INC: Fitch Hatchets Sr. Unsec. Debt Rating Down 2 Notches
ENRON CORP: El Paso Demands Broadband's Decision on Fiber Pact
ENRON: Florida Wants Court to Compel Preservation of Documents

EVERCOM INC: 2001 EBITDA Drops Due to Increase in Bad Debt Costs
FLAG TELECOM: Gets Court Nod to Tap Elizabeth Gloster as Counsel
FORMICA: Seeking Nod to Hire Thompson Hine as Special Counsel
FRIEDE GOLDMAN: Vision Pitches Winning Bid for Halter Marine
GWI HOLDING: Today's the Deadline to Vote on Chapter 11 Plan

GENERAL DATACOMM: Secures Exclusivity Extension Until August 1
GENUITY INC: S&P Junks Credit Rating After Verizon Decision
GLOBAL CROSSING: NETtel Trustee Wants to Continue Lawsuit
GLOBAL CROSSING: Inks 15-Year Contract with Dutch Nat'l Research
GLOBAL LIGHT: Secures Extension of CCAA Stay through August 1

GOLDMAN INDUSTRIAL: Wants to Expand O'Connor & Drew's Engagement
GROUP TELECOM: Canadian Court Extends CCAA Protection to Sept 10
HQ GLOBAL: Court Fixes August 30 Bar Date for Creditors' Claims
HANOVER COMPRESSOR: S&P Lowers Corporate Credit Rating to BB
HOMELIFE: Disclosure Statement Hearing Scheduled on September 19

IT GROUP: Committee Hires Friedman Kaplan to Sue Bank Lenders
INTEGRA INC: Commences Chapter 11 Proceeding in Pennsylvania
JACOBSON STORES: Commences Liquidation Process at All 18 Stores
JOSTENS INC: S&P Assigns BB- Rating to Proposed $330MM Bank Loan
KAISER: Wants Court to Approve Key Employee Retention Program

LTV CORP: USWA Submits Administrative Claim for Wages & Benefits
LOGOATHLETIC: Wants Cozen O'Connor to Pursue Avoidance Actions
MARTIN IND: Terminates Andersen Firm as Independent Accountants
METALS USA: Proposes Uniform Customer Setoff Procedures
METOKOTE CORP: S&P Assigns B+ Rating to Proposed $168M Bank Loan

ORBITAL: Committee Seeks Probe re Relationship with Orbimage
OWENS CORNING: Seeks Approval of Lease Indenture with Lexington
PACIFIC GAS: PwC Employing Ethical Walls to Protect Parties
PANACO: Taps Schully as Special Mineral Matters Counsel
PENN SPECIALTY: Court Confirms Third Amended Reorganization Plan

PHYCOR: New York Court Confirms Plan of Reorganization
PINNACLE TOWERS: US Trustee Names Unsecured Creditors' Committee
POLAROID CORP: Continuing Current Employee Severance Program
POINT.360: Inks Option Agreement to Purchase Alliance Shares
SCHUFF INTERNATIONAL: S&P Cuts Corp. Credit Rating to B from B+

SMURFIT-STONE: Planned Mill Acquisition Spurs S&P's B+ Rating
SPIGADORO INC: AMEX Commences Delisting Proceedings
SULPHUR CORP: Creditors Protection Under CCAA Expires July 19
SUN WORLD: Nixed Agreement Prompts S&P to Affirm Low-B Ratings
USG CORP: Trafelet Employs Young Conaway as Local Counsel

WARNACO GROUP: Wants to Expand BDO Seidman's Accounting Services
WHEELING-PITTSBURGH: Court OKs Settlement with KWELMB Companies
WILLIAMS COMMUNICATIONS: Resolves Issues with Former Parent
WILLIAMS COMMS: Secures $150-Million Investment from Leucadia
WORLDCOM INC: Bringing-In Weil Gotshal as Chapter 11 Counsel

WORLDCOM: Bankruptcy Not Affecting Internet So Far, Keynote Says

* BOND PRICING: For the week of July 29 - August 2, 2002

                           *********

8X8 INC: Gets Approval to Transfer Listing to Nasdaq SmallCap
-------------------------------------------------------------
8x8, Inc., (Nasdaq: EGHT) announced that its application for
listing on the Nasdaq SmallCap Market has been approved. 8x8
will retain its ticker symbol of EGHT, and begin trading on the
Nasdaq SmallCap Market on Friday, July 26, 2002.

As a result of its transfer to the Nasdaq SmallCap Market, 8x8's
delisting determination will be extended an additional ninety
days until October 7, 2002.  8x8 can continue the quotation of
its shares on the Nasdaq SmallCap Market if it achieves a
closing bid price of $1.00 for at least ten consecutive trading
days before October 7, 2002.  If it fails to do so, yet meets
the initial listing criteria for the Nasdaq SmallCap Market on
October 7, 2002, then it will remain eligible to be quoted on
the Nasdaq SmallCap Market for an additional 180-calendar day
grace period thereafter (expiring on April 7, 2003), subject to
its compliance with the continued listing requirements during
the extended grace period.  There can be no assurance that 8x8
will be able to meet the initial listing criteria on October 7,
2002 or maintain compliance with the continued listing
requirements during the extended grace period.

8x8, Inc., offers consumer videophones, telecommunication
services, hosted iPBX solutions (through its subsidiary
Centile, Inc.) and voice and video semiconductors and related
software (through its subsidiary Netergy Microelectronics,
Inc.). For more information, visit 8x8's Web site at
http://www.8x8.com


AEROVOX: Sells Unit's Mexico City Operations to NGM for $2.6MM
--------------------------------------------------------------
On June 28, 2002, pursuant to an auction held in the U.S.
Bankruptcy Court for the District of Massachusetts, Eastern
Division, on June 4, 2002, Aerovox Incorporated sold the Mexico
City operation of its Aerovox de Mexico subsidiary to Nueva
Generacion Manufacturas S.A. de C.V.

The winning bid awarded to NGM totaled $2.6 million, which was
paid in cash. The assets sold included all inventory, machinery,
equipment, accounts receivable, prepaid expenses, information
technology systems, agreements, intellectual property, customer
data and marketing materials pertaining to the Mexico City
operation. The cash proceeds from the sale will be used to
satisfy a portion of the amounts owed to the Company's
creditors.

It is management's opinion that the proceeds from this sale of
assets combined with the proceeds from the completed sale of the
shares of BHC Aerovox Ltd., on May 3, 2002 will not satisfy the
Company's debts owed to its secured and unsecured creditors;
therefore, a return of proceeds to the Company's
shareholders is not anticipated.

Aerovox Inc., is a leading manufacturer of electrostatic and
aluminum electrolytic capacitors. The Company filed for Chapter
11 protection on June 6, 2001 in Massachusetts. Harold B.
Murphy, Esq., at Hanify & King is helping the Debtor in its
restructuring efforts. When the company filed for protection
from its creditors, it listed $70,702,599 in assets and
$54,721,050 in debt.


ALLIANT TECHSYSTEMS: S&P Says Outlook of BB Rating is Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on rocket
component and ammunition manufacturer Alliant Techsystems Inc to
positive from stable. All ratings on the company, including the
double-'B'-minus corporate credit rating, are affirmed. Alliant
has about $870 million in debt.

"The outlook revision reflects expectations of an improved
financial profile due to Alliant's broadened business base and
better diversification after a series of acquisitions, positive
trends in defense spending, and further debt reduction," said
Standard & Poor's credit analyst Christopher DeNicolo.

Ratings on Alliant Techsystems reflect an average competitive
position and an aggressively leveraged balance sheet, but do not
incorporate major acquisitions or share repurchases. Hopkins,
Minn.-based Alliant manufactures solid rocket motors,
conventional munitions, composite structures, fuses, and
sensors. The April 2001 debt-financed acquisition of Thiokol
Propulsion Corp., a leading supplier of rocket propulsion
systems, strengthened Alliant's existing propulsion operations.
Alliant's diversification, although improved, remains somewhat
below average, but business risk is tempered by demonstrated
successful pursuit of follow-on and next-generation contracts in
its niche markets. Consequently, the firm's long-lived programs
and healthy backlogs ($3.5 billion at March 31, 2002) provide a
high level of predictability to revenues and profits.

Alliant's capital structure is aggressively leveraged, although
total debt to capital is now below 65%, down from over 80% after
the Thiokol acquisition, due to the issuance of $250 million in
equity in late 2001 to finance another acquisition. Credit
protection measures are appropriate for the current ratings,
with pretax interest coverage of 2.6 times, EBITDA interest
coverage of 3.6x, and total debt to EBITDA of 3.2x.

Alliant's healthy backlogs, high operating efficiency, and
respectable internal cash generation should permit more debt
repayment over the next few years. Consequently, Alliant's
credit profile is expected to improve to the point that could
warrant an upgrade in the intermediate term.


AMRESCO RESIDENTIAL: Fitch Junks 1997-3 Class B2F Certificates
--------------------------------------------------------------
Fitch Ratings takes ratings actions on the following Amresco
Residential Securities Corp. mortgage pass-through certificates
issues:

                      Series 1997-3 Group 1

      -- Class B2F downgraded to 'CCC' from 'B' and removed from
         Rating Watch;

      -- Class B1F downgraded to 'BB' from 'BBB' and removed from
         Rating Watch;

      -- Classes A1-A9 affirmed at 'AAA';

      -- Class M1-F affirmed at 'AA';

      -- Class M2-F affirmed at 'A'.

                     Series 1997-3 Group 2

      -- Class A10 affirmed at 'AAA';

      -- Class M1-A affirmed at 'AA':

      -- Class M2-A affirmed at 'A';

      -- Class B1A affirmed at 'BBB-'.

                     Series 1998-1 Group 1

      -- Class B1F downgraded to 'D' from 'BBB';

      -- Classes A1-A6 affirmed at 'AAA';

      -- Class M1-F affirmed at 'AA';

      -- Class M2-F affirmed at 'A'.

                     Series 1998-1 Group 2

      -- Class A7 affirmed at 'AAA';

      -- Class M1-A affirmed at 'AA';

      -- Class M2-A affirmed at 'A';

      -- Class B1A affirmed at 'BBB-'.

The 1997-3 Groups 1 & 2 certificates are collateralized by a
pool of fixed- and adjustable-rate home equity mortgage loans,
respectively. The rating action on the classes B1-F and B2-F is
due to the erosion of overcollateralization as well as the high
levels of delinquencies. The following were reported as of the
June 25, 2002 distribution:

      -- OC amounts of $359,774.00 and $3,420,000.00 (0.46% and
5.18% of the current pool balance) for 1997-3 Groups 1 and 2,
respectively;

      -- monthly losses of $302,486.85 for Group 1 bringing the
cumulative losses to $11,166,573.00 (4.20% of the original pool
balance) and $123,520.00 for Group 2 bringing the cumulative
losses to $26,221,065.00 (3.83% of the original pool balance);
and,

      -- 30, 60 and 90+ day delinquencies of 2.08%, 1.43% and
11.59% for Group 1 and 2.30%, 1.12% and 23.77% for Group 2. The
delinquency numbers are inclusive of Foreclosure, Bankruptcy and
REO properties.

The 1998-1 Groups 1 & 2 certificates are also collateralized by
a pool of fixed and adjustable rate home equity mortgage loans,
respectively. The rating action on the class B1-F is due to
erosion of overcollateralization caused by high levels of losses
as well as the high levels of delinquencies. The following were
reported as of the June 25, 2002 distribution:

      -- OC amount for 1998-1 Group 2 of $3,388,032 (4.80% of the
current pool balance);

      -- monthly losses of $946,240.23 for Group 1 bringing the
cumulative losses to $25,647,464.00 (6.41% of the original pool
balance) and $359,969.22 for Group 2 bringing the cumulative
losses to $35,446,538.33 (5.91% of the original pool balance);
and,

      -- 30 day, 60 day and 90+ day delinquencies of 1.57%, 0.73%
and 10.92% for Group 1 and 2.93%, 0.82% and 27.78% for Group 2.
The delinquency numbers are inclusive of Foreclosure, Bankruptcy
and REO properties.

Additionally, the remaining classes are affirmed based on
Fitch's opinion that credit enhancement provided by cross-
collateralization, overcollateralization and excess interest is
sufficient to maintain the current ratings.


ATLANTIC EXPRESS: S&P Further Junks Debt Ratings to CC from CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt ratings on Atlantic Express
Transportation Corp. to double-'C' from triple-'C' and removed
the ratings from CreditWatch, where they were placed on June 14,
2002. The rating actions reflect the school bus provider's
delayed March (fiscal third-quarter) 2002 10-Q filing with the
SEC, which indicated the company will likely not have enough
liquidity to fund its scheduled Aug. 1, 2002, interest payment
on the rated notes. Approximately $120 million of rated debt is
affected. The outlook is negative.

"Atlantic Express Transportation's announcement (in its delayed
March 31, 2002, 10-Q filing with the SEC) that it will not have
enough liquidity to fund its insurance requirements, currently
planned capital expenditures, and other anticipated working
capital requirements after taking into account its August 1,
2002, scheduled interest payment on the rated notes indicates
that it will likely not have the ability to make those interest
payments," said Standard & Poor's credit analyst Betsy Snyder.
The company's losses have widened in the first nine months of
2002--to $25.6 million from $8.6 million in the prior-year
period--due primarily to increased vehicle and workers'
compensation insurance costs, and health and welfare and pension
costs; as well as a charge against deferred tax assets.

The ratings reflect Atlantic Express Transportation's small size
and weak financial profile. Its primary business--close to 80%
of revenues--is providing school bus transportation in the U.S.
Although it has a strong position in the markets it serves, it
is considerably smaller than its major competitors. Atlantic
Express Transportation's financial profile is also significantly
weaker than those of some of its competitors and, as a privately
held company, it has limited options for increasing liquidity.
At March 31, 2002, the company had $1.5 million of unrestricted
cash on hand and its equity base had eroded to only $27.5
million. In addition, the company indicated it does not expect
to be able to borrow further under its credit facility. As a
result, it is exploring restructuring the rated notes and their
August 1 interest payment, as well as other alternatives. If
these initiatives are not successful, the company could file for
Chapter 11 bankruptcy protection.

If Atlantic Express does not make the August 1, 2002, interest
payment on the rated notes, ratings would be lowered to 'D.'

DebtTraders reports that Atlantic Express Transport's 10.750%
bonds due 2004 (ATEX04USR1) are trading between 22 and 24. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ATEX04USR1
for real-time bond pricing.


ATLANTIC EXPRESS: Needs Added Funding to Avert Chapter 11 Filing
----------------------------------------------------------------
Atlantic Express Transportation Corp., said it wouldn't have
enough liquidity to fund all of its insurance needs, capital
spending and other working capital requirements after taking
into account the scheduled August 1 interest payment on its
senior notes, reported Dow Jones. According to its quarterly
report for the period ended March 31, filed with the Securities
and Exchange Commission, the company is discussing its liquidity
needs with its senior bank lenders and its financial advisers
and is exploring alternative sources of funding and ways to
improve its capital structure, the newswire reported. According
to Dow Jones, the New York-based company said that if it is not
able to obtain added funding, it might be forced to seek chapter
11 bankruptcy protection. (ABI World, July 24, 2002)


BAC SYNTHETIC: Fitch Downgrades Three Classes of Notes
------------------------------------------------------
Fitch Ratings has downgraded three classes of notes issued by
BAC Synthetic CLO 2000-1 Limited, a synthetic cash flow CDO
established by Bank of America to provide credit protection on a
$10 billion portfolio of investment grade, corporate debt
obligations.

No rating action has been taken or is contemplated at this time
for the class A or class B notes, which are rated 'AAA' and 'A+'
respectively. Based on the current risk profile of the reference
portfolio, the class A and class B notes continue to maintain
credit enhancement levels consistent with the assigned ratings.

The following securities have been downgraded and removed from
Rating Watch Negative:

      -- $100,000,000 class C notes to 'BB+' from 'BBB';

      -- $100,000,000 class D notes to 'CC' from 'CCC';

      -- $25,000,000 class E notes to 'C' from 'CC'.

Fitch's rating action reflects the notes' exposure to Worldcom,
which recently filed for bankruptcy, and the expectation of a
low recovery rate. This will result in higher than expected
credit protection payments under the credit default swap
agreement with Bank of America CLO Corporation II, and a
diminished level of credit enhancement for the class C, D, and E
notes.


BCE INC: Achieves Second Quarter Results Expectations as Planned
----------------------------------------------------------------
For the second quarter of 2002, BCE Inc., (TSX, NYSE: BCE)
reported total revenue of $4.9 billion, EBITDA(1) of $1.9
billion, and net earnings applicable to common shares of $11
million. Net earnings before non-recurring items were $400
million.

"In the face of challenging times within our industry, BCE's
results in the second quarter are on plan," said Michael Sabia,
President and Chief Executive Officer of BCE Inc. "BCE achieved
its solid performance as a result of productivity initiatives
and rigorous expense management. During the quarter, BCE
completed an extensive balance sheet review of all its
operations. The resulting charges which we have announced
[Wednes]day will allow us to move forward with a clear balance
sheet. And, as we do, all our efforts will focus on leveraging
the capabilities of BCE to grow and expand our 24 million
customer connections."

              OPERATIONAL HIGHLIGHTS (Q2 2002 vs. Q2 2001
                  unless otherwise indicated)

     -  High-speed Internet (DSL) net additions in the quarter
        were 43,000; total subscribers grew by 72% to reach
        909,000;

     -  Postpaid cellular and PCS subscribers net additions in
        the quarter were 117,000; total cellular and PCS
        subscribers grew by 20% to reach 3,645,000;

     -  Bell ExpressVu net activations in the quarter were
        31,000; total subscribers grew 39% to reach 1,176,000;

     -  Bell Globemedia's EBITDA improved 41% to $58 million;

     -  BCE Emergis' revenues increased by 8% over the first
        quarter of 2002 to $142 million; and,

     -  Productivity savings of $225 million achieved in the
        quarter.

"At Bell Canada, we are pleased with the traction we have
achieved on productivity initiatives while maintaining growth in
key areas", Mr. Sabia said. "Revenues from our wireless
operations increased by 21% while Bell ExpressVu revenues
increased by 35%."

"At Bell Globemedia cost-control measures and an increase in
revenues due partially to higher demand for advertising have
enhanced EBITDA performance," Mr. Sabia concluded. "BCE Emergis'
revised business plan and restructuring efforts contributed to
returning the company to positive EBITDA."

Total revenue at BCE increased 4% over the second quarter of
2001 mainly as a result of growth from BCE's wireless, DTH
(Direct-to-Home) satellite entertainment and data services and
increased revenues at Bell Globemedia. EBITDA improved by 7%
compared to the same period last year, mainly due to prudent
cost management across all areas and higher overall revenue.

BCE completed an extensive review of the carrying value of its
assets on its balance sheet and as a result recorded the
following after-tax charges in the second quarter of 2002:

     -  A transitional goodwill impairment charge of $8.2 billion
        applied to opening retained earnings in accordance with
        the changes from the Canadian Institute of Chartered
        Accountants on goodwill accounting. The charge pertains
        to Teleglobe ($7.5 billion), Bell Globemedia ($545
        million), and BCE Emergis ($119 million);

     -  A loss from discontinued operations of $295 million,
        relating to BCE's investments in BCI and Teleglobe;

     -  Restructuring and other charges totaling $153 million at
        Bell Canada, mainly relating to accounts receivables
        write-offs from legacy systems dating back to the early
        1990's as part of the modernization of Bell's billing
        systems, including the introduction of a new billing
        platform; and,

     -  A $63 million restructuring and other charge at BCE
        Emergis.

BCE also recorded net gains on investments of $122 million,
mainly the gain on the sale by Bell Canada of an approximate 36%
interest in Telebec and Northern Telephone.

                       OTHER DEVELOPMENTS

Effective in the second quarter, BCE has classified Teleglobe as
a discontinued operation. BCI had been classified as a
discontinued operation effective in the first quarter of 2002.
In addition, BCE deconsolidated Teleglobe and BCI effective in
the second quarter.

                          BELL CANADA

The Bell Canada segment includes Bell Canada, Aliant, Bell
ExpressVu and Bell Canada's interests in other Canadian telcos.

     -  Total revenue in the second quarter was up 3% to $4.4
        billion, driven mainly by growth in wireless, DTH and
        data revenues.

     -  Local and access revenues decreased by 4% to $1.5
        billion, mainly due to lower network access and carrier
        access tariff revenues, partially offset by higher
        consumer terminal sales.

     -  Long distance revenue remained flat at $645 million. The
        effect of a 5% increase in Bell's long distance
        conversation minutes, to 4.7 billion minutes, was offset
        by lower pricing due to competitive pricing pressures.

     -  Wireless revenue was up 21% to $542 million due mainly to
        strong growth in cellular and PCS subscribers.

     -  Data revenue increased 8% to $947 million, mainly due to
        higher IP/Broadband and Sympatico ISP revenues.

     -  Total Internet (DSL and dial-up) subscribers reached 1.9
        million as at June 30.

     -  Bell ExpressVu had net subscriber activations in the
        quarter of 31,000, bringing the total customer base to
        almost 1.2 million. Year-over-year, the number of
        ExpressVu subscribers grew by 39 %.

     -  Bell Canada's EBITDA grew by $131 million or 8% in the
        second quarter to reach $1.9 billion due mainly to
        continued productivity improvements and the growth in
        revenues.

                        BELL GLOBEMEDIA

Bell Globemedia includes CTV, The Globe and Mail and Bell
Globemedia Interactive.

     -  Total revenue was $326 million in the quarter compared
        with revenue of $297 million for the same period last
        year. This increase includes the impact of the
        acquisitions of CFCF-TV, CKY-TV and ROB TV, which were
        purchased in the latter part of 2001, as well as organic
        growth.

     -  Advertising revenue was $230 million in the quarter, an
        increase of 8% compared to the second quarter of 2001.

     -  Subscriber revenues increased by 11% to reach $70
        million, reflecting the recognition of revenue from the
        new digital specialty channels starting in January 2002,
        a higher penetration of the DTH market, and increased
        print circulation revenues due mainly to rate increases.

     -  EBITDA was $58 million in the second quarter compared
        with $41 million for the same period last year,
        reflecting the increase in revenues and implemented
        productivity initiatives.

                         BCE EMERGIS

     -  BCE Emergis' revenue was $142 million in the quarter,
        compared with $159 million in revenues for the same
        period in 2001, due mainly to a decline in non-recurring
        revenues.

     -  BCE Emergis' revenue increased by 8% when compared to the
        first quarter of 2002, primarily due to higher revenues
        in the eHealth Solutions Group.

     -  EBITDA decreased by $20 million to $11 million, mainly
        reflecting the shortfall in revenues.

     -  Second quarter of 2002 EBITDA compared favorably to the
        first quarter of 2002 EBITDA shortfall of $20 million.
        The improvement in sequential quarter over quarter EBITDA
        was mainly related to lower employment costs and
        productivity improvements.

     -  In the quarter, 40% of BCE Emergis' total revenue was
        from its U.S. operations.

     -  During the second quarter, BCE Emergis implemented a cost
        reduction plan and recorded pre-tax restructuring and
        other charges of $119 million (BCE's share, on an after
        tax basis, is $63 million).

                          BCE VENTURES

BCE Ventures includes the activities of CGI, Telesat and other
investments.

     -  BCE Ventures' revenue was $261 million in the quarter,
        flat compared with the same period of 2001. Revenues at
        both CGI and Telesat were higher, offset by lower
        revenues from other Ventures' businesses.

     -  EBITDA was $73 million in the quarter compared with $72
        million in the second quarter of 2001. Higher EBITDA at
        CGI and Telesat was partially offset by lower EBITDA from
        other Ventures' businesses.

     -  In July 2002, BCI's Plan of Arrangement was approved by
        its noteholders, its shareholders, and the courts.

                 BELL CANADA STATUTORY RESULTS

Bell Canada "statutory" includes Bell Canada, Bell Canada's
interests in other Canadian telcos, and Bell Canada's 39%
interest in Aliant (equity-accounted).

Bell Canada's reported revenue was $3.6 billion in the second
quarter compared with $3.5 billion in the same quarter of 2001.
The net loss applicable to common shares was $1 billion in the
quarter compared with net earnings applicable to common shares
of $466 million for the same period last year. One-time charges
in the quarter included the write-down of the Bell Canada's 23%
interest in Teleglobe as well as the impact of the charge
relating to the accounts receivable write-down.

                       GOODWILL NOTE

The CICA recently issued new Handbook Sections 1581, Business
Combinations, and 3062, Goodwill and Other Intangible Assets.
Effective July 1, 2001, the standards require that all business
combinations be accounted for using the purchase method.
Additionally, effective January 1, 2002, goodwill and intangible
assets with an indefinite life are no longer being amortized to
earnings and will be assessed for impairment on an annual basis
in accordance with the new standards, including a transitional
impairment test whereby any resulting impairment was charged to
opening retained earnings. As of June 30, 2002, BCE's management
had allocated its existing goodwill and intangible assets with
an indefinite life to its reporting units and completed the
assessment of the quantitative impact of the transitional
impairment test on its financial statements. In the second
quarter of 2002, an impairment of $8,180 million was charged to
opening retained earnings as of January 1, 2002, as required by
the transitional provisions of the new CICA Handbook section
3062, regarding the accounting for goodwill and other intangible
assets, relating to impaired goodwill of reporting units within
Teleglobe ($7,516 million), Bell Globemedia ($545 million) and
BCE Emergis ($119 million).

BCE is Canada's largest communications company. It has 24
million customer connections through the wireline, wireless,
data/Internet and satellite services it provides, largely under
the Bell brand. BCE leverages those connections with extensive
content creation capabilities through Bell Globemedia which
features some of the strongest brands in the industry 3/4
CTV, Canada's leading private broadcaster, The Globe and Mail,
Canada's National Newspaper and Sympatico-Lycos, the leading
Canadian Internet portal. As well, BCE has extensive e-commerce
capabilities provided under the BCE Emergis brand. BCE shares
are listed in Canada, the United States and Europe.

