TCR_Public/020807.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Wednesday, August 7, 2002, Vol. 6, No. 155     

                          Headlines

ANC RENTAL: Seeks Approval to Enter into IT Upgrading Agreements
ADELPHIA BUSINESS: Wants to Keep Exclusivity Until November 30
ADELPHIA COMMS: Names Cornelius and Kronman as New Directors
AGERE: Proxim Completes Acquisition of LAN Equipment Business
AIRGATE PCS: Working Capital Deficit Widens to $18MM at June 30

ALLMERICA FIN'L: S&P Lowers Ratings on 2 Synthetic Deals to BB+
AMERICAN COMMERCIAL: Ernst & Young Replaces Andersen as Auditors
AQUILA: Fitch Says Aborted Cogentrix Acquisition Frees Up Cash
AVIATION GENERAL: Posts Improved Performance for Second Quarter
BALLANTYNE OF OMAHA: Closes Xenotech Asset Sale to Ex-Manager

BUDGET GROUP: Wants to Obtain $100 Million Primary DIP Facility
BURLINGTON: Transfer of Mexican Joint Venture Interest Approved
CAMPBELL SOUP: Names Kelly Johnston as VP for Government Affairs
CAPITOL COMMUNITIES: Boca First Discloses 64.6% Equity Stake
CELESTRON: Hilco Extends $6M Facility for Management Buyout Deal

CENTRAL EUROPEAN MEDIA: Taps Deloitte to Replace Arthur Andersen
CHART INDUSTRIES: May Sell More Assets to Meet Debt Covenants
COHO ENERGY: Court Okays Settlement Pact with Hicks Muse Units
COMDISCO: Court Approves Stipulation with Transamerica Equipment
CONSECO FINANCE: S&P Junks Various Related Transactions

CONSECO INC: Moody's Further Junks Senior Unsecured Note Ratings
CORNERSTONE PROPANE: Preparing to Commence Chapter 11 Proceeding
DADE BEHRING: Wants to Employ Ordinary Course Professionals
DERBY CYCLE: Seeks Delay Entry of Final Decree Until January 27
EARTHCARE COMPANY: BDO Seidman Bows Out as Independent Auditors

ENCORE SOFTWARE: Navarre Corporation Acquires Primary Assets
ENRON CORP: Court Approves Stipulation with El Paso Global
ENRON CORP: Resolves Dispute Over Contracts with Eli Lilly
EXIDE TECHNOLOGIES: Committee Wins Nod to Hire Pepper Hamilton
FLEMING COS.: Will Service Shipley Store's Distribution Needs

GLENOIT CORP: Obtains Exclusivity Extension Until September 10
GUNTHER INT'L: Sets Annual Shareholders' Meeting for Sept. 12
HAWK CORP: S&P Keeping Watch on B- Rating After S-4/A Filing
ITC DELTACOM: US Trustee Will Convene Creditors' Meeting Friday
INFINITE GROUP: Auditors Doubt Ability to Continue Operations

INTEGRATED HEALTH: Rotech Wants More Time to File Final Report
INTELEFILM CORP: Commences Chapter 11 Reorganization Proceeding
INTELEFILM CORP: Case Summary & 20 Largest Unsecured Creditors
KAISER ALUMINUM: Reaches Pact with Maxxam re Stock Disposition
KENNAMETAL INC: Derwin Gilbreath Resigns as Vice President & COO

KEY3MEDIA GROUP: James A. Wiatt Resigns as Director
KMART CORP: Dorel Juvenile Seeks Stay Relief to Allow Setoff
KMART CORP: Lexington Seeks Stay Relief to Prosecute Claims
LACLEDE STEEL: SEC Approves Proposed Modified Reporting Protocol
MALDEN MILLS: Expects to File Chapter 11 Plan by Month's End

MEDQUEST: S&P Assigns Low-B Ratings Over High Leverage Profile
NATIONSRENT INC: Continues Tinkering with DIP Loan Covenants
NEON COMMUNICATIONS: Wants to Hire Pepper Hamilton as Co-Counsel
NEWPOWER: Seeking Nod to Sign-Up LeBoeuf Lamb as Special Counsel
NORTHWEST AIRLINES: Completes $749MM Capital Markets Financing

NORTHWEST AIRLINES: Names Glenn Woythaler as VP, Atlantic Region
OWENS CORNING: Asbestos Claimants Balk at Prof. McGovern's Fees
PG&E: Obtains Waiver of Ratings Trigger after Moody's Downgrades
PG&E NATIONAL: Moody's Cuts Several Ratings Down to Low-B Level
PINNACLE ENTERTAINMENT: Settles with Regulator re Investigation

PINNACLE TOWERS: Hires Bayard for Sears Tower Litigation
PRIMEDIA: Improved Q2 EBITDA Spurs S&P to Affirm B Credit Rating
PRINTING ARTS: Court Approves Dismissal of Chapter 11 Cases
PROVANT INC: Bank Lenders Extend Revolver through Month's End
PROVANT INC: Appoints Wayne Hall as Independent Board Member

PUEBLO XTRA: S&P Junks Rating Over Unit's Interest Nonpayment
QWEST: Brings-In Barry K. Allen as Chief Human Resources Officer
RURAL CELLULAR: June 30 Balance Sheet Upside-Down by $48 Million
SEITEL INC: Closes Sale of DDD Energy to Rising Star for $23.8MM
SHELBOURNE: Amends Stock Purchase Agreements with HX Investors

SILVERADO GOLD MINES: Needs to Obtain New Financing to Fund Ops.
STONEPATH: Completes Restructuring of Convertible Preferreds
TIMCO AVIATION: Lenders Agree to Amend Senior Credit Facilities
U.S. INDUSTRIES: Selling European Lighting Division to JPMorgan
USI HOLDINGS: S&P Places B+ Credit Rating on Watch Developing

UNITED AIRLINES: Appoints Jake Brace as Exec. Vice. Pres. & CFO
W.R. GRACE: Seeking Third Extension of Exclusive Periods
WARNACO: Gets Open-Ended Prucenter Lease Decision Time Extension
WILLIAMS SCOTSMAN: S&P Ups Corporate Credit Rating to B+ from B
WORLDCOM INC: Look for Schedules and Statements by November 4

XCEL: Lenders Strike Cross-Default Provision under Credit Pacts
XO COMMS: Court Allows Forstmann Little Break-Up Fee Payments

* Meetings, Conferences and Seminars

                          *********

ANC RENTAL: Seeks Approval to Enter into IT Upgrading Agreements
----------------------------------------------------------------
William J. Burnett, Esq., at Blank Rome Comisky & McCauley LLP,
in Wilmington, Delaware, tells the Court that there is a need to
upgrade the software and hardware supporting ANC Rental
Corporation and its debtor-affiliates' Information Technology
system operating reservations, rental operations, fleet
management, sales and marketing and billing for Alamo Rent-A-Car
LLC and National Car Rental System Inc.

Thus, the Debtors seek the Court's authority to enter into
agreements to purchase or lease:

  -- new hardware from IBM, EMC Corporation, and Storagetek, and

  -- new software from Computer Associates International Inc.,
     Aonix, Group One, SAS IBM and Candle.

Mr. Burnett informs the Court that in connection with their
efforts to consolidate the operations of Alamo and National
under ANC at airports nationwide, the Debtors have decided to
support only one operating system for both brands.  At present,
National operates using the information technology service known
as "Odyssey" and Alamo operates using the information technology
service known as "Legacy".  The use of the two separate systems
creates cost redundancies and inefficiencies in the way the
Debtors manage their fleet and business in general.  Mr. Burnett
explains that the Debtors have opted to use the Legacy system
because it is better suited to their business needs and provides
the flexibility needed for the Debtors' future business
operations in connection with the airport consolidation program.
Legacy already has been named One-System.

It is estimated that the use of One-System will reduce the
Debtors' IT costs by $45,000,000.  The savings will come from
reduced support costs of $20,000,000 and reduced amortization of
$18,000,000 due to the write off of the Odyssey system.  The
remainder is attributed to reduced equipment costs and
telecommunications rates.

Mr. Burnett asserts that the IT upgrading agreements are
necessary to rid the Debtors of old and obsolete equipment and
provide them with new equipment necessary to support One-System.
"The software upgrades are necessary to accommodate the planned
mainframe hardware upgrades, which are necessary to support the
operating system," Mr. Burnett says.

The salient terms of each agreement are:

A. The IBM Hardware Agreement:  The Debtors will purchase
   mainframe central processing unit upgrades, development and
   web servers, and miscellaneous hardware.  Estimated
   cost: $5,400,000.

B. The EMC Agreement:  The Debtors will purchase direct access
   storage devices for the mainframe upgrades and the new data
   warehouse necessary for One-System.  Estimated cost:
   $970,000.

C. The Storagetek Agreement:  The Debtors will purchase Virtual
   Tape Solution and tape drives for the mainframe upgrades
   required for One-System and tape drives and tape media for
   the new data warehouse required to support One-System.  
   Estimated cost: $2,550,000.

D. The Computer Associates Agreement:  The Debtors will purchase
   multiple software upgrades that are necessary to support the
   Hardware Upgrades.  Estimated cost: $2,700,000.  Incremental
   annual software maintenance payable after the upgrade is
   completed is $1,000,000.

E. The Aonix Agreement:  The Debtors will purchase NOMAD
   software.  Estimated cost: $70,000.

F. The Group One Agreement:  The Debtors will purchase Code One
   Plus software.  Estimated cost: $400,000.

G. The SAS Agreement:  The Debtors will purchase Base SAS
   software.  Estimated cost: $70,000.  Incremental annual
   software maintenance payable after the upgrade is completed
   is $25,000.

H. The IBM Software Agreement:  The Debtors will purchase
   WebSphere Application and Development Server software.
   Estimated cost: $1,200,000.

I. The Candle Agreement:  The Debtors will purchase multiple
   software upgrades for Omegaview, Omegamon II and Command
   Center.  Estimated cost: $781,443.  Incremental annual
   software maintenance payable after the upgrade is completed
   is $218,557. (ANC Rental Bankruptcy News, Issue No. 17;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADELPHIA BUSINESS: Wants to Keep Exclusivity Until November 30
--------------------------------------------------------------
Adelphia Business Solutions, Inc., and its debtor-affiliates
tell the Bankruptcy Court that they need more time to file a
plan of reorganization and they want to retain control of the
plan process.  By this Motion, the Debtors ask the Court to
extend their exclusive period to file a chapter 11 plan to
November 30, 2002.  The ABIZ Debtors also ask for an extension
of their exclusive period to solicit creditors' acceptances of a
plan to January 31, 2003.  Both of these extensions, ABIZ makes
clear, are without prejudice to the Company's right to seek
additional extensions.

Judy G.Z. Liu, Esq., at Weil Gotshal & Manges LLP, in New York,
tells the Court that during the first three months of these
chapter 11 cases, the ABIZ Debtors have faced many formidable
challenges.  The initial postpetition financing arranged with
ACOM was thwarted by ACOM's own chapter 11 cases.  ABIZ had to
expend substantial time and effort to pursue alternative
postpetition financing arrangements.  The well-publicized
allegations regarding financial irregularities and management
self-dealing at ACOM adversely affected those efforts, and
forced the ABIZ Debtors to re-tool their business model three
times since the commencement of these cases.

Ms. Liu also notes that the ABIZ Debtors' complex relationship
with certain incumbent local exchange carriers required
management to wage a daily war of vigilance to ensure the
collection of undisputed postpetition receivables -- the
lifeblood of the ABIZ Debtors' businesses.  Two full days of
hearings were required to resolve the ABIZ Debtors' motion
pursuant to Section 366 of the Bankruptcy Code and the
objections thereto.  The additional filings by the ACOM Debtors
necessitate a second 366 hearing.

The numerous allegations surrounding the conduct of certain
members of the Rigas family, who formerly served in senior
management and board of director positions at ACOM, created a
ripple effect at ABIZ because the same people served in similar
capacities.  The request for John Rigas, Timothy Rigas, James
Rigas, and Michael Rigas to resign from their senior management
and board positions at ABIZ posed unique difficulties that
weren't resolved until July 22.

According to Ms. Liu, the Debtors hold assets in the form of
equipment, networks, real property, and usage rights that span
the nation.  A multitude of leases and other complex agreements
related to these assets required review and analysis to protect
the Debtors' rights in responding to disputes, as well as to
fulfill the ABIZ Debtors' statutory requirements to complete for
each of the Debtors a set of schedules reflecting assets and
liabilities, and statements of financial affairs.  The
preparation of Schedules and Statements is a complex and
fundamental task that will result in the compilation of the very
information that is necessary to the formulation and development
of any potential plan of reorganization.  The ABIZ Debtors are
currently engaged in the process of preparing their Schedules
and Statements.  The filing of the ACOM Debtors' chapter 11
cases has exacerbated the heavy administrative burdens that this
enormous task already brings to bear on the Debtors' personnel.

Ms. Liu contends that the Debtors' cases are of the size and
complexity that warrant an extension of the Filing and
Solicitation Periods.  As with other large and complex
reorganization cases, the Debtors' initial Filing and
Solicitation Periods have not given them enough time to develop
a consensual chapter 11 plan.  The sheer size and complexity of
the Debtors' chapter 11 cases, standing alone, constitutes
sufficient cause to extend the Filing and Solicitation Periods.

Ms. Liu assures the Court that the concerted efforts of the
Debtors' management and professionals have been directed toward
the stabilization process commenced at the inception of these
cases.  The Debtors' management, employees, and professionals
have devoted hundreds of hours to the review of operations and
the development of information required by the provisions of
chapter 11.  The Debtors' management and staff have expended
significant efforts responding to the myriad of emergencies that
are incidental to the commencement of any chapter 11 case, but
which are multiplied exponentially in cases as large and complex
as these.  The Debtors also have expended countless hours
allaying the concerns of the constituencies most critical to the
Debtors' business operations -- their customers, employees,
utilities, and other vendors.

Ms. Liu adds that the Debtors have also directed their efforts
toward engaging in frequent, substantive communications with the
respective professionals acting for the Creditors' Committee and
the ad-hoc committee of holders of ABIZ 12-1/4% Senior Secured
Notes.  There has been a high level of cooperation and positive
exchanges among the parties, and an ongoing dialogue to bridge
the gaps on matters of disagreement.  In sum, the Debtors have
taken the measures necessary to manage their businesses in the
ordinary course and preserve the value of their assets for the
benefit of all parties-in-interest.

Ms. Liu contends that the termination of the Filing and
Solicitation Periods at this juncture would undermine and impair
the reorganization efforts that have been undertaken thus far in
these chapter 11 cases.  Given these circumstances, the
requested extension of the Filing and Solicitation Periods is
clearly warranted.

Ms. Liu asserts that the Debtors have demonstrated good faith in
their efforts to communicate with all interested parties at this
critical stage of the reorganization.  Granting an extension of
the Filing and Solicitation Periods will not give the Debtors
unfair bargaining leverage over creditor constituencies.
Instead, an extension will afford the Debtors an opportunity to
propose a realistic and viable chapter 11 plan.  Thus, failure
to extend the Filing and Solicitation Periods as requested would
defeat the very purpose of section 1121 of the Bankruptcy Code
-- to provide the debtor with a reasonable opportunity to
negotiate with creditors and other parties-in-interest and
propose a confirmable chapter 11 plan.

The Court will convene a hearing on August 8, 2002, to consider
ABIZ's extension requests.  ABIZ's exclusive period will remain
intact through the conclusion of that hearing. (Adelphia
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ADELPHIA COMMS: Names Cornelius and Kronman as New Directors
------------------------------------------------------------
Adelphia Communications Corporation (OTC: ADELQ) announced that
its Board of Directors has nominated two additional directors to
the Board.

The announcement was made by Erland "Erkie" Kailbourne, the
Company's Chairman and interim Chief Executive Officer.  The
appointments will be effective once the bankruptcy court
overseeing Adelphia's Chapter 11 case approves indemnification
agreements with the two appointees.

The two new directors are Rod Cornelius, an investor and former
Vice Chairman of Renaissance Cable and former Vice Chairman of
Cablevision Industries, and Anthony T. Kronman, Dean of Yale Law
School and a leading expert on legal ethics and governance
issues.  They will join the current members of Adelphia's Board
-- Leslie Gelber, Pete J. Metros, Dennis Coyle, and Mr.
Kailbourne.

Mr. Cornelius has broad experience in the cable industry as a
senior executive and successful investor.  Dean Kronman, who has
headed Yale Law School since 1994, has a distinguished record as
a legal scholar and has written extensively on legal ethics and
morality in law.

Chairman and interim CEO Kailbourne said, "These appointments
begin to deliver on our promise to expand the Board's cable
industry expertise and corporate governance capabilities by
adding these outstanding nominees.  Over the next several
months, we will continue to augment Adelphia's Board and
management team through the addition of several new executives
with strong cable industry and governance expertise."

Mr. Kailbourne added, "Rod Cornelius and Anthony Kronman bring a
wealth of knowledge of corporate governance and industry
dynamics that are of significant value to the Adelphia Board and
new management team overseeing the Company's turnaround.  
Adelphia's directors and management team are taking significant
action to restore the Company's reputation and credibility,
maximize the value of the Company for its stakeholders, and
provide uninterrupted quality cable, high speed Internet and
other services to more than 5.7 million customers nationwide."

Rodney William Cornelius, a CPA, has extensive experience in the
cable industry as both a senior executive and successful
investor.  Most recently, Mr. Cornelius had served as Vice
Chairman of Renaissance Cable which he helped form in 1997.  Mr.
Cornelius and his team orchestrated the $310 million acquisition
of systems with 125,000 subscribers in Louisiana and Tennessee
and the company's sale, only months later, for $459 million to
Charter Communications.  Mr. Cornelius is currently an investor
and operator of a 120- employee materials aggregate, concrete
and asphalt construction business that he founded in 1999.

Previously, Mr. Cornelius was with Cablevision Industries, which
he joined in 1982 as a General Manager, moving up through
various positions, including Chief Financial Officer and Chief
Operating Officer.  In 1987, he was named Executive Vice
President and Vice Chairman.  He oversaw its growth from a
company with fewer than 100,000 subscribers to one with 1.4
million subscribers.  In 1996, Mr. Cornelius managed the sale of
the company to Time Warner for $2.9 billion.

Prior to that, Mr. Cornelius was Chief Financial Officer of
Robotics, Inc., a manufacturer of industrial robots based in
Malta, New York.  A native of Albany, NY, Mr. Cornelius received
his bachelor's degree in accounting from the State University of
New York at Albany, graduating with distinction in 1973.

Anthony T. Kronman was appointed the sixteenth Dean of Yale Law
School in 1994.  His teaching areas include Contracts,
Bankruptcy, Jurisprudence & Social Theory, and Professional
Responsibility.  He became a permanent member of the Yale Law
School faculty in 1979 and in 1985 was appointed Edward J.
Phelps Professor of Law.  He previously served on the law
faculty of the University of Minnesota and the University of
Chicago before accepting a position as Visiting Associate
Professor at Yale Law School in 1978.

His most recent book, "The Lost Lawyer," deals with the
contemporary state of the American legal profession and analyzes
the movement away from what he calls the "lawyer-statesman"
ideal of responsible law practice.  Dean Kronman's other books
include "The Economics of Contract Law," co-authored with
Richard Posner; "Max Weber"; and "Cases and Materials on
Contract Law," co-authored with Friedrich Kessler and Grant
Gilmore.

Dean Kronman received a bachelor's degree in political science
from Williams College, graduating magna cum laude in 1968.  A
Danforth Fellow, he studied philosophy at Yale University and
received a Ph.D. in 1972.  He earned a J.D. in 1975 from Yale
Law School, where he served as a senior editor on the Yale Law
Journal.

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

Adelphia Communications' 9.50% bonds due 2005 (ADEL05USR1),
DebtTraders reports, are trading at 31 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL05USR1
for real-time bond pricing.


AGERE: Proxim Completes Acquisition of LAN Equipment Business
-------------------------------------------------------------
Proxim Corporation (Nasdaq: PROX), a leading manufacturer of
wireless networking equipment, completed its previously
announced acquisition of Agere Systems' 802.11 wireless local
area networking (WLAN) equipment business, including the award-
winning ORiNOCO(R) product line, for $65 million in cash.

The addition of ORiNOCO extends Proxim's leadership position in
all major wireless infrastructure markets, from 802.11
enterprise LAN and public wireless access to distributed
broadband and carrier-grade wireless backhaul systems. With this
acquisition, Proxim acquired a broad offering of WLAN products
for homes, small offices, enterprises, service providers and
outdoor environments.

"Our acquisition of ORiNOCO takes us a major step forward in our
goal of continually expanding our leadership of the wireless
infrastructure equipment market," said Jonathan Zakin, Proxim's
chairman and chief executive officer.

"It bolsters our position as the first truly integrated wireless
networking equipment manufacturer focused on serving
enterprises, service providers and consumers.  We are convinced
that the wireless infrastructure market remains the bright spot
and a potential growth engine for the entire telecommunications
industry. Proxim is committed to fully demonstrating the immense
value and possibilities of high-speed wireless connections for
improving how we work, live and play."

Agere and Proxim have executed a three-year strategic supply
agreement, under which Agere will provide 802.11 chips, modules
and cards to Proxim, a license agreement with regard to Proxim's
use of Agere's wireless LAN technology and a broad patent cross-
license agreement for their respective patent portfolios that
will result in the settlement of the pending patent-related
litigation between the two companies.  Agere's new strategic
supply agreement with Proxim represents a new engagement with a
leading wireless LAN equipment provider.

"With leading positions in the 802.11a, 802.11b and fixed-
wireless markets, we are poised to marry the best of each
product line into innovative end-to-end solutions that provide
unparalleled integrated wireless connectivity and serve pressing
customer needs," said David King, president and chief operating
officer of Proxim. "Proxim is now structured to respond quickly
to customer needs with sales divisions addressing our major
markets and product divisions focused on developing industry
leading products.  Our high-speed, high-capacity wireless
connections provide customers with tremendous reliability and
greater flexibility, allowing businesses and individuals to
operate more efficiently and creatively."

Along with the WLAN product lines, approximately 150 ORiNOCO
employees will remain with Proxim from Agere Systems, bringing
Proxim's total workforce to approximately 550. The acquisition
also adds several locations to Proxim's facilities worldwide,
including offices in Duluth, GA; Herndon, VA; Bangalore, India;
Nieuwegein, The Netherlands; and Nan-Tou City, Taiwan.

As previously announced, Warburg Pincus and Broadview Capital
Partners collectively invested $75 million in Proxim to finance
the acquisition.  The two investors were issued convertible
preferred stock in the amount of approximately $41 million, with
a conversion price of $3.06 per share.  The remaining $34
million of the investment was in the form of notes that will
convert, upon Proxim stockholder approval, into additional
shares of convertible preferred stock.  The investors were
granted warrants to acquire 6,708,335 shares of common stock for
$3.06 per share.  Additional warrants will be issued to the
investors upon receipt of Proxim stockholder approval. Upon
stockholder approval, the preferred stock and warrants issued to
Warburg Pincus and Broadview will represent approximately 24% of
Proxim's outstanding common stock on an as-converted and as-
exercised basis. Under the financing agreement, following
stockholder consideration of the conversion, Warburg Pincus will
also have the right to nominate one member to Proxim's Board of
Directors. Warburg Pincus intends to nominate one of its
Managing Directors, Larry Bettino.

Proxim Corporation, the company created by the merger between
Proxim, Inc., and Western Multiplex Corporation, is a leading
manufacturer of wireless networking equipment, securely
connecting networks within buildings as well as between
locations. Proxim's complete line of high-speed fixed wireless
solutions and wireless local area networks (LANs) provides
enterprises, service providers and consumers with unprecedented
network capacity and mobility. Primary applications for the
company's products include mobile/wireless backhaul, fiber
extension/redundancy, enterprise/campus LAN bridging, in-
building LANs, last mile access and small office and home
networking. For the Proxim Corporation Investor Information
Service, call toll free at 877-996-8947. The company's Web site
is http://www.proxim.com/newproxim

                         *    *    *

As reported in the June 4, 2002 edition of Troubled Company
Reporter, Standard & Poor's assigned a 'B' rating to Agere
Systems Proposed $220 million Convertible Notes.


AIRGATE PCS: Working Capital Deficit Widens to $18MM at June 30
---------------------------------------------------------------
AirGate PCS, Inc., (Nasdaq/NM:PCSA), a PCS affiliate of Sprint,
announced financial and operating results for the third fiscal
quarter and nine months ended June 30, 2002.

Total revenues were $122.8 million for the third quarter of
fiscal 2002, compared with $49.7 million for the prior-year
period, which excluded the effects of the acquisition of iPCS,
Inc. completed on November 30, 2001. Net loss for the third
fiscal quarter of 2002 was $50.1 million compared with $23.7
million in the same period last year. Consolidated EBITDA
(earnings before interest, taxes, depreciation and
amortization), excluding non-cash stock option compensation was
$3.6 million for the third quarter of fiscal 2002, compared with
$8.3 million for the third quarter of fiscal 2001. Third quarter
2002 revenues were reduced by a $5.4 million out-of-period
revenue adjustment ($4.9 million impact to EBITDA after the 8%
Sprint management fee) due to the uncertainty created by the
FCC's July 3 decision regarding the ability of wireless carriers
to collect access charges from long distance carriers for
terminating calls on their networks. EBITDA for the consolidated
operations, excluding non-cash stock option compensation expense
and the out-of-period adjustment, was $1.3 million for the third
quarter of fiscal 2002.

"AirGate PCS added 26,079 net new subscribers during the third
fiscal quarter," commented Thomas M. Dougherty, president and
chief executive officer of AirGate PCS. "The June quarter is
typically the slowest period for AirGate. However, excluding the
out-of-period access revenue adjustment, AirGate did achieve
positive EBITDA in our consolidated operations in only eleven
quarters since our initial funding. Reaching this financial
objective ahead of expectations is a significant milestone."

For the nine months ended June 30, 2002, the Company reported
revenues of $319.4 million compared with $109.8 million for the
same period last year. AirGate PCS reported a net loss of $381.6
million for the nine months ended June 30, 2002, compared with a
net loss of $86.0 million in the same period of 2001. Excluding
the goodwill impairment of $261.2 million recorded in the second
fiscal quarter, net loss for the nine months ended June 30,
2002, would have been $120.4 million. EBITDA loss, excluding
non-cash stock option compensation expense and goodwill
impairment was $31.1 million for the first nine months of fiscal
2002, compared with $42.3 million for the same period a year
ago.

At June 30, 2002, the Company's unaudited balance sheet shows
that its total current liabilities exceeded its total current
assets by about $18 million.

"The third fiscal quarter proved challenging on several fronts,"
added Dougherty. "Economic uncertainty, aggressive competition,
higher than anticipated rates of customer churn and more
stringent credit policies for certain sub-prime customer
segments were all factors limiting net subscriber growth. As
such, we are highly focused on our sales execution and have
identified specific marketing initiatives that we believe will
allow us to continue to achieve balanced growth in subscribers
and operating earnings. As a PCS affiliate of Sprint, we are
looking forward to the launch of third-generation, or 3G,
wireless services nationwide. The coming of 3G service to
wireless is a true technology breakthrough, and we believe being
the first competitor in most of our markets to offer this
technology will provide AirGate with a competitive advantage. In
addition, AirGate will launch new local rate plans in August,
which will include an increased amount of anytime minutes.
Finally in all Midwest distribution channels, we have removed
the deposit from all but the lowest credit classes. This
decision reflects the lower churn and bad debt rates that we
have seen in that part of our territory." Additional combined
financial and operating highlights for the third quarter of
fiscal 2002 include the following:

     --  AirGate added 26,079 net new Sprint PCS customers in
its tenth quarter of commercial PCS operations. The Midwest
Region added 14,675 net new subscribers, and the Southeast
Region added 11,404 net new subscribers in the third fiscal
quarter. As a result, the Company had a total of 532,446
subscribers as of June 30, 2002, net of a 6,102 subscriber
adjustment for subscribers not reasonably expected to pay, which
translates into a covered POP penetration rate of 4.6%.  

     --  Excluding the out-of-period revenue adjustment, average
revenue per subscriber (ARPU), was $60 for the quarter,
consistent with ARPU of $60 in the previous quarter. For the
quarter, ARPU did not include access revenues. Prior to April 1,
2002, ARPU included approximately $1.50 in access revenue.  

     --  Total roaming revenue was $32.0 million for the third
fiscal quarter of 2002, compared with $22.2 million for the
second fiscal quarter of 2002. Roaming expense was $21.8 million
for the quarter, compared with $18.2 million for the second
fiscal quarter of 2002. Thus, net roaming margin was $10.2
million in the third fiscal quarter compared to $4.0 million in
the second fiscal quarter.  

     --  Churn, net of 30-day returns and an adjustment for
those customers not reasonably expected to pay, was 3.2% in the
third fiscal quarter, compared with 3.0% in the second fiscal
quarter of 2002.  

     --  Capital expenditures were $21.2 million, compared with
$37.3 million in the second fiscal quarter of 2002. Capital
expenditures included $2.0 million of capitalized interest in
the current quarter.  

AirGate PCS, Inc., including its subsidiaries, is a PCS
affiliate of Sprint with the exclusive right to sell PCS
products and services in territories within seven states located
in the southeastern and mid-western United States. The
territories include over 14.6 million residents in key markets
such as Grand Rapids, Michigan; Charleston, Columbia, and
Greenville-Spartanburg, South Carolina; Augusta and Savannah,
Georgia; Champaign-Urbana and Springfield, Illinois; and the
Quad Cities areas of Illinois and Iowa. AirGate PCS is among the
largest PCS affiliates of Sprint. As a PCS affiliate of Sprint,
AirGate PCS operates its own local portion of the Sprint network
to exclusively provide 100% digital, 100% PCS products and
services under the Sprint name in its territories.

Sprint operates the nation's largest all-digital, all-PCS
wireless network, already serving the majority of the nation's
metropolitan areas including more than 4,000 cities and
communities across the country. Sprint has licensed PCS coverage
of more than 280 million people in all 50 states, Puerto Rico
and the U.S. Virgin Islands. Sprint plans to launch its 3G
network nationwide this summer and expects to deliver faster
speeds and advanced applications on Sprint PCS 3G Phones and
devices. For more information on products and services, visit
www.sprint.com/mr. Sprint PCS is a wholly-owned tracking group
of Sprint Corporation trading on the NYSE under the symbol
"PCS." Sprint is a global communications company with more than
80,000 employees worldwide and $26 billion in annual revenues
and is widely recognized for developing, engineering and
deploying state-of-the art network technologies.

                         *    *    *

As reported in Troubled Company Reporter's June 11, 2002
edition, Standard & Poor's placed the single-'B'-minus corporate
credit rating on wireless carrier AirGate PCS on CreditWatch
with negative implications based on Standard & Poor's concern
that the company could be challenged to meet the minimum
subscriber covenant under the stand-alone senior credit facility
of its wholly owned operating subsidiary iPCS Wireless Inc. for
the quarter ending June 30, 2002. AirGate markets its services
under the Sprint brand primarily in lower-tiered markets in the
Southeast and Midwest.


ALLMERICA FIN'L: S&P Lowers Ratings on 2 Synthetic Deals to BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
synthetic transactions related to Allmerica Financial Corp. to
double-'B'-plus from triple-'B' and removed them from
CreditWatch negative.

The rating actions follow the lowering of Allmerica Financial
Corp.'s preferred stock rating on August 1, 2002.

The two transactions are swap-independent synthetic transactions
that are weak-linked to the underlying collateral, Allmerica
Financial Corp.'s preferred stock. The lowered ratings reflect
the credit quality of the underlying securities issued by AFC
Capital Trust I.

            Ratings Lowered and Removed From Creditwatch

                   PreferredPLUS Trust Series ALL-1
             $48 million trust certificates series ALL-1

                            Rating
               Class     To        From
               A         BB+       BBB/Watch Neg
               B         BB+       BBB/Watch Neg

                   CorTs Trust For AFC Capital Trust I
              $36 million Allmerica corporate-backed trust
             securities (CorTs) certificates series 2001-19

                            Rating
               Class     To        From
               A         BB+       BBB/Watch Neg


AMERICAN COMMERCIAL: Ernst & Young Replaces Andersen as Auditors
----------------------------------------------------------------
PricewaterhouseCoopers LLP was previously the principal
independent accounting firm for American Commercial Lines LLC.
On July 25, 2002, PwC's appointment as the principal independent
accounting firm for ACL was terminated and Ernst & Young LLP was
engaged as ACL's principal independent accounting firm. The
decision to change accountants was recommended by the Audit
Committee of the Board of Directors of ACL's parent company,
Danielson Holding Corporation, and the recommendation to change
accountants was accepted by the Board of Managers of ACL on July
25, 2002.

American Commercial Lines LLC is an integrated marine
transportation and service company operating approximately 5,100
barges and 200 towboats on the inland waterways of North and
South America. ACL transports more than 70 million tons of
freight annually. ACL also operates marine construction, repair
and service facilities and river terminals. The company is
headquartered in Jefferson, Indiana.

As previously reported, Moody's Investors Service rated American
Commercial Lines LLC's proposed $120 million 11-1/4% senior
unsecured notes due January 1, 2008 with a Caa2 rating and gave
its Caa3 rating to the proposed $116.5 million 12% payment-in-
kind senior subordinated notes due July 1, 2008. The PIK notes
are to be issued in exchange for a like amount of ACL's existing
rated Ca 10-1/4% senior unsecured notes due June 2008, as part
of the acquisition and recapitalization of ACL by Danielson
Holding Corporation (DHC-unrated). The rating on the 10-1/4%
notes will be withdrawn after completing the exhange.

At the same time, Moody's confirmed the company's existing
ratings:

      * $413 million senior secured facilities, consisting of
        $100 million revolving credit and $313 million of term
        loans - B3

      * Senior Implied Rating - Caa2

      * Issuer Rating - Ca

The rating actions are in response to the recapitalization
agreement between ACL and DHC whereby the latter will acquire
100% of the former for cash consideration of $25 million. The
money will partly be applied to ACL's existing bank loans
outstanding. ACL's preferred equity holders will receive cash of
$7 million while management will receive worth $1.7 million of
Danielson common stock.

The assigned ratings reflect ACL continued poor earnings and
still high pro forma leverage. Debt burden remains high. It is
expected that the company's increased lease financing of its
fleet equipment will provide ACT with needed covenant cushion
but the company will continue to be vulnerable to general
economic and business challenges.


AQUILA: Fitch Says Aborted Cogentrix Acquisition Frees Up Cash
--------------------------------------------------------------
On Friday, Aquila Inc., and Cogentrix Energy announced that the
parties have terminated their April agreement under which ILA
was to acquire Cogentrix.  From a credit perspective, the
termination of the purchase obligation will free up ILA's
available cash and unused bank facilities and provide a
meaningful liquidity cushion. ILA has agreed to compensate
Cogentrix for $5 million of expenses.

ILA's current liquidity position is sufficient relative to
scheduled upcoming payments. Cash on hand was approximately $207
million as of the first quarter 2002, and ILA has about $570
million of available capacity under its bank lines. ILA's credit
facilities consist of a 364-day $325 million tranche that
expires in April 2003, and a three-year $325 million tranche
that expires in April 2005. ILA recently completed a $280
million equity issuance and a $500 million senior unsecured note
offering, the proceeds of which were used to refinance $675
million of 2002 maturing debt. Other near-term uses of funds
include the $150 million repayment of a bridge loan related to
the acquisition of Midlands, due in December 2002, and $63
million of common stock dividends, to be paid in September and
December 2002.

Fitch will continue to monitor ILA's progress in winding down
its energy market exposures, reducing staff and operating
expenses, and monetizing non-core assets. ILA's future credit
profile will depend upon which ILA assets or businesses are
sold, which are retained, and the amount of debt leverage
remaining after the dispositions.

Fitch currently rates ILA as follows: senior unsecured 'BBB-',
preferred stock 'BB+', and commercial paper 'F3'. The Rating
Outlook is Stable.


AVIATION GENERAL: Posts Improved Performance for Second Quarter
---------------------------------------------------------------
Aviation General, Incorporated (NASDAQ:AVGE) reported revenue
for the second quarter ended June 30, 2002 of $4,729,309
compared to revenue of $3,219,008 for the second quarter ended
June 30, 2001.

Net income for the second quarter was $250,011 compared to a net
loss of $455,408 in the second quarter of 2001.

For the six months ended June 30, 2002, revenues were $6,234,130
compared to $5,858,768 for the first six months of 2001. Net
loss for the six months ended June 30, 2002 was $40,174 compared
to a net loss of $1,053,995 for the six month period the
previous year.

All elements of the company's business have strengthened. The
company believes its business model is unique in the general
aviation industry. The company plans to grow organically and
explore appropriate merger and acquisition possibilities as well
as opportunities with strategic partners and investors.

Aviation General, Incorporated is a publicly traded holding
company with two wholly owned subsidiaries, Commander Aircraft
Company and Strategic Jet Services, Inc.

Commander Aircraft Company -- http://www.commanderair.com--  
manufactures, markets and provides support services for its line
of single engine, high performance Commander aircraft, and
consulting, sales, brokerage acquisition, and refurbishment
services for all types of piston aircraft.

Strategic Jet Services, Inc. -- http://www.strategicjet.com--  
provides consulting, sales, brokerage, acquisition, and
refurbishment services for jet aircraft.

                          *    *    *

As reported in Troubled Company Reporter's July 24, 2002,
edition, Aviation General, Incorporated appealed Nasdaq Staff
determinations that the company was not in compliance with Rule
4310(C)(2) regarding minimum $2,000,000 net tangible assets or
the minimum $2,500,000 stockholders' equity requirements and
Rule 4310(C)(4) regarding minimum bid price requirements for
continued listing on the Nasdaq SmallCap Market.

The Company's common shares will continue to trade on the Nasdaq
Stock Market pending the outcome of the appeal the Company has
filed in accordance with the Nasdaq procedures, although there
can be no assurance Nasdaq will grant the Company's appeal for
continued listing.

The Company is in the process of securing additional capital.


BALLANTYNE OF OMAHA: Closes Xenotech Asset Sale to Ex-Manager
-------------------------------------------------------------
Ballantyne of Omaha, Inc. (OTC BB:BTNE), a leading manufacturer
of motion picture projection and long-range follow spotlights,
completed the sale of certain assets and business operations of
Xenotech Rental Corp., located in North Hollywood, California to
the former division Vice President and General Manager of the
unit for an undisclosed sum.

Prior to the sale, the Company had been restructuring the unit
as part of a broader effort to reduce operating expenses. In
2001, the unit generated approximately $700,000 of rental
revenues and contributed to the Company's operating loss during
the year. The Company will continue to manufacture, market and
sell a full range of Xenotech products, and will continue to
maintain a distribution relationship with the new unit, ARC
Light Efx, Inc.

Ballantyne of Omaha is a leading U.S. supplier of commercial
motion picture and specialty projection equipment utilized by
major theater chains and location-based entertainment providers.
The Company also manufactures, rents and leases specialty
entertainment lighting products used at top arenas, television
and motion picture production studios, theme parks and
architectural sites around the world.

                         *    *    *

As reported in July 22, 2002 edition of Troubled Company
Reporter, Ballantyne of Omaha announced that in the second
quarter, it anticipated recording a charge of approximately
$500,000 related to a bad debt associated with one of its
equipment distributors, Media Technology Source of Minnesota,
LLC, which filed for Chapter 7 bankruptcy protection on June 25,
2002. As a result of this charge and its expected impact on
EBITDA for the second quarter, Ballantyne announced that it
expects to be out of compliance with its revolving credit
facility and term loan with GE Capital Business Credit for
failing to maintain a fixed charge coverage ratio. As of June
30, 2002, the Company had no borrowings under the revolving
credit facility, approximately $1.6 million outstanding under
its term loan and approximately $3.5 million in cash.

The Company will report complete second quarter and six month
results middle of this month.


BUDGET GROUP: Wants to Obtain $100 Million Primary DIP Facility
---------------------------------------------------------------
For credit enhancement of the Postpetition Fleet Financing and
working capital purposes, Budget Group Inc., and its debtor-
affiliates seek the Court's authority to obtain access up to
$100,000,000 under a debtor-in-possession financing facility
from a syndicate of lenders led by General Electric Capital
Corporation.

On an interim basis, the Debtors seek the Court's permission to
obtain up to $71,000,000 for Postpetition Enhancement Letters of
Credit and up to $24,000,000 for working capital purposes.  The
Debtors also intend to provide adequate protection to the
Prepetition Secured Lenders and the Prepetition Agent by
granting priming liens to the lenders to secure repayment of
these superpriority claims.

William Johnson, Executive Vice President and Chief Financial
Officer of Budget Group Inc., relates that the Debtors and its
non-debtor subsidiaries will guaranty payment of the Primary DIP
Facility Obligations.

Mr. Johnson explains that the proposed Primary DIP Facility,
among other things, remain expressly subject to the resolution
of certain inter-creditor issues by and among the Primary
Postpetition Lenders, the Secondary DIP Facility Lenders, the
Postpetition Fleet Financing Facility Lenders and the
Prepetition Secured Lenders.

To secure all of the Debtors' obligations under the Primary DIP
Facility, the Primary Agent, on behalf of itself and the Primary
Postpetition Lenders, shall receive a fully perfected, valid
first priority security interest or liens in all of the existing
and after acquired real and personal, tangible and intangible,
assets of Borrower and each Guarantor as Collateral.

The Collateral will exclude:

  (a) avoidance actions under Chapter 5 of the Code, other than
      actions under section 549 of the Code,

  (b) each vehicle purchased by the Debtors which is financed by
      a person other than the Primary Postpetition Lenders aid
      which is acceptable to the Primary Agent, and

  (c) vehicles leased by TFFC to the Debtors under financing
      leases, any related rights or payments under manufacturer
      Repurchase Programs or other proceeds of vehicles, the
      Group IV Master Lease or any other Group IV Collateral.

The Collateral is subject to:

  (a) certain permitted liens described in the final Primary DIP
      Facility documents,

  (b) the Carve-Out,

  (c) security interests in and liens upon certain property of
      the Debtors granted to the Secondary DIP Facility Agent by
      the Bankruptcy Court order to secure the obligations under
      the Secondary DIP Facility, and

  (d) security interest in and liens upon certain property of
      the Debtors granted to the Prepetition Agent to provide
      adequate protection.

All Collateral and the Excluded Assets will be free and clear of
other liens, claims, and encumbrances, except for the claims
against, and security interests in and liens upon, the
Collateral which are held by the Prepetition Agent and the
Secondary DIP Facility Agent that are provided for or described
in the Secondary DIP Facility Order, and other encumbrances
acceptable to the Primary Agent, including, without limitation,
those granted:

  (i) to an Approved Lienholder, and

(ii) to finance companies providing insurance policy financing
      to the Debtors -- so long as such liens are limited to the
      unearned insurance premiums payable to the Debtors.

The Primary DIP Facility Obligations will have superpriority
over any and all other administrative expenses, subject only to
the Carve-Out and no other person shall have a superpriority
administrative expense claim which is pari passu with the claim
of the Primary DIP Facility Obligations.

GE Capital has agreed to recognize Ford Motor Credit Company and
TFFC as Approved Lienholders.

The Collateral will be subject to a reserve for accrued and
unpaid and future fees and disbursements incurred by the
Debtors' professionals and professionals for any statutory
committee appointed in the Debtors' Cases and allowed by the
Court.  The reserve amount shall not exceed $5,000,000 -- or a
lesser amount acceptable to the Debtors.  The Collateral will
also be subject for payment of fees pursuant to 28 USC Section
1930 and to the Clerk of Court.

The Debtors will bear the costs of the Primary DIP Facility.
(Budget Group Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1) are trading
at 14 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for  
real-time bond pricing.


BURLINGTON: Transfer of Mexican Joint Venture Interest Approved
---------------------------------------------------------------
Burlington Industries, Inc., BII Mexico Laundry Holding Co. and
Burlington Apparel Services Company -- the Debtors -- obtained
the Court's authority to transfer its interests in the Joint
Venture between BII and J.C. Viramontes International, Inc.

As previously reported, the remaining portion of the Joint
Venture, which consists of:

    (a) Grupo IGP-BGP S.de RL CV;

    (b) IGP-BGD S. de RL de CV; and

    (c) Servicios IGP-BGD, S. de RL de CV.,

is held by certain Mexican Entities, including J.C. Viramontes
International and one of Burlington Industries, Inc.'s non-
debtor affiliates, Burlington Morelos, S.A. de C.V.  The Joint
Venture was formed in January 1998 for the purpose of building
and operating a denim, garment and laundry processing facility
used to produce shelf-ready denim jeans.  The total production
capacity of the Denim Processing Facility is estimated at
approximately 10 million units per year.

Accordingly, the Debtors engaged in the Transaction to exit the
Joint Venture and rid their estates of a significant portion of
their liabilities.

In particular, the Term Sheet provides that:

   -- Burlington and BII will transfer all of their interest in
      the Joint Venture, including the U.S. Entities, to J.C.
      Viramontes International.

   -- Bank of America will reduce its claim against the Guaranty
      by $500,000 and the Guaranty will be limited to those
      obligations that existed as of the Petition Date.

   -- Burlington and J.C. Viramontes International will issue
      mutual waivers and releases from all obligations and
      liabilities under the Investment and Cooperation Agreement
      as amended, and related agreements.  The waiver, release
      and discharge does not extend:

      (a) to direct obligations of J.C. Viramontes International
          or Burlington in respect of the Joint Venture to
          parties other than the parties to the Joint Venture or
          the Joint Venture itself; and

      (b) the obligations of J.C. Viramontes International or
          Burlington to Bank of America in respect of their
          respective guarantees of the Joint Venture loan
          obligations.

   -- All of the prepetition receivables due from Burlington or
      Burlington Apparel to the Joint Venture for certain
      laundry operation services will be released.

   -- The Advances made by Burlington to the Joint Venture
      will be expunged.

   -- All of the Joint Venture's obligations or liabilities
      incurred, accrued, or arising from and after the Petition
      Date will be the responsibility of the Joint Venture
      without any guaranty or other liabilities or participation
      by Burlington or any of its affiliates, which obligations
      and liabilities will be assumed exclusively by J.C.
      Viramontes International.

   -- The Mexican employees' severance obligation of the Joint
      Venture that will result if the Mexican operation of the
      Joint Venture were closed and all ordinary course trade
      payables and obligations of the Joint Venture will be
      assumed and guaranteed by J.C. Viramontes International,
      with specific indemnification to Burlington. (Burlington
      Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)   

Burlington Industries' 7.25% bonds due 2005 (BRLG05USR1),
DebtTraders reports, are trading at 18 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BRLG05USR1
for real-time bond pricing.


CAMPBELL SOUP: Names Kelly Johnston as VP for Government Affairs
----------------------------------------------------------------
Campbell Soup Company (NYSE:CPB) has named Kelly Johnston as
Vice President - Government Affairs, effective September 3,
2002. Johnston most recently served as Executive Vice President
for Government Affairs and Communications at the National Food
Processors' Association. At Campbell, he will coordinate
federal, state, and local government relations in the U.S.,
oversee activities with the company's trade associations, and
coordinate similar activities for Campbell businesses throughout
the world. He will report to Ellen Kaden, Senior Vice President
for Law and Government Affairs.

"Kelly comes to us with a record of outstanding qualifications
and accomplishments," Kaden said. "His extensive experience in
government and his six years with one of our key industry
associations make Kelly a superb addition to the Campbell
leadership team. We are delighted he will be joining us."

Johnston joined NFPA in 1996, serving as the trade association's
chief federal and state legislative and political affairs
representative and chief media spokesperson. From 1995 to 1996,
he was Secretary of the U.S. Senate, the Senate's chief
legislative, financial and administrative officer. Johnston has
also served as Staff Director of the Senate Republican Policy
Committee, as Deputy Assistant Secretary, Public Affairs in the
U.S. Department of Transportation, and in various Senatorial and
Congressional committee functions, including Deputy Political
Director of the National Republican Senatorial Committee from
1989 to 1991.

Johnston commented, "Campbell Soup Company is one of the most
esteemed organizations in the food industry, and I am honored to
be joining their team. Campbell's integrity, professionalism and
great products are well known and respected in the government
relations arena."

Johnston earned his B.A. from the University of Science and Arts
of Oklahoma in 1976.

Campbell Soup Company is a global manufacturer and marketer of
high quality soup, sauces, beverages, biscuits, confectionery
and prepared food products. The company owns a portfolio of more
than 20 market-leading businesses each with more than $100
million in sales. They include "Campbell's" soups worldwide,
"Erasco" soups in Germany and "Liebig" soups in France,
"Pepperidge Farm" cookies and crackers, "V8" vegetable juices,
"V8 Splash" juice beverages, "Pace" Mexican sauces, "Prego"
Italian sauces, "Franco-American" canned pastas and gravies,
"Swanson" broths, "Homepride" sauces in the United Kingdom,
"Arnott's" biscuits in Australia and "Godiva" chocolates around
the world. The company also owns dry soup and sauce businesses
in Europe under the "Batchelors," "Oxo," "Lesieur," "Royco,"
"Liebig," "Heisse Tasse," "Bla Band" and "McDonnells" brands.
The company is ably supported by approximately 24,000 employees
worldwide. For more information on the company, visit Campbell's
Web site on the Internet at http://www.campbellsoup.com

                             *    *    *

At April 28, 2002, Campbell Soup's balance sheet shows $5.7
billion in assets and liabilities of just $80 million less than
that total.  The company routinely operates with a working
capital deficit and current liabilities exceed current assets by
about $1.3 billion at April 28, 2002.


CAPITOL COMMUNITIES: Boca First Discloses 64.6% Equity Stake
------------------------------------------------------------
On July 17, 2002, Boca First Capital, LLLP, a Florida limited
liability limited partnership acquired control of Capitol
Communities Corporation in an exchange of 16 million shares of
common stock of the Company held by Michael G. Todd, the
Company's president, and Prescott Investments, L.P., a Nevada
limited partnership beneficially owned by Mr. Todd for a
combined 33% interest in Boca First.  

Boca First is controlled by its general partner, Addison Capital
Group , a Nevada limited liability company. The manager/members
of Addison are Howard Bloom, an individual residing in the State
of Florida, Kenneth Richardson, an individual residing in the
State of Florida and Michael G. Todd, an individual residing in
the State of California.  

The Addison Managers, except for Mr. Bloom who's beneficial
interest in Boca First is held by MB 2002 LLC, a Florida limited
liability company, are limited partners of Boca First, as is
Prescott Investments L.P., and control Boca First, which now
owns 64.6% of the Company's issued shares.

By reason of the exchange of securities, the general partner of
Boca First, Addison, may be deemed to have voting power and/or
dispositive power with respect to the 16,000,000 shares of
common stock owned by Boca First.  There are no arrangements or
understandings among the members of the former and new control
groups and their associates with respect to the election of
directors; except that Boca First anticipates voting its
interest to increase the board from three to five members, and
voting for the board to be consisted of at least three outside
directors.  To the knowledge of the  Company, there are no
arrangements by the holders of the reported stock to pledge the
acquired  securities that would by operation result in a
subsequent change of control of the Company.

Capitol Communities Corporation, through its subsidiary, owns
approximately 1,000 acres of residential property in the master
planned community of Maumelle, Arkansas. Maumelle is a planned
city with about 12,000 residents. It is located directly across
the Arkansas River from Little Rock. Maumelle contains a full
complement of industrial and commercial development, parks,
lakes, green belts, jogging trails, and other lifestyle
amenities.

In its Form 10QSB dated May 15, 2002, filed with the Securities
and Exchange Commission, Capitol Communities' March 31, 2002
balance sheet shows a total shareholders' equity deficit of
about $3 million.


CELESTRON: Hilco Extends $6M Facility for Management Buyout Deal
----------------------------------------------------------------
Theodore L. Koenig, President and CEO of Hilco Capital LP,
announced the completion and funding of a $6 million credit
facility for the benefit of Celestron Acquisition, LLC.
Celestron obtained the Hilco Capital facility in order to
facilitate the acquisition by management of Celestron
International and to provide additional working capital.

Celestron, based in Torrance, CA, is a designer, manufacturer,
and distributor of precision optical products including
telescope accessories, spotting scopes, and binoculars. The
company was the first in the United States to commercially
manufacture advanced astronomical telescopes. Celestron's goal
is to manufacture the best telescopes in the world, and in the
forty years the company has been in business, they have earned
the reputation of providing affordable optical excellence. It is
this well-deserved reputation for excellence that makes
Celestron the first choice in telescopes around the world.
Recommended by amateurs, professionals and educators alike,
Celestron is the choice for reliability, exceptional performance
and customer satisfaction.

Mr. Koenig said, "This transaction was a perfect management
buyout opportunity. Celestron has been a leader in its industry
for over four decades. Its strong management team is perfectly
suited to take this company to the next level."

Joseph Lupica, CEO of Celestron Acquisition, LLC, said, "We
could not have done this transaction without Hilco Capital.
Their confidence in our team and their financial backing made
closing this deal possible. Our entire management team is
grateful for the opportunity they gave us to purchase a great
business with a long history."

Hilco Capital LP is an investment fund specializing in providing
junior secured debt, tranche B debt, mezzanine financing and
senior bridge financing throughout North America. Hilco Capital
focuses on a broad cross-section of manufacturers, distributors,
retailers, importers and service providers. Hilco Capital prides
itself on creating innovative and customized financing
solutions, its flexible investment approach, its ability to
execute difficult or complex transactions and its ability to
close and fund transactions quickly. To learn more about Hilco
Capital, visit http://www.hilcocapital.com


CENTRAL EUROPEAN MEDIA: Taps Deloitte to Replace Arthur Andersen
----------------------------------------------------------------
The Audit Committee of the Board of Directors of Central
European Media Enterprises Ltd., annually considers and
recommends to the Board the selection of its independent public
accountants. As recommended by the Company's Audit Committee,
the Board of Directors has decided to no longer engage Arthur
Andersen as the Company's independent public accountants and
engaged Deloitte & Touche to serve as the Company's independent
public accountants for 2002. Andersen's report for the year 2001
was modified on a going concern basis since in its cash flow
projections the Company was relying on cash flows that were
outside the Company management's direct control.

Central European Media Enterprises Ltd., is a TV broadcasting
company with leading stations located in Romania, Slovenia,
Slovakia and Ukraine. CME is traded on the Over the Counter
Bulletin Board under the ticker symbol "CETVF.OB".

The Company's December 31, 2001, balance sheet shows a total
shareholders' equity deficit of about $88 million.


CHART INDUSTRIES: May Sell More Assets to Meet Debt Covenants
-------------------------------------------------------------
Chart Industries, Inc., (NYSE:CTI) reported financial results
for its second quarter and six months ended June 30, 2002. Sales
for the second quarter of 2002 were $79.2 million, down seven
percent from $84.8 million for the corresponding quarter of
2001. Net income was $359,000 for the second quarter of 2002
compared with a net loss of $424,000 for the second quarter of
2001.

Effective January 1, 2002, the Company adopted the non-
amortization provisions of Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" (SFAS
No. 142). If such provisions were in effect for 2001, the
Company's second-quarter 2001 net income would have been
$944,000.

The Company recorded employee separation and plant closure costs
of $165,000 in the second quarter of 2002 for the previously
announced consolidation of its Denver-East facility, compared
with $1.5 million in the second quarter of 2001, which related
primarily to the consolidation of tank repair and rehabilitation
services and the resultant plant closures. The Company also had
a $0.9 million foreign currency loss in the second quarter of
2002 compared with a foreign currency gain of $0.4 million in
the second quarter of 2001. In addition, the Company realized a
$1.4 million gain on the sale of a product line during the
second quarter of 2002.

Sales for the first six months of 2002 decreased 16 percent to
$146.9 million from $173.8 million for the corresponding period
in 2001. For the first half of 2002, the net loss was $3.1
million compared with a net loss of $19,000 for the first half
of 2001. If the non-amortization provisions of SFAS No. 142 were
in effect for 2001, the Company's net income would have been
$2.6 million for the first half of 2001.

Commenting on Chart's results for the second quarter and first
half of 2002, Arthur S. Holmes, Chairman and Chief Executive
Officer, said, "As expected, our operating performance for the
second quarter of 2002 was significantly stronger than the first
quarter of 2002. Sales increased 17 percent and gross profit
increased 23 percent from the 2002 first-quarter results.
Performance by business segment was mixed but generally in line
with our earlier forecasts."

The strong order intake for the Process Systems and Equipment
segment in the previous two quarters provided the basis for
increased sales and gross margin contribution in the second
quarter of 2002. While 2002 second-quarter orders for this
segment were below the previous two quarters, they were actually
above planned levels. The PS&E businesses continue to actively
bid natural gas, ethylene and other large hydrocarbon projects
around the world. Increasing demand is anticipated for these
PS&E products in the second half of 2002.

Although up slightly from the first quarter of 2002, the
Distribution and Storage segment was below plan in orders, sales
and gross margin for the second quarter of 2002. Capital
spending reductions by industrial gas customers and the general
economic conditions in North America and Europe have caused
sales and order softness for bulk tanks, engineered tanks and
tank rehabilitation services. Low factory workload created
under-absorption of fixed overhead and reduced gross margin.

Commenting further, Mr. Holmes stated, "During the second
quarter of 2002, we continued to pursue several avenues for
reducing the Company's debt load and leverage ratio. Charges of
$1.0 million were incurred in the quarter to cover costs related
to our pursuit of investor capital and the completion of our
plant consolidation studies. These costs increased our selling,
general and administrative expenses for the quarter above the
levels expected going forward. In addition, we had $851,000 of
foreign currency losses, $480,000 of derivative contracts
valuation expense, and $165,000 of employee separation and plant
closure costs during the second quarter of 2002. On the positive
side, the Company sold its cryogenic pump line during the second
quarter of 2002, resulting in a $1.4 million gain. The net
impact of these charges and gain was a $1.1 million pre-tax
charge and represented a reduction of $0.03 per share in Chart's
net income of $0.01 per diluted share for the quarter. Without
these items, our net income would have been $0.04 per diluted
share."

Continuing, Mr. Holmes stated, "Looking ahead, I expect the
second half of 2002 to show a slight improvement in sales and
gross margin contribution compared to the second quarter of
2002. The Company has embarked on an aggressive manufacturing
facility reduction plan designed to consolidate excess capacity
and reduce overall operating costs. The first step of this plan
was the closure of the Company's Denver-East facility, which was
completed in the second quarter of 2002. The second step in this
plan, announced in July 2002, includes the closure of the
Company's Costa Mesa, California and Columbus, Ohio
manufacturing facilities. The expenses of closing these two
facilities of approximately $2.6 million will be incurred
primarily in the third and fourth quarters of 2002. We
anticipate annual savings of over $3 million and a recovery of
our one-time costs for the closure of these two facilities in
less than one year. Due to debt covenant considerations we will
soon request bank approval to proceed with the closures of
additional facilities that will involve the sale of significant
assets. If approved, the implementation of this step of the plan
in the second half of 2002 will result in further restructuring
expenses and will put some negative short-term pressure on
sales. The payback of our restructuring expenses from operating
improvements related to this step is expected to be about one
year. We also continue to work with several investor groups
regarding a potential significant equity investment in Chart,
including one group that is at an advanced stage of due
diligence, and are pursuing the sale of other assets that are
non-core in an effort to reduce debt."

Mr. Holmes concluded, "I remain optimistic that our markets will
support increased demand for Chart's products in the second half
of 2002. If so, we expect improved operating earnings each
quarter as the year progresses. The belt-tightening and cost
reductions both planned and underway will contribute to our
improved performance going forward."

               Second-Quarter 2002 Financial Results

Sales for the second quarter of 2002 were $79.2 million versus
$84.8 million for the second quarter of 2001, a decrease of $5.6
million, or 6.6 percent.

Primarily driven by a decrease in oil field equipment sales,
which were strong in the second quarter of 2001, D&S segment
sales in the second quarter of 2002 were down $8.2 million, or
24.1 percent, to $25.9 million. In addition, the sales of
standard cryogenic tanks were down because of the continued
industry-wide capital spending reduction by the large industrial
gas companies. The AT segment was also impacted by the slowdown
in industrial gas company spending as it experienced reductions
in vacuum-insulated pipe sales and in the sales of systems which
incorporate tanks, piping and other components. Partially
offsetting this decline was the relative strength of the
hydrocarbon-processing markets of the PS&E segment. The PS&E
segment had sales of $18.1 million in the second quarter of
2002, an increase of $5.7 million, or 45.5 percent, over the
second quarter of 2001.

Gross profit for the second quarter of 2002 was $20.6 million
versus $21.5 million for the second quarter of 2001, a decrease
of $0.9 million, or 4.4 percent. Gross profit margin for the
second quarter of 2002 was 26.0 percent versus 25.4 percent for
the second quarter of 2001. The increase in gross profit margin
was largely driven by better sales mix in PS&E and AT, offset by
low plant utilization in the D&S segment.

SG&A expense for the second quarter of 2002 was $15.0 million
versus $14.1 million for the second quarter of 2001. SG&A
expense as a percentage of sales was 19.0 percent for the second
quarter of 2002 versus 16.6 percent for the second quarter of
2001. Second-quarter 2001 SG&A expense reflected several
positive items, including a favorable financial settlement with
a tenant in Europe and positive experience on medical and
workers' compensation claims. SG&A expense in the second quarter
of 2002 included $1.0 million of expenses related to the
Company's pursuit of investor capital and the completion of
plant consolidation studies and unfavorable medical claims
experience of $0.5 million.

During the second quarter of 2002, the Company recorded $165,000
of employee separation and plant closure costs related to its
consolidation of the Denver-East facility. The Company incurred
$1.5 million of employee separation and plant closure costs in
the second quarter of 2001 related primarily to the Cryogenic
Services Division as the Ottawa Lake, Michigan, facility and two
smaller sites were closed. The 2001 closure costs primarily
included the write-off of leasehold improvements, equipment, and
severance costs. The Company also incurred $745,000 of inventory
charges in the second quarter of 2001 related to these sites,
which were included in cost of sales for the 2001 period.

The Company recorded $1.3 million and $2.5 million of goodwill
amortization in the second quarter and first six months of 2001,
respectively. Due to the Company's adoption of SFAS No. 142 in
the first quarter of 2002, the Company is no longer recording
goodwill amortization. During the second quarter of 2002, the
Company completed the transitional impairment tests of SFAS No.
142 and determined there were no indicators of impairment for
its reporting units with goodwill. As such, the Company will not
be required to record a cumulative effect charge as of January
1, 2002 for the adoption of SFAS No. 142.

The Company sold its cryogenic pump product line during the
second quarter of 2002 and recorded a gain of $1.4 million in
other income. Included in other expense in the second quarter of
2002 is $851,000 of foreign currency remeasurement losses,
versus $431,000 of foreign currency remeasurement gains in the
second quarter of 2001.

Net interest expense for the second quarter of 2002 was $4.7
million versus $5.9 million for the second quarter of 2001,
reflecting lower rates. The Company recorded $480,000 of
derivative contracts valuation expense in the second quarter of
2002, compared with $240,000 in the second quarter of 2001,
primarily related to a decline in the forward interest rate
yield curve. One of the Company's two interest rate collars
expired and was settled on June 28, 2002. The other collar
covering $38.2 million of the debt outstanding at June 30, 2002
is outstanding until March 2006. As of June 30, 2002, the
Company had borrowings of $263.5 million on its Credit Facility
and was in compliance with all related covenants.

Income tax expense of $234,000 for the second quarter of 2002
was recorded based on the Company's estimated annual effective
tax rate, which is consistent with the rate used in the first
quarter of 2002.

The Company's operations provided $385,000 of cash in the first
half of 2002 compared with $6.4 million used by operations in
the first half of 2001. Operating cash flow improved compared to
the prior year due to favorable progress billing terms on long-
term project contracts and tighter controls over disbursements
for payables.

Capital expenditures for the first half of 2002 were $1.9
million compared with $4.0 million in the first half of 2001.
The Company presently does not have any large capital projects
in process and anticipates approximately the same level of
capital expenditures experienced in the second quarter of 2002
for the remaining quarters of this year.

Pursuant to the Company's amended Credit Agreement, the Company
was required to issue to its lenders warrants at June 28, 2002
to purchase, in the aggregate, 513,559 shares of Chart Common
Stock at an exercise price of $2.425 per share. These warrants
have been valued at $0.7 million and will be amortized to
financing costs amortization expense over the remaining term of
the Company's Credit Agreement, which expires in March 2006.

                       Orders And Backlog

Chart's consolidated orders for the second quarter of 2002
totaled $77.2 million, compared with orders of $75.5 million for
the first quarter of 2002. Chart's consolidated firm order
backlog at June 30, 2002 was $68.8 million, a decrease of $5.0
million from $73.8 million at March 31, 2002.

AT orders for the second quarter of 2002 totaled $37.5 million,
compared with $33.3 million for the first quarter of 2002.
Second-quarter orders were strong in biomedical products. The
backlog in this segment has been adjusted by $3.2 million to
reflect the cancellation of an LNG fuel station for the city of
Santa Monica, California due to stringent bonding requirements
the Company was not willing to undertake.

In the D&S segment, orders for the second quarter of 2002
totaled $25.3 million, compared with $22.5 million for the first
quarter of 2002. These amounts included the recently announced
orders for LNG tanks for several Norwegian LNG terminals.

PS&E orders for the second quarter of 2002 totaled $14.5
million, compared with $19.7 million in the first quarter of
2002. PS&E backlog at June 30, 2002 was $28.1 million, down from
$31.7 million at March 31, 2002. The decrease in backlog is not
necessarily indicative of future quarters, as backlog levels in
this segment can fluctuate significantly due to the large size
of the projects awarded and the variability in timing of order
placement.

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

For more information on Chart Industries, Inc., visit the
Company's web site at http://www.chart-ind.com


COHO ENERGY: Court Okays Settlement Pact with Hicks Muse Units
--------------------------------------------------------------
Coho Energy, Inc., (OTCBB:CHOH) announced that the United States
Bankruptcy Court has approved the settlement agreement between
Coho and five affiliates of Hicks, Muse, Tate & Furst related to
litigation matters between such parties.

Under the settlement agreement, Hicks Muse agreed to pay Coho
$8.5 million and to dismiss its claims against Coho's former
officers under separate litigation. In exchange, Coho agreed to
release Hicks Muse in full from any and all claims under its
litigation against Hicks Muse and dismiss such litigation.

The $8.5 million settlement payment was paid into the bankruptcy
court registry in May 2002 because disputes are still pending
associated with pending contingency claims by third parties.
Additionally, pursuant to Coho's March 2000 plan of
reorganization, Coho is required to distribute 20% of the
proceeds of the settlement, after fees and expenses, to Coho
Energy shareholders as of February 7, 2000. It is expected that
Coho will receive proceeds, net of legal fees and the
shareholder distribution, ranging from a low of approximately
$2.8 million to a high of approximately $4.3 million depending
on the outcome of these pending contingency claims.

Coho's net proceeds from the settlement are an asset in its
bankruptcy proceeding. Such proceeds will be a portion of Coho's
assets that will be used to pay creditors pursuant to bankruptcy
court approval.


COMDISCO: Court Approves Stipulation with Transamerica Equipment
----------------------------------------------------------------
Comdisco, Inc. and its debtor-affiliates obtained Court approval
of their proposed stipulation with Transamerica Equipment
Financial Services Corporation granting Transamerica relief from
the automatic stay.

As previously reported, under the terms of two non-recourse
promissory notes, Transamerica loaned to the Debtors the
principal sums of $536,426 and $1,742,882.  The Debtors'
obligations under the Non-Recourse Notes were secured by the
terms of the Security Agreement, Chattel Mortgage and Assignment
of Lease.

Under the Security Agreement, the Debtors granted Transamerica a
security interest in certain assets, including certain rights
under a Master Lease Agreement and certain lease schedules
between the Debtors and ACT Manufacturing, Inc.  Among other
things, the Debtors:

   (i) collaterally assigned to Transamerica its rights under
       Schedules EG-13 and EG-14 to the Lease; and

  (ii) granted Transamerica a first priority lien against the
       equipment covered by the Transamerica Lease Schedules.

With the Court approval of the Stipulation, the relief from the
automatic stay will allow Transamerica to effect a transfer of
the Transamerica Lease Schedules and the Equipment. (Comdisco
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


CONSECO FINANCE: S&P Junks Various Related Transactions
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings to
triple-'C'-plus from single-'B'-minus on the lowest subordinate
classes of various series issued by Home Improvement Loan Trust,
Home Equity Loan Trust, Home Improvement & Home Equity Loan
Trust, Green Tree Financial Corp., Green Tree Recreational,
Equipment & Consumer Trust, Manufactured Housing Senior/Sub Pass
Thru Trust, Green Tree Financial Corp., and Conseco Finance
Corp.

Each of the certificates has credit support from a limited
guarantee provided by Conseco Finance Corp. and from monthly
excess spread. Without the use of the limited guarantee, the
monthly excess spread may be insufficient to protect against
losses over the life of the transactions. Therefore, the lowered
ratings are based on the lowering of Conseco Finance Corp.'s
long-term credit rating to triple-'C'-plus from single-'B'-minus
on Aug. 2, 2002.

The lowering of Conseco Finance Corp.'s rating is directly
linked to the rating action for Conseco Inc., which was
downgraded because of the immense pressure on Conseco Inc., and
its subsidiaries (collectively, Conseco Group) to meet the
substantial debt and interest payment obligations during the
next two years. Standard & Poor's believes Conseco Group will be
severely stretched to meet its financial obligations over the
next two years because of the continuing pressure on operational
earnings associated with the weak economy and the uncertainty
surrounding ongoing asset dispositions.

                         Ratings Lowered

                    Home Improvement Loan Trust

                                          Rating
          Series    Class              To        From
          1994-BI   B-2                CCC+      B-
          1994-CI   B-2                CCC+      B-
          1994-D    B-2                CCC+      B-
          1995-A    B                  CCC+      B-
          1995-F    B-2                CCC+      B-
          1996-A    B-2                CCC+      B-
          1996-B    (single class)     CCC+      B-
          1996-E    (single class)     CCC+      B-
          1999-E    B-2                CCC+      B-
     
             Home Improvement & Home Equity Loan Trust

                                          Rating
          Series    Class              To       From
          1996-C    HI:B-2 & HE:B-2    CCC+     B-
          1996-D    HI:B-2 & HE:B-2    CCC+     B-
          1996-F    HI:B-2 & HE:B-2    CCC+     B-
          1997-A    HI:B-2 & HE:B-2    CCC+     B-
          1997-C    HI B-2 & HE B-2    CCC+     B-
          1997-D    HI:B-2 & HE:B-2    CCC+     B-
          1997-E    HI:B-2 & HE:B-2    CCC+     B-
          1998-B    HI:B2 & HE:B2      CCC+     B-
     
                    Home Equity Loan Trust

                                   Rating
          Series    Class      To      From
          1997-B    B-2        CCC+    B-
          1998-C    B-2        CCC+    B-
          1999-C    B-2        CCC+    B-
          1999-D    B-2        CCC+    B-
     
     Green Tree Home Improvement & Home Equity Loan Trust

                                  Rating
          Series    Class     To      From
          1999-B    B-2       CCC+    B-
     
               Conseco Finance Home Loan Trust

                                  Rating
          Series    Class     To       From
          1999-F    B-2       CCC+     B-
          1999-G    B-2       CCC+     B-
     
            Conseco Finance Home Equity Loan Trust

                                   Rating
          Series    Class      To        From
          1999-H    B-2        CCC+      B-
          2000-A    BV-2       CCC+      B-
          2000-B    BF-2       CCC+      B-
          
     Green Tree Financial Corp. Manufactured Housing Trust

                                  Rating
          Series    Class     To       From
          1995-2    B-2       CCC+     B-
          1995-3    B-2       CCC+     B-
          1995-4    B-2       CCC+     B-
          1995-5    B-2       CCC+     B-
          1995-6    B-2       CCC+     B-
          1995-7    B-2       CCC+     B-
          1995-8    B-2       CCC+     B-
          1995-9    B-2       CCC+     B-
          1995-10   B-2       CCC+     B-
          1996-1    B-2       CCC+     B-
          1996-2    B-2       CCC+     B-
          1996-3    B-2       CCC+     B-
          1996-4    B-2       CCC+     B-
          1996-5    B-2       CCC+     B-
          1996-6    B-2       CCC+     B-
          1996-7    B-2       CCC+     B-
          1996-8    B-2       CCC+     B-
          1996-9    B-2       CCC+     B-
          1996-10   B-2       CCC+     B-
          1997-4    B-2       CCC+     B-
          1997-6    B-2       CCC+     B-
          1997-7    B-2       CCC+     B-
          1997-8    B-2       CCC+     B-
          1998-2    B-2       CCC+     B-
          1998-3    B-2       CCC+     B-
          1998-5    B-2       CCC+     B-
          1998-6    B-2       CCC+     B-
          1998-8    B-2       CCC+     B-
     
      Green Tree Recreational, Equipment & Consumer Trust

                                 Rating
          Series    Class      To       From
          1996-B    B          CCC+     B-
          1996-C    B          CCC+     B-
          1996-D    B          CCC+     B-
          1997-B    B          CCC+     B-
          1997-C    B          CCC+     B-
          1997-D    Certs      CCC+     B-
          1998-A    B-C        CCC+     B-
          1998-A    B-H        CCC+     B-
          1998-B    B-2        CCC+     B-
          1998-C    B-2        CCC+     B-
          1999-A    B-2        CCC+     B-
     
       Manufactured Housing Senior/Sub Pass Thru Trust

                               Rating
          Series    Class      To       From
          1999-1    B-2        CCC+     B-
          1999-2    B-2        CCC+     B-
          1999-3    B-2        CCC+     B-
          1999-4    B-2        CCC+     B-
          1999-5    B-2        CCC+     B-

    Manufactured Housing Contract Senior/Sub Pass Thru Trust

                               Rating
          Series    Class     To      From
          1999-6    B-2       CCC+    B-


CONSECO INC: Moody's Further Junks Senior Unsecured Note Ratings
----------------------------------------------------------------
The recent voluntary par-for-par exchange for Conseco, Inc.'s
senior unsecured notes spurs Moody's Investors Service to assign
ratings to six guaranteed senior notes and downgrade the old
senior notes not exchanged.

                          Ratings Assigned

                            Conseco, Inc.                    

      -- Caa2 Guaranteed Senior Notes

         includes:
     
         * 8.5% Guaranteed Senior Notes due 10/15/03

         * 6.4% Guaranteed Senior Notes due 2/10/04

         * 8.75% Guaranteed Senior Notes due 8/9/06

         * 6.8% Guaranteed Senior Notes due 6/15/07

         * 9.0% Guaranteed Senior Notes due 4/15/08

         * 10.75% Guaranteed Senior Notes due 6/15/09

                         Ratings Lowered    

                          Conseco, Inc.

      -- senior debt rating to Caa3 from Caa1;

      -- prospective senior debt shelf rating to (P)Caa3 from
         (P)Caa1,

      -- senior subordinated debt rating to Ca from Caa2;

      -- senior subordinated debt shelf rating to (P)Ca
         from (P)Caa2;

       Conseco Financing Trusts I, II, III, IV, V, VI, and VII

      -- preferred stock ratings to Ca from Caa3;

     Conseco Financing Trusts IV,V,VI, VII, VIII, IX, X and XII
   
      -- prospective preferred stock shelf ratings to (P)Ca from
         (P)Caa3;

                 Conseco Annuity Assurance Company

     -- insurance financial strength rating to B2 from Ba3;

                 Bankers Life and Casualty Company

     -- insurance financial strength rating to B2 from Ba3;

              Conseco Senior Health Insurance Company

     -- insurance financial strength rating to B2 from Ba3;

                  Conseco Health Insurance Company

     -- insurance financial strength rating to B2 from Ba3;

               Conseco Direct Life Insurance Company

     -- insurance financial strength rating to B2 from Ba3;

                  Conseco Life Insurance Company

     -- insurance financial strength rating to B2 from Ba3;

               Washington National Insurance Company

     -- insurance financial strength rating to B2 from Ba3;

                        Conseco Finance Corp.

     -- senior debt rating to Caa3 from Caa1; prospective senior
        debt shelf rating to (P)Caa3 from (P)Caa1; and
        prospective subordinated debt shelf rating to (P) Ca
        from (P) Caa2;

              GT Capital Trusts I, II, III, and IV

     -- preferred shelf ratings to (P) Ca from (P)Caa3

                       Rating on Review

                Conseco Variable Insurance Company

      -- Ba3 insurance financial strength rating -- pending the
         completion of the announced sale of the company.
     
Preferred stock and prospective preferred stock ratings were
confirmed at Ca and (P) Ca.

Ratings outlook remains negative.

The ratings reflect the uncertainty clouding the Company's
ability to improve liquidity and comply with existing bank loan
covenants. Moody's believes that Conseco might not be able to
pay its principal payment due October 15, 2002 on time.

Conseco Inc., headquartered in Carmel, Indiana, operates in
insurance and fee based operations through its life and health
insurance companies, and finance operations through Conseco
Finance. The company posted consolidated GAAP assets of $61.5
billion and shareholders' equity of $4.6 billion as of March 31,
2002.

Conseco Inc.'s 10.75% bonds due 2008 (CNC08USR1) are trading at
27 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC08USR1for  
real-time bond pricing.


CORNERSTONE PROPANE: Preparing to Commence Chapter 11 Proceeding
----------------------------------------------------------------
CornerStone Propane Partners, L.P. (NYSE: CNO), is continuing to
review its financial restructuring and strategic options,
including the commencement of a Chapter 11 case under the United
States Bankruptcy Code.  CornerStone has begun to prepare to
commence a Chapter 11 case under the United States Bankruptcy
Code.  Consistent with this review process, and in an effort to
conserve its available liquidity, CornerStone has elected not to
make the aggregate approximate $5.6 million interest payment on
three classes of its Senior Secured Notes which was due on July
31, 2002.  As previously announced, the note agreements
governing these Senior Secured Notes contain a five (5) business
day grace period with respect to the interest payments before
the failure to make the interest payments would constitute an
event of default under the note agreements.  CornerStone's
decision not to make these interest payments will constitute an
event of default under the note agreements.

CornerStone's decision follows internal analysis and
conversations with Credit Suisse First Boston, the lead lender
under its working capital facility, and NorthWestern
Corporation, the guarantor under its working capital facility,
which led to the determination that CornerStone is unable to
satisfy the conditions to making further drawings under its
working capital facility.  NorthWestern is CornerStone's largest
unit holder, and CornerStone Propane GP, Inc., a wholly owned
subsidiary of NorthWestern, manages the operations of
CornerStone.  In order to address its immediate liquidity needs,
CornerStone has entered into a loan agreement with SYN Inc., its
special general partner, whereby SYN has lent CornerStone
$3.0 million.  SYN is owned 82.5% by NorthWestern.
Representatives of SYN have stated their willingness to make
additional loans, on short notice, to CornerStone to address its
immediate liquidity needs on a short-term basis, assuming that
SYN is satisfied with the progress made in Cornerstone's review
of potential restructuring and strategic options and its efforts
in that regard.  CornerStone has been informed by
representatives of SYN, that SYN has cash and liquid securities
of approximately $23 million (after taking into account the $3.0
million loan to CornerStone).

CornerStone has made and, subject to applicable law or other
restrictions, intends to continue to make timely payments to all
suppliers.  CornerStone remains committed to continuing to
service it customers without disruption.

CornerStone Propane Partners, L.P., is a master limited
partnership.  The Partnership is one of the nation's largest
retail propane marketers, serving approximately 440,000
customers in more than 30 states.  For more information, please
visit our Web site at http://www.cornerstonepropane.com


DADE BEHRING: Wants to Employ Ordinary Course Professionals
-----------------------------------------------------------
Dade Behring, Holdings, Inc., and its debtor-affiliates, with
the support of the Administrative Agent and the Noteholders
Committee, ask the U.S. Bankruptcy Court for the Northern
District of Illinois to continue employing the professionals
they utilize in the ordinary course of their businesses.

The Debtors relate that in the day-to-day operation, their
employees regularly call upon certain professionals, including
attorneys; accountants; actuaries; environmental, financial,
regulatory and tax consultants; and other professionals, to
assist them in carrying out their assigned responsibilities.

Because of the magnitude and breadth of the Debtors' business
and the geographic diversity of the professionals retained by
the Debtors, they point out that it would be costly, time
consuming and cumbersome to require each Ordinary Course
Professional to apply for employment and compensation from the
Bankruptcy Court. The Debtors also submit that the uninterrupted
service of the Ordinary Course Professionals is vital to the
Debtors' continuing operations and their ability to reorganize.

The Debtors wish to pay the Ordinary Course Professionals, 100%,
of the interim fees and disbursements upon submission of an
appropriate invoice, provided that this do not exceed $50,000
per month per professional, and $600,000 per month for all
Professionals. This amount is based upon the present monthly
average of all Ordinary Course Professionals utilized by the
Debtors.

The Debtors comprise the sixth largest manufacturer and
distributor of in vitro diagnostic (IVD) products in the world.
The Debtors primarily sell diagnostic systems that include
instruments, reagents, consumables, service and date management
systems. Of the total estimated $20 billion annual global IVD
market, the Debtors serve a $12 billion segment targeted
primarily at clinical laboratories. The Company filed for
chapter 11 protection on August 1, 2002. James Sprayregen, Esq.,
at Kirkland & Ellis represents the Debtors in their
restructuring efforts.


DERBY CYCLE: Seeks Delay Entry of Final Decree Until January 27
---------------------------------------------------------------
The Derby Cycle Corporation moves the U.S. Bankruptcy Court for
the District of Delaware to delay entering a final decree under
Rule 5009-1(a) of the Local Rules of Bankruptcy Practice and
Procedure, to January 27, 2003.

The Debtor tells the Court that since the Confirmation Date, it
has worked diligently in an effort to resolve each of the proofs
of claim and interest filed in this chapter 11 case. To date,
the Debtor has filed its first omnibus objection to claims.

The Debtor believes it will file a second omnibus objection, and
it needs more time to complete its review of all remaining
claims. The Debtor believes that delaying entry of a final
decree will provide adequate time to "fully administer" its
estate and, where possible, consensually resolve disputed
claims.

The Derby Cycle Corporation is a leading designer, manufacturer
and marketer of bicycles and parts and accessories via numerous
operating companies located worldwide. The Company filed for
chapter 11 protection on August 15, 2001. Jeffrey D. Saferstein,
Esq., Andrew N. Rosenberg, Esq., and Heather D. McAm, Esq., at
Paul, Weiss, Rifkind, Wharton & Garrison and Pauline K. Morgan,
Esq., Michael R. Nestor, Esq., at Young, Conoway, Stragatt &
Taylor, LLP represent the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $162,114,000 in assets and $207,207,000 in debts.


EARTHCARE COMPANY: BDO Seidman Bows Out as Independent Auditors
---------------------------------------------------------------
On July 25, 2002, BDO Seidman, LLP resigned as the independent
accountants for EarthCare Company. As BDO resigned, their action
was neither approved nor recommended by the Company's Board of
Directors.

As a result of EarthCare Company's filing for bankruptcy on
April 11, 2002 and the probable settlement of the affairs of the
EarthCare estate, EarthCare Company does not intend to seek new
independent accountants.

EarthCare is changing its hazardous waste diet from liquids to
solids. The company plans to sell its nonhazardous liquid waste
operations along with its oil and oil-polluted water treatment
operations to focus on its nonhazardous solid waste operations.
EarthCare serves commercial, residential, and industrial
customers in Florida where it collects, hauls, and disposes of
solid waste. The company is expanding its solid waste operations
by acquiring small solid waste collection companies in Florida.


ENCORE SOFTWARE: Navarre Corporation Acquires Primary Assets
------------------------------------------------------------
Navarre Corporation (Nasdaq: NAVR), a leading distributor of a
broad range of home entertainment and multimedia software
products, has acquired the primary assets of Encore Software,
Inc., from the United States Bankruptcy Court for the Central
District of California.  

Encore is the nation's leading privately held PC entertainment
and education publisher, with diversified proprieties and
licenses including Sesame Street(R), Dragon Tales(TM), National
Geographic(R), Kaplan and Fun & Skills Packs, among others.  
Encore's portfolio also includes console and handheld properties
such as Dragon's Lair 3D(TM) and Daredevil(TM) for next-
generation console platforms.

Under the terms of the transaction, Navarre acquired the assets
of Encore Software for cash.  The transaction will not result in
any share dilution, nor will Navarre assume any of Encore's
liabilities.  Mike Bell, Encore's CEO and Founder, will continue
in his duties overseeing Encore's day-to-day operations.  
Navarre Corporation expects this acquisition to be accretive to
its earnings per share this year.

Eric Paulson, Navarre's President and Chief Executive Officer,
stated, "Over the past year Navarre has focused on a strategy to
augment its core distribution operations in key entertainment
segments with both acquired and owned content.  The acquisition
of Encore supports this strategy, while also serving to
strengthen our position in the interactive video game
marketplace. Industry analysts are currently predicting a 30%
compound annual growth rate for the inter-active video game
industry from 2001-2005, as new technology platforms such as
PlayStation(R)2 and the Xbox(TM) video game system gain broad
consumer acceptance.

Mr. Paulson, continued, "With the acquisition of Encore, we can
more actively participate in the high-growth video game
industry.  Additionally, our participation in this industry
enables us to further extend our direct distribution
relationships with large retailers generating solid sell-through
of Encore titles."

Mike Bell, Chief Executive Officer of Encore, stated, "Encore
has enjoyed a successful working relationship with Navarre and
its senior management team for almost a decade.  As a result of
our lengthy working relationship, Navarre's executive team has
an in-depth understanding of our operations.  We are excited
about this new relationship, and the opportunities to leverage
both of our strengths in our mission to become a leading
interactive publisher."

Encore is a leading interactive publisher in the videogame and
PC CD-ROM markets.  Earlier this year, the company shipped
Circus Maximus, and future releases include such highly
anticipated next-gen console games as Dragon's Lair 3D and
Daredevil.  As a leading privately held PC entertainment and
education publisher, Encore also offers a broad range of titles
under internationally recognized properties such as Sesame
Street, Dragon Tales, National Geographic and Kaplan.  Encore
products are sold in over 35,000 stores nationwide, and in major
international markets.  The company has been recognized in the
past two years by Inc magazine as one of America's 500 fastest
growing private companies.  For more information, visit
http://www.encoresoftware.com  

Navarre Corporation (Nasdaq: NAVR) provides distribution and
related services to leading developers and retailers of home
entertainment content, including PC software, audio and video
titles, and interactive games. Navarre's client-specific
delivery systems allow its product lines to be seamlessly
distributed to over 11,000 retail locations throughout North
America.  The Company provides such value-added services as
inventory management; web-based ordering and fulfillment;
marketing; and EDI customer and vendor interface.  Since its
founding in 1983, Navarre has built a broad base of partnerships
with such leading retailers as CompUSA, Best Buy, The Musicland
Group, Transworld, Sam's Club, Circuit City, and Costco, as well
as content developers including Microsoft, Apple, Symantec, and
independent record labels including Cleopatra and Riviera
Entertainment.  For more information, please visit the Company's
Web site at http://www.navarre.com


ENRON CORP: Court Approves Stipulation with El Paso Global
----------------------------------------------------------
To do away with the cost and expense of litigation, the parties
stipulate that:

    (a) Enron Broadband will determine on or before October 8,
        2002, whether to assume or reject the Agreement under
        Section 365 of the Bankruptcy Code, and, in the event
        that Enron Broadband decides to assume the Agreements,
        Enron Broadband will file a motion to assume such
        Agreements on or before the agreed date;

    (b) In the event that on or before October 8, 2002, Enron
        Broadband fails to:

         (i) file a motion to assume the Agreement, or

        (ii) file a notice of rejection of the Agreement in
             accordance with the procedures established by the
             January 9 Order,

        the Agreements shall be deemed rejected as of October 8,
        2002; provided, however, if Enron Broadband files an
        serves a Notice of Rejection of the Agreements prior to
        October 8, 2002, the applicable date of rejection will
        be the earlier to occur of October 8, 2002 or the
        effective rejection date under the Notice of Rejection;

    (c) Nothing in this Stipulation shall limit or prejudice
        Enron Broadband's right to seek an extension of the
        October 8, 2002 deadline or El Paso's right to oppose
        the request for extension; and

    (d) except as expressly provided by this Stipulation, the
        parties reserve their respective rights with respect to
        the Agreements or the Motion.

Judge Gonzalez puts his stamp of approval on the Stipulation.

                         *    *    *

As previously reported, El Paso Global Networks Company and
Enron Broadband are parties to an agreement under which El Paso
granted Enron Broadband an indefeasible right to use certain
fibers in a fiber optic cable system that will connect Los
Angeles, California to Houston, Texas.

The 20-year agreement says that Enron Broadband will pay El Paso
$17,280,000 when the fibers are delivered and accepted and will
further pay $432,000 in annual maintenance fees. (Enron
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ENRON CORP: Resolves Dispute Over Contracts with Eli Lilly
----------------------------------------------------------
Enron Corporation, its debtor-affiliates, and Eli Lilly agreed
to resolve the Motion through a stipulation.  As approved by
Judge Gonzalez on July 11, 2002, the Stipulation contains these
terms:

  (i) the Project, Operations, Maintenance, and Repair
      Management Agreement is deemed rejected;

(ii) each of the other Contracts are deemed rejected to the
      extent that the Contracts do not automatically terminate
      by their own terms upon termination of the Project,
      Operations, Maintenance, and Repair Management Agreement;

(iii) the automatic stay is lifted to the extent necessary to
      allow setoff of Hesten's $727,289 prepetition claim
      against the Debtors and the Debtors' $3,165,949
      prepetition claim resulting in a $2,438,660 net claim of
      the Debtors against Hesten; and

(iv) Lilly and the Debtors agree to promptly dissolve Hesten
      and terminate the LLC Agreement under the terms of the LLC
      Agreement, and to make final distributions in accordance
      with the LLC Agreement and the Delaware Limited Liability
      Company Act.  However, the LLC Agreement shall not
      terminate until Hesten has been dissolved and final
      distributions have been made under the LLC Agreement and
      the Delaware Limited Liability Company Act.

Eli Lilly and Company is a leading global manufacturer of
various pharmaceutical products including prescription drugs and
medications.  Lilly is also a global leader in the research and
development of products related to the diagnosis, prevention and
treatment of diseases in humans as well as animals.

As previously reported, the Debtors contracted to perform a
variety of services at some of Lilly's facilities including,
among other things, bill management services, operation,
maintenance and repair services, and various project related
services, supply and management of natural gas and electricity
deliveries, as well as commodity and bill management services.  

Pursuant to a certain Limited Liability Company Agreement, LE
Hesten Energy LLC was formed as a limited liability company
owned by Enron Energy Service Operations Inc. and Lilly for the
purposes of providing Bundled Services to the five largest
Facilities.  Under the Energy Services Agreement, Hesten also
agreed to provide energy services to the Facilities. Hesten
subcontracted its responsibilities under the ESA to EESO
pursuant to the Project, Operations, Maintenance, and Repair
Management Agreement.

Shortly before the Petition Date, the Debtors informed Lilly
that it would no longer provide certain services to the company.  
From November 30, 2001 through the present, the Debtors failed
to perform various services at the Facilities.  This forced
Lilly to institute "stop-gap" measures and engaged in short-term
alternatives in order to provide for a reliable source of
Bundled Services.  As a result, Lilly incurred and continues to
incur approximately $100,000 per month in incremental expenses
for maintaining these contingency plans.

Lilly was frustrated by the Debtors' failure to reject these
Contracts related to their Agreements:

    -- LLC Agreement;

    -- POMR Agreement;

    -- Head Lease Agreement dated February 23, 2001, pursuant to
       which EESO agreed to finance certain of Lilly's projects;

    -- Employee Secondment Agreement dated February 23, 2001,
       pursuant to which EESO seconded to Hesten an account
       manager to serve as a liaison among EESO, Lilly and
       Hesten;

    -- Labor Transition Agreement dated February 23, 2001,
       pursuant to which EESO would employ some of Lilly's
       employees; and

    -- Letter of Agreement captioned, Bill Management Services
       for Certain Lilly Facilities, dated February 20, 2001,
       pursuant to which EESO agreed to provide bill management
       services for some of Lilly's Facilities. (Enron
       Bankruptcy News, Issue No. 38; Bankruptcy Creditors'
       Service, Inc., 609/392-0900)

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


EXIDE TECHNOLOGIES: Committee Wins Nod to Hire Pepper Hamilton
--------------------------------------------------------------
Exide Technologies' Official Committee of Unsecured Creditors
obtained permission from the Court, pursuant to Section 1103(a)
of Title 11 of the United States Code and Rule 2014 of the
Federal Rules of Bankruptcy Procedure, to retain Pepper Hamilton
LLP as its co-counsel in the Debtors' Chapter 11 cases, nunc pro
tunc to April 29, 2002.

The Firm will provide the Committee, among other things, the
following assistance:

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

B. to the extent requested by the Committee and Akin Gump,
   assist and advise the Committee in its consultations with the
   Debtors relative to the administration of these Cases;

C. to the extent requested by the Committee and Akin Gump,
   assist the Committee's investigation of the acts, conduct,
   assets, liabilities and financial condition of the Debtors
   and other parties involved with the Debtors, and of the
   operation of the Debtors' businesses;

D. to the extent requested by the Committee and Akin Gump,
   assist the Committee in analyzing intercompany transactions
   and issues relating to the Debtors' non-debtor affiliates;

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

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

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

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

I. to the extent requested by the Committee and Akin Gump,
   perform such other services as may be required and are deemed
   to be in the interests of the Committee in accordance with
   the Committee's powers and duties as set forth in the
   Bankruptcy Code.

The Firm will charge for its legal services on an hourly basis
in accordance with its ordinary and customary hourly rates in
effect on the date such services are rendered. The current
hourly rates charged by the Firm for professionals and
paraprofessionals employed in its offices are provided below:

     Billing Category                    Range
     ---------------------------       ---------
     Partners                          $375-$415
     Special Counsel and Counsel       $250-$300
     Associates                        $150-$245
     Paraprofessionals                 $ 60-$135

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

     David B. Stratton    (Partner)        - $415
     David M. Fournier    (Partner)        - $375
     Adam Hiller          (Associate)      - $225
     Aaron Garber         (Associate)      - $225
     William Firth        (Associate)      - $150
     J. Helen Cook        (paralegal)      - $135
     David Smith          (document clerk) - $ 35
(Exide Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Exide Technologies' 10% bonds due 2005 (EXDT05USR1), DebtTraders
reports, are trading at 15 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDT05USR1
for real-time bond pricing.


FLEMING COS.: Will Service Shipley Store's Distribution Needs
-------------------------------------------------------------
Fleming (NYSE: FLM) has been selected by Shipley Stores, a
convenience-store operator of the 34 store chain, operating
under the name of Tom's convenience stores and Cigarette
Cellars.  The stores operate in Central and Eastern
Pennsylvania.  The stores will be supplied by Fleming's
convenience-store distribution center in Altoona, Pennsylvania.

"We take great pride in Shipley Stores choosing Fleming to
service its distribution needs," said Michael Klein, Division
President, Altoona Division. "We look forward to supporting
Shipley Stores' success by providing the right products at the
right price and at the right time."

"Fleming's strong distribution expertise and in-store
assistance, in areas such as planograms and merchandising will
support our operation's goals," said Bret Hoffmaster, President
of Shipley Stores.  "Fleming offered us a compelling solution
that focused their size and scale as a national convenience-
store distributor on providing us best-of-class efficiencies in
merchandising and distribution."

With its national, multi-tier supply chain network, Fleming is
the #1 supplier of consumer package goods to retailers of all
sizes and formats in the United States.  Fleming serves nearly
50,000 retail locations, including supermarkets, convenience
stores, supercenters, discount stores, concessions, limited
assortment, drug, specialty, casinos, gift shops, military
commissaries and exchanges, and more.  In addition, Fleming is
the nation's leading distributor to Hispanic markets.  Fleming
also has a growing presence in value retailing, operating 110
stores under the Food4Less and Rainbow Foods banners and 17
stores under the Yes!Less banner.  To learn more about Fleming,
visit its Web site at http://www.fleming.com

                         *    *    *

As reported in Troubled Company Reporter's June 24, 2002,
edition, Standard & Poor's affirmed its double-'B' corporate
credit rating on Fleming Cos. Inc., and raised its rating on
Core-Mark International Inc.'s subordinated debt to single-'B'-
plus (Fleming's level) from single-'B' following the completion
of Fleming's acquisition of Core-Mark.

The subordinated debt rating on Core-Mark was also removed from
CreditWatch and the double-'B'-minus corporate credit rating on
the company was withdrawn. The outlook on Fleming is negative.
Lewisville, Texas-based Fleming had $2.2 billion total debt
outstanding as of April 20, 2002.


GLENOIT CORP: Obtains Exclusivity Extension Until September 10
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Glenoit Corporation and its debtor-affiliates obtained
an extension of their exclusive periods.  The Court gives the
Debtors, until September 10, 2002, the exclusive right to file
their plan of reorganization and solicit acceptances of that
Plan.

Headquartered in New York City, Glenoit Corporation is a
domestic manufacturer of small rugs, knit pile fabrics and an
importer and manufacturer of home products such as quilts,
comforters, shams, shower curtains, table linens, pillows and
pillowcases with operations in North Carolina, Ohio, California
and Canada. The Company filed for Chapter 11 protection on
August 8, 2000. Joel A. Waite, Esq., at Young, Conaway, Stargatt
& Taylor represents the Debtors in their restructuring efforts.


GUNTHER INT'L: Sets Annual Shareholders' Meeting for Sept. 12
-------------------------------------------------------------
The 2002 Annual Meeting of Stockholders of Gunther International
Ltd. will be held at the corporate office of the Company, One
Winnenden Road, Norwich, Connecticut, on Thursday, September 12,
2002 at 10:30 a.m., local time, for the following purposes:

      (1) To elect a Board of eight directors to serve until the
next Annual Meeting of Stockholders or until their respective
successors shall be elected and qualified;

      (2) To approve the Gunther International Ltd. 2002 Stock
Option Plan;

      (3) To approve an amendment to the Gunther International
Ltd. Directors' Equity Plan; and

      (4) To act upon such other matters as may properly come
before the meeting or any postponements or adjournments thereof.

The Board of Directors has fixed the close of business on July
19, 2002 as the record date for the determination of the
stockholders entitled to notice of and to vote at the Annual
Meeting.

Gunther International makes electronic publishing, mailing, and
billing systems that automate the assembly of printed documents.
Its EP-4000 Electronic Publishing System will staple, bind,
match, and insert documents into envelopes for distribution.
Primary customers include large insurance companies such as
Allstate, Metropolitan Life, and Mutual of Omaha. Gunther also
serves the government, retail, and service bureau sectors.
Director Gerald Newman and the estate of former chairman Harold
Geneen, through Park Investment Partners, collectively own
almost 40% of the company.

At March 31, 2002, Gunther's balance sheet shows a working
capital deficit of about $1 million.


HAWK CORP: S&P Keeping Watch on B- Rating After S-4/A Filing
------------------------------------------------------------
Standard & Poor's Ratings Services placed its single-'B'-minus
corporate credit rating on Hawk Corp., on CreditWatch with
positive implications following the company's S-4/A filing with
the SEC, which indicates the company is in the process of
exchanging its senior unsecured notes and will be obtaining a
new bank credit facility in the near term.

The CreditWatch listing affects about $100 million in
outstanding debt securities. The Cleveland, Ohio-based company
is a highly engineered components manufacturer.

"As a result of Hawk's proposed transactions, the company's
near-term refinancing risk should be eliminated and the company
should have adequate liquidity to help finance its operating
needs", said Standard & Poor's credit analyst Eric Ballantine.

The S-4/A filing states that Hawk will exchange its current $65
million senior unsecured notes due December 2003, for similar
securities maturing in 2006. Additionally, the company will
obtain a new $53 million bank credit facility (maturing in 2006)
which replaces the company's current facility, which matures in
March of 2003. Standard & Poor's views both of these
transactions favorably because they reduce Hawk's near-term
refinancing risk, reduce scheduled debt amortization payments,
and provide the company with additional liquidity. Should the
transaction be completed as proposed, Hawk's corporate credit
rating would be raised to single-'B', its senior secured bank
loan rating would be rated single-'B'-plus, and its senior
unsecured rating would be rated single-'B'-minus.

Standard & Poor's will continue to monitor the progress of the
proposed transaction. Following its completion, Standard &
Poor's will remove the ratings from CreditWatch.


ITC DELTACOM: US Trustee Will Convene Creditors' Meeting Friday
---------------------------------------------------------------
The United States Trustee will convene a meeting of ITC
DeltaCom, Inc.'s creditors on August 9, 2002 at 10:00 a.m., Room
2112, 2nd Floor, J. Caleb Boggs Federal Building, 844 King
Street, Wilmington Delaware 19801.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

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

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


INFINITE GROUP: Auditors Doubt Ability to Continue Operations
-------------------------------------------------------------
Infinite Group, Inc., operates through two business segments,
its Laser Group and its PhotonicsGroup.

Revenues from the Laser Group for the quarter ended March 31,
2002 were $1,529,046 (69.3% of total quarterly continuing
revenues) compared to $1,961,200 for the quarter ended March 31,
2001. Revenues related to the Photonics Group in the quarter
ended March 31, 2002 were $678,077 (30.7% of total quarterly
continuing revenues) compared to $108,013. Each business segment
is essential to Infinite's overall growth. The Laser Group has
been in business for over twenty years, while the Photonics
Group started just over a year ago. Research and development
performed in the Laser Group led to the original patent on the
diode technology that became the core business of the Photonics
Group. Infinite expects the Laser Group to grow at the rate of
the general economy, and for the Photonics Group to grow from
approximately $1.2 million in annual revenues in 2001 to in
excess of approximately $5.7 million of revenues from the DARPA
contract in 2002. It anticipates developing diode lasers for
defense, telecommunications, materials processing, laser
printers, and medical applications and anticipates that the
Photonics Group will continue to grow much more rapidly than the
Laser Group. In general, the Company expects most commercial and
governmental customers to pay for contract research and
development in order to design diodes specific to their
application in terms of wattage output needed and other
characteristics.

During 2001, Infinite also had a Plastics Group, which consisted
of two subsidiaries, Express Pattern, Inc. and Osley & Whitney,
Inc.  The Plastics Group provided rapid prototyping services and
proprietary mold building services. In November 2001 and
December 2001, the board of directors determined to dispose of
O&W and EP. The Company plan consisted of shutting down the
operations of O&W and selling the assets of EP. The O&W
equipment was sold at auction in March 2002. The O&W land and
building were sold at auction on July 16, 2002 for $650,000. A
closing of this sale is scheduled for August 8, 2002. This
closing will complete the liquidation of the O&W assets,
resulting in a net obligation to the secured lender, including
accrued interest and closing expenses, of approximately
$200,000. The obligation of O&W to the secured lender was
guaranteed by Infinite.  Accordingly,  Infinite will assume that
remaining outstanding balance. The secured lender has
tentatively agreed with Infinite to convert the balance into a
term loan amortizing monthly based upon a seven year
amortization schedule, with a balloon payment due eighteen
months from issuance. It is anticipated that this note will be
executed and delivered following the closing of the sale of the
land and building.

On March 14, 2002, the Company sold the net assets of its
Express Pattern subsidiary for $725,000, consisting of $575,000
in cash (of which $300,000 was paid to O&W's secured lender) and
a five-year 8% subordinated $150,000 note, due upon maturity
with quarterly interest payments. The purchasers included a
former employee of Express Pattern and Thomas J. Mueller, the
Company's chief operating officer, who is a passive investor in
the purchasing entity. Infinite states that the sale was
negotiated at "arm's length" by disinterested management with
the former employee and his financier.

During 2001, the Company continued to experience operating
losses, due primarily to losses in the discontinued Plastics
Group attributed to falling demand for injection molds, and to
the start-up costs for the Photonics Group. These losses
resulted in reductions in cash flow and a negative working
capital position. Infinite is currently focused on its two
primary lines of business and is are actively pursuing
additional capital through the equity line of credit agreement,
private equity sources, strategic alliances, venture capital and
investment banking sources.

At December 31, 2001 Infinite had a working capital deficit of
approximately $1.7 million, ($1.3 million after eliminating the
assets and liabilities of its discontinued operations). The
working capital deficit was primarily caused by recurring losses
at the former Plastics Group resulting in slow payments to the
Company's vendors.

A going concern qualification was included in the opinion issued
by Infinite's auditors on its 2000 financial statements as a
result of one of the Company's primary lenders not having issued
its waiver for certain loan covenant violations that existed at
December 31, 2000 at the Laser Fare subsidiary. The loan
covenants are measured annually at December 31. The loan
covenant violations which existed at December 31, 2000 related
to failure to meet certain levels of working capital, debt to
tangible net worth ratio and exceeding capital expenditure
limits. Due to the acquisition of LENS equipment in a non-
monetary transaction and acquisition of stent equipment, the
Company exceeded the capital expenditure limitations to support
the growth of its Laser Group. Subsequent to the issuance of the
financial statements and the repayment of a certain portion of
the related debt, the bank issued a waiver letter for the
violations.

Revenues from the Laser Group for the years ended December 31,
2001 and 2000 were $7,305,574 and $6,285,882, respectively, with
a net operating loss of $140,742 and $239,704, respectively. The
increase in revenues was due primarily to increased services
performed for General Electric (approximately $411,000) and
Barnes Aerospace (approximately $436,000) on gas turbine parts
and the remainder from medical device manufacturers. The reduced
operating loss resulted from economies of scale.

Revenues from the Photonics Group for the years ended December
31, 2001 and 2000 were $1,202,074 and $341,688, respectively.
Net operating loss for the 2001 period was $332,245 as compared
to net income of $84,727 for the 2000 period. The 2001 operating
loss was due to start-up costs at Infinite Photonics. The
increased revenue in 2001 of approximately $860,000 was
attributable to work performed and billed under the DARPA
contract during the period.

At December 31, 2001, the Company was in violation of certain
covenants related to its failure to meet certain levels of debt
to tangible net worth ratio and exceeding the capital
expenditure limits. It had completed acquisition of the LENS
equipment in a non-monetary transaction in 2001, which also
caused the Company to exceed capital limitation requirements.
The covenant violations were waived by the bank prior to the
issuance of the financial statements.

In 2001, consolidated revenues were $8,507,648 on cost of goods
sold of $5,897,511 resulting in a gross profit of $ 2,610,137
from continuing operations for the year. Consolidated revenues
from continuing operations in 2000 were $6,627,570 on cost of
sales of $ 4,720,649, resulting in a gross profit of $1,906,921.
The increase of $ 1,880,078, or 28.4%, in consolidated revenues
for the year ended December 31, 2001 compared to the year ended
December 31, 2000 was primarily due to a $1.3 Million DARPA
contract in 2001 awarded to the Photonics Group, and increases
in sales in the Laser Group to GE Gas Turbine and Barnes
Aerospace for gas turbine parts and to medical device
manufacturers. Gross profit margin increased in 2001 to 30.7%
from 28.8% in 2000. This increase was due to slightly higher
margins in both gas turbine and medical devices. Infinite signed
a large $12.0 million DARPA contract on January 23, 2002 where
net margins are limited to approximately 6.7% for government
research which historically has been approximately eight
percent. As a result, it is expected that revenues will increase
significantly in 2002, but at lower net margins.

Infinite had a consolidated net loss from continuing operations
of $1,788,459 for the year ended December 31, 2001 as compared
to $1,710,582 in 2000. The loss from discontinued operations was
$994,055 for the year ended December 31, 2001 as compared to
$383,665 for the period ended December 31, 2000. Disappointing
results, offshore Asian competition in the mold business, and a
weak market after the tragedies of September 11, 2001 led to the
discontinuance of the Plastics Group.

  
INTEGRATED HEALTH: Rotech Wants More Time to File Final Report
--------------------------------------------------------------
According to Local Rule 5009-1(a), the U.S. Bankruptcy Court for
the District of Delaware will enter a final decree at the
expiration of 180 days after the date a plan of reorganization
is confirmed, unless a party in interest files a motion for
delay.  In addition, under Local Rule 5009-1(c), a debtor will
file a final report and account at the earlier of 150 days after
entry of the confirmation order or 15 days before the hearing on
any motion to close the case.

As the Rotech Plan was confirmed on February 13, 2002, the 180-
day period for entry of the final decree will expire on August
12, 2002, unless there a motion for delay is filed.  The
deadline for Rotech to file a final report and account was July
15, 2002 or 15 days before the hearing on any motion to close
the case.

The Reorganized Rotech Debtors believe they need an extension of
both periods.  While the claims administration process is
largely complete, there are still disputed claims that have not
been resolved or litigated.  The Reorganized Rotech Debtors
intend to complete a final review of the claims register to
determine if any additional objections need to be filed before
entry of a final decree.  There are also other matters, which
may need to be brought before the Court.

Therefore, the Reorganized Rotech Debtors ask the Court to
extend:

  (a) the automatic entry of a final decree closing these cases
      until December 12, 2002, and

  (b) the date for filing a final report and accounting through
      the earlier of November 12, 2002 or 15 days before the
      hearing on any motion to close the Reorganized Rotech
      Debtors' cases.

Pursuant to Delaware Bankruptcy Rule 9006-2, the deadlines are
automatically extended until the August 13, 2002 hearing.
(Integrated Health Bankruptcy News, Issue No. 40; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


INTELEFILM CORP: Commences Chapter 11 Reorganization Proceeding
---------------------------------------------------------------
iNTELEFILM Corporation (OTCBB:FILM) has filed a voluntary
petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code with the U.S. Bankruptcy Court.  The Chapter 11
filing will provide the Company with cash-flow relief while it
focuses on the completion of the it's long-running litigation
against ABC Radio Networks, Inc., and The Walt Disney Company
that resulted in a jury award of $9.5 million in May 2002. The
timing of a final resolution of the litigation is uncertain
because post-trail motions have not been decided and appeals are
likely.

The Company also announced that it has reached an agreement,
subject to U.S. Bankruptcy Court approval, with a secured
creditor to provide access to cash collateral which will provide
adequate liquidity to fund the Company's ongoing activities
during the reorganization process. The Company will also
immediately cease its filings with the Securities and Exchange
Commission and has and will continue to taken other steps to
minimize its ongoing operating expenses.

Also, the Company's majority-owned subsidiary, WTV, Inc.
(formerly known as Video3, Inc.), has completed the sale of its
assets to an entity owned by former members of the subsidiaries
management team.

Mark A. Cohn, Chairman and CEO said, "We have completed the sale
of our last remaining operating subsidiary. As a result, a
successful implementation of our reorganization plan should
allow for full repayment of iNTELEFILM's obligations to its
creditors after the receipt of the full ABC/Disney jury award.
In addition, should the Company realize more than the jury award
through the addition of pre and/or post judgment interest, or an
appeal, the remaining amount after payment to creditors would be
distributed to iNTELEFILM's shareholders."

iNTELEFILM Corporation FILM is based in Minneapolis and trades
on the Over-the-Counter Bulletin Board under the symbol "FILM."
Additional information on the Company can be found in the
Company's filings with the Securities and Exchange Commission.


INTELEFILM CORP: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Intelefilm Corporation
        604-221 Twelve Oaks Center
        15500 Wayzata Blvd.
        Wayzata, Minnesota 55391

Bankruptcy Case No.: 02-32788

Type of Business: The Debtor is a holding company for software
                  development company, sales & products.

Chapter 11 Petition Date: August 5, 2002

Court: District of Minnesota

Judge: Gregory F. Kishel

Debtor's Counsel: Michael L. Meyer, Esq.
                  Ravich Meyer Kirkman McGrath & Nauman PA
                  80 South 8th Street Suite 4545
                  Minneapolis, Minnesota 55402
                  Phone: 612-317-4745        
           
Total Assets: $10,516,867

Total Debts: $7,929,375

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Taylor & Taylor Assoc      Insurance                    $6,739

Jones Day Reavis & Pogue   Services                 $3,728,547  
Adrian Wagers-Zito
202-879-3939
PO Box 7805
Ben Franklin Station
Washington DC 20014


Kaplan Strangis & Kaplan   Services                   $284,464
Bruce Parker
5500 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402

Dahl, Christopher, Sr.     Emp Cont/Lease Gty         $264,696
2662 Hamel Road
Medina, MN 55340
763-478-8686

Quinn, John                Consult/Non-Comp           $150,000

Charles River Associates   Services                   $129,000

P and D Strategic          Goods and Services          $64,762
Solutions   

E Riggs & Morgan           Services                    $60,304

Kagan Media Appraisals     Services                    $47,942

Cohn, Mark A               Emp Cont/Unpaid Bonus       $33,000

Nortrax Inc.               Rent (DEP $18,602)          $27,903

IM Tassos                  Goods and Services          $22,000

Troy & Gould Professional  Goods and Services          $21,555
Corp       

Cherry Tree Securities     Goods and Services          $20,027

Frank R. Berman PA         Services                    $16,172

Faegre & Benson            Services                    $12,876

Georgeson Shareholder      Goods and Services           $8,789
Comm  

Accesible Evidence         Goods and Services           $7,699

IDS Capital                Goods and Services           $2,800

Silvermann Olson           Accounting Services          $6,613
Thorvilson         


KAISER ALUMINUM: Reaches Pact with Maxxam re Stock Disposition
--------------------------------------------------------------
Kaiser Aluminum Corporation, its debtor-affiliates, and MAXXAM
have reached an agreement regarding the disposition of Kaiser
stock.  Their Stipulation provides that:

A. The deadline by which MAXXAM is required to respond to the
   Motion and the date on which a hearing on the Motion will be
   held are both continued indefinitely;

B. MAXXAM shall not dispose of any of its Kaiser stock prior to
   a hearing (whether scheduled separately or as part of an
   omnibus hearing) on the Motion.  MAXXAM may obtain a hearing
   on the Motion as follows:

   a. If MAXXAM serves the Debtors with a written request for
      hearing and a written response to the Motion, the Motion
      shall be included in the Debtors' agenda for, and be heard
      at, the next omnibus hearing date, provided that the
      Request for Hearing is served on the Debtors by fax or
      email at least 10 business days before the scheduled
      hearing; or,

   b. MAXXAM may file with the Court a written request for a
      separate hearing on the Motion, but if a separate hearing
      is scheduled, MAXXAM's written response to the Motion must
      be served on the Debtors by fax or email at least 10
      business days before the scheduled hearing.

   The Debtors may file a reply to MAXXAM's response no later
   than three days prior to the omnibus hearing or separate
   hearing, as applicable.  If the Court does not agree to hear
   the Motion at a separately scheduled hearing, MAXXAM shall
   not dispose of any of the stock until the Motion is heard at
   the next omnibus hearing;

C. The Debtors may set the Motion for hearing at any time,
   provided that MAXXAM receives at least 32 days' prior written
   notice of the hearing by fax or email.

                         *    *    *

As previously reported, Kaiser Aluminum Corporation and its
debtor-affiliates urge the Court to prohibit MAXXAM Inc., or
MAXXAM Group Holdings Inc., from any disposition of Kaiser stock
which is in violation of the automatic stay.  This includes the
sale, transfer, or exchange of MAXXAMs' stock in Kaiser or
treating any if its Kaiser stock as worthless for federal income
tax purposes. The Debtors propose that MAXXAM first seek relief
from the Court so that the Court may determine whether a
disposition will jeopardize Kaiser's ability to utilize certain
tax attributes that are property of the bankruptcy estate.

According to Edward A. Kaplan, Vice President of Taxes for
Kaiser Aluminum Corporation and Kaiser Aluminum & Chemical
Corporation, such action from MAXXAM may deprive Kaiser of its
ability to utilize full value of its net operating losses,
foreign tax credits, and minimum tax credits. While there are
other 5% shareholders of Kaiser stock, MAXXAM is the only 5%
shareholder with a sufficient number of shares to independently
effectuate an ownership change.

The NOLs and taxes have significant potential value to Kaiser
because they can be used to shelter taxable income (including
gains from asset sales) or offset cancellation of indebtedness
income resulting from the reorganization process. Used as
deductions, the potential value of Kaiser's NOLs is about
$20,000,000. Tax credits can be used at their face value,
subject to certain limitation, making potential value of
Kaiser's foreign tax credits and minimum tax credits more than
$120,000,000.

Mr. Kaplan estimates that as of December 31, 2001, the Kaiser
U.S. consolidated tax group had various tax attributes that were
of significant potential value, including NOLs of approximately
$60,000,000, foreign tax credits of about $94,000,000 and
minimum tax credits worth $27,000,000. There will be additional
tax attributes that Kaiser will generate during the course of
2002 and beyond, up and until the conclusion of the
reorganization process. (Kaiser Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

Kaiser Aluminum & Chemicals' 12.75% bonds due 2003 (KLU03USR1)
are trading at 17 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KLU03USR1for  
real-time bond pricing.


KENNAMETAL INC: Derwin Gilbreath Resigns as Vice President & COO
----------------------------------------------------------------
Kennametal Inc. (NYSE: KMT), announced that Derwin R. Gilbreath
Vice President, Chief Operating Officer, Metalworking Solutions
and Services Group is leaving to pursue other opportunities.

"Derwin has played a significant role in the repositioning of
the metalworking business unit by consistently improving
financial performance and establishing strong operating
discipline and we wish him the best in his future endeavors,"
said Markos Tambakeras, Chairman, President and Chief Executive
Officer of Kennametal, Inc.  "Looking ahead, the major emphasis
will be on profitable growth.  For the immediate future, Pat
Mahanes, currently our Executive Vice President Global Strategic
Initiatives, will assume the title of Interim Chief Operating
Officer of MSSG.  Pat, who previously headed metalworking,
possesses an intimate working knowledge of this business and
will be effective in ensuring a smooth transition."

Kennametal also announced the appointment of Dan Bagley to
replace Pat Mahanes in an expanded role as Vice President
Corporate Strategic Initiatives and Business Development.  Dan
comes to Kennametal from an industrial consulting position with
Deloitte and Touche, where he led business development efforts
in the global manufacturing sector, with a focus on automotive,
aerospace, and other industrial markets.  He was previously
employed by General Signal Corporation and Robert Bosch Fluid
Power Corporation in various sales, marketing, and sourcing
roles.

Kennametal Inc., aspires to be the premier tooling solutions
supplier in the world with operational excellence throughout the
value chain and best-in- class manufacturing and technology.  
Kennametal strives to deliver superior shareowner value through
top-tier financial performance.  The company provides customers
a broad range of technologically advanced tools, tooling systems
and engineering services aimed at improving customers'
manufacturing competitiveness.  With approximately 12,000
employees worldwide, the company's fiscal 2002 annual sales were
approximately $1.6 billion, with a third coming from sales
outside the United States.  Kennametal is a five-time winner of
the GM "Supplier of the Year" award and is represented in more
than 60 countries. Kennametal operations in Europe are
headquartered in Furth, Germany. Kennametal Asia Pacific
operations are headquartered in Singapore.  For more
information, visit the company's Web site at
http://www.kennametal.com  

                        *    *    *

As reported in the May 28, 2002 edition of Troubled Company
Reporter, Kennametal Inc., (NYSE: KMT) intended to launch an
underwritten public offering of 3,000,000 shares of Common Stock
and an underwritten public offering of $300 million of Senior
Unsecured Notes due in 2012.

The offerings are consistent with the company's previously
announced plans to fund the acquisition of the Widia Group as
part of a comprehensive refinancing of its capital structure,
which is also expected to include a new, three-year revolving
credit facility.  The company believes these financing
arrangements are consistent with its commitment to investment
grade ratings.

Standard & Poor's rates the company's Corporate Credit Rating
at BBB.  Its senior unsecured debt is rated Ba1 by Moody's, and
BBB- by Fitch.


KEY3MEDIA GROUP: James A. Wiatt Resigns as Director
---------------------------------------------------
Effective July 25, 2002, James A. Wiatt resigned as a director
of Key3Media Group, Inc., citing demands on his time.

Key3Media owns and produces about 60 trade shows and conferences
for the information technology industry, including the annual
COMDEX show held in Las Vegas. In addition to the popular US
event, Key3Media puts on nearly 20 other COMDEX shows in 16
countries. (COMDEX shows account for almost 35% of sales.) Other
events include Networld+Interop, Seybold Seminars, SOFTBANK
Forums, and JavaOne. Key3Media's events draw about 1.5 million
participants each year. The company was spun off from publisher
Ziff-Davis (now part of CNET Networks) in 2000. Japan's SOFTBANK
owns about 55% of Key3Media.

Key3Media Group, Inc., (NYSE: KME) is undertaking a strategic
review of its operations in response to the sustained economic
downturns being experienced in the information technology,
networking and trade show industries.

In addition, the New York Stock Exchange has announced that it
will suspend trading of Key3Media Group, Inc.'s common stock
commencing on Monday, July 29, 2002 and seek to delist the
shares from the exchange. The NYSE said it was taking this
action due to the abnormally low recent selling prices of the
shares. The Company has discussed these matters with the NYSE
and has decided not to challenge the NYSE's actions. The Company
intends to apply to have its shares included in the over-the-
counter bulletin board to facilitate future trading. A new
trading symbol for the Company's shares will be announced as
soon as it is available.


KMART CORP: Dorel Juvenile Seeks Stay Relief to Allow Setoff
------------------------------------------------------------
Prior to the Petition Date, Dorel Juvenile Group, Inc. supplied
Kmart Corporation with certain houseware products including
folding furniture and step stools and certain baby products like
strollers, high chairs, cribs and playpens.  The shipment of
these products cost $10,597,130, which remains unpaid to date.

On the other hand, Kmart is entitled to certain advertising
rebates for the housewares and juvenile products it purchased
from Dorel prepetition.  In 2001, Kmart was entitled to a
$484,244 advertising rebate.

Thus, Dorel seeks relief from automatic stay to setoff Kmart's
prepetition claims for the advertising rebates against Dorel's
shipment claims against Kmart.

Alan K. Mills, Esq., at Barnes & Thornburg, in Indianapolis,
Indiana, asserts that Dorel is entitled to setoff rights since
both parties have mutual obligations, which arise out of the
supply relationship between Dorel and Kmart.  Dorel's claim is
also valid and enforceable.

                         Debtors Object

The Debtors find Dorel's request as nothing more than an effort
to force them to undertake a claims reconciliation process.

According to J. Eric Ivester, Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, there is no equitable
basis in forcing the Debtors to begin undertaking formal claims
resolution processes now, long before the Debtors have developed
a business plan of reorganization.  Dorel can accomplish the
same thing by filing a proof of claim.

Although the Debtors do not deny that their prepetition rebate
claims may, as a general matter, be setoff against prepetition
vendor claims, Mr. Ivester says, the Debtors do not believe they
owe any amounts to Dorel.  Hence, there is nothing to setoff.
(Kmart Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

Kmart Corp.'s 9.0% bonds due 2003 (KM03USR6) are trading at 30
cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for  
real-time bond pricing.


KMART CORP: Lexington Seeks Stay Relief to Prosecute Claims
-----------------------------------------------------------
On July 24, 1999, Triyar Capitol, LLC and Emerald Equities hired
DC Taylor Co., to repair and replace the roof of Kmart store at
32nd and Cactus in Phoenix, Arizona.  In the middle of the
repair job, a large section of the roof collapsed at the same
area where DC Taylor had loaded its materials for the work,
resulting in extensive damages to Kmart's roof, building and
property.

As a result, Triyar and Emerald refused to pay DC Taylor for its
services.  They blamed DC Taylor's negligence for the damage.
Anticipating litigation, DC Taylor filed a suit in Maricopa
County, Arizona against Triyar, Emerald and Kmart for breach of
contract and unjust enrichment.  The Defendants filed
counterclaims for damages premised on DC Taylor's negligence.

Christopher J. Zachar, Esq., at Zachar & Associates PC, in
Phoenix, Arizona, relates that Lexington Insurance Company,
Kmart's insurer, later joined in the litigation.  According to
Mr. Zachar, Lexington asserted claims of negligence against DC
Taylor, Triyar and Emerald for its own subrogation interest for
the significant amounts paid to Kmart.  Lexington's claim
exceeds $2,000,000.  "Lexington has significant interest in
seeing the litigation proceed," Mr. Zachar says.

Lexington asks the Court to lift the automatic stay so that its
unliquidated claims against the parties, other than Kmart, will
be determined by judgment in the pending court action.

Since the start of Kmart's bankruptcy proceedings, the Maricopa
County Action has been stayed, even though Kmart is much more a
plaintiff than a defendant in this matter.  According to Mr.
Zachar, the claims asserted against Kmart are incredulously thin
and non-meritorious.  In fact, Kmart never received any benefit
from the work performed by DC Taylor.  Mr. Zachar also points
out that since Triyar and Emerald contracted for DC Taylor, they
should be held responsible for the maintenance and repair of the
roof under the lease with Kmart.  Any claim for payment should
be against them, not Kmart's. (Kmart Bankruptcy News, Issue No.
29; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LACLEDE STEEL: SEC Approves Proposed Modified Reporting Protocol
-------------------------------------------------------------
The Securities and Exchange Commission, Division of Corporate
Finance, indicates that it will not object if Laclede Steel
Company does not file periodic reports under Sections 13(a) and
15(d) of the Securities Exchange Act of 1934, until such time as
the Debtor completes its liquidation.

Under the Bankruptcy Code, the Debtor is required to file
monthly operating reports with the U.S. Trustee and the
Bankruptcy Court until the conclusion of the Chapter 11
proceeding. At the conclusion of the proceeding, a final report
will be filed with the Bankruptcy Court.

Laclede will file, under cover of Form 8-K:

     - all financial reports required to be filed with the
       Bankruptcy Court within fifteen days after such reports
       are required to be filed with the Bankruptcy Court; and

     - disclosure regarding material events relating to the
       liquidation including the likelihood of any liquidation
       payments being made to equity holders and the amounts of
       any liquidation payments and expenses.

Upon completion of the Company's liquidation, it must:

     - file a final report on Form 8-K;
     
     - complete the steps necessary to terminate Laclede's
       existence; and

     - file a Form 15 to terminate Laclede's reporting
       obligations.

                          * * *

In a so-called "No Action Letter" addressed to the Securities
and Exchange Commission, Peter D. Van Cleve at Bryan Cave LLP
relates the Company complied with all periodic reporting
obligations with the SEC. Mr. Van Cleve submits that continued
filing of periodic reports will require unreasonable effort and
expense considering the Debtor's limited resources.

In view of the non-existent trading market in the Company's
common stock and the likelihood that the Company's common equity
holders will not receive any proceeds and the availability of
information about the Company through the Bankruptcy Court, Mr.
Van Cleve believes that the modified reporting procedure are
appropriate.

Laclede Steel Company filed for chapter 11 protection on July
27, 2001 in the U.S. Bankruptcy Code for the Eastern District of
Missouri. The Company is in the process of closing facilities,
conducting going concern sales and otherwise liquidating its
real property and other assets for the benefit of its estate and
creditors. Historically, the Company primarily manufactured and
marketed a wide range of carbon and alloy steel products,
including pipe and tubular products and hot rolled products.


MALDEN MILLS: Expects to File Chapter 11 Plan by Month's End
------------------------------------------------------------
Aaron Feuerstein, Malden Mills Industries CEO and President,
announced that the company is working with interested parties to
file a plan of reorganization to successfully emerge from
Chapter 11 protection.  The plan is expected to be filed with
the court by the end of August 2002.  Malden Mills is best known
as the innovators, manufacturers and marketers of Polartec(R)
brand technical fabrics.  Malden Mills and Polartec(R) products
have continued to receive strong support from employees,
customers, and consumers around the world resulting in growing
earnings and a stronger balance sheet.  The company is on track
to meet the 2002 business plan, enabling Malden Mills to emerge
from bankruptcy. Significant improvements have resulted from the
restructuring of the business including more efficient
manufacturing, faster product commercialization and a
strengthening of the Polartec(R) brand.

Executive Vice President of Sales and Marketing, Cesar Aguilar
stated, "Our customers stood by us through Chapter 11 because we
remain the source for innovation in technical fabrics.  
Polartec(R) fabrics help bring new levels of performance to our
customers' products and provide powerful differentiation in an
increasingly competitive retail environment.  Malden Mills is
emerging as a more efficient, highly focused organization with
one of the most valuable brands in our industry.  2003 is
expected to be a strong year for Malden Mills with accelerating
sales growth.  As a team, we have worked extremely hard this
past year to re-direct the company and are confident that the
positive sales trend will continue for years to come."

The company filed Chapter 11 on November 29th, 2001 at the
Federal Bankruptcy Court in Worcester, MA, Judge Joel Rosenthal
presiding.  The filing was necessitated by the cost of servicing
bank debt.  A number of factors contributed, including the high
costs associated with rebuilding after the devastating December
11, 1995 fire.  Company owner Aaron Feuerstein has continued to
be recognized around the world for his example of corporate
responsibility when he decided to rebuild in Lawrence, MA the
day after the fire -- and pay idled employees during the
process.  Corporate responsibility to the employees, community
and the environment continue to be the core values of Malden
Mills.


MEDQUEST: S&P Assigns Low-B Ratings Over High Leverage Profile
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its single-'B'-plus
corporate credit rating to the diagnostic imaging company,
MedQuest Inc.

At the same time, Standard & Poor's assigned a preliminary
rating of double-'B'-minus to the proposed $80 million senior
secured bank facility maturing in August 2007 and a preliminary
rating of single-'B'-minus to MedQuest's proposed $180 million
subordinated notes due in August 2012. The outlook is stable.
Pro forma for the transaction, $210 million of debt will be
outstanding.

"The speculative-grade ratings on the Alpharetta, Georgia-based
MedQuest reflect the company's single-business-line
concentration, ambitious growth plans, and very highly leveraged
capital structure," said Standard & Poor's credit analyst Jill
Unferth. She added, "Disciplined operating strategies, top-tier
standing in an otherwise highly disaggregated market, and the
high-margin, rapidly growing nature of its specialty medical
field partly offset these vulnerabilities."

The stable outlook reflects expectations that MedQuest will
leverage its to-date successful operating platforms to execute
growth plans, without material change in debt levels. Still, the
company has limited capacity to weather unexpected operating
setbacks and pricing pressures.

The proposed debt issues, part of a larger recapitalization that
introduces a prominent financial sponsor , represents a more
aggressive financial policy at the same time that the company is
accelerating growth.

An active acquirer, MedQuest is expected to add up to 20 fixed-
site imaging centers per year. Execution remains a risk,
particularly in light of well established competitors.

MedQuest should benefit from demand growth fueled by wider
acceptance of imaging as a cost-reducing diagnostic tool,
expanded medical applications, favorable demographic trends, and
a relatively stable technology environment.

MedQuest operates a large, established network of 70 fixed-site
imaging centers that offer a broad array of diagnostic services
in the fast-growing U.S. Southwest and Southeast.


NATIONSRENT INC: Continues Tinkering with DIP Loan Covenants
------------------------------------------------------------
NationsRent Inc., is currently in the process of renegotiating
certain financial covenants in the DIP Financing Facility to
reflect the financial performance set forth in the Company's
strategic business plan submitted to the Agents in March 2002
and subsequent operating performance.

In the Company's recent 10-Q filing with the Securities and
Exchange Commission, the Debtors relate that the DIP lenders
have agreed to suspend compliance with the existing financial
covenants related to minimum adjusted consolidated EBITDA  
subject to limiting availability for cash borrowings under the
facility to no more than $10,000,000 in excess of existing
letters of credit.  The Debtors are also renegotiating DIP
covenants requiring the hiring of a permanent president and CEO.

As of July 1, 2002, the Company had made no cash borrowings and
had $11,400,000 in letters of credit outstanding under the DIP
Financing Facility.  Remaining availability under the DIP
Financing Facility as of July 1, 2002, was $10,000,000.

On June 28, 2002, the Debtors together with Fleet National Bank,
as Administrative Agent, and First Union National Bank, as
Syndication Agent, executed a second amendment to DIP Revolving
Credit Agreement.

According to Philip V. Petrocelli, NationsRent's interim
President and CEO, the parties to the Credit Agreement have
stipulated that the Borrowers, at their sole cost and expense,
will obtain and deliver to the Agents and the Banks by October
1, 2002, a fair market value appraisal of the Borrowers' rental
equipment as the Agents may request.  Ritchie Brothers, Inc., or
another appraiser acceptable to the Agents, will conduct the
appraisal.

Mr. Petrocelli relates that the appraiser will follow a
methodology and deliver the appraisal report in a form
acceptable to the Agents.  The Borrowers will provide to the
Agents and the Banks supplemental appraisal-related information
and follow-up appraisals as Fleet Bank may from time to time
reasonably request.  Fleet Bank will be entitled to share all
the appraisals and appraisal-related information with the
Prepetition Agents and the Prepetition Lenders.

The DIP lenders further agreed to suspend certain covenants
until the Suspension Expiration Date.  The suspension will apply
only to the provisions and for the periods specified therein and
only until the Suspension Expiration Date.

The suspended covenants include:

A. Minimum Adjusted Consolidated EBITDA:

    for the consecutive three-month period ending May 2002;
    for the consecutive three-month period ending June 2002;

B. Cumulative Cash Flow:

    for the period ending at the end of May 2002;
    for the period ending at the end of June 2002;

Mr. Petrocelli, however, makes it clear that any obligation of
the Banks to make Loans, or of the Issuing Bank to issue, extend
or renew Letters of Credit, will, at all times, be subject to
the satisfaction of all of the terms and conditions of the
Credit Agreement.  The Banks and the Agents will at all times
retain all rights and remedies in respect of any Default or
Event of Default.

The Suspension Expiration Date means the earliest to occur of:

    (a) 5:00 p.m. Boston time on July 31, 2002;

    (b) the date on which outstanding Loans to the Borrowers
        under the Credit Agreement exceed the total sum of
        $10,000,000;

    (c) the date on which any Letters of Credit are issued,
        extended or renewed, other than Letters of Credit issued
        prior to June 28, 2002 and the $500,000 Letter of Credit
        contemplated in the Final DIP Financing Order; and

    (d) the date on which the Borrowers request Loans or Letters
        of Credit which would cause an event referred to in the
        foregoing clause (b) or (c) to occur.

The current members of DIP Lending Consortium:

    * Fleet National Bank,
    * Wachovia Bank, National Association (f/k/a First Union
      National Bank),
    * General Electric Capital Corporation,
    * Goldman Sachs Credit Partners, LP,
    * Senior Debt Portfolio,
    * Grayson & Co.,
    * GMAC Commercial Credit LLC,
    * Eaton Vance Institutional Senior Loan Fund
(NationsRent Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

NationsRent Inc.'s 10.375% bonds due 2008 (NRNT08USR1),
DebtTraders says, are trading at 1 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NRNT08USR1
for real-time bond pricing.


NEON COMMUNICATIONS: Wants to Hire Pepper Hamilton as Co-Counsel
----------------------------------------------------------------
Neon Communications, Inc., and its debtor-affiliate Neon Optica,
Inc., want to employ Pepper Hamilton, LLP as co-counsel, nunc
pro tunc to June 25, 2002.

The Debtors have determined that it will be necessary to engage
Delaware co-counsel with knowledge and experience in chapter 11
reorganization. Pepper Hamilton has been advising the Debtors on
procedures relating to the Debtors' chapter 11 filings and is
greatly familiar with the legal issues that may arise in these
cases.

In conjunction with Paul Hastings, Pepper Hamilton is expected
to:

     a) provide legal advice with respect to their powers and
        duties as debtors in possession in the continued
        operation of their business and management of their
        properties;

     b) prepare and pursue confirmation of a plan and approval
        of a disclosure statement;

     c) prepare on behalf of the Debtors necessary applications,
        motions, answers, orders, reports and other legal
        papers;

     d) appear in Court and protect the interests of the Debtors
        before the Court; and

     e) perform all other necessary legal services for the      
        Debtors.

Pepper Hamilton will charge the Debtors its customary hourly
rates:

          Partners               $350 - $415
          Special Counsel        $250 - $350
          Associates             $125 - $250
          Paralegals/Clerks      $ 75 - $135

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


NEWPOWER: Seeking Nod to Sign-Up LeBoeuf Lamb as Special Counsel
----------------------------------------------------------------
The New Power Company and its debtor-affiliates ask permission
from the U.S. Bankruptcy Court for the Northern District of
Georgia to employ LeBoeuf, Lamb, Greene & MacRae, LLP as special
counsel.

LeBoeuf Lamb represented the Debtors asset purchases and sales
(principally relating to retail electric and gas contracts) and
various state regulatory matters, including securing various
regulatory approvals for acquisitions, sales or other
transactions engaged in by the Debtors.

The hourly rates of LeBoeuf Lamb's professionals who will be
primarily responsible for this retention are:

          partners and counsel      $420 - $625
          associates                $275 - $415
          paraprofessionals         $ 60 - $190

The Debtors, a provider of electricity and natural gas to
residential and small commercial customers in markets that have
been deregulated to permit retail competition, filed for chapter
11 protection on June 11, 2002. Paul K. Ferdinands, Esq. at King
& Spalding and William M. Goldman, Esq. at Sidley Austin Brown &
Wood LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection form its creditors, it
listed $231,837,000 in assets and $87,936,000 in debts.


NORTHWEST AIRLINES: Completes $749MM Capital Markets Financing
--------------------------------------------------------------
Northwest Airlines (Nasdaq: NWAC) has successfully completed a
$749 million secured aircraft bond financing in the public
capital markets.  The bonds sold in this financing were
structured as enhanced equipment trust certificates.  The bonds
have a final maturity of up to 19 years and a combination of
both fixed and floating interest rates, with an initial average
weighted interest rate of 4.07%.  Proceeds from the bond sale
will be used by Northwest for the acquisition of 20 new
aircraft, most of which are scheduled for delivery in 2003.

Mickey Foret, Northwest's executive vice president & chief
financial officer, said, "We are pleased by the capital market's
favorable reception to our EETC offering.  This transaction is
the largest EETC completed by Northwest since completing its
first such transaction in 1994.  The bonds have attractive
interest rates and were largely oversubscribed by investors. The
combined factors of large offering, attractive rates and strong
demand for the Northwest offering clearly indicate that the
capital markets are open and accessible to properly structured
airline financings."

In addition to this $749 million EETC financing, Northwest has
arranged a number of financings in 2002, which among others
include, a $300 million public unsecured notes offering, over
$300 million of aircraft bank financings, $130 million to
refinance three B747's, and about $200 million of other
structured financing and credit facilities for a total of over
$1.6 billion, in addition to arranging for the refinancing of an
airport municipal bond deal for $288 million.

Dan Matthews, Northwest's senior vice president and treasurer
said, "Throughout 2002 there have been opportunities for
Northwest and other airlines to raise money in the capital
markets.  We have accessed these opportunities when possible.  
As a result, Northwest continues to be in a strong liquidity
position."  At the end of June 2002, Northwest had $2.8 billion
in cash.

Northwest Airlines is the world's fourth largest airline with
hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam and more than 1,700 daily departures.  With its travel
partners, Northwest serves nearly 750 cities in almost 120
countries on six continents.

                         *    *    *

As reported in Troubled Company Reporter's March 22, 2002,
edition, Fitch Ratings assigned a rating of 'B+' to the $300
million in senior unsecured notes issued by Northwest Airlines
Corp. The privately placed notes carry a coupon rate of 9.875%
and mature in March 2007. The Rating Outlook for Northwest is
Negative.

The 'B+' rating reflects the signs of stabilization in
Northwest's cash flow position that have begun to appear over
the last several weeks. Following the unprecedented collapse in
air travel demand that resulted from the events of September 11,
Northwest's revenue per available seat mile (RASM) performance
has improved steadily. RASM showed a year-over-year decline of
16% (in line with industry norms) in the fourth quarter, with
sequential improvements seen in each month since September.
Northwest continues to enjoy a RASM premium over the U.S.
industry average, due in large part to its strong competitive
position at the Minneapolis-St. Paul and Detroit hubs. Moreover,
Northwest's customer appeal should be improved as a result of
the February opening of the new WorldGateway terminal at
Detroit. Although passenger yields remain very weak as a result
of a less favorable business/leisure passenger mix and continued
discounting, booked load factors in the first quarter appear to
be improving. More normal load factors (74.4% system wide in
February) and unit revenue comparisons suggest that the
foundation has been laid for a return to positive operating cash
flow in the second and third quarters, when seasonal demand
patterns are strong. Fitch believes that the risk of a further
weakening in Northwest's operating cash flow position is
unlikely given the more positive demand outlook for the rest of
2002.

In spite of these encouraging developments, Northwest continues
to face a high degree of financial risk as it seeks to recover
from the post-September 11 demand shock. Adjusted leverage,
reflecting both on-balance sheet debt and off-balance sheet
aircraft and facilities lease obligations, remains extremely
high. After drawing down its bank credit facility following
September 11 and completing financing for a large number of new
aircraft deliveries, Northwest's fixed financing charges will
remain high in 2002-2003.


NORTHWEST AIRLINES: Names Glenn Woythaler as VP, Atlantic Region
----------------------------------------------------------------
Northwest Airlines (Nasdaq: NWAC) announced the promotion of
Glenn Woythaler to Vice President - Atlantic region.  He will
have responsibility for Northwest's finance, operations, sales
and marketing activities in Europe, the Middle East, South Asia
and Africa.  He replaces Dick Johnson, who is retiring from
Northwest Airlines after 30 years of service.

Woythaler, currently serves as Northwest's Systems Operations
Center vice president crew and performance analysis.  Since
joining Northwest in 1992, he has held a number of senior
positions in sales and SOC.  Prior to Northwest, he served in
management positions in financial planning and marketing with
American Airlines.  Woythaler received a Master of Business
Administration degree from Cornell University and a Bachelor of
Arts degree from St. Lawrence University.

"Glenn's leadership positions in finance, marketing and
operations make him uniquely qualified for his new position at
Northwest," said Phil Haan, executive vice president
international, sales and information services.  "He will play a
pivotal role in helping forge even stronger ties between   
Northwest Airlines and our partner KLM as well as leading the
company's Atlantic region."

Commenting on Johnson, Haan continued, "Dick has played a key
role in coordinating sales, marketing and operations matters
between Northwest and KLM.  We thank him for his 30 years of
service to Northwest Airlines and wish him well as he retires."

Johnson began his career at Northwest in 1972 as a sales
representative in Boston.  While at Northwest, he has held
various sales management positions in the United States,
including District Sales Manager Boston, Director of National
Sales and Managing Director - Corporate and Agency Sales.  In
1998, he was appointed vice president - Europe, Middle East,
South-Asia and Africa.

Northwest Airlines is the world's fourth largest airline with
hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam and more than 1,700 daily departures.  With its travel
partners, Northwest serves nearly 750 cities in almost 120
countries on six continents.

Northwest Airlines Inc.'s 8.875% bonds due 2006 (NWAC06USR1) are
trading at 94 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NWAC06USR1
for real-time bond pricing.


OWENS CORNING: Asbestos Claimants Balk at Prof. McGovern's Fees
---------------------------------------------------------------
Fifteen asbestos claimants of Owens Corning and its debtor-
affiliates aren't happy with Professor McGovern's flat rate
compensation as Mediator.  They want the Court to direct that
Professor McGovern be paid by the hour.

Robert Jacobs, Esq., at Jacobs & Crumplar PA, in Wilmington,
Delaware, argues that Professor McGovern should be made to file
for compensation based upon hours and costs -- just like every
other professional paid by chapter 11 debtor under 11 U.S.C.
Sec. 330.

The objecting claimants are: Leroy Arthur, Leon Ashcraft, Jospeh
[sic] Andreavich, William & Vietta Banning, Harry Barsky, Edward
& Patricia Begley, Wilbur & Wanda Best, Robert & Josephine
Black, James & Elaine Bradford, Joseph (deceased) and Virginia
Brand, Howard Brewster, Naomi & William Brown, Amanda Buckland,
Helen Burrows, and William Calhoun. (Owens Corning Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc.,
609/392-0900)   


PG&E: Obtains Waiver of Ratings Trigger after Moody's Downgrades
----------------------------------------------------------------
PG&E Corporation issued the following statement following
Moody's Investors Service credit rating downgrade for the
Corporation's PG&E National Energy Group (PG&E NEG) and the PG&E
NEG's primary operating subsidiaries:

    "The lenders in the Corporation's credit agreement with
General Electric Capital Corporation, Lehman Commercial Paper
Inc, and certain other lenders have provided a waiver through
August 16, 2002, of the requirement that the PG&E National
Energy Group maintain an investment grade credit rating by
either Standard & Poor's or Moody's Investor Services.

    "We are now working with these lenders to discuss long-term
modifications to this lending agreement, as our team has done
successfully in the past.  We look forward to reaching an
agreement soon.

    "Although the action by Moody's is a disappointment, we
continue to believe the fundamentals in our national energy
business and its operating units are solid.  As emphasized in
the Corporation's conference call last week with the financial
community, the PG&E NEG is continuing to implement aggressive
measures aimed at reducing expenses and financing needs going
forward.

    "The action by Moody's does not result in substantial
incremental impacts at the PG&E NEG beyond those associated with
last week's credit action by Standard and Poor's.

    "The PG&E NEG has reviewed its estimated sources and uses of
cash over the next 12 months, and we believe that the company's
liquidity is sufficient to meet the anticipated cash
requirements, including those associated with the rating
agencies' actions, including Moody's action [Mon]day.  The PG&E
NEG's liquidity analysis appears in its 10Q filed Friday with
the U.S. Securities and Exchange Commission."


PG&E NATIONAL: Moody's Cuts Several Ratings Down to Low-B Level
---------------------------------------------------------------
Moody's Investors Service took rating actions on PG&E National
Energy Group, Inc., and two of its subsidiaries: PG&E Gas
Transmission Northwest and USGen New England, Inc.

                   Ratings downgraded include:

                PG&E National Energy Group, Inc.

      - Senior Unsecured Debt, Issuer Rating, and Bank Loan
        Facility to Ba2 from Baa2

                PG&E Gas Transmission Northwest

      - Senior Unsecured Debt to Baa2 from Baa1

                    USGen New England, Inc.

      - Pass-Thru Certificates and Bank Loan Facility to Baa3
        from Baa1

While PGT's short-term rating for commercial paper was confirmed
at Prime-2, bank loan rating of PG&E Generating Company was
withdrawn.

The rating downgrade on NEG reflects the Moody's concerns on the
company's weaker than expected operating cash flow and weak
liquidity profile. It is expected that the company will renew
its $1.25 billion revolving credit maturing on August 22, 2002.
If its not, ratings could be further downgraded.

The lowered ratings on both PGT and USGenNE is due to NEG's
historical reliance of the two subsidiaries to help support the
company's funding requirements.

PG&E National Energy Group, Inc., with headquarters in Bethesda,
Maryland, is a wholly-owned subsidiary of Pacific Gas & Energy
Corporation.  


PINNACLE ENTERTAINMENT: Settles with Regulator re Investigation
---------------------------------------------------------------
Pinnacle Entertainment, Inc., (NYSE: PNK) executed a settlement
with the Indiana Gaming Commission in connection with the
previously announced investigation into events surrounding, and
claims underlying, lawsuits filed by two former employees.  At
the Indiana Gaming Commission meeting held July 29, 2002, the
Company agreed, among other things, to pay a fine of $2.26
million, suspend gaming operations at Belterra Casino Resort for
a 3-day period beginning at 6:00 p.m. on October 6 to 12:01 p.m.
on October 9, 2002, build a new 300 guest-room tower within two
years and establish a new compliance committee of the Company's
Board of Directors.

For further information please contact: Dan Lee, Chairman & CEO,
or Wade Hundley, COO, or Bruce Hinckley, CFO, all of Pinnacle
Entertainment, Inc., +1-818-662-5900; or Sean Collins, Partner,
Coffin Communications Group, +1-818-789-0100, for Pinnacle
Entertainment, Inc.

                        *    *    *

As previously reported in the Troubled Company Reporter,
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on Pinnacle Entertainment Inc., to
single-'B' from single-'B'-plus. Standard & Poor's also lowered
its subordinated debt rating on the company to triple-'C'-plus
from single-'B'-minus.

The actions followed Glendale, California-based Pinnacle's
lower-than-expected 2001 operating results, further
deterioration of credit measures, and Standard & Poor's
expectation that near-term debt leverage would remain high on
continued competitive pressures for the owner and operator of
casino facilities.


PINNACLE TOWERS: Hires Bayard for Sears Tower Litigation
--------------------------------------------------------
Pinnacle Towers III Inc., and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the Southern
District of New York to retain The Bayard Firm as special
litigation counsel to render advice regarding commencement and
prosecution of certain litigation involving Motorola, Sears
Roebuck & Company and Trizec Hahn.

The Debtors want to bring-in Bayard because the firm has already
commenced review and work on the litigation, including disputes
regarding sites on the Sears Towers against Motorola, Sears and
Trizec.

Bayard's hourly rates range from:

     directors            $300 to $440
     associates           $180 to $325
     paraprofessionals    $ 80 to $125

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.

Pinnacle Holdings Inc.'s 10% bonds due 2008 (BIGT08USR1),
DebtTraders reports, are trading at 26 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BIGT08USR1
for real-time bond pricing.


PRIMEDIA: Improved Q2 EBITDA Spurs S&P to Affirm B Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its single-'B'
corporate credit rating on publisher PRIMEDIA Inc., and removed
the rating from CreditWatch (where it was placed on Sept. 26,
2001) reflecting the company's second quarter EBITDA from
continuing operations increasing 27%, in line with Standard &
Poor's expectations.

The New York City-based company has total debt and preferred
stock of about $2.4 billion as of June 30, 2002. The outlook is
negative.

"The management has taken appropriate measures to assure
immediate-term liquidity," said Standard & Poor's credit analyst
Hal Diamond.

The rating also considers the company's thin interest coverages
resulting from the lackluster advertising environment and high
debt load. Profitability of the company's Channel One school TV
news operation, consumer and trade magazines, and About.com
portal are weak due to the soft market for general brand,
business-to-business, and Internet advertising. Despite flat
EBITDA for the first half of 2002, the company expects full-year
2002 EBITDA from continuing businesses to increase more than 20%
due to cost reductions already taken, the elimination of
Internet losses, and a full year ownership of EMAP USA. Standard
& Poor's takes a cautious view of 2002 EBITDA growth and gains
in interest coverage, which may be restricted by the uncertain
industry outlook for traditional and Internet advertising
demand.

"Liquidity is adequate for the rating with revolving credit
availability of about $235 million and minimal debt maturities
until the $100 million 10.25% senior notes mature in June 2004.
Nevertheless, Standard & Poor's remains concerned that credit
measures will remain weak due to soft economic and advertising
conditions. Even when an upturn materializes, debt will remain
high and Internet operations are still likely to be in a
development mode," notes Mr. Diamond.


PRINTING ARTS: Court Approves Dismissal of Chapter 11 Cases
-----------------------------------------------------------
Upon consideration of the joint motion by Printing Arts America,
Inc., and debtor-affiliates, the Agent, and the Unsecured
Creditors' Committee, the U.S. Bankruptcy Court for the District
of Delaware approved the dismissal of the Debtors' chapter 11
cases.

The Court stipulates that these chapter 11 cases shall be
dismissed three business days following the Debtors' filing with
the Court a certification that all allowed administrative claims
and US Trustee Fees have been paid in full.

Each professional shall file a final fee statement on or before
August 26, 2002 (30 days after entry of Dismissal Order) for the
remaining unpaid compensation or be forever barred from
asserting a claim against the Debtors for such professional fees
or expenses.

Objections to all Final Fee Statements shall be filed not later
than September 4, 2002. If there are timely-filed objections, a
hearing on the objected Final Fee Statement is scheduled on
September 11, 2002.

Following disposition of the last Final Fee Statement, the
Debtors are also directed to reserve an amount sufficient to
satisfy:

     i) any further US Trustee Fees payable or anticipated;

    ii) unpaid Professional Fees as allowed by this order or by
        the Court after consideration of the Final Fee
        Statements and any timely-filed objections;

   iii) the remaining Administrative Expenses and

    iv) the unpaid fees of the Agent and its professionals.

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


PROVANT INC: Bank Lenders Extend Revolver through Month's End
-------------------------------------------------------------
Provant, Inc. (NASDAQ: POVT), a leading provider of performance
improvement training services and products, announced that its
bank lenders have agreed to extend Provant's line of credit,
which was to expire July 31, 2002, to August 30, 2002. During
that time, the Company will continue its discussions to
restructure the line of credit. There can be no assurance that
the Company will be successful in restructuring the credit
facility.

As a leading provider of performance improvement training
services and products, Provant helps its clients maximize their
effectiveness and profitability by improving the performance of
their people. With over 1,500 corporate and government clients,
the Company offers blended solutions combining web-based and
instructor-led offerings that produce measurable results by
strengthening the performance and productivity of both
individual employees and organizations as a whole.

For the latest Provant news, or to request faxed or mailed
information about Provant, call the Company's toll-free
shareholder communications service at 1-877-PROVANT. This
service is available 24 hours a day, seven days a week.
Shareholder information is also available on the World Wide Web
at http://www.provant.com


PROVANT INC: Appoints Wayne Hall as Independent Board Member
------------------------------------------------------------
Provant, Inc. (NASDAQ: POVT), a leading provider of performance
improvement training services and products, announced the
appointment of one new independent board member to its Board of
Directors and the resignation of two board members.

Joining the Provant Board of Directors as head of the audit
committee is Wayne Hall. Mr. Hall, who is also a certified
public accountant, is currently the Vice Chairman of Black &
Veatch Holding Company, a leading global engineering,
construction and consulting company, where he spent close to ten
years as Chief Financial Officer. He was also President and
Chief Executive Officer of Black & Veatch Pritchard, Inc. from
2000-2001. Prior to joining Black & Veatch, Mr. Hall was Vice
President and Chief Financial Officer-Store Planning for The
Limited, a retail company based in Columbus, Ohio.

Mr. Hall holds a Bachelor of Science degree in accounting from
California State Polytechnic University in San Luis Obispo,
California, and completed the Columbia University Graduate
School of Business Senior Executive Program in 1997.

Curt Uehlein, Provant's President and CEO, said, "We are very
pleased to have Wayne as a new board member. He brings nearly 30
years of senior financial and operating management experience to
Provant and we know he will be an invaluable contributor.
Wayne's appointment is part of Provant's continued commitment to
maintaining a strong independent perspective and high corporate
governance standards."

David Hammond and Esther Smith have each resigned from the
Provant Board of Directors for personal reasons. Each has
resigned from the Board for personal reasons.

Mr. Uehlein continued, "David and Esther have been valued
members of Provant's Board since the founding of the Company and
we are of course disappointed to see them go. Each has served
Provant and its shareholders with dedication and loyalty. We
wish them all the best in the future."

As a leading provider of performance improvement training
services and products, Provant helps its clients maximize their
effectiveness and profitability by improving the performance of
their people. With over 1,500 corporate and government clients,
the Company offers blended solutions combining web-based and
instructor-led offerings that produce measurable results by
strengthening the performance and productivity of both
individual employees and organizations as a whole.


PUEBLO XTRA: S&P Junks Rating Over Unit's Interest Nonpayment
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on supermarket operator Pueblo Xtra International Inc.,
to double-'C' from triple-'C'-plus based on the company's
announcement that its operating subsidiaries will not pay $8.4
million of interest due to Pueblo Xtra, the parent company.
The outlook is negative. Pompano Beach, Florida-based Pueblo
Xtra has about $220 million in rated debt.

"As a result of this action, it is unlikely that Pueblo Xtra
will be able to make the $8.4 million semi-annual interest
payment due on [August 2] on its $177 million senior unsecured
notes maturing in August 2003," Standard & Poor's credit analyst
Patrick Jeffrey said. "Should the company not make this interest
payment, the ratings would be lowered to reflect a default on
this obligation."


QWEST: Brings-In Barry K. Allen as Chief Human Resources Officer
----------------------------------------------------------------
Qwest Communications International Inc., (NYSE: Q) announced
that Barry K. Allen has joined the company as executive vice
president and chief human resources officer, reporting to Qwest
Chairman and CEO Richard C. Notebaert.  Allen, most recently
served as President of Allen Enterprises, LLC, which focused on
private equity investments and management in the manufacturing,
banking and real estate industries.

Allen brings more than 25 years of senior management experience
in the high-tech, telecommunications and health care sectors to
Qwest.  While serving as President and COO of Marquette
Electronics, he directed the company's day-to-day business
operations and oversaw its international and acquisition
strategies.

During his tenure in the telecommunications arena, Allen held
senior management positions at SBC Communications Inc. and
Ameritech Corporation. These positions included network
operations, marketing and regulatory affairs. He also served as
President and CEO at Illinois Bell, Wisconsin Bell and Ameritech
Publishing.

"Barry has held key senior management positions in several
different industries and we welcome his extensive experience as
our 56,000 employees focus on delivering world-class services to
our customers," said Notebaert. "Barry's previous experience
will help us as we look to energize and inspire our employees to
be leaders in the telecommunications industry."

Allen replaces Ian V. Ziskin, who has resigned to pursue other
opportunities.

Allen will assume responsibility for all human resources related
functions at Qwest, including overseeing the company's union
relationships.

Allen holds an M.B.A. from Boston University, and a B.A. in
Economics from the University of Kentucky.

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 (QUS03USA9) are trading at
about 84, DebtTraders says. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=QUS03USA9


RURAL CELLULAR: June 30 Balance Sheet Upside-Down by $48 Million
----------------------------------------------------------------
Rural Cellular Corporation (Nasdaq:RCCC) reports unaudited
consolidated financial results for the quarter ended June 30,
2002.

Second quarter ended June 30, 2002 highlights compared to second
quarter ended June 30, 2001:


     --  EBITDA increased 15% to $58.7 million.  
     --  EBITDA margin increased to 50%.  
     --  Free cash flow increased 102% to $16.8 million.  
     --  Retention improved to 98.5%.  
     --  Postpaid net customer additions were 16,020.  

Richard P. Ekstrand, president and chief executive officer,
commented: "In the wake of what has been a difficult quarter for
the telecom industry, RCC's long held balanced growth strategy
produced very strong EBITDA and free cash flow. Additionally,
customer growth rebounded nicely as our retention reached near
record levels."

As of June 30, 2002, the Company's balance sheet remains upside-
down with a total shareholders' equity deficit of about $48
million.

          Strong Customer Growth and Reduced Bad Debt

RCC is reporting a 145% increase in net postpaid customer
additions of 16,020 as compared to the first quarter of '02,
reflecting effective retention efforts together with solid gross
adds.

Second quarter `02 bad debt expense decreased 64% to $1.2
million, as compared to $3.4 million in the second quarter of
`01. Retention also improved to 98.5% in the second quarter of
`02 as compared to 97.8% for all of '01. Additionally, net ARPU
for the second quarter of `02 remained unchanged at $53 as
compared to the second quarter of `01.

                      Roaming Growth

The Company's roaming revenue increased 19% to $33.9 million in
'02 as compared to '01. Additionally, the Company's net roaming
position, or the net amount RCC receives after subtracting
incollect cost from roaming revenue, increased. Contributing to
these increases was a $2 million retroactive net settlement from
one of the Company's roaming partners.

                     Cost Containment

SG&A continues to decline as a percentage of revenue coming in
at 24% in the second quarter of '02 as compared to 26% in the
prior year. This decline is due to a decrease in bad debt
expense, cost reductions from consolidation of service centers,
declining billing cost, efficiencies in the organization and
other cost reduction initiatives.

A combination of lower incollect expense together with other
network cost efficiencies resulted in network cost as a
percentage of total revenue, decreasing to 22% as compared to
23% in `01. This quarter marks the fifth consecutive quarter
that year over year network costs as a percentage of revenue,
has declined.

          Compliance With Credit Facility Covenants

As of June 30, 2002, the Company had $793.9 million outstanding
and $258.9 million in availability under the credit facility and
is in compliance with all of its bank covenants.

            Initial Assessment of Asset Impairment

Statement of Financial Accounting Standards (SFAS) No. 142,
which provides accounting and reporting standards for acquired
intangible assets, requires that the Company perform an
assessment to determine whether goodwill of any acquired
intangible asset has been impaired. RCC has completed the
initial assessment required by SFAS No. 142 and has determined
that the carrying value of a region exceeds its fair value. The
Company is currently in the process of completing the second
phase of this evaluation to determine the amount of impairment.
Management expects that upon completion of this evaluation, RCC
will record in its statement of operations a non-cash charge of
approximately $400 - $450 million as the cumulative effect of a
change in accounting principle. As required by SFAS No. 142, the
charge will be made retroactive to the first quarter of fiscal
year 2002 once the second phase of the impairment test is
completed. The impairment test will be completed and final
adjustments made by December 31, 2002.

Rural Cellular Corporation, based in Alexandria, Minnesota,
provides wireless communication services to Midwest, Northeast,
South and Northwest markets located in 14 states.


SEITEL INC: Closes Sale of DDD Energy to Rising Star for $23.8MM
----------------------------------------------------------------
Business Wire  Aug 5

Seitel, Inc., (NYSE: SEI) has closed on the previously announced
sale to Rising Star Energy, LLC of a majority of the assets of
DDD Energy, Inc. DDD Energy is a wholly-owned subsidiary of
Seitel that is involved in the direct exploration for oil and
gas.

After estimated adjustments provided for in the sale agreement,
the Company received cash proceeds of $23.8 million for these
assets. A final adjustment (positive or negative), if any, will
be made within the next 90 days.

Kevin Fiur, President and Chief Executive Officer of Seitel,
said, "We are pleased to complete this transaction, which is a
necessary element of our efforts to focus on our core seismic
data business."

As previously announced, the Agreement grants Rising Star Energy
with the option, exercisable within 30 days of the closing, to
purchase additional assets of DDD for up to $15 million, or to
enter into a joint venture arrangement with Seitel related to
these additional assets. The Company is in active discussions
with Rising Star Energy regarding the additional assets.

Seitel markets its proprietary seismic information/technology to
more than 400 petroleum companies, selling data from its library
and creating new seismic surveys under multi-client projects.

                           *    *    *

As reported in Troubled Company Reporter's July 23, 2002,
edition, Seitel reached an Agreement with its Senior Noteholders
to extend the previously announced standstill agreement for an
additional 90 days.

Under the terms of the standstill agreement, the Senior
Noteholders have agreed to forebear from exercising any rights
and remedies they have against the Company related to the
previously reported events of technical default under the Senior
Note Agreements, until October 15, 2002 (Seitel has never missed
any payments of interest or principal to its creditors). During
the 90 day standstill period, various existing covenants under
the Senior Note Agreements are being suspended, and replaced
with certain enumerated covenants. These new covenants include
requirements that the Company receive Noteholder approval to
make certain investments or payments out of the ordinary course
of business, incur additional debt, create liens or sell assets.

The standstill agreement will terminate prior to October 15,
2002, among other things, in the event of a default by the
Company under the standstill agreement or any subsequent default
under the existing Senior Note Agreements, a default in the
payment of any non-excluded debt of $5,000,000 or more, in the
event the Company does not provide the Noteholders with an
acceptable business plan by August 31, 2002, or in the event the
closing and funding of the previously announced sale of certain
DDD Energy assets does not occur by August 31, 2002 (currently
scheduled to close July 31, 2002). The Company said that its
negotiations towards a long-term modification of its Senior Note
Agreements continue.


SHELBOURNE: Amends Stock Purchase Agreements with HX Investors
--------------------------------------------------------------
Shelbourne Properties I, Inc. (Amex: HXD), Shelbourne Properties
II, Inc. (Amex: HXE) and Shelbourne Properties, III, Inc. (Amex:
HXF), which are diversified real estate investment trusts,
amended their previously announced stock purchase agreements
with HX Investors, L.P.

Pursuant to the amended agreements, HX Investors will increase
the purchase price per share being offered in its pending tender
offers for up to 30% of the outstanding common stock of each
company from $53.00 to $63.15 for Shelbourne I, $62.00 to $73.85
for Shelbourne II and  $49.00 to $58.30 for Shelbourne III.  In
addition, HX Investors has agreed to reduce the incentive
payment payable to HX Investors, as provided for in the
companies' related plans of liquidation, from 25% to 15% of net
proceeds, after the payment of a priority return to
stockholders.  If the tender offers are fully subscribed, HX
Investors will own approximately 42% of the outstanding common
stock of each company.

Founded in 2000, Shelbourne Properties I, Inc., Shelbourne
Properties II, Inc. and Shelbourne III, Inc. are diversified
real estate investment trusts with holdings in the office,
retail and industrial asset sectors.  They are successors to
Integrated Resources High Equity Partners, Series 85,a
California Limited Partnership; High Equity Partners L.P. -
Series 86; and High Equity Partners L.P. - Series 88,
respectively.


SILVERADO GOLD MINES: Needs to Obtain New Financing to Fund Ops.
----------------------------------------------------------------
At May 31, 2002, Silverado Gold Mines Ltd. had a working capital
deficiency of $158,153, down from $2,096,803 at May 31, 2001,
primarily as a result of renegotiating the repayment terms of a  
portion of the $2,000,000 convertible debentures and related
interest.  The Company is in arrears of required mineral claims
and option payments for certain of its mineral properties at May
31, 2002, in the amount of $306,500 and therefore, the Company's
rights to these properties with a carrying  value of $315,000  
may be adversely affected as a result of these non-payments.  
The Company  understands that it has the forbearance of the
property owners and is not in default of the agreements in
respect of these properties.  The Company included the unpaid
mineral claims and  option payments in current liabilities at
May 31, 2002.

The Company's financial statements were prepared on a going
concern basis, which assumes the  realization of assets and
settlement of liabilities in the normal course of business.  The  
application of the going concern concept and the recovery of
amounts recorded as mineral properties and buildings, plant and
equipment is dependent on the Company's ability to obtain the
continued forbearance of certain creditors, to obtain additional
financing to fund its operations and acquisition, exploration
and development activities, the discovery of economically
recoverable ore on its properties, and the attainment of
profitable operations.  Current uncertainty with regard to these
matters raises substantial doubt about the Company's ability to
continue as a going concern.

Silverado Gold Mines Ltd., is engaged in the acquisition,
exploration and development of mineral properties in the State
of Alaska and the development of low-rank coal-water fuel
technology as a replacement for oil fired boilers and utility
generators. The Company holds interests in four groups of
mineral properties in Alaska.  The Company's main projects are
exploration and development of the Ester Dome Gold Project,
located 10 miles northwest of Fairbanks, Alaska, and the Nolan
Gold Project, located 175 miles north of Fairbanks, Alaska.

Revenue from gold sales decreased to $971 for the six months
ended May 31, 2002, from $1,655 for  the six months ended May
31, 2001. Revenues in the six-month period were attributable to
sales of  existing gold inventory.

The Company anticipates that significant revenues will not be
achieved until the Company is able to  place the Nolan gold
project into production. The Company anticipates that revenues
from the Company's low-rank-coal-water-fuel business will not be
achieved until commercial feasibility of this technology has
been established.  Revenues from the Nolan gold project and the
low rank coal water fuel business are contingent upon the
Company achieving additional financing.

The Company's loss increased to $1,042,585 for the six months
ended May 31, 2002 from $882,828 for the six months ended May
31, 2001, representing an increase of $159,757.  This increase
in the Company's loss was primarily attributable to the increase
in consulting costs in the amount of $380,144 that was off-set
by a decrease in advertising and promotion expenses of $57,748,
a decrease in research costs of $44,141, and a decrease in long
term interest costs of $34,477.  Loss for the second quarter
ended May 31, 2002, was $474,847 down from $545,823 for the
three-month period ended May 31, 2001. The Company anticipates
that it will continue to incur a loss until such time as the
Company can achieve significant revenues from its Nolan gold
project.


STONEPATH: Completes Restructuring of Convertible Preferreds
------------------------------------------------------------
Stonepath Group (AMEX: STG) has successfully completed the
restructuring of its outstanding shares of Series C Convertible
Preferred Stock.

The restructuring had been agreed to in February 2001 when
Stonepath received the consent of the Series C holders as part
of the Company's transition to the logistics business.

Dennis L. Pelino, the Company's Chairman and Chief Executive
Officer remarked, "We appreciate the support of our Series C
holders who have worked so constructively to help us through our
transition to the world of logistics. The restructuring is an
important milestone for Stonepath as it clears the way for the
additional capital that we will require to fuel our continued
growth."

In the restructuring, all of the shares of the Company's Series
C Convertible Preferred Stock, representing approximately $44
million in principal amount, have been surrendered and retired
in exchange for a combination of securities consisting of:

        - 1,911,071 shares of common stock;

        - 1,543,413 warrants to purchase common stock at an
          exercise price of $1.00;

        - Shares of a newly designated class of Series D
          Convertible Preferred Stock which in the future are           
          convertible into 3,607,448 shares of the Company's
          common stock.

The Series D Shares were designed to be a common equity
equivalent, with a limited liquidation preference for events of
sale or liquidation prior to December 31, 2003. The holders of
the Series D Shares are not entitled to receive dividends and
have only limited voting rights. The Series D Shares
automatically convert into common stock on December 31, 2004.

In addition, the holders of the Series D Shares have agreed to
restrictions on resale in the form of a lock-up through July 19,
2003 (or earlier if the trading price of the Company's stock
reaches $4.50) and limited resales through July 19, 2004 based
upon trading volume during that period.

The Company also announced that in a registration statement
filed with the Securities and Exchange Commission, it has
registered the shares of common stock issued upon conversion of
the Series C Shares, as well as the shares of common stock
issuable upon exercise of the warrants and conversion of the
Series D Shares issued in the restructuring. The registration
has the effect of permitting the future public resale of the
shares under and subject to the terms of a Prospectus dated
August 2, 2002. Except for the exercise of the warrants, the
Company will not receive any proceeds from the eventual sale of
the shares covered by the Prospectus.

As a result of the restructuring, approximately 23.4 million
shares of the Company's common stock are now outstanding, with
an additional 16.3 million shares of common stock issuable upon
the conversion or exercise of outstanding convertible
securities, warrants and options.

Stonepath Group -- http://www.stonepath.com-- is building a  
global logistics services organization that integrates
established logistics companies with innovative technologies.
Through our subsidiaries, Air Plus Limited, Global
Transportation Services and United American Freight Services,
Stonepath offers a full-range of time-definite transportation
and distribution solutions. For more information about Stonepath
Group and Stonepath Logistics, please contact John Brine at
(646) 486-4085.


TIMCO AVIATION: Lenders Agree to Amend Senior Credit Facilities
---------------------------------------------------------------
On July 12, 2002, Timco Aviation Services entered into an
agreement amending and restating its senior credit facilities
with a syndicate of four lenders led by Citicorp USA Inc. and
UPS Capital Corporation pursuant to the terms of a Fifth Amended
and Restated Credit Agreement dated July 12, 2002. Under the
Amended Credit Agreement, the Company has obtained a $30.0
million senior secured revolving line of credit and a $7.0
million senior secured term loan.

The Company utilized the proceeds from the Amended Credit
Facility to repay outstanding borrowings under its previously
outstanding revolving credit facility and its previously
outstanding $12.0 million senior secured term loan. As of July
19, 2002, the outstanding principal balance of the revolving
loans under the Amended Revolving Credit Facility was $2.5
million, the aggregate amount of letters of credit outstanding
under the Amended Revolving Credit Facility was $11.6 million
and availability under the Amended Revolving Credit Facility was
$4.6 million.

The interest rate on the Amended Revolving Credit Facility is,
at the Company's option, (a) prime plus 3% per annum, or (b)
LIBOR plus 4.5% per annum. The interest rate on the Amended Term
Loan is 12% per annum. The Amended Revolving Credit Facility is
due on January 31, 2004. The Amended Term Loan is due in
quarterly installments of $500,000, commencing September 30,
2002, with the remaining principal balance due in full on
January 31, 2004.

The Amended Credit Agreement contains certain financial
covenants regarding the Company's financial performance and
certain other covenants, including limitations on the amount of
annual capital expenditures and the incurrence of additional
debt, and provides for the suspension of the Amended Credit
Facility and repayment of all debt in the event of a material
adverse change in the business or a change in control.  
Generally, the Amended Credit Agreement requires mandatory
repayments and reduction of the commitments thereunder from
proceeds of a sale of assets or an issuance of equity or debt
securities. Mandatory repayments are also required as a result
of insufficient collateral to meet the borrowing base
requirements thereunder or in the event the outstanding
obligations under the Amended Credit Facility exceed the
commitments thereunder. Substantially all of the Company's
assets are pledged as collateral for amounts borrowed.


U.S. INDUSTRIES: Selling European Lighting Division to JPMorgan
---------------------------------------------------------------
U.S. Industries, Inc. (NYSE:USI), has signed an agreement
relating to the sale of SiTeco, its European lighting division,
to funds advised by JPMorgan Partners, the private equity arm of
JPMorgan Chase & Company.

Total consideration is approximately EUR120 million in cash. The
sale, which is subject to customary closing conditions, is
expected to close by August 31, 2002.

SiTeco, based in Traunreut, Germany, manufactures and
distributes lighting systems in Germany, Austria, Slovenia and
other countries.

David H. Clarke, Chairman and Chief Executive Officer of U.S.
Industries, said, "We are pleased to announce this sale which is
part of our non-core asset sale program. Proceeds from the
transaction will be utilized as amortization under the Company's
restructured credit facilities."

U.S. Industries owns several major businesses selling branded
bath and plumbing products, along with its consumer vacuum
cleaner company. The Company's principal brands include Jacuzzi,
Zurn, Sundance Spas, Eljer, and Rainbow Vacuum Cleaners.

                         *    *    *

As previously reported, Fitch downgraded U.S. Industries' senior
secured notes to B-.

Meanwhile, Standard & Poor's ratings on U.S. Industries Inc.,
and its related entities remain on CreditWatch with positive
implications.

Whether the company will be able to consummate the asset
disposals or debt refinancing in time to meet scheduled
amortizations to its lenders remains uncertain. Consequently,
the company's independent auditors issued a qualified opinion in
its report on the fiscal 2001 financial statements with respect
to the ability of the company to continue as a going concern.

Although the company has been successful in divesting of some
assets in a difficult market environment, potential ratings
improvement awaits the outcome of further asset disposals as
well as a restructuring of the company's credit facilities.

               Ratings Remaining on CreditWatch
                  with Positive Implications

     U.S. Industries Inc.                       Ratings
        Corporate credit rating                   CCC+
        Senior secured debt                       CCC+

     USI American Holdings, Inc.
       Senior secured debt                        CCC+

     USI Global Corp
       Senior secured debt                        CCC+


USI HOLDINGS: S&P Places B+ Credit Rating on Watch Developing
-------------------------------------------------------------
Standard & Poor's placed its ratings on USI Holdings Corp., on
CreditWatch with developing implications because of USI's
planned IPO, which is scheduled for September 2002, as well as
the recent second amendment to its S-1 filing to the SEC.

"If USI successfully completes the IPO, it is expected to pay
down its debt significantly, thereby substantially improving
leverage and coverage ratios," observed Standard & Poor's credit
analyst Donovan Fraser. "This scenario could lead to the ratings
being affirmed or raised by one notch." If the IPO is
unsuccessful, the company's high leverage, poor operating
results, and history of having to amend its bank debt covenants
to remain in compliance will likely lead to the ratings being
lowered by one or two notches.

Whether or not the IPO is successful, Standard & Poor's intends
to meet with USI's senior management in mid September to discuss
prospective capitalization plans, at which time the CreditWatch
status of the ratings is expected to be resolved.


UNITED AIRLINES: Appoints Jake Brace as Exec. Vice. Pres. & CFO
---------------------------------------------------------------
United Airlines (NYSE: UAL) announced four officer appointments,
three of which will fill executive positions that are currently
open.

    -- Jake Brace, currently senior vice president-Finance and
chief financial officer, will become executive vice president
and chief financial officer and will continue to report to
Chairman and Chief Executive Officer Jack Creighton.

    -- Bob Merz, currently managing director-Corporate Planning,
will move to vice president-Financial Planning and Analysis.  He
will report to Brace.

    -- Jeff Kawalsky, currently assistant treasurer, will become
vice president and treasurer.  He will report to Brace as well.

    -- Mark Anderson, currently senior director-Governmental
Affairs, will assume the duties of vice president-Governmental
Affairs in Washington. He will continue to report to Shelley
Longmuir, senior vice president-International, Regulatory and
Governmental Affairs, and oversee local, state and federal
affairs nationwide.

"All of the people promoted [Mon]day bring a wealth of
experience and skill to their leadership positions that will
help us successfully navigate the difficult territory we find
ourselves in," Creighton said.

United operates more than 1,900 flights a day on a route network
that spans the globe.  News releases and other information about
United may be found at the company's Web site at
http://www.united.com

                         *    *    *

As reported in Troubled Company Reporter's July 16, 2002
edition, the International Association of Machinists (IAM) of
UAL Corp., (B/Watch Dev) unit United Air Lines Inc., (B/Watch
Dev) announced on July 9, 2002, that it formally rejected
management's proposal for a 10% wage reduction. Standard &
Poor's ratings for both entities, which were lowered to their
current level June 28, 2002, remain on CreditWatch with
developing implications.

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


W.R. GRACE: Seeking Third Extension of Exclusive Periods
--------------------------------------------------------
For the third time, W. R. Grace & Co., and its debtor-affiliates
ask Judge Fitzgerald to further extend the exclusive period
during which only W.R. Grace may file a plan of reorganization.  
W.R. Grace asks that its time to propose and file a plan be
extended until February 1, 2003.  The Debtors also ask that
their exclusive period to solicit acceptances of that plan until
April 1, 2003.

David W. Carickhoff, Esq., at Pachulski Stang Ziehl Young &
Jones, Wilmington, Delaware, reminds the Court that these
chapter 11 cases were filed as a result of mounting asbestos-
related litigation liabilities rather than as a result of
difficulties with the Debtors' core businesses.  Defining these
liabilities, then providing for payment of valid claims on a
basis that preserves the Debtors' core business operations is a
complex process.  Given its nature, this process could require
significant litigation, which will take time.

Considering the strength of their core businesses, the
Debtors contend that they will be able to file a viable plan of
reorganization in due course as the procedures for addressing
the asbestos-related claims unfolds.  Amid intense opposition
from the Asbestos Committees over the process to be employed,
the Debtