TCR_Public/020801.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, August 1, 2002, Vol. 6, No. 151     

                          Headlines

ANC RENTAL: Court Okays Sale of East Point Property to Diplomat
ADELPHIA: Century Wants to Enjoin Escrow Deposit Disbursement
ADELPHIA COMMS: Court Okays BSI as Claims and Noticing Agents
AMER REEFER: Mandate Shipping Agrees to Fund Reorganization Plan
AMERICAN ENERGY: Auditors Doubt Ability to Continue Operations

AQUA CARE: Falls Below Nasdaq Continued Listing Requirements
ATLAS AIR WORLDWIDE: Second Quarter Net Loss Narrows to $34.2MM
ATMEL CORP: Implementing Restructuring Plan to Further Cut Costs
BETHLEHEM STEEL: Asks Court to Fix September 30 Claims Bar Date
BIOSHIELD: Wins Favorable Summary Judgment in Case vs. AHT Corp

BUDGET GROUP: Ryder System Not Part of Bankruptcy Filing
CANMINE RESOURCES: Will File for CCAA Protection in Canada
CASUAL MALE: Seeks Extension of Plan Exclusivity through Jan. 27
CERTCO INC: Case Summary & 20 Largest Unsecured Creditors
COMDISCO: Committee Pulls Plug on Chaim Fortgang's Engagement

COMDISCO: Committee Pulls Plug on Chaim Fortgang's Engagement
CORSPAN INC: Must Raise New Funds to Meet Current Obligations
EBF LLC: Case Summary & 6 Largest Unsecured Creditors
ENRON CORP: Rex Roger Gets Okay to Hire Manatt Phelps as Counsel
ENRON CORP: Court OKs Dyer Ellis as Hudler & Lindsey's Counsel

ENRON CORP: Merrill Lynch Calls Dealings "Appropriate & Proper"
EXODUS COMMS: XO Demands $15-Million Admin. Expense Payment
FEDERAL-MOGUL: June 30, 2002 Balance Sheet Upside-Down by $884MM
FLAG TELECOM: Assuming Right-Of-Use Agreement with Chief Telecom
GADZOOX NETWORKS: Commences Trading on OTCBB Effective July 31

GADZOOX NETWORKS: June 30, 2002 Equity Deficit Reaches $3.7MM
GENTEK INC: Blocked from Paying Interest of 11% Senior Sub Notes
GENUITY: Will Defer Publishing Q2 Results Due to Verizon Action
GLOBAL CROSSING: Auction Scheduled for Tomorrow
GLOBAL INTERACTIVE: Inks Pact to Sell Assets to ISW Subsidiary

ICG COMMS: Wanting to Sell Maroon Circle Property -- Again
INFRACOR INC: Appoints Jim Quarles as Acting President and CEO
KAISER ALUMINUM: Hatch Seeks Stay Relief to Prosecute $3M+ Claim
L-3 COMMS: Inks Manufacturing Services Agreement with SMTC
LAND O'LAKES: Posts Improved Operating Results for 2nd Quarter

MASSEY ENERGY: Working Capital Deficit Tops $85MM at June 30
MEASUREMENT SPECIALTIES: Appoints John P. Hopkins as New CFO
MORGAN STANLEY: Fitch Junks Some 1999-RM1 Certificates' Ratings
MORTON INDUSTRIAL: Expects to Move Listing to OTCBB Today
MPOWER HOLDING: Emerges from Bankruptcy with 90% Less Debt

NATIONAL STEEL: Gets Go-Signal to Hire MB Valuation as Appraiser
NEXTERA ENTERPRISES: 2nd Quarter Results Fall Below Expectations
OWENS CORNING: New York Packaging Corp. Battle Continues to Rage
PINNACLE TOWERS: Gets Okay to Hire Grisante Galef as Advisors
POLAROID CORP: One Equity Entity Completes Asset Acquisition

PRECISION SPECIALTY: Secures Exclusivity Extension Until Aug. 29
PROVIDIAN: Sacramento Facility Goes & More to Follow by Year-End
QWEST COMMS: Uncertain When Restatement will be Completed
RATEXCHANGE CORP: June 30 Balance Sheet Upside-Down by $5.3MM
RESPONSE BIOMEDICAL: Secures US$500K Revolving Credit Facility

RIVERWOOD: Tender Offers for Senior Notes Extended to Sept. 6
SHEFFIELD STEEL: Oklahoma Court Confirms Reorganization Plan
SITHE/INDEPENDENCE: Fitch Drops Sec. Notes & Bonds Rating to BB
SUCCESSORIES INC: Nasdaq Stock Market to Delist Shares Tomorrow
SYSTECH RETAIL: April 30, 2002 Balance Sheet Upside Down by $47M

SYSTECH RETAIL: Taps Northern Securities to Assist in Workout
TELSCAPE: Chap. 11 Trustee Wants More Time to Decide on Leases
TRIUMPH CAPITAL: S&P Junks Ratings on 5 Classes of Notes
US LEC CORP: Equity Deficit Reaches $135MM at June 30, 2002
USG CORP: Court Approves Hilsoft as PD Committee's Consultants

USG CORP: Judge Wolin to Preside Over Personal Injury Matters
VALLEY MEDIA: Wants Plan Exclusivity Stretched through Nov. 15
VANGUARD AIRLINES: Files for Chapter 11 Protection in Missouri
VANGUARD AIRLINES: Case Summary & 20 Largest Unsecured Creditors
VANGUARD AIRLINES: Dickson Explains Chapter 11 Filing to Workers

W.R. GRACE: Sealed Air Solvency Test Will Include Future Claims
WARNACO GROUP: Committee Wins Nod to Retain Huron as Advisors
WHEELING-PITTSBURGH: Lease Decision Time Stretched to January 7
WILLIAMS COMPANIES: Fitch Lowers Senior Unsecured Rating to B-
WILLIAMS COMPANIES: Posts Net Loss of $349MM for Second Quarter

WILLIS GROUP: S&P Raises Counterparty Credit Rating to BB+
WORLDCOM INC: Seeks Okay to Pay Prepetition Employee Obligations
XCEL ENERGY: Fitch Cuts Senior Unsecured Rating to BB+ from BBB+
XCEL ENERGY: Airs Disappointment Over Fitch's Ratings Downgrades
XO COMMS: Court Approves Proposed Uniform Voting Procedures

ZIFF DAVIS: Likely to File Prepackaged Chapter 11 by Week's End

* DebtTraders' Real-Time Bond Pricing

                          *********

ANC RENTAL: Court Okays Sale of East Point Property to Diplomat
---------------------------------------------------------------
Judge Walrath permits ANC Rental Corporation, and its debtor-
affiliates to sell the real property located on Bobby Brown
Parkway in East Point, Georgia to Diplomat Companies for
$1,150,000 on the condition that the sale close within 30 days
of the expiration of the inspection period.  The Debtors are
also allowed to lease the property from Diplomat for $5,000 per
month until the earlier of the completion of the facility under
the construction at Buffington Road in Atlanta, Georgia or six
months. (ANC Rental Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ADELPHIA: Century Wants to Enjoin Escrow Deposit Disbursement
-------------------------------------------------------------
Century Communications seeks enforcement of the automatic stay
to prevent ML Media Partner L.P., and First Union National Bank,
the escrow agent, from taking any action to cause the
disbursement to ML Media of a $10,000,000 escrow deposit in
which the Century Debtor has an interest.  Under Section 362 of
the Bankruptcy Code, the Century Debtor and Adelphia are
entitled to such relief because disbursement of the $10,000,000
escrow deposit would result in ML Media obtaining property of
the Debtor's estate.  Alternatively, pursuant to the Section 105
of the Bankruptcy Code, the Century Debtor and Adelphia are
entitled to a preliminary injunction because:

* ML Media's claimed entitlement to the $10,000,000 escrow
  deposit is based wholly on ML Media's erroneous assertion that
  there has been an acceleration of the closing date under a
  leveraged recapitalization agreement among ML Media, the
  Debtor and others; and

* the imminent disbursement of the escrow fund to ML Media would
  deprive the century Debtor of a significant cash asset during
  a critical time period, thereby impeding its reorganization
  efforts.

Roger Netzer, Esq., at Willkie Farr & Gallagher in New York,
informs the Court that the Century Debtor and ML Media are each
50-percent partners in the Joint Venture.  The Century Debtor's
50-percent ownership interest in the Joint Venture is its
principal asset.  The Joint Venture was formed in July of 1986
for the purpose of acquiring the Cable Television Company of
Greater San Juan, Inc., which owned and operated a cable
television system in San Juan, Puerto Rico.  Thereafter, the
Joint Venture organized Century-ML Cable Corporation as a
wholly-owned subsidiary of the Joint Venture and, in September
of 1987, acquired additional cable television systems serving
Toa Alta, Catano and Toa Baja, Puerto Rico.  Under the Joint
Venture Agreement, Century manages the Cable Systems for the
Joint Venture and responsibility for the day-to-day operations
of the Cable Systems and the supervision of the Subsidiary's
business.

In 1998, Mr. Netzer recounts that the Century Debtor entered
into negotiations with Adelphia regarding a merger of the two
companies, which culminated in the execution of an Agreement and
Plan of Merger dated March 5, 1999.  The merger closed on
October 1, 1999 and resulted in Adelphia becoming the indirect
parent company of the Century Debtor.  During the merger
negotiations between the Century Debtor and Adelphia, a dispute
arose between the Century Debtor and ML Media regarding the
parties' respective rights and obligations under the Joint
Venture Agreement, which resulted in the commencement of an
action by ML Media in the Supreme Court of the State of New
York.  Ultimately, the Original State Court Action was settled
pursuant to a Stipulation of Settlement that contemplated
redemption by the Joint Venture of ML Media's 50-percent
interest in the Joint Venture for $275,000,000 on the terms set
forth in the Recapitalization Agreement.  The Stipulation of
Settlement states that the Supreme Court of the State of New
York retained jurisdiction over any disputes arising under the
Recapitalization Agreement.

Mr. Netzer explains that the Recapitalization Agreement provided
for the grant to ML Media of a security interest in Century's
50% interest in the Joint Venture as collateral for the
performance by Adelphia of its purchase obligation under the
Recapitalization Agreement, pursuant to a separate Security and
Pledge Agreement among Century, Adelphia and ML Media, dated
December 13, 2001. The Recapitalization Agreement states that
the closing of the sale of ML Media's interest to the Joint
Venture shall take place no later than September 30, 2002,
subject to certain closing conditions.  The Recapitalization
Agreement further provides for an acceleration of the closing
date to the tenth business day after the occurrence of certain
specified events, including the "closing of any Transaction
referred to in section 2.2(a)" of the Recapitalization
Agreement.  The definition of "Transaction" includes "any
transaction that results in control of Adelphia by any
individual, entity or group other than the Rigas family."

Prior to the Petition Date, Mr. Netzer relates that ML Media
wrongly notified Debtor of its intent to foreclose on its
security interest in Debtor's 50% interest in the Joint Venture
and to assert control of the management of the Joint Venture,
supposedly based on ML Media's erroneous claim that a closing of
a "Transaction" and an acceleration of the Closing Date has
occurred.  However, no such "Transaction" has closed, so no
acceleration has been triggered.  If the Joint Venture fails to
consummate the redemption of ML Media's interest on the Closing
Date, the Recapitalization Agreement provides that the Century
Debtor's parent, Adelphia shall, on the following business day,
purchase ML Media's interest on the same terms as the purchase
was to have been made by Century.  If both the Joint Venture and
Adelphia fail to repurchase ML Media's interest in the Joint
Venture, the Recapitalization Agreement provides that ML Media
will be entitled to withdraw, as partial damages, a $10 million
escrow deposit made by Highland pursuant to an Escrow Agreement,
dated December 13, 2001, by and among the Joint Venture, ML
Media, Adelphia, Century, Highland and First Union National
Bank, as Escrow Agent.

Under the Recapitalization Agreement, Mr. Netzer states that
upon the consummation of the purchase of ML Media' interest in
the joint venture, ML Media is to cause the Escrow Agent to pay
the $10 Million Escrow to Highland Holdings, an entity owned and
controlled by members of the Rigas Family, controlling
stockholders of Adelphia, and thereby, indirectly, the Debtor.
The Recapitalization Agreement further provides that the Escrow
Agent is to disburse the $10 Million Escrow in accordance with
ML Media's instructions within five days of receipt of such
instructions.

According to Mr. Netzer, ML Media's erroneous claim that an
Accelerated Closing Date has been triggered under the
Recapitalization Agreement is based on its misreading of the
plain terms of an agreement dated May 23, 2002 between John
Rigas, Tim Rigas, James Rigas and Michael Rigas, pursuant to
which the Rigas Family Members agreed to resign immediately as
members of the Board of Directors and as officers of Adelphia.
Pursuant to the Rigas Family Agreement, the Rigas Family Members
also agreed to place all stock owned by the Rigas Family Members
in a voting trust, said trust to be established at an
unspecified future date, until all obligations of the Rigas
Family Members to the Company for certain loans, advances or
borrowings from Adelphia are satisfied.  In addition, under the
Rigas Family Agreement, the Rigas Family Members agreed to
transfer to the Company, at an unspecified future date, assets
valued at more than $1 billion.

The Rigas Family Agreement expressly states that it sets forth
only the "essential terms of an agreement" between Adelphia and
the Rigas Family Members, further providing that "[t]he
implementation of this agreement will require the preparation
and execution of definitive documentation and the approval,
consent or other action of third parties" and that "[t]he
parties will act in good faith and use their commercially
reasonable efforts, separately and in cooperation with each
other, to implement this agreement."  Consistent with the
Agreement, the parties to the Rigas Family Agreement must enter
into several agreements providing for the specific terms upon
which the agreement is to be implemented.

Mr. Netzer states that subsequent efforts by Adelphia and ML
Media to negotiate a resolution of their dispute over whether an
acceleration of the closing date has occurred, and to negotiate
a reasonable standstill agreement to allow for resolution of the
parties' concerns, failed.  Accordingly, on June 10, 2002,
Century sought, but was unable to obtain, a temporary
restraining order in Supreme Court of the State of New York that
would have prevented ML Media from foreclosing on Century's 50%
interest in the Joint Venture and seizing management control.  
The chapter 11 filing in this Court was made following the
failure to obtain the temporary restraining order in order to
protect Century's 50-percent interest in the Joint Venture.  
Notwithstanding the Debtor's chapter 11 filing, on June 11,
2002, ML Media sent a letter to the Escrow Agent instructing it
to disburse the $10 Million Escrow.  Presumably, such request
was made on the basis of ML Media's belief that an acceleration
of the Closing Date under the Recapitalization Agreement had
occurred.  On information and belief, such disbursement has not
yet taken place.

By its request for disbursement of the $10 Million Escrow, ML
Media has made clear its intention to wrongly obtain possession
of the Century Debtors' interest in the $10 Million Escrow,
thereby requiring the Century Debtor to seek relief from this
Court in the form of an extension of the automatic stay.
Moreover, ML Media's conduct threatens the reorganization
process by potentially depriving the Debtor of a significant
cash asset during a critical time period. (Adelphia Bankruptcy
News, Issue No. 12; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


ADELPHIA COMMS: Court Okays BSI as Claims and Noticing Agents
-------------------------------------------------------------
Adelphia Communications sought and obtained authorization from
the Court to employ Bankruptcy Services LLC (BSI) as the notice,
claims and balloting agent in connection with its chapter 11
cases pursuant to the terms and conditions of the Bankruptcy
Services Agreement.

Randall D. Fisher, the ACOM Debtors' Vice President and General
Counsel, tells the Court that the ACOM Debtors have tens of
thousands of creditors and other parties in interest in these
chapter 11 cases, many of whom are expected to file proofs of
claims.  The noticing and receiving, docketing and maintaining
proofs of claims would impose heavy administrative and other
burdens upon the Court and the Office of the Clerk of the Court.
Preparing and serving the notices on all such creditors and
parties in interest and docketing and maintaining the large
number of proofs of claim that may be filed in these cases would
strain the resources of the Clerk's Office.

The sheer number of the Debtors' creditors makes it
impracticable for the Clerk's Office to undertake such tasks.  
The Debtors submit that the Debtors' engagement of an
independent third party to act as agent for the Court and to
perform such services is the most effective and efficient manner
to perform these tasks:

  * receiving, docketing, maintaining, photocopying and
    transmitting proofs of claim in these cases;

  * overseeing the distribution of solicitation material;

  * receiving, reviewing and tabulating ballots; and

  * performing other administrative tasks such as maintaining
    creditor lists and mailing notices.

The Debtors seek to engage BSI to:

A. transmit certain notices (including the notice of
   commencement of these cases, and the bar date notice with
   proof of claim forms);

B. receive, docket, scan, maintain and photocopy claims filed
   against the Debtors;

C. assist the Debtors in the distribution of solicitation
   materials;

D. receive, review and tabulate ballots cast in accordance with
   voting procedures approved by this Court; and

E. assist the Debtors with certain administrative functions
   relating to their chapter 11 plans of reorganization.

The Debtors submit that if BSI is not engaged, then the Debtors
may have to divert substantial manpower from reorganization
efforts to managing the claims process and implementing the plan
solicitation process.

The Debtors believe BSI is particularly suited for this
retention because BSI is a data-processing firm whose principals
and senior staff have more than 10 years of in-depth chapter 11
experience in performing noticing, claims processing, claims
reconciliation and other administrative tasks for chapter 11
debtors.  Mr. Fisher notes that BSI is also experienced in
performing plan voting and distribution services, and other
services relating to its role as a Claims and Balloting Agent.  
BSI has been appointed to act as Claims and Balloting Agent in
many districts throughout the United States.  BSI is currently
acting as claims and noticing agent in connection with many
large chapter 11 cases including 360networks (USA) Inc.; Enron
Corp.; Reliance Group Holdings, Inc.; Global Crossings, Ltd.;
The Warnaco Group, Inc.; and Indesco International, Inc.

Under the Agreement, it is anticipated that BSI will perform
these services as Agent at the request of the Debtors or the
Clerk's Office:

A. assist the Debtors with all required notices in these cases
   including, among others:

    * a notice of the commencement of these chapter 11 cases and
      the initial meeting of creditors under Section 341(a) of
      the Bankruptcy Code;

    * notice of claims bar dates;

    * notice of objections to claims,

    * notices of any hearings on the Debtors' disclosure
      statement and confirmation of the Debtors' chapter 11
      plans of reorganization; and

    * such other miscellaneous notices as the Debtors or the
      Court may deem necessary or appropriate for the orderly
      administration of these chapter 11 cases;

B. promptly after the service of a particular notice, file with
   the Clerk's Office a certificate or affidavit of service that
   includes:

    * a copy of the notice served;

    * a list of persons upon whom the notice was served, along
      with their addresses; and

    * the date and manner of service;

C. receive, examine and maintain copies of all proofs of claim
   and proofs of interest filed in these cases;

D. maintain official claims registers in each of the Debtors'
   cases by docketing all proofs of claim and proofs of interest
   in the applicable claims database that includes the following
   information for each such claim or interest asserted:

    * the name and address of the claimant or interest holder
      and any agent thereof, if the proof of claim or proof of
      interest was filed by an agent;

    * the date the proof of claim or proof of interest was
      received by BSI and/or the Court;

    * the claim number assigned to the proof of claim or proof
      of interest;

    * the asserted amount and classification of the claim; and

    * the applicable Debtor against which the claim or interest
      is asserted;

E. implement necessary security measures to ensure the
   completeness and integrity of the claims registers;

F. transmit to the Clerk's Office a copy of the claims registers
   on a weekly basis, unless requested by the Clerk's Office on
   a more or less frequent basis;

G. maintain an up-to-date mailing list for all entities that
   have filed proofs of claim or proofs of interest and make the
   list available upon request to the Clerk's Office or any
   party in interest;

H. provide access to the public for examination of copies of the
   proofs of claim or proofs of interest filed in these cases
   without charge during regular business hours;

I. record all transfers of claims and provide notice of the
   transfers;

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

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

L. provide such other claims processing, noticing and related
   administrative services as may be requested from time to time
   by the Debtors;

M. oversee the distribution of the applicable solicitation
   material to each holder of a claim against or interest in the
   Debtors;

N. respond to mechanical and technical distribution and
   solicitation inquiries;

O. receive, review and tabulate the ballots cast, and make
   determinations with respect to each ballot as to its
   timeliness, compliance with the Bankruptcy Code, Bankruptcy
   Rules and procedures ordered by this Court subject, if
   necessary, to review and ultimate determination by the Court;

P. certify the results of the balloting to the Court; and

Q. perform such other related plan-solicitation services as may
   be requested by the Debtors.

Ron Jacobs, a member of BSI, ascertains that the Firm neither
holds nor represents any interest adverse to the Debtors or the
Debtors' estates on matters for which it is to be retained; has
no prior connection with the Debtors, their creditors or any
other party in interest; and is a "disinterested" person as is
defined in Section 101(14) of the Bankruptcy Code. (Adelphia
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Adelphia Communications' 9.875% bonds due 2007 (ADEL07USR2),
DebtTraders says, are trading at around 43.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL07USR2
for real-time bond pricing.


AMER REEFER: Mandate Shipping Agrees to Fund Reorganization Plan
----------------------------------------------------------------
Amer Reefer Co. Ltd provides an update of its Chapter 11
Proceedings:

     After protracted Litigation since September 2001 in the New
York Bankruptcy Court and negotiations during the last two
weeks, Vroon b.v., and Aston Financial International Ltd --
holders of 67.64% of the Amer Reefer Notes -- and other
creditors have reached a Settlement Agreement.

     The Agreement provides for one of the creditors, Mandate
Shipping Company Limited, to fund Amer Reefer's Reorganization
Plan which will include payment of 67 cents for each Dollar in
face value of the Notes plus interest.  The Reorganization Plan,
which will incorporate the above payment, will be accepted by
the Parties.  Interest will be payable from 12th July 2002 until
such time as Vroon and Aston Financial International receive the
agreed consideration.

     The Agreement also provides for the ships to be auctioned
in the event of non payment of the consideration within an
agreed time limit.

     All Parties and the management of Amer Reefer consider this
Agreement to represent a satisfactory solution.


AMERICAN ENERGY: Auditors Doubt Ability to Continue Operations
--------------------------------------------------------------
American Energy Services, Inc., a Texas corporation, was founded
and incorporated in 1987.  It began  active operations in 1989
after acquiring certain operating assets of two other valve
manufacturing  and re-manufacturing businesses, CGM Valve, Inc.
and American Energy Valves, Inc. Its current Directors, Pat
Elliott, Larry Elliott, Sid McCarra, Mark Elliott and Cary
McCarra, were previously associated with CGM and AEV.

Seahawk Overseas Exploration Corporation, a California
corporation was formed in November 1988 to conduct the
international operations of Seahawk Oil International
Corporation.  In January  1989, in conjunction with a planned
sale of certain domestic producing oil properties by SOIC, the
shares of stock of Seahawk were distributed to the shareholders
of SOIC, who number over 3000.  Seahawk continued operations
with little or no success up until the time of the merger with
Old AES, a Texas corporation.  In January 1996, Old AES was
merged with and into Seahawk under an Agreement and Plan of
Merger between Old AES and Seahawk.  In accordance with the
terms of the merger, (i) Seahawk became the surviving entity
although its name was changed to "American Energy Services,
Inc." and (ii) shares of Seahawk stock were issued to the seven
stockholders of Old AES.  In February  1996, a new corporation
was formed under the name American Energy Services, Inc., a
Texas corporation.  Subsequent to the formation of New AES,
Seahawk merged with and into New AES to maintain the historic
domicile of Old AES in Texas and to retain the historical
business name. In addition, the merger was intended to provide
it with a legal entity which could enter the public  domain and
ultimately, provide potential capital through the sale of
registered securities. The effect of this merger has been that
the Company was able to acquire approximately 1,500 shareholders
formerly owning shares of Seahawk stock.

Net sales for the Company's fiscal year ended February 28, 2002
decreased by $85,738 to $3,272,938  compared to $3,358,676 for
the fiscal year ended February 28, 2001.

Cost of sales in fiscal 2002 decreased by $1,594,356, or 34%
lower than fiscal 2001, to $3,064,042.  The Gross profit (loss)
for fiscal 2002 was 208,896, or a $1,508,618 improvement over
the loss of $1,299,702 for fiscal year 2001. This gross profit
reflects an increase in the Company's basic valve manufacturing
business during fiscal 2002.

Operating expenses in fiscal 2002 also decreased from $4,799,584
in fiscal 2001 to $2,299,441 for fiscal 2002.  This decrease,
outside of expenses related to litigation, can be attributed to
aggressive cost control initiated American Energy. In addition,
cost reductions included re-negotiations of all utilities
(telephone, water, gas, etc.), a 20% reduction in the salaries
of officers, and a more efficient management of production
personnel overtime pay.

Other income for fiscal 2002 decreased by $204,417 over other
income in fiscal 2001 largely due to other income increase
attributed to the settlement of certain liabilities at amounts
lower than recorded in previous years.

Net loss for fiscal year 2002 was $2,235,642, or an improvement
of $4,213,178 from a net loss of  $6,448,820 for fiscal year
2001. This 65% decrease in net loss is attributed to increased
sales and margins in the Company's core manufacturing business
in fiscal 2002, as well as reduced expenditures, both in
operations and public company expenses during fiscal 2002.

American Energy Services receives the majority of its revenues
from customers in the energy industry, which experienced a
significant downturn in 1998 that continued throughout 1999.  
Industry  conditions improved in 2000 and 2001, however the
Company's customer base has not to date increased  project
expenditure levels to those existing in the first half of 1998.  
Demand for products and services are impacted by the number and
size of projects available as changes in oil and gas  
exploration and production activities change the respective
customers' forecasts and budgets.  These fluctuations have a
significant effect on American Energy's cash flows.

Oil and gas prices have improved significantly since the
downturn in 1998. While these price  improvements have brought
the Company increases in the frequency of inquires and
subsequent orders,  it has not yet benefited to a meaningful
degree from an increase in the volume of valve projects.
Consequently, its financial performance has been subject to
significant fluctuations.

As a result of the downturn in the oil and gas industry over the
last two years and the resultant  negative effect on the
Company's financial position, its management initiated actions
in 2001/2002  which included among others, (a) downsizing
personnel, (b) attempting to improve its working capital by,
among other things, restructuring debt, (c) retargeting
marketing efforts and, (d) consolidating  administrative
functions to ensure that its resources are deployed in a more
profitable manner. The efforts to restructure operations
commenced in the first quarter of 2000 and continued through
2002. However, the results of these efforts were not sufficient
to prevent significant operating losses or provide sufficient
levels of operating capital.

The Company's impaired liquidity position has resulted in the
inability to pay certain vendors in a timely manner.  In spite
of this, none of its creditors to date have threatened to file a
bankruptcy  petition.  The lack of liquidity has hampered
Company ability to hire sub-contractors, obtain materials and
supplies, and conduct operations in an effective or efficient
manner.  Moreover,  throughout most of fiscal 2001 and 2002, the
Company was in default with virtually all its debt agreements.  
To alleviate liquidity problems and to improve overall capital
structure, the Company initiated a program to restructure debt
and its equity positions.  The program involved a series of
steps designed to raise new funds, restructure debt and increase
shareholders' equity. This will primarily be accomplished by the
efforts of its consultant Roy Hill.

American Energy Services has been in default on four loans at
Metro Bank since September 1999 totaling $3.3 million in
principal and approximately $900,000 in interest expense. To
date there has been no threatened foreclosure action by the
bank. The Company is in negotiation with Metro Bank to  
restructure this  debt.  The proposed restructured debt is
expected to provide an additional  $250,000 working capital for
the Company and will place the debt under more favorable terms.
If the debt is successfully restructured it will allow the
Company to reduce its interest expense and increase the term of
the note to 17 years. However, there can be no assurance it will
be able to restructure this debt with Metro Bank.

American Energy engaged in a private offering through March to
May of 2001. A Securities Purchase Agreement with certain
investors to purchase units, for a purchase price of $1,000 per
Unit, each  unit consisting of 6% Convertible Promissory Note in
the original principal amount of $1,000 and 500 warrants to
purchase one share of common stock.  Upon conversion of the
Notes, the investors can purchase a number of shares, without
limitation, based upon a thirty (30%) percent discount from the
average market price of its common stock for the five trading
days prior to the conversion.  The  agreements do not contain a
trading price below which the investor is not permitted to
convert the Note. As a result, the number of shares that these
investors are entitled to receive upon conversion will increase
as the stock price decreases.  Therefore, these investors have
an incentive to engage in short selling activities aimed at
driving down the price of the common stock. The Company is
currently in a dispute with STL Capital Partners LLP and the
other investors in this offering.  It has filed a lawsuit
against STL Capital Partners LLP and the other investors and as
a consequence  these investors cannot currently convert the
Notes or exercise the Warrants.

Although it has had some limited success raising capital, there
can be no assurance that it will be able to obtain additional
capital, and if additional capital is obtained that it will be
on terms  favorable to the Company. As of February 28, 2002,
current assets totaled $2,570,187 and current liabilities were
$7,470,857 resulting in a working capital deficit of
approximately $4,900,670.  The Company is actively seeking new
sources of financing, including the restructuring of old debt
and raising capital through the issuance of company stock.  
Additionally, it continues to pursue methods to expand business
activities and enhance operating cash flow.  However, absent new
sources of  financing, or if it does significantly improve
operating performance, it will not have sufficient funds to meet
current obligations over the next twelve months and could be
forced to dispose of assets in order to satisfy future liquidity
requirements.  The current uncertainties surrounding the
sufficiency of its future cash flows and the lack of firm
commitments for additional capital raise substantial doubt about
its ability to continue as a going concern.


AQUA CARE: Falls Below Nasdaq Continued Listing Requirements
------------------------------------------------------------
Scott Hefner, President of Aqua Care Systems, Inc. (Nasdaq:
AQCR), announced that the Nasdaq Listings Qualifications Group
had sent Aqua Care a letter notifying the Company that it did
not comply with either the minimum $2,000,000 net tangible
assets or the minimum $2,500,000 stockholder's equity required
in accordance with Nasdaq Marketplace Rule 4310(C)(2)(B), and
that the Staff did not believe the Company provided a definitive
plan evidencing its ability to achieve near term compliance with
the continued listing requirements or sustain such compliance
over an extended period of time. This determination, if not
changed, would result in the Company being delisted from the
Nasdaq SmallCap Market. The Company is in the process of
appealing this determination in accordance with Nasdaq
Marketplace Rule 4800 Series.

The Company recently completed a private placement for $762,500,
and signed a letter of intent to complete an additional equity
investment, as announced in a recent press release. The Company
is negotiating the terms and conditions of the investment. While
there can be no assurance, the Company believes that it can
present information at the hearing supporting its position that
it will be able to comply with the listing requirements of
Nasdaq Marketplace Rule 4310(C)(2)(B) in the near term and
sustain such compliance over an extended period of time.


ATLAS AIR WORLDWIDE: Second Quarter Net Loss Narrows to $34.2MM
---------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc., (NYSE:CGO) reported a second
quarter 2002 loss of $34.2 million for the period ended June 30,
2002, compared to a $49.0 million loss in the same period of
2001.

Quarter-end cash and short-term investments stood at $278
million.

"Although the quarter was difficult from an earnings
perspective, the Company successfully resolved some of its most
significant outstanding issues over the course of the period,"
said Richard Shuyler, Chief Executive Officer of Atlas Air
Worldwide Holdings. "We reached our first-ever labor agreement
with our flight crew employees at Atlas Air, which we are
pleased to report has now been ratified, and secured financing
for Atlas Air's three second-half B747-400 deliveries. While the
air cargo market has still not yet returned to acceptable
levels, we saw signs of improvement in key markets, particularly
Asia, and expect revenue to substantially improve in the third
and fourth quarters of the year."

Compared to the prior year, second-quarter operating revenues
increased $86.6 million, primarily due to the inclusion of Polar
in 2002. Excluding Polar, second-quarter operating revenues
declined $7.9 million versus the prior year, reflecting a
reduction in contract services revenue.

"On a sequential basis, military flying declined by 44% versus
the first quarter, leading to a reduction in total charter
revenue of $26.2 million," continued Shuyler. "The increase in
commercial charter activity that we saw in March proved to be
temporary, and did not resume again until late in June. That was
the bad news. The good news was that revenues in our two core
businesses, ACMI/hub activities at Atlas and scheduled service
at Polar, were up 4% and 27% respectively, for an increase of
$17.4 million."

Operating expenses increased by $54.9 million versus the second
quarter of 2001 due to the inclusion of Polar in 2002, offset by
the larger impairment charge booked at Atlas in 2001. Operating
expenses also increased due to the greater degree of charter
flying at Atlas, which increased fuel and ground expenses in the
quarter.

In addition, the Company incurred approximately $12.1 million in
special non-cash charges in the second quarter, primarily
related to impairment charges with respect to certain of its
grounded aircraft and a required purchase price accounting
adjustment with respect to Polar's B747-100 aircraft.

"We were further encouraged by the improvement in our liquidity
position during the quarter," added Shuyler. "We grew our cash
and investment position by $12 million, ending the quarter at
$278 million. Also, as we previously announced, we now believe
our year-end cash and investment balances will further exceed
our second-quarter level. Indeed, Atlas Air's liquidity will see
a $27.6 million benefit as a result of the return of certain
aircraft delivery deposits and the deferral of other such
deposits that would have otherwise been due this year."

"We are also pleased to have reached agreement on a first
contract with our flight crew employees at Atlas Air, after two
and a half years of negotiations. That agreement was formally
ratified by our crew members yesterday. The contract is for a
42-month term, and provides for significant wage increases and
quality-of-life improvements for our crewmembers. We believe
that this contract is a good one for both the Company and our
crew members, and ensures the Company's ability to continue to
provide our customers with the reliable, low-cost and
outstanding service they have come to expect."

Consolidated earnings before interest, taxes, depreciation and
aircraft rentals (EBITDAR), an important measure of pre-leverage
cash flow, excluding impairment charges, totaled $38.3 million
for the quarter, a margin of 16.2%, compared to $50.8 million or
34.1% for the comparable period of 2001.

For the first six months of 2002, consolidated EBITDAR,
excluding impairment charges, totaled $114.6 million, a margin
of 23.8%, compared to $117.7 million or 35.8% for the comparable
period of 2001.

Shuyler concluded, "Recent increases in airfreight volumes,
particularly out of Asia, make us more optimistic about our
revenue heading into our peak flying season. This is reflected
in several short-term agreements that we have recently signed,
including the earlier-announced ACMI agreement with China
Eastern. In addition, we are pleased to have placed in the past
week one of the just-delivered new 747-400s from Boeing under a
fifteen month lease with a new customer to Atlas, subject only
to certain pending government approvals. Although our second
quarter performance was disappointing, the increased activity we
are seeing at both Atlas and Polar early in the third quarter is
encouraging. As a result, we are currently reactivating at least
3 of the 6 parked aircraft at Atlas for service in the peak
flying season. We are therefore optimistic about our revenue
prospects for the peak season, and expect a significantly
improved second-half performance."

Atlas Air Worldwide Holdings, Inc., is the parent company of
Atlas Air, Inc., and of Polar Air Cargo. Atlas Air offers its
customers a complete line of freighter services, specializing in
ACMI (Aircraft, Crew, Maintenance, and Insurance) contracts,
with its fleet of B747 aircraft. Polar Air Cargo's fleet of B747
freighter aircraft specialize in time-definite, cost-effective,
airport-to-airport scheduled airfreight service. Polar Air Cargo
and Atlas Air are operated as separate subsidiaries of the
parent company.

As reported in Troubled Company Reporter's May 17, 2002,
edition, Standard & Poor's downgraded its rating on Atlas Air
Worldwide Holdings' corporate credit rating to B+.

Atlas Air Inc.'s 10.75% bonds due 2005 (CGO05USR1) are trading
at 51 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CGO05USR1for  
real-time bond pricing.


ATMEL CORP: Implementing Restructuring Plan to Further Cut Costs
----------------------------------------------------------------
Atmel(R) Corporation (Nasdaq:ATML) commented that its financial
guidance remains unchanged, and that the Company is executing on
its restructuring plan to bring costs down and return the
Company to profitability.

George Perlegos, President and Chief Executive Officer, stated,
"We believe Atmel's business is improving, as evidenced by the
14% sequential increase in second quarter revenues to $315
million, from $276 million in the first quarter of 2002.

"Also, our financial position remains strong," continued
Perlegos. "Cash and equivalents totaled over $440 million at
June 30, and our estimated EBITDA totaled $26 million for the
second quarter, which is approximately double the level of the
previous quarter.

"As we stated on the quarterly conference call last week, we
have made a great deal of progress in the restructuring program
to date, such as a reduction of approximately 1500 in headcount,
and a $97 million reduction in operating expenses since the
first quarter of 2001. Also we are continuing to take the
appropriate steps to best position the Company for the upturn,
such as the recently announced closure of Fab 8 in Irving,
Texas.

Perlegos concluded, "We remain tightly focused on achieving our
expense reduction goals by completing the Company-wide migration
to more cost-effective technology processes such as 0.18 micron,
closing or idling factories until the capacity is needed, and
eventually closing some of our older facilities."

Management believes these cost reduction measures should be
completed over the next several quarters.

Founded in 1984, Atmel Corporation is headquartered in San Jose,
California with manufacturing facilities in North America and
Europe. Atmel designs, manufactures and markets worldwide,
advanced logic, mixed-signal, nonvolatile memory and RF
semiconductors. Atmel is also a leading provider of system-level
integration semiconductor solutions using CMOS, BiCMOS, SiGe,
and high-voltage BCDMOS process technologies.

                         *    *    *

As previously reported, Standard & Poor's assigned its single-
'B' corporate credit rating to Atmel Corp.  At the same time,
Standard & Poor's assigned a triple-'C'-plus rating to Atmel's
$512 million zero coupon convertible subordinated debentures due
2021.

The current outlook is negative.

The ratings on San Jose, California-based Atmel reflect weak
market conditions, a high cost structure, and substantial near-
term cash obligations, offset in part by the company's moderate
business diversity and currently good liquidity. Atmel is a
leading supplier of commodity "flash" memories and other
nonvolatile memory chips, comprising 40% of the company's
revenues. Flash memories are used in cell phones, cameras, and
other consumer electronic devices. The company has expanded its
position in other markets for the past several years through
acquisitions and internal development and now also supplies
microcontrollers and other complex logic devices, chip-based
"smart cards", and radio frequency transcievers.

While current liquidity is adequate, pre-financing cash flows
are expected to remain negative, and access to external
financing cannot be assured. Should financial flexibility
decrease materially, or if other financial measures weaken
further, ratings could be lowered.


BETHLEHEM STEEL: Asks Court to Fix September 30 Claims Bar Date
---------------------------------------------------------------
Bethlehem Steel Corporation, and its debtor-affiliates ask the
Court to set September 30, 2002, at 5:00 p.m. (Eastern Time) as
the general bar date for all creditors to file their proofs of
claim on account of prepetition debts or liabilities against any
of the Debtors.

George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that the creditors must follow these procedures:

    (a) File an original proof of claim either by:

         (i) mailing the original proof of claim to the United
             States Bankruptcy Court, Southern District of New
             York, Bethlehem Steel Claims Processing, P.O. Box
             5043, Bowling Green Station, New York, New York
             10274-5043; or

        (ii) delivering the original proof of claim by messenger
             or overnight courier to United States Bankruptcy
             Court, Southern District of New York, Bethlehem
             Steel Claims Processing, One Bowling Green, New
             York 10004-1408;

    (b) The proof of claim will only be accepted if they are
        actually received on or before the Bar Date.  Proofs of
        Claim submitted through facsimile and telecopy will not
        be accepted;

    (c) These parties are not required to file a proof of claim:

           (i) any person or entity that has already filed with
               the Court clerk a proof of claim against the
               applicable Debtor utilizing a claim form that
               conforms to Official Form No. 10;

          (ii) any person or entity:

               -- whose claim is listed on the
                  Debtors' Schedule of Assets and Liabilities,

               -- whose claim is not described as "disputed",
                  "contingent", or "unliquidated",

               -- whose claim is asserted against a specific
                  Debtor,

               -- who does not dispute the specific Debtor
                  against which person or entity asserts a
                  claim, and

               -- who does not dispute the amount or nature of
                  the claim for the person or entity,

               in each case is identified on the Proof of Claim;

         (iii) any person having a claim under Sections 503(b)
               or 507(a)(1) of the Bankruptcy Code as an
               administrative expense of any of the Debtors'
               Chapter 11 cases;

          (iv) any person or entity whose claim has been paid or
               otherwise satisfied in full by any of the
               Debtors;

           (v) any Debtor having a claim against another Debtor;

          (vi) any person or entity that has or may have a claim
               that has been allowed by an order of this Court
               entered on or before the Bar Date;

         (vii) any present or former employee of the Debtors
               and, with respect to benefits claims, any spouse
               or beneficiary thereof; and

        (viii) any person or entity whose claim is limited
               exclusively to the repayment of principal,
               interest or other applicable fees and charges
               under any bond or note issued by the Debtors
               pursuant to an indenture qualified under the
               Trust Indenture Act of 1939; provided, however,
               that:

               -- the foregoing exclusion shall not apply to the
                  Indenture Trustee;

               -- each Indenture Trustee shall be required to
                  file one proof of claim on account of all of
                  the Debt Claims on the applicable Debt
                  Instruments on or before the Bar Date;

               -- any holder of Debt Claim wishing to assert a
                  claim, other than the Debt Claim, arising out
                  of or relating to a Debt Instrument shall be
                  required to file a proof of claim on or before
                  the Bar Date unless another exception in this
                  paragraph applies;

    (d) a separate bar date will be established for the asserted
        claims of present and former employees and their spouses
        and beneficiaries after the nature and extend of any
        modification or termination of current benefit plans are
        determined;

    (e) Proofs of Claim due to rejection of executory contract
        or unexpired lease shall be filed based on the rejection
        on or before the Bar Date.  If the rejection date is
        after the Bar Date, the Court shall establish the date
        for the Claimant to file their proof of claim;

    (f) In conformity of the Official Form No. 10, each proof of
        claim shall contain:

          (i) the amount of claim;

         (ii) the specific Debtor of the claim;

        (iii) the type of claim held by the creditor; and

         (iv) if the claim is disputed, contingent or
              unliquidated.

    (g) Other modification to the Official Form include:

          (i) allowing the creditor to correct any incorrect
              information contained in the name and address
              portion;

         (ii) modifying the categories in the Basis for Claim
              and Unsecured Priority Claims sections; and

        (iii) including instructions for completing and filing
              the Proof of claim; and

    (h) the proof of claim shall be written in English, be
        dominated in US currency and be signed by the claimant.

Mr. Davis continues that if a creditor fails to timely file a
proof of claim, that creditor shall be forever barred, estopped
and enjoined from asserting its claim against the Debtors and
the Debtors shall be forever discharged from any and all
indebtedness or liability with respect to its claim.  The barred
claimant shall not be permitted to vote to accept or reject any
Chapter 11 plan or participate in any distribution in the
Debtors' Chapter 11 cases.

Furthermore, the Debtors ask the Court to authorize, but not
direct, JPMorgan Chase Bank to file a proof of claim on behalf
of all of the Prepetition Inventory Lenders and in respect of
all claims arising under the Inventory Credit Agreement.

Pursuant to the proposed Bar Date Order and Bankruptcy Rule
2002(a)(7), the Debtors will mail the Bar Date Notice and Proof
of Claim form to:

  (a) the Office of the US Trustee for the Southern District of
      New York;

  (b) each member of the statutory creditor's committee
      appointed in these Chapter 11 cases and the attorneys for
      the Committee;

  (c) all known holders of claims listed on the Schedules at
      the addresses stated therein;

  (d) all counterparties to the Debtors' executory contracts
      and unexpired leases listed on the Schedules at the
      addresses stated therein;

  (e) the District Director of Internal Revenue for the
      Southern District of New York;

  (f) the Securities and Exchange Commission;

  (g) attorneys for the Debtors' prepetition lenders and
      postpetition lenders;

  (h) certain other entities with whom, prior to the Petition
      Date, the Debtors had done business or who may have
      asserted a claim against the Debtors in the recent past;

  (i) the US Attorney for the Southern District of New York;
      and

  (j) the entities set forth in the Debtors' Master Service
      List established pursuant to the Order Establishing
      Notice Procedures dated October 15, 2001 and to all
      vendors and customers who had business with the Debtors
      one year prior to Petition Date.

Since the Debtors do not have all the addresses of over 30,000
litigation claimants, the Debtors further ask Judge Lifland for
authority to mail the proposed Bar Date Notice to the attorneys
for the Litigation Claimants in lieu of mailing to each
Litigation Claimant.

Out of abundance of caution, the Debtors will publish the Bar
Date Notice once in The Wall Street Journal, The New York Times,
Marine Reported and Engineering News, Pipeline & Gas Journal,
Railway Track & Structures, Metal Architecture and American
Metal Market at least 30 days prior to the Bar Date.  The Bar
Date Notice shall also be published on the company Web site at,

      http://www.bethsteel.com

Mr. Davis informs the Court that equity holders are unlikely to
receive distribution under the Chapter 11 plan on account of
their equity interests.  Thus, the Debtors believe that fixing a
bar date for them is not warranted under the circumstances.

Mr. Davis contends that the proposed Notice procedures are
reasonable and adequate because, with the proposed date, the
creditors will 45-60 days' notice to file proofs of claim, which
is substantially longer than the 20-day notice requirement of
Bankruptcy Rule 2002(a)(7). (Bethlehem Bankruptcy News, Issue
No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Bethlehem Steel Corporation's 10.375% bonds due 2003 (BS03USR1),
DebtTraders reports, are trading at 9.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for  
real-time bond pricing.


BIOSHIELD: Wins Favorable Summary Judgment in Case vs. AHT Corp
---------------------------------------------------------------
BioShield Technologies, Inc., (OTC Bulletin Board: BSTI)
announced that the United States Bankruptcy Court for the
Southern District of New York, overseeing the case of AHT
Corporation vs. BioShield Technologies, Inc., and certain
directors and officers of the Company as defendants, has awarded
a summary judgment in favor of certain officers and directors of
Bioshield Technologies in a decision that was handed down on
July 16, 2002 by the Honorable Judge Hardin.

Tim Moses stated, "This is phenomenal news for the executives of
Bioshield and removes a burden that has hung over our heads for
over a year and a half. We are hopeful that this will serve as a
springboard to resolving the rest of this case in the near
future and moving forward with a renewed focus on building
BioShield Technologies and finally putting this distraction
behind us."

AHT still has the opportunity to seek to overturn the favorable
decision BioShield executives received.  Although the final
outcome of this case cannot be determined at this time,
BioShield's management believes in the potential for favorable
developments on the corporate level that will positively impact
BioShield Technologies, Inc., and its shareholders.

BioShield Technologies, Inc., is a Norcross Georgia-based
emerging growth company focused in biotechnology and
antimicrobial products.  Its core business is committed to the
discovery, development, marketing and sale of surface-modifying
antimicrobial and biostatic products.  The company's
antimicrobial technology is a revolutionary alternative to
conventional sanitizers, disinfectants, bleaches, biocides or
preservatives primarily because it kills bacteria, including
HIV, on contact and can remain active for extended time periods.  
To date BioShield has received three US patents and eight EPA
registrations, including the first U.S. germ killer and
disinfectant against Salmonella cholerasuis, Staphylococcus
aureus and other microorganisms.  The company has developed
several alliances in different industries, such as healthcare,
textiles and storm water.

Further information on BioShield and its line of products can be
found by visiting the firm's Web site at
http://www.bioshield.comor by calling 1-770-925-3653, Tim  
Moses.


BUDGET GROUP: Ryder System Not Part of Bankruptcy Filing
--------------------------------------------------------
Ryder System, Inc. (NYSE:R), a $5 billion, Fortune 500 global
leader in transportation and supply chain management solutions,
today issued a general reminder that its business operations --
including its subsidiary Ryder Truck Rental, Inc. -- are not
affiliated with those of Budget Group, Inc., which recently
filed for federal bankruptcy protection. Budget Group, Inc.
(OTCBB:BDGPA) (formerly NYSE:BD) operates a truck rental
business under the name "Ryder TRS" (the "yellow trucks").

Budget Group and its Ryder TRS business unit are not
affiliated with Ryder System or Ryder System's subsidiary Ryder
Truck Rental, Inc. As such, Budget's current financial
circumstances in no way affect the solid financial standing of
Ryder System or its ability to serve customers throughout North
America and in Latin America, Europe and Asia.

Ryder System, Inc., which has one of the nation's largest
truck rental and leasing fleets, sold its consumer-oriented
"yellow" truck rental division in 1996. Those business
operations were subsequently purchased by the current owner,
Budget Group, Inc. and operated under the name "Ryder TRS,"
pursuant to a Trademark License Agreement signed in connection
with the 1996 sale. In March of this year, Ryder terminated the
Trademark License Agreement and filed suit against Budget and
Ryder TRS based on breaches of the Trademark License Agreement
and violations of state and federal law. This suit to enforce
the termination is pending in federal court in New York.

Ryder System, Inc. is a business-to-business enterprise
serving commercial customers. The Company has a fleet of more
than 170,000 vehicles. The fleet consists of trucks and trailers
that are painted and decaled with the logos and graphics of
Ryder System customers, or that are painted white and emblazoned
with red and black Ryder logos. This fleet of vehicles serves
commercial customers on a full-service lease, dedicated contract
carriage basis, or as part of comprehensive supply chain
solutions. Included within this fleet are approximately 30,000
commercial rental trucks (white, with red and black logos) that
are used to supplement customers' fleets during high-volume
periods and are available to commercial customers on a short-
term basis. (Budget Group Bankruptcy News, Issue No. 1;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1) are trading
at 17 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for  
real-time bond pricing.


CANMINE RESOURCES: Will File for CCAA Protection in Canada
----------------------------------------------------------
Canmine Resources Corporation (TSX Symbol: CMR) will seek to
restructure its financial obligations under the Companies
Creditors Arrangement Act.  As part of this process, the company
will seek an Order for protection under CCAA before the Ontario
Superior Court of Justice.   

The decision to initiate a restructuring under CCAA replaces an
earlier proposal announced on June 18, 2002 that was to involve
MFC Bancorp Ltd., pursuant to a non-binding memorandum of
understanding. MFC's advisory services or assistance will not be
sought under the proposed CCAA restructuring.


CASUAL MALE: Seeks Extension of Plan Exclusivity through Jan. 27
----------------------------------------------------------------
Pursuant to 11 U.S.C. Sec. 1121(d), Casual Male Corp., and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York for a further extension of their exclusive
periods to file their chapter 11 plan and to solicit acceptances
of that plan.  The Debtors tell the Court that they will need
until January 27, 2003, to propose a plan and until
March 17, 2003, to solicit acceptances of that plan.

The Debtors remind the Court that they have sold all of their
operating assets and are proceeding with an orderly wind-down of
their estates. As part of this wind-down process, the Debtors
need to resolve:

     (i) capital structure issues,
    (ii) inter-company issues,
   (iii) purchase price allocation issues, and
    (iv) general creditor issues (Plan Issues).

The Debtors explain that although the Plan itself will be a
liquidating plan, it has not yet been determined as to which
estates have an interest in which sale proceeds, if any.  As
such, the resolution of the Plan Issues (which affect the
interests of various of the Debtors' estates) are critical to
the formulation of a Plan and a meaningful disclosure statement.
The Debtors point out that it would be impracticable for them to
propose a Plan until the Plan Issues have been satisfactorily
addressed.

Casual Male Corp., with its debtor-affiliates filed for chapter
11 protection on May 18, 2001. Adam C. Rogoff, Esq., at
Cadwalader, Wickersham & Taft represents the Debtors as they
wind-down their assets. When the Company filed for protection
from its creditors, it listed $299,341,332 in total assets and
$244,127,198 in total debts.  The Debtors anticipate that the
Estates may have in excess of $70 million to be distributed to
creditors under a chapter 11 plan.


CERTCO INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Certco Inc.
        320 Park Avenue 18th Floor
        New York, NY 10022

Bankruptcy Case No.: 02-13683

Type of Business: Certco develops software for securing
                  transactions over the internet through the
                  use of encryptions.

Chapter 11 Petition Date: July 30, 2002

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Debtors' Counsel: Mark S. Indelicato, Esq.
                  Hahn & Hessen LLP
                  350 Fifth Avenue
                  New York, NY 10118
                  (212) 736-1000
                  Fax : (212) 594-7167

Total Assets: $1,800,202

Total Debts: $1,947,806

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Steptoe & Johnson          Trade                      $167,200

Gray Cary Ware &           Trade                      $116,129
Freidenrich

Digex Incorporated         Trade                       $82,830

Dun & Bradstreet           Trade                       $68,750

Pillsbury Winthrop         Trade                       $66,200

55 Broad Street L.P.       Trade                       $50,000

June Yee Felix             Trade                       $35,828

Gartner Group, Inc.        Trade                       $29,686

Weber Shandwick            Trade                       $25,937

NextLinx Corporation       Trade                       $25,000

Info Tech Contract Services Trade                      $21,090

Ernst & Young LLP (UK)     Accounting services         $21,000

Media General Financial    Trade                       $20,000
Service

Manchester, Inc.           Trade                       $19,165

Marcel Yung Marcel Yung    Trade                       $18,380

Willis of New York, Inc.   Trade                       $17,826

Shared Technologies        Delivery of goods           $16,916
Fairchild                  and services

Humphrey Polanen           Delivery of goods           $15,000
                            and services

Verizon (Bell - NY)        Delivery of goods           $13,844
                            and services

Federal Express            Delivery of goods           $12,289
                            and services


COMDISCO: Committee Pulls Plug on Chaim Fortgang's Engagement
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in the chapter 7
cases involving Comdisco, Inc., and its debtor-affiliates, seeks
the Court's approval to withdraw Chaim Fortgang as co-counsel
nunc pro tunc to July 1, 2002.

Ronald W. Hanson, Esq., at Latham & Watkins, in Chicago,
Illinois, tells the Court that it is Mr. Fortgang's own volition
to withdraw as counsel for the Committee.  Mr. Fortgang has
agreed that he will not seek reimbursement of expenses or
payment of legal fees for services rendered after July 1, 2002.  
The Committee does not say why Mr. Fortgang quit, but it implies
that Mr. Fortgang has completed the required services.

The Committee will continue to retain Latham & Watkins as sole
counsel for the remainder of the cases. (Comdisco Bankruptcy
News, Issue No. 32; Bankruptcy Creditors' Service, Inc.,
609/392-0900)   


COMDISCO INC: Illinois Court Confirms Plan of Reorganization
------------------------------------------------------------
Comdisco, Inc., (OTC:CDSOQ) announced that its First Amended
Plan of Reorganization has been approved by the United States
Bankruptcy Court for the Northern District of Illinois and that
more than 98 percent of the creditors and stockholders who voted
on the Plan have voted for its confirmation. The company said
that it expects the Plan to become effective during the week of
August 12, 2002.

The company also announced that Ronald C. Mishler, 41, has been
appointed chief executive officer of the newly reorganized
company, effective immediately. Mishler, who joined Comdisco in
July 2001 as a senior vice president and treasurer, had been
serving as president and chief operating officer since April 26,
2002. Norman P. Blake, who had

been serving as chairman and chief executive officer since he
joined Comdisco in March 2001, will remain as non-executive
chairman until the Effective Date of the Plan.

The company also said that the following individuals have been
named to serve on the Board of Directors of the newly
reorganized Comdisco: Ronald C. Mishler, (chairman), Jeffrey A.
Brodsky, Robert M. Chefitz, William A. McIntosh and Randolph I.
Thornton. On the Effective Date, they will succeed all of the
former directors of the company.

The amended Plan provides for an up to three-year orderly wind
down of the company's remaining assets. The distribution of the
net proceeds realized from such runoff, as well as the cash
accumulated to date, are anticipated to result in an
approximately 90% recovery to creditors. Common stockholders
will share in the net proceeds realized, beginning at 3 percent
of the remaining net proceeds once creditors realize 85 percent
recovery, and scaling up to a 37 percent recovery in any
remaining net proceeds once the creditors realize 100 percent on
their claims. Both Comdisco's Official Committee of Unsecured
Creditors and Equity Committee supported confirmation of the
Plan.

"We are very pleased to have completed our reorganization
process," said Ronald Mishler, chief executive officer. "As we
emerge from Chapter 11 reorganization, our focus will be on
maximizing the value of the company's assets over the next three
years. We have a team of extremely talented people dedicated to
that goal."

Since its Chapter 11 filing in July 2001, Comdisco sold its
availability services unit to SunGard Data Systems, Inc; the
majority of its electronics, lab and scientific, and healthcare
leasing assets to divisions of GE Capital Corporation, and
certain leasing assets in Australia and New Zealand to Allco
International Ltd. "The interests of Comdisco's stakeholders
have been well-served. The company sold those units that were
viable and inherently profitable through an efficient auction
process," said Norm Blake, non-executive chairman.

Comdisco said that it expects an initial distribution to its
stakeholders will be made prior to the close of its current
fiscal year, which ends on September 30, 2002.

Rosemont, IL-based Comdisco -- http://www.comdisco.com--  
provides technology services to help its customers maximize
technology functionality and predictability, while freeing them
from the complexity of managing their technology. Through its
Ventures division, Comdisco provides equipment leasing and other
financing and services to venture capital backed companies.


CORSPAN INC: Must Raise New Funds to Meet Current Obligations
-------------------------------------------------------------
During the quarter to May 31, 2002, Corspan Inc., conducted its
operations through its wholly owned subsidiaries, Total Print
Solutions Limited, New Media North Limited, Corspan Limited, and
ICM Resource Limited which was disposed of on May 30, 2002. All
of the subsidiaries are located in the United Kingdom.  Prior to
March 1, 2002, the Company conducted its operations entirely
through ICM Recource Limited.

The Company's financial statements were prepared on a basis that
contemplates the Group's continuation as a going concern and the
realization of assets and liquidation of liabilities in the
ordinary course of business. However, the Company has an
accumulated deficit of $1,716,683 at May 31, 2002, and negative
working capital of $1,245,507 at May 31, 2002.  These matters,
among others, raise substantial doubt about its ability to
remain a going concern for a reasonable period of time. To date,
in addition to Corspan having incurred significant net operating
losses, the Company anticipates that it may continue to incur
significant operating losses for some time in the event that its
current business plan does not meet expectations.  

Corspan must immediately raise significant capital to enable it
to meet its current obligations and to fund its current
operations until it is to become profitable.  Profitability is
dependent upon its ability to generate sufficient sales from
second-generation services. Its very existence is dependent on
its ability to obtain the necessary financing.

The Company is currently seeking financing through private
placements and has received approval to trade it's shares by the
NASD.  The Company hopes to raise significant proceeds through
this medium, which will be used to fund future acquisitions and
operating expenses. The Company is actively reviewing various
avenues to raise capital and is currently visiting with and
meeting a number of potential investors.

The Company, through a wholly owned subsidiary, New Media North
Ltd., has entered into an agreement to sell, on an on-going
basis, certain receivables subject to the terms of the
agreement. As the credit risk of these receivables remain with
the Company, this arrangement is accounted for as a loan
securitized. The Company is permitted to receive advances of up
to 60% of the receivables sold to the lender.

Corspan has insufficient relevant operating history upon which
an evaluation of performance and prospects can be made.  It is
still subject to all of the business risks associated with a new
enterprise, including, but not limited to, risks of current and
unforeseen capital requirements, lack of fully-developed
products, failure of market acceptance, failure to establish
business relationships, reliance on outside contractors for
manufacture and distribution, and competitive disadvantages
against larger and more established companies.  The likelihood
of success must be considered in light of the development cycles
of new products and technologies and the competitive environment
in which it operates.

Corspan Inc., is engaged in the business of developing and
marketing a bottom-up print-solutions operation, layering
additional services over acquired profitable businesses,
creating new efficiencies and enhanced profitability.

The Company intends to seek out and acquire companies who
fulfill its acquisition requirements in each of its chosen
industry sectors in the UK.  Through this strategy, it aims to
increase market share, consolidate its industry share while
increasing its competitive advantage. The marketplace is
currently extremely fragmented, which gives Corspan a wide-open
opportunity to acquire at low cost a broad portfolio of
solutions, products and services that it can unify under one
footprint. There is currently no dominant, unified provider
servicing the $130 billion marketing communications marketplace
where Corspan currently operates.


EBF LLC: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: EBF LLC
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 02-13702

Type of Business: The purpose of EBF LLC, an affiliate of Enron
                  Corp., is to acquire, own, operate, maintain
                  and sell a cold rolled mill steel processing
                  plant and all related land improvements and
                  tangible and intangible properties. EBFL's
                  products are used by producers of coated
                  products, tube manufacturers, metal drum
                  manufacturers, metal building companies
                  (primarily roof decking), and service
                  centers.

Chapter 11 Petition Date: July 31, 2001

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  212-310-8602
                  Fax: 212-310-8007
                  
                  and
   
                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $16,527,854

Total Debts: $16,921,811

Debtor's 6 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
HuntCo Steel, Inc.         Trade Debt                 $800,000
Robert J. Marischen, President
14323 South Outer Forty Dr.
Suite 600N
Town & Country, MO 63017
PH: 314-878-0155
FAX: 314-878-4537

Mississippi County         Tax Debt                   $108,343
Personal Property Tax

ADEQ                       State Environmental         $11,919
State of Arkansas Dept.     Permit
of Environmental Quality

Mississippi County         Electric utility             $1,000
Electric Cooperative, Inc.

N.E. Miss. Co. Water Assn. Water utility                  $536

N.E.T. Systems Inc.        Trade Debt                     $134


ENRON CORP: Rex Roger Gets Okay to Hire Manatt Phelps as Counsel
----------------------------------------------------------------
Richard L. Levine, Esq., at Weil, Gotshal & Manges, in New York,
relates that Enron Corporation and its debtor-affiliates have no
information suggesting that Vice President and Associate General
Counsel Rex Roger is anything other than a mere witness.
Moreover, it is the Debtors' understanding and belief that Mr.
Rogers did seek representation from Swidler, and that Swidler
did recommend that he seek separate counsel due to an actual or
potential conflict of interest.  Thus, the Debtors do not object
to the retention of Mr. Roger's counsel.

(2) Official Committee of Unsecured Creditors

The Committee asks the Court to deny the motion because the
Application fails to show that the retention is in the best
interests of the Debtors' estates.  The creditors should not be
compelled to suffer expenses that provide no reciprocal benefit.

According to Luc A. Despins, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, the Application does not meet the
requirement of Section 327(e) of the Bankruptcy Code which
provides the retention of attorneys to represent only a debtor-
in-possession and not the Debtors' employees. The Section also
unambiguously limits court-approved retention of attorneys to
circumstances where the retention not only redounds to the
benefit of the estate but when the retention is demonstrably in
the best interest of the estate.

The retention should also not entail a representation adverse to
the Debtors and its estate.  However, the Applications raises
great concern by ambiguously admitting that Rogers may have an
actual or potential conflict of interest.

In the same manner, Mr. Despins asserts that the Application
does not meet the requirements of Section 363(b) of the
Bankruptcy Code and should be subjected to the requisite
"heightened scrutiny" because it was requested by and is
intended to benefit directly an insider.  Mr. Despins recalls
that Mr. Rogers sought representation by Swidler but Swidler
could not take on the representation because of a potential or
actual conflict of interest.  It is then unclear from the
Application whether the interests of the Debtors and Mr. Rogers
will diverge during the investigations.  Accordingly, Mr.
Despins says, providing Mr. Rogers with his own counsel puts his
interest before the interests of the estates.

                      *     *      *

After due deliberation, Judge Gonzalez approves Manatt, Phelps &
Phillips LLP's retention as Mr. Rogers' counsel in connection
with and through the completion of the Investigations, nunc pro
tunc to March 8, 2002.  Except to the extent objections are
filed, the Debtors shall pay 80% of Manatt's billed fees through
April 30, 2002 and all of its expenses incurred through April
30, 2002, pursuant to Section 330 and 331 of the Bankruptcy Code
promptly on or before July 26, 2002.  Thereafter, Manatt shall
petition this Court for any further fees and costs incurred in
accordance with the procedures set forth in the Interim
Compensation Orders.

                         Background

Rex R. Rogers is currently the Vice President and Associate
General Counsel of Enron Corporation, and has been an in-house
legal counsel for the Debtors since 1985.

The Subcommittee on Oversight and Investigations of the United
States House of Representatives asked Mr. Rogers to appear on a
panel on March 14, 2002 and give his testimony about certain
matters related to the Debtors' business practices.  To prepare
for the testimony, Mr. Rogers sought legal representation of
Swidler Berlin Shereff Friedman LLP, which is the Special
Employees Counsel approved by the Court.  Swidler told Mr.
Rogers that the firm could not represent him due to an actual or
potential conflict of interest.  Instead, Swidler suggested that
Mr. Rogers retain a separate counsel.

Mr. Rogers did just that.

Mr. Rogers agreed to pay Manatt's hourly billing rates that are
generally in effect from time to time and reimburse Manatt for
its out-of-pocket costs.  Mr. Rogers paid an initial retainer
fee in the amount of $10,000.  However, Manatt agreed to seek
full reimbursement of Mr. Rogers' fees and expenses from the
Debtors.

Manatt's current regular hourly rates range from:

          $350 to $600 for partners
          $190 to $325 for associates
           $60 to $325 for paraprofessionals

For the individual attorneys who represented Mr. Rogers before
the Subcommittee, their billing rates are:

             B. Michael Rauh - $475
            Pamela J. Marple - $375
      Lindsey W. Cooper, Jr. - $230
(Enron Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ENRON CORP: Court OKs Dyer Ellis as Hudler & Lindsey's Counsel
--------------------------------------------------------------
Judge Gonzalez approves the retention and employment of Dyer,
Ellis & Joseph PC as counsel for Shirley Hudler and Mark
Lindsey, nunc pro tunc to March 22, 2002 and March 28, 2002, in
connection with the government investigations relating to Enron
Corporation and debtor-affiliates, and their employee benefit
plans.  

Ms. Hudler is a former Senior Director of Enron Global Finance.
She was also the Manager for the JEDI I and II Partnerships from
1997 to December 2001.  On the other hand, Mr. Lindsey is a Vice
President for Enron.  He is responsible for managing and
supervising approximately 30 accountants who do the accounting
work for various Enron business units including Enron Global
Finance.  Because of their positions, various government
agencies have sought to interview Ms. Hudler with regard to
issues related to Enron's business practices and Mr. Lindsey
with regard to issues related to accounting work for Enron.

Specifically, DEJ will provide these services:

  (a) representing Ms. Hudler and Mr. Lindsey in connection with
      specific Investigations or regulatory matters involving
      any branches and agencies of the United States Government
      (including, but not limited to, any interviews,
      depositions, hearings and investigations that have been or
      may be initiated by the United States Congress, the
      Securities and Exchange Commission, the Federal Bureau of
      Investigation, the Department of Justice, the Department
      of Labor, and the Federal Energy Regulatory Commission) as
      well as similar proceedings initiated by a domestic or
      foreign, state or local government entity;

  (b) attending meetings on behalf of Ms. Hudler and Mr. Lindsey
      with third parties with respect to the Investigations;

  (c) appearing before the United States Bankruptcy Court, any
      district or appellate courts, and the U.S. Trustee on
      behalf of Ms. Hudler and Mr. Lindsey with respect to the
      Investigations;

  (d) facilitating and coordinating communications between Ms.
      Hudler, Mr. Lindsey and other parties in connection with
      the Investigations; and

  (e) performing on behalf of Ms. Hudler and Mr. Lindsey the
      full range of services normally associated with the
      Investigations.

The Firm's hourly rates currently range from:

          $275 to 450    partners
           250 to 335    counsel
           145 to 240    associates
            90 to 125    paralegals
            35 to 140    other non-attorney professionals
(Enron Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

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


ENRON CORP: Merrill Lynch Calls Dealings "Appropriate & Proper"
---------------------------------------------------------------
Merrill Lynch & Co., Inc., (NYSE:MER) issued the following
statement in response to allegations raised in a Senate
subcommittee hearing or previously reported in the news media
regarding its business relationship with Enron:

"Merrill Lynch strongly believes that our limited dealings with
Enron were appropriate and proper. At no time did we engage in
transactions that we thought were improper."

Regarding Merrill Lynch research coverage of Enron, the company
said:

"At no time was Merrill Lynch's research compromised. Our
ratings represented the independent views of our analysts and
were not among the most bullish on Enron. No rating was changed
as a result of pressure from investment banking or Enron.

"Our original analyst retained his intermediate 'Neutral' rating
throughout the time in question (July 1997 - August 1998, when
he left the firm.) On joining another firm, this analyst in
October 1998 initiated coverage of Enron with a higher rating of
'Accumulate.'

"The Merrill Lynch analyst who subsequently assumed coverage of
Enron, along with his continuing coverage of a related sector,
also initiated coverage of Enron with a rating of 'Accumulate."
Our analyst was one of the first to downgrade Enron in August
2001 before the company's bankruptcy."

Regarding questions raised about a certain transaction involving
an equity investment related to electricity generating barges,
Merrill Lynch said:

"There was no guarantee - secret or otherwise - that Enron or
any entity related to Enron would buy Merrill Lynch's shares in
a Nigerian energy barge company. Merrill Lynch was fully at risk
for its ownership of these shares. Enron did not guarantee any
rate of return on this investment.

"In fact, Merrill Lynch made a $7 million investment in a
wholly-owned newly-formed entity, Ebarge LLC. Pursuant to a
written binding agreement, Ebarge LLC acquired an equity
interest in Enron Nigeria Barge Ltd. The written binding
agreement includes no guarantee regarding the return on, or
recovery of Merrill Lynch's investment. In addition, the written
binding agreement includes the following important provision:

'10. Entire Agreement

10.1 This Agreement and the schedules hereto contain the whole
     agreement between the Parties relating to the sale and
     purchase of the Shares, and supersede all previous
     agreements between the Parties relating to such sale and
     purchase.

10.2 Each Party acknowledges that in agreeing to enter into this
     Agreement it has not relied on any representation,
     warranty, covenant, undertaking, indemnity, collateral
     contract or other assurance made or given by any other
     Party or any other person, whether in writing or otherwise,
     at any time before signature of this Agreement, except as
     expressly set out herein, and in any other written
     instruments between the Parties.

10.3 Neither Party shall have any right of action against the
     other arising out of or in connection with any
     representation, warranty, undertaking, collateral contract
     or other assurance referred to in Clauses 10.1 or 10.2,
     except as expressly set out in this Agreement and except in
     the case of fraud.'

"In short, while Enron said it would help Merrill Lynch find a
buyer for its interest, Merrill Lynch bore the total risk of
ownership for six months and had no enforceable claim against
any other party regarding this investment.

"Contrary to assertions made in the press and elsewhere that
Merrill Lynch's investment was a loan, the investment was in
fact an equity interest with no enforceable claim on any party
for repayment, and was properly recorded in Merrill Lynch's
financial statements as an equity investment.

"Had we known at the time what we know today, we would not have
conducted business with Enron. Without the benefit of hindsight,
however, and based on the information available to us at the
time, we strongly believe that our actions were appropriate and
proper."


EXODUS COMMS: XO Demands $15-Million Admin. Expense Payment
-----------------------------------------------------------
XO Communications asks the Court to compel Exodus
Communications, Inc., and its debtor-affiliates to pay
$15,543,136 in administrative expenses.

According to Russell D. Gill, Esq., XO Senior Manager for Legal
Affairs and Revenue Operations, the Debtors and XO are parties
to a National Master Communications Services Agreement.  Under
the June 19, 2001 Agreement, XO provided the Debtors with high-
level telecommunications services. (Exodus Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


FEDERAL-MOGUL: June 30, 2002 Balance Sheet Upside-Down by $884MM
----------------------------------------------------------------
Federal-Mogul Corporation (OTC Bulletin Board: FDMLQ) reported
second quarter 2002 sales of $1,442 million up one percent
compared to $1,425 million in 2001.  Excluding the effects of
foreign currency and businesses divested in the prior year,
second quarter sales increased four percent.  Second quarter
2002 earnings from operations were $48 million compared to a
loss from operations of $5 million in 2001.  Earnings from
operations for the second quarter 2002 exclude restructuring
charges, impairment charges and Chapter 11 related expenses.  
Earnings from operations for the second quarter 2001 exclude
restructuring charges, impairment charges, gains and losses on
sales of businesses, gain on debt to equity swaps, and have been
adjusted on a proforma basis for the adoption of SFAS 142.

In the second quarter 2002, Federal-Mogul had reported earnings
of $16 million compared to a loss of $18 million in 2001.

Second quarter 2002 cash flow from operations, net of capital
expenditures, was $11 million compared to a one million-dollar
cash usage for second quarter 2001.  By geographic region, total
second quarter 2002 sales were 62 percent in North America, 36
percent in Europe and two percent in the rest of the world.

At June 30, 2002, Federal-Mogul's unaudited balance sheet shows
a total shareholders' equity deficit of about $884 million.

"We continue to achieve operational improvement and I am pleased
with our progress to date," said Frank Macher, chairman and
chief executive officer. "Our net new business backlog rose to
$440 million with significant contracts gained for pistons in
both North America and Europe.  The strength of our customer
relationships at this time is very encouraging."

                    Impact of SFAS 142 Adoption

On January 1, 2002, Federal-Mogul adopted Statement of Financial
Accounting Standard (SFAS) No. 142.  Under SFAS 142, companies
no longer amortize goodwill and other indefinite-lived
intangible assets and are required to perform annual tests of
impairment.  During the second quarter of 2002, Federal-Mogul,
along with the assistance of an outside valuation firm,
completed its initial fair-value based impairment test of its
goodwill and indefinite-lived intangible assets required by SFAS
142.  As a result of these tests, Federal-Mogul recorded a non-
cash charge of $1,428 million for the cumulative effect of a
change in accounting principle.  The performance of certain
operating units and changes in market conditions were the
primary reasons for the decrease in certain operating units'
fair values that resulted in the impairment charge.

After this non-cash charge, reported six months 2002 net loss
was $17.65 per share compared to $1.14 per share in 2001.

Federal-Mogul is a global supplier of automotive components and
sub- systems serving the world's original equipment
manufacturers and the aftermarket.  The company utilizes its
engineering and materials expertise, proprietary technology,
manufacturing skill, distribution flexibility and marketing
power to deliver products, brands and services of value to its
customers.  Federal-Mogul is focused on the globalization of its
teams, products and processes to bring greater opportunities for
its customers and employees, and value to its constituents.

Headquartered in Southfield, Michigan, Federal-Mogul was founded
in Detroit in 1899 and today employs 49,000 people in 24
countries.  On October 1, 2001, Federal-Mogul decided to
separate its asbestos liabilities from its true operating
potential by voluntarily filing for financial restructuring in
Bankruptcy Court in the United States and Administration in the
United Kingdom.

For more information on Federal-Mogul, visit the company's Web
site at http://www.federal-mogul.com  

Federal-Mogul Corporation's 8.8% bonds due 2007 (FMO07USR1) are
trading at about 19 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FMO07USR1for  
real-time bond pricing.


FLAG TELECOM: Assuming Right-Of-Use Agreement with Chief Telecom
----------------------------------------------------------------
FLAG Telecom Holdings Limited, and its debtor-affiliates seek
the Court's authorization and approval to amend and assume the
Premises Use Agreement, dated November 23, 2001, between Chief
Telecom Inc. and FLAG Asia Ltd. The agreement provides FLAG Asia
with the right to use the premises, facilities and ancillary
equipment located in Chief's data center in Taipei, Taiwan. It
also provides Internet application services to FLAG Asia.

The agreement grants FLAG Asia a 15-year exclusive right of use
of the premises, a 15-year right of use of the facilities and
use of around-the-clock management services provided by Chief.
It enabled the Debtors to establish a significant landing site
in Taiwan and complete their North-Asian Loop.

As of the Petition Date, $2,500,000 in customized service fees
were due and payable by FLAG Asia to Chief. In addition, the
Premises Use Agreement requires FLAG Asia to make a payment of
$5,000,000 to Chief for its 15-year lease. The payment must be
made seven days following receipt by FLAG Asia of an invoice
from Chief on or before June 28, 2002.

                          Amendment

By an amendment that awaits Court approval, Chief has agreed
that FLAG Asia settle its $2,500,000 unpaid customized service
fees in six monthly installments of $416,667. The amendment also
extends the due date for the lease payment to:

    (a) seven days following the receipt by FLAG Asia of an
        invoice from Chief on or after the date that a Type 1
        telecommunications license is obtained and the Taiwan
        section of the FLAG North-Asian Loop is able and
        permitted to carry commercial traffic; or

    (b) October 1, 2002, whichever is earlier.

Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, says the
Debtors' assumption of the agreement will allow them to maintain
their landing site in Taiwan and complete the FLAG North-Asian
Loop. Completion of the loop is a key element of the Debtors'
business plan. (Flag Telecom Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GADZOOX NETWORKS: Commences Trading on OTCBB Effective July 31
--------------------------------------------------------------
Gadzoox Networks, Inc., (Nasdaq: ZOOX) a global supplier of
innovative Storage Area Network products, announced the
voluntary withdrawal of the Nasdaq delisting appeal.

"The market perception of Gadzoox Networks does not reflect the
value of the company's industry recognized technology.  We are
executing on a new plan of action that I believe will build real
and sustainable shareholder value," stated Steve Dalton, Gadzoox
Networks President and CEO.  "With the concurrence of our board
of directors we have decided to withdraw our appeal to remain
listed on Nasdaq.  We have determined that the steps needed to
achieve compliance with Nasdaq not only created a business
distraction but could also diminish the value of the company at
this time and is not in the best interest of our shareholders.  
This action allows us to concentrate on what we have to do
today, and that is to close the new business opportunities we
have in front of us," continued Dalton.

The Gadzoox Networks stock commenced trading on the Over The
Counter Market Wednesday, July 31 under the same stock symbol:  
ZOOX.

Since 1996 Gadzoox Networks has led the industry in market
"firsts" and continues to drive the Storage Area Network (SAN)
edge market with innovative Fibre Channel switching technology.
The company has consistently delivered a time to market
advantage to major OEM customers enabling them to create clear
business value for their customer base. Gadzoox Networks is a
voting member of the Storage Networking Industry Association
(SNIA), with corporate headquarters located in San Jose,
California.  For more information about Gadzoox Networks'
products and technology advancements in the SAN industry, visit
the company's Web site at http://www.gadzoox.com  


GADZOOX NETWORKS: June 30, 2002 Equity Deficit Reaches $3.7MM
-------------------------------------------------------------
Gadzoox Networks, Inc., (Nasdaq: ZOOX) a global supplier of
innovative Storage Area Network (SAN) products, reported
financial results for its fiscal 2003 first quarter.

The Company posted fiscal first quarter revenue of $4.5 million,
slightly higher than the guidance update of $4.0 million to $4.2
million.  

Gross profit for the first fiscal quarter was $2.2 million or
50% of net revenues.  This result is above the guidance provided
in the previous earnings call, which forecasted a gross margin
for the quarter in the range of 43% to 45%.  Operating expenses
during fiscal first quarter were $4.1 million, excluding
restructuring and amortization costs of $2.3 million.  This is
consistent with the guidance provided during the previous
earnings call, which forecasted operating expenses of $3.9
million to $4.4 million.  Ongoing operating expenses without
restructuring, impairment and amortization costs have declined
by $3 million or 42% from the prior quarter and $8.4 million or
67% from the first fiscal quarter of the prior year.

Gadzoox Networks' June 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $3.7 million.

"In the seven weeks I have been heading up Gadzoox Networks we
have closed a major OEM deal with Acer, launched a new revenue
stream and are increasing our visibility," stated Steve Dalton,
Gadzoox Networks, President and CEO. "We are moving fast to
achieve results that are tangible and I think we have already
begun to prove ourselves.  While the name maybe the same,
customers, partners and shareholders are beginning to realize
this is a new company."

          The Company's First Fiscal Quarter Highlights

The first quarter for the Company was marked with a number of
customer wins and significant achievements.

     -- Appoints New President and CEO;

     -- Inked multimillion dollar OEM deal with Acer;

     -- Introduced FabriCore Engines Suite of Technology; with
        one deal closed and others in negotiations;

     -- Met expense and gross margin expectations for the
        quarter and continued cost reduction efforts;

     -- Enhanced existing Slingshot 2Gb Open Fabric product line
        to include 18-port high availability switch and 8-port      
        embedded switch;

     -- Announced the availability of Open SAN OS for the
        Slingshot family of 2Gb switches.

"While we were disappointed with the decline in revenue this
quarter, we were pleased that the Company's results in other key
areas such as operating expense levels and cash usage, were on
target," commented Barbara Velline, Chief Financial Officer for
Gadzoox Networks.  "Our expense management actions are now being
reflected in our financial results."

In a separate announcement Gadzoox Networks announced the
voluntary withdrawal of the Nasdaq delisting appeal.  This
decision will be discussed in further detail during the earnings
conference call.

Since 1996 Gadzoox Networks has led the industry in market
"firsts" and continues to drive the Storage Area Network (SAN)
edge market with innovative Fibre Channel switching technology.
The company has consistently delivered a time to market
advantage to major OEM customers enabling them to create clear
business value for their customer base. Gadzoox Networks is a
voting member of the Storage Networking Industry Association
(SNIA), with corporate headquarters located in San Jose,
California.  For more information about Gadzoox Networks'
products and technology advancements in the SAN industry, visit
the company's Web site at http://www.gadzoox.com.  


GENTEK INC: Blocked from Paying Interest of 11% Senior Sub Notes
----------------------------------------------------------------
GenTek Inc., (OTC Bulletin Board: GNKI) has received a payment
blockage notice from its senior lenders pursuant to its senior
credit facility preventing the Company from making its scheduled
August 1, 2002 interest payment on its 11% Senior Subordinated
Notes due 2009.  The Company's senior credit facility permits
the Company's senior lenders to issue one payment blockage
notice in any 12-month period while the Company is in default of
its senior credit facility.

Under the terms of the indenture governing the 11% Senior
Subordinated Notes, an event of default will be deemed to occur
if the Company does not make the scheduled August 1, 2002
interest payment on or before August 31, 2002.  If the Company
is not permitted to make the interest payment on or before
August 31, 2002, acceleration of the principal amount and all
accrued interest on all outstanding 11% Senior Subordinated
Notes may result.

Although the Company has been engaged in discussions with its
senior lenders as to the terms of an amendment to the Company's
senior credit facility, no agreement has been reached as to such
terms and the Company is currently considering various
restructuring alternatives.  The Company noted that it has
approximately $140 million of cash on hand which should permit
it to maintain existing payment terms with vendors while it
explores its restructuring alternatives.

No assurances can be given that the Company will be able to
consummate any amendment to the credit facility, any
restructuring, recapitalization or reorganization or that it
will be able to meet scheduled interest payments on the 11%
Senior Subordinated Notes.

GenTek Inc., is a technology-driven manufacturer of
telecommunications and other industrial products.  Additional
information about the company is available on GenTek's Web site
at http://www.gentek-global.com  


GENUITY: Will Defer Publishing Q2 Results Due to Verizon Action
---------------------------------------------------------------
Genuity has announced it will postpone the release of its second
quarter 2002 earnings due to recent events set in motion when
Verizon renounced its option to increase its ownership in the
company. The action by Verizon triggered a default on the
company's borrowings from Verizon and from a consortium of
banks.

The company indicated that, prior to the Verizon action, its
operating earnings were on track to meet its financial guidance
for the quarter and for the year.

The company was scheduled to release earnings on August 1, 2002.
The company's Form 10-Q is due to be filed with the SEC on or
before August 14th.


GLOBAL CROSSING: Auction Scheduled for Tomorrow
-----------------------------------------------
Global Crossing announced that, in accordance with the bidding
procedures order originally approved by the United States
Bankruptcy Court for the Southern District of New York, it has
moved the date of the auction to determine the successful bidder
from July 31, 2002 to August 2, 2002.  The auction will take
place at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York 10153 at 10:00 a.m. EDT.  The auction
hearing is still scheduled for August 7, 2002.

"We are extending the auction in order to give the parties more
time to finalize and compare the competing investment
proposals," said John Legere, chief executive officer of Global
Crossing.

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 INTERACTIVE: Inks Pact to Sell Assets to ISW Subsidiary
--------------------------------------------------------------
Interactive Systems Worldwide Inc., (Nasdaq:ISWI) announced that
its wholly owned subsidiary, ISW Acquisition Co., LLC, had
entered into agreements to acquire all of the outstanding shares
of Global Interactive Gaming Ltd.

GIG is the Company's worldwide exclusive licensee for wagering
and contests utilizing its play-by-play SportXction(TM) Wagering
System. The Closing of the transaction is subject to customary
closing conditions and to the approval of the liquidator of
Prisma iVentures, a KirchGroup affiliate. This is expected to
occur imminently, with the completion and receipt of the
electronic transfer of funds due at the closing, a process that
is currently underway.

In addition to the acquisition of the shares of GIG, the Company
will also receive the funds in the ISWI/GIG Escrow Account,
which was originally $6.3 million when negotiations on this
transaction initiated, $3.2 million of which has been
distributed equally between the parties. GIG used its share of
these funds for the operation of its business.

Chairman and CEO, Barry Mindes stated, "With this acquisition we
are greatly encouraged by the future prospects for the Company.
By recovering our software license, the Company will now act as
the primary operator and be entitled to all of the proceeds
generated by our technology, versus the fractional share we
would have received as simply a licensor. We expect that this
distinction will be perceived by our investors and the
investment public in general. It is important to note however,
that with this acquisition the Company will now incur greater
costs, including operating, marketing, and advertising expenses
without the comfort of previous minimum license fees. We are
hopeful though that as our play-by-play wagering and contest
systems are received favorably by interactive television,
Internet and hand-held device (cell phones and PDA's) users, our
upside potential could be increased by several times. In short,
our risk continues to be consumer acceptance, as it always has,
but our revenue potential has substantially improved through the
acquisition of GIG."

The primary financial terms of the acquisition are:

     1.  The Company will pay a total of $460,000 to GIG's
principal shareholder and another Kirch Group affiliated
company.

     2.  In March 2000, in connection with the signing of the
original License Agreements with GIG, GIG was granted 423,087
Warrants to purchase the Company's Common Stock. Of these,
265,435 Warrants will continue to be held by GIG. GIG will
distribute 115,043 of these Warrants to MultiSport Games
Development, Inc., a minority shareholder of GIG, and 42,609 to
Peter Sprogis, another minority shareholder of GIG. The Warrants
are exercisable at $4.38 per share of Company Common Stock and
expire on March 16, 2005.

     3.  The Company will issue 60,000 shares of a new class of
Preferred Stock to MultiSports. Each share of Preferred Stock
will have one vote, is convertible into 10 shares of the
Company's Common Stock at $15 per share of Common Stock and is
redeemable by the Company seven years after issuance for nominal
consideration if not previously converted into Common Stock.

     4.  All loans and other obligations between GIG and its
shareholders and/or any affiliated companies will be terminated.

The above terms do not include any options, or other financial
incentives, which may be granted in the future to management or
other key employees of GIG who continue with GIG after the
acquisition or severance payments to those who do not remain
with GIG.

The Company believes that the available funds, approximately $11
million (including that which is currently in the Escrow
Account), are sufficient to operate the combined ISW/GIG
business in order to launch the game into the market and
determine the ultimate acceptance in the wagering and
entertainment market. The success of the Company remains
dependent upon acceptance of the product by the potential users.
As previously announced, GIG did not rollout the SportXction(TM)
System for use during the World Cup because GIG's Internet
partner filed for bankruptcy protection several days prior to
the World Cup due to financial difficulties unrelated to GIG. It
is expected that initial use of the live system will begin in
the UK with soccer on interactive television in fall of 2002, as
requested by GIG's largest interactive television partner.

                         *    *    *

As reported in Troubled Company Reporter's June 4, 2002,
edition, ISWI announced that GIG had delayed the rollout of the
SportXction(TM) System for use during the World Cup. Although
testing of the system has proceeded without any significant
problems, GIG advised ISW that its Internet partner that was to
support rollout did not sign an agreement, the terms of which
had been agreed, due to the partners' unrelated financial
difficulties. Although GIG will attempt to secure arrangements
with another company for such rollout during the course of the
World Cup, it is impossible to predict whether GIG's efforts
will be successful. If the World Cup rollout does not take
place, initial use of the live system is likely to be delayed
for use with interactive television until the Premier League
begins its new season in August 2002.

As expected, due to the failure of the Kirch Group to continue
to fund GIG, GIG did not make its required minimum royalty
payment into the Escrow Account on May 15, 2002, as required by
the License Agreements. Accordingly, the Company has informed
GIG that they are in default of the License Agreements.


ICG COMMS: Wanting to Sell Maroon Circle Property -- Again
----------------------------------------------------------
ICG Communications, Inc., and its debtor-affiliates notify the
Court that they intend to sell ICG Holdings, Inc.'s interest in
a parcel of improved real estate in Englewood, Colorado.  The
Maroon Circle Property comprises of a 2.88-acre land and a
30,144-square foot suburban office building located at 9605
Kingston Court.  The Debtors will sell the Maroon Circle
Property for $1,700,000 in cash, free and clear of all liens,
claims and encumbrances, to Brighton Shops LLC.

The Debtors utilized the Maroon Circle Property as additional
office space to house employees and a telecommunications hub.  
As a result of their ongoing efforts to reduce costs and
expenses, and a significant reduction in their workforce, the
Debtors no longer require use of the Maroon Circle Property.

Since May 2001, the Debtors have extensively marketed the Maroon
Circle Property.  During that time, the property has been under
contract for sale thrice.  The Debtors received their first
offer -- $3,670,000 -- on August 15, 2001.  But the prospective
purchaser terminated the contract.

In November 2001, CB Richard Ellis appraised the property and
assigned it a $2,600,000 value.  The Debtors' subsequent efforts
to sell the property were hampered by:

    (a) a significant deterioration in the Colorado real estate
        market,

    (b) an increase in office building vacancy rates, and

    (c) a general decline in the Denver economy.

As a result of these conditions, the property's current fair
market value fell between $1,556,000 and $1,980,667.

In January 2002, the Debtors initiated an aggressive marketing
strategy to sell the property.  As a result of these efforts,
the Debtors received five offers ranging between $1,200,000 and
$2,100,000. Naturally, the Debtors accepted the $2,100,000
offer.  But during the inspection period, the purchaser backed
out saying its offer was too high.

Now, Brighton Shops LLC is the remaining highest bidder.

The Maroon Circle Property is subject to a commercial note and
deed of trust dated September 2, 1994.  The Bank of Denver holds
the commercial note in the original principal amount of
$1,300,000, which is secured by the deed of trust.  As of July
1, 2002, the outstanding principal balance of this note was
$928,666.16.  Under the terms of this loan, the Bank of Denver
holds a property perfected security interest in the Maroon
Circle Property.  In June 2001, the Court authorized the Debtors
to provide adequate protection to the Bank of Denver is
connection with this property.

Upon the sale of the property, ICG Holdings, the property's fee
simple owner and the borrower under the loan, will utilize the
sale proceeds to pay off the Bank of Denver.  After payoff of
the mortgage, the Debtors will net $771,333.84, less sales costs
and related expenses, from the sale.

The Debtors have evaluated the terms and benefits of Brighton's
offer to buy the Maroon Circle Property, as well as the benefits
of other alternatives, including retention of the property.  In
their business judgment, the Debtors have determined that
Brighton's offer represents the greatest overall benefit to
their estates.  The Debtors further assert that:

    (1) The property is a surplus asset, which requires weekly
        upkeep even though it is empty and provides no benefit
        to the Debtors;

    (2) The Debtors' broker predicts that the commercial real
        estate market in Colorado will remain flat for some time
        and may deteriorate further given Colorado's current
        economic conditions; and

    (3) Based on the offers received in 2002, the offer is at
        the top of the range that the market perceives for the
        property.

Continued marketing of the Maroon Circle Property or its
submission to an auction process is unlikely to produce any
better offer.

The salient terms of the Sale Agreement are:

    (1) Purchase Price -- $1,700,000 paid in cash, with an
        earnest money deposit of 5% of the purchase price,
        equivalent to $85,000, paid in escrow upon contract
        execution, and an additional 5% paid upon completion
        of an inspection period;

    (2) Assets Sold -- The proposed sale will include all of
        the Debtors' right, title, and interest in the Maroon
        Circle Property, as well as the UPS system, emergency
        generator, Liebert cooling units, certain furniture,
        fixtures, and the security system;

    (3) Closing -- The closing of the purchase and sale of the
        Maroon Circle Property shall be held no later than 15
        days after the end of the inspection period, upon which
        the remaining $1,530,000 will be paid in cash; and

    (4) Conditions to Closing -- This purchase and sale is
        subject to completion of customary due diligence. (ICG
        Communications Bankruptcy News, Issue No. 27; Bankruptcy
        Creditors' Service, Inc., 609/392-0900)  

ICG Services Inc.'s 13.50% bonds due 2005 (ICGX05USR1) are
trading at 4.5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ICGX05USR1
for real-time bond pricing.


INFRACOR INC: Appoints Jim Quarles as Acting President and CEO
--------------------------------------------------------------
InfraCor, Inc., (OTCBB: INFC) confirmed that its Board of
Directors has accepted Jim Quarles' resignation as president and
chief executive officer, effective July 31, 2002 and has
appointed Warren Beam as acting president and chief executive
officer, effective August 1, 2002.

In addition, Mr. Beam will continue to serve as the Company's
chief accounting officer and corporate controller, positions he
has held with InfraCor for more than four years.  Mr. Quarles
will continue to serve on the Company's Board of Directors as
chairman, a position he has also held for more than four years.

Mr. Quarles, states: "Warren Beam is well suited to perform the
duties associated with the Company's compliance with regulatory
requirements and other related responsibilities. At the same
time, InfraCor will continue its pursuit of a financial
restructuring which could possibly propel the organization from
its current situation to one which holds greater promise."

InfraCor Inc., is a construction company specializing in design,
build and rehabilitation of subsurface infrastructure corridors,
utilizing trenchless technologies and conventional methods on
behalf of municipalities, utilities and industries requiring
pipelines for water, sewer, gas, and cable. The corporate Web
site is http://www.InfraCor.net  

At March 31, 2002, InfraCor's balance sheet shows a total
shareholders' equity deficit of about $1 million.


KAISER ALUMINUM: Hatch Seeks Stay Relief to Prosecute $3M+ Claim
----------------------------------------------------------------
For the second time, Hatch Associates, Inc. and Hatch Associates
Consultants, Inc., affiliated companies, ask the Bankruptcy
Court for relief from the automatic stay so they could prosecute
their claims against Kaiser Aluminum & Chemical Corporation in a
pending arbitration proceeding through determination and
quantification of the Claim.

This time, Hatch also asks the Court to permit their insurer,
Lexington Insurance Company, to participate in and enforce its
rights in the Arbitration.

In August 2000, Hatch succeeded an Engineering, Procurement and
Construction (EPC) Agreement to rebuild the Debtors' Gramercy,
Louisiana refinery.  Hatch asserts a $3,536,534 claim against
the Debtors for its work on the Gramercy Rebuild Project.  As of
the Petition Date, the Debtors' multi-million dollar debt to
Hatch remains past due and unpaid. (Kaiser Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


L-3 COMMS: Inks Manufacturing Services Agreement with SMTC
----------------------------------------------------------
SMTC Corporation (Nasdaq: SMTX) (TSE: SMX) a global provider of
electronics manufacturing services, has signed a supply
agreement with L-3 Communications (NYSE:LLL) to provide
manufacturing services to its Global Network Solutions division.
The agreement reflects SMTC's continued focus on new business
development initiatives to strengthen its prospects for growth,
the company said.

L-3 Communications' GNS division is a worldwide supplier and
integrator of quality telecommunications products and end-to-end
communications solutions. GNS' products include Fixed Voice
Compression utilizing ADPCM technology, Scalable Voice
Compression utilizing an advanced MPMLQ algorithm, Network
Access Products, and Wireless Subscriber Terminals for Voice,
Fax & Data compatible with the worldwide Global System for
Mobile Communications standards.

"We are pleased L-3 Communications' GNS division has selected
SMTC as its manufacturing partner," said Paul Walker, SMTC
President and C.E.O. "This opportunity is a great fit for SMTC
as it enables us to leverage our communications industry
expertise and add a leading organization such as L-3
Communications to our client base. Moving forward, we will
continue to pursue strategic marketplace opportunities to grow
our business, while providing quality products and services to
build on our existing customer relationships."

SMTC will provide product assembly and test services of the
Digicall(TM), a GSM-compatible subscriber unit that provides
fixed access of customers to either standard GSM mobile cellular
network or GSM wireless loop from its Chihuahua, Mexico
facility.

SMTC Corporation is a global provider of advanced electronics
manufacturing services to the technology industry. The Company's
electronics manufacturing and technology centers are located in
Appleton-Wisconsin, Austin-Texas, Boston-Massachusetts,
Charlotte-North Carolina, San Jose-California, Toronto-Canada,
Ireland and Mexico. SMTC offers technology companies and
electronics OEMs a full range of value-added services including
product design, procurement, prototyping, printed circuit
assembly, advanced cable and harness interconnect, high
precision enclosures, system integration and test, comprehensive
supply chain management, packaging, global distribution and
after-sales support. SMTC supports the needs of a growing,
diversified OEM customer base primarily within the industrial,
networking and communications markets. SMTC is a public company
incorporated in Delaware with its shares traded on the Nasdaq
National Market System under the symbol SMTX and on The Toronto
Stock Exchange under the symbol SMX. Visit SMTC's Web site,
http://www.smtc.comfor more information about the Company.

Headquartered in New York City, L-3 Communications is a leading
merchant supplier of secure communications systems and products,
avionics and ocean products, training products, microwave
components and telemetry, instrumentation, space and wireless
products. Its customers include the Department of Defense,
selected US government intelligence agencies, aerospace prime
contractors and commercial telecommunications and wireless
customers. To learn more about L-3 Communications, please visit
the company's Web site at http://www.L-3Com.com

                         *   *   *

As previously reported in the June 24, 2002 edition of the
Troubled Company Reporter, Standard & Poor's expected to raise
its corporate credit rating on New York, New York-based L-3
Communications to double-'B'-plus from double-'B' after the
defense company completes its proposed offering of approximately
$900 million in common stock and $750 million in senior
subordinated debt and assuming that any pending acquisition
activity is on a scale that can be accommodated by the company's
enhanced financial resources. At the same time, the rating on
the company's subordinated debt would be raised to double-'B'-
minus from single-'B'-plus. The outlook would be stable. The
company's ratings remain on CreditWatch with positive
implications, where they were placed on June 6, 2002.

The proceeds from the sale are expected to refinance and pay
down debt related to the company's recent $1.1 billion purchase
of Raytheon Corp.'s Aircraft Integration Services (AIS) division
and restore the company's capital structure. The securities sale
is expected to be completed by the end of June 2002.


LAND O'LAKES: Posts Improved Operating Results for 2nd Quarter
--------------------------------------------------------------
Land O'Lakes, Inc., reported $48.3 million in second quarter net
earnings, a figure which included $32.7 million in proceeds from
several negotiated settlements related to vitamin price-fixing
litigation and an unrealized hedging gain of $6.3 million. Sales
for the quarter were $1.4 billion, up 2.9% over the second
quarter of 2001, this increase was driven primarily by the
additional sales resulting from the company's acquisition of
Purina Mills, Inc., last October.

Year-to-date, the company is reporting sales of $2.9 billion, up
6.8% over one year ago, and $47.3 million in net earnings, down
from $57.2 million for the first two quarters of 2001. Company
officials indicated key elements in the earnings decline
included ongoing competitive pressures on Upper Midwest dairy
manufacturing operations, costs related to the start-up of the
Cheese & Protein International joint venture, and commodity
price declines in the feed, egg, and swine industries.

                         Dairy Foods

Land O'Lakes reported a $5.4 million second quarter pretax loss
in Dairy Foods, as compared to $12.7 million in pretax earnings
for the second quarter of 2001. Year-to-date, Land O'Lakes is
reporting a $9.3 million pretax loss in its Dairy Foods
operations.

Company officers indicated key factors in the earnings decline
were the impact of continuing competitive pressure on Upper
Midwest Industrial (manufacturing) operations, retail pricing
issues and costs related to the CPI start-up.

Despite this environment, Land O'Lakes did report $5.0 million
in second quarter pretax earnings in its Dairy Foods Value-Added
operations, driven in part by increased volume in its retail
cheese and foodservice cheese categories.

On the Industrial side of its Dairy Foods business, the company
reported a $10.4 million loss for the quarter, as compared to
$5.5 million in pretax earnings for the second quarter of 2001.

Upper Midwest manufacturing operations reported an $8.4 million
loss for the quarter. Land O'Lakes officials said the loss was
due primarily to the impact of declining milk production and
charges related to restructuring efforts in the region.
Industrial earnings were also affected by $7.1 million loss
related to the start-up of Cheese & Protein International LLC,
the company's world-class, joint venture (with Mitsui of Japan)
West Coast cheese and whey processing facility, as well as
depressed mozzarella and whey markets industry-wide.

                           Feed

Land O'Lakes Feed reported $29.4 million in pretax earnings for
the second quarter, which included $31.9 million in proceeds
from various litigation settlements related to alleged price-
fixing by certain vitamin product suppliers.

Without the settlements, Feed would have reported a $2.5 million
pretax loss for the quarter, as compared to $7.3 million in
pretax earnings for the second quarter of 2001. Year-to-date,
Feed is reporting $32.8 million in pretax earnings, up from $9.5
million one year ago. Without the vitamin settlement, year-to-
date pretax earnings would be $1.0 million. Company officers
indicated year-to-date Feed earnings were impacted by a
combination of $10.0 million in one-time restructuring and
integration costs related to the Purina Mills acquisition and
the effect of unseasonably warm weather on livestock feed
volumes.

This shortfall was partially offset by the realization of
synergies and cost-savings related to the Purina Mills
acquisition. Year-to-date, Land O'Lakes Feed operations have
realized approximately $31 million in annualized synergies and
the company continued to make progress toward the anticipated
$50 million in synergies.

Land O'Lakes year-to-date pretax earnings in Feed are $32.9
million.

                            Seed

In Seed, Land O'Lakes reported $3.4 million in pretax earnings,
as compared to $2.8 million for the second quarter of 2001.
Year-to-date, pretax earnings in Seed are $14.5 million, as
compared to $17.1 million one year ago. The primary reason for
the first half decline is an aggressive 2001 fourth quarter
marketing and shipping program that brought considerable volume
and gross margins (that traditionally would have been realized
in the first quarter of 2002) forward into the final quarter of
2001.

                          Agronomy

Land O'Lakes conducts its Agronomy business through Agriliance,
a joint venture in which the company holds 50 percent ownership.
For the quarter, Agronomy operations contributed $41.0 million
in pretax earnings, following a $15.4 million first quarter loss
(due in part to adverse weather conditions). In the second
quarter of 2001, the company recorded $29.5 million in pretax
earnings. Year-to-date, pretax Agronomy earnings stand at $25.6
million, as compared to $17.3 million one year ago.

Land O'Lakes -- http://www.landolakesinc.com-- is a national,  
farmer-owned food and agricultural cooperative, with sales of $6
billion. Land O'Lakes does business in all fifty states and more
than fifty countries. It is a leading marketer of a full line of
dairy-based consumer, foodservice and food ingredient products
across the U.S.; serves its international customers with a
variety of food and animal feed ingredients; and provides
farmers and local cooperatives with an extensive line of
agricultural supplies (feed, seed, crop nutrients and crop
protection products) and services.

                           *   *   *

As reported in the November 6, 2001 edition of Troubled Company
Reporter, Standard & Poor's assigned its double-'B' rating to
Land O'Lakes Inc.'s $300 million senior notes due 2011.

At the same time, Standard & Poor's affirmed its double-'B'-plus
corporate credit rating and its triple-'B'-minus senior secured
debt rating on Land O'Lakes as well as its single-'B'-plus
preferred stock rating on Land O'Lakes Capital Trust I
(guaranteed by Land O'Lakes Inc.).

The outlook is stable.

The senior unsecured notes are rated one notch below the
corporate credit rating reflecting the substantial amount of
senior secured debt outstanding. Upon the closing of the $300
million senior unsecured notes transaction, Standard & Poor's
will affirm and remove the senior secured debt rating from
CreditWatch where it was placed on Oct. 3, 2001. If this
transaction is not completed or the proceeds are less than $300
million, Standard & Poor's will lower the senior secured debt
rating to double-'B'-plus and reevaluate the outlook.

The ratings on Land O'Lakes reflect the firm's diverse product
line, geographic coverage and strong consumer brand franchise.
These factors are offset by an aggressive financial profile,
modest discretionary cash flow, and a sizable debt amortization
schedule.


MASSEY ENERGY: Working Capital Deficit Tops $85MM at June 30
------------------------------------------------------------
Massey Energy Company (NYSE: MEE) reported financial results for
its second quarter ended June 30, 2002.  Coal revenues were
$330.9 million for the quarter, an increase of 8% over $305.0
million for the prior year period ended June 30, 2001.  Coal
sales for the quarter decreased by 7% from 11.1 million tons in
2001 to 10.3 million tons in 2002, while coal production
decreased by 6% from 11.7 million tons in 2001 to 11.0 million
tons for the three-month period in 2002. The Company reported
earnings for the quarter of $398,000 compared to a loss of $2.3
million for the comparable prior year period.

As of June 30, 2002, Massey's total current liabilities exceeded
its total current assets by about $85 million.

"While we exceeded our anticipated operating results of
breakeven for the 2nd quarter," stated Don L. Blankenship,
Massey Energy's Chairman and CEO, "coal demand remained weak and
our operational efficiency is not up to our high standards."
Blankenship reported that while the warm summer weather appeared
to be contributing to the firming of coal prices, sluggish
demand caused the Company to further reduce its sales
expectations for calendar year 2002.  "With high coal stockpiles
at utilities throughout the first half of the year and little
improvement in the general economic environment, our customers'
requirements were lower than anticipated," said Blankenship.

Given the weak market conditions that have prevailed throughout
the first half of the year, Massey reported that it has revised
its sales volume expectations for 2002 to 44 - 45 million tons.  
Virtually all of this tonnage is currently sold.  Average sales
price per ton is now expected to be between $31.50 and $32.00,
compared to an average sales price per ton of $27.51 in fiscal
2001.  Average sales price per ton was $32.06 for the second
quarter of 2002 and $31.42 for the year to date.

Average cash cost per ton for the full year is now estimated to
be between $27.50 and $28.00, compared to $28.01 for the second
quarter and $28.06 for the year to date. "We have not seen the
longwall productivity improvements and cost reduction that we
had earlier anticipated," said Blankenship.  "We hope this will
change as a result of our continuing efforts, but given recent
performance we believe the revised forecast is appropriate."  
EBITDA for 2002 is now estimated at $230 to $250 million. Total
depreciation, depletion and amortization ("DD&A") is projected
at between $190 and $200 million for 2002. The Company expects
total capital expenditures, excluding approximately $11 million
in operating leases, of approximately $150 million, compared to
$248 million for fiscal 2001.  "Even with all the challenges of
a difficult environment, the Company does expect positive free
cash flow during 2002 and significantly more in 2003," said
Blankenship.

The Company reported that overall mine productivity remained
relatively flat during the quarter, although some improvement
was apparent at specific mines.  Tons per man hour improved at
the Company's surface, highwall and room and pillar mines, while
management focus remains on resolving geological and other
operating issues at two of its four longwall mines.  "Although
we did see some measurable improvement during the second half of
the quarter," related Blankenship, "we remain frustrated with
our inability to reduce costs and improve productivity as
quickly as we would like.  These remain our greatest challenges
at this time."

Coal revenues of $654.4 million for the first six months of 2002
grew by 6% from $617.7 million for the same period in 2001.  
Tons sold decreased by 9%, from 22.8 million tons in 2001 to
20.8 million tons in 2002.  For the first six months in 2002,
Massey's loss was $1.7 million as compared to a loss of $847,000
during the same period in 2001.  EBITDA for the first six months
in 2002 was $105.2 million compared with $103.5 million for the
same period in 2001.

The Company reported that a number of factors contributed to the
continuation of higher costs. "Excessive regulatory requirements
continue to detract from the focus of management and to increase
the cost of doing business," said Blankenship. Low productivity
at several longwall mines due to persistent geological issues
continued to result in higher costs.

The Company expressed guarded optimism about future market
conditions, given the expected increase in demand during the
summer and firmer prices resulting from the coal industry's
rapid response to cut production in reaction to reduced market
demand.  In Central Appalachia, coal production through the end
of June had shrunk by 4.5% or approximately 6 million tons.
"It's been a long time since we've seen so little new mine
development activity in Central Appalachia," said Blankenship.  
"Some producers continue to struggle financially, while others
are withdrawing permanently from the region."  The Company
believes that mining conditions in West Virginia will continue
to be difficult due to pressures from the environmental
agencies, bonding and permitting issues, trucking weight
regulations and the difficulty of securing insurance.

The Company anticipates shipping between 11 and 12 million tons
for the third quarter ending September 30, 2002 at an estimated
average price per ton of between $31.50 and $32.00.  The Company
currently projects earnings per share of breakeven to $0.10 for
the third quarter.

An average sales price of between $30.00 and $31.00 per ton is
expected on projected sales of 47 - 48 million tons for 2003.  
Sales commitments for calendar 2003 currently represent about
70% of planned shipments.

As referenced in the Company's 2001 Form 10-K, trial is
currently proceeding in Boone County, W.V. with respect to
certain claims brought against the Company by Harman Mining
Corporation and its affiliates.  The plaintiffs allege that the
Company's assertion of force majeure on a coal purchase
agreement wrongfully forced Harman into bankruptcy. It appears
likely that trial will conclude within the next several days.

Massey had $330.5 million of short-term borrowings from its bank
credit facility at June 30, 2002.  As the Company previously
reported, Moody's and S&P downgraded its credit ratings in May,
preventing it from accessing the commercial paper market for
short-term funding needs.  As a result, the Company is now
relying on borrowings under its revolving credit facilities that
total $400 million.  Current available liquidity from the
Company's credit facility and cash at the end of the second
quarter totaled approximately $72 million. Total debt-to-book
capitalization ratio was 42.8% at June 30, an increase from
39.9% at December 31, 2001.

Massey Energy Company, headquartered in Richmond, Virginia, is
the fifth largest coal producer by revenue in the United States.

                           *    *    *

As reported in Troubled Company Reporter's April 1, 2002,
edition, Massey Energy Company's bank syndicate unanimously
approved the amendment of the financial covenants related to its
$400 million credit facility. With the approval of this
amendment, Massey expects to remain in compliance with all of
the covenants in the credit agreements.

Massey's $400 million credit facility consists of $150 million
364-day and $250 million 3-year revolving credit facilities that
serve primarily to provide a liquidity backstop to Massey's
commercial paper program.


MEASUREMENT SPECIALTIES: Appoints John P. Hopkins as New CFO
------------------------------------------------------------
Measurement Specialties (Amex: MSS) announced the appointment of
John P. Hopkins as Chief Financial Officer.

Mr. Hopkins has twenty years of experience in finance,
accounting and auditing. Most recently he was Vice President,
Finance at Cambrex Corporation, a NYSE listed company.
Previously, he held various senior financial positions at ARCO
Chemical and was an Audit Manager at PricewaterhouseCoopers.  
Mr. Hopkins holds a B.S. in Accounting from West Chester
University, and an MBA from Villanova University.

Frank Guidone, Chief Executive Officer of Measurement
Specialties, commented, "We chose our new CFO carefully. John
has the right combination of experience and talent to be a key
contributor to our current restructuring, as well as creating a
strengthened financial infrastructure for the future.

John Hopkins added, "I come to Measurement Specialties ready for
challenges, but, I am joining because of the opportunity I see
here to help return the Company to profitability."

Measurement Specialties is a designer and manufacturer of
sensors, and sensor-based consumer products. Measurement
Specialties produces a wide variety of sensors that use advanced
technologies to measure precise ranges of physical
characteristics, including pressure, motion, force,
displacement, angle, flow, and distance. Measurement Specialties
uses multiple advanced technologies, including piezoresistive,
application specific integrated circuits, micro-
electromechanical systems, piezopolymers, and strain gages to
allow their sensors to operate precisely and cost effectively.

                         *    *    *

As reported in Troubled Company Reporter's July 10, 2002
edition, Measurement Specialties, Inc., has successfully
negotiated and executed an extended forbearance agreement with
its lenders.  This agreement provides that the lenders will
forbear, until November 1, 2002, from exercising the rights and
remedies available to them as a result of the Company's defaults
under its credit agreement.  The agreement is the critically
important first step in the Company's broader restructuring plan
announced June 19th.  In a display of support for the proposed
restructuring plan, the lenders have also agreed to extend
additional credit under the Company's revolving credit facility
as well as allow the Company to apply the proceeds from the
sale/liquidation of certain Company assets against amounts
outstanding under the revolving credit facility (rather than
against amounts outstanding under the term loan as otherwise
required by the credit agreement).  As a condition to the
agreement and the lenders' continued forbearance, the Company
has agreed to pledge in favor of the lenders certain
unencumbered assets, and must take certain actions and comply
with strict financial covenants during the forbearance period.


MORGAN STANLEY: Fitch Junks Some 1999-RM1 Certificates' Ratings
---------------------------------------------------------------
Morgan Stanley Capital I Inc., commercial pass-through
certificates, series 1999-RM1, $122.2 million class A-1, $429.3
million class A-2 and interest only class X are affirmed at
'AAA' by Fitch Ratings.  In addition, Fitch affirms the
following certificates:

    * $43.0 million class B at 'AA',
    * $45.1 million class C at 'A',
    * $12.9 million class D at 'A-',
    * $34.4 million class E at 'BBB',
    * $17.2 million class F at 'BBB-',
    * $10.7 million class G at 'BB+',
    * $23.6 million class H at 'BB',
    *  $8.6 million class J at 'BB-',
    * $12.9 million class K at 'B+',
    *  $6.4 million class L at 'B',
    *  $8.6 million class M at 'B-' and
    *  $8.6 million class N at 'CCC'.

Fitch does not rate the $150 million class O certificates. These
ratings affirmations follow Fitch's annual review of the
transaction, which closed in March 1999.

As of the July 2002 distribution date, the transaction's
aggregate principal balance has decreased 7.1% from issuance, to
$798.5 million. The certificates are currently collateralized by
213 loans, compared to 229 at issuance.  The properties are
located in 35 states with significant concentrations in
California (25%), Georgia (11.9%), Florida (8.5%), and Virginia
(7.2%). Significant property type concentrations include retail
(34.7%), multifamily (22.8%), office (20%), hotel (10.5%) and
industrial (9.4%). The majority of the loans mature in 2008
(77%).

CapMark Services, LP, as master servicer, collected year-end
2001 financial statements for 90% of the loans. The year-end
2001 weighted-average debt service ratio (DSCR) for loans that
also reported financials in 2000 is 1.73 times compared to a
1.65x at YE 2000, and 1.44x at issuance. Seven loans, comprising
3.09% of the pool's outstanding loan balance, have a DSCR below
1.0x for YE 2001.

The deal is diverse by loan size with the top five loans
accounting for 13.8% of the outstanding loan balance. The YE
2001 weighted DSCR for four of the top five loans that reported
is 2.0x compared to 1.78x at YE 2000, and 1.40x at issuance.
None of the loans have a DSCR under 1.10x.

Twenty-two loans, representing 8.99% of the outstanding loan
balance, are on the servicer's watch list compared to 5.70% last
year. Two of these loans, representing 0.97% of the pool, are in
special servicing. The first property, Temple Medical Building,
accounts for 0.42% of the pool and represents the only
delinquent loan in the deal. The loan is collateralized by an
office building located in Salt Lake City, Utah. It was
transferred to the special servicer, Lennar Partners Inc., due
to the borrower's inability to meet debt service obligations
caused by the property's historically low occupancy rate. The
Southside Square Shopping Center is the other property in
special servicing and represents 0.55% of the pool. The loan was
recently transferred over to the special servicer in June
because Kmart, which represents 54.7% of the gross leaseable
area, vacated the property after the company filed for
bankruptcy earlier this year. The loan remains current and the
borrower has three prospective tenants that would occupy the
vacated Kmart space for the same rent. The property had a YE
2001 DSCR of 1.68x.

Fitch is concerned with the increased number of watchlist loans
in the transaction. The overall strong performance of the pool
and the low percentage of delinquencies mitigate this concern.
Fitch will continue to closely monitor this transaction.


MORTON INDUSTRIAL: Expects to Move Listing to OTCBB Today
---------------------------------------------------------
Morton Industrial Group, Inc. (Nasdaq: MGRP), a leading contract
manufacturing supplier to large industrial original equipment
manufacturers, announced that it is withdrawing its appeal to
the Nasdaq Listing Qualifications Department regarding its
earlier notice to delist the Company's securities from the
Nasdaq SmallCap Market and is moving its securities to the OTC
Bulletin Board.

This may occur as early as August 1, 2002. The Company's trading
symbol will remain unchanged.

William D. Morton, Chairman and Chief Executive Officer of
Morton Industrial Group, Inc. stated: "Given the uncertainty of
the current economic environment, the volatility of the markets,
and the limited number of shares we have historically traded, we
believe it is appropriate for our shares to trade on the OTC
Bulletin Board. Our management focus continues to be on the
execution of our restructuring plan, improving our operations
using Six Sigma methodologies and meeting the requirements of
our prestigious customer base. These important activities will
properly position us for improved financial results as the
economy recovers."

Morton Industrial Group, Inc., is a supplier of highly
engineered metal and plastic components and subassemblies for
large industrial original equipment manufacturers. The Company
provides large industrial original equipment manufacturers with
a wide range of services including design, prototype
development, precision tool making and production of metal
fabrications and plastic component parts. The Company's eleven
manufacturing facilities employ approximately 1,800 in the
Midwestern and Southeastern United States and are strategically
located near our customers' manufacturing and assembly
facilities. Morton's principal customers include B/E Aerospace,
Bombardier, Caterpillar Inc., Compaq Computer Corporation, Deere
& Company, EMC Corp., GE Appliances, and Honda of America Mfg.,
Inc.


MPOWER HOLDING: Emerges from Bankruptcy with 90% Less Debt
----------------------------------------------------------
Mpower Holding Corporation (OTC Bulletin Board: MPWRQ) announced
that it, and its subsidiary Mpower Communications Corp., will
formally emerge from Chapter 11 as its recapitalization plan
becomes effective.  Mpower's pre-negotiated recapitalization
plan received overwhelming approval from all voting classes and
was confirmed by the United States Bankruptcy Court for the
District of Delaware on July 17, 2002, only 100 days after it
was filed.

Through the recapitalization plan, Mpower eliminated $583.4
million in debt and preferred stock, as well as the associated
annual interest and dividend payments from its balance sheet by
paying $19 million in cash and issuing additional common stock.  
The shares of common stock of the recapitalized company were
issued as of 5:00 p.m. eastern time Tuesday, July 30, 2002 and
began trading on the NASD Over-the-Counter Bulletin Board
yesterday, July 31, 2002 under the symbol "MPOW."

"We're pleased that we were able to successfully execute
Mpower's well designed pre-negotiated plan, enabling us to
recapitalize the company in a remarkably short period of time,"
stated Mpower Holding Chairman and Chief Executive Officer Rolla
P. Huff.  "[Tues]day Mpower emerges as a vital partner for our
customers with a stronger balance sheet and more than $200
million in recurring revenue from a base of over 122,000
customers.  We are better positioned than many of our industry
peers as a result of this effort and are proud of the fact that
we were able to accomplish it while maintaining high- quality
service for our customers."

           Schedules Second Quarter Earnings Announcement

Mpower will hold a public conference call to discuss its second
quarter results on Friday, August 9, 2002 at 10:00 a.m. Eastern
time.  To access the call, dial 1-888-391-0082 and reference
"Mpower Second Quarter 2002 Results."  A replay of the call will
be available from Friday, August 9, 2002 at 12:00 p.m. ET
through Friday, August 16, 2002 at 12:00 p.m. ET by dialing 1-
800-633-8284. The reservation number for the replay is 20793439.

As previously announced, as a result of the emergence from
Chapter 11, Mpower Holding and its consolidated subsidiaries,
including Mpower Communications Corp., will implement "fresh
start" accounting rules.  These rules require Mpower Holding to
revalue its assets and liabilities on a consolidated basis to
current fair value, re-establish stockholders' equity as of the
reorganization value determined in connection with the
recapitalization plan, and report any differences between the
reorganization value and asset values as changes to goodwill.  
The company expects that the adoption of fresh start reporting
will have a material effect on Mpower Holding's consolidated
financial statements.  As a result, Mpower Holding's
consolidated financial statements published for periods
following July 30, 2002 will not be comparable with those
prepared before July 30, 2002.

      Appoints Deloitte & Touche LLP as Independent Auditor

Also Tuesday, Mpower announced that it has engaged Deloitte &
Touche LLP to serve as the company's independent auditor
effective July 30, 2002, replacing Arthur Andersen LLP.

Mpower Holding Corporation is the parent company of Mpower
Communications Corp., a facilities-based broadband
communications provider offering a full range of data,
telephony, Internet access and Web hosting services for small
and medium-size business customers.  Further information about
the company can be found at http://www.mpowercom.com


NATIONAL STEEL: Gets Go-Signal to Hire MB Valuation as Appraiser
----------------------------------------------------------------
After due deliberation, the Court authorizes the retention of
Allen Bealmear and MB Valuation Services Inc., as National Steel
Corp., and its debtor-affiliates' independent appraiser, nunc
pro tunc to April 10, 2002.

The professionals at MB Valuation with primary responsibility
for rendering appraisal services to the Debtors include Allen
Bealmear, Karen Milan, David Collins, Jay Tonubbee and Willis
Choate.  MB Valuation's services are critical to the prosecution
of these Chapter 11 cases, and MB Valuation has substantial
expertise in this type of work.

MB Valuation will provide these services:

  (i) Appraisal of real property under the Market Value concept
      including site inspection, research, data analysis and
      correlation for the Debtors' facilities located in:

      (a) Mishawaka, Indiana;

      (b) Ecorse, including the Michigan Steel Property and the
          Stinson Training Center and River Rouge, Michigan;

      (c) Granite City, Illinois, including the corporate
          office;

      (d) Portage, Indiana;

      (e) Canton, Michigan; and

      (f) Keewatin, Minnesota.

(ii) Appraisal of personal property located at the Facilities
      under various valuation methods;

(iii) Appraisal of Major Spares Inventory; and

(iv) Appraisal of certain additional real estate and personal
      property that the Debtors' deem necessary from
      time-to-time.

MB Valuation shall be compensated for their services:

  (i) For the appraisal of personal property, MB Valuation
      estimates a fee of $180,000 for four valuations, based on
      various valuation concepts;

(ii) For the appraisal of real property, MB Valuation estimates
      a fee of $120,000;

(iii) For the valuation of Major Spares Inventory, MB Valuation
      estimates a fee of $30,000; and

(iv) MB Valuation will be reimbursed for reasonable documented
      out-of-pocket expenses incurred in connection with
      providing the appraisals services including travel related
      expenses, computer processing, report preparation and
      miscellaneous costs including long distance, parking and
      delivery costs. (National Steel Bankruptcy News, Issue No.
      12; Bankruptcy Creditors' Service, Inc., 609/392-0900)

National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1),
DebtTraders reports, are trading at 38 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1
for real-time bond pricing.


NEXTERA ENTERPRISES: 2nd Quarter Results Fall Below Expectations
----------------------------------------------------------------
Nextera Enterprises, Inc. (NASDAQ: NXRA), which consists of
Lexecon, one of the world's preeminent economics consulting
firms, reported results for the second quarter ended June 30,
2002.

Revenues for the second quarter were $18.2 million, down
sequentially from $18.9 in the first quarter 2002 on a
comparable basis.

Nextera recorded earnings per share for the second quarter of
$0.04, including the net reversal of $0.7 million of previously
recorded restructuring reserves due to the favorable settlement
of terminated real estate lease obligations. Pro Forma net
income, excluding the reversal of restructuring reserves, was
$0.03 per share, equivalent to that of the first quarter 2002.
Net income for the quarter was $2.4 million. Net income for the
quarter, excluding the gain associated with the reversal of
restructuring reserves of $0.7 million, was $1.6 million,
consistent with net income in the first quarter 2002.

Nextera did not record a federal income tax provision in the
second quarter as a result of the Company's substantial deferred
tax asset, which was $53.0 million as of December 31, 2001 and
consists primarily of net operating loss carry-forwards, that is
fully reserved on the balance sheet.

Operating income in the second quarter, excluding the gain from
the reversal of the restructuring reserves, was $3.2 million,
with an operating margin of 18%. First quarter 2002 operating
income, on a comparable basis, totaled $3.6 million.

As of June 30, 2002, Nextera's total current liabilities
eclipsed its total current assets by about $600,000.

David Schneider, Chairman and Chief Executive Officer, said,
"While these results are slightly below our expectations, the
demand for Lexecon's services remained strong. Throughout its
25-year history, Lexecon has always operated as a project-based
business and, accordingly, during the course of any quarter,
large projects end and others begin. This normal business
turnover, coupled with ongoing projects entering phases with
varying degrees of required expert economic analysis, clearly
explains this quarter's slight dip in revenues."

Schneider continued, "The regulatory emphasis on accounting
transparency, which has resulted in an outcry for greater
corporate governance and more independent advice, has created a
larger marketplace for Lexecon's objective consultants. While
this did not have an immediate impact on demand for Lexecon's
services in the quarter, we expect it will contribute to the
need for our services in the future. We are confident in our
prospects for the third quarter."

                       Highlights

Lexecon's annualized revenue per professional in the second
quarter remained solid at $466,000.

Nextera continued to reduce its debt during the second quarter.
Currently, the Company has $28.6 million outstanding under its
senior credit facility, down from $30.4 million at the end of
the first quarter 2002, as the result of principal payments of
$1.8 million in the quarter.

Nextera had $2.6 million in cash at the end of the second
quarter, up significantly from $1.2 million in the first
quarter.

Additionally, in connection with the new credit agreement
announced at the end of last quarter, Fleet National Bank and
Bank of America have consented to Nextera's request to exchange
a portion of the Series A Cumulative Convertible Preferred
Stock. In July, the Company converted $20.0 million of the $23.7
million Series A Cumulative Convertible Preferred Stock. This
reduces Nextera's fully diluted common stock equivalents by
22.599 million shares. Had the conversion taken place at the
beginning of the second quarter, pro forma net income would have
been $0.05 per share for the quarter, an increase of $0.01 per
share from actual results.

In the second quarter, Nextera applied and was approved for
listing on the Nasdaq Small Cap Market, where its stock has
traded since June 3, 2002.

Recent client engagements for Lexecon include:

     - Assisting Walter Hewlett on a matter of corporate
governance in the fight for control of Hewlett-Packard;

     - Analyzing economic evidence on behalf of major
telecommunications company relating to a claim that the company
filed fraudulent financial statements;

     - A continuing study of the competitive behavior of
regulated and unregulated natural gas providers during
California's 2000-01 energy shortage for El Paso Merchant
Energy;

     - Assisting AmBev before the Argentina Competition Bureau
in its merger with Quilnes, a transaction that would combine the
two largest Argentine brewers;

     - Providing expert testimony in front of the International
Trade Commission on behalf of Elkem Metals Company regarding
anticompetitive acts of domestic ferrosilicon producers.

In addition, Lexecon has recently been engaged by several
clients in connection with alleged accounting fraud and related
issues.  

Nextera Enterprises Inc. currently consists of Lexecon, one of
the world's preeminent economics consulting firms. Lexecon
provides its law firm and corporate clients with analysis of
complex economic issues in connection with legal and regulatory
proceedings, strategic-planning decisions, and other business
activities. The firm has offices in Cambridge and Chicago. More
information can be found at http://www.nextera.comand  
http://www.lexecon.com


OWENS CORNING: New York Packaging Corp. Battle Continues to Rage
----------------------------------------------------------------
Owens Corning and its debtor-affiliates ask the Court to move to
August 15, 2002 their deadline to submit a dispositive motion on
New York Packaging Corporation's disputed claims.

New York Packaging demands a $1,414,606 payment -- plus interest
from May 3, 2001 -- based on the Debtors' alleged failure to pay
for 8,200 plastic sheets it shipped in April 2001.  The Debtors
objected, seeing a significant price increase for the same goods
-- from $0.46 per sheet of plastic to $172.50.  The difference
in price would require the Debtors to pay over $1,414,606,
rather than $7,000, for the same plastic sheets.

Upon agreement by the parties, the Court entered an Order on
April 19, 2002 setting deadlines for mutual discovery on New
York Packaging's motion and the Debtors' subsequent objection.  
The original deadline for the dispositive motion was set for
July 19, 2002.

The Court Order required that all discovery regarding New York
Packaging's motion and the objection should be completed by the
parties on June 21, 2002.  The Debtors, however, have not met
the requirement due by the deadline.

Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, claims the Debtors have adhered to the deadlines.
However, Mr. Pernick informs the Court that a deposition beyond
the discovery deadline was set on June 28, 2002 in order to
accommodate New York Packaging's counsel.  A formal Notice of
Deposition was sent on June 10, 2002 to New York Packaging.  In
the notice, the Debtors stated they want examination on:

1. any communications between New York Packaging and Debtors
   pertaining to the goods, purchase order, and the invoice
   that are the subject of New York Packaging Motion; and,

2. the manner in which the price per unit charged to the Debtors
   by New York Packaging for the invoice at issue was
   calculated.

New York Packaging did not object to the topics listed in the
notice.

Mr. Pernick explains that the Debtors are asking for an
extension because during the deposition, New York Packaging's
witness came unprepared, not bringing with him the documents
responsive to the Debtors' points of inquiry in the Notice of
Deposition.  This deprived the Debtors of the opportunity to
question the witness intelligently.

Mr. Pernick cited excerpts of the deposition, where New York
Packaging's witness admitted that he "would have to check on"
whether anyone else at New York Packaging had ever communicated
with the Debtors about the order.  The witness also admitted he
did not conduct any internal investigation prior to the
deposition to determine whether anyone at New York Packaging had
had any communications with Debtors in relation to the goods,
purchase order, and invoice that are the subject of the motion.

As to the calculation of the purchase price, the witness stated
that although he had records at his office that would enable him
to calculate the price he charged the Debtors, he had not looked
at the calculations prior to the deposition and was not prepared
to explain them.  The witness also admitted that he did not
bring with him the records that would enable him to expound on
the basis for the price jack-up and was not prepared to testify
about them.

                 Debtors Are Uncooperative

If the Debtors are asking for an extension of the deadline to
file for a dispositive motion, New York Packaging is asking the
Court to compel the Debtors to produce the documents necessary
to complete New York Packaging' discovery.

Richard J. Parks, Esq., at MacDonald Illig Jones & Sritton LLP,
in Erie, Pennsylvania, tells the Court the Debtors' counsel have
so far been uncooperative in New York Packaging's discovery
efforts.  According to Mr. Parks, the Debtors failed to respond
to New York Packaging's request for document production, which
was issued more than 14 days before the June 21 discovery
deadline.

Mr. Parks alleges the Debtors' counsel unilaterally refused to
comply with New York Packaging's discovery requests and even
advised New York Packaging's counsel they would not comply
because the discovery was not issued more than 30 days before
the Court's expiration date.  It was only during the June 28
deposition did the Debtors' counsel offered to comply with the
outstanding discovery due to New York Packaging.  But even then,
Mr. Parks assails the Debtors' counsel for not advising the
Debtors' witnesses who appeared for deposition that New York
Packaging had requested that they bring documents to support
their testimony for issues stated in New York Packaging's own
Notice of Deposition.

Mr. Parks defends the New York Packaging's witness' apparent
lack of preparation by saying that the Debtors' counsel was on a
fishing expedition for documents, which apparently do not exist.
The Debtors, thus, were not deprived of any information or
documents.  The Debtors have been provided with all the
information and documents available.

During the deposition, New York Packaging's witness agreed that
he would inquire to see if anyone had communicated with Owens
Corning, and that he would also see if he had any record of any
price quote for the plastic ordered by the Debtor.  The Debtors
received a correspondence from New York Packaging's witness on
July 2, 2002.

Thus, Mr. Parks contends, there is no reason why the Debtors
could not file a dispositive motion.  "The Debtors' counsel
would not be wasting the Court's time in considering the
requested extension if only they had responded to New York
Packaging's earlier discovery requests and had not asked
irrelevant and wandering questions during the three-hour
deposition," Mr. Parks says. (Owens Corning Bankruptcy News,
Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PINNACLE TOWERS: Gets Okay to Hire Grisante Galef as Advisors
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted permission to Pinnacle Towers III Inc., and its debtor-
affiliates to employ the services of Grisante Galef & Goldress
I, LLC as their restructuring advisor, nunc pro tunc to the
Petition Date.

Grisante Galef will:

     a) assist the Debtors in preparing and implementing a plan
        of reorganization;

     b) assist the Debtors in developing operating strategies
        during bankruptcy which lead to rapid emergence;

     c) organize and implement strategies for determination
        of executory contracts, their renegotiation or rejection
        and presenting the result of such renegotiations to
        management for approval and eventual submission to the
        Court;

     d) appear on behalf of the Debtors in court when and if
        requested to do so;

     e) insure that the correct financial documents are
        prepared and submitted to the Court in a timely fashion;
        and

     f) assist the Debtors in emerging from bankruptcy in as
        short as a time frame possible.

The Debtors shall pay Grisante Galef:

     a) a monthly fee of $80,000 per month; plus

     b) $100,000 success fee upon successful emergence from
        chapter 11 before August 31, 2002.

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: One Equity Entity Completes Asset Acquisition
------------------------------------------------------------
Polaroid Corporation and One Equity Partners announced that an
affiliate of One Equity Partners has acquired substantially all
Polaroid assets, creating a new company that will operate under
the Polaroid Corporation name.

"Polaroid is a very special company with a unique heritage and
promising opportunities," said Charles F. Auster, partner in One
Equity Partners and chairman of the new Polaroid board of
directors.  "The company has made significant progress since
filing for bankruptcy last October in improving its operations
and is well positioned to take advantage of future
opportunities. We look forward to working closely with the
company's loyal and committed employees to maximize its
potential."

In a joint statement, Polaroid Executive Vice Presidents William
L. Flaherty and Neal D. Goldman said, "We are pleased that One
Equity Partners shares our vision for revitalizing Polaroid.  
Our objectives are to build a profitable core business and
realize the tremendous potential of our instant digital printing
technology."

As previously announced, One Equity Partners will own 65 percent
of the new company and the former Polaroid -- now known as PDC,
Inc. -- will own the remaining 35 percent until distributed
under a reorganization plan approved by the U.S. Bankruptcy
Court.

One Equity Partners manages $3.5 billion of investments and
commitments for Bank One Corporation in direct private equity
transactions.  Bank One Corporation is the sixth-largest bank
holding company in the United States. More information can be
found on the Internet at http://www.bankone.com  

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

Polaroid Corporation's 11.50% bonds due 2006 (PRDC06USR1) are
trading at 4.5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRDC06USR1
for real-time bond pricing.


PRECISION SPECIALTY: Secures Exclusivity Extension Until Aug. 29
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Precision Specialty Metals, Inc., and its debtor-
affiliates obtained an extension of their exclusive periods.  
The Court gives the Debtors until August 29, 2002 the exclusive
right to file their plan of reorganization and until October 27,
2002 to solicit acceptances of that Plan.

Precision Specialty Metals is a specialty steel conversion mill
engaged in re-rolling, slitting, cutting and polishing stainless
steel and high- performance alloy hot band into standard or
customized finished thin-gauge strip and sheet product. The
Company filed for Chapter 11 protection on June 16, 2001 in the
U.S. Bankruptcy Court for the District of Delaware. Laura Davis
Jones, Esq., at Pachulski, Stang, Ziebl, Young & Jones P.C.,
represents the Debtor on its restructuring efforts.


PROVIDIAN: Sacramento Facility Goes & More to Follow by Year-End
----------------------------------------------------------------
Providian Financial Corporation (NYSE: PVN) announced net income
for the second quarter of 2002 of $153.9 million, which includes
the effect of asset dispositions and other significant items
described below.  These results compare to net income of $232.4
million for the second quarter of 2001.

With the completion of the restructuring actions taken to date
and based on the implementation of its strategic initiatives,
the Company expects to report aggregate earnings for the full
year ending December 31, 2002 of between $180 and $200 million.

In a continuation of its restructuring effort to align its
operations infrastructure with its business going forward, the
Company also announced the closure of its Sacramento operations
facility, effective immediately, and plans to close facilities
in Fairfield, California and Salt Lake City, Utah by the end of
this year.  Approximately 300 employees will be affected by the
closing of the Sacramento facility and an additional 1,000
employees will be affected at the Fairfield and Salt Lake City
facilities.  The Company estimates that it will realize
operating, salary and benefit expense savings of approximately
$10.4 million over the remainder of 2002 and  $66.8 million in
2003 as a result of these closures. The Company took a one-time
charge of approximately $37.9 million in the second quarter of
2002 to reflect the decommissioning and associated costs for
facilities closures.

"I am extremely pleased with our progress this quarter," said
Joseph Saunders, Providian's chairman and chief executive
officer.  "With the completion of the structured sale of the
higher risk portfolio and [Tues]day's personnel announcements,
we have not only completed the asset dispositions contemplated
in our five-point strategic plan but have essentially completed
the associated restructuring of our workforce.  As a result of
these transactions and our other strategic initiatives, we have
significantly enhanced our capital and liquidity position, and
we have reduced our credit risk profile.  There's been a lot of
hard work and some pain, but we are on track with our
commitments and I am proud of our accomplishments to date."

Commenting further on developments concerning Providian's
workforce, Saunders stated that "Our Sacramento, Fairfield and
Salt Lake City employees have made valuable and lasting
contributions to this company.  I deeply regret the need to take
these steps.  We will work closely with the employees affected
by these changes to provide them with an appropriate transition
package as well as outplacement and other benefits."

The Company's second quarter financial results reflect actions
taken by its bank subsidiaries to reduce their credit risk
profile, improve their focus on the middle and prime market
segments, and further strengthen their balance sheets.  
Significant items during the second quarter are described in
detail below:

                  Effects of Portfolio Sales

The net effect of the sales during the second quarter resulted
in an increase to income of approximately $39.3 million,
comprised of the following items:

     -- Completion of the structured sale of approximately $2.4
billion of higher risk credit card receivables on June 25, 2002
in a transaction developed in conjunction with two limited
liability companies formed by affiliates of Goldman, Sachs &
Co., Salomon Smith Barney, CardWorks, Inc., and CompuCredit
Corporation.  In addition to the pre-tax charge of approximately
$400 million recognized in the first quarter of 2002, the
Company recognized a pre-tax charge in the second quarter of
approximately $4.5 million.

     -- The sale of the higher risk portfolio resulted in the
removal of those assets from the methodology, including the
historical roll rate calculation, used to estimate uncollectible
loan balances.  As a result, the Company recognized a pre-tax
benefit of approximately $81.7 million comprised of a $66.6
million reduction in the allowance for loan losses and a $15.1
million net reduction in the estimate of uncollectible portion
of finance charges and fees.

     -- A pre-tax charge of $37.9 million to reflect the
decommissioning and associated costs for facilities closures.  
As a result of these actions, the Company expects to realize
operating, salary and benefit expense savings over the remainder
of 2002 and 2003 of approximately $77.2 million.

                    Discontinued Operations

The net effect of sales of discontinued operations during the
second quarter of 2002 resulted in an increase to income of
approximately $103.6 million, comprised of the following items:

     -- Completion of the sale of the U.K. credit card business
to Barclaycard, a division of Barclays PLC, on April 18, 2002.  
The cash proceeds from the sale were over $600 million and
resulted in a pre-tax gain of approximately $95.6 million.

     -- Completion of the sale of the Argentina operations to a
local investor group in Buenos Aires on May 13, 2002.  The
consummation of this transaction resulted in a pre-tax gain of
approximately $8.0 million during the second quarter.  During
the fourth quarter of 2001, the Company recognized a $133
million pre-tax charge primarily related to the estimated losses
from the devaluation of the Argentine peso and the
reclassification of its Argentine operations as discontinued.

               Estimates of Loan Collectibility

In addition to the reduction to the allowance described above,
the net effect of changes to estimates of loan collectibility
resulted in an increase to income of approximately $65.3  
million during the second quarter, comprised of the following
items:

     -- The allowance for loan losses was reduced by
approximately $122.2 million, reflecting the 10% sequential
reduction in the size of the reported loan portfolio.  At the
end of the second quarter of 2002, the allowance for loan losses
was $1.2 billion, representing 16.34% of reported loans.

     -- Charges totaling approximately $56.9 million to increase
the estimate of the uncollectible portion of finance charges and
fees for charge-offs due to bankruptcy.  These charges reduced
net interest income and non-interest income by $22.0 million and
$34.9 million, respectively.

                    Capital and Liquidity

The Company ended the quarter with total equity, including
capital securities, of $2.2 billion and an allowance for loan
losses of $1.2 billion, which together represent 45% of reported
loans and 17% of managed loans.  Cash and investments increased
during the second quarter by over $2.2 billion and ended the
quarter at approximately $7.9 billion, representing
approximately 40% of total managed credit card loans.

"Building on the momentum of the first quarter, our second
quarter results have further strengthened our liquidity and
capital position," said Anthony Vuoto, Providian's vice chairman
and chief financial officer.  "The Company is in a solid
financial position to manage our existing portfolio and to grow
our new business in the middle and prime market."

The Company's principal banking subsidiaries remain on track
with the requirements of the Capital Plan.  For the second
quarter of 2002, these subsidiaries must maintain total risk-
based capital ratios at "well capitalized" levels as shown on
their Call Reports, and Providian National bank is required to
maintain a total risk-based capital ratio of at least 8% after
applying increased risk weightings consistent with the Expanded
Guidance for Subprime Lending Programs ("Subprime Guidance").  
As of June 30, 2002, Providian National Bank and Providian Bank
exceeded the 10% "well capitalized" level with total risk-based
capital ratios of 17.41% and 14.57%, respectively. After
application of the Subprime Guidance risk weightings, Providian
National Bank exceeded the 8.00% threshold with a total risk-
based capital ratio of 12.32%.  This ratio was 11.88% for the
banks on a combined basis.

                      Financial Results

The Company ended the second quarter with $19.6 billion in total
managed credit card loans and 12.9 million accounts, down from
$22.1 billion in managed credit card loans and 15.0 million
accounts at the end of the first quarter 2002.  The sequential
reduction in the total managed credit card loans and accounts
reflect the sale of the high risk loan portfolio including $1.4
billion in net book value and 1.3 million accounts as well as
other actions taken by the Company to manage the remaining
managed portfolio.  During the second quarter, the Company
originated approximately 350,000 new customer accounts with a
balanced distribution in the middle and prime market segments of
approximately 65% and 35%, respectively.

Total managed revenue for the second quarter of 2002, comprised
of net interest income and non-interest income, was $1.32
billion.  Managed net interest income for the second quarter of
2002 was $783.2 million and the managed net interest margin on
loans was 16.38%. Managed non-interest income for the second
quarter was $532.6 million.

The managed net credit loss rate and the managed 30+ day
delinquency rate for the second quarter of 2002 were 17.53% and
10.16%, respectively. Consistent with the Company's expectation,
the quarter ended with a managed net credit loss rate for the
month of June 2002 of 17.22%, down from the managed net credit
loss rate for the month of March 2002 of 17.64%.  For the first
two quarters of 2002 the Company reported managed net credit
losses of approximately $1.9 billion and expects that managed
net credit losses for the full year 2002 will be approximately
$3.6 billion.  Based upon current delinquency trends and
historical patterns, the Company expects that the managed net
credit loss dollars will decline in the third quarter and show a
modest increase in the fourth quarter.

The Company continued to build its customer franchise by
investing $104.2 million in solicitation and advertising during
the second quarter. This compares to $108.7 million spent on
solicitation and advertising in the first quarter of 2002.  
Other non-interest expense (excluding solicitation and
advertising) was $385.1 million for second quarter 2002 and
included approximately $37.9 million in facilities
decommissioning charges and related costs previously described.  
The quarter's results compare to non-interest expense (excluding
solicitation and advertising) of $438.4 million in the first
quarter of 2002, a sequential decrease of approximately $53.3
million. The Company expects to realize further reductions in
non-interest expense upon completion of its interim servicing
obligations for previously announced asset sales and the
implementation of additional steps in its infrastructure
reduction plan.  Additionally, the Company is continuing to
identify various avenues for potential cost savings and plans to
continue to lower its overall cost structure over the remainder
of 2002.

                      Strategic Review

Since the Company announced its five-point strategic plan on
October 18, 2001, it has taken the following actions:

     -- Completed the structured sale, through a limited
liability subsidiary of Providian National Bank, of its higher
risk portfolio in a transaction developed in conjunction with
two limited liability companies formed by affiliates of Goldman,
Sachs and Co., Salomon Smith Barney, CardWorks, Inc., and
CompuCredit Corporation

     -- Completed the sale of its credit card operations in the
United Kingdom to Barclaycard, a division of Barclays PLC

     -- Completed the sale of its operations in Argentina to a
local investor group in Buenos Aires

     -- Completed the sale of its interests in the Providian
Master Trust to JP Morgan Chase

     -- Reached an agreement with its regulators for managing
capital and growth

     -- Completed over $2.8 billion of securitization
transactions

     -- Discontinued all new account marketing in the standard
market segment, tightened credit line increases across all
segments and selectively re-priced loans that have exhibited
increased risk levels

     -- Closed operations centers in Henderson, Nevada and
Sacramento.  

                          *   *   *

As reported in Troubled Company Reporter's May 27, 2002 edition,
Fitch Ratings lowered the senior debt rating of Providian
Financial Corp., to 'B' from 'B+' and senior debt rating of
Providian National Bank to 'B+' from 'BB-.' The ratings remain
on Rating Watch Negative where they were placed on December 20,
2001.

Fitch's downgrade of Providian's ratings primarily reflects
heightened concerns regarding performance of the Providian
Gateway Master Trust (PGMT), where excess spread levels have
fallen over the past few months. The decline in excess spread
has been driven by a sharp rise in net chargeoffs of these
assets. The increase in loss rates reflects weakness in the
economy that began in 2001, limitations in growth, but it is
also indicative of the high-risk nature of Providian's customer
base, a high percentage of which would be considered subprime
under bank regulatory definitions.


QWEST COMMS: Uncertain When Restatement will be Completed
---------------------------------------------------------
Qwest Communications International Inc., (NYSE: Q) announced the
current status of the ongoing analysis of its accounting
policies and practices, including its policies and practices
with respect to revenue recognition in connection with sales of
optical capacity assets. Earlier this year the company and its
board of directors began an analysis of, among other things,
revenue recognition and accounting treatment for optical
capacity sales (particularly sales to customers from which the
company agreed to purchase optical capacity assets), the sale of
equipment by the company to certain customers and changes in the
production schedules and lives of some of its directories.

Based on the analysis to date, the company has determined that
it has in some cases applied its accounting policies incorrectly
with respect to certain optical capacity asset sale transactions
in 1999, 2000 and 2001. Certain adjustments may be required to
correct the period in which the revenue was recognized with
respect to some transactions, and other adjustments may be
required to reverse the recognition of revenue with respect to
other transactions. In addition, further adjustments are
required to account for certain sales of equipment in 2000 and
2001 that the company had previously determined had been
recorded in error. In the fourth quarter of 2001, the company
reduced revenue and adjusted EBITDA related to these equipment
transactions. The company has also determined that in a limited
number of transactions it did not properly account for certain
expenses incurred for services from telecommunications providers
in 2000 and 2001.

The company is continuing to analyze its accounting policies and
practices in consultation with its new auditor, KPMG LLP. When
the company completes its analyses, it expects to restate its
financial statements for prior periods. The company will attempt
to conclude these analyses promptly. However, as a result of the
change in the company's auditors and the ongoing investigation
by the Securities and Exchange Commission, the company cannot
state with certainty when a restatement will be completed. In
the meanwhile, the company will seek to comply with its
reporting requirements under the securities laws and the rules
of the New York Stock Exchange in light of the constraints on
completing the restatement.

The company also announced it is withdrawing its financial
guidance for the full year 2002 as management reassesses the
impact of continuing weakness in the telecommunications sector
and the regional economy in the company's 14-state local service
area, as well as competitive pressure. The company announced
that it will report its results for the second quarter of 2002
and revised guidance for the full year on Thursday, August 8,
2002.

                    Optical Capacity Sales

The company analyzed its application of the revenue recognition
policies approved by its previous auditor, Arthur Andersen LLP,
with respect to optical capacity sales and concluded that those
policies were incorrectly applied to optical capacity asset
transactions in 1999, 2000 and 2001 which totaled approximately
$1.16 billion in recognized revenue, and which represented
approximately 18 percent of the optical capacity asset
transactions in this period. Of this amount, revenue of $591
million was recognized by the company after June 30, 2000, the
effective date of the merger of Qwest and U S WEST Inc. (the
company that was deemed the accounting acquirer and whose
financial statements were carried forward as those of the
combined company). $571 million was recognized by Qwest before
June 30, 2000 and therefore not included in the company's
historical financial statements. KPMG has not participated in
this initial analysis of these transactions.

The $591 million of revenue recognized with respect to the
optical capacity asset sales identified in the company's initial
analysis represented 1.4 percent and 1.8 percent of total
revenue in 2000 and 2001, respectively, and 24.5 percent and
34.5 percent, respectively, of total revenue from optical
capacity asset sales in those years. The gross margin for those
transactions represented 1.7 percent and 2.4 percent of total
adjusted EBITDA in 2000 and 2001, respectively, and 20.2 percent
and 35.2 percent of total gross margin for optical capacity
asset sales in those years.

The company, in consultation with KPMG, is now analyzing the
application of the company's accounting policies to all of the
company's optical capacity sales transactions. The company, in
consultation with KPMG, is also analyzing the appropriateness of
the accounting policies themselves. The company believes that,
whether as a result of these continuing analyses or the ongoing
investigation by the SEC, the company may conclude that the
company recognized revenue inappropriately with respect to the
transactions identified in the initial analysis and other
optical capacity sales and that the amount of the additional
revenue adjustments may be significant. For example, if the
company were to determine that certain of the policies as
applied to all optical capacity sales were inappropriate, the
company may be required to restate its financial statements with
respect to optical capacity sales affected by such policies,
which could be all optical capacity sales in the relevant
periods.

The company has previously disclosed in its annual report on
form 10-K that the amounts of revenue and gross margin
attributable to all optical capacity sales in 2000 and 2001 were
as follows: (1) revenues of $468 million, or 2.8 percent of
total revenue, in 2000 and $1.013 billion, or 5.1 percent of
total revenue in 2001 and (2) gross margin of $232 million,
which is 3.4 percent of adjusted EBITDA, in 2000 and $486
million, which is 6.6 percent of adjusted EBITDA, in 2001. On an
after-tax basis, the gross margin of all optical capacity sales
was approximately $140 million and $290 million in 2000 and
2001, respectively. Any adjustment of all revenue for optical
capacity sales may have a material affect on operating income,
net income or earnings per share. Depending upon the ultimate
determination of the appropriate accounting treatment, any
decreases in these amounts in the periods in which they have
been recorded would be partially offset by the amounts that
would be recognized over the lives of the agreements if the
optical capacity asset sales were instead treated as operating
leases or services contracts. The company has previously
disclosed that it does not plan on any sales of optical capacity
in 2002 that would be treated as sales type leases and require
recognition of revenue up front.

The company expects to restate its financial statements for
prior periods when it completes its analyses of its accounting
policies and practices for optical capacity sales. At this time,
the company is unable to estimate the effect of the revenue
adjustments in any period, since the determination of the
amounts of revenue that may be reversed altogether or deferred
to subsequent periods will depend upon which accounting
policies, if any, are determined to be inappropriate.

                       Equipment Sales

The expected restatement of the company's financial statements
will also include adjustments for three transactions relating to
the sale by the company of equipment to other parties. Two
transactions involved related agreements to provide services to
or buy services from the company. The variances that were
identified were the result of the determination that the revenue
and/or profit in these transactions were incorrectly recognized
upfront and should be deferred. The total amount of revenue and
adjusted EBITDA of all these equipment sales in 2000 and 2001 is
as follows: (1) revenues of $100 million or 0.6 percent of total
revenue, in 2000 and $183 million, or 0.9 percent of total
revenue, in 2001 and (2) adjusted EBITDA of $80 million, which
is 1.2 percent of adjusted EBITDA, in 2000 and $82 million,
which is 1.1 percent of adjusted EBITDA, in 2001. The company
has already reduced revenues and adjusted EBITDA by $73 million
and $124 million, respectively, in the fourth quarter of 2001 to
adjust for these transactions. The proposed further adjustments
either defer the revenue and gross margin originally recognized
up front or adjust the previous correction in the appropriate
quarter. The company is continuing to discuss the accounting for
these transactions with KPMG.

                          QwestDex

The company, in consultation with KPMG, is also analyzing
certain accounting policies and practices with respect to its
QwestDex directories business, including, among other things,
the changes in the production schedules and lives of some of its
QwestDex directories. If the company were to determine that any
of these policies and practices were inappropriate, the company
believes a restatement would include adjustments as to the
timing of the revenue recognized under such polices and these
adjustments may be significant.

                Telecommunications Services

During 2000 and 2001 the company received services from third
party telecommunications providers and paid such providers but
did not record the cost entry for such services properly. The
company has preliminarily estimated that 2000 costs were
overstated by $15 million, which is 0.2 percent of adjusted
EBITDA and 2001 costs were understated by approximately $113
million, which is 1.5 percent of adjusted EBITDA.

                    CEO and CFO Statements

An order issued by the SEC in June 2002 requires the chief
executive officer and chief financial officer of the company,
and 944 other publicly traded companies, to state or assert (or
to explain why they are unable to state) in a filing with the
SEC by August 14, 2002 that, to the best of their knowledge
(based upon a review of the respective company's annual report
on Form 10-K for the most recent fiscal year and all reports on
Form 10-Q, all reports on Form 8-K and all definitive proxy
materials of the company filed with the SEC after the Form 10-K
and except as corrected or supplemented in a subsequent covered
report), the covered reports (1) did not contain an untrue
statement of material fact as of the end of the period covered
by the respective report (or in the case of a report on Form 8-K
or definitive proxy materials, as of the date on which it was
filed with the SEC) and (2) did not omit to state a material
fact necessary to make the statements in the respective report,
in light of the circumstances under which they were made, not
misleading as of the end of the period covered by the report (or
in the case of a report on Form 8-K or definitive proxy
materials, as of the date on which it was filed). The company's
chief executive officer and chief financial officer joined the
company in June 2002 and July 2002, respectively.

The company said that these officers currently intend to explain
in the sworn written statements, which they intend to submit to
the SEC by August 14, 2002, that they will be unable to make the
statement specified in the SEC order because of the expected
restatement of the company's financial statements, the ongoing
analyses by the company and KPMG of the accounting policies and
practices of the company and the ongoing investigation by the
SEC, among other reasons.

          Review of Second Quarter Financial Statements

KPMG has informed the company that due to the identification of
the adjustments that the company believes it is required to make
in its financial statements, the ongoing analyses by the company
and KPMG of the accounting policies and practices of the company
and the inability of the company's chief executive officer and
the chief financial officer to make the assertion referred to
above, KPMG is not able to complete all the procedures necessary
to finalize its review of the financial statements to be
included in the second quarter 2002 report on Form 10-Q required
by the regulations under the federal securities laws. Although
the company does not anticipate that the failure to obtain this
review will have a material adverse effect on the company, there
can be no assurances in this regard.

                Update on SFAS 142 Impairment Charge

As stated in the company's Form 10-Q for the period ended March
31, 2002, the company expected an impairment of the carrying
amount of its goodwill upon adoption of the transition
provisions of FASB Statement No. 142. That impairment was
estimated to be in the range of $20 to $30 billion. The
methodology used to calculate this range is being evaluated by
our new auditors KPMG. Prior to filing its Form 10-Q for the
period ended June 30, 2002, the company will either have to
determine whether any changes to the methodology will require a
change in the previously disclosed estimate or the company will
have to update its disclosure of the estimated impairment
charge.

Qwest Communications International Inc., (NYSE: Q) is a leader
in reliable, scalable and secure broadband data, voice and image
communications for businesses and consumers. The Qwest Macro
Capacity(R) Fiber Network, designed with the newest optical
networking equipment for speed and efficiency, spans more than
175,000 miles globally. For more information, please visit the
Qwest Web site at http://www.qwest.com  

As reported in Troubled Company Reporter's July 22, 2002
edition, Standard & Poor's lowered Qwest Communications'
corporate credit rating B+ from BB+.

Qwest Corp.'s 7.625% bonds due 2003 (QUS03USS9) are trading at
85 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=QUS03USS9for  
real-time bond pricing.


RATEXCHANGE CORP: June 30 Balance Sheet Upside-Down by $5.3MM
-------------------------------------------------------------
Ratexchange Corporation (Amex: RTX) announced financial results
for the second quarter 2002. Revenue from continuing operations
during the quarter ended June 30, 2002 was $2,009,000, an
increase of $1,938,000 from the quarter ended June 30, 2001. Net
loss was $750,000 for the three months ended June 30, 2002, a
significant improvement from net loss of $5,675,000 for the
three months ended June 30, 2001. Net cash used in operating
activities was $434,000 during the second quarter 2002, which
compares favorably to $3,825,000 in cash used in operating
activities during the second quarter 2001.

Revenue from continuing operations for the second quarter 2002
increased by $1,416,000, or 239%, compared to the first quarter
2002, while net loss decreased from the first quarter by
$866,000, or 54%. Additionally, cash used in operating
activities was $443,000 less than the first quarter 2002. Cash,
cash equivalents and marketable securities were substantially
unchanged at $3,333,000 as of June 30, 2002, compared to
$3,451,000 at March 31, 2002.

Ratexchange Corporation's June 30, 2002 balance sheet shows a
total shareholders' equity deficit of about $5.3 million.

"During the second quarter, we increased our business
substantially and are currently benefiting from the market's
extreme volatility," said Jon Merriman, CEO of Ratexchange. "We
continue to believe that now is the time to build an investment
bank focused on emerging growth companies and serving the needs
of institutional investors who invest in these companies. Most
of the investment banks serving these sectors have been acquired
by larger financial institutions and are refocusing their
efforts on larger capitalization companies, downsizing or, in
some cases, closing their operations. The combination of
available talent, facilities, and the large number of companies
needing corporate services, investment banking, and research and
trading support, has created a large, timely opportunity for RTX
Securities. I am particularly pleased with our progress in the
corporate services area. There is a growing universe of high
quality companies needing capital markets advice, share
repurchases and executive services. We plan to make this segment
a cornerstone of our business."

During the second quarter 2002, the Company:

     -- Hired a number of professionals for RTX Securities in
research, sales, trading and investment banking, including Gary
Abbott as Managing Director of Equity Research and Peter Fader
as Managing Director of Capital Markets, responsible for our
corporate services activity;

     -- Received authorization from the NASD to trade for our
proprietary account;

     -- Closed three investment banking transactions;

In addition, during the second quarter, the senior management
team, certain employees and members of our Board of Directors
purchased over 700,000 shares of Ratexchange common stock in
both public and private transactions.

Ratexchange is an institutional brokerage firm serving emerging
growth companies and the institutions that invest in these
companies. Our RTX Securities Corporation subsidiary is a NASD
licensed, fully disclosed broker-dealer offering research, sales
and trading expertise to institutions and private clients, as
well as advisory, investment banking and capital markets
services to our corporate clients.


RESPONSE BIOMEDICAL: Secures US$500K Revolving Credit Facility
--------------------------------------------------------------
Response Biomedical Corp., (RBM: TSX Venture Exchange) has
secured a US$500,000 revolving demand credit facility with The
Toronto-Dominion Bank. Proceeds are to be used primarily for
working capital purposes including research and development,
sales and marketing, administration, and production of the
RAMP(TM) Anthrax Test System.

"Together with the proceeds from the ongoing exercise of
outstanding warrants, these funds bridge our short-term capital
needs ahead of anticipated near-term sales of our anthrax
system," states Bill Radvak, President and CEO. "The Company is
focused on achieving sustainable positive cash flow from sales
of its RAMP Anthrax Test in 2002."

The interest rate on the credit facility is the Prime Rate. The
facility is guaranteed by Menderes Holding AG, the Company's
largest shareholder who owns 8.2% of the Company's issued and
outstanding shares. In consideration of the guarantee, in
accordance with policies of the TSX Venture Exchange, the
Company has agreed to issue non-transferable warrants to
purchase 410,427 common shares of the Company, exercisable for
the term of the guarantee, currently set at June 30, 2003, at a
price of $0.75 per share. Shares issued as a result of the
exercise of the warrants will have a hold period of four
months from the date of issue. The facility and warrant
transactions are subject to approval by the TSX Venture
Exchange.

"I would like to acknowledge the unwavering support of our
largest shareholder for demonstrating strong confidence in both
the commercial prospects of our RAMP platform technology and
management's ability to create shareholder value," adds Radvak.
"With FDA cleared technology, the recent market introduction of
our first commercial product and significant on-going progress
in the lab, the prospects for Response Biomedical have never
been stronger."

Response Biomedical develops rapid on-site diagnostic tests for
use with its proprietary RAMP Reader intended for both clinical
and environmental applications, including tests for the
detection of heart attack and biological agents beginning with
anthrax.

The RAMP System is a platform technology that delivers accurate
and reliable on-site test results in less than fifteen minutes.
It consists of a portable fluorescence reader and disposable
test cartridges, with the potential to be adapted to more than
250 medical and non-medical tests currently performed in
laboratories. Additional assays under development include tests
for the diagnosis and/or monitoring of prostate cancer,
therapeutic drugs and environmental agents including botulism
toxin and ricin.

On June 11, 2002, the Company received marketing clearance in
Canada for the Myoglobin Assay System. On January 8, 2002, the
Company announced the U.S. Food and Drug Administration provided
marketing clearance for Response Biomedical's RAMP Reader for
general clinical use, as well as the Myoglobin test - a cardiac
marker used in the early diagnosis of heart attack.

Response Biomedical's shares are listed on the TSX Venture
Exchange under the trading symbol "RBM". For further
information, including a photo of the RAMP System, visit the
Company's Web site at http://www.responsebio.com

In November 2001, Response Biomedical announced that one hundred
percent of the voting creditors of the Company voted to accept
the proposal filed with the British Columbia Supreme Court under
the Bankruptcy and Insolvency Act. The Company is now seeking
court approval and moves to fulfill the terms of the proposal to
the satisfaction of the trustee.


RIVERWOOD: Tender Offers for Senior Notes Extended to Sept. 6
-------------------------------------------------------------
Riverwood Holding, Inc., and Riverwood International Corporation
announced today the extensions of the tender offer expiration
dates for Riverwood International's pending cash tender offers
to purchase any and all of its outstanding 10-7/8% Senior
Subordinated Notes due 2008 (CUSIP No. 769507AJ3), 10-5/8%
Senior Notes due 2007 issued in July 1997 (CUSIP No. 769507AM6)
and 10-5/8% Senior Notes due 2007 issued in June 2001 (CUSIP No.
769507AQ7).

Each tender offer had been scheduled to expire at 5:00 P.M., New
York City time, on Friday, August 2, 2002.  The tender offer
expiration date for each tender offer is being extended to 5:00
P.M., New York City time, on Friday, September 6, 2002, unless
further extended.  

In addition, each tender offer is being amended (1) to permit
holders to withdraw their Notes at any time prior to the
applicable tender offer expiration date and (2) to provide that
Riverwood International will pay the applicable tender offer
consideration plus the consent payment equal to $2.50 for each
$1,000 principal amount of Notes tendered to all holders who
tender their Notes on or prior to the applicable tender offer
expiration date.  Prior to such amendment, the consent payment
was payable only to holders who tendered their Notes on or prior
to the June 28, 2002 consent expiration date and withdrawal
rights had expired on June 28, 2002.  A holder who withdraws its
Notes and does not re-tender such Notes on or prior to the
applicable tender offer expiration date will not receive the
applicable tender offer consideration or consent payment.

The tender offers are being extended and amended due to current
equity market conditions affecting the timing of the proposed
initial public offering of common stock by Riverwood Holding.  
Riverwood Holding continues to work towards the completion of
its proposed initial public offering and related financing
transactions, subject to market conditions.

As of the close of business on July 29, 2002, the following
principal amounts of Notes had been tendered: approximately $306
million of the $400 million outstanding principal amount of the
10-7/8% Senior Subordinated Notes due 2008; approximately $201
million of the $250 million outstanding principal amount of the
10-5/8% Senior Notes due 2007 issued in July 1997; and
approximately $206 million of the $250 million outstanding
principal amount of the 10-5/8% Senior Notes due 2007 issued in
June 2001.

On May 30, 2002, Riverwood International commenced the cash
tender offers to purchase any and all of its outstanding Notes
of each issue, as well as the related consent solicitations,
from holders.  The purpose of each consent solicitation was to
amend the applicable indenture to eliminate substantially all of
the restrictive covenants, certain repurchase rights and certain
events of default and related provisions contained in such
indenture.  The consent solicitations expired at 5:00 P.M., New
York City time, on Friday, June 28, 2002.  As Riverwood
International received requisite consents in each of the consent
solicitations, Riverwood International and the trustee under
each indenture executed a supplemental indenture relating to
each such indenture as of July 1, 2002.  The amendments to each
indenture will not become operative unless and until the
relevant Notes are accepted by Riverwood International for
purchase pursuant to the related tender offer.

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

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

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


SHEFFIELD STEEL: Oklahoma Court Confirms Reorganization Plan
------------------------------------------------------------
The U.S. Bankruptcy court in Tulsa, Oklahoma, on July 26,
Friday, signed an order confirming Sheffield Steel Corp.'s
chapter 11 reorganization plan, reported Dow Jones Newswires.  
The plan is expected to become effective August 7.  The company
will continue operations after the plan becomes effective, but
with less debt, reported the Journal.  Sheffield Steel filed for
chapter 11 bankruptcy protection in December 2001. (ABI World,
July 30, 2002)


SITHE/INDEPENDENCE: Fitch Drops Sec. Notes & Bonds Rating to BB
---------------------------------------------------------------
Fitch Ratings has lowered its rating of Sithe/Independence
Funding Corporation's secured notes and bonds to 'BB' from
'BBB-'. This rating action follows the recent downgrade to 'B'
of the senior unsecured debt of Dynegy Holdings Inc., the
guarantor of contracts representing approximately 33% of Sithe
Independence's revenues. Although Dynegy continues to make
timely payment of its obligations under the contracts, there is
a heightened risk of contractual default. The downgrade of Sithe
Independence reflects the apparent absence of alternate offtake
arrangements with pricing that would support debt service with
sufficient cushion to justify the former rating level.

Sithe Independence has entered into a tolling agreement and an
electricity swap agreement with subsidiaries of Dynegy Holdings
Inc. Together, the two agreements hedge Sithe Independence's
gross margin on essentially the entire plant output over the
remaining life of the rated debt. In the event that a
contractual default leads to termination of the agreements,
Sithe could self-procure fuel and sell energy into the merchant
market. As a merchant facility, however, Fitch believes it is
doubtful that Sithe could replicate the economics of the Dynegy
agreements in the current marketplace.

Positively, nearly 60% of Sithe Independence's revenues are
secured through the life of the debt with strong, investment
grade counterparties. Consolidated Edison (rated 'A+' by Fitch)
purchases 740MW of the project's installed capacity (ICAP)
credits each year, providing approximately 52% of annual
revenues. Although Sithe Independence continues to be certified
as a Qualifying Facility, failure to maintain this QF status
does not jeopardize the Consolidated Edison contract. In
addition, Alcan (rated 'A' by Fitch) purchases 44MW of electric
energy and steam, providing approximately 6% of annual revenues.

The remainder of revenues consists of merchant ICAP sales,
transmission congestion rents, and interest income. Congestion
rents are earned during every hour there is congestion on the
specific transmission path regardless of Sithe Independence's
level of generation. Therefore, congestion rents are not
dependent on Dynegy's utilization of the plant. Congestion rents
can be volatile, however, as they are heavily correlated to
market energy prices.

Sithe Independence is a 1,000-megawatt, natural gas-fired
cogeneration project located in Scriba, New York. The project
began commercial operation in December 1994 and is owned by
Sithe/Independence Power Partners, L.P., a partially owned
subsidiary of Sithe Energies, Inc. The notes and bonds were
issued by Sithe Funding, with an unconditional guarantee from
the partnership. Sithe Energies, Inc. is owned 49.9% by Exelon
Fossil Holdings, Inc., 34.2% by Vivendi Universal, SA, 14.9% by
Marubeni Corporation and 1% by management.


SUCCESSORIES INC: Nasdaq Stock Market to Delist Shares Tomorrow
---------------------------------------------------------------
Successories (Nasdaq:SCES) received a letter dated July 25, 2002
from Nasdaq Stock Market, Inc., informing Successories that the
Company's Common Stock shall be delisted at the opening of
business on August 2, 2002. Successories believes it meets the
eligibility criteria to have its Common Stock quoted on the OTC
Bulletin Board (OTCBB) and its Common Stock may be quoted on the
OTCBB beginning on August 2, 2002.

The delisting is due to the failure of the Common Stock to
maintain a minimum market value of publicly held shares of $5
million and a minimum closing bid price per share of $1.00 over
the required timeframe.

Successories, Inc., designs, manufactures, and markets a diverse
range of motivational and self-improvement products, many of
which are the Company's own proprietary designs, for business
and for personal motivation. The Company's products are sold via
the millions of catalogs it mails each year and through a
network of over 50 retail franchise and company-owned stores.
Additionally, the Company's products may be purchased online via
its Web site at http://www.successories.com


SYSTECH RETAIL: April 30, 2002 Balance Sheet Upside Down by $47M
----------------------------------------------------------------
Systech Retail Systems Inc. (TSE:SYS), a leading provider of
technology solutions for retail, reported results for the
quarter ended April 30, 2002.

First Quarter Highlights: (three months ended April 30, 2002
compared with three months ended April 30, 2001)

* Revenues were $23.6 million compared with $22.5 million, an
  increase of 4.5%

* Loss before amortization, interest, and finance charges was
  $2.5 million compared with a loss of $5.9 million

* Net loss was $5.3 million compared with a net loss of $10.6
  million

* Net loss per share was $0.13 basic and fully diluted, compared
  with a net loss per share of $0.31 basic and fully diluted.

In the quarter, facilities consolidation and severance charges
totaling $1.3 million were recorded.  But for these charges,
loss before amortization, interest and finance charges would
have been $1.2 million.

As of April 30, 2002, Systech's balance sheet is upside-down
with a total shareholders' equity deficit of about $47 million,
and a working capital deficiency of about $73 million.

                       In the quarter:

* Management terminated the IBM contract for Kmart in February,
  after determining that the contract could never be profitable
  for Systech, given the manner in which systems replacement was
  being implemented at Kmart by IBM.

* Plans to consolidate the Company's Mississauga operations into
  Systech's new Raleigh facility were implemented.  Repair and
  refurbishment, warehousing, and all other operations were
  transferred to Raleigh.  Finance and administration were
  transferred to Systech's development office, also in
  Mississauga.

* Systech's OpenField software was embraced by a 168 store
  Canadian chain, after extensive analysis by the customer, and
  funded customization commenced.  Pilots have now been
  installed, and roll-out is expected to commence shortly.

* Services project volumes with Food Lion increased
  significantly over the prior year.

* Projects with A&P commenced in Canada and the US.

* The Company shipped its second shipment of 1,400 RTI screenkey
  consoles to Food Lion, following a 2,600 unit shipment in
  December, bringing the total shipped volume to just over 4,000
  units, for total revenues of C$ 4 million.  Several pilots for
  this system have now been installed with major retailers in
  the US, and letters of intent have been received for an
  additional 11,000 units.

* Management began negotiations with Integrated Partners, and
  its stakeholders, aimed at financing a balance sheet
  restructuring that has now been initiated, and is being
  announced separately.

* The Company's cost reduction program continued.  Among other   
  things, the workforce was reduced from 652 at January 31,
  2002, and the total complement now stands at 561, with further
  reductions being implemented. Performance was not impaired as
  a result of these continuing reductions.

William Moore, Director, said:  "Although significant
improvements were achieved in this quarter, the results are not
acceptable.  Continued consolidation and cost reductions will be
undertaken, in the context of a financial restructuring which is
being initiated immediately."

Subsequent to the quarter end, the Company entered into an
agreement with Systech Group Inc., the company's parent, Park
Avenue Equity Partners, L.P., and Integrated Partners Limited
Partnership One. Under this agreement, the company will receive
a secured loan of up to $10 million to finance restructuring
efforts over a three to six month period. Upon successful
completion of the restructuring, it is expected that secured
loans and preferred shares totaling in excess of $53 million
will be converted to common shares, leaving a maximum balance of
interest-bearing indebtedness of $10 million. The parties
further expect that other liabilities and preferred shares will
be discounted and/or converted to common equity at the end of
the restructuring period.

Systech is the retail industry's premier independent developer
and integrator of retail technology, including software, systems
and services to supermarket, general retail and hospitality
chains throughout North America.  Its open architecture
solutions enable e-commerce and other powerful new technology to
be applied in the retail environment.  The Company's significant
cross-platform capability and considerable technical service
force allow it to address any in-store systems requirements
regardless of project size or scope.  Shares of Systech Retail
Systems are traded on the Toronto Stock Exchange under the
symbol (SYS).  For more information, see http://www.srspos.com  


SYSTECH RETAIL: Taps Northern Securities to Assist in Workout
-------------------------------------------------------------
Systech Retail Systems Inc., (TSX:SYS) has engaged Northern
Securities Inc., as its financial advisor for the purpose of
implementing an informal financial restructuring of the Company.

The Restructuring has been endorsed by current stakeholders
Systech Group Inc., and Park Avenue Equity Partners, L.P., and
backed by a private equity fund managed by Integrated Partners.

Park Avenue has agreed, upon the successful completion of the
Restructuring, to convert its $3.8 million of subordinated debt
into a maximum of 5.4 million Systech common shares and its
$10.6 million of preferred shares into a maximum of 10.6 million
Common Shares.

Systech Group, which controls approximately 60% of the currently
issued and outstanding Common Shares, has agreed to convert its
$6.7 million of subordinated debt into a maximum of 10.1 million
Common Shares upon the successful completion of the
Restructuring.

Park Avenue has also agreed to convert its $10.8 million of
recently advanced senior secured debt into up to 35.2% of the
Common Shares that will be issued and outstanding, upon the
successful completion of the Restructuring.

Integrated has committed $10.4 million of new capital to
Systech, which will be provided to the Company on a senior
secured basis over the course of the Restructuring, subject to
certain conditions including Integrated being satisfied with the
progress of the Restructuring and the achievement of certain
cost savings initiatives, and converted into 33.8% of the Common
Shares that will be issued and outstanding, upon the successful
completion of the Restructuring.

Integrated and Park Avenue have also agreed in principle to
acquire $32 million of debt from Systech's current senior
lending institution which, upon the successful completion of the
Restructuring, will be reduced to a principal amount owing by
the Company to an amount not exceeding $10.2 million. The
acquisition of the $32 million in debt is expected to close on
or about August 2, 2002.

If the Restructuring is completed, a total of $95 million of
debt and preferred shares, including the investment from
Integrated, will be converted into common shares.  $42 million
of this $95 million total is represented by the agreements on
the Restructuring entered into by the Company and Park Avenue,
Integrated and Systech Group. There are additional holders of
subordinated debt, preferred shares and accounts payable that
are owed or have invested the balance or $53 million with whom
the Company proposes to negotiate agreements for the
restructuring of their debt and investments. There is no
assurance that agreements with the remaining stakeholders will
be entered into with the Company.

If the Restructuring is completed as proposed, approximately
$73.5 million in debt and accounts payable will be eliminated
which takes into account the reduction of the bank debt from $32
million to $10.2 million.

Systech intends to call a special meeting as soon as possible to
approve the Restructuring plan that will outline the proposed
Restructuring of the creditors and other stakeholders and to
authorize the issuance of up to 425 million Common Shares that
may be issued to implement the Restructuring. The successful
completion of the Restructuring is subject to the satisfaction
of a number of conditions including approval from appropriate
regulatory authorities.

Systech also announced that Geoff Owen has been appointed
interim President & CEO of the Company and that Bill Moore has
resigned as President & CEO.  Mr. Moore remains on the Company's
Board of Directors and stand for re-election at the Systech
annual general meeting to be held on July 31, 2002.

The Company has currently issued and outstanding 36,645,901
Common Shares. If the Restructuring is successfully implemented,
the Company will have approximately 462 million issued and
outstanding Common Shares. The anticipated closing date for the
Restructuring is October 31, 2002.

Systech Retail Systems Inc., is the retail industry's premier
independent developer and integrator of retail technology,
including software, systems and services to supermarket, general
retail and hospitality chains throughout North America. Its open
architecture solutions enable e-commerce and other powerful new
technology to be applied in the retail environment. The
Company's significant cross-platform capability and considerable
technical service force allow it to address any in-store systems
requirements regardless of project size or scope. Common Shares
of Systech are traded on the Toronto Stock Exchange under the
symbol SYS. For more information, see http://www.srspos.com  

Park Avenue Equity Partners, L.P., is a US$110 million private
equity fund focused on creating value through equity and
equity-linked investments in middle-market companies. Park
Avenue is an active partner with management, providing capital,
resources and value-added expertise. More information on Park
Avenue is available at http://www.pkave.com  

Integrated Partners is a manager of private equity funds and is
a subsidiary company of Integrated Asset Management Corp., a
Toronto based asset management company (TSX venture exchange:
IAM). IAM has over $1.3 billion in assets under management in
private equity, private debt, real estate and hedge funds. More
information on Integrated Partners and IAM is available at
http://www.iamgroup.ca


TELSCAPE: Chap. 11 Trustee Wants More Time to Decide on Leases
--------------------------------------------------------------
David Neier, the Chapter 11 Trustee for Telscape International,
Inc., wants more time to determine whether to assume, assume and
assign, or reject the Debtors' unexpired nonresidential real
property leases.  The Trustee tells the U.S. Bankruptcy Court
for the District of Delaware that he needs until October 17,
2002 to make those decisions.

Since his appointment, the Trustee has reviewed the Debtors'
business operations and has made the determination to reject
certain of the Debtors' leases. The Trustee has also negotiated
the sale of the Debtors' California CLEC assets and has assumed
and assigned the Debtors' leases.  

The Trustee has been unable to determine whether the remaining
leases will ultimately be in the best interest of the Debtors'
estates to assume or reject.  An extension of the lease decision
period will provide significant benefit to the Debtors' estates
and creditors without unduly harming the landlord.

Telscape International is a leading integrated communications
provider serving the Hispanic markets in the United States,
Mexico and Central America, offering local and long distance
telephone, internet and pre-paid calling card services. The
Company filed for Chapter 11 petition on April 27, 2001 in the
District of Delaware. Brendan Linehan Shannon, Esq., at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts and Victoria W. Counihan, Esq., and Scott
D. Cousins, Esq., at Greenberg Traurug, LLP represent the
Chapter 11 Trustee.


TRIUMPH CAPITAL: S&P Junks Ratings on 5 Classes of Notes
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B-1, B-2, C-1, C-2, and D notes issued by Triumph Capital
CBO I Ltd., an arbitrage CBO transaction originated in May of
1999, and removed them from CreditWatch with negative
implications, where they were placed on October 1, 2001.

At the same time, the triple-'A' ratings assigned to the class
A-1A, A-1B, and A-2 notes are affirmed based on a financial
guarantee insurance policy issued by Financial Security
Assurance Inc. The ratings on the class B-1, B-2, C-1, C-2, and
D notes had previously been placed on CreditWatch with negative
implications on May 31, 2001 and then were subsequently lowered
on July 16, 2001.

The current rating action on class B-1, B-2, C-1, C-2, and D
notes reflects factors that have negatively affected the credit
enhancement available to support the notes since the ratings
were last lowered on July 16, 2001. These factors include
continued severe par erosion of the collateral pool securing the
rated notes, a continuing negative migration in the credit
quality of the performing assets in the pool, and a decline in
the weighted average coupon generated by the pool.

Standard & Poor's noted that $130.26 million of asset defaults
have occurred since the July 16, 2001 rating action; this
equates to approximately 23% of the assets that had at that time
been performing. As a result, the overcollateralization ratios
for the transaction have suffered. According to the most recent
monthly report (June 10, 2002), all of the transaction's
overcollateralization ratio tests were out of compliance; the
class A overcollateralization ratio was at 107.2% versus the
minimum required 115.0%, the class B overcollateralization ratio
was at 107.2% versus the minimum required 104.5%, the class C
class overcollateralization ratio was at 93.9% versus the
minimum required 102.0%, and the class D overcollateralization
ratio was at 92.6% versus the minimum required 101.0%.

Both the credit quality and weighted average coupon of the
performing assets in the portfolio have deteriorated since the
July 16, 2001 rating action was undertaken. Currently, more than
50% of the assets in the portfolio come from obligors rated
triple-'C'-plus or lower. Standard & Poor's Trading Model test,
a measure of the ability of the credit quality in the portfolio
to support the ratings assigned to the tranches, is out of
compliance. In addition, the weighted average coupon generated
by the portfolio has declined to 9.70%, versus the minimum
required weighted average coupon of 10.0%.

Standard & Poor's has reviewed the results of cash flow runs
generated for Triumph Capital CBO I Ltd. to determine the level
of future defaults the rated tranches can withstand under
various stressed default timing and interest rate scenarios,
while still paying all of the rated interest and principal due
on the notes. When the results of these cash flow runs were
compared with the projected default performance of the
collateral pool, it was determined that the ratings assigned to
the B, C, and D notes were no longer consistent with the credit
enhancement available, leading to the lowered ratings.

    RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE
               Triumph Capital CBO I Ltd.

                 Rating
     Class    To        From              Current Balance
     B-1      CCC-      B/Watch Neg       $35.00 million
     B-2      CCC-      B/Watch Neg       $22.00 million
     C-1      CC        CCC/Watch Neg     $13.00 million
     C-2      CC        CCC/Watch Neg     $3.00 million
     D        CC        CCC-/Watch Neg    $8.00 million

                   RATINGS AFFIRMED
              Triumph Capital CBO I Ltd.

     Class     Rating     Current Balance
     A-1A      AAA        $72.75 million
     A-1B      AAA        $47.50 million
     A-2       AAA        $395.50 million


US LEC CORP: Equity Deficit Reaches $135MM at June 30, 2002
-----------------------------------------------------------
US LEC Corp. (Nasdaq: CLEC), a super-regional telecommunications
carrier providing integrated voice, data and Internet
telecommunications services, announced strong results for the
second quarter, 2002.  The second quarter was highlighted by:

     * Growing net revenue to $58.8 million -- up 9%
sequentially over the first quarter of 2002 and up 37% year over
year

     * Growing end-customer revenue to $35.2 million -- a 13%
increase over the first quarter of 2002, representing 60% of
total revenue

     * Began amortization of scheduled senior debt payments

     * Passing the 8000th customer milestone in early June

     * Achieving positive EBITDA of $2.1 million -- representing
the seventh consecutive quarter of EBITDA improvement, excluding
the provision for doubtful accounts of $9.5 million due to
WorldCom's bankruptcy filing

     * Increasing the number of data service subscribers to over
2,700 by June 30, 2002

     * Increasing business customer take rates of data services
to almost one in two new customers

Net revenues for the quarter ended June 30, 2002, increased 37%
to $58.8 million, compared with $43.1 million for the quarter
ended June 30, 2001, and 9% sequentially compared to $53.9
million reported in the first quarter of 2002.  EBITDA for the
second quarter was $2.1 million, excluding the provision for
doubtful accounts of $9.5 million due to WorldCom's bankruptcy,
filing compared to an EBITDA loss of ($4.9) million in the
second quarter of 2001 and positive EBITDA of $0.7 million in
the first quarter of 2002.  The Company reported a net loss
attributable to shareholders of $24.0 million on 26.4 million
average shares outstanding for the quarter ended June 30, 2002,
compared with net loss attributable to shareholders of $18.4
million on 27.8 million average shares outstanding for the
quarter ended June 30, 2001. Excluding the $9.5 million
provision related to WorldCom, US LEC's second quarter 2002
recurring diluted EPS was $0.55 per share compared to $0.58 per
share for the first quarter 2002.

Net revenues for the six months ended June 30, 2002, totaled
$112.7 million, compared with $81.1 million for the six months
ended June 30, 2001. For the six months ended June 30, 2002,
end-customer revenue increased to $66.4 million from $40.5
million in the same period of 2001.  EBITDA for the six months
ended June 30, 2002, was $2.8 million positive EBITDA, excluding
the provision for doubtful accounts of $9.5 million due to
WorldCom's bankruptcy, filing compared with a ($10.2) million
EBITDA loss for the same period in 2001.  The net loss
attributable to common shareholders was $39.1 million on 26.4
million weighted average shares outstanding for the six months
ended June 30, 2002, compared with net loss attributable to
common shareholders of $36.7 million on 27.8 million weighted
average shares outstanding for the six months ended June 30,
2001.

Frank J. Jules, US LEC's chief executive officer, commented, "US
LEC has again achieved very solid results in an economic
environment that has been particularly difficult for the telecom
industry.  Like others in the industry, we were affected by
WorldCom's bankruptcy filing.  However, our business is stronger
than ever.  We experienced 12% customer growth over last quarter
to reach over 8,400 medium to large business customers, and an
impressive 22% growth in the number of our data customers.  At
the same time, we have carefully managed our costs and improved
our EBITDA results for the seventh consecutive quarter.  In
addition, during the quarter US LEC made cash repayments to our
banks on schedule -- reducing our long-term debt by $4.7
million.  We believe these results speak volumes about the
strength of US LEC, and of the outstanding execution of our
business plan by every member of the US LEC team."

Commenting on the Company's second quarter 2002 results, Aaron
D. Cowell, US LEC's president and chief operating officer said,
"US LEC delivered another very strong operating quarter, adding
more customers in the second quarter than in any prior quarter
and maintaining our standard of excellence in customer care.  
Demand for our data services continued to be strong with
deployed data channels growing 27% and data customers growing
22% during the quarter.  Revenue from data services contributed
9% of the Company's total revenue in the second quarter.  US LEC
also continued its strong growth in local and long distance
services with a 12% growth in deployed voice channels. We
matched these customer additions with continued efforts to
improve our network efficiency, resulting in only a 6% growth in
our network cost during the quarter compared to 13% growth in
end customer revenue.  Achieving these results during a
difficult time for our industry and for the economy as a whole
is a solid indication that the marketplace values US LEC's
proven business solutions, its full portfolio of voice, data and
Internet products, and US LEC's reputation for post-sale
customer support."

Michael K. Robinson, executive vice president and chief
financial officer of US LEC added, "We're very pleased with US
LEC's continuing successes and increasingly strong financial
results.  The positive trends are a very good indication that US
LEC is executing on its business plans.  The Company continued
to grow end-customer revenue to $35.2 million or approximately
60% of total revenue for the second quarter of 2002, a 13%
increase over the first quarter.  In addition, the Company's
balance sheet remains strong with almost $50.0 in cash and long-
term debt reduced to $145.0 million as of June 30, 2002.  As a
result of our efforts to control our costs, SG&A has decreased
as a percentage of total revenue.  Clearly, we are and will
continue to keep a close watch over our expenses and capital
spending.  US LEC remains financially sound in a tough economic
environment which allows us to focus our efforts on driving more
customers onto our network and accelerating our growth."

Based in Charlotte, NC, US LEC is an integrated
telecommunications carrier providing voice, data and Internet
services to over 8,400 mid-to-large-sized business customers
throughout the southeastern and mid-Atlantic United States. US
LEC's network of 26 digital switching centers consists of Lucent
5ESS(R) AnyMedia(TM) digital switches, Lucent CBX500 ATM data
switches, Juniper M20(TM) Internet Gateway routers and an
Alcatel MegaHub(R) 600ES.  The US LEC local service area
includes Alabama, Florida, Georgia, Kentucky, Louisiana,
Maryland, Mississippi, New Jersey, North Carolina, Pennsylvania,
South Carolina, Tennessee, Virginia and the District of
Columbia.  In addition to the states listed above, US LEC also
offers selected voice and data services in Connecticut, Indiana,
Massachusetts, New York, Ohio and Texas.  For more information
about US LEC, visit http://www.uslec.com  

US LEC Corp.'s consolidated balance sheets, as of June 30, 2002,
shows a total shareholders' equity deficit of about $135
million, as compared to $97 million equity deficit recorded at
December 31, 2001.


USG CORP: Court Approves Hilsoft as PD Committee's Consultants
--------------------------------------------------------------
Martin Dies, Chairman of The Official Committee of Asbestos
Property Damage Committee of USG Corporation and its debtor-
affiliates, and designee of the Catholic Archdiocese of New
Orleans, obtained permission from Judge Newsome to retain and
employ Hilsoft Notifications, an operating unit of Hilsoft,
Inc., as a consultant to the PD Committee, nun pro tunc to March
19, 2002, pursuant to Sections 1103(a) and 328(a) of Title 11 of
the United States Code and Rules 2014(a) and 2016 of the Federal
Rules of Bankruptcy Procedure.

Hilsoft is a consulting firm that specializes in designing,
developing, analyzing and implementing legal notification plans.
To ensure the overall effectiveness of legal notification
efforts, Hilsoft statistically quantifies and documents the
potential claimant audiences' exposure to notice, analyzing
numerous measures of notice plan adequacy.

Hilsoft will provide consulting services for the PD Committee
throughout the course of the Chapter 11 Cases, including:

      (a) Analyzing and responding to the Debtors' proposed
          notification plan;

      (b) Analyzing and responding to proposed notice materials
          including, without limitation, print and television
          advertisements;

      (c) Assessing Debtors' or other parties' proposals,
          including, without limitation, proposals from other
          creditors' committees;

      (d) Assisting the PD Committee in negotiations with
          various parties;

      (e) If necessary, implementing the notice program;

      (f) Rendering expert testimony as required by the P.D.
          Committee;

      (g) Such other advisory services as may be requested by
          the P.D. Committee, from time to time.

If Hilsoft only consults and advises with respect to the bar
date notice program, Hilsoft has agreed to hourly compensation
rates, in accordance with its normal billing practices.
Hilsoft's current hourly rates are:

       Position             Charge per Hour
       --------             ---------------
       President                  $350
       Senior planners            $275
       Planners                   $225
       Administrators             $125
       Managers                   $ 95

If, however, Hilsoft proposed a bar date notice program that is
court approved and Hilsoft is to implement the program, Mr. Dies
relates that Hilsoft will forego any hourly compensation.
Instead, Hilsoft will agree to be compensated through the
aggregate fees Hilsoft is paid by media and publishers based on
the gross amount of its media notice program placements. (USG
Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


USG CORP: Judge Wolin to Preside Over Personal Injury Matters
-------------------------------------------------------------
The USG case, along with four other asbestos-related bankruptcy
cases, has been assigned to Judge Alfred M. Wolin, a senior
federal judge in Newark, New Jersey.  Judge Wolin will preside
over asbestos personal injury matters in all five cases.  He has
assigned all other bankruptcy matters in the USG case to Judge
Randall J. Newsome, a U.S. Bankruptcy Court judge sitting in
Delaware.

In recent developments involving USG's case, the Bankruptcy
Court in April established a bar date for all claims except
asbestos personal injury claims. A court order requires all
claims except asbestos personal injury claims to be filed by
January 15, 2003.  The Official Committee of Asbestos Property
Damage Claimants has appealed to Judge Wolin the order applying
that bar date to property damage claims.  In addition, in July,
the Bankruptcy Court appointed Dean M. Trafelet, a former
Illinois state court judge, as the legal representative for
future asbestos claimants in USG's case.

Judge Wolin will be considering the procedures through which he
will address the liability for asbestos personal injury claims.  
The primary parties in USG's case will file briefs presenting
their views on the subject through the end of August.  No date
has been set for a ruling on this matter.

USG Corporation is a Fortune 500 company with subsidiaries that
are market leaders in their key product groups:  gypsum
wallboard, joint compound and related gypsum products: cement
board; gypsum fiber panel; ceiling panels and grid; and building
products distribution.  For more information about USG
Corporation, visit the USG home page at http://www.usg.com


VALLEY MEDIA: Wants Plan Exclusivity Stretched through Nov. 15
--------------------------------------------------------------
Valley Media, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware for an extension of its time period to
exclusively file its Reorganization Plan and solicit acceptances
of that Plan from its creditors. The Debtor proposes to enlarge
its exclusive plan filing period to run through November 15,
2002, and its exclusive solicitation period through January 14,
2003.

The Debtor relates that it has accomplished significant progress
in liquidating the estate for the benefit of creditors. The
Debtor hired FTI/Policano & Manzo as liquidation consultants
early in the case. Policano, with the Debtor's assistance, has
collected $25 million in accounts receivables and continues to
aggressively seek payment of accounts for the benefit of the
Debtor's estate and creditors.

Pursuant to the Private Sales Order, the Debtor has entered into
and consummated agreements to sell the Debtor's inventory. To
date, the Debtor has brought more than $30 million into the
estate.

The Debtor has also brought more than 25 preference, turnover
and other actions against various defendants, seeking to bring
more than $40 million into the estate; expended significant time
defending its interest in the Contested Inventory; kept
creditors updated and informed regarding the ongoing asset sales
process; worked with the Committee and has responded to its
requests for information necessary for the Committee to perform
its fiduciary obligations; rejected numerous unexpired leases of
personal and real property and unexpired contracts not essential
to the winding down process; and worked with the Committee to
identify assets that are potentially available for distribution
to creditors and discussed with the Committee the best method
for winding up this case.

Valley Media Inc., a distributor of music and video
entertainment products, filed for chapter 11 protection on
November 20, 2002. Neil B. Glassman, Esq., Steven M. Yoder,
Esq., and Christopher A. Ward, Esq., at The Bayard Firm
represent the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
$241,547,000 in total assets and $259,206,000 in total debts.


VANGUARD AIRLINES: Files for Chapter 11 Protection in Missouri
--------------------------------------------------------------
Vanguard Airlines has suspended all scheduled flights
indefinitely. Vanguard Airlines has filed for protection under
the Chapter 11 federal bankruptcy code in the U.S. Bankruptcy
Court for the Western District of Missouri. Vanguard Airlines
continues to seek new financing. Although there can be no
assurances that operations recommence, passengers should keep
there paper tickets and/or confirmation codes for future travel.

Customers may email any inquiries to ch11@flyvanguard.com

Vanguard Airlines has made passenger re-accommodation
arrangements on the following airlines:

     * Frontier Airlines will waive certain advance purchase
requirement and other restrictions for passengers holding valid
Vanguard tickets. Proof of Vanguard Airlines purchase is
required, such as a paper ticket or a print out of an e-ticket
confirmation. Call 1-800-432-1359 for more details and
reservations. Printed confirmation and/or paper tickets must be
presented at the airport ticket counter at the time of travel.

     * National Airlines has a special discounted fare and waive
certain advance purchase requirements for passengers holding
valid Vanguard tickets. Proof of Vanguard Airlines purchase is
required, such as a paper ticket or a print out of an e-ticket
confirmation. Call 1-888-757-5387 for more detail and
reservations. Printed confirmation and/or paper tickets must be
presented at the airport ticket counter at the time of travel.


VANGUARD AIRLINES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Vanguard Airlines, Inc.
        533 Mexico City Avenue
        Kansas City, Missouri 64153

Bankruptcy Case No.: 02-50802

Type of Business: The Debtor is a passenger airline.

Chapter 11 Petition Date: July 30, 2002

Court: Western District of Missouri (Kansas City)

Judge: Jerry W. Venters

Debtor's Counsel: Daniel J. Flanigan, Esq.
                  Polsinelli Shalton & Welte, P.C.
                  Suite 1000
                  700 W. 47th St.
                  Kansas City, MO 64112-1808
                  816-753-1000
                  Fax : 816-753-1536

                  and

                  Michael J Pankow, Esq.
                  Brownstein Hyatt & Farber, P.C.
                  Twenty-Second Floor
                  410 Seventh Street
                  Denver, CO 80202-4437
                  303-223-1100

Total Assets: $39,724,302

Total Debts: $95,915,957

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Airlines Reporting Corp    Cash Refund              $1,407,000
Carol Dillon                                   Security/Setoff
1530 Wilson Blvd. Ste. 800                          $1,100,000
Arlington VA 22209
703-816-8160
703-816-8017 - fax

American Express Travel    Credit Card Refund       $3,728,000
Related Services                              Security/Setoff
Gennye Feldman                                      $1,967,000
SE Maintenance Unit
PO Box 53773
Phoenix AZ 85072
212-640-6317
212-640-0212 - fax

Cascio Communications,     Trade Payables             $253,000
Inc.
Dan Cascio
One IBM Place, Suite 2610
Chicago IL 60611
702-738-6040
702-738-1881 - fax

City Treasurer of Kansas   Trade Payables             $435,612
City-PFC
Ray Fuller
Aviation Department Lockbox
PO Box 210513
Kansas City MO 64141-0513
816-243-3129
816-243-3172 - fax

Debis Air Finance          Aircraft Lease             $930,251
Tim Bergin                                     Security/Setoff
100 NE 3rd Ave # 800                                  $264,000
Ft. Lauderdale FL 33301
954-467-7497
954-760-7716 - fax

Delta Airlines             Trade Payables           $1,033,084
Steven Andriotti                               Security/Setoff
P.O. Box 102509                                       $170,000
Atlanta GA 30368-0509
404-715-6665
404-773-5160 - fax

Discover Card Services     Credit Card Refund         $879,000
Greg Sako                                      Security/Setoff
2500 Lake Cook Road                                   $600,000
Riverwoods IL 60015
248-474-1335
248-474-2056 - fax

Finova Capital             Aircraft Lease           $9,787,186
David Sands                                    Security/Setoff
4800 N Scottsdale Road                              $3,010,708
Scottsdale AZ 85251-7623
480-636-4974
480-636-6667 - fax

Flight Safety Boeing       Trade Payables             $749,434
Mike Calcagno
PO Box 75221
Charlotte NC 28275-0221
972-574-7028
972-574-7003 - fax

GE Capital Aviation        Aircraft Lease          $11,061,983
Services                                      Security/Setoff
Guy Bacigalupi                                        $475,754
201 High Ridge Road
Stamford CT 06927-4900
203-316-7372
203-357-6680 - fax

Interlease Aviation Corp   Aircraft Lease           $6,012,501
One Northfield Plaza                           Security/Setoff
Ste 525                                               $560,000
Northfield IL 80093
Phil Coleman
847-446-2644
847-446-2749 - fax

International Aero         Lender / Lessor          $1,743,778
Components                                    Security/Setoff
Don Berkach                                         $1,445,000
6880 S. Tucson Boulevard
Tucson AZ 85706
520-741-0499
520-741-0480 - fax

Mimi Leasing               Aircraft Lease           $3,363,159
(N912MP / 603)                                Security/Setoff
One Northfield Place,                                 $200,000
Suite 525
Northfield IL 60093
Phil Coleman
847-446-2644
847-446-2749 - fax

North American Specialty    Surety Bond Claim       $2,200,000
Insurance Company
Michael Beernaert
Suite 400
1200 Arlington Heights Rd
Itasca IL 60143
914-828-8294
914-828-7294 - fax

Open Skies Inc.             Trade Payables            $226,441

Pegasus Aviation, Inc.      Aircraft Lease         $15,432,215
Walter Keast                                   Security/Setoff
Four Embaracadero Center                              $775,000
35th Floor
San Francisco CA 94111
415-743-0254
415-434-3917 - fax

Seabury Advisors LLC        Trade Payables            $473,884
Tom Mahr
540 Madison Ave, 17th Floor
New York NY 10022
203-363-1001
203-321-0360 - fax

The Sabre Group Inc. -      Trade Payables            $752,602
ANJ/XN197
Connie Tucker
7285 Collection Center Drive
Chicago IL 60693
602-273-8331
602-273-8273 - fax

USAir Leasing and Service   Aircraft Lease          $2,899,065
Richard G. Agan                                Security/Setoff
2345 Crystal Drive                                    $880,000
Arlington VA 22227
703-872-7506
703-872-5515 - fax

WorldSpan                   Trade Payables            $334,477
Dell Messick
Drawer CS 198537
Atlanta GA 30384-8537
770-563-6377
770-563-7663 - fax


VANGUARD AIRLINES: Dickson Explains Chapter 11 Filing to Workers
----------------------------------------------------------------
Vanguard Airlines' Chairman, Chief Executive Officer, and
President, Scott Dickson addressed this letter to all Vanguard
employees:

                                   July 30, 2002

Dear Vanguard Family:

     "Today is a sad day.  At 1 a.m. this morning, Vanguard
Airlines suspended operations. Absent receipt of critical
funding, we [filed] for Chapter 11 protection in the federal
bankruptcy court for the western district of Missouri. This very
difficult decision was made only after every effort was made to
obtain the financing necessary to continue operations. We simply
came up dry and ran out of time. The reasons for the cessation
of operations and need to file are more particularly set forth
in our press release. It is likely that this is a permanent
shutdown.

     "With very limited exceptions, all Vanguard employees have
their employment terminated as of 1 a.m. this morning. No
bumping rights exist. A limited group of employees who are being
contacted individually will have their employment continued for
a brief period of time as we seek to obtain financing. Such
employees are hired only on a day-to-day basis and may be
terminated on notice. The possibility of shutdown has been
communicated, and known, for a long time. We were unable to
provide specific notice of the actual shutdown earlier, because
we have had hope of obtaining financing, and have held
discussions with potential lenders, until the very last minute.
Any notice provided prior to today would have removed any chance
of obtaining financing. Several times in the last year we have
been on the verge of shutdown and obtained financing at the last
possible moment. This situation was no different, and it was
definitely worth our while to try to obtain financing until the
last possible moment.

     "Employees are required to return any airport-issued badges
and keys and are requested to return this Thursday or Friday to
retrieve their personal belongings. Except in the case of
emergency need, you will not be allowed admittance to Vanguard
facilities today (July 30th). I regret this inconvenience but
the fundamental purpose of Chapter 11 is to provide an orderly
process and today all our efforts must be focused on obtaining
additional capital to allow the Company to recommence
operations. If you have an immediate emergency need for a
personal item, please advise a security guard and we may be able
to retrieve it for you.

     "Your management team and I continue to believe that
Vanguard held an excellent industry position and had
demonstrated the viability of the business strategy. However,
the general skepticism of investors towards airlines since
September 11, coupled with Vanguard's history of losses,
prevented us from obtaining significant new capital. In short,
we were doing the right things but past history and timing vis-
a-vis September 11th were against us.

     "Although we will attempt to reorganize in bankruptcy and
fly again, I cannot provide you any assurance of this. I am
certain you will be able to follow the course of our
reorganization efforts in the Kansas City newspapers.

     "Employee inquiries should be sent by email to
njemp@flyvanguard.com   You may also contact the Company's
General Counsel, Bob Rowen, by phone at 816-243-2995. However,
please understand that the Bankruptcy Court will allow the
hiring of only a tiny staff to handle the liquidation and that
staff will be extremely busy. The staff may have a limited
ability to return emails and may not have time to handle phone
inquiries.

     "If you believe Vanguard may not have your current address
on file, please leave your current address and contact
information with Human Resources, by hand delivery, letter
and/or email to njemp@flyvanguard.com  

     "During the last year, you worked extremely hard to make
Vanguard a success. Our passengers demonstrated their confidence
in the airline by purchasing tickets for future transportation.
Our shareholders provided as much financial support as they were
able given economic conditions over the last 10 months. Many of
our suppliers also provided substantial financial concessions,
while their payables increased. The shutdown of Vanguard is a
tragedy for many. I am deeply sorry that it had to happen.

     "You have a lot about which to be proud. Despite
substantial adversity, we operated a safe airline for over seven
years. We brought affordable transportation to Kansas City and
the Midwest. You showed tremendous spirit, hard work and
determination.

     "I appreciate the personal friendships I enjoyed with many
of you during the last year. I wish you the best in your future
career. You will be in our prayers."

                                   Very truly yours,

                                   Scott Dickson

                     *    *    *

Why did it happen?

"Vanguard Airlines has been in financial distress for at least
three years. During this period, many payables increased. During
2000, Vanguard management adopted a revised business strategy
and this strategy was implemented during 2001. Although the
strategy showed immediate signs of success, the events of
September 11 interrupted our business improvement and our
efforts to obtain additional financing.

"Since September 11, we have been battling time. The general
weakness in the industry resulted in our operations continuing
to be a financial drain. Our debts to creditors mounted and time
ran out. More information is contained in our press release.

When will I get my earned pay?

"Wages and salaries owed you as of [Tues]day are "prepetition
wages" and likely will not be paid for a matter of months, if
not longer. Employee wages (including vacation) earned in the
last 90 days are a priority claim (up to $4,650 per employee)
and thus, absent unusual circumstances, will be paid before any
amount is paid to the Company's general unsecured creditors.

"The Company will schedule the amount you are owed and, as long
as you agree with this schedule, you will not have to file a
claim for wages.

When will I get my expenses reimbursed?

"These are also prepetition claims entitled to priority subject
to the aggregate limit of $4,650. You will likely want to file a
claim in the Company's bankruptcy case for the amount of these
expenses. You will be sent a claim form in due course. You do
not need to file anything before then, and filing anything
before then will not get you paid any sooner. If you have
expenses that have not been turned in on an expense report, you
should submit that report (by mail, to Accounts Payable),
keeping a copy for your records.

What about my health claims?

"Employee health (medical) insurance claims are also
prepetition. If such claims have not been paid by the Company,
they will be caught up in the bankruptcy and payment will, at a
minimum, be deferred for several months and may be denied
entirely.

"Unpaid health insurance claims will be entitled to priority
together with your unpaid wage claims, up to an aggregate
maximum of $4,650 (all of your claims combined). To the extent
you have unpaid health claims, you may want to discuss this
situation with your doctor or hospital soon. At a minimum, you
should demand that any doctor or hospital continue to provide
the United HealthCare negotiated discounts. We understand this
will create an extreme hardship for certain individuals. This is
how the law works. It is beyond our ability to convince the
court to allow selected claims to be paid.

"If you participate in any AFLAC sponsored plans (other than the
flex spending accounts), you should contact AFLAC directly to
continue such plans.

"Amounts you contributed to flex plans (dependent care or health
care accounts), that have not been paid to you, are prepetition
claims which may be aggregated with wages and other claims to
receive priority up to the $4,650 limit.

What about the Dental and Vision Plans?

"The dental and vision plans will likely cease as of August 1,
2002.

What about the 401(k) plan?

"Amounts invested in the 401(k) plan, including the Company
match, are not affected by the Chapter 11 filing. No funds in
the 401(k) were invested in Vanguard stock. In the event the
Company cannot reorganize, the plan will be terminated and
unvested accounts will become vested. If you wish to withdraw
your funds from the plan, please contact Benfits Disbursement,
The Premiere Solution, 57 Germantown Court, Suite 400, Cordova,
TN 38018.

What about Vanguard stock?

"Any Vanguard stock you hold (including stock purchased in the
Employee Stock Purchase Plan) is almost certainly worthless and
it is likely you will be entitled to claim a capital loss on
such stock this year.

What happened to the Air Transportation Stabilization Board
(ATSB) loan?

"Had we received ATSB loan approval earlier this year, I am
confident we would have survived. But we did not. Although we
were having a little success in convincing ATSB that Vanguard
should receive a loan, we ran out of time. We discuss the ATSB
further in our press release.

What about our Senators and Congressmen?

"Senators Kit Bond and Jean Carnahan, Congressman Sam Graves,
Congresswoman Karen McCarthy, Congressman Dennis Moore, and a
number of other senators and Congressmen, Mayor Kay Barnes and
Governors Bill Graves and Bob Holden, all worked hard to
convince ATSB to promptly approve Vanguard's application. They
did everything they could to support our application and efforts
to obtain additional financing. We even appealed to the
President who did see our request.

Who will manage the Company?

"In large part, this question needs to be answered by the
Bankruptcy Court. We are asking the Court to approve the
continued employment of a core group of individuals for a few
days, who could work with a new investor to return the Company
to flying condition. If a new investor does not come forward in
the next few days, it is likely that continued employment will
be confined to a small group of about 15 individuals directly
involved in liquidating the Company.

How do I contact the Company?

"We expect the Company to continue to receive mail and a limited
number of phone calls at the 533 Mexico City Avenue, Kansas
City, MO 64513 location and we have established
njemp@flyvanguard.com to receive email. You may also contact the
Company's Chapter 11 counsel, who is:

               Polsinelli, Shalton, Welte
               700 West 47th Street
               Suite 100
               Kansas City, MO 64112-1802
               Attention: Dan Flanigan

"There are a number of issues that need to be addressed in the
initial stages of a Chapter 11 filing, should a new investor
materialize. We kindly request that you do not contact the
Company until Monday August 5th. At that time, we will be better
able to answer your questions."


W.R. GRACE: Sealed Air Solvency Test Will Include Future Claims
---------------------------------------------------------------
Sealed Air Corporation (NYSE:SEE) reported that the federal
court overseeing the W. R. Grace bankruptcy proceeding, which
will hear the September 30, 2002 trial of fraudulent transfer
claims against Sealed Air Corporation, issued a ruling on the
legal standards applicable to the trial.

Subject to certain limitations, the ruling held that post-1998
asbestos claims should be included in the solvency analysis of
W. R. Grace. Sealed Air issued the following statement:

     "The 1998 transaction by which the Cryovac business of
Grace was combined with Sealed Air was an arm's-length
transaction negotiated in good faith between two independent
companies after considering all relevant issues including
Grace's solvency under applicable law. We are disappointed with
the interim pre-trial ruling on the legal standards to be
applied at the September 30th hearing, and we will seek a prompt
appeal of this decision."

Sealed Air Corporation is a leading global manufacturer of a
wide range of food, protective and specialty packaging materials
and systems, including such widely recognized brands as Bubble-
Wrap(R) air cellular cushioning, Jiffy(R) protective mailers and
Cryovac(R) food packaging products. For more information about
Sealed Air Corporation, please visit the Company's Web site at
http://www.sealedair.com


WARNACO GROUP: Committee Wins Nod to Retain Huron as Advisors
-------------------------------------------------------------
The Warnaco Group, Inc.'s Official Committee of Unsecured
Creditors obtained Court's authority to employ and retain Huron
Consulting Group, LLC as their financial, accounting and tax
advisors effective May 11, 2002.

As retained professionals, Huron will render to the Committee:

   (a) the review of all financial information prepared by the
       Debtors or their accountants or other financial advisors
       as requested by the Committee including, but limited to,
       a review of the Debtors' financial statements as of the
       date of filing of the petitions, showing in detail all
       assets and liabilities and priority and secured
       creditors;

   (b) monitoring of the Debtors' activities regarding cash
       expenditures, loan draw downs and projected cash and
       inventory requirements;

   (c) attendance at meetings of the Committee, the Debtors,
       creditors, their attorneys and financial advisors, and
       federal, state and local tax authorities, if required;

   (d) assistance as requested by the Committee in these cases
       with respect to:

            (i) any suggested or proposed plan or reorganization
                for the Debtors;

           (ii) determination of whether the Debtors' financial
                condition is such that a plan of reorganization
                is likely or feasible;

          (iii) review of the Debtors' periodic operating and
                cash flow statements;

           (iv) review of the Debtors' books and records for
                related party transactions, potential
                preferences and fraudulent conveyances;

            (v) preparation of a going concern sale and
                liquidation value analysis of the estates'
                assets;

           (vi) any investigation that may be undertaken with
                respect to the prepetition acts, conduct,
                property, liabilities and financial condition of
                the Debtors, including the operation of their
                businesses;

          (vii) review of any business plans prepared by the
                Debtors;

         (viii) review and analysis of proposed transactions for
                which the Debtors seek Court approval;

           (ix) investment banking assistance with the Debtors'
                asset sale process and valuation matters as may
                be required; and

            (x) other services as the Committee, its counsel,
                and Huron mutually deem necessary.

In the performance of the services, Huron will charge the
Committee with their hourly rates customarily charged by Huron
for the same services:

      Directors and Managers        $350 - 700
      Associates                     250 - 375
      Analysts                       125 - 250
(Warnaco Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


WHEELING-PITTSBURGH: Lease Decision Time Stretched to January 7
---------------------------------------------------------------
Judge Bodoh grants Wheeling-Pittsburgh Steel Corp., and its
debtor-affiliates a Fourth Extension of its Lease Decision
Period, and revises the Order to meet the limited objections of
SunTrust and First Union.

Thus, the Debtors have until January 7, 2003 to assume, assume
and assign, or reject their unexpired leases of nonresidential
real property.  


WILLIAMS COMPANIES: Fitch Lowers Senior Unsecured Rating to B-
--------------------------------------------------------------
The Williams Companies, Inc.'s senior unsecured debt rating has
been downgraded to 'B-' from 'BB-' by Fitch Ratings. The short-
term rating for WMB remains at 'B'. In addition, the senior
unsecured debt rating for WMB's three pipeline issuing
subsidiaries, Northwest Pipeline Corp., Texas Gas Transmission
Corp., and Transcontinental Gas Pipe Line Corp., are lowered to
'BB-' from 'BB'. All outstanding ratings remain on Rating Watch
Negative.

The downgrades are based on Fitch's ongoing analysis of WMB and
reflect WMB's lack of progress thus far in restoring its cash
and liquidity profile since the expiry of a $2.2 billion
unsecured credit facility on July 23, 2002. Since the lapsing of
the credit facility, WMB has repaid $175 million of maturing
Transco senior notes and posted cash margins to support energy
marketing and trading activities of at least $280 million. As a
result, Fitch estimates that WMB's available cash position has
dwindled to less than $700 million from approximately $1.14
billion just one week ago. With upcoming debt maturities of $300
million on July 31, 2002 and $350 million on August 1, 2002 and
the potential for more than $300 million of additional cash
collateral calls at energy trading in the near term, WMB's
liquidity position is becoming increasingly tenuous. Given
execution risk on near-term asset sales and continued pressure
on liquidity, in the absence of securing a new credit facility
Fitch anticipates further downgrades of WMB's credit ratings.

                         Rating Actions:

                     The Williams Companies, Inc.

--Senior unsecured notes and debentures to 'B-' from 'BB-;

--Feline PACs to 'B-' from 'BB-';

--Short-term rating remains at 'B'.

                          WCG Note Trust

--Senior notes to 'B-' from 'BB-'.

                    Northwest Pipeline Corp.

--Senior unsecured notes and debentures to 'BB-' from 'BB'.

                   Texas Gas Transmission Corp.

--Senior unsecured notes and debentures to 'BB-' from 'BB'.

                Transcontinental Gas Pipe Line Corp.

--Senior unsecured notes and debentures to 'BB-' from 'BB'.


WILLIAMS COMPANIES: Posts Net Loss of $349MM for Second Quarter
---------------------------------------------------------------
Williams (NYSE: WMB) announced an unaudited net loss of $349.1
million, compared with net income of $339.5 million for the same
period last year. The 2002 results are consistent with earnings
guidance provided on July 22.

On a recurring basis, Williams realized an unaudited second-
quarter recurring loss of 34 cents per share vs. recurring
earnings of 57 cents per share during the same period last year.

Williams also announced it has delayed the quarterly conference
call, originally scheduled for 10 a.m. Eastern Monday, July 29,
2002, until later this week.

As a result of a recently announced restructuring plan executed
by various parties, including Williams, the company during the
second quarter recognized an additional $15 million writedown of
receivables and claims from Williams Communications Group
(WCGRU). For further details, visit
http://www.williams.com/newsmedia/2002/20020726_294.htm

Accompanying this release are a reconciliation of loss from
continuing operations to recurring loss and an unaudited
Consolidated Statement of Operations and related notes for the
second quarter.

During the second quarter, Williams recorded an aggregate
expense of approximately $30 million related to a previously
disclosed early retirement program, for which the employee
election to participate concluded on April 26, 2002. The
respective amounts attributable to each business unit are
included in the results discussed below based on their
respective participation.

Prior period segment amounts have been restated as noted in the
attached unaudited Consolidated Statement of Operations.
Following is a summary of the second-quarter results of
Williams' major business groups:

Energy Marketing & Trading, which provides energy commodities
marketing and trading and price-risk management services,
reported second-quarter 2002 segment loss of $497.5 million vs.
a segment profit of $262.2 million for the same period last
year.

The segment loss in 2002 primarily reflects a significant
decline in the forward mark-to-market value of Energy Marketing
& Trading's portfolio, resulting from this unit's limited
ability to exercise hedging strategies as market liquidity
deteriorated and spark spreads lowered, as well as increased
credit and liquidity reserves reflective of the deterioration in
the energy trading sector condition.

In addition, this unit recorded approximately $82 million of
loss accruals associated with commitments for certain power
projects that have been terminated. Also, a $57.5 million
partial impairment of goodwill was recorded resulting from
deteriorating market conditions during the second quarter.

Gas Pipeline, which provides natural gas transportation and
storage services through systems that span the United States,
reported second-quarter 2002 segment profit of $156.7 million
vs. $181 million for the same period last year.

Equity earnings from the Gulfstream pipeline, the benefit of
expansion projects placed into service since the second quarter
of 2001, and new transportation rates effective Sept. 1, 2001,
on the Transco system were more than offset by cost writeoffs
and an early retirement expense accrual.

In the second quarter of this year, the company wrote off costs
totaling approximately $20 million representing its cost and
investment in the Western Frontier and Independence expansion
projects due to Williams' second-quarter decision not to pursue
these projects. This unit also incurred $11.2 million of
additional expense associated with an early retirement program,
discussed previously. These were partially offset by the benefit
of a $27.4 million contractual construction completion fee
received by an equity affiliate related to the second-quarter
completion of the Gulfstream pipeline.

During the second quarter of 2001, results were increased $42.5
million by a gain on the sale of Williams' interest in Northern
Border Pipeline and the reversal of a regulatory reserve.

Energy Services, which provides a wide range of energy products
and services, reported second-quarter 2002 segment profit of
$131.8 million, compared with $263.9 million during the same
period last year. The difference is in large part due to a $72.1
million gain on the sale of convenience stores that occurred
during the second quarter of 2001.

Results of the major business segments within Energy Services
are:

Exploration & Production, which includes natural gas
exploration, development and production in basins within the
Rocky Mountain, San Juan and Mid-continent areas, reported
second-quarter 2002 segment profit of $95.4 million vs. $45.2
million for the same period last year.

The improvement primarily was due to increased natural gas
production volumes, reflecting a strategy of low-risk
development drilling with a focus on tight-sand and coal-seam
areas, and the acquisition of Barrett Resources in the third
quarter of last year. Production volumes sold increased nearly
200 percent during the second quarter of 2002 over the same
period of 2001.

Midstream Gas & Liquids, which provides gathering, processing,
natural gas liquids transportation, fractionation and storage
services, and olefins production, reported second-quarter 2002
segment profit of $84.6 million compared with $64.5 million for
the same period of last year. The improvement results primarily
from increased equity earnings, primarily from Discovery
pipeline, the contribution of a Venezuelan gas compression
facility that was placed into service in the third quarter of
2001, and the benefit of higher liquids margins and volumes.

Petroleum Services, which includes refining, retail petroleum
and bio-energy, reported second-quarter 2002 segment loss of
$20.7 million vs. $130.1 million segment profit for the same
period a year ago. Williams has announced it is considering the
sale of a significant portion of the assets in this segment.

In addition to the absence of last year's $72.1 million gain on
the sale of convenience stores, the segment profit decline
reflects lower results from refining and bio energy, generally
reflecting lower margins and prices, respectively. Although the
refining results are down from the same quarter of last year's
exceptionally strong performance, these activities remain
profitable. The current period also includes $27 million for
asset impairments and loss accruals for certain travel centers,
reflecting management's estimate of fair value to determine the
charge.

The Williams Energy Partners segment reported second-quarter
segment profit of $29.5 million vs. $33.7 million for the same
period last year. The decline primarily was due to increased
operating expenses and the impact of reduced ammonia shipments.

Also included in Energy Services' results is an International
unit. It reported a segment loss of $57.0 million for the second
quarter of 2002 vs. segment loss of $9.5 million for the same
period last year. Included in the segment loss for the current
period is a $44.1 million asset impairment of this segment's
soda ash mining operations. This operation is being considered
for sale and is engaged in a reserve price auction process. The
impairment is the result of management's estimate of the fair
value of the assets.

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


WILLIS GROUP: S&P Raises Counterparty Credit Rating to BB+
----------------------------------------------------------
Standard & Poor's raised its counterparty credit rating on
Willis Group Holdings Ltd., to double-'B'-plus from double-'B'
due to the company's continued debt reduction and improved
operating fundamentals. It also said it raised related ratings
and revised the outlook to stable from negative.

"The company has demonstrated a willingness to pay down debt
ahead of schedule, maintain good interest coverage, and leverage
a well-established global market presence. Partially offsetting
these strengths is the company's increasing concentration in
insurance brokerage operations, which increases the company's
exposure to the vagaries of the insurance underwriting cycle,"
observed credit analyst Donovan Fraser.

The company has met and exceeded Standard & Poor's expectations
to date and is expected to continue to further decrease leverage
given record net income of $68 million in the first quarter of
2002 versus $39 million as of first quarter 2001. Standard &
Poor's expects the company to prudently manage capital as
measured by a debt-to-capital ratio of below 60% in 2002 and
2003. GAAP interest coverage is expected to remain in line with
the rating level and in excess of 3x over the same time period.


WORLDCOM INC: Seeks Okay to Pay Prepetition Employee Obligations
----------------------------------------------------------------
Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code,
WorldCom Inc., and its debtor-affiliates seek the Court's
authority to pay its Prepetition Employee Obligations that
become due and owing during the pendency of these cases and to
continue their practices, programs and policies with respect to
their Employees that were in effect as of the Petition Date.  
The Debtors further ask the Court to authorize and direct the
Disbursement Banks to honor and pay all prepetition and
postpetition checks issued and fund transfers requested in
respect of the Prepetition Employee Obligations. The Debtors
also seek the Court's authority to issue new postpetition
checks, or effect new fund transfers, on account of the
Prepetition Employee Obligations to replace any prepetition
checks or fund transfer requests that may be dishonored or
rejected.

As of June 30, 2002, Debtors employed 63,900 employees in 65
countries.  About 57,700 were full-time employees and 6,200 were
part-time employees.  About half of the Employees are salaried
employees, with the balance accruing wages on an hourly basis.
In addition, 425 employees are represented by organized labor
organizations.

Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP in New
York, tells the Court that the Debtors incurred certain costs
and obligations to the Employees that remain unpaid as of the
Petition Date.

            Wages, Salaries and Compensation Expenses

Ms. Goldstein reports that the Debtors' average monthly gross
payroll for all of their Employees is about $325,000,000.  The
Debtors do not believe that any amounts will be owed for payroll
obligations for services rendered by the Employees in the
prepetition period other than "exception" pay, e.g., overtime or
shift differential pay, which is paid one week in arrears, and
any amounts represented by uncashed checks.  In addition, the
Debtors regularly withhold wages for Employee's child support or
other garnishments that they are legally required to pay.  As of
the Petition Date, the Debtors estimate that they have withheld
but not remitted $500,000 for these wage attachments.

According to Ms. Goldstein, the Debtors' core communications
service business, which provides voice, data, Internet and
international services to thousands of customers throughout the
world, requires the maintenance and development of key customer
relationships.  In that regard, the Debtors employ 8,000
Employees trained to cultivate new business and enhance service
to existing large customers.  These Employees in the Debtors'
sales management, emerging markets, strategic account
management, technical consulting, wholesale, Internet dial, and
global account divisions are entitled to receive commissions to
the extent they increase the Debtors' net revenues through the
sale of the Debtors' services or the retention of current
customers. Depending on the type of compensation program,
commissions are paid to eligible Employees on either a monthly
or a quarterly basis in arrears amounting to $35,000,000 per
month.

Additionally, Ms. Goldstein continues, the Debtors employ 15,000
telemarketing and customer service Employees responsible for
selling and servicing 20,000,000 residential and small business
accounts.  These Employees receive commissions based on their
sales productivity and goals attainment amounting to $10,000,000
per month.  The Debtors also maintain a commission bank program
for its most productive sales persons.  Failure to pay these
particular amounts would penalize the most productive sales
Employees.  The Debtors cap the monthly commission payable to
these very valuable Employees at $25,000 per month, and accrues
all commissions earned above this amount into an unfunded
commission "bank."  As of the Petition Date, there was
$4,200,000 in the commission bank.

                        Trust Fund Taxes

Ms. Goldstein informs the Court that the Debtors are required by
law to withhold from an employee's wages amounts related to
federal, state and local income taxes, and social security and
Medicare taxes and remit these to the tax authorities.  The
Debtors are also required to:

    -- match from their own funds, the social security and
       Medicare taxes, and

    -- pay, based on a percentage of gross payroll, additional
       amounts for state and federal unemployment insurance, and

    -- remit the Payroll Taxes to the Taxing Authorities.

The Debtors' average monthly Payroll Taxes reach $29,600,000.  
As of the Petition Date, the Debtors owe $2,000,000 in Payroll
Taxes.

                           401(k) Plan

The Debtors maintain the WorldCom 401(k) Salary Savings Plan
under which participating Employees may defer a portion of their
salary.  In addition, the Debtors make a matching contribution
to the 401(k) Plan based on the Employee deferrals.  The total
amount of Employee deferrals is $7,700,000 while matching
contributions is $4,300,000, per biweekly payroll period.

                          Pension Plans

Ms. Goldstein further relates that the Debtors maintain two non-
contributory defined benefit pension plans, the WorldCom Pension
Plan and the MCI Pension Plan, which allow eligible Employees
and former employees of the Debtors to receive certain benefit
amounts upon retirement.  Benefits under the Pension Plans were
frozen as of January 1, 1999, at which time participants ceased
prospective benefit accruals.  No amounts are due to be
contributed to the Pension Plans as of the Petition Date.
However, it is anticipated that Debtors may have to make
aggregate contributions up to $2,800,000 to the Pension Plans in
2003.  At retirement, Employees participating in the Pension
Plans are entitled to receive their pension payments in the form
of monthly annuity payments or lump sum distributions.
Currently, 1,744 participants are entitled to receive monthly
annuity payments under the Pension Plans.  The Debtors believe
there are no accrued and unpaid Pension Plan Obligations to
participants as of the Petition Date.

                    Health and Welfare Benefits

The Debtors also sponsor several health and welfare benefit
plans for the Employees, including, medical, health, life, death
and dismemberment, dental, vision care, short-term and long-term
disability, and flexible medical and dependant spending.  The
Debtors intend to continue payments under the Retiree Health
Care Plan.  The Debtors estimate that its total annual
expenditures under the Health and Welfare Plans for Employees is
$340,000,000. Because of the manner in which expenses are
incurred and claims are processed under the Health and Welfare
Plans, it is difficult for the Debtors to determine the
outstanding accrued obligations under the Health and Welfare
Plans at any particular time.  The Debtors estimate that, as of
the Petition Date, the obligations that have accrued but have
not been paid to, or on behalf of, the Employees under the
Health and Welfare Plans reach $39,300,000, plus an additional
$1,300,000 in accrued obligations in respect of the Retiree
Health Care Plan.

                      Tuition Reimbursement

Ms. Goldstein relates that the Debtors maintain a discretionary
tuition reimbursement plan designed to encourage employees to
continue their formal education.  Pursuant to the Educational
Assistance Program, eligible Employees are reimbursed, up to
$4,500 per year for full-time Employees and $2,500 per year for
part-time Employees, for college tuition and fees and career-
related certificate courses.  From January 1, 2002 through the
Petition Date, the Debtors paid $5,500,000 in respect of Tuition
Expenses.  As of the Petition Date, the outstanding and unpaid
Tuition obligations amounted to $250,000.

                          Paid Time Off

Under the Debtors' paid time-off policy, Ms. Goldstein explains
that eligible Employees accrue paid time-off, including
vacation, floating holiday, personal or sick time, based on
weekly hours worked and length of service at the Debtors.  
Pursuant to the paid time-off Plan, eligible Employees earn
their full wages for each vacation, personal or sick day, up to
the maximum number of days accrued by the Employee under the
Plan.  Unused vacation and floating holiday pay are generally
paid to Employees only upon termination of employment, where
legally required.  Prior to the Petition Date, the Debtors paid
$4,500,000 per month on average in respect of paid time-off
Time.  The Debtors estimate that $60,600,000 of paid time-off
Time is accrued and outstanding as of the Petition Date.

                       Relocation Benefits

As a global enterprise on six continents, Ms. Goldstein notes,
the Debtors often ask Employees to relocate on a temporary or
permanent basis to other offices in accordance with the
requirements of the Debtors' businesses.  Employees, including
new hires, who relocate at the Debtors' request are reimbursed
for various expenses, including, rental lease payments, moving
and transportation costs, dependent education assistance and
annual visit privileges.  Additionally, for Employees working
abroad, the Debtors pay taxes for these Employees to the extent
that the tax liability of these Employees exceeds the federal,
state and social security taxes that would have been paid by
these Employees if they were employed only in the United States,
as well as pay certain additional expenses in connection with
their working abroad, including housing allowance, education
allowance, home visitations, and repatriation costs.  The
Debtors averaged $1,100,000 per month in respect of payments for
Relocation Obligations.  The Debtors estimate that $5,700,000 is
outstanding in respect of the Relocation Obligations as of the
Petition Date.

                 Business Expense Reimbursement

The Debtors customarily reimburse Employees who incur business
expenses in the ordinary course of performing their duties.
These reimbursement obligations include travel and entertainment
expenses incurred by the Employees through the use of their own
funds or credit cards.  The Debtors averaged $4,300,000 per
month in respect of payments for Reimbursement Obligations.  The
Debtors estimate that, as of the Petition Date, the
Reimbursement Obligations to be paid to Employees reach
$4,000,000.

      Administration of Employee and Retiree Benefit Plans

In the ordinary course of their businesses, the Debtors utilize
the services of certain professionals, including Equiserve L.P.,
Watson Wyatt and Putnam Investments, to facilitate the
administration and maintenance of their books and records in
respect of the Debtors' employee benefit plans.  While most
Benefit Administration Obligations are built into the cost of
benefits, the Debtors estimate that $190,000 Benefit
Administration Obligations are accrued and unpaid as of the
Petition Date.

                        Severance Amounts

During the ordinary course of business, the Debtors maintain a
severance policy for eligible Employees providing for severance
pay benefits and extended medical and dental benefits for a
period of time based generally upon an employee's level and
years of service.  Within the 90 days prior to the Petition
Date, the Debtors terminated 5,100 employees eligible for
Severance Benefits and to whom Severance Benefits are owed as of
the Petition Date.

            Payment Of Obligations Should Be Authorized

The Debtors believe that substantially all of their Prepetition
Employee Obligations constitute priority claims.  To the extent
any Employee is owed over $4,650 on account of Prepetition
Employee Obligations, Ms. Goldstein asserts that payment of
these amounts is necessary and appropriate and is authorized
under Section 105(a) of the Bankruptcy Code pursuant to the
"necessity of payment" doctrine, which "recognizes the existence
of the judicial power to authorize a debtor in a reorganization
case to pay prepetition claims where such payment is essential
to the continued operation of the debtor."  Any delay in paying
Prepetition Employee Obligations will adversely impact the
Debtors' relationship with their Employees and will irreparably
impair the Employees' morale, dedication, confidence, and
cooperation.  The Employees' support for the Debtors'
reorganization efforts is critical to the success of those
efforts.  At this early stage, the Debtors simply cannot risk
the substantial damage to their businesses that would inevitably
result from a decline in their Employees' morale attributable to
the Debtors' failure to pay wages, salaries, benefits and other
similar items. (WorldCom Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


XCEL ENERGY: Fitch Cuts Senior Unsecured Rating to BB+ from BBB+
----------------------------------------------------------------
Fitch Ratings has lowered the outstanding ratings of Xcel
Energy, Inc., and its subsidiaries Northern States Power MN,
Northern States Power WI, Southwestern Public Service Co., and
Public Service Co. of Colorado. XEL's senior unsecured rating
was lowered to 'BB+' from 'BBB+'. XEL's commercial paper rating
is lowered to 'B' from 'F2' and withdrawn. The ratings of the
subsidiaries NSP-MN, NSP-WI, SPS and PSC remain investment grade
but are constrained by the rating of the parent group.; The
ratings have been removed from Rating Watch Negative. The Rating
Outlook for all five entities is Negative.

Ratings were lowered on June 24, 2002 in consideration of high
leverage and liquidity concerns at XEL's subsidiary, NRG Energy,
Inc., and the likely need for parental infusions of capital or
credit support. At the time, Fitch stated that it would monitor
the group's plans for NRG. The current rating action reflects
the material deterioration of liquidity at NRG, pressure upon
XEL liquidity as outlined below, including but not exclusively
related to pressure at the XEL level from potential further,
albeit limited, committed support by XEL for NRG. Although a
cross-default clause exists which would link a future default by
NRG to an event of default within XEL's $800 million in parent-
level committed facilities, the ratings incorporate an
expectation by Fitch that a waiver will ultimately be negotiated
with the bank group, thus limiting the linkage between the
rating of XEL and the implicit rating of NRG. Failure to achieve
receipt of a waiver from the bank group for the $800 million
committed facilities would see XEL's ratings lowered further
into speculative grade. XEL retains drawing capacity under the
$800 million facilities (two facilities of $400 million,
expiring in November 2002 and November 2005) - available drawing
capacity stood at $530 million as of June 30 2002, though the
company has also used a portion of the facilities to refinance
maturing commercial paper thus far during third-quarter 2002.

The current ratings also acknowledge the strength of dividend
cash-flow received by XEL from its four regulated subsidiaries,
but also the limitations upon increasing this source of cash for
the XEL holding company. The utilities have very strong
individual financial profiles and provide stable dividend income
that is the primary support for the credit of the XEL parent
company. XEL itself has low headline leverage, though this is to
some extent offset by the proximate pressures on cash-flow.
These include: potential support of NRG as outlined below, low
levels of remaining undrawn committed facilities at the XEL
level; the decreased likelihood of progress with a $500 million
equity offering previously planned for the balance of 2002; the
possibility that counterparties of XEL's trading operation may
require collateral from XEL (including a portion of the NRG
trading book guaranteed by XEL as part of the integration
process); and the obstacles that further deterioration at NRG
may create in closing on additional committed funding at the XEL
level. Fitch notes that XEL has historically had a relatively
high dividend payout ratio, and that this area of cash
expenditure is open to review going forward, but that a material
reduction in dividend alone would not offset the current
liquidity concerns.

              Unregulated subsidiaries - NRG

Management's plan for NRG continues to focus on cutting back on
capital expenditure, deferring projects and selling assets to
reduce debt. An asset sales process already underway, targeting
$1.5 billion by the end of 2002, will reduce XEL consolidated
leverage, particularly at NRG, but both amounts and timing are
subject to material uncertainty in the current market. The sharp
deterioration of liquidity at the NRG level has been driven both
by the likely need to provide a significant volume (potentially
in excess of $1 billion) of collateral, following the downgrade
of the ratings of NRG by other rating agencies, and by the
prospect of the $1.5 billion acquisition of 2,535MW of
generation capacity from FirstEnergy Corp. NRG is currently
attempting to negotiate the terms of collateral provision, which
would otherwise typically be required within 15 business days of
the downgrade of NRG. Again, execution risk on these
negotiations, which may involve linkage with the timing of
proceeds from the asset sale programme, remains high. The
combined cost of meeting all potential collateral requirements
and the NRG-supplied equity component of the FE asset
acquisition would exceed currently available liquidity at NRG.
In addition, completion of the additional funding elements for
the acquisition of the FE assets - including non-recourse debt
at the project level, a lease structure, and a portion of third-
party equity - is subject to high levels of execution risk at
this time.

XEL could inject up to $400 million into NRG in the balance of
2002. This figure reflects a cap on tangible support from XEL to
NRG, fixed in reference to XEL's retained earnings, under
Section 53 of the PUHCA Act. The cap mitigates, but does not
fully offset, the material drain on XEL level liquidity which a
further capital injection by XEL into NRG would represent,
relative to XEL committed facilities and cash-flow receipts over
the remainder of the year.

The downgrades affecting ratings of NSP-MN, NSP-WI, SPS and PSC
are driven by Fitch's policy regarding the linkage of ratings of
subsidiaries with those of a lower-rated parent. On a stand-
alone basis, the companies' financial profiles remain consistent
with those of companies with higher ratings. The current ratings
reflect linkage to the reduced financial flexibility of their
parent. The continued Negative Outlook reflects the Outlook of
parent XEL.

          Ratings affected by the rating action are:

                      Xcel Energy Inc.

--Senior unsecured debt lowered to 'BB+' from 'BBB+';

--Commercial paper lowered to 'B' and withdrawn;

             Northern States Power Company-MN

--First mortgage bonds and secured pollution control revenue
bonds lowered to 'BBB+' from 'A+';

--Senior unsecured debt and unsecured pollution control revenue
bonds lowered to 'BBB' from 'A';

--Trust preferred stock lowered to 'BBB-' from 'A-';

--Commercial paper lowered to 'F2' from 'F1';

            Northern States Power Company-WI

--First mortgage bonds lowered to 'BBB+' from 'A+';

--Senior unsecured debt and unsecured shelf ratings lowered to
'BBB' from 'A';

         Southwestern Public Service Company

--First mortgage bonds lowered to 'BBB+' from 'A+';

--Senior unsecured debt lowered to 'BBB' from 'A';

--Commercial paper lowered to 'F2' from 'F1';

        Southwestern Public Service Capital I

--Trust preferred stock lowered to 'BBB-' from 'A-';

        Public Service Company of Colorado

--First mortgage bonds lowered to 'BBB+' from 'A';

--Senior unsecured notes lowered to 'BBB' from 'A-';

--Preferred stock lowered to 'BBB-' from 'BBB+';

--Commercial paper rating lowered to 'F2' from 'F1';

--Rating Outlook Negative for all entities.

Xcel Energy Inc., is the holding company for six electric
utility companies that serve electric and natural gas customers
in 12 states, together with two transmission companies and two
natural gas pipelines. XEL also owns a number of non-regulated
businesses, the largest of which is NRG Energy, Inc. (now wholly
owned by XEL). A very small portion of business is done by
subsidiaries in utility engineering, broadband
telecommunications, natural gas marketing and trading and
investments in affordable housing.


XCEL ENERGY: Airs Disappointment Over Fitch's Ratings Downgrades
----------------------------------------------------------------
Xcel Energy (NYSE:XEL) officials said they are disappointed
Fitch Ratings lowered Xcel Energy's corporate credit rating to
below investment grade. The Fitch rating stands in contrast to
ratings from the two largest rating agencies, Moody's and
Standard & Poor's, which kept Xcel Energy at investment grade.

Fitch maintained the ratings of Xcel Energy regulated
subsidiaries Northern States Power Co.-Minnesota, NSP-Wisconsin,
Public Service Co., of Colorado and Southwestern Public Service
Co., at investment grade.

All of the credit rating agency actions stem from concerns about
Xcel Energy's nonregulated subsidiary, NRG Energy Inc.

"We're working hard to execute the plans we've developed to
improve NRG's financial strength through discussions with
lenders, asset sales and cost reductions," said Dick Kolkmann,
managing director of investor relations. "Amending the cross-
default relationship between Xcel Energy and NRG and increasing
NRG's liquidity are our top priorities."

Xcel Energy reiterated that it is moving aggressively to address
the financial issues facing the company:

     -- The company is in active discussions with its lenders to
amend the "cross-default" relationship between Xcel Energy and
NRG. At the same time, Xcel Energy also is working with banks to
renegotiate NRG's cash collateral requirements.

     -- Xcel Energy is making progress in efforts to negotiate
better terms between NRG and FirstEnergy regarding the
acquisition of some FirstEnergy plants. Xcel Energy officials
met last week with FirstEnergy's bankers and management.

     -- Progress is being made on the sale of major NRG assets.
Completion of the sale of NRG's ownership interests in Energy
Development Limited in Australia, with proceeds expected to be
nearly $44 million, was announced last week., and Xcel Energy
officials expect to review bids for the other assets in the next
week.

Xcel Energy is a major U.S. electricity and natural gas company
with regulated operations in 12 Western and Midwestern states.
Formed by the merger of Denver-based New Century Energies and
Minneapolis-based Northern States Power Co., Xcel Energy
provides a comprehensive portfolio of energy-related products
and services to 3.2 million electricity customers and 1.7
million natural gas customers through its regulated operating
companies. In terms of customers, it is the fourth-largest
combination natural gas and electricity company in the nation.
Company headquarters are located in Minneapolis. More
information is available at http://www.xcelenergy.com  


XO COMMS: Court Approves Proposed Uniform Voting Procedures
-----------------------------------------------------------
The deadline for XO Communications, Inc.'s balloting agent,
Bankruptcy Services LLC, to receive ballots from claimants,
equity interest holders and Intermediaries in respect of the
Plan is August 19, 2002 at 5:00 p.m. (prevailing Eastern Time).

July 18, 2002 is the "record date" for determining who can and
can't vote on the Plan.

The hearing on any Claimant Voting Motion under Rule 3018 of the
Federal Rules of Bankruptcy Procedure will be conducted on
August 13, 2002 at 10:00 a.m. (prevailing Eastern Time).

The Amended Voting Procedures are:

(a) Any ballot, which is properly completed, executed, and
    timely returned to the Balloting Agent that does not
    indicate an acceptance or rejection of either of the
    FL/Telmex Plan or the Stand-Alone Plan, or indicates both an
    acceptance and rejection of either of the FL/Telmex Plan or
    the Stand-Alone Plan shall be deemed to be a vote to accept
    such Plan;

(b) Any ballot, which is returned to the Balloting Agent
    indicating acceptance or rejection of the FL/Telmex Plan and
    the Stand-Alone Plan but which is unsigned or does not
    contain an original signature shall not be counted;

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

(d) Pursuant to Bankruptcy Rule 3018(a), whenever a holder of a
    claim submits more than one ballot voting the same claim
    prior to the deadline for receipt of ballots, except as
    otherwise directed by the Court, the last such properly
    completed ballot sent and received prior to the voting
    deadline will be deemed to reflect the voter's intent and
    thus to supersede any prior ballots. The Court has adopted a
    rebuttable presumption that any creditor who submits a
    superseding ballot has sufficient cause to do so, within the
    meaning of Bankruptcy Rule 3018(a);

(e) A holder of a claim or interest must vote all of its claims
    or interests within a particular class under the Plan either
    to accept or reject each of the FL/Telmex Plan and the
    Stand-Alone Plan, and may not split its vote. Accordingly, a
    ballot (or multiple ballots with respect to separate claims
    within a single class), that partially rejects and partially
    accepts the FL/Telmex Plan or the Stand-Alone Plan, or that
    indicates both a vote for and against the FL/Telmex Plan or
    the Stand-Alone Plan, will not be counted. This provision
    shall not apply to summary ballots, completed by
    intermediaries acting on behalf of groups of claim holders,
    that reflect the votes of the beneficial holders of such
    claims;

(f) If a creditor casts simultaneous or duplicate ballots voted
    inconsistently, such ballots shall count as one vote
    accepting the Plan;

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

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

(i) Unless otherwise ordered by the Court, questions as to the
    validity, form, eligibility, acceptance, and revocation or
    withdrawal of ballots shall be determined by the Balloting
    Agent and the Debtor in its sole discretion, and this
    determination will be final and binding. (XO Bankruptcy
    News, Issue No. 5; Bankruptcy Creditors' Service, Inc.,
    609/392-0900)


ZIFF DAVIS: Likely to File Prepackaged Chapter 11 by Week's End
---------------------------------------------------------------
Ziff Davis Media, which was a major player in technology
publishing with PC magazine and the now-closed Yahoo Internet
Life, has been telling advertisers that it will be forced to
enter a pre-packaged chapter 11 bankruptcy by the end of this
week, reported The New York Times. Company officials had no
comment on the potential bankruptcy, but acknowledged that there
would be a financial restructuring by Friday, August 2.
According to public filings, the company is restructuring
because it cannot meet its current obligations and has little
cash on hand, reported the Times. (ABI World, July 29, 2002)


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Crown Cork & Seal     7.125%  due 2002    96 - 98     +1.5
Freeport-McMoran      7.5%    due 2006  90.5 - 91.5    +.5
Global Crossing Hldgs 9.5%    due 2009  1.13 - 1.63   -.37
K-Mart                9.375%  due 2006 39.50 - 40.50   n/a
Levi Strauss          6.8%    due 2003    89 - 91      n/a
Lucent Technologies   6.45%   due 2029    47 - 49      -11
MCI Worldcom          6.5%    due 2010  45.5 - 47      n/a
Terra Industries      10.5%   due 2005    86 - 89       +1
Westpoint Stevens     7.875%  due 2008    59 - 62       -3
Worldcom              7.5%    due 2011    17.5-18.5    n/a
Xerox Corporation     8.0%    due 2027    43 - 45       -6

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

                          *********

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

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

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

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

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

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

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

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

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

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

                *** End of Transmission ***