BCE's Second Quarter 2002 unaudited Financial Statements,
Investor Briefing and other relevant financial materials are
available in the "Investors" section of BCE's Web site at
http://www.bce.ca


BELL CANADA: Closes $366MM Sale of Interests in Telecom Americas
----------------------------------------------------------------
Bell Canada International Inc., announced the closing of the
sale of its interest in Telecom Americas Ltd., to America M•vil
S.A. de C.V., of Mexico for a total consideration of
approximately US$366 million.  As part of the transaction BCI
was also released from approximately US$250M of guarantees
relating to Telecom Am‚ricas (i.e. ATL indemnity and Tess
Notes).

On closing, BCI received cash of approximately US$146 million
and a US$220 million interest-free note from America Movil due
on March 1, 2003.  From these proceeds, BCI fully repaid the
$174 million owed under its senior secured credit facility that
has now been cancelled.

BCI is operating under a court supervised Plan of Arrangement to
dispose of its remaining assets, settle all claims against the
company and make a final distribution to its stakeholders.  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
temporarily symbol BCICD. Visit our Web site at
http://www.bci.ca.


BCI INC: Obtains Necessary Approvals for Plan of Arrangement
------------------------------------------------------------
Bell Canada International Inc., released results for the second
quarter ending June 30, 2002.

Chairman and CEO Bill Anderson stated, "Since the announcement
on June 3 of BCI's intention to sell its interest in Telecom
Americas and proceed with the eventual voluntary and orderly
liquidation of the company through a Plan of Arrangement,
significant milestones have been achieved including obtaining
approvals of noteholders, shareholders and the Court. On July
24, we completed the sale of our stake in Telecom Americas. In
addition, significant dilution to shareholders was avoided when
affiliates of American International Group, Inc., sold their
indirect interest in Comunicacion Celular - Comcel S.A.,
triggering the termination of the AIG Put and the Secondary
Warrants."

Mr. Anderson added, "The Plan of Arrangement is the best
solution for all BCI stakeholders under the circumstances. The
TAL disposition, together with anticipated proceeds from the
disposition of BCI's remaining assets, Axtel and Canbras, will
likely permit BCI to repay its unsecured creditors and make a
distribution to shareholders, subject to the resolution of
certain contingent claims against BCI."

                          RESULTS REVIEW

Basis of Presentation

As of June 1, 2002, BCI ceased accounting for TAL on a
proportionate consolidation basis and adopted the cost
accounting method for this investment. Axtel and Canbras have
been accounted for as discontinued operations since March 2001
and December 2001, respectively.

As the sale of TAL was only completed following the end of BCI's
second quarter, BCI has included its investment in TAL on its
June 30, 2002 balance sheet in Current Assets at its estimated
net realizable value. Axtel and Canbras are also included on the
June 30, 2002 balance sheet in the Investments at the lower of
equity carrying value and estimated net realizable value.

The remaining items on BCI's balance sheet as of June 30, 2002
reflect only BCI's Corporate assets and liabilities.

Recent Events

      --  On June 3, BCI announced that it had reached an
agreement with America Movil S.A. de C.V., to sell its 42%
interest in TAL. The sale transaction closed on July 24, 2002
for a total consideration of approximately US$366 million of
which approximately US$146 million was paid in cash on closing
and US$220 million was paid in the form of an interest-free note
due March 1, 2003. In addition, as part of the transaction, BCI
was released from contingent liabilities related to TAL of
approximately US$250 million.

      --  On July 12, BCI's shareholders and holders of its 11%
senior unsecured notes due in 2004 approved BCI's Plan of
Arrangement, which is comprised of: the sale of BCI's interest
in TAL; a share consolidation; the disposition of BCI's
remaining assets, Axtel and Canbras, as well as an expeditious
process to identify and deal with any claims against BCI. Once
completed, BCI will proceed to a final distribution to its
stakeholders with the assistance of the court-appointed monitor
and approval of the Court.

      --  On July 12, BCI also announced the termination of the
AIG Put and the expiry of the Secondary Warrants issued with
BCI's Rights Offering. No shares will be issued by BCI in this
regard, preventing significant dilution that would have
otherwise occurred.

      --  On July 17, the Ontario Superior Court of Justice
approved BCI's Plan of Arrangement and appointed Ernst & Young
Inc., as monitor to perform the duties set forth in the Plan of
Arrangement. Such duties include providing a recommendation to
BCI and the Court on or before August 16, 2002 with respect to
the commencement of a process to identify and deal with claims
against BCI.

      --  On July 22, BCI implemented a share consolidation on
the basis of a ratio of approximately 120 to one, resulting in
BCI having 40 million shares outstanding.

      --  On July 24, BCI fully repaid the $174 million owed
under its $200 million senior secured credit facility from the
proceeds of the TAL disposition. The credit facility has been
cancelled.

      --  As of June 30, 2002, BCI had cash on hand of $54
million. Following the receipt of the proceeds from the TAL
disposition and the repayment of BCI's credit facility, this
cash balance increased to approximately $100 million. Cash
outlays to March 1, 2003 are estimated at approximately $30-35
million including net interest and overhead costs. On March 1,
2003, the US$220 million note receivable from America Movil
matures. For the last 10 months of 2003, BCI estimates cash
outlays (including net interest and overhead costs) at
approximately $35 million. The foregoing estimates exclude any
amounts that may be required to settle contingent liabilities
such as the class action suit, the Vesper guarantee and the
Comcel voice over IP claim.

Second Quarter and Year to Date Results

      --  Revenue in the quarter was $95 million and EBITDA $20
million reflecting two months of TAL results.

      --  Net income from continuing operations in the quarter
reflects a provision for loss on disposition of TAL of $339
million.

      --  The net loss from discontinued operations for the
quarter includes a reduction of $109 million of the carrying
value of discontinued operations to $96 million reflecting
current financial circumstances and the reversal of a deferred
tax provision of $80 million related to the sale of BCI's
previous Asian investments, Hansol M.com and KG
Telecommunications Co. Ltd.

      --  BCI also recorded a goodwill impairment charge of $732
million to January 1, 2002 opening retained earnings relating to
its TAL investment. This charge relates to the adoption of the
new accounting standards for the treatment of goodwill.

      --  Revenue for the six months ended June 30, 2002 was $232
million and EBITDA $61 million reflecting five months of TAL
results.

      --  Net loss from continuing operations for the six months
ended June 30, 2002 was $538 million including a $339 million
provision for loss on the sale of TAL.

      --  Net earnings from discontinued operations for the six
months ended June 30,2002 of $644 million are mainly
attributable to a net gain recognized on the Telecom Americas
reorganization transactions, principally from the disposition of
Comcel.

Discontinued Operations

      --  Canbras Communications Corp's. revenues reached $16.5
million in the quarter, up $2.8 million over the second quarter
of 2001 driven primarily by cable and internet access subscriber
growth partially offset by a devaluation in the Brazilian real
compared to the Canadian dollar. EBITDA was $1.7 million, up
$2.1 million over the same quarter last year, primarily due to
increased revenue and lower expenses resulting from the closure
of the Montreal office in 2001. Debt at the end of the period
was $35 million.

      --  Axtel S.A de C.V's revenues were $96 million for the
quarter, an increase of $20 million over the previous year
driven by higher revenue per subscriber as a result of a change
in customer mix. EBITDA reached $23 million, up $25 million over
the same quarter last year due primarily to increased revenues,
higher margins and reduced general and administrative expenses.
Axtel is currently in discussions with its major supplier with
respect to the terms of its supply and financing contracts. Debt
at the end of the period was $797 million.

BCI is operating under a court supervised Plan of Arrangement to
dispose of its remaining assets, settle all claims against the
company and make a final distribution to its stakeholders. 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 temporary
symbol BCICD. Visit our Web site at http://www.bci.ca


BERRY PLASTICS: S&P Affirms B+ Rating After GS-Led Acquisition
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its single-'B'-plus
corporate credit rating on Berry Plastics Corp. (100%-owned
operating subsidiary of BPC Holding Corp.) following the
completion of its acquisition by an investor group led by GS
Capital Partners 2000 L.P.  Ratings were removed from
CreditWatch, where they were placed on March 22, 2002. The
outlook is positive.  At the same time, ratings on BPC Holding's
outstanding 12.5% senior secured notes due 2006, and Berry's
12.25% senior subordinated notes due 2004 and 11% senior notes
due 2007, were withdrawn, following the concurrently completed
debt refinancing.

Evansville, Indiana-based Berry is a leading manufacturer and
supplier of rigid open-top containers, plastic injection molded
aerosol overcaps, closures, drinking cups, and housewares.
Outstanding debt was about $493 million at March 31, 2002.

"The positive outlook reflects Standard & Poor's expectation of
a gradual improvement to Berry's financial profile in the
intermediate term, supported by the company's leading shares in
niche markets, low cost position, and consistent free cash
generation," said Standard & Poor's credit analyst Liley Mehta.

Ratings reflect a below-average business risk profile and very
aggressive debt leverage. Berry's business position reflects
large market shares in its niche segments, strong customer
relationships, and sole-supplier arrangements, advantages that
provide some barriers to entry. The bulk of the company's output
is sold to dairy, food, and other consumer goods producers, a
relatively recession-resistant customer base. The continuing
conversion to plastic containers from paper and other materials
in the company's end markets is an important growth driver.

During July 2002, an investor group led by GS Capital Partners
2000 L.P., a private equity investment fund managed by Goldman,
Sachs & Co. (GS) successfully closed its acquisition of Berry
for about $837.5 million, including repayment of existing
indebtedness. The financing plan included a $269 million equity
contribution (including $175 million from GS, $81 million from
J.P. Morgan Partners, and $13 million in management rollover
equity), a $330 million term loan (under the new $480 million
credit facilities), and $250 million 10.75% senior subordinated
notes due 2012.


BIG V SUPERMARKETS: Wakefern Acquires Assets for $185MM + Debts
---------------------------------------------------------------
Wakefern Food Corp., has successfully closed on its purchase of
Big V Supermarkets, Inc., on July 12, 2002, for approximately
$185 million in cash and assumed liabilities. The purchase
completes a joint plan of reorganization that was confirmed by
U.S. Bankruptcy Court for the District of Delaware on June 27,
2002. The purchase included substantially all of Big V's assets,
including 27 stores in the Hudson Valley region of New York and
central New Jersey.

Big V filed for Chapter 11 on November 22, 2000 and is
headquartered in Florida, N.Y.

According to Thomas Infusino, chairman and CEO of Wakefern Food
Corp., "The acquisition of Big V by ShopRite Supermarkets, Inc.,
a wholly owned subsidiary of Wakefern, will ensure the future of
our cooperative and will strengthen our position as the leading
supermarket retailer in the region." ShopRite Supermarkets, Inc.
(SRS), which was founded in 1965, currently operates 8 stores in
New York and New Jersey.

Wakefern/ShopRite Supermarkets, Inc., simultaneously closed the
financing associated with this transaction. The Prudential
Insurance Company of America and Northwestern Mutual Life
Insurance Company were the lead providers of financing for the
acquisition.

Kevin Mannix, president and COO of ShopRite Supermarkets, Inc.
said, "We believe that both Big V Associates and Customers will
benefit from the acquisition by SRS. We look forward to
enhancing the training provided to our Associates and will
aggressively begin rebuilding our relationship with ShopRite
Customers in that region." According to Mr. Mannix, the stores
will also benefit from upgrades in technology, remodeling and an
expansion of the products and services offered to customers.
Kevin Mannix joined Wakefern in 1977 and was appointed as the
President of SRS in 1997. SRS is headquartered in Edison, New
Jersey and will also maintain operations in Florida, New York.

Wakefern Food Corp., is a retailer-owned cooperative and the
wholesale merchandising and distribution arm for ShopRite
supermarkets. The 40 Wakefern members operate approximately 180
stores under the ShopRite name and are located throughout New
Jersey, New York, Pennsylvania, Connecticut and Delaware.


BROADWING INC: Posts Improved Operating Results for 2nd Quarter
---------------------------------------------------------------
Broadwing Inc., (NYSE:BRW) announced financial results for the
second quarter. For the period, revenue of $553 million
represented a 3 percent increase over the first quarter of 2002,
and a 6 percent decline from the same period a year ago.

Earnings before interest, taxes, depreciation, and amortization
(EBITDA) increased 4 percent year over year to $158 million.
Operating income more than doubled to $36 million from $16
million in the second quarter of 2001 and improved $27 million
over the first quarter of 2002.

During the quarter, the Company reported a net loss of $0.10 per
share, which represents a $0.04 per share improvement over a
$0.14 per share loss in the second quarter of 2001.

During the quarter, the Company borrowed from its credit
facility a net $27 million, down from $75 million of net
borrowings during the same period in the prior year. Both
figures include cash used for restructuring of $12 million and
$5 million respectively.

"I am pleased that even in this challenging environment, our
focus on operating income and cash flow drove measurable
improvement in the second quarter," said Rick Ellenberger,
Broadwing Inc. Chairman and CEO. "Our Cincinnati Bell businesses
remain strong and steady, and Broadwing Communications continues
to grow its share of high-value enterprise customers on a
national basis."

                          Special Items

A carrier customer in bankruptcy terminated a service agreement
with Broadwing Communications, releasing the Company from the
obligation to provide service. As a result, the Company
recognized a $17.5 million non-recurring, non-cash benefit in
both revenue and EBITDA.

During the quarter, a large construction contract at Broadwing
Communications was terminated. Since the contract is in dispute,
$13 million was recorded as expense to recognize costs incurred
in the quarter, which include shutdown costs.

Additionally, Broadwing Communications has deferred cash payment
of the quarterly dividend, due August 15, 2002, on its Broadwing
Communications subsidiary 12-1/2 percent preferred shares, in
accordance with the terms of the security. The dividend will be
accrued and the Company will conserve approximately $12.4
million of cash in the third quarter.

As required, the Company adopted SFAS 142 effective January 1,
2002. As a result of completing the Company's goodwill analysis
in the second quarter, the statement of operations reflects a
$2.0 billion non-cash, after-tax charge, effective January 1,
2002, associated with the write-off of goodwill related to the
acquisition of its broadband business. In addition the Company
stopped amortizing goodwill. This change will account for a
decrease in amortization of $22 million in each quarter of 2002.

The company continues to be in compliance with all of its bank
debt covenant agreements.

                     Cincinnati-Based Operations

Broadwing's Cincinnati-based businesses continued to drive
revenue growth and margin expansion by leveraging demand for
service bundles, offering award-winning customer service, and
focusing on expense management.

On a consolidated basis, the Cincinnati Bell businesses reported
revenue of $294 million and EBITDA of $137 million; growth of 4
percent and 15 percent respectively over the same period in
2001. Operating income improved to $92.5 million, up 20% from
$76.8 million in the second quarter of 2001. Selling, general,
and administrative (SG&A) expenses were 16 percent of revenue,
an improvement of 5 points over the same period in 2001. Capital
spending for the Cincinnati Bell companies in the second quarter
was $30 million, a 34 percent reduction versus the same quarter
a year ago.

                     Local Communications Services

Broadwing's local-exchange company, Cincinnati Bell Telephone,
delivered another quarter of stable financial performance.
Revenue grew by 1 percent to $210 million and EBITDA expanded 4
percent to an all-time high of $109 million, with a record
EBITDA margin of 52 percent. Operating income grew 3 percent to
$73 million.

Revenue growth continued to be driven by sales of data, voice,
and IP services on Broadwing's national network and aggressive
marketing of bundled services. For example, Complete
Connections, Cincinnati Bell's bundled services product, enjoyed
a record quarter for sales, adding nearly 23,000 net new
subscribers. Cincinnati Bell is one of the industry leaders in
the penetration of value added services, with 38 percent
penetration.

Cincinnati Bell Telephone also completed the negotiation of a
tentative contract (scheduled for a ratification vote July 25th)
with its CWA represented workers that extends through May 2005.

                        Wireless Services

Cincinnati Bell Wireless continued its focus on maximizing its
financial profitability. Revenue of $68 million represented an 8
percent increase over the same period in 2001. EBITDA improved
72 percent from a year ago to $26 million and CBW's EBITDA
margin of 39 percent represented an improvement of over 14
points over the comparable quarter in 2001. Operating income
doubled over the same period last year to $18 million. Capital
spending was $13 million and the operation produced net income
of $8 million, up 20 percent over the first quarter of 2002.

In the quarter, Cincinnati Bell Wireless increased postpaid ARPU
to $60.51, while churn remained low at under 1.6 percent. In the
period, CBW recorded total net subscriber adds of 6,300.

                         Other Operations

In total, Other Communications Services businesses increased
revenue 6 percent over the second quarter of 2001 to $20
million, while EBITDA improved to $2 million from a loss of $1
million during the same period. Operating income improved to
$1.5 million, as compared to a loss of $1.7 million in the
second quarter of 2001.

Cincinnati Bell Any Distance, the company's long distance
offering, repeated its 2001 customer service success by winning
the prestigious JD Power and Associates Award for Long Distance
Customer Satisfaction Among Mainstream Users for the second
straight year. Cincinnati market share for this offering
remained unchanged over the prior quarter at 68 percent in the
residential market and increased almost two points over the
first quarter to 41 percent in the business market.

                  National Communications Services

Broadwing Communications, the company's national communications
services business, recorded revenue of $278 million, a decline
of 13 percent from the second quarter 2001. EBITDA was $24
million, down $12 million from the same quarter a year ago.
These results include the special non-recurring items previously
discussed. With the national network complete, capital spending
declined 87 percent over the comparable period in 2001 to $17
million.

Despite the challenging environment in the carrier market,
Broadwing Communications continued to have solid success among
high-value enterprise customers, attracting orders from new
customers and expanding business opportunities with existing
clients.

In the second quarter, the National Accounts business, serving
Fortune 2000 companies, generated over $11 million in revenue -
almost doubling in size since the beginning of the year.

Further, Broadwing's unique MultiConnect offering, which
recently won the Frost & Sullivan award for product distinction
innovation, continues to be a strong acquisition tool, doubling
revenue, customers, and number of locations sequentially.

"This remains a challenging environment and we are managing our
business accordingly," said Kevin Mooney, chief operating
officer, Broadwing Inc. "I am pleased by the progress we have
made in the quarter to improve cash flow by carefully managing
operating and capital expenses. Our focus persists on delivering
superior service and products to our customers and continuing
the financial discipline that will enable us to survive this
challenging period in our industry."

Broadwing Inc., (NYSE: BRW) is an integrated communications
company comprised of Broadwing Communications and Cincinnati
Bell. Broadwing Communications leads the industry as the world's
first intelligent, all-optical, switched network provider and
offers businesses nationwide a competitive advantage by
providing data, voice and Internet solutions that are flexible,
reliable and innovative on its 18,500-mile optical network and
its award-winning IP backbone. Cincinnati Bell is one of the
nation's most respected and best performing local exchange and
wireless providers with a legacy of unparalleled customer
service excellence and financial strength. The company was
recently ranked number one in customer satisfaction by J.D.
Power and Associates for local residential telephone service and
residential long distance among mainstream users. Cincinnati
Bell provides a wide range of telecommunications products and
services to residential and business customers in Ohio, Kentucky
and Indiana. Broadwing Inc., is headquartered in Cincinnati,
Ohio. For more information, visit http://www.broadwing.com

Broadwing Inc.'s March 31, 2002 balance sheet shows a working
capital deficit of about $285 million.


BROADWING INC: Fitch Junks 12.5% Series B Preferred Stock Rating
----------------------------------------------------------------
Fitch Ratings has downgraded Broadwing Communications, Inc.'s
12.5% Series B Junior Exchangeable Preferred Stock to 'C' from
'B'.  BCI is a wholly owned subsidiary of Broadwing, Inc.  The
Rating Outlook for all of Broadwing, Inc.'s ratings has been
changed to Negative from Stable.

The rating action on the Exchangeable Preferred Stock follows
the company's announcement to defer the cash payment of the
quarterly dividend due on August 15, 2002. Fitch's Negative
Rating Outlook reflects the company's limited financial
flexibility in terms of available liquidity resources and
continued compliance with the financial covenants contained
within the company's senior secured credit facility. Fitch
estimates that the company has approximately $200 million of
additional availability under its senior secured credit
facility. However, the liquidity available under the revolver
amortizes to approximately $140 million by year-end 2002 and
will provide very limited availability during the first half of
2003. The company's liquidity position will be further pressured
in 2003 as the term loans under the company's bank facility
begin to amortize during the second quarter of 2003. Fitch
acknowledges the steps the company has taken to maximize and
preserve cash flow including reductions to capital spending,
operating cost controls and the suspension of the dividend on
the Exchangeable Preferred Stock. Broadwing borrowed only $27
million during the second quarter of which $12 million was for
restructuring. While the company has made significant progress
towards being free cash flow positive in the fourth quarter
2002, Fitch expects that the company will need to access capital
markets to solidify its liquidity position entering 2003.

While the company reports that it is in compliance with its bank
covenants for the second quarter 2002, Fitch anticipates that
covenant compliance during the third and fourth quarters will be
challenging given the anticipated step downs in with the senior
debt and total debt leverage covenants.

Factors that could contribute to a stabilization of the
company's credit rating include the company improving its
financial flexibility through securing additional liquidity,
easing of bank covenants through an amendment or reduction of
the facility size and stabilization of the company's broadband
communications unit.


CALPINE CORP: Freestone Energy Center in Texas Enters Operations
----------------------------------------------------------------
Calpine Corporation (NYSE: CPN), the San Jose, California-based
independent power producer, announced its Freestone Energy
Center in Fairfield, Texas (80 miles southeast of Dallas) has
entered operations.  The Freestone facility can generate more
than 1,000 megawatts of electricity and is Calpine's first
facility built in the northern part of the Electric Reliability
Council of Texas market.  It will serve a critical region that
suffers from a lack of transmission into the area from the
south.

"Freestone is our ninth facility in Texas and adds a tremendous
boost to our asset base in this market," said Calpine Senior
Vice President Diana Knox.  "Calpine's portfolio approach gives
us access to a highly efficient and diversified fleet of power
plants, with the flexibility of a market-driven energy company.
Customers benefit from our integrated system that provides low-
cost, reliable power as well as ancillary services and other
options."

The Freestone Energy Center generates electricity using four
natural gas-fired combustion turbines in combination with two
steam turbines.  This combined-cycle technology is approximately
40 percent more efficient than old-technology gas-fired plants.

According to the Environmental Protection Agency's 2001 data,
Calpine consistently outperforms the average Texas fossil-fueled
power plant in curbing emissions of nitrogen oxide (NOx), carbon
dioxide (CO2) and sulfur dioxide (SO2), thereby reducing the
formation of ozone, greenhouse gases and acid rain.  Compared to
the average Texas fossil-fueled power plant, Calpine's Freestone
facility generates 89 percent less NOx, 50 percent less CO2, and
nearly 100 percent less SO2 emissions.

Calpine's Texas power plants can generate enough electricity
annually to power 4.1 million homes, while at the same time
conserving natural gas resources.  Using combined-cycle
technology, each Calpine facility consumes 33 percent less fuel
than the average Texas fossil-fueled power plant.  For Calpine's
entire Texas portfolio, this fuel savings is equal to enough
natural gas to serve an additional 2.8 million homes annually.
Calpine's proactive standards for efficient electric power
generation demonstrate a sound environmental philosophy for
safeguarding Texas communities, resources and industry.

Based in San Jose, California, Calpine Corporation is an
independent power company that is dedicated to providing
customers with clean, efficient, natural gas-fired power
generation.  It generates and markets power through plants it
develops, owns and operates, in 21 states in the United States,
three provinces in Canada and in the United Kingdom.  Calpine
also is the world's largest producer of renewable geothermal
energy, and it owns 1.3 trillion cubic feet equivalent of proved
natural gas reserves in Canada and the United States.  The
company was founded in 1984 and is publicly traded on the New
York Stock Exchange under the symbol CPN.

Calpine posted a working capital deficit of about $582 million
as of March 31, 2002.

DebtTraders reports that Calpine Corp.'s 8.750% bonds due 2007
(CPN07USN1) are trading between 60 and 65. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CPN07USN1for
real-time bond pricing.


CARAUSTAR: Signs $79.8M Pact to Acquire Smurfit Unit's Business
---------------------------------------------------------------
Caraustar Industries, Inc., (Nasdaq: CSAR) has entered into a
definitive agreement with a subsidiary of Smurfit-Stone
Container Corporation (Nasdaq: SSCC) to acquire substantially
all the assets (excluding accounts receivable) of Smurfit's
Industrial Packaging Group business for a purchase price of
approximately $79.8 million.  Caraustar expects the acquisition
to be accretive to Caraustar's earnings in the fourth quarter of
2002 in a range of $0.03 to $0.04 per share and for the full
year 2003 in a range of $0.20 to $0.25 per share.

The Smurfit business consists of 17 paper tube and core plants,
3 uncoated recycled paperboard mills and 3 partition
manufacturing plants located in 16 states across the U.S. and in
Canada.  The Smurfit business had 2001 annual sales of
approximately $138 million excluding intradivisional sales.  The
three paperboard mills shipped approximately 118 thousand tons
of uncoated recycled boxboard in 2001, of which 55 thousand tons
were used by the paper tube and core converting facilities, 24
thousand tons were shipped to other Smurfit operations and 40
thousand tons were shipped to external customers. The converting
facilities consumed approximately 125 thousand tons of uncoated
recycled boxboard, of which 55 thousand tons were supplied by
the three Smurfit mills, with the balance purchased from
external suppliers.  In accordance with the terms of long-term
supply agreements, Caraustar will supply Smurfit with tubes and
cores and uncoated recycled boxboard that are currently supplied
internally.

The acquisition is subject to various conditions, including
expiration or early termination of the pre-merger notification
period under the Hart-Scott-Rodino Act, and is expected to close
on or before August 22, 2002.

Thomas V. Brown, president and chief executive officer of
Caraustar, commented, "Smurfit's tube and core business is an
excellent strategic acquisition in a business in which we have
extensive experience and competence.  These new facilities will
expand our presence in the Midwest and West Coast regions and
substantially improve Caraustar's ability to serve customers
throughout North America."

Brown added, "Caraustar expects to achieve significant synergies
from this acquisition.  Caraustar will continue to operate the
acquired uncoated paperboard mills located in Tacoma, WA,
Lafayette, IN and Cedartown, GA.  In addition, existing
Caraustar mill locations will begin supplying approximately
31 thousand tons annually of uncoated recycled boxboard that
Smurfit has been purchasing from other third parties.  This
additional tonnage should allow Caraustar to increase its
uncoated mill capacity utilization rate to approximately 100
percent and generate over $1.5 million of incremental EBITDA
by this year's fourth quarter and over $6 million in 2003.

"The integration of Smurfit and Caraustar's tube and core
operations will also provide potential synergies from economies
of scale and facility consolidation that should generate an
additional $6 million annually in incremental EBITDA by the end
of 2003.  Caraustar will record an acquisition liability of
approximately $5 million in expected costs associated with the
anticipated closing of several facilities.

"Caraustar currently has sufficient cash on hand to pay for the
acquisition.  Alternatively, we may fund a portion of this
purchase price from our undrawn $75 million bank credit facility
or access the long-term debt markets on an opportunistic basis."

Caraustar, a recycled packaging company, is one of the largest
and lowest-cost manufacturers and converters of recycled
paperboard and recycled packaging products in the United States.
The company has developed its leadership position in the
industry through diversification and integration from raw
materials to finished products.  Caraustar is the only major
packaging company that serves the four principal recycled
paperboard product markets: tubes, cores and cans; folding
carton and custom packaging; gypsum wallboard facing paper; and
miscellaneous "other specialty" and converted products.

                        *   *   *

On April 8, 2002, Standard & Poor's lowered its corporate credit
ratings on recycled paperboard manufacturer Caraustar Industries
Inc to 'BB' and removed them from CreditWatch where they were
placed on December 20, 2001. Rating outlook is stable.

The rating action reflected expectations that weak market
conditions amid continuing overcapacity will prevent Caraustar
from improving credit measures to levels expected for the prior
rating. Although most of the company's operating issues have
been remedied, and new business volumes are starting to ramp up,
recycled paperboard demand is unlikely to rebound sufficiently
in the near term to significantly boost performance.

The ratings reflect Caraustar's slightly below-average business
profile, with leading positions in various segments of the
recycled paperboard market, limited product diversity, and a
somewhat aggressive financial policy.


COMDISCO: Retains Huron as Financial Advisor Replacing Andersen
---------------------------------------------------------------
Comdisco, Inc., and its debtor-affiliates seek the Court's
authority to employ and retain Huron Consulting Group LLC as
their financial advisor, nunc pro tunc to May 6, 2002.

Comdisco Chief Legal Officer Robert Lackey relates that the
Debtors have previously retained Arthur Andersen as their
financial advisor.  "The impact of Arthur Andersen's current
situation has directly affected the team working on the Debtors
cases and most of the members have resigned from their positions
already," Mr. Lackey states.  Most of these professionals
however have transferred to Huron.

Mr. Lackey explains that the people at Huron who worked as part
of the Andersen team working on the Debtors' cases have been
integral in:

    -- their examination of the Debtors' assets in Europe,

    -- their analysis of the over 4,000 claims filed against the
       estate,

    -- the formulation of a liquidation analysis and disclosure
       statement, and

    -- the restructuring and management of the Venture portfolio.

"The Debtors believe it is important to retain Huron and the
team that has been working with them since the beginning of the
case, as well as additional Huron staff necessary to perform the
services they require," Mr. Lackey says.

Thomas J. Allison, lead director of Huron's Corporate Advisory
Practice, will head the team.  Mr. Lackey tells the Court that
that Mr. Allison is well qualified to act as a financial advisor
in these cases due to his considerable experience assisting
companies both inside and outside bankruptcy.  While at
Andersen, Mr. Allison worked closely with senior management to
develop a strategy for the Debtors' reorganization as well as
the business plan for a reorganized Comdisco.  In addition, Mr.
Allison has extensive and irreplaceable knowledge of the
Debtors' European operations.

Mr. Lackey believes that Huron's retention will lessen the cost
and delay that would be associated in retaining a financial
advisor devoid of the residual knowledge possessed by the Huron
professionals.  "At this critical time in the case, if the
Debtors were forced to bring a new financial advisor up to speed
it would hinder their efforts to emerge from bankruptcy during
the summer of 2002," Mr. Lackey says.

As financial advisor, Huron is expected to:

    (i) review financial and other information as necessary to
        maintain an understanding of the Debtors' operations and
        financial position;

   (ii) assist the Debtors with financial reporting matters
        resulting from the bankruptcy and restructuring, and any
        reports required by the Court;

  (iii) review cash or other projections and submissions to the
        Court of reports and statements of receipts,
        disbursements and indebtedness;

   (iv) assist the Debtors in formulating a plan of
        reorganization and accompanying disclosure statement;

    (v) consult with the Debtors' management and counsel with
        other business matters relating to the activities of the
        Debtors;

   (vi) assist the Debtors in the preparation of a liquidation
        analysis;

  (vii) provide expert testimony as required;

(viii) assist the Debtors in preparing communications to
        employees, customers and creditors;

   (ix) work with accountants and other financial consultants for
        the banks, committees and other creditor groups;

    (x) assist in the review of financial information and
        strategic options regarding the operations of foreign
        subsidiaries;

   (xi) provide litigation support and other information as
        specifically requested;

  (xii) provide other financial and business consulting services
        as required by the Debtors and their legal counsel; and

(xiii) assist in the management of the Ventures portfolio to
        help maximize recovery.

Huron will charge fees for its services based on the firm's
hourly rates, which are competitive in the marketplace as:

        Directors             $425 - 550
        Managers               300 - 425
        Associates             200 - 300
        Analysts               125 - 200

Huron Director David J. Grende, Esq., in Chicago, Illinois, has
been leading a team of portfolio managers in the Ventures'
portfolio restructuring.  For these services, Huron agrees to
share with the Debtors the risk and rewards relating to the
portfolio's performance.  Accordingly, Huron agrees not to bill
hourly fees for Mr. Grende's services, but to partake in the
benefits of the Ventures' compensation plan.  The recovery to
Huron will be based on a $200,000 annual base salary.
Furthermore, to ensure that Huron shares the same risk of
recovery that the Debtors' employees are assuming, Huron will
participate in both the Semi-annual Performance Bonus Plan and
Business Unit Upside Sharing Plan at an 11.33% Share of the
Business Unit Incentive Pool.  In return for this compensation,
Huron agrees to make Mr. Grende's time completely available to
the Debtors.  "The anticipated duration of Huron's retention
with respect to Mr. Grende is until December 31, 2003," Mr.
Lackey informs the Court.

Huron will also seek reimbursement for necessary expenses
incurred, which includes travel, photocopying, delivery service,
postage, vendor charges and other out-of-pocket expenses.  As an
accommodation to the Debtors, Huron agreed to limit the
reimbursement of Mr. Grende's travel expenses to $3,000 per
month, plus airfare.

Mr. Grende asserts that Huron officers and employees:

    -- do not have any connection with the Debtors, their
       creditors, or any other party-in-interest, or their
       respective attorneys or accountants; and

    -- do not hold or represent an interest adverse to the
       Debtor's estates.

Thus, Huron Consulting Group is a "disinterested person" under
Section 101(14) of the Bankruptcy Code. (Comdisco Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


COMPUTONE: Board Approves Corporate Name Change to Symbiat Inc.
---------------------------------------------------------------
Effective July 1, 2002, Computone Corp., changed its corporate
name to Symbiat, Inc.   The name change was approved by the
Board of Directors on June 26, 2002, and on June 27, 2002,
holders of the majority of the issued and outstanding shares of
common stock consented to the name change.  A certificate of
amendment was filed with the Delaware Division of Corporations
on the 1st of July, 2002.

                         *     *     *

As previously reported in the July 24, 2002 issue of the
Troubled Company Reporter, Computone Corporation incurred a net
loss of $5,262,000 on revenues of $8,791,000 during fiscal 2002,
compared to a net loss in fiscal 2001 of $4,423,000 on revenues
of $10,882,000.

During the years ended March 31,2002 and 2001, the Company
suffered net losses of $5,262,000 and  $4,423,000, respectively,
operating cash flow deficiencies of $781,000 and $1,279,000,
respectively and as of March 31, 2002, the Company had a net
working capital deficiency of $5,038,000.

On June 28, 2000, the Company entered into an agreement with a
lender to issue a $2,500,000, 11% note payable due on December
28, 2001, the proceeds of which were used to partially fund the
Multi-User acquisition and the Company's general working capital
needs.   In March 2002, the Company had the Note's maturity date
extended to April 29, 2002.  As consideration for the extension,
the Company issued the lender 100,000 shares of its common
stock.  As of July 1, 2002, the Company is in default of the
Note.   The Company believes that a reasonable extension can be
negotiated with this lender. There can be no assurances that
such discussions will be successful or that the lender will not
take legal action to collect amounts due.  In connection with
the issuance of the Note on June 28, 2000, the Company issued a
warrant to purchase 392,577 shares of its common stock
exercisable at $3.25 per share.  The warrant is currently
exercisable in whole or in part and expires in June 2003.  The
agreement called for the warrant exercise price to be adjusted
in the event the Company issued any additional shares of common
stock, warrants or options exercisable at less than $3.25 per
share price. As of March 31, 2002, the adjusted exercise price
of the warrant was $2.47.  Exercise of the  warrant may be
either in cash or by surrender of the warrant to the Company in
exchange for the  Company's common stock equal to the value of
the warrants as defined in the warrant agreement. The fair value
of the warrant of $1,328,000, determined through the use of the
Black Sholes valuation  model, was accounted for as additional
paid-in-capital (debt discount) in the Company's consolidated
balance sheet.

The Note was subordinated to the Company's line of credit.  The
Note is guaranteed by the Company  and its wholly-owned
subsidiaries and places restrictions on the Company's ability to
sell its business or its product lines, incur additional
indebtedness, declare or pay dividends, consolidate, merge or
sell its business and make investments.  The Note also includes
a cross default provision  whereby a default on the Note would
occur if the Company  was in default of any covenants of any of
its other financing arrangements in excess of $50,000.

As of March 31, 2001, the Company was in violation of the Note's
cross default provision.  On June 22, 2001, the Company cured
the default by repayment of the Line.

The above noted matters raise substantial doubt about the
ability of the Company to continue as a going concern.


CONDOR TECH: Special Shareholders Meeting Aug. 15 in Baltimore
--------------------------------------------------------------
A Special Meeting of Stockholders of Condor Technology
Solutions, Inc., a Delaware Corporation will be held on
Thursday, August 15, 2002, at 10:00 a.m. EDT at The Warehouse at
Camden Yards at 333 West Camden Street in Baltimore, Maryland.

At the Special Meeting stockholders will be asked to consider
and vote on: (1) a proposal to sell substantially all of the
assets of the Company to a wholly-owned subsidiary of CACI
International Inc for cash pursuant to the terms and conditions
of an asset purchase agreement; and (2) any other business that
properly comes before the meeting.

The affirmative vote of the holders of a majority of the shares
of common stock, par value $.01 per share, outstanding and
entitled to vote will be required to complete the CACI
Transaction.

Condor Technology Solutions is a technology and communications
company specializing in the organization, analysis and creative
distribution of business information. The company's business
practices include Web development, business intelligence,
contact center services, infrastructure support and marketing
communications. Condor Technology Solutions was founded in 1998.

                         *     *     *

As previously reported in the March 7, 2002 issue of the
Troubled Company Reporter, the company reported earnings before
interest, taxes, depreciation, amortization and impairment of
long-lived assets (EBITDA) of $461,000 on fourth quarter
revenues of $12.9 million, compared to an EBITDA loss of $6.1
million in the fourth quarter of 2000. The Company had a fourth
quarter 2001 net loss of $10.1 million versus $16.2 million for
the fourth quarter of 2000.

Included in the company's net loss was impairment of long-lived
assets of $13.9 million in the fourth quarter of 2001 versus
$5.4 million in 2000. The company also recorded a $4.1 million
extraordinary gain on the extinguishment of debt.

Cash generated from operations in the fourth quarter 2001 was
$1.7 million.

For the year 2001, the EBITDA loss was reduced to $0.4 million
compared to $1.5 million in the prior year. In addition, Condor
had a net loss of $26.3 million in 2001 after extraordinary
items, on total revenues of $68.3 million. Net loss for fiscal
year 2000 was $20.2 million.

"Fourth quarter EBITDA improved more than $6.5 million over the
fourth quarter in the previous year", said Jim Huitt, Condor
president and CEO. "In addition, the company has cut selling,
general and administrative costs from $10.3 million in the
fourth quarter of 2000 to $2.9 million in 2001, which represents
a decrease from 47.5% to 22.9% of revenue from year to year.
Revenues year-to-year declined as a result of the company's
decision to sell off business units in 2001 that were under
performing or not in line with Condor's core business."


CONNECTICARE: S&P Affirms BB Ratings Over Good Market Position
--------------------------------------------------------------
Standard & Poor's Rating Services affirmed its double-'B'
counterparty credit and financial strength ratings on
ConnectiCare Inc., based on the company's good market position
in Connecticut, strong enrollment growth, very strong earnings
performance, improving capitalization, and conservative
investments, offset by its below-average financial flexibility.

Standard & Poor's also said the company's outlook was revised to
positive from stable reflecting ConnectiCare's significantly
improved earnings performance and capitalization.

"Standard & Poor's expects ConnectiCare's net income to be in
the $18 million-$20 million range in 2002.  The company's total
enrollment is expected to increase about 2% in 2002 to about
280,000 members," said Standard & Poor's Director Phillip Tsang.
"When excluding the Medicare+Choices exit (effective January
2002), however, membership is expected to increase by about 12%
by year-end 2002," Tsang added.

The company's capital adequacy ratio is expected to rise to 115%
in 2002, with total capital and surplus of approximately $60
million by year-end. Further improvements are expected for 2003
as the company continues to generate positive earnings and
because of the exit from the Medicare business on Jan. 1, 2002.

ConnectiCare is one of the leading HMOs in Connecticut.  The
company has a particularly strong presence in the small- to
medium-sized group business because of an extensive provider
network and its ability to negotiate tailored benefits to meet
employers' needs in this market segment. In 2001, ConnectiCare's
enrollment increased 9.3% to 273,788 members. From January-March
2002, enrollment held at 273,471 members, despite losing
approximately 24,000 members due to ConnectiCare's exit from the
Medicare business.


COVANTA: Travelers Wants to Pay Yuba Heat Half of Coverage Claim
----------------------------------------------------------------
Out of an abundance of caution, Travelers Indemnity Company
seeks the Court's authority to immediately pay $549,535 to
Connell Limited Partnership for coverage, pursuant to a
settlement, of certain losses attributable to a division of
Connell, Yuba Heat Transfer -- a non-debtor entity of Covanta
Energy Corporation.

Lynn K. Neuner, Esq., at Simpson Thacher & Bartlett, in New
York, relates that Travelers issued several general liability
insurance policies naming as insured, Covanta Energy Corporation
and Yuba, for the period July 5, 1978 to December 1, 1984.  The
Policies provide coverage for liability arising out of bodily
injury and property damage occurred during the policy period.
The Policies also contain retrospective premium obligations,
whereby Travelers is owed additional premium based upon the
amount of losses incurred under the Policies -- Retro Premium
Obligation.

Prior to Petition Date, Ms. Neuner continues, Yuba made a claim
for coverage under the Policies seeking reimbursement for
$1,049,535 in settlements made in connection with Product
Claims. Upon negotiation, Traveler and Yuba tentatively agreed
that Travelers will reimburse Yuba $549,535 as Settlement Costs.
This amount, Ms. Neuner explains, reflects Yuba's agreement to
offset its claim by $500,000 due to the Retro Premium
Obligations. Moreover, Travelers will reimburse Yuba for certain
future Settlement Costs and Defense Costs.

Ms. Neuner contends that the Settlement should be approved
because Covanta's bankruptcy case does not affect Yuba's
independent rights to coverage under the Policy.  Moreover, the
automatic stay is inapplicable to Yuba's independent rights
because the contemplated payment poses no threat to
reorganization.  In fact, Ms. Neuner says, the contemplated
payment will reduce the limits of the Policies by $1,049,535.
Importantly, Covanta has not presented to Travelers significant
pending claims that would require payment from the same limits.
Consequently, Ms. Neuner notes, there are no pending claims that
"threaten to become a free-for-all that might exhaust the
insurance proceeds and thereby jeopardize estate assets over and
above the limits of the policy". (Covanta Bankruptcy News, Issue
No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900)


DYNEGY INC: S&P Downgrades Corporate Credit Rating to B+ from BB
----------------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating of Houston, Texas-based energy provider Dynegy Inc., and
subsidiaries to single-'B'-plus from double-'B'.

At the same time, Standard & Poor's lowered the corporate credit
rating of Northern Natural Gas Co., to single-'B'-plus from
triple-'B' minus and the Creditwatch listing was changed to
negative from developing. All other affiliates' ratings remain
on CreditWatch with negative implications.

The rating action reflects Standard & Poor's analysis that cash
flow deterioration continues unabated. Cash flow from Dynegy's
core merchant energy business is now expected to decline even
further because it is likely industry counterparties are
engaging in only low-margin spot gas transactions, a trend that
is expected to continue. As a result, Standard & Poor's now
views Dynegy's single-'B'-plus corporate credit rating as more
reflective of its ability to meet its debt obligations.

According to Standard & Poor's credit analyst John Kennedy,
"Given counterparty unwillingness to transact in little more
than spot gas trades, Dynegy's cash flow potential has
weakened."

In addition, Dynegy has been unable to execute on asset
divestitures, including the expected partial monetization of
Northern Natural Gas, which further exacerbates credit
difficulties. The rating action at Northern Natural reflects
Standard & Poor's view that the sale is uncertain and therefore
Northern Natural's creditworthiness is commensurate with the
consolidated credit rating of Dynegy.

Dynegy's available sources of liquidity have diminished slightly
recently as some cash collateral calls have been demanded. As
evidenced by its inability to quickly sell assets or access
capital markets, Dynegy's liquidity position is tenuous.
Importantly, Standard & Poor's estimates that the firm's
liquidity position has eroded from the $800 million that Dynegy
disclosed earlier this week. The sources of these funds are cash
on hand, unused bank facilities, and commodity (natural gas) in
storage.

Also, Dynegy has several near-term obligations on the horizon,
with about $750 million in debt and bank facilities ($300
million at Dynegy and $450 million at Northern Natural) due to
mature or expire by November 2002, and a $1.5 billion preferred
stock right held by Dynegy's largest shareholder, ChevronTexaco
Corp., which is redeemable in November 2003.

In addition, Dynegy's plan to solidify its balance sheet faces
significant execution risk in several areas, including its
launch of a master limited partnership, Dynegy Energy Partners,
expected to provide $200 million in additional capital. The
ability to execute this transaction is highly questionable under
current market conditions.

The CreditWatch with negative implications reflects lingering
concerns regarding the firms' ability to access capital markets
and or execute asset sales necessary to preserve an adequate
liquidity position to meet its obligations over the next 18
months. Resolution of the CreditWatch listing is predicated on
Dynegy's execution of stated business objectives and its ability
to meet debt maturities at a level that supports the current
rating. A demonstrated ability to achieve these goals could
result in ratings stability.


DYNEGY INC: Fitch Hatchets Sr. Unsec. Debt Rating Down 2 Notches
----------------------------------------------------------------
Dynegy Holdings Inc.'s senior unsecured debt and Dynegy Inc.'s
indicative senior unsecured debt have been lowered to 'B' from
'BB-'. The short-term ratings for DYN, DYNH and Illinois Power
Co., remain at 'B'.  In addition, the long-term ratings of
affiliated companies, IP and Illinova Corp., have been lowered,
as shown below. All ratings for DYN and its affiliates remain on
Rating Watch Negative.

The downgrades are based on Fitch's current analysis of DYN and
reflect a continued weakening in the company's credit profile.
Cash flow projections for year 2002 that were disclosed by the
company this past Tuesday are materially weaker than prior
estimates. In addition, the company announced that it had
terminated its pending $325 million bond financing at IP. Cash
from operations after changes in working capital are now
expected to range between $600-700 million. Prior estimates were
closer to $1 billion. Based on new estimates, consolidated cash
flow from operations for the remainder of 2002 has been cut
approximately in half. The company has stated that the revisions
have resulted from a downturn in marketing and trading
activities, partially the result of industry conditions, and
lower-than-expected prices for power, natural gas and natural
gas liquids. Based on available information, Fitch is unable at
this time to have a high level of confidence in estimates of
sustainable cash from operations, other than from the regulated
electric and gas pipeline operations.

DYN is in the process of executing a restructuring plan designed
to reduce consolidated debt and improve liquidity. However,
capital market conditions continue to worsen and the negative
over-hang from the SEC's investigation of accounting and trading
issues, ongoing FERC inquiries, and potential litigation
exposure have not abated. Therefore, DYN's ability to
successfully execute its restucturing plan has become less
assured.

To allow for execution risk, Fitch stress case analysis around
the DYN restructuring plan has assumed no new equity financing
at DYN or its MLP and additional near-term cash uses of $300-400
million relating to collateral postings. However, the inability
to complete the IP secured bond financing is an adverse change
from Fitch's prior stress case. DYN hopes to re-launch the
financing later this quarter.

In recent weeks DYN has done the following: secured a $250
million advance on its UK storage assets sales; amended its West
Coast Power credit facility which improved DYN's liquidity by
$100 million; received $200 million of interim financing secured
by its Renaissance and Rolling Hills merchant generation
facilities; and eliminated $301 million of rating triggers.
Prospectively, the full or partial sale of its UK gas storage
and Northern Natural Gas appears to have DYN's highest priority.
The inability to execute timely planned asset sales could lead
to further downgrades.

Consolidated liquidity, including liquid gas inventory, is
approximately $800-850 million. There are no material debt
maturities or anticipated extraordinary cash drains other than
potential collateral postings until November 2002 when a $300
million revolver at DYN and a $450 million secured loan at
Northern Natural Gas Co. come due. By that time DYN plans to
have sold assets and issued units at its MLP but Fitch notes
that there is heightened execution risk.

The downgrades to IP and Illiniova reflect the large
intercompany loans and the structural and functional ties
between the affiliated companies. Cash flows and operations at
IP and Illinova are especially sensitive to a potential default
by DYN or DYNH.

The following ratings have been downgraded:

                               DYN

      -- indicative senior unsecured debt to 'B' from 'BB-'.

                               DYNH

      -- senior unsecured debt to 'B' from 'BB-'.

                       Dynegy Capital Trust I

      -- trust preferred to 'CC' from 'B-'.

                         Illinois Power Co.

      -- senior secured debt and pollution control bonds to 'BB-'
         from 'BB';

      -- senior unsecured debt to 'B' from 'BB-';

      -- preferred stock and trust preferred to 'CCC' from 'B-';

                           Illinova Corp.

      -- senior unsecured debt to 'B' from 'BB-'.


ENRON CORP: El Paso Demands Broadband's Decision on Fiber Pact
--------------------------------------------------------------
El Paso Global Networks Company and Enron Broadband are parties
to an agreement under which El Paso granted Enron Broadband an
indefeasible right to use certain fibers in a fiber optic cable
system that will connect Los Angeles, California to Houston,
Texas.

The 20-year agreement says that Enron Broadband will pay El Paso
$17,280,000 when the fibers are delivered and accepted and will
further pay $432,000 in annual maintenance fees.

David A. Rosenzweig, Esq., at Fulbright & Jaworski L.L.P., in
New York, says that El Paso has attempted -- on several
occasions -- to talk to Enron Broadband representatives about
whether or not Enron intends to assume or reject these
agreements.  Enron hasn't made any decision and won't even
indicate when it might make the decision, El Paso complains.

El Paso says that the uncertainty regarding Enron Broadband's
intentions is causing financial harm.  El Paso has already spent
millions of dollars in constructing the System.  More money will
need to be expended to complete the System.  El Paso doesn't
want to spend more money if Enron doesn't want the fibers.

Mr. Rosenzweig notes that a non-debtor party "is not expected to
incur significant added detriment while those who have an
interest in the property or the bankruptcy estate are unable to
resolve how to deal with an asset."  The balance of equities in
this case strongly favors El Paso, Mr. Rosenzweig argues, asking
Judge Gonzalez to compel Enron to make a decision without
further delay. (Enron Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ENRON: Florida Wants Court to Compel Preservation of Documents
--------------------------------------------------------------
The Florida State Board of Administration asks Judge Gonzalez to
draw on his broad equitable powers under Section 105(a) of the
Bankruptcy Code and enter an order requiring Enron Corporation
and its debtor affiliates to:

      (1) preserve all documents in their possession, and

      (2) account for and segregate all documents evidencing or
          relating to the Debtors' communications and
          relationship with Enron's auditor, Arthur Andersen LLP.

Glen DeValerio, Esq., at Berman DeValerio Pease Tabacco Burt &
Pucillo, relates that Florida State Board is a creditor, equity
holder and party-in-interest in Enron's bankruptcy cases.
Florida State Board claims it sustained $334,000,000 in losses
from its transactions in Enron common stock and bonds from
October 18, 1998 through November 27, 2001.  The Florida State
Board is actively involved in the consolidated securities class
action lawsuits pending before the United States District Court
for the Southern District of Texas.

"Florida State Board does not suggest that Enron employees are
destroying documents at this time nor does Florida State Board
relates any instances where it knows Enron has destroyed a
document that it wanted to put its hands on," Mr. DeValerio
clarifies. (Enron Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


EVERCOM INC: 2001 EBITDA Drops Due to Increase in Bad Debt Costs
----------------------------------------------------------------
Evercom, Inc. (formerly known as Talton Holdings, Inc.), a
provider of inmate telecommunications systems, announced the
following preliminary unaudited operating and financial results.
These results are subject to change upon the completion of the
Company's annual audit for the year ended December 31, 2001 or
as a result of additional information that may become available
before such financial statements are finalized. A key variable
in the Company's financial statements is its bad debt reserve
estimates. The Company's billing cycle for calls billed through
local exchange carriers can be quite long -- from six to nine
months in the vast majority of cases. As more information
becomes available to the Company prior to the finalization of
its financial statements, this reserve could change. Any such
variation from the Company's estimates could have a material
adverse effect on the Company and the value of its Senior Notes.
For more discussion regarding this risk and other Risk Factors
associated with the Company, please refer to the "Risk Factors"
section of the Company's Form 10-Q dated November 14, 2001 that
is on file with the Securities and Exchange Commission. Certain
reclassifications have been made to conform to the
classifications used in the Company's most recent filings with
the Securities and Exchange Commission.

                 2001 Preliminary Unaudited Results

The Company generated operating revenue of $245.2 million for
the year ended December 31, 2001 as compared to $235.3 million
and $237.5 million for the years ended December 31, 2000 and
1999, respectively. The increase in operating revenue was
primarily due to new sales initiatives in the Company's
traditional inmate business coupled with higher equipment sales
to Solutions customers.

The Company generated operating income of $6.1 million for the
year ended December 31, 2001 as compared to $15.7 million and
$8.8 million for the years ended December 31, 2000 and 1999,
respectively. The decline in operating income was primarily due
to an increase in bad debt expense in large part caused by the
deteriorating economy. Average commission rates in the Core
business for 2001 were 38.1%.

The Company generated $28.3 million of earnings before interest,
income taxes, depreciation, amortization, and an extraordinary
loss on debt extinguishment (EBITDA) for the year ended December
31, 2001 as compared to $38.8 million and $37.5 million for the
years ended December 31, 2000 and 1999, respectively. The
decline in EBITDA was primarily due to an increase in bad debt
expense in large part caused by the deteriorating economy.

The Company generated net cash from operations of $10.7 million
for the year ended December 31, 2001 as compared to $20.2
million and $15.9 million for the years ended December 31, 2000
and 1999, respectively. Cash used in investing activities for
the year ended December 31, 2001 was $15.9 million, consisting
primarily of $13.9 million for new business, contract renewals
and infrastructure improvements. Also in 2001 the Company paid
$2.0 million for acquisitions made in 2001 and prior years. As
of December 31, 2001 the Company had $3.6 million of
availability under its Senior Credit Facility and total long-
term indebtedness outstanding of $163.5 million, consisting of
$115 million of Senior Notes and $48.5 million of borrowings
under the Senior Credit Facility. Interest expense for the year
ended December 31, 2001 was $19.0 million.

As a result of the refinancing of its Senior Credit Facility in
December 2001, the Company incurred an extraordinary loss on the
extinguishment of debt of $3.3 million before considering the
income tax effect of such loss.

                2002 Preliminary, Unaudited Results

The following operating and financial results of the Company
through May 31, 2002 are estimated, unaudited and have not been
subject to any scrutiny from the Company's independent auditors.
These estimates are subject to change as a result of additional
information that may become available before such financial
statements are finalized, in particular additional information
concerning its bad debt reserves.

For the five months ended May 31, 2002, the Company generated
revenues of $105.2 million, representing a 3% increase over the
same period in 2001, operating income of $5.0 million and EBITDA
of $12.2 million. Throughout 2002 bad debt rates have continued
to increase as a percentage of the Company's revenue, although
the Company has recently experienced an abatement of this trend.
However, due to the recent volatility of the financial markets
and the effect this could have on the overall economy, the
Company has taken an additional reserve for bad debt expense.
Operating income results have benefited by approximately $1.8
million for the five months ended May 31, 2002 as a result of
the discontinuance of goodwill amortization in conjunction with
the implementation of Financial Accounting Standards Board
Statement No. 142 effective January 1, 2002.

"Evercom, not unlike many businesses, was severely impacted by
the deteriorating economy in 2001 as manifested by an increasing
rate of bad debt expense," said Dick Falcone, the Company's
Chief Executive Officer. "From a revenue perspective, the
Company proved resilient to recession and before considering bad
debt expense, the Company's margins and profitability in its
Core business were consistent between 1999, 2000 and 2001.
However, the deteriorating economy and increasing unemployment
rates proved very detrimental to collection efforts by inmate
telecommunications providers, increasing our total bad debt
expense by an estimated 4% of revenue in the Core business in
2001."

"Despite the unfortunate bad debt results in 2001 we were
successful at growing revenue," Mr. Falcone additionally stated.
"Our Core business generated $211 million of revenue in 2001 as
compared to $205 million in 2000. We accomplished this by
intensely focusing on exemplary customer service and technology
leadership; efforts that I believe have established Evercom as
the premier brand in the industry. In addition to our success in
growing our Core business, we generated growth in our new
Solutions business, adding close to $10 million of revenue from
new Solutions partners in 2001, from a base of almost zero in
2000."

                Financing and Other Considerations

As of May 31, 2002 the Company had $3.7 million of borrowing
availability under its Senior Credit Facility and had long-term
indebtedness outstanding of $158.8 million, consisting of $115
million of Senior Notes and $43.8 million of borrowings under
its Senior Credit Facility. The Company incurred $4.6 million
for capital expenditures for the five-month period ended May 31,
2002. As a result of liquidity constraints, the Company did not
make a $6.3 million interest payment on its Senior Notes that
was due on July 1, 2002.

As previously disclosed, Evercom is in default of certain
covenants under its Senior Credit Facility. Under the terms of
the forbearance agreement, the Company's senior lenders will not
exercise remedies available to them during the period ending
July 29, 2002. The Company is in the process of exploring
strategic and financial alternatives. This includes discussions
with potential investors, the Company's investors and creditors,
and potential strategic partners.

The Company is currently evaluating a potential write-down of
the carrying value of its long-lived assets in conjunction with
Financial Accounting Standards Board Statement No. 121. Because
of the Company's recent operating results, it is likely the
Company will record a write-down of its long-lived assets in its
financial statements for the year ended December 31, 2001.
However, the amount of such write-down is not determinable at
this time. Therefore, the results of operations presented herein
do not reflect any write-down that may ultimately be recorded in
the Company's financial statements for the year ended December
31, 2001. Such an adjustment, if required, would primarily
represent a write-down of the Company's intangible assets such
as goodwill.

Evercom is a provider of inmate telecommunications systems,
serving approximately 2,000 correctional facilities throughout
the United States. The Company has become a recognized leader in
providing comprehensive, innovative technical solutions and
responsive value-added service to the corrections industry.


FLAG TELECOM: Gets Court Nod to Tap Elizabeth Gloster as Counsel
----------------------------------------------------------------
FLAG Telecom Holdings Limited and its debtor-affiliates sought
and obtained authority from the Court to retain Elizabeth
Gloster, Queen's Counsel, as their special Bermuda counsel to
assist special counsel Appleby Spurling & Kempe.

The Debtors' reorganization has involved the filing of winding-
up proceedings and the appointment of provisional liquidators in
Bermuda. Four of the Debtors that are incorporated in Bermuda,
FLAG Telecom Holdings Ltd., FLAG Ltd., FLAG Atlantic Ltd. and
FLAG Asia Ltd., have commenced coordinated proceedings in the
Supreme Court of Bermuda.

That adds a level of complexity to the Debtors' reorganization
proceedings, and Kees van Ophem, FTHL Secretary and General
Counsel, says coordination of the proceedings is necessary.

Mr. van Ophem says that in a complex international bankruptcy
matter such as that of the Debtors, it is not unusual for a
Debtor in Bermuda to employ both a QC (a senior barrister) and a
Bermuda firm of attorneys.

A QC works closely with the Bermuda firm of attorneys to provide
expert advice on complex issues of law.

Mr. van Ophem says the Debtors selected Ms. Gloster based on her
special expertise in Bermuda law and the international aspects
of the Bermuda restructuring proceedings. Ms. Gloster has
extensive experience counseling large corporations in
restructuring under Bermuda law, cross-border insolvencies and
matters of corporate law and governance under English legal
systems such as those in Bermuda.

                        Disinterestedness

Ms. Gloster tells the Court that she had previously been
involved in matters that have involved a number of the Debtors'
creditors on specific cases only, not in any sense retained as
permanent counsel.

None but Sumitomo Trust & Banking Co., she says, paid her fees
that represent more than 1% of her revenue for 2001. The fees
paid to her by Sumitomo represent 2.8% of her individual income
for 2001. Her representation of Sumitomo ended before the
Debtors commenced their Chapter 11 cases.

Ms. Gloster says she currently represents partners of KPMG in
matters unrelated to the Debtors' Chapter 11 cases. KPMG
partners have been appointed as joint provisional liquidator in
the Debtors' winding-up proceedings. She says the fees she
received from KPMG did not represent more than 1% of her revenue
for the year 2001.

Also, Ms. Gloster currently represents Arthur Andersen, the
accountants, auditors and financial advisors for Debtors in
matters that are unrelated to their Chapter 11 cases. She also
discloses retention by Global Crossing Ltd. in its bankruptcy
filing. That representation, Ms. Gloster says, is not related to
the Debtors' cases.

Ms. Gloster says she is confident that she does not hold any
interest adverse to that of the Debtors.

                          Compensation

Ms. Gloster says she will bill for her services on an hourly
basis, plus reimbursement of expenses she will incur. Her
current hourly rate is Pound 600. (Flag Telecom Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FORMICA: Seeking Nod to Hire Thompson Hine as Special Counsel
-------------------------------------------------------------
Formica Corporation asks the United States Bankruptcy Court for
the Southern District of New York for permission to retain
Thompson Hine LLP as special counsel, nunc pro tunc to the
petition date.

For almost four years, Thompson Hine has rendered services to
the Debtors in connection with various labor, employment,
pension, employee benefits, ERISA, antitrust, trade regulation,
general corporate, litigation, and other related matters.  This
retention has afforded Thompson Hine an intimate familiarity
with the Debtors' affairs.

The Debtors seek to engage Thompson Hine to advise them with
respect to:

      a) labor and employment;

      b) employee benefits;

      c) antitrust, business regulation, and competition; and

      d) litigation with respect to matters in connection with
         labor and employment, employee benefits, antitrust,
         business regulation, and competition.

Thompson Hine's current hourly rates are:

           Partners           $230 - $435
           Associates         $125 - $260
           Legal Assistants   $ 95

The primary members of Thompson Hine who will be responsible in
these cases are:

           Les Jacobs         $435
           Thomas Collin      $385
           Tim Brown          $275
           Keith Spiller      $230

Formica, together with its debtor and non-debtor-affiliates is a
preeminent worldwide manufacturer and marketer of decorative
surfacing materials. The company filed for chapter 11 protection
on March 5, 2002. Alan B. Miller, Esq., and Stephen Karotkin,
Esq., at Weil, Gotshal & Manges LLP represent the Debtors in
their restructuring efforts. As of September 30, 2001, the
Company reported a consolidated assets of $858.8 million and
liabilities of $816.5 million.

DebtTraders reports that Formica Corp.'s 10.875% bonds due 2009
(FORC09USR1) are trading between 18.5 and 22.5 . See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FORC09USR1
for more real-time bond pricing.


FRIEDE GOLDMAN: Vision Pitches Winning Bid for Halter Marine
------------------------------------------------------------
In a U.S. Bankruptcy Court sanctioned auction, Vision
Technologies Kinetics, Inc. (a wholly owned subsidiary of
Singapore Technologies Engineering, Ltd.), provided the winning
bid of $66 million to purchase Halter Marine from Friede Goldman
Halter, Inc. (OTCBB:FGHLQ).

The sale includes the facilities of Halter Pascagoula, Halter
Moss Point, Moss Point Marine, Halter Port Bienville, Halter
Lockport, and Halter Gulfport East including the Corporate
Headquarters and Gulfport Central. With the closing of this
sale, which is expected to take place within 30 days, following
final Hart-Scott-Rodino approval. Halter will have a solid
balance sheet and a financially strong parent. This, combined
with Halter's history of being a market leader will put the
newly formed VT-Halter Marine Group at the forefront of the
industry.

Anil Raj, Chief Operating Officer of FGH said, "This is an
exciting moment for Halter's employees, customers, and
suppliers. Halter has continued to do business as a premiere
vessel builder throughout the bankruptcy process. This change
will allow the new VT-Halter to start new projects as well as
options on existing contracts."

Friede Goldman Halter and the Creditors Committee are
appreciative of the efforts made by the bidders throughout this
process.

"This has been a highly successful auction process," said James
Decker, Director, Houlihan Lokey Howard Zukin, Investment
Bankers for Friede Goldman Halter. "The sale of Halter Marine is
a major step in providing a return to the creditors and brings
the company closer to emerging from Chapter 11."

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


GWI HOLDING: Today's the Deadline to Vote on Chapter 11 Plan
-------------------------------------------------------------
On June 28, 2002, the United States Bankruptcy Court for the
District of Delaware approved the joint Amended Disclosure
Statement of GWI Liquidating, Inc. (f/k/a Garden Way
Incorporated), and GWI Holding, Inc., as containing adequate
information regarding the Debtors' Liquidating Chapter 11 Plan
pursuant to 11 U.S.C. Section 1125 of the Bankruptcy Code.  The
Court established July 29, 2002 at 4:00 p.m. Eastern Time as the
deadline for soliciting of ballots rejecting or accepting the
Plan.

Ballots must be received by:

                 Bankruptcy Services LLC
                 70 East 55th Street, 6th Floor
                 New York, New York 10022-3222
                 Attn: GWI Liquidating Company
                       Balloting Center

GWI Liquidating, Inc., headquartered in New York, designs,
manufactures and sells premium-quality outdoor power equipment
for the consumer lawn and garden market, through national
retailers, independent dealers and direct consumer distribution
channels throughout North America and Europe. The Company filed
for Chapter 11 protection on July 30, 2001. Pauline K. Morgan,
Esq., M. Blake Cleary, Esq., and Matthew B. Lunn, Esq., at Young
Conaway Stargatt & Taylor, LLP are helping the company in its
liquidating efforts.


GENERAL DATACOMM: Secures Exclusivity Extension Until August 1
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, General DataComm Industries, Inc., and its debtor-
affiliates obtained an extension of their exclusive periods.
The Court gives the Debtors until August 1, 2002 the exclusive
right to file their plan of reorganization, and until October 1,
2002 to solicit acceptances of that Plan from their creditors.

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


GENUITY INC: S&P Junks Credit Rating After Verizon Decision
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on managed Internet infrastructure services provider
Genuity Inc., to triple-'C'-minus from double-'B' following the
company's announcement that Verizon Communications Inc., has
decided not to ultimately reintegrate Genuity. This will lead to
an event of default under Genuity's bank credit facility and its
credit facility with Verizon.

The rating remained on CreditWatch with negative implications.
As of July 25, 2002, Woburn, Massachusetts-based Genuity had
total debt outstanding of about $3.5 billion.

"Verizon's action significantly weakens Genuity's liquidity
position," Standard & Poor's credit analyst Rosemarie Kalinowski
said. "Because Genuity's financial condition was already fragile
due to overcapacity in the telecom industry and the weak
economy, we are concerned that Verizon's action could impact
Genuity's viability as a going concern."

Earlier this week, Genuity gave notice to its bank group that it
would draw down the remaining $850 million available under the
$2 billion bank credit facility. Of the $850 million, $723
million has been funded. Genuity's total cash balance is $1.3
billion.

Standard & Poor's said Genuity is currently in discussion with
the banks, and that it would monitor the development of
discussions.


GLOBAL CROSSING: NETtel Trustee Wants to Continue Lawsuit
---------------------------------------------------------
Wendell W. Webster, the Chapter 7 Trustee of NETtel Corporation
and NETtel Communications Inc., asks the Court to modify the
automatic stay to allow him to resume and complete to judgment
his preference action against Global Crossing Ltd., and its
debtor-affiliates in the United States Bankruptcy Court for the
District of Columbia.

Linda M. Correia, Esq., at Webster Frederickson & Brackshaw, in
Washington, D.C., informs the Court that in the adversary
proceeding, the Chapter 7 Trustee seeks to recover $4,500,000 in
preference payments made by NETtel to the Debtors within 90 days
of NETtel's bankruptcy filing.  At the time the Debtors filed
its own bankruptcy petition, the Trustee and the Debtors were
engaged in discovery in the adversary proceeding.  Ms. Correia
asserts that granting the relief requested will facilitate the
orderly liquidation of the NETtel estates, as well as the
orderly liquidation of the Trustee's claim against the Debtors
in this case.

According to Ms. Correia, NETtel and the Debtors entered into a
Carrier Services Agreement on April 16, 1998, under which the
Debtors agreed to provide various wholesale telecommunications
services to NETtel.  Pursuant to this Agreement, the Debtors
began providing NETtel with telecommunications services in April
of 1998.  By early 1999, NETtel fell significantly behind on its
accounts with the Debtors.  Throughout 1999 and into 2000,
NETtel continued to slide further into arrears for services
rendered by the Debtors under the Agreement.  By July 12, 2000,
NETtel had accrued a $7,700,000 past due balance on one account,
and over $500,000 on another.

NETtel allegedly made a $3,700,000 wire transfer to the Debtors
for prior services rendered under the Agreement.  After this
payment, NETtel remained in arrears to the Debtors for more than
$3,100,000 on both accounts.  The Debtors continued pressuring
NETtel to bring its accounts current.  As a result, on August
16, 2000, NETtel made another wire transfer -- this time,
$1,000,000 -- for prior services.  On September 28, 2000, NETtel
made a $130,000 final wire transfer to the Debtors for prior
services rendered under the Agreement.

In a series of motions, hearings, and interim consent orders
before the U.S. Bankruptcy Court for the District of Columbia,
between October 4, 2000 and October 23, 2000, Ms. Correia
relates that the Debtors agreed to maintain its
telecommunication services to NETtel postpetition, in exchange
for $200,000 immediate payment, which was paid to the Debtors on
October 17, 2000, and the provision of up to $1,000,000 in
surcharge on the Secured Creditors' collateral.  On October 23,
2000, when NETtel's petitions were converted to Chapter 7, the
Columbia bankruptcy court granted the Debtors permission to
terminate all telecommunications services to NETtel at noon on
October 24, 2000.  But the Debtors continued to provide
telecommunications services to NETtel in the Chapter 7 period,
until October 27, 2000.

On June 13, 2001, the Debtors filed a Request for Payment of
Administrative Expense Claim and Enforcement of Section 506(c)
Surcharge with the District of Columbia Bankruptcy Court,
seeking a $1,714,633.26 allowed administrative expense claims
for its telecommunications services provided to NETtel during
the Chapter 11 and Chapter 7 periods.  The Trustee and several
of NETtel's Secured Creditors objected to the Debtors' request
for administrative expenses.  The Trustee asserted that the
transfers on July 18, 2000, August 16, 2000, and September 28,
2000, were preferential transfers, the sum of which exceeded the
Debtors' administrative expense claim.

On November 1, 2001, the Trustee initiated an adversary
proceeding against the Debtors before the Columbia bankruptcy
court.  The Trustee sought to avoid the transfers on July 18,
2000, August 16, 2000, and September 28, 2000.  In the
Complaint, the Trustee asserts that NETtel transferred
$4,830,000 to the Debtors that are avoidable as prepetition
preferential transfers under Section 547(b) of the Bankruptcy
Code.  The parties continued to litigate the administrative
expense claim.  On November 26, 2001, after extensive settlement
negotiations and considerable discovery -- including production
of documents and deposition testimony, the Trustee and the
Debtors entered into a Joint Stipulation that the Trustee would
place $1,225,000, for complete settlement of the administrative
claim, in an escrow account.  The parties further stipulated
that the Escrow Amount, together with any interest, would be
paid to the Debtors or the Trustee upon entry of a final non-
appealable judgment or settlement of the Adversary Proceeding.
On March 7, 2002, the Trustee learned that Global Crossing
voluntarily filed for protection under Chapter 11 of the
Bankruptcy Code on January 28, 2002.  As a result, the
preference claim was stayed, pending the resolution of the
Debtors' reorganization.

Before that, Ms. Correia relates, the adversary proceeding was
being actively litigated in the Columbia bankruptcy court.  The
Debtors had already responded to the Trustee's first set of
interrogatories and request for production of documents, and
propounded discovery of its own.  As a result of the related
administrative claim, the parties are very familiar with the
issues involved in the preference action, increasing the
likelihood of an expeditious resolution of the adversary
proceeding.

The parties' dispute over the administrative expenses was
actively litigated in the Columbia bankruptcy court for more
than one year prior to the preference action.  In addition,
Columbia Bankruptcy Court Judge Teel is very familiar with the
relationship between the parties and the contested issues.
Final resolution of the administrative expense claim hinges upon
the outcome of the preference action.  The two proceedings have
entailed the commitment of significant judicial resources by
Judge Teel and the Columbia bankruptcy court.

Ms. Correia tells Judge Gerber that the Trustee is prepared to
move forward expeditiously to complete discovery and proceed
with a trial in the preference action.  In the interest of
judicial economy, the adversary proceeding should be allowed to
proceed in the Columbia bankruptcy court so that the dispute can
be resolved as quickly as possible.  If the stay is maintained,
this Court will expend valuable time and resources overseeing
the re-litigation of many issues that have been previously
covered in the adversary proceeding.  Ms. Correia contends that
re-litigating some of the issues from the preference action in
another venue will force the estates of both parties to incur
substantial added expenses.  On the other hand, lifting the stay
and allowing the prompt resolution of the preference action in
the District of Columbia bankruptcy court, will avoid
duplication and save the valuable time and resources of this
Court, and the parties involved.  For these reasons, it is in
the interest of judicial economy and the expeditious and
economical resolution of litigation to modify the stay and allow
the adversary proceeding to continue in the District of Columbia
bankruptcy court. (Global Crossing Bankruptcy News, Issue No.
16; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Inks 15-Year Contract with Dutch Nat'l Research
----------------------------------------------------------------
Global Crossing has signed a 15-year contract with the Dutch
National Research network SURFnet to connect the European radio
telescope institute JIVE (Joint Institute for VBLI) with ASTRON
(Stichting Astronomisch Onderzoek in Nederland), the
Netherlands' foundation for research in astronomy. The radio
telescopes are each a part of the EVN (European Very Long
Baseline Interferometry Network), for which JIVE is the central
institute based within ASTRON's premises in Dwingeloo, a remote
area in the north of Holland.

"We're proud to see this growing relationship with SURFnet lead
to exciting projects that will change the way scientists work
together and the nature of the Internet as we know it today,"
said John Legere, chief executive officer of Global Crossing.
"Global Crossing can meet the challenge of insatiable bandwidth
demand to helps research and academic communities work more
productively, bridging together fellow researchers and
institutes via our 100,000 route mile global network."

Linking European radio telescopes from different countries
creates a virtual telescope with a diameter of thousands of
kilometers. As a result of the Global Crossing high-grade fiber
link from Amsterdam to Dwingeloo, this virtual radio telescope
can now be connected directly to the EVN's dedicated data
processor, the most advanced in the world. By using the
bandwidth available through Global Crossing's advanced optical
network, which has a bandwidth of up to 400 Gbits/s for a single
fiber, the telescope's sensitivity will be greatly enhanced,
making visible weak radio sources at the very edges of the
universe.

"Advanced networking technologies working without bandwidth
restrictions form the basis of next generation Internet
applications, of which this joint astronomy project is a
wonderful example," says Boudewijn Nederkoorn, Managing Director
of Holland's SURFnet. "Global Crossing has been a first rate
partner for many SURFnet projects facilitating broadband
projects. They are an essential part of this critical link."

"We need this vast receiving surface to get a stronger signal
from the stars," explains Boudewijn Schipper, Head of Systems
Administration at ASTRON. "High capacity fibre will feed the
signals from collectors to our processor at speeds of 16
terabits per second."

ASTRON is designing and building in-house its own dedicated
computer for signal processing, and is even involved in
designing chips that will be used in the search for extra
terrestrial intelligence.

"Together with SURFnet we chose Global Crossing's advanced
optical network infrastructure because it is the best for the
job," affirms Mr Schipper. "Thanks to the new infrastructure we
have a real-time connection between EVN's global network and
Dwingeloo. This real-time interaction between ASTRON and JIVE
will speed up our research efforts as well as giving us
economies by eliminating the need for the transport of data
tapes."

Connecting numerous, dispersed radio telescopes over a high
performance network is the first step towards electronic non-
parabolic telescopes as all-electronic telescopes become
financially attractive due to the increasing manufacturing costs
of traditional steel structures.

ASTRON will also use the advanced optical network for its newest
electronic Internet telescope, LOFAR (Low Frequency Array), a
radio telescope that is more sensitive and gives sharper images
than any current telescope. LOFAR connects numerous dispersed
clusters of flat radio telescopes occupying the space of a
football field and as such, can be accessed anywhere in the
world from a personal computer with a broadband access.

JIVE is the central institute for the European VLBI (Very Long
Baseline Interferometry) network, a European scientific
organisation funded by the European Commission that connects the
radio telescopes from the eight European countries. The
participating research institutes are in The Netherlands,
Germany, the U.K., Italy, Sweden, Spain, Poland and Finland.
Other partners are based in China, Ukraine, the U.S.A. and South
Africa.

This latest contract from SurfNET builds on Global Crossing's
growing status as a network provider to academic and research
institutions. Among other projects, the company has commissioned
a multi-Gigabit IP Transit Service to DANTE -- the organisation
responsible for managing the world's largest academic and
research network, GEANT. This 10Gbit/s European IP backbone
provides international connectivity to the research community
and comprises 3,000 National Research and Educational Networks
in 31 countries. In addition, Global Crossing has a three-year
agreement with FAPESP (Fundacao de Amparo a Pesquisa do Estado
de Sao Paulo), the largest academic research institution in
Brazil, to provide rapid data transmission between universities
and research centres in the US and Brazil.

SURFnet operates the innovative Dutch national research network
that connects over 200 institutions in higher education and
research in the Netherlands. To maintain its leadership SURFnet
puts in a sustained effort to improve the infrastructure and
develop new applications to give users faster and better access
to new Internet services. SURFnet is a key partner in the
GigaPort project whose aim is to give the Netherlands a lead in
the development and use of advanced and innovative Internet
technology. GigaPort runs the SURFnet5 network, considered the
world's most advanced research network with speeds of 10 Gigabit
per second, running IPv4 unicast, IPv6 unicast as well as IPv4
multicast, all in native mode. Universities, polytechnics,
research centers and similar institutions are connected to this
network, which also offers businesses the opportunity to develop
next generation Internet applications. For these network users,
quality, access and high performance are critical requirements.

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services. Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing.

On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda. On the same date,
the Bermuda Court granted an order appointing joint provisional
liquidators with the power to oversee the continuation and
reorganization of the Bermuda-incorporated companies' businesses
under the control of their boards of directors and under the
supervision of the U.S. Bankruptcy Court and the Supreme Court
of Bermuda. On April 23, 2002, Global Crossing commenced a
Chapter 11 case in the United States Bankruptcy Court for the
Southern District of New York for its affiliate, GT UK, Ltd.
Global Crossing does not expect that any plan of reorganization,
if and when approved by the Bankruptcy Court, would include a
capital structure in which existing common or preferred equity
would retain any value.

Please visit http://www.globalcrossing.comor
http://www.asiaglobalcrossing.comfor more information about
Global Crossing and Asia Global Crossing.


GLOBAL LIGHT: Secures Extension of CCAA Stay through August 1
-------------------------------------------------------------
Global Light Telecommunications Inc., reports that the order
granting it certain relief, including a stay of proceedings and
protection from creditors, under the Companies' Creditors
Arrangement Act issued on June 28, 2002 has been extended until
August 1, 2002 to allow the Company and its principal creditors
and the Monitor to discuss the terms upon which the present stay
may be extended beyond August 1, 2002.


GOLDMAN INDUSTRIAL: Wants to Expand O'Connor & Drew's Engagement
----------------------------------------------------------------
Goldman Industries Group, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to expand
the scope of O'Connor & Drew PC's retention as special Tax
Accountants to include assistance with an audit of certain of
the Debtors' 401(K) Plans.

The expanded professional services that O'Connor & Drew will
perform include:

      i) an audit of the 401(k) Plans of Bridgeport, FC 11
         Corporation and Bryant Grinder Corporation;

     ii) negotiating any disputes and finalizing any compromises
         relative to the audit;

    iii) coordinate as necessary with Greenberg Traurig, LLP with
         respect to the services; and

     iv) providing other services relating to O'Connor & Drew's
         expert knowledge as the Debtors shall request from time
         to time.

O'Connor & Drew will be paid a flat rate of $10,000 for the
Bridgeport 401(k), and $5,000 to $7,000 for the audits of the FC
and BG 401(k) plans.

Goldman Industrial Group, Inc., with its affiliates, provide
metalworking machinery to manufacturers; marketing and selling
original equipment primarily to the aerospace, automotive,
computer, defense, medical, farm, construction, energy,
transportation and appliance industries. The Company filed for
chapter 11 protection on February 14, 2002. Victoria W.
Counihan, Esq., at Greenberg Traurig, LLP represents the Debtors
in their restructuring efforts.


GROUP TELECOM: Canadian Court Extends CCAA Protection to Sept 10
----------------------------------------------------------------
GT Group Telecom Inc., announced that it has sought and obtained
from the Ontario Superior Court of Justice an order granting it
and its affiliates an extension of protection under the
Companies' Creditors Arrangement Act to September 10, 2002.

Group Telecom was previously granted an Order on June 26,
providing for an initial period of 30 days' protection. The
extended Order will continue to stay all proceedings against the
Company and suspend payments in respect of any debt obligations
existing on or before June 26, pending development of a
restructuring plan.

The Order provides for an extended period of 46 days' protection
by the Court, and permits the Company to continue to operate its
business in the ordinary course.

PricewaterhouseCoopers Inc., continues to act as the Company's
monitor.

The Company also obtained a preliminary injunction in the United
States which has the effect of staying proceedings against it in
the U.S.  The preliminary injunction is valid until July 29 and
the Company intends to seek an extension of that injunction at
that time.

"We are pleased to be granted an extension of the CCAA Order,"
said Dan Milliard, chief executive officer of Group Telecom.
"The extension is a result of our ability to demonstrate to our
lenders, and the Court, that we are making progress with our
restructuring discussions. This unopposed extension permits the
Company to continue providing uninterrupted service to our
customers while allowing additional time to negotiate a
restructuring plan with our lenders. We are one step closer to
ensuring the long-term viability of the Company."

The Company currently has sufficient cash to allow it to carry
on its business in the ordinary course during the restructuring
period, including providing service to customers, paying for
goods and services supplied after the date the initial Order was
granted, and the on-going payment of wages and benefits to
employees.

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

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

DebtTraders reports that GT Group Telecom's 13.250% bonds due
2010 (GTGR10CAR1) are quoted between 6 and 9. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GTGR10CAR1
for more real-time bond pricing.


HQ GLOBAL: Court Fixes August 30 Bar Date for Creditors' Claims
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
established the Claims Bar Dates by which creditors of HQ Global
Holdings, Inc., and its debtor-affiliates, must file their
claims against the Debtors' estates or be forever barred from
asserting such claim.

In order for the Debtors to complete the reorganization process
and make distributions under a plan, the Court has established
the General Claims Bar Date as August 30, 2002, 5:00 p.m.
Eastern Time.  On the other hand, holders of Government Claims
are required to file proofs of claim by September 9, 2002.

Entities asserting claims in connection with the Debtors'
rejection of executory contracts and unexpired leases must file
their proofs of claim on or before the later of:

       a) the General Bar Date, and

       b) 30 days after the date approving the Debtors' rejection
          of the contract or lease.

All proofs of claim must be delivered in person, or by courier
service or hand delivery to:

          The Garden City Group, Inc.
          105 Maxess Road
          Melville, New York 11747
          Attn: HQ Claims Processing Department

Proofs of claims are not required to be filed by:

       i) any Entity that has already properly filed a proof of
          claim against one or more of the Debtors.

      ii) any entity whose claim is not disputed, contingent or
          unliquidated and that agrees with the nature, amount of
          its Claim as identified in the Schedules.;

     iii) any Entity whose claim against a Debtor previously has
          been allowed by, or paid pursuant to, an order of the
          Court;

      iv) any Entity whose Claim against a Debtor is limited
          exclusively to a claim for the repayment by the Debtors
          of principal, interest and other applicable fees and
          charges on or under the Amended and Restated Credit
          Agreement;

       v) the Debtors.

HQ Global Holdings Inc., one of the largest providers of
flexible office solutions in the world, filed for chapter 11
protection on March 13, 2002 in the U.S. Bankruptcy Court for
the District of Delaware.  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A. and Corinne Ball, Esq., and
Charles M. Oellermann, Esq., at Jones, Day, Reavis & Pogue
represent the Debtors in their restructuring efforts.  When the
Company filed for protection from its creditors, it listed
estimated assets of more than $100 million.


HANOVER COMPRESSOR: S&P Lowers Corporate Credit Rating to BB
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Houston, Texas-based Hanover Compressor Co., the
largest participant in the transportable natural gas compression
equipment industry, to double-'B' from double-'B'-plus. Hanover
has about $1.7 billion in debt. The outlook is negative.

"The new ratings reflect Hanover's burdensome debt leverage and
its inability and questionable willingness to repair its
financial profile," noted Standard & Poor's credit analyst
Steven K. Nocar. "While the company's business profile and the
intermediate-term industry fundamentals remain strong, Hanover
has aggressively grown in recent years by running free cash flow
deficits that have been financed through a mix of mostly debt
and equity," he continued. As a result, the company's financial
position has suffered. A rapid improvement in the company's debt
leverage is unlikely, as only modest, free cash flow surpluses
are likely over the intermediate term.

Hanover had been expected to retire $150 million of debt
incurred in its acquisition of Production Operators Inc. with
common equity. Market conditions have forced the indefinite
delay of that offering and Standard & Poor's consequently is
assigning ratings that exclude any expectation of future equity
issuance.

Projected credit protection measures now are commensurate with a
double-'B' corporate credit rating. In the medium term, EBITDA
and rent interest coverage is expected to fall between 2.6 times
and 3.5x, while funds from operations to total debt should fall
between 10% and 20%. Although the company intends to reduce
capital expenditures to a level that enables it to generate
consistent free cash flow, near-term debt reduction through the
application of free cash flow is expected to be moderate.
Financial flexibility is provided by a highly discretionary
capital spending budget (as maintenance capital requirements are
about $65 million), about $120 million of borrowing capacity
under a $350 million bank credit facility maturing in November
2004, and the absence of significant, near-term debt maturities
until 2004, when $358 million of long-term debt and operating
leases are due.

The negative outlook reflects Standard & Poor's continued
concerns regarding Hanover's ability and willingness to
rebalance its capital structure. Ratings could be further
lowered if Hanover continues to run significant, free cash flow
deficits and is required to seek significant external financing,
such that the company's fixed charges materially increase. The
outlook could be revised to stable if Hanover is successful in
rebalancing its capital structure and demonstrates its
commitment to maintaining a more conservative financial profile.


HOMELIFE: Disclosure Statement Hearing Scheduled on September 19
----------------------------------------------------------------
As reported in the Troubled Companies Reporter's July 2, 2002
edition, Homelife Corporation and its debtor-affiliates filed
their Joint Liquidating Chapter 11 Plan and an accompanying
Disclosure Statement in the U.S. Bankruptcy Court for the
District of Delaware.

To consider the adequacy of the Debtors' Disclosure Statement,
the Court will convene a hearing on September 19, 2002 at 9:00
a.m. before the Honorable John C. Akard.  Objections and other
responses to the Disclosure Statement must be in by 4:00 p.m. on
September 9, 2002 and must be received by:

        i) Counsel to the Debtors
           James A. Stempel, Esq.
           Kirkland & Ellis
           200 East Randolph Drive,
           Chicago, Illinois 60601
           Fax: 312 861 2200

                   and

           Laura Davis Jones, Esq.
           Pachulski, Stang, Zeihl, Young & Jones PC
           919 North Market Street
           16th Floor
           PO Box 8705
           Wilmington, Delaware 19899-8705
           Courier 19801
           Fax: 302 652 4400

       ii) Counsel to the Committee
           Clifford A. Katz, Esq.
           Platzer Swergold Karlin Levine Goldberg & Jaslow LLP
           150 East 52nd Street
           New York, New York 10022-6017
           Fax: 212 593 0353

                  and

           Thomas G. Macauley, Esq.
           Zukerman Spaeder LLP
           1201 Orange Street
           Suite 650, PO Box 1028
           Wilminton, Delaware 19899
           Fax: 302 427 8242

      iii) The Office of the United States Trustee
           David Buchbinder, Esq.
           844 N. King Street, Suite 2311
           Lockbox 35, Wilmington, DE 1980
           Fax: 302 573 6497

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


IT GROUP: Committee Hires Friedman Kaplan to Sue Bank Lenders
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of The IT Group, Inc., and its debtor-affiliates, sought
and obtained Court Approval to hire Friedman Kaplan Seiler &
Adelman LLP as Special Counsel for the Committee nunc pro tunc
to April 18, 2002.

The Committee will rely on Friedman Kaplan to serve as special
counsel in connection with the preparation, assertion and
prosecution of claims against the Prepetition Lenders
on behalf of the Committee in accordance with the Court's Cash
Collateral Order.

The Committee filed its lawsuit against IT Group's Prepetition
Lenders last week.

The firm will be compensated on an hourly basis with
reimbursement of actual necessary expenses the firm may incur.
The rates of the professionals who are to work in these cases
are:

                 Professional            Hourly rates
            ---------------------       --------------
             Edward A. Friedman             $575
             Andrew W. Goldwater             475
             Emily A. Stubbs                 315

From time to time Friedman Kaplan may utilize other attorneys
and legal assistants to aid in the representation.  The hourly
rates for these attorneys are:

                 Professional            Hourly rates
              ------------------        --------------
                   Partners               $390 - 575
                  Associates               225 - 385
               Legal assistants            110 - 175

(IT Group Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


INTEGRA INC: Commences Chapter 11 Proceeding in Pennsylvania
------------------------------------------------------------
Integra, Inc., (Amex: IGR) entered into a letter of intent with
APS Healthcare Bethesda, Inc., a wholly-owned subsidiary of APS
Healthcare, based in Bethesda, Maryland, pursuant to which APS
would acquire certain of Integra's assets in a Chapter 11
proceeding filed Friday by Integra in the United States
Bankruptcy Court for the Eastern District of Pennsylvania.

The sale is subject to a number of conditions, including APS'
completion of due diligence with regard to Integra, negotiation
of definitive documentation that is satisfactory to APS,
Integra's achievement of certain cash and cash equivalent
targets, the absence of a material adverse change, Bankruptcy
Court approval and competing bids by third parties, among other
conditions. Integra expects to continue to operate its business
as a debtor and a debtor-in-possession until the closing. After
a short transitional period following the closing, APS plans to
operate Integra's business under the name APS Healthcare
Bethesda.

The letter of intent contemplates a total purchase price for
Integra's assets of approximately $1.3 million, of which $1
million would be paid at the closing. The remaining $300,000
would be paid as an earn-out seven months after the closing if
Integra's business achieves certain revenue targets for the six-
month period after the closing. After payment of secured
indebtedness aggregating approximately $650,000, Integra
anticipates that net proceeds would be available to pay priority
and general unsecured claimants in Integra's bankruptcy
proceedings under a plan of reorganization/liquidation that
Integra expects to file with the Bankruptcy Court. Integra
expects that the proceeds of the $300,000 earn-out, if it is
earned, would also be available to pay claimants in the
bankruptcy proceedings. Under the letter of intent, APS would
not assume any of Integra's liabilities.

It is not anticipated that any distribution will be made to
Integra's equity security holders in connection with its
bankruptcy proceedings or otherwise.

APS Healthcare, Inc., is a privately owned behavioral healthcare
company also offering disease management services. Additionally,
APS offers employee assistance programs which provide assessment
and referral services to assist employees and their dependents
in identifying and addressing potential mental health and
substance abuse problems at their earliest stages. APS provides
service to employers, commercial health plans and public sector
programs in the United States and Puerto Rico, serving
approximately 9 million covered lives. APS is committed to
helping people lead healthier lives by providing user-friendly
and innovative behavioral healthcare systems. For more
information about APS Healthcare, please visit
http://www.apshealthcare.com


JACOBSON STORES: Commences Liquidation Process at All 18 Stores
---------------------------------------------------------------
Jacobson Stores Inc., received authorization to begin
liquidating over $100 million of merchandise inventory in its 18
remaining stores. Closing sales begin Friday, July 26, 2002.

The United States Bankruptcy Court for the Eastern District of
Michigan, Southern Division approved two bids, one to purchase
the Company's merchandise and another to purchase its accounts
receivable.

Approval of the liquidation process follows the Company's
unsuccessful attempts to sell the business as a going concern.

A joint venture group comprised of Gordon Brothers Retail
Partners LLC, SB Capital Group, LLC, Tiger Capital Group, LLC,
and Buxbaum & Associates, Inc. will manage the liquidation sales
for the 134-year-old specialty retailer.

The going out of business sales will continue until all
merchandise has been sold. The sales will offer storewide
discounts off the lowest ticketed prices in categories such as
men's, women's and children's clothing, home furnishings,
giftware and fine jewelry.

"This is great opportunity for Jacobson's customers to find the
distinctive merchandise assortments and fine gifts that they
have come to expect at Jacobson's at significant discounts,"
said Gary Kulp of Boston-based Gordon Brothers Group, on behalf
of the joint venture. "Since many of the most popular designer
brand-name products will be featured in the sales, we know the
stores will sell out very quickly."

Jacobson's currently operates 18 specialty stores in Michigan,
Indiana, Kentucky, Kansas and Florida. The Company's Web site is
located at http://www.jacobsons.com


JOSTENS INC: S&P Assigns BB- Rating to Proposed $330MM Bank Loan
----------------------------------------------------------------
Standard & Poor's assigned its double-'B'-minus rating to the
proposed $330 million senior secured term C bank loan of school-
related affinity products manufacturer Jostens Inc. The proposed
bank loan is due 2009, and proceeds will be used to repay in
full the company's term B bank loan (which has approximately
$330 million outstanding). Upon the closing of the new tranche,
Standard & Poor's will withdraw the existing double-'B'-minus
rating on the term B loan.

At the same time, Standard & Poor's affirmed the double-'B'-
minus corporate credit and secured debt ratings on Minneapolis,
Minnesota-based Jostens, as well as the company's single-'B'
subordinated debt rating. The outlook has been revised to
positive from stable, reflecting Jostens' improved credit
protection measures. Standard & Poor's expects that these
measures will strengthen further following Jostens' bank
amendment and its proposed partial bank refinancing, which will
extend the maturity and lower the company's interest expense.

Josten's had about $650 million in debt outstanding on June 29,
2002.

"The ratings reflect Jostens' high leverage and relatively
narrow business profile," said Standard & Poor's credit analyst
Jean C. Stout. "These factors are somewhat mitigated by the
company's defendable leading position in the school-related
affinity products market."

Jostens is a leading supplier of yearbooks, class rings,
graduation products, and photography services. The $2.3 billion
U.S. scholastic products and school photography services market
is competitive, and three companies dominate a significant
portion of the class ring and yearbook segments. However,
Jostens continues to hold the leading market position in the
approximately $500 million school yearbook market, holding about
twice the share of the next two largest providers. In addition,
Jostens remains the market leader in the estimated $500 million
North American high school and college class ring market.

The school affinity products industry is highly seasonal. As a
result, one-half of Jostens' sales and two-thirds of its
operating income occur in the second quarter.

Jostens remains highly leveraged following its May 2000 LBO,
despite $45 million in voluntary debt payments (as of June
2002). The company improved its financial performance after
exiting the underperforming recognition business. Financial
performance has also benefited from increased pricing,
manufacturing efficiencies, and cost containment initiatives.

The rating on the new and revised bank facilities continues to
be the same as the corporate credit rating. The facility
consists of the existing $150 million term A loan due 2006 (with
an outstanding balance approximately $95 million as of June 29,
2002); a new $330 million term C loan due 2009; and an existing
$150 million revolving credit facility due 2006. The new rating
for term C bank loan is based on preliminary documentation, and
it is subject to review once final documentation is received.


KAISER: Wants Court to Approve Key Employee Retention Program
-------------------------------------------------------------
"[Kaiser Aluminum Corporation and its debtor-affiliates] cannot
afford to lose key employees," Paul N. Heath, Esq., at Richards,
Layton & Finger P.A., in Wilmington, Delaware, tells the
Bankruptcy Court, because "many possess valuable institutional
knowledge that would be difficult to replace."  For the Debtors,
providing compensation incentives is particularly important
because their industry is extremely competitive and their
better-capitalized major competitors aggressively recruit
qualified candidates for management and sales positions.
Without an adequate retention program in place, the Debtors
believe that their competitors and other prospective employers
in other industries would quickly target their most qualified
employees and offer them new career opportunities.

If the key employees are lost, Mr. Heath says, it would be
difficult, costly and time-consuming for the Debtors to attract
qualified replacements since:

    a. the uncertainty created by the Chapter 11 filing makes it
       difficult to recruit replacements with the same caliber as
       those who leave;

    b. hiring new employees would likely require the Debtors to
       pay significant signing bonuses, relocation expenses and
       executive search fees; and

    c. the process of identifying replacement employees could be
       time-consuming, resulting in key positions remaining
       unfilled for significant period of time.

Mr. Heath also points out that the Debtors' operations will
likely suffer because the key employees' departure could erode
vendor and customer confidence.  The loss of these key employees
is likely to lead to further attrition as a result of employees
following their colleagues to the same new employer, the
instability and impairment of morale engendered by the departure
of critical employees, and increased demands on other Key
Employees while positions remained unfilled.

Accordingly, the Debtors the Court's authority to implement a
comprehensive Key Employee Program that:

    -- provides the incentives necessary to retain certain key
       employees;

    -- takes into account the financial constraints and
       obligations to creditors incumbent upon Chapter 11
       Debtors-In-Possession; and

    -- is well within the range of financial incentives approved
       by courts under retention programs for similarly-situated
       Chapter 11 debtors.

            Four Plans Under The Key Employee Program

1. Retention Plan -- designed to facilitate the retention of the
    Key Employees at various levels within the Debtors, and to
    prevent any further attrition of Key Employees.  The salient
    terms under the Retention Plan:

    a. Coverage: The Retention Plan covers 55 of the Key
       Employees divided into two tiers.  Tier I includes the six
       most senior executive officers:

             Jack Hockema      Pres and CEO
             John Bameson      Sr. VP & Chief Admin Officer
             Joseph Bonn       EVP, Corporate Development
             John LaDuc        Executive VP & CFO
             Harvey Perry      EVP & Pres. of Global Commodities
             Edward Houff      General Counsel

    b. Retention Payment:

          Tier I -- annual retention payment from 1.0x to
                       1.25x base salary;

          Tier 2 -- annual retention payment from 0.3x to
                       1.25x base salary;

       50% of each annual Retention Payment is payable every six
       months starting September 30, 2002.

       For Tier 1 employees, 50% of the Retention Payment will be
       withheld by the Debtors and not paid to the employee until
       the Debtors emerge from bankruptcy.  Upon emergence, the
       employee would be paid the withheld Retention Payment in
       two equal installments:

          -- on the Emergence Date; and,
          -- on the anniversary of the Emergence Date

       No portion of the Retention Payment will be withheld in
       the case of Tier 2 employees.

    c. Termination: The Retention Plan is a two-year plan that
       terminates on March 31, 2004.  An eligible employee must
       be employed in good standing on the due date of an
       installment of the Retention Payment in order to receive
       that installment.

       If an employee:

          -- voluntarily terminates his employment prior to a
             Retention Payment date, he will not be entitled to
             any portion of the Retention Payment

          -- is terminated without cause during the pendency of
             the Retention Plan, he will be entitled to his pro
             rata share of the next Retention Payment, based on
             the period of time that employee worked during the
             applicable Retention Payment period.

    d. Discretionary Fund: The Retention Plan provides for a
       $1,000,000 discretionary fund, which may be used, at
       the Debtors' discretion, to address:

          * specific retention issues and for new employees
          * employees not covered by the Retention Plan, and
          * employees already covered by the Plan who are viewed
            as having a high departure risk.

    e. Annual Cost of Plan: $7,300,000 or 0.42 % of the Debtors'
       revenues

2. Severance Plan -- designed to, among other things, provide
    job security in an uncertain environment to certain of the
    Key Employees.  The salient terms of the Severance Plan
    include:

    a. Coverage: The Severance Plan provides severance benefits
       for 62 Key Employees in the event they are terminated
       without cause or constructively terminated.  The Key
       Employees are divided into Tier 1 and Tier 2.  Tier 1
       includes the four senior executive officers EXCEPT:

             Joseph Bonn       EVP, Corporate Development
             John LaDuc        Executive VP & CFO

    b. Severance Payments: An eligible employee is entitled to a
       Severance Payment (lump sum cash payment) in the event of
       an involuntary termination without cause.  Severance
       benefits would not be paid if a Key Employee voluntarily
       terminates his employment or is terminated for cause.

       The Severance Payments include:

          Tier 1 -- equal to 2.Ox base salary effective on the
                       date of termination

          Tier 2 -- from 0.5x to 1.Ox base salary effective on
                       the date of termination

       Members in both Tiers would also receive benefits within
       6 months to 2 years after the termination of employment,
       paralleling the amount of the Severance Payment.  Benefits
       include:

          * medical       * dental       * vision
          * life          * insurance    * disability benefits

    c. Potential Cost: The maximum potential cost of Plan,
       (assuming all 62 Key Employees were terminated or
       constructively terminated) is $14,900,000, or about 0.86%
       of revenues.

3. Change In Control (CIC) Plan -- intended to retain the Key
    Employees through any potential merger or acquisition
    transaction and provide appropriate incentives to Key
    Employees to maximize the potential value to be received from
    that transaction.  The salient terms under this Plan are:

    a. Coverage: The CIC Plan covers 20 of the Key Employees
       again divided into Tier 1 and Tier 2.  Same Tier 1 members
       as the Severance Plan.

    b. CIC Payment: In the event of:

          (1) a change in control, which includes:

                -- a sale of all or some of Debtors' assets
                -- a change in the composition of the Board of
                   Directors or the shareholders

              in connection with a transaction; and,

          (2) termination or constructive termination;

       The corresponding CIC payments are:

          Tier 1 -- equal to 3.Ox the sum of the employee's
                    annual salary and incentive target, plus
                    prorated incentive

          Tier 2 -- equal to 2.Ox the sum of the employee's
                    annual salary and incentive target, plus
                    prorated incentive

          All payments are effective at the time of the
          termination or constructive termination.

       Key Employees in both Tiers also would receive the same
       benefits provided under the Severance Plan for a period of
       years corresponding to the CIC Payment multiple for each
       Tier.  The CIC protection would continue for two years
       after the date of a change in control, and would be in
       lieu of, not in addition to, any Severance Payment.

    c. Potential Cost: The maximum potential cost of Plan
       (assuming that a CIC occurs and all covered employees are
       terminated or constructively terminated) is $24,600,000,
       representing 1.42% of annual sales.

4. Long Term Incentive Plan -- designed to provide incentive to
    the Key Employees in order to meet certain identified
    performance objectives and to motivate these employees
    successfully to reorganize the Debtors at the  earliest
    practicable time.  The Debtors' LTI Plan is a cash-based
    program that would replace the Debtors' equity-based program
    that existed prior to the Petition Date.  The terms of the
    LTI Plan include:

    a. Coverage: The LTI Plan covers 55 Key Employees

    b. Incentive: Eligible employees would receive an incentive
       award based on the annual cost reduction achieved (with no
       inflation adjustment) and the Key Employee's individual
       LTI target and performance:

       -- For year 2002, the cost reduction plan is $105,000,000,
          and the LTI Plan provides for a $75,000,000 minimum
          threshold;

       -- For year 2003, the cost reduction plan is an additional
          $28,000,000, with no minimum threshold in that year.

       In each year, the aggregate award available to covered
       employees would be 15% of the actual cost reduction in
       excess of the minimum threshold.

       If the:

          -- $105,000,000 plan were met in year 2002, the total
             award would be $4,500,000;

          -- if the $28,000,000 plan were met in year 2003 the
             total award would be $4,200,000.

       These awards would not be paid until emergence.  The
       awards would then be payable in two equal installments:

          -- on the Emergence Date
          -- on the anniversary of the Emergence Date

    c. Termination: Any earned but undistributed awards would be
       forfeited if an eligible Key Employee voluntarily
       terminates his employment with the Debtors -- other than
       normal retirement at age 62 -- or is terminated for cause
       prior to the scheduled payment date.

               Creditors Committee Supports KERP

The Unsecured Creditors Committee asks the Court to allow the
Debtors to implement the Key Employee Program because it is a
product of lengthy discussions and negotiations among the
Debtors and their creditors.

In fact, Rafael X. Zahralddin-Aravena, Esq., at Ashby & Geddes,
in Wilmington, Delaware, discloses that the Debtors agreed to
make two changes to the KERP before filing their Motion:

1. The Debtors have agreed to defer an additional 0.25x base
    salary, in addition to the 0.50x base salary deferred until
    emergence from bankruptcy, for the Tier I employees under the
    Retention Plan.  Thus, depending on the occurrence of the
    Effective Date of the Debtors' reorganization plan, Tier 1
    employees will receive:

    a. 100% -- if the Effective Date occurs within 30
       months of the Petition Date;

    b. 50% -- if the Effective Date occurs within 30
       to 42 months of the Petition Date; and,

    c. zero -- if the Effective Date occurs thereafter.

2. The Debtors have agreed to increase the cost improvement
    threshold from $75,000,000 to $80,000,000, which is the
    minimum amount of actual cost reductions that must be
    achieved in order for executives to be eligible to receive
    compensation under the LTI Plan.

"The Creditors' Committee believes that these changes will
provide a realistic incentive for management as well as keep the
overall annual cost of the Key Employee Program more in line
with historical prepetition compensation and key employee
retention plans in other cases," Mr. Zahralddin-Aravena says.

But while the Unsecured Creditors Committee fully supports the
Debtors' proposed Key Employee Program (with the revisions), Mr.
Zahralddin-Aravena points out that there is an open issue
relating to certain terms of the Debtors' Key Employee Program,
including the definitions of "cause", "change in control", and
"constructive termination."  Although the Debtors have been
diligently attempting to get these terms completed and sent to
the Committee for its review, the Committee has not yet been
able to review any of these crucial terms of the Key Employee
Program.

Out of an abundance of caution, the Creditors' Committee
reserves all of its rights to object to the Key Employee Program
if an agreement among the Creditors' Committee and the Debtors
cannot be reached regarding these vital terms.

           Asbestos Claimants Want More Time To Review

According to Matthew G. Zaleski, III, Esq., at Campbell &
Levine, LLC in Wilmington, Delaware, the Asbestos Claimants
Committee only learned of the proposed Program two days before
the filing of the Motion.  The Debtors gave the Asbestos
Claimants Committee a presentation concerning their proposed
retention programs.

Consequently, the Asbestos Claimants Committee believes that it
has not had sufficient time to complete its review of the facts
and circumstances underlying the Debtors' proposed compensation
programs or determine whether or not objections as to the
implementation of the proposed program should be made.

                          USWA Objects

The United Steelworkers of America, AFL-CIO-CLC wants the
implementation of a Key Employee Program denied or adjourned
until the Debtors have produced a business and strategic plan
that has been reviewed by major constituencies.  If considered
now, the program should be modified to remove some of its most
egregious components.

According to Susan E. Kaufman, Esq., at Heiman, Aber, Goldlust &
Baker, in Wilmington, Delaware, the implementation of the
program is rather premature because Court approval is being
sought prior to the formulation and distribution of a business
and strategic plan.  The Debtors also failed to prove that they
are facing an employee exodus and failed to demonstrate a need
to implement any programs.

"Stripped to its core, the Motion seeks approval of a program
that handsomely rewards executives, regardless of their track
record, the wisdom (or even completion) of business and
strategic plans, or the likelihood of being hired away," Ms.
Kaufman says. Approval of the program will more likely cost the
estates their needed assets rather than assisting
reorganization.

Ms. Kaufman further points out that the Debtors' proposed
program is inequitable and will create a major negative impact
on the morale of the bargaining unit employees and a
deterioration in Kaiser's relationship with the USWA --
particularly in the face of the Debtors' suggestion that one of
the reasons for the bankruptcy filing was the cost of retiree
benefits.  The program also demonstrates unfair labor practices
and the failure to directly consult with the USWA concerning the
instant programs.

"It is simply outrageous for the Debtors to propose spending
huge sums to retain a small group of executives so, apparently,
those same high-priced executives can seek concessions from the
bargaining unit Retirees' Committee," Ms. Kaufman says.

The Debtors also fail to demonstrate a basis for particular
aspects of the proposed Program:

    (a) The Retention Program guarantees payment to the covered
        executives without regard to the ultimate outcome of the
        Debtors' Chapter 11 cases;

    (b) The Retention Program merely rewards an executive for
        remaining on the job, rather than providing an incentive
        for executives to devote additional time and energy to
        pursuing a plan of reorganization to maximize the benefit
        for all classes of stakeholders -- including its hourly
        employees;

    (c) The program fails to provide for a set-off of retention
        and severance payments if an employee is severed;

    (d) The program fail to provide for mitigation in the event
        of severance;

    (e) The Motion and KERP fail to provide a justification for
        the CIC provisions; and

    (f) The KERP fails to require that retention payments, in
        particular, are made in the currency that is distributed
        to creditors, rather than a guarantee of cash.  If the
        KERP is approved executives will have a guarantee of
        cash, while creditors await their fate.

Ms. Kaufman also makes it clear that, although USWA has been
appointed as a member of the Official Committee of Unsecured
Creditors in these cases, this objection is made only in the
USWA's own capacity as a creditor, not as a member of the
Committee.
                      Debtors Reply To USWA

"Contrary to the USWA's implications, the Key Employee Program
does not add layers of incentives on top of what already
existed, but rather, in large part, replaces prior programs with
ones better tailored to the Chapter 11 context," Paul N. Heath,
Esq., at Richards, Layton & Finger P.A., in Wilmington,
Delaware, explains.  Mr. Heath contends that failure to put
these programs in place to replace the pre-existing ones would
result in a substantial decrease in compensation and benefits
for all key employees, many if not most of which would
undoubtedly seek alternative employment at a market rate of
compensation.

The Debtors have already in fact lost several key employees
since the Petition Date.  "There is simply no reason why
approval of the Key Employee Program should be delayed, whether
until completion of a strategic plan or for any other reason,"
Mr. Heath says.

Mr. Heath reiterates that the need for the Key Employee Program
is immediate to avoid further attrition and to ensure that those
employees who are most essential to the development of the
strategic plan and the completion of the Debtor's ultimate
reorganization do not leave the employ of the Debtors to the
detriment of all creditors. (Kaiser Bankruptcy News, Issue No.
12; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LTV CORP: USWA Submits Administrative Claim for Wages & Benefits
----------------------------------------------------------------
The United Steelworkers of America, AFL-CIO-CLC, formerly the
collective bargaining representative of certain employees of LTV
Steel Company, Inc., and its affiliates at numerous facilities,
present a request for allowance of administrative expense, along
with a proof of claim, for:

      Basis of Claim                  Amount of Claim
      --------------                  ---------------
  (1) Unpaid Vacation                 Unliquidated, but at least
                                      $22,000,000 *1*

  (2) Vacation Bonus                  Unliquidated, but at least
                                      $1,080,000

  (3) Service Bonus                   Unliquidated, but at least
                                      $55,000

  (4) Severance                       Unliquidated, but at least
                                      $34,236,600

  (5) Claims relating to              Unliquidated, but at least
      Voluntary Employee              $44,000,000
      Benefits Association

  (6) WARN Act Liability              Unliquidated, but at least
                                      $37,742,400

  (7) Contributions to Institute      Unliquidated, but at least
      for Career Development          $636,300

  (8) Contributions to Overtime       Unliquidated, but at least
      Control Training Fund           $13,238,400

  (9) Grievances *2*                  Unliquidated

(10) Employee deductions,            Unliquidated
      unpaid holiday pay, unpaid
      sick leave, unreimbursed
      medical, drug, accident,
      sickness and disability
      expenses, retiree benefits,
      unreimbursed other expenses,
      unpaid contributions to
      employee benefit funds, and
      all other monies which may be
      due under the CBAs, including
      wages, shift differentials,
      premiums, leave and holidays *3*

*1* Per an inter-creditor agreement not further identified,
     the USWA says this amount has been subordinated to other
     administrative claims.

*2* In addition to all wages and other amounts directly due
     under grievances, the Debtors are obligated for all fund
     contributions, vacation accrual, premiums and amounts due
     under the CBAs in relation to wages owed under these
     grievances.

*3* The Debtors were authorized to make these payments under
     certain first-day orders and other orders of the Court.

Since the Petition Date, Assistant General Counsel David R.
Jury, Esq., relates, the Debtors have been and continue to be in
breach of their respective obligations to the USWA.  "This proof
of claim is made on behalf of the USWA and present and former
employees, and surviving spouses, of the Debtors for claims
arising from the CBAs," Mr. Jury explains.  The USWA demands
"any priority to the extent permitted under Sections 503,
507(a)(1), 1113, 1114, and any other applicable section of the
Bankruptcy Code."  The USWA reserves the right to establish the
liability of all amounts due under the CBAs under the grievance
and arbitration procedures of the CBAs. (LTV Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-
00900)


LOGOATHLETIC: Wants Cozen O'Connor to Pursue Avoidance Actions
--------------------------------------------------------------
LogoAthletic, Inc., and the Official Unsecured Creditors'
Committee appointed in the company's chapter 11 cases are now
pursuing preference claims and other avoidance actions to
increase the amount of money available to the company's
creditors.

Cozen O'Connor, Proskauer Rose, co-counsel to the Committee, and
Pachulski, Stang, Ziehl, Young and Jones P.C., counsel for the
Debtors, have jointly pursued recoveries through the first stage
of a two stage process to recover payments avoidable under
Section 547 of the Bankruptcy Code.  That first stage consisted
of sending demand letters to target defendants.

The Debtors and the Committee now want to proceed to the second
stage and commence adversary proceedings to recover preferences
not recovered through the demand letter phase as soon as
possible. The Debtors and the Committee believe it would be most
efficient to have one Delaware firm represent the estates in all
of the preference actions.

Cozen O'Connor agrees to look solely to the proceeds of the
Preference Actions recovered by way of settlement, adjudication
or otherwise after May 1, 2002.  Cozen O'Connor also agrees to
"cap" its total compensation for Preference Services at one
third of the aggregate gross Preference Action Recoveries.

LogoAthletic, Inc., made NFL-, MLB-, NBA-, NCAA- and NHL-
licensed sports apparel (pants, jackets, shirts, shorts, and
caps). The Company filed for chapter 11 protection on November
6, 2000. Christopher James Lhulier, Esq., at Pachulski Stang
Ziehl Young & Jones PC represents the Debtors in their
restructuring efforts.


MARTIN IND: Terminates Andersen Firm as Independent Accountants
---------------------------------------------------------------
On July 11, 2002, Martin Industries, Inc., dismissed its
independent accountants, Arthur Andersen LLP, effective
immediately. The decision to terminate the engagement of
Andersen was approved by the Company's Board of Directors upon
the recommendation of its Audit Committee. Andersen's report on
the Company's 2001 financial statements was issued earlier in
March, 2002, in conjunction with the filing of the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.
The Company is still in the process of investigating and
approving new independent accountants.

Martin Industries designs, manufactures and sells high-end, pre-
engineered gas and wood-burning fireplaces, decorative gas logs,
fireplace inserts and gas heaters and appliances for commercial
and residential new construction and renovation markets, and do-
it-yourself utility trailer kits known as NuWay.

                           *   *   *

As reported in the July 9, 2002 issue of the Troubled Company
Reporter, Martin Industries, Inc., received an extension of its
current line of credit from its primary lender through August
31, 2002.  The $7.5 million line was scheduled to expire on July
1, 2002.  The Company's primary lender has agreed to waive the
Company's noncompliance with certain loan covenants through the
end of the second quarter.  Also extended to August 31, 2002
were fees of $100,000, which are waived if the full amount
outstanding on the line is paid by July 31, 2002. If the full
amount on the line is paid after July 31, 2002, but on or
before August 15, 2002, Martin is only obligated to pay one-half
of the fees. In addition, the Company's previously announced
agreement to issue to its primary lender a warrant to purchase
common stock in the Company in the event the Company did not
repay the line in full by July 1, 2002 was extended to July 31,
2002.


METALS USA: Proposes Uniform Customer Setoff Procedures
-------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates ask the Court to
approve uniform procedures allowing their customers to setoff
prepetition amounts due to them by the Debtors against
prepetition amounts they owe to the Debtors.

Zack A. Clement, Esq., at Fulbright & Jaworski LLP, in Houston,
Texas, tells the Court that the Debtors are willing to gamble on
a procedure to improve their ability to collect collectibles
with minimum expense to the estates and use of the Court's time.
Mr. Clement relates that since the Petition Date, the Debtors
have been working diligently to collect the receivables from
their customers.  Demand letters have even been sent out to
customers whose accounts are past due.  But many customers
refused to pay, unless allowed to setoff its prepetition debts
to the Debtors.

So long as the remaining amount due after setoff is promptly
paid, the Debtors have no qualms accommodating their customers.

The elements of a setoff include:

    a. the Debtor must owe a debt to the creditor which arose
       prior to commencement of the action;

    b. the Debtor must have a claim against the creditor which
       arose prior to the commencement of the action; and

    c. the debt and claim must be mutual.

The Debtors specifically seek to establish this procedure for
setoff:

1. Any customer interested in using the setoff procedure shall
    provide the Debtors with all information in writing,
    including invoices, contracts, etc., evidencing their right
    to a setoff;

2. The Debtors shall review the information provided by the
    customer and determine whether and to what extent a customer
    has a valid right to setoff;

3. Once the Debtors and customer agree on the validity and
    amounts of the proposed setoffs, they shall enter into a
    Stipulation and Agreed Order Authorizing Setoff and Payment
    of Claims, substantially in its standard form, which will
    require the customer to pay the net receivable promptly, or
    else pay a penalty;

4. The Setoff Stipulation will:

    a. fix the amount owed to the relevant Debtor relating to the
       pre-petition period;

    b. fix the creditor's pre-petition claim amount against
       the relevant Debtor;

    c. permit setoff pursuant to Sections 553, 362 and 105;

    d. fix the remaining net amount owed to (or claimed against)
       the relevant Debtor;

    e. require prompt payment, within 10 business days, of net
       amounts owed to the relevant Debtor; and

    f. act as a resolution or withdrawal of any proof of claim
       filed by the creditor to the extent of the claimed setoff.
       The Debtors will provide the Creditors' Committee's
       counsel and the Bank Group's counsel with 10 business days
       negative notice via electronic mail prior to any Setoff
       Stipulation filing.

Any creditor that disagrees with the Debtors' view about the
setoff may file its own motion.

Mr. Clement points out that the proposed procedure will maximize
the Debtors' recovery of their receivables and minimize expenses
to collect the receivables.  The setoff will also expedite the
claims resolution process and improve Debtors' relationships
with their customers, which will, in turn, enhance Debtors'
reorganization efforts.

If the setoff procedure is not approved, Mr. Clement says, the
trial of a turnover action would be required, which would be
costly since it is unlikely that the Debtors would obtain a
finding providing for recovery of any amount greater than what
is proposed in the Setoff Stipulation.  The attorney's fees and
expenses necessary to litigate the action could be greater than
the small amounts in controversy.

                        Mesquite Responds

The City of Mesquite and the Mesquite Independent School
District do not believe the Debtors' setoff procedure is fair
because:

    -- it does not require written support for the setoff
       to be attached to the Setoff Stipulation,

    -- notice of any Setoff Stipulations is inadequate,

    -- the Debtors are relying only on three elements to
       determine whether to give the creditor a setoff, and

    -- the Court is not required to conduct a hearing on the
       fairness of any compromise.

Kent F. Brooks, Esq., at the Law Office of Kent F. Brooks in
Dallas, Texas, asserts that the Debtors should modify the Setoff
Procedure to address Mesquite's concerns. (Metals USA Bankruptcy
News, Issue No. 16; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


METOKOTE CORP: S&P Assigns B+ Rating to Proposed $168M Bank Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its single-'B'-plus
corporate credit rating to MetoKote Corp., the largest
independent provider of industrial coating in the U.S.

At the same time, Standard & Poor's assigned its single-'B'-plus
rating to the company's proposed $168.4 million senior secured
credit facility expiring Nov. 2, 2005. Proceeds from the
facility are to be used to refinance all of the company's
existing revolving credit facility and all, or a portion, of the
existing $36.5 million tranche A term loan, both of which are
scheduled to mature on November 2, 2003. The Lima, Ohio-based
company has $188 million at fiscal year-end 2001. The outlook is
stable.

"The corporate credit rating on MetoKote reflects the company's
well below-average business profile and its aggressive financial
position," said Standard & Poor's credit analyst Nancy Messer.

MetoKote occupies a favorable business position, including the
company's broad product line and its integrated business model
that consists of design, building, and installation of coating
equipment. MetoKote is the only company in the industry capable
of delivering a complete range of coating services-
electrocoating, powder, and liquid painting.

Mitigating these favorable business characteristics is the
cyclical and highly competitive nature of the markets for
MetoKote's products and services, along with the company's
concentrated customer base. The company has modest geographic
diversity, with the vast majority of MetoKote's net revenue
generated in the U.S.

Standard & Poor's does not view liquidity as a near-term concern
because MetoKote's maturities are moderate for 2002 and 2003
(the company's fiscal year ends in October), and the revolving
credit facility is mostly unused. Maturities, however, step up
significantly in 2004.

The upside rating potential is limited by cyclical and
competitive characteristics of MetoKote's operating environment.
Downside rating risk is mitigated by a disciplined growth
strategy and relatively stable cash flow generated by the
company's annex locations.


ORBITAL: Committee Seeks Probe re Relationship with Orbimage
------------------------------------------------------------
On June 19, 2002, the Official Committee of Unsecured Creditors
of Orbital Imaging Corporation filed a motion in the Bankruptcy
Court in the Eastern District of Virginia seeking authority to
conduct discovery against Orbital Sciences Corporation under
Federal Rule of Bankruptcy Procedure 2004. The following sets
forth more details regarding the relationship with ORBIMAGE and
the genesis of this motion.

                           ORBIMAGE

In 1992, Orbital Sciences Corp., formed ORBIMAGE to provide
satellite-based remote sensing services. Between 1992 and May
1997, Orbital Sciences operated ORBIMAGE as a wholly owned
subsidiary, with a limited number of employees pursuing
commercial and government remote sensing market opportunities.
During this time, Orbital Sciences entered into several
agreements with ORBIMAGE, including a fixed price procurement
agreement to sell ORBIMAGE several satellite systems, and a
services agreement whereby Orbital Sciences provided ORBIMAGE
with certain administrative services and technical support.
Certain of Orbital Sciences' officers and directors served in
similar capacities with ORBIMAGE.

Between May 1997 and February 1998, ORBIMAGE raised
approximately $60 million in three private sales of its Series A
convertible preferred stock to accredited investors. As a result
of these sales, and after giving effect to the payment of
dividends on the preferred stock in kind since its initial
issuance, at March 31, 2002, Orbital Sciences owned 99.9% of
ORBIMAGE's outstanding common stock and approximately 52% of the
total voting interests in ORBIMAGE after giving effect to the
conversion of ORBIMAGE's preferred stock.

At the time of the initial sales of the preferred stock, Orbital
Sciences entered into a stockholders agreement with the
preferred stockholders, pursuant to which that corporation
granted the preferred stockholders significant control rights.
Among other things, the stockholders' agreement provided for the
reconstitution of the ORBIMAGE board of directors. The number of
board seats was fixed at five, with two directors appointed by
Orbital Sciences, two appointed by the holders of the preferred
stock, and one independent director nominated by Orbital
Sciences, subject to the approval of the two directors appointed
by the holders of the preferred stock. The stockholders'
agreement required that at least one director appointed by the
preferred stockholders needed to approve material transactions
with Orbital Sciences or its affiliates. In addition, the
stockholders' agreement required that at least one of the
directors appointed by the preferred stockholders approve all
proposed transactions involving potential obligations in excess
of $500,000.

Between 1998 and 1999, ORBIMAGE raised $225 million in senior
notes due 2005. The indenture governing these notes, which are
non-recourse to Orbital Sciences, imposed additional
requirements with respect to the approval of certain affiliate
transactions, including the need to obtain a fairness opinion
from a disinterested third party for affiliate transactions with
a value above $10 million. Orbital Sciences indicates that it
believes that it complied with these provisions in its dealings
with ORBIMAGE.

In 1999, ORBIMAGE and MacDonald, Dettwiler & Associates, Ltd.,
then Orbital Sciences wholly owned subsidiary, entered into a
license agreement granting ORBIMAGE the worldwide distribution
rights for data to be generated by the Radarsat-2 satellite
currently under construction by MDA. In June 2000, Orbital
Sciences agreed to assist ORBIMAGE in negotiating a modification
to this license agreement. In connection with Orbital Sciences'
agreement to assist in negotiating this modification, that
corporation agreed to temporarily refund $20 million to ORBIMAGE
if a modification meeting certain requirements had not been
agreed to by January 2001. At that same time, ORBIMAGE and
Orbital Sciences agreed to the termination of a stock purchase
agreement pursuant to which Orbital Sciences had agreed to make
certain equity investments in ORBIMAGE based on its cash
requirements.

On February 9, 2001, the parties signed a new agreement that
granted ORBIMAGE a license to distribute Radarsat-2 data in the
United States. Despite the delay, Orbital Sciences says it did
not (and does not believe it was required to) temporarily refund
the $20 million to ORBIMAGE. Under the terms of the modified
distribution agreement, ORBIMAGE agreed to pay a total of $40
million to MDA ($30 million of which was credited from payment
made under the original contract) with the remaining $10 million
dollars to be paid in two $5 million installments, which are due
from ORBIMAGE in July and December of 2002. Orbital Sciences
also agreed that it would purchase receivables from ORBIMAGE in
an amount equal to the installment obligation, and to forward
such payments to MDA, if ORBIMAGE is unable to make these
payments to MDA and if so requested by ORBIMAGE. Any such
purchase would be subject to bankruptcy court procedures and
approval and Orbital Sciences may not be able to monetize any
receivables to the full extent of the price it pays.

ORBIMAGE is currently in default on its interest payment
obligations under its senior notes. On April 5, 2002, ORBIMAGE
filed a voluntary petition of reorganization under Chapter 11 of
the U.S. Federal Bankruptcy Code in the Eastern District of
Virginia. ORBIMAGE has not yet filed a plan of reorganization.
While Orbital Sciences is attempting to negotiate a consensual
plan of reorganization with ORBIMAGE, certain of its major
preferred stockholders and the Creditors Committee, to date
Orbital Sciences has been unable to reach a mutually
satisfactory agreement.

Under the procurement agreement, Orbital Sciences is continuing
to construct the OrbView-3 satellite and related launch vehicle
and ground segment. OrbView-3 is scheduled for launch in the
second half of 2002. In September 2001, Orbital's Taurus rocket
that was carrying the OrbView-4 satellite for ORBIMAGE did not
achieve the mission's intended orbit and the satellite was lost.
Orbital Sciences also has continued to provide ORBIMAGE with
certain administrative services and technical support, generally
on a cost-reimbursable basis. At December 31, 2001, ORBIMAGE
owed Orbital Sciences approximately $7 million under the
procurement agreement and the administrative services agreement.

Orbital Sciences could become involved in litigation with
ORBIMAGE, its other stockholders and/or its creditors. ORBIMAGE
has suggested that it might have a claim against Orbital
Sciences with regard to the agreement described above to
temporarily refund to it $20 million. ORBIMAGE has also
suggested that it may have other, unspecified claims, including
those relating to the Radarsat-2 transactions  and other claims
arising out of alleged conflicts of interest surrounding
transactions among Orbital, ORBIMAGE and MDA.

On June 19, 2002, the Creditors Committee filed a motion in the
Bankruptcy Court for authority to conduct discovery against
Orbital under Federal Rule of Bankruptcy Procedure 2004. The
stated purpose of the Creditors Committee in seeking such
discovery is to investigate the details of ORBIMAGE's
relationship and transactions with Orbital Sciences in order to
reveal whether claims are warranted against it or certain of its
directors, officers and former officers on theories that might
include, among others, wrongful control and domination, breach
of fiduciary duty, breach of contract, fraud and
misrepresentation.

If any such litigation were to be commenced, the amounts sought
by ORBIMAGE and its stakeholders could be material. Orbital
Sciences believes it has valid defenses to those claims that
ORBIMAGE and the Creditors Committee have articulated to date
and intends to vigorously defend any actions that may be brought
against the Corporation relating to ORBIMAGE.

Orbital develops and manufactures affordable space systems,
including satellites, launch vehicles and advanced space
systems. Orbital is also involved with satellite-based networks
that provide wireless data communications and high-resolution
Earth imagery to customers all around the world. More
information about Orbital can be found at http://www.orbital.com

As of March 31, 2002, the Company posted a total working capital
deficit of about $33.7 million.


OWENS CORNING: Seeks Approval of Lease Indenture with Lexington
---------------------------------------------------------------
Owens Corning and its debtor-affiliates seek approval of an
Indenture of Lease with Lexington Minneapolis LLC and a
Development Agreement with Lexington and Jones Development
Company LLC.  The agreements are for the construction and lease
of a warehouse and distribution facility that is to be
constructed directly behind the Owens Corning's shingles
manufacturing plant in Minneapolis, Minnesota.

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, informs the Court that the Debtors decided to
construct a new storage facility because the existing one, which
the Debtors lease on a month-to-month basis, is 13 miles from
the plant.  Thus, significant transportation and other costs are
incurred in transporting products between the two locations.
Furthermore, the current storage facility is not paved and is
not large enough to meet the plant's production capabilities.

According to Ms. Stickles, the new storage facility is
envisioned to contain indoor facilities for storing
miscellaneous packaging materials, as well as shipping offices
needed for the operation of the facility.  In addition, the road
to the facility would be paved and would be big enough to
accommodate the plant's production capacity.

Pursuant to the Development Agreement, Ms. Stickles continues,
Lexington will engage Jones Development as an independent
contractor to develop and construct for Lexington the new
storage facility.  The development consists primarily of:

    a. constructing 18,000-square feet of ancillary offices, and

    b. grading, paving, lighting and constructing drainage
       facilities for an outdoor storage area on the 10.5-acre
       site.

The Development Agreement hinges on, among other things:

1. Lexington acquiring title to the land;

2. Lexington and Owens Corning executing the Lease and putting
    a $1,700,000 security deposit into escrow; and

3. the parties completing ordinary due diligence.

The Indenture of Lease obligates Owens Corning to lease the
property for a primary term of 12 years with three five-year
renewal terms.  The initial rent is fixed at $43,656 per month,
with yearly escalations over the 12-year primary term, subject
to adjustments as provided in the Lease.  Owens Corning is also
required to pay additional rent to cover insurance premiums
provided for in the Lease, and various other expenses and
obligations relating to the property.

The Indenture of Lease gives Owens Corning the option to
purchase the property after five years:

      Lease Year         Exercise Date         Price
      ----------         -------------      ----------
         5                 11/1/07          $5,000,000
         6                 11/1/08           5,100,000
         7                 11/1/09           5,202,000
         8                 11/1/10           5,306,040
         9                 11/1/11           5,412,161
         10                11/1/12           5,520,404
         11                11/1/13           5,630,812
         12                11/1/14           5,743,428

Owens Corning is also obligated to make an offer, which may be
rejected, to purchase the Property if the plant is sold to an
unrelated third party, or if the plant is shutdown for more than
30 consecutive days without plans for restoring operations.  The
purchase price would then be:

      Lease Year         Exercise Date         Price
      ----------         -------------      ----------
         1                 11/1/03          $4,784,250
         2                 11/1/04           4,688,565
         3                 11/1/05           4,594,794
         4                 11/1/06           4,502,898
         5                 11/1/07           4,412,180
         6                 11/1/08           4,324,583
         7                 11/1/09           4,238,091
         8                 11/1/10           4,153,330
         9                 11/1/11           4,070,263
         10                11/1/12           3,988,858
         11                11/1/13           3,909,081
         12                11/1/14           3,830,899

Ms. Stickles maintains that sound business justification exists
for the Court to approve the motion.  The new storage facility
will permit Owens Corning to consolidate the storage and
packaging of roofing products in Minneapolis in one location and
thus eliminate or reduce operating costs.  Ms. Stickles points
out that:

    -- the financial terms of the Lease and Development Agreement
       are competitive with those available in the market, and

    -- the option to purchase is a beneficial provision in the
       Lease, the purchase price being competitive and grounded
       on the fair market value of the Property.

Ms. Stickles assures the Court the Lease and Development
Agreements are products of an arm's-length, good faith
negotiations between Owens Corning, Lexington and Jones
Development. (Owens Corning Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Owens Corning's 7.700% bonds due 2008
(OWC08USR1) are trading between 38.75 and 40. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=OWC08USR1for
real-time bond pricing.


PACIFIC GAS: PwC Employing Ethical Walls to Protect Parties
-----------------------------------------------------------
In a Sixth Supplemental Declaration, Thomas E. Lumsden, a
Partner at PricewaterhouseCoopers LLP, reports that PwC has been
retained to provide audit and tax services to Edison
International, parent company of Southern California Edison, a
creditor of PG&E and an interested party in the settlement of
PG&E's claims with the California Power Exchange (Cal PX) and
the California Independent System Operator (Cal ISO).

In addition, specialists from PwC's audit and business assurance
division have been retained by the Debtor's parent -- PG&E
Corporation -- to assist in:

    (a) gathering financial and operating information from
        company records,

    (b) formatting information for both footnote and MD&A
        disclosure, and

    (c) providing SEC and GAAP comments to the Registration
        Statement Team for the filing and registration of the
        disaggregated entities of PG&E.

PG&E Corporation also asked PwC to provide transition assistance
for the disaggregated entities.  "Appropriate people and
processes" are reportedly in place at the newly formed entities.
PwC will not be providing any assurance services, Mr. Lumsden
assures the Court.

PwC reaffirms that ethical wall procedures are in place to
protect the use and confidentiality of information and services
to the PG&E Official Committee of Unsecured Creditors.

Mr. Lumsden further advises Judge Montali that effective July 1,
2002, PwC has increased its standard professional billing rates
for all clients.

     Professional      Position           Old Rates   New Rates
     ------------      --------           ---------   ---------
     Hamilton, Mike    Partner              640         640
     Lumsden, Tom      Partner              595         595
     Pellervo, Pat     Partner              595         595
     Reiss, Freddie    Partner              595         595
     Ho, Rocky         Director             450         475
     Lu, Jennifer      Manager              400         450
     Young, Allison    Manager              375         425
     Chen, Yitze       Sr. Associate        325         345
     Neis, Margery     Sr. Associate        325         345
     Iking, Floris     Associate            250         265
     Perfit, Ryan      Associate            200         215
     Sin, Theresa      Associate            175         185
     Dolan, Catherine  Paraprofessional      40          55
(Pacific Gas Bankruptcy News, Issue No. 40; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PANACO: Taps Schully as Special Mineral Matters Counsel
-------------------------------------------------------
Panaco, Inc., asks for permission from the U. S. Bankruptcy
Court for the Southern District of Texas to employ Schully,
Roberts, Slattery, Jaubert & Marino as special counsel.

The Debtor relates to the Court that it has previously employed
Schully Roberts as oil and gas counsel, including negotiations
with Foothill Capital Corporation as well as representing Debtor
in litigation involving Debtor's mineral interests in Louisiana.

The Debtor assets that they need the services of Schully Roberts
to execute faithfully its duties and to develop, propose, and
consummate a chapter 11 plan. Schully Roberts will render:

      i) general advice on mineral property-related matters,
         including questions related to title and operational
         issues and compliance with governmental requirements;

     ii) assist in negotiations for the purchase, sale or other
         disposition of mineral interests;

    iii) assist in negotiations related to existing or new
         financing sources;

     iv) representation of Debtor in litigation proceedings
         involving Debtor's oil and gas properties or the
         operation thereof; and

      v) provide other assistance as required by Debtor in
         connection Debtor's oil and gas properties and
         interests.

Schully Roberts' customary hourly rates are:

           Lisa Jaubert             Member       $260 per hour
           Gerald F. Slattery       Jr. Member   $260 per hour
           Paul J. Goodwine         Associate    $175 per hour
           Stephen B. Panus         Associate    $160 per hour
           Janet H. Aschaffenburg   Associate    $160 per hour

Panaco, Inc., is in the business of selling oil and natural gas
produced on properties it leases to third party purchasers. The
Company filed for chapter 11 protection on July 16, 2002. Monica
Susan Blacker, Esq., at Neligan Stricklin LLP represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $130,189,000 in assets
and $170,245,000 in debts.


PENN SPECIALTY: Court Confirms Third Amended Reorganization Plan
----------------------------------------------------------------
After determining that the Plan complies with the applicable
provisions of the Bankruptcy Code, the U.S. Bankruptcy Court for
the District of Delaware confirmed Penn Specialty Chemical,
Inc.'s Third Amended Plan of Reorganization.  On the Effective
Date, the Reorganized Debtor will adopt and file its Amended and
Restated Certificate of Incorporation.

Lyondell Chemical Company filed an objection to confirmation of
the Plan that was withdrawn before the Confirmation Hearing.

The Plan provides for the selection of officers and directors,
consistent with the interests of creditors and equity security
holders and with public policy.  The Reorganized Debtor intends
to continue paying all retiree benefits currently in place.

The Debtors convinced the Court that their Plan is feasible and
that confirmation of the Plan is not likely to be followed by a
liquidation or the need for further financial reorganization.
There is, the Bankruptcy Court found, a reasonable prospect that
the Debtor will meet its financial obligations under the Plan.

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


PHYCOR: New York Court Confirms Plan of Reorganization
------------------------------------------------------
PhyCor announced that its creditors have overwhelmingly approved
its bankruptcy reorganization plan and that the plan has been
confirmed by the United States Bankruptcy Court for the Southern
District of New York.  PhyCor expects the plan to be consummated
on or about July 31, 2002. When the plan is consummated, PhyCor
will change its name to Aveta Health, Inc. PhyCor filed for
Chapter 11 bankruptcy relief on January 31, 2002.

Under the terms of the reorganization plan, PhyCor's creditors,
including holders of its 4.5% convertible subordinated
debentures, will receive 5.7 million shares of Aveta Health,
Inc. common stock, except that holders of allowed claims against
PhyCor below $50,000 will receive a cash payment of 12.2% of
their claim. PhyCor's common stockholders will not participate
in the plan and their common stock will be canceled. The Company
anticipates that the newly issued stock of Aveta Health, Inc.
will not be publicly traded.

Commenting on the reorganization, President and Chief Executive
Officer Tarpley B. Jones, said, "Bankruptcy is a difficult
process because a company must confront those institutions and
individuals who lost substantial sums of money while it tries to
maintain its customer base. I am pleased, however, that PhyCor
was in bankruptcy for only six months and that our operating
units performed well during this time. That is a testament to
the months of hard work that went into formulating the
bankruptcy plan. Aveta Health will emerge from bankruptcy with a
good business plan and solid opportunities for growth."

Aveta will have an entirely new Board of Directors, consisting
of Mr. Jones, as Chairman, and Paul Giordano, Scott Creedon,
Gary Glatter and Joseph Mark.

Acting as counsel to the Company during the bankruptcy process
were the New York Office of Skadden, Arps, Slate, Meagher & Flom
LLP and Waller Lansden Dortch Davis PLLC of Nashville. The
Company's financial advisor was Jefferies & Company, Inc.

Aveta Health, which will remain headquartered in Nashville, is a
healthcare risk management company that provides services to
630,000 individuals in California, Illinois, Tennessee and
Kansas. Aveta Health arranges for the provision of healthcare
services through its relationships with its owned and affiliated
Independent Physician Associations (IPAs) and Physician Hospital
Organizations (PHOs). Aveta Health provides these services
through its North American Medical Management (NAMM)
subsidiaries. Aveta also has two divisions that provide contract
management services to hospital-owned physician groups (Pivot
Health) and consulting and related services to physician groups
(Medical Group Practice Systems).


PINNACLE TOWERS: US Trustee Names Unsecured Creditors' Committee
----------------------------------------------------------------
Carolyn S. Schwartz, the United States Trustee for Region II,
appointed a five-member Official Unsecured Creditors Committee
in the chapter 11 cases involving Pinnacle Towers III, Inc., and
its debtor-affiliates.  The Committee members who will represent
the interests of the Debtors' general unsecured creditor body in
plan-related negotiations are:

      1. The Bank of New York, as Trustee
         101 Barclay Street
         New York, New York 10286
         Attention: Gerard Facerdola, Vice President
         Tel: (212) 896-7224

      2. Abrams Capital LLC
         425 Boylston Street, Suite 3
         Boston, Massachusetts 02116
         Attention: David Abrams
         Tel: (617) 646-6100

      3. Lonestar Partners, L.P.
         8 Greenway Plaza, Suite 800
         Houston, Texas 77046
         Attention: Jerome Simon
         Tel: (713) 622-0321

      4. Fort Washington Investment Advisors
         420 East Fourth Street
         Cincinnati, OH 45202
         Attn: Brendan White
         Tel: (513) 361-7639

      5. Corban Communications, Inc.
         901 Jupiter Road
         Plano, Texas 75074
         Attention: President
         Tel: (214) 969-1367

Pinnacle Towers III, Inc., the leading independent providers of
wireless communications site space in the United States, filed
for chapter 11 protection on May 21, 2002.  Peter Alan Zisser,
Esq., and Sandra E. Mayerson, Esq., at Holland & Knight, LLP
represent the Debtors in their restructuring efforts. As of May
31, 2002, the Debtors listed $1,002,675,000 in assets and
$931,899,000 in liabilities.


POLAROID CORP: Continuing Current Employee Severance Program
------------------------------------------------------------
As previously reported, Polaroid Corporation and its debtor-
affiliates sought the Court's authority to extend the
implementation of a current Severance Program through September
30, 2002 with the expected cost of $1,700,000.

Judge Peter J. Walsh of the United States Bankruptcy Court for
the District of Delaware authorizes the Debtors to pay the
Employees terminated on or before September 30, 2002:

    (a) accrued vacation pay in a lump sum on the day of the
        Employee's termination; and

    (b) at the Debtors' sole discretion, either:

        -- four weeks of salary paid over time in line with
           standard payroll practices and four weeks of medical
           health benefits at Employee rates from the date of
           termination; or

        -- an approved leave of absence with pay and benefits for
           four weeks after termination;

Furthermore, the Court rules that:

    (a) the total payment under the Severance Program for
        Employees terminated between October 20, 2001 and
        September 30, 2002 should not exceed $5,700,000 without
        further Court order;

    (b) any terminated Employee that will be hired by One Equity
        Partners will not be eligible for severance payments;

    (c) any Employee that receives a payment under the Severance
        Program will not be eligible for any payment under any
        other Debtors' severance program; and

    (d) if, under the applicable state or federal employment law,
        the Debtors are required to pay terminated Employees an
        amount in excess of that to be paid under the Severance
        Program, the Debtors are authorized to do so, provided
        that the Debtors give written notice of their intention
        to counsel for the DIP Agent and the Creditors' Committee
        at least 10 days' prior to any payment.


POINT.360: Inks Option Agreement to Purchase Alliance Shares
------------------------------------------------------------
On July 3, 2002, Point.360 entered into an Option Agreement with
Alliance Atlantis Communications Inc., whereby the Company
acquired an option to purchase all of the issued and outstanding
shares of Tattersall Casablanca Sound Inc., Calibre Digital
Design Inc. and Salter Street Digital Limited,  wholly-owned
subsidiaries of Alliance.   The Company may exercise the option
to purchase the Subsidiaries at any time prior to December 31,
2002.

In consideration for the Agreement, the Company granted Alliance
a warrant to purchase 500,000  shares of the Company's common
stock at $2.00 per share.  The warrant is exercisable on the
earlier of (i) the date on which the Company purchases the
Subsidiaries, or (ii) the date on which the Company allows the
option to expire.  The warrant expires on July 3, 2007, or July
3, 2005 if the Company does not exercise its option to acquire
the Subsidiaries.

Point.360, which changed its name from VDI MultiMedia in mid-
2001, provides video and film management services to film
studios and ad agencies. Point.360 offers editing, mastering,
reformatting, archiving, and distribution services for
commercials, movie trailers, electronic press kits,
infomercials, and syndicated programs. Services provided to the
seven major film studios accounted for nearly 40% of VDI's 2000
revenue.

                         *   *   *

As reported in the May 7, 2002 edition of Troubled Company
Reporter, Point.360 (Nasdaq: PTSX) has completed a long-term
financing  agreement with its existing banks.

In entering the agreement, the Company made an initial principal
payment of $2 million after which the Company's cash balance was
approximately $4.4 million. The loan will bear interest at the
banks' prime rate plus 1.25% which is less than the rate paid
previously.

Haig S. Bagerdjian, the Company's Chairman, stated: "Reaching a
long-term arrangement is a major achievement as we prepare for
future growth and profitability. Strong operating performance by
Luke Stefanko and his team has exceeded our expectations
enabling the Company to generate cash sufficient to meet and
exceed previously set objectives and permit a mutually
beneficial bank restructuring. Our balance sheet has been
strengthened since January 1, 2001 as we have reduced vendor
liabilities by approximately $5.6 million and increased cash by
approximately $5.7 million (prior to the $2 million initial
principal payment). As a result of operational efficiencies
already implemented, we are generating sufficient cash to enable
us to not only fulfill our obligations to creditors, but give us
funds necessary to invest in the future. The bank agreement also
removes the condition that caused the qualified audit opinion in
our recently filed Form 10-K."


SCHUFF INTERNATIONAL: S&P Cuts Corp. Credit Rating to B from B+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Phoenix, Arizona-based
Schuff International Inc., to single-'B' from single-'B'-plus,
citing the engineering and construction firm's announcement of
weaker earnings. The company had about $100 million of debt
outstanding at June 30, 2002. The outlook is negative.

"The rating action follows the company's announcement that due
to continued weak market conditions, it generated $2.3 million
of EBITDA in the second quarter of 2002 versus $7.5 million in
the prior-year period," said Standard & Poor's credit analyst
Joel Levington. "These results have heightened financial risk,
with trailing 12-month total debt to EBITDA of about 5.7 times,"
the analyst said. In addition, credit protection measures may
decline further as the company now anticipates EBITDA of $14
million-$16 million in 2002, down from about $22 million in
2001. Liquidity is marginal, with just $12 million of cash and
$4 million of bank availability at June 30, 2002.

The ratings on Schuff International reflect its limited
liquidity, very aggressive financial profile, and its leading
positions with niche segments of the North American construction
market.

Schuff competes in niche segments within the large and highly
fragmented engineering and construction (E&C) sector. Demand is
highly cyclical, as it is tied heavily to new commercial
construction activities. Weak market conditions have led to a
significant decline in project margins; with EBITDA declining
69% in the second quarter on just a 8.9% revenue decline.
Pricing pressures will likely remain high (particularly in the
joists business), which may further strain the credit profile in
the near term. Although Schuff's backlog, at about $197 million
at June 30, 2002 (compared with about $130 million at Dec. 31,
2000) has grown, the company has experienced some project
delays, and such project awards can be cancelled with limited
economic repercussions to customers. Somewhat tempering the weak
market demand is the company's highly variable cost structure,
which limits operating leverage.

Nonetheless, current credit measures are modest, with total debt
to EBITDA of about 5.7x at June 30, 2002. The financial profile
may erode further in the very near term as lower-margined work
is completed. In addition, the company's financial flexibility
is limited with only $4 million under a $15 million revolving
credit facility available and $12 million in cash as of June 30,
2002. As a result of the modest absolute size of cash
generation, Standard & Poor's expects the company's credit
measures to fluctuate over the business cycle, with total debt
to EBITDA in the 5.0x-6.0x range, and EBITDA interest coverage
in the 2.0x range.

Failure to stabilize cash flow generation and liquidity may lead
to further downgrades in the near term.


SMURFIT-STONE: Planned Mill Acquisition Spurs S&P's B+ Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its single-'B'-
plus corporate credit rating on major packaging manufacturer
Smurfit-Stone Container Corp., following the announcement that
it has agreed to purchase a corrugated medium mill from
MeadWestvaco Corp. The outlook remains stable.

Smurfit-Stone, based in Chicago, Illinois, has agreed to
purchase MeadWestvaco's Stevenson, Alabama corrugated medium
mill and its associated operations for $350 million in cash,
plus $25 million related to financing. "The acquisition should
allow Smurfit-Stone to continue the progress it has made during
the past few years in optimizing its manufacturing base and
improving its cost structure", said Standard & Poor's credit
analyst Cynthia Werneth. "Management expects at least $40
million in synergies from the transaction".

The announcement of this transaction closely follows news that
Smurfit-Stone has agreed to sell its industrial packaging
operations to Caraustar Industries Inc., for about $80 million
in cash, retaining about $12 million in receivables. Smurfit-
Stone did not have a leadership position in this business--the
manufacturing of tubes, cores, and partitions.

Standard & Poor's said that its ratings on Smurfit-Stone
incorporate the expectation of continued, gradual strengthening
of the company's financial profile over the intermediate term.
However, in the near term, somewhat better economic and
containerboard market conditions are likely to be offset by high
recycled fiber costs, continued production downtime, and
slightly higher debt levels.


SPIGADORO INC: AMEX Commences Delisting Proceedings
---------------------------------------------------
Spigadoro, Inc., (Amex: SRO) confirmed that the American Stock
Exchange had commenced delisting proceedings with respect to the
Company's common stock. The AMEX has notified the Company that
due to substantial net losses incurred by the Company, a working
capital deficit and a going concern opinion provided by the
Company's auditors, as well as a low stock trading price for a
substantial period of time and the previously announced
agreement to sell the Company's operating subsidiaries, the
Company no longer complies with the AMEX's continued listing
standards set forth in Sections 1002(a), 1002(e), 1003(a)(iv)
and 1003(f)(v) of the AMEX Company Guide.

Trading in the Company's shares has been halted since July 19th,
when the Company announced its agreement to sell its operating
subsidiaries. It is anticipated that the delisting will become
effective at the opening of trading on July 29, 2002. The
Company does not anticipate that the Company's common stock will
be listed for trading on an alternative marketplace.


SULPHUR CORP: Creditors Protection Under CCAA Expires July 19
-------------------------------------------------------------
Proprietary Industries Inc., announced that the stay granted to
SCC under the Companies' Creditors Arrangement Act expired on
July 19, 2002.  SCC is 80% owned by PPI.

SCC has also received formal notice from Ridley Terminals Inc.,
that all subleases and operating agreements between RTI and SCC
have been terminated. The inability to complete a restructuring
combined with the RTI terminations leaves SCC no means of paying
its debts, or continuing with construction at Prince Rupert. SCC
is currently insolvent and all of its directors have resigned.

Proprietary has invested approximately $19 million in equity and
debt in SCC.

The foregoing will lead to a write-down of Proprietary's assets.
Proprietary is in the process of taking a one time write-down of
approximately $19 million in property, plant and equipment,
effective June 30, 2002. This represents approximately 7% of
Proprietary's gross assets. The Board has not concluded an
examination of all its options however and the final details of
the write-down have not yet been confirmed.

Proprietary's management still believes that the potential
remains for Proprietary to negotiate new leases and successfully
complete the Prince Rupert sulphur handling facility, which is
at present 80% complete. Proprietary's management also believes
that Proprietary is well positioned to arrange for the
completion of formed, blocked and molten sulphur storage
facilities, and to assemble the only integrated sulphur handling
facility in Canada.

Proprietary is based in Calgary, Alberta and listed on the
Toronto and Swiss Stock Exchanges trading under the symbol PPI.
Proprietary is a principal merchant bank that owns, manages and
deals in a portfolio of financial, natural resource and real
estate interests. Proprietary's management strives to maintain a
balance between generating profits, sustaining growth and
realizing capital appreciation, having targeted 20% as its
minimum operating margin, annual asset and revenue growth rates.
Proprietary has paid dividends for the last two of its nine
years of operations. Proprietary has been named in the Profit
100 list of Canada's fastest growing companies for the past
three years, and has had a five-year revenue growth of 6,116%.


SUN WORLD: Nixed Agreement Prompts S&P to Affirm Low-B Ratings
--------------------------------------------------------------
Standard & Poor's affirmed its single-'B'-minus corporate credit
rating and single-'B' senior secured debt rating on Sun World
International Inc.  All ratings are removed from CreditWatch,
where they were placed on January 16, 2002.

The rating action follows the company's announcement that Sun
World and Kingdom Agricultural Development Co., a private
Egyptian firm, have mutually agreed not to complete the
combination of their two companies at this time. However, the
two companies will continue to work together under a project
management agreement established in 1999.

The outlook is negative. Total rated debt for Santa Monica,
California-based Sun World is about $115 million.

Although Sun World's recent operating results have been below
Standard & Poor's expectations, the firm has used the downturn
in the farming industry as an opportunity to reposition the
business. The firm has shifted its production mix to higher
priced proprietary products, which now account for about 50% of
revenues up from 30% in 1999.

"In the short-term, Sun World's ratings could be lowered if the
bank facilities are not refinanced and/or credit protection
measures do not begin to improve in fiscal 2002," said Standard
& Poor's credit analyst Jayne M. Ross.

The ratings for Sun World reflect the company's highly levered
financial profile, the commodity nature of its products, and
potential earnings and cash flow volatility. The refinancing
risk and investment strategy of the company's parent, Cadiz
Inc., is another rating consideration.

Sun World is an important participant in the highly competitive
California-based agriculture industry, with well over 15,000
acres of owned land. The company is a grower and marketer of
table grapes, watermelons, sweet peppers, plums, peaches,
nectarines, apricots, and lemons. The company is also a large
independent marketer of third-party crops.

There is some refinancing risk because Sun World's one-year
secured revolving credit facility matures in November 2002, and
Cadiz's one-year $35 million secured bank facility, matures in
January 2003.


USG CORP: Trafelet Employs Young Conaway as Local Counsel
---------------------------------------------------------
Dean M. Trafelet, the Legal Representative for Future Claimants
in the Chapter 11 cases of USG Corporation and its debtor-
affiliates, sought and obtained the Court's authority to retain
Young Conaway Stargatt & Taylor LLP as local counsel, nunc pro
tunc to June 6, 2002.

Young Conaway will assist Mr. Trafelet on matters relating to
local custom and practice, as well as the general administration
of these Chapter 11 cases.  Young Conaway will work closely with
the Futures Representative's lead counsel -- Kaye Scholar LLP --
to avoid duplication of effort.

Mr. Trafelet tells the Court that Young Conaway is a general
practice, litigation-oriented firm that maintains a national,
regional and local practice in the areas of personal injury,
employment, and environmental law.  Young Conaway also has
extensive experience and knowledge in the field of debtor's
rights and Chapter 11 business reorganizations.  Currently,
Young Conaway represents the legal representatives for the
unknown asbestos injury claimants in the Celotex, Babcock &
Wilcox, Federal-Mogul Global, Owens Corning, and Armstrong World
Industries bankruptcy cases.  The firm also represents Fuller-
Austin Insulation Company in its Chapter 11 case.

Young Conaway's services will enable the Futures Representative
to carry out his duties and responsibilities in connection with
these Chapter 11 cases.  Specifically, Young Conaway will:

    (a) provide legal advice with respect to the Futures
        Representative's powers and duties to the Future
        Claimants;

    (b) take any and all actions necessary to:

        -- protect and maximize the Debtors' estates' values for
           the purpose of making distributions to Future
           Claimants; and

        -- represent the Futures Representative in connection
           with negotiating, formulating, drafting, confirming,
           and implementing a plan(s) of reorganization, and
           performing other functions set forth in Section
           1103(c) of the Bankruptcy Code and necessary to
           effectively the interests of the Future Claimants;

    (c) prepare, on behalf of the Futures Representative,
        necessary applications, motions, objections, answers,
        orders, reports and other legal papers in connection with
        the estates' administration in these cases; and

    (d) perform any other legal services and other support
        requested by the Futures Representative in connection
        with these Chapter 11 cases.

Young Conaway's attorneys and paralegal presently designated to
these cases, and their current hourly rates are:

         James L. Patton, Jr.     Partner         $475
         Edward J. Harron         Associate       $330
         Sharon M. Zieg           Associate       $240
         Timothy E. Lengkeek      Associate       $220
         Sandi Van Dyk            Paralegal       $130

The firm will also seek reimbursement for all expenses,
including telephone and telecopier toll and other charges, mail
and express mail charges, document processing, supply charges,
and the like.

James L. Patton, Jr., Esq., a partner at Young Conaway, informs
the Court that he conducted a conflicts search to determine the
firm's disinterestedness.  Mr. Patton asserts that Young Conaway
do not have any representations that are materially adverse to
the interests of the Debtors' estates, any class of creditors or
equity security holders, or the Futures Representative.
According to Mr. Patton, Young Conaway will periodically review
its files during the pendency of these Chapter 11 cases to
ensure that no entities or other disqualifying circumstances
exists or arise.  If any new relevant facts or relationships are
discovered or arise, Mr. Patton assures the Court, the firm will
use reasonable efforts to identify further developments and will
promptly file a Supplemental Affidavit, as Bankruptcy rule
2014(a) requires. (USG Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WARNACO GROUP: Wants to Expand BDO Seidman's Accounting Services
----------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates seek the
Court's authority to expand the scope of BDO Seidman's
employment, nunc pro tunc to July 3, 2002, so that the firm may
assist them in formulating and confirming a plan of
reorganization.

Stanley P. Silverstein, Warnaco Vice President, General Counsel
and Secretary, relates that BDO Seidman's expanded duties will
include:

    (a) an analysis of the financial condition, operating results
        and prospective results of the Company, including:

          (i) The Plan and prospective financial information
              prepared by the Company and its financial advisors;

         (ii) Balance Sheets, historical and at the projected
              effective date of a plan, assets, liabilities and
              book value;

        (iii) historical operating results, particularly profits
              generated and factors affecting profits;

         (iv) dividends paid historically, if any, and dividend-
              paying capacity; and

          (v) outlook at the Valuation Date;

    (b) interviews and correspondence with the Company's
        management.  BDO will interview the Company's executives
        and financial advisors to augment its knowledge of the
        Company, including its history and management, the
        nature of its business, and factors affecting its
        business going forward;

    (c) a review of published market data and other available
        public information relating to the Company and the
        apparel industry, including:

          (i) relevant historical trends, current performance
              indicators, and outlook at the Valuation Date for
              the economy and the apparel industry;

         (ii) bases of investors' appraisal, at the Valuation
              Date, of publicly traded shares of companies that
              can be used for comparative purposes; and

        (iii) acquisitions of companies that can be used for
              comparative purposes; and

    (d) presentation of its opinion, observation and
        conclusions in a narrative report with related schedules
        and exhibits and, if necessary, in a sworn statement or
        oral testimony to be provided in support of the Company's
        plan or plans of reorganization in these cases.

Mr. Silverstein explains that BDO Seidman will be compensated
for the Valuation Services on an hourly basis based on these
current rates:

        Partners             $330 - 550
        Senior Managers       215 - 480
        Managers              195 - 330
        Associates            140 - 245
        Staff                  85 - 185

BDO Seidman will also be reimbursed for its reasonable out-of-
pocket expenses.  The firm estimates that the total cost for the
additional services will range from $75,000 to $85,000.  The
out-of-pocket reimbursement is expected not to exceed 7% of the
estimated fees.

Mr. Silverstein assures the Court that the provisions of the
Original Retention Order will, except as otherwise stated in
this Application, continue to govern BDO Seidman's employment
under the Original Retention Order and the new Order. (Warnaco
Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WHEELING-PITTSBURGH: Court OKs Settlement with KWELMB Companies
---------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation sought and obtained Court
approval of its settlement with:

    (a) Kingscroft Insurance Company, Ltd.
          aka Dart & Kraft Ins. Co.,

    (b) Walbrook Insurance Co. Ltd.,

    (c) El Paso Insurance Co. Ltd.,

    (d) Lime Street Insurance Co. Ltd.
          aka Louisville Ins. Co. Ltd.,

    (e) Mutual Reinsurance Co. Ltd., and

    (f) Bermuda Fire & Marine Insurance Co. Ltd.

In October 1999, WPSC settled certain environmental claims that
it had made against various insurers under certain insurance
policies.  Some of the insurers, who participated in the
relevant policies, were subject to insolvency proceedings in
England.  These insurers included the KWELMB companies.

Pursuant to an October 22, 1999 Settlement, the insurers
allocated $3,690,695.91 for payment by the KWELMB companies.
WPSC asserted claims to recover these funds.

As of November 2001, the projected recoveries for KWELMB
creditors allegedly ranged from 20% to 41%, depending on the
relative liabilities of the companies involved in a particular
insurance program.  Average recoveries were projected to be 30%.

WPSC has now reached an agreement to settle all of its claims
against the KWELMB companies for $1,414,039 cash payment.  This
translates to 37% recovery.

The Debtors convinced Judge Bodoh that the settlement is fair
and reasonable.  Without the settlement, WPSC could have been
required to litigate with the KWELMB companies. (Wheeling-
Pittsburgh Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WILLIAMS COMMUNICATIONS: Resolves Issues with Former Parent
-----------------------------------------------------------
Williams (NYSE: WMB) has entered into agreements with its former
subsidiary, Williams Communications Group (OTC Bulletin Board:
WCGRQ), and the Official Committee of Creditors in WCG's Chapter
11 bankruptcy case, settling all issues between the two
companies.  Subject to bankruptcy court approval of WCG's
Chapter 11 case, Williams will receive aggregate consideration
of $325 million, comprised of $225 million in cash and a $100
million note, and Williams' ongoing involvement with WCG will be
substantially terminated.

"[Fri]day's announcement is an important step toward fixing this
problem, which has created considerable uncertainty in the
market," said Steve Malcolm, chairman, president and CEO of
Williams. "This settlement agreement allows us to focus all of
our efforts on the issues of our ongoing business and our
liquidity."

The global settlement, which is to serve as the cornerstone of
WCG's plan to emerge from Chapter 11 bankruptcy, includes these
key components:

      -- Leucadia National Corporation (NYSE: LUK) will purchase
Williams' largest claims against WCG for $180 million.

      -- Williams will sell the WCG headquarters building and
certain related assets to WCG for $45 million in cash and a $100
million mortgage note.

      -- Williams and WCG will exchange mutual releases and WCG's
creditors will give up any claims they have against Williams.

      -- Williams agrees to allow WCG use of the Williams
Communications name for two years and provides all rights to the
WilTel name to the newly restructured company.

      -- Leucadia will invest an additional $150 million in WCG
and receive 45 percent of the stock in WCG in respect of the new
money and the purchase of Williams' claims.

      -- WCG's bondholders will receive substantially all of the
remaining 55 percent in WCG in exchange for their debt. Williams
no longer will have an investment in the telecommunications
company.

WCG's plan of reorganization must be approved by creditors and
the bankruptcy court for the settlement to become effective. No
assurances can be given that the required approvals will be
obtained or that the other conditions to the settlement will be
satisfied.

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.
Williams information is available at http://www.williams.com

DebtTraders reports that Williams Communications Group Inc.'s
10.875% bonds due 2009 (WCGR09USR1) are trading between     12.5
and 14. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCGR09USR1
for more real-time bond pricing.


WILLIAMS COMMS: Secures $150-Million Investment from Leucadia
-------------------------------------------------------------
Williams Communications Group, Inc. (OTC Bulletin Board: WCGRQ),
has reached an agreement on a minority investment of $150
million from Leucadia National Corporation (NYSE: LUK); the
investment is a key component of the Company's restructuring
efforts. Williams Communications also announced that the
Official Committee of Unsecured Creditors has entered into a
Settlement Agreement with the Company, The Williams Companies
(NYSE: WMB), and Leucadia National Corporation. Filed with the
Settlement Agreement will be additional restructuring
agreements, including the terms of Leucadia's investment in the
Company and Leucadia's purchase of certain rights associated
with the claims of The Williams Companies against Williams
Communications for the purchase price of $180 million.

"Leucadia's investment in Williams Communications is an
important step forward for the Company and we are pleased that
all parties were able to work together to formalize the
Settlement Agreement," said Howard Janzen, chief executive
officer of Williams Communications Group. "Not only is this a
significant endorsement of our business strategy, quality
workforce and superior network and operations, it also aligns
with Leucadia's strategy of seeking out opportunities that can
provide long-term investment growth. We hope to successfully
emerge from Chapter 11 this fall and remain focused on providing
the world-class network and superior level of service our
customers have come to expect."

As also outlined in the Settlement Agreement, Williams
Communications will transition to the WilTel name over the next
two years. WilTel was the precursor to Williams Communications
and led the development of fiber-optic networks by pioneering
the use of decommissioned pipelines to carry fiber-optic lines
in the 1980s.

A form of the Amended Plan of Reorganization will be included in
the exhibits to the Settlement Agreement and is expected to be
filed soon with the United States Bankruptcy Court for the
Southern District of New York. Joining the Company in sponsoring
the Plan will be the Official Committee of Unsecured Creditors
and Leucadia National Corporation. The Plan will describe the
treatment of all claims against the Company, as well as the
structure of the reorganized Company upon emergence from
bankruptcy.

Filed with the Plan will be an Amended Disclosure Statement that
describes the process for voting on the confirmation of the Plan
and provides important information to the members of those
classes who will vote. A hearing on the Disclosure Statement has
been scheduled for August 13.

Under the proposed Plan, the unsecured creditors would receive
approximately 55 percent of the new equity in a reorganized
Williams Communications. As detailed in the Settlement
Agreement, Leucadia National will purchase the claims of The
Williams Companies and, when combined with its $150 million
investment in the Company, Leucadia would hold approximately 45
percent of the new equity. Each of those equity stakes would be
subject to dilution by distributions from an allocation set
aside for securities claims settlements. The Plan will provide a
mechanism for distributing up to two percent of the new equity
to holders of securities-related claims. Details on this
mechanism will be outlined at a later date and are subject to
court approval.

As part of the proposed Plan a new Williams Communications Board
of Directors would be formed. It would include two directors
selected by Leucadia, five directors selected by the Official
Committee of Unsecured Creditors, one director selected by the
current Board of Directors and Howard Janzen, CEO of the
reorganized Company.

Also included in the transactions envisioned by the Plan is the
proposed purchase of Williams Communications' headquarters
building in Tulsa and other assets from The Williams Companies
for $150 million. The purchase would consist of a cash payment
of approximately $45 million and a $100 million mortgage to be
held by The Williams Companies. By purchasing these assets on
these terms, Williams Communications will save more than $30
million per year.

Based in Tulsa, Oklahoma, Williams Communications Group, Inc.,
is a bankrupt "debtor in possession" and the parent company of
Williams Communications, LLC, a leading broadband network
services provider. For more information, visit
http://www.williamscommunications.com


WORLDCOM INC: Bringing-In Weil Gotshal as Chapter 11 Counsel
------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates are depending on Weil
Gotshal & Manges LLP to represent them in these Chapter 11
cases.

WorldCom Senior Vice-President Susan Mayer tells the Court that
Marcia L. Goldstein, Esq., Lori R. Fife, Esq., and Alfredo R.
Perez, Esq., and certain other members, counsels, and associates
of the Firm, are members in good standing of the Bar of the
State of New York and the United States District Court for the
Southern District of New York, among others.  In addition,
Christopher Mallon, Esq., as well as other members, counsels,
and associates in the Firm's office in London, United Kingdom
will provide international expertise with respect to matters
pertaining to the Debtors' operations in foreign jurisdictions.

Ms. Mayer explains that the Debtors have selected Weil Gotshal
as their attorneys because of the firm's knowledge of the
Debtors' businesses and financial affairs, and its extensive
general experience and knowledge, particularly its recognized
expertise in the field of debtors' protections and creditors'
rights and business reorganizations under chapter 11 of the
Bankruptcy Code. Weil Gotshal has been actively involved in
major Chapter 11 cases, including the representation of the
debtors in Global Crossing Ltd., Enron Corp., APW Ltd.,
Bethlehem Steel Corporation, Rhythms NetConnections Inc., Regal
Cinemas, Inc., Armstrong Worldwide Industries, Sunbeam
Corporation, Ames Department Stores, Inc., Genesis Health
Services Corp., Carmike Cinemas, Inc., DIMAC Holdings, Inc., Sun
Healthcare Group, Inc., Bruno's, Inc., United Companies
Financial Corporation, Consolidated Hydro, Inc., Olympia & York
Development Limited, Texaco Inc., Edison Brothers Stores, Inc.
(I) and (II), G. Heileman Brewing Company, Inc., R.H. Macy &
Co., Inc., Weiner's Stores, Best Products Co., Inc. (I) and
(II), P.A. Bergner & Co. Holding Company, Grand Union
Corporation and The Drexel Burnham Lambert Group, Inc., among
others.

According to Ms. Mayer, the Debtors engaged Weil Gotshal in June
2002 for assistance and advice with respect to the formulation,
evaluation, and implementation of various restructuring
alternatives, debtor-in-possession financing, and the
commencement and prosecution of their Chapter 11 cases.  There
is no doubt that the Firm is well qualified and uniquely able to
represent the Debtors in their Chapter 11 cases in a most
efficient and timely manner.

Were the Debtors required to retain attorneys other than Weil
Gotshal in the prosecution of these Chapter 11 cases, Ms. Mayer
says, the Debtors, their estates, and all parties-in-interest
would be unduly prejudiced by the time and expense necessarily
attendant to the attorneys' familiarization with the intricacies
of the Debtors and their business operations.

The Debtors expect Weil Gotshal to:

A. take all necessary action to protect and preserve the estates
    of the Debtors, including the prosecution of actions on the
    Debtors' behalf, the defense of any actions commenced against
    the Debtors, the negotiation of disputes in which the Debtors
    are involved, and the preparation of objections to claims
    filed against the Debtors' estates;

B. prepare on behalf of the Debtors, as debtors in possession,
    all necessary motions, applications, answers, orders,
    reports, and other papers in connection with the
    administration of the Debtors' estates;

C. negotiate and prepare on behalf of the Debtors a plan of
    reorganization and all related documents thereto; and

D. perform all other necessary legal services in connection with
    the prosecution of these chapter 11 cases.

Marcia L. Goldstein, a member of the Firm, assures the Court
that the Firm does not have any connection with, or any interest
adverse to, the Debtors, their creditors, or any other party in
interest, or their respective attorneys and accountants.
However, Ms. Goldstein acknowledges that the Firm previously
represented, currently represents, and may represent in the
future these entities, in matters totally unrelated to the
Debtors:

A. Bondholder: American Express, Bank of New York, Bank of
    NY/Barclays Capital, First Union, LaSalle Bank, Merrill
    Lynch, SG Cowen Securities, Prudential, PNC Bank, Bank of
    America, BT Alex Brown, Credit Suisse First Boston, Goldman
    Sachs, UBS PaineWebber, Donaldson Lufkin Jenrette, and Morgan
    Stanley;

B. Indenture Trustee: Mellon Bank N.A., and Fleet Bank;

C. Bank Lender: Arab Bank PLC, Banco Bilbao Vizcaya, Bank of
    Nova Scotia, Bank of Tokyo Mitsubishi, Bank One NA,
    Bayerische Landesbank, Credit Lyonais, Fortis Capital Corp.,
    Governor & Co. Bank of Scotland, Intesabci SPA, JP Morgan
    Chase, Lloyds TBS Bank PLC, Mizuho Holdings - DKB/Fuji/IBJ,
    Royal Bank of Scotland, Westdeutsche Landesbank Girozentrale,
    ABN AMRO, Deutsche Bank, Citibank, N.A./Salomon Smith Barney,
    J.P. Morgan Chase, BNP Paribus, and Fleet Bank;

D. DIP Lender: GE Capital

E. Underwriter: Arthur Andersen-Morgan Stanley, Bear Stearns,
    Lehman Brothers, NationsBanc Montgomery Securities LLC, The
    Bank of Tokyo-Mitsubishi Ltd., UBS Warburg LLC, and Warburg
    Dillon Read;

F. Unsecured Creditors: AMC Corporation, AT&T Communications,
    BellSouth Corporation, Cisco Systems, Compaq Computer Corp.,
    Electronic Data Systems Inc., GC Services Inc., Hewlett
    Packard, Indostat, Messner Velere Berger Mcnamee, Motorola,
    Qwest Communications, SBC Communications Inc., Verizon
    Communications, and Wells Fargo;

G. Landlord: CIT Capital Finance, Daimler Chrysler Services
    North America, NYNEX, and Pacificorp;

H. Regulatory Agency: The Department of Justice, and The Federal
    Communications Commission; and

I. Professionals: Ernst & Young LLP, KPMG, and
    PricewaterhouseCoopers LLP.

Weil Gotshal will charge the Debtors with its customary hourly
rates.  The Firm's current hourly rates range from:

       Members and Counsel         $375 to $700
       Associates                  $200 to $410
       Paraprofessionals           $120 to $175

The Firm will also seek reimbursement of its expenses related to
the prosecution of these cases.

Ms. Goldstein reports that Weil Gotshal received $8,000,000
advanced from the Debtors as compensation for:

    (a) professional services performed and to be performed
        relating to the potential restructuring of the Debtors'
        financial obligations and the commencement and
        prosecution of these chapter 11 cases, and

    (b) reimbursement of reasonable and necessary expenses
        incurred.

The Firm has used this advance to credit the Debtors' account
for its charges for professional services performed and expenses
incurred prior to the Petition Date, estimated to be $1,900,000.
The $6,000,000 balance will be applied to postpetition
allowances of compensation and reimbursement of expenses that
are allowed by the Court. (Worldcom Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

DebtTraders reports that Worldcom Inc.'s 10.875% bonds due 2006
(WCOM06USR2) are trading between 14 and 16. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM06USR2
for more real-time bond pricing.


WORLDCOM: Bankruptcy Not Affecting Internet So Far, Keynote Says
----------------------------------------------------------------
Keynote Systems (Nasdaq:KEYN), The Internet Performance
Authority(R), reported that, so far, Internet performance shows
no signs of performance degradation in light of WorldCom's
recent bankruptcy filing Sunday, July 21, 2002. Through UUNET
and other subsidiaries, WorldCom (Nasdaq: WCOME, MCITE) is the
world's largest carrier of Internet traffic. Keynote measures
the pulse of the Internet 24 hours a day from 50 cities around
the globe and has the ability to quickly detect degradation in
Internet performance as experienced by end users.

Since WorldCom declared Bankruptcy concerns have been raised
publicly regarding, what, if any, would be the affect on the
Internet-using public. So far, Internet performance has remained
steady, though businesses have been advised to have long-term
contingency plans in place for back-up carriers should they be
required.

According to the Keynote Business 40 Internet Performance Index,
the industry standard benchmark for the overall health of the
Internet, which measures the download speed of 40 important
business Web sites over high speed T1 and T3 Internet
connections, between June 24 and July 21, the average download
times of the 40 Web sites fell between 1.52 and 2.56 seconds. On
Monday, July 22, the first workday following WorldCom's Chapter
11 filing, the Index averaged 2.41 seconds. The measurement for
the first workday following WorldCom's bankruptcy is an
important distinction since Internet traffic is lighter during
the weekend when WorldCom officially filed for bankruptcy. The
reported averages are considered normal for Internet Web sites.
To view Keynote's Internet Performance Indexes, click
http://www.keynote.com/company/html/services.html

"Because weekend Internet traffic is lighter than it is during
the weekdays, businesses should find solace that on the first
workday after WorldCom's filing, the Internet performed
normally," said Eric Siegel, principal Internet consultant at
Keynote. "In light of recent issues with ISPs, now is a good
time for e-businesses to think about contingency plans for
dealing with Internet instability. Having a direct connection to
an alternate ISP already in place is one step businesses can
take to minimize downtime if the primary network fails."

For regularly updated information on network performance
(latency) between major backbones in the United States, visit
Keynote's Internet Health Report at
http://www.internethealthreport.com

"Instabilities in the Internet due to problems at any major ISP
will cause congestion and delays for all Internet users, not
just those who are direct customers of the ISP in trouble,"
added Siegel. "Keynote provides enterprise customers with
accurate and timely information to manage the relationships with
their ISPs, pinpoint and repair performance bottlenecks when
they occur, reduce downtime, and deliver an optimal quality of
service to end users."

Keynote Systems (Nasdaq:KEYN), The Internet Performance
Authority(R), is the worldwide leader in Internet performance
management services that improve the quality of e-business.
Keynote's services enable corporate enterprises to benchmark,
diagnose, test and manage their e-business systems both inside
and outside the firewall. More than 2,400 corporate IT
departments and 18,000 individual subscribers rely on the
company's easy-to-use and cost-effective services to optimize
revenues and reduce downtime costs without requiring additional
complex and costly software implementations.

Keynote Systems, Inc., was founded in 1995 and is headquartered
in San Mateo, California. The company can be reached at
http://www.keynote.comor by phone in the U.S. at 650/403-2400.


* BOND PRICING: For the week of July 29 - August 2, 2002
--------------------------------------------------------

Issuer                                Coupon  Maturity  Price
------                                ------  --------  -----
ABGenix Inc.                           3.500%  03/15/07    70
AES Corporation                        4.500%  08/15/05    57
AES Corporation                        8.000%  12/31/08    70
AES Corporation                        8.750%  06/15/08    74
AES Corporation                        8.875%  02/15/11    68
AES Corporation                        9.375%  09/15/10    71
AES Corporation                        9.500%  06/01/09    70
Alternative Living Services (Alterra)  5.250%  12/15/02     4
American Tower Corp.                   9.375%  02/01/09    64
American & Foreign Power               5.000%  03/01/30    61
Armstrong World Industries             9.750%  04/15/08    53
Atlas Air Inc.                         9.250%  04/15/08    51
AT&T Corp.                             6.500%  03/15/29    71
Bethlehem Steel                        8.450%  03/01/05    14
Borden Inc.                            7.875%  02/15/23    60
Borden Inc.                            9.250%  06/15/19    61
Boston Celtics                         6.000%  06/30/38    63
Burlington Northern                    3.200%  01/01/45    44
Burlington Northern                    3.800%  01/01/20    63
Calpine Corp.                          4.000%  12/26/06    74
Case Corp.                             7.250%  01/15/16    74
Centennial Cell                       10.750%  12/15/08    57
Century Communications                 8.875%  01/15/07    34
Charter Communications, Inc.           5.750%  10/15/05    58
Cincinnati Bell Telephone (Broadwing)  6.300%  12/01/28    70
CIT Group Holdings                     5.875%  10/15/08    74
Comcast Corp.                          2.000%  10/15/29    20
Comforce Operating                    12.000%  12/01/07    61
Cox Communications Inc.                0.426%  04/19/20    40
Cox Communications Inc.                3.000%  03/14/30    27
Cox Communications Inc.                7.750%  11/15/29    26
Critical Path                          5.750%  04/01/05    63
Critical Path                          5.750%  04/01/05    63
Crown Castle International             9.000%  05/15/11    67
Crown Castle International             9.375%  08/01/11    69
Crown Castle International             9.500%  08/01/11    73
Crown Cork & Seal                      7.375%  12/15/26    61
Cubist Pharmacy                        5.500%  11/01/08    52
Dana Corp.                             7.000%  03/01/29    72
Dana Corp.                             7.000%  03/15/28    73
Dobson/Sygnet                         12.250%  12/15/08    74
EOTT Energy Partner                   11.000%  10/01/09    69
Equistar Chemicals                     7.550%  02/15/26    67
Finisar Corp.                          5.250%  10/15/08    55
Foster Wheeler                         6.750%  11/15/05    54
Gulf Mobile Ohio                       5.000%  12/01/56    61
Hasbro Inc.                            6.600%  07/15/28    71
Human Genome                           3.750%  03/15/07    67
Huntsman Polymer                      11.750%  12/01/04    67
Inland Steel Co.                       7.900%  01/15/07    50
Level 3 Communications                11.250%  03/15/10    48
Level 3 Communications                 9.125%  05/01/08    45
Lucent Technologies                    6.450%  03/15/29    56
Lucent Technologies                    6.500%  01/15/28    58
Missouri Pacific Railroad              4.750%  01/01/20    67
Missouri Pacific Railroad              4.750%  01/01/30    62
Missouri Pacific Railroad              5.000%  01/01/45    58
MSX International                     11.375%  01/15/08    71
Nextel Communications                  9.375%  11/15/09    63
Nextel Partners                       11.000%  03/15/10    59
Noram Energy                           6.000%  03/15/12    58
Northern Pacific Railway               3.000%  01/01/47    46
Northern Pacific Railway               3.000%  01/01/47    46
OSI Pharmaceuticals                    4.000%  02/01/09    75
Pegasus Satellite                     12.375%  08/01/06    49
Primedia Inc.                          7.625%  04/01/08    68
Public Service Electric & Gas          5.000%  07/01/37    72
Qwest Capital                          7.625%  08/03/21    69
Qwest Capital                          7.750%  02/15/31    70
Royster-Clark                         10.250%  04/01/09    75
Rural Cellular                         9.625%  05/15/08    58
SBA Communications                    10.250%  02/01/09    68
Silicon Graphics                       5.250%  09/01/04    68
Solutia Inc.                           7.375%  10/15/27    70
Sprint Capital Corp.                   6.875%  11/15/28    72
Time Warner Telecom                    9.750%  07/15/08    54
Tribune Company                        2.000%  05/15/29    66
Ugly Duckling                         11.000%  04/15/07    60
United Air Lines                       9.125%  01/15/12    60
United Air Lines                      10.250%  07/15/21    60
Universal Health Services              0.426%  06/23/20    62
US Timberlands                         9.625%  11/15/07    63
US West Capital                        6.875%  07/15/28    67
Vesta Insurance Group                  8.750%  07/15/25    74
Viropharma Inc.                        6.000%  03/01/07    36
Weirton Steel                         10.750%  06/01/05    53
Weirton Steel                         11.375%  07/01/04    58
Westpoint Stevens                      7.875%  06/15/08    58
Wind River System                      3.750%  12/15/06    73
Worldcom Inc.                          6.400%  08/15/05    58
XO Communications                      5.750%  01/15/09     1

                           *********

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.

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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.

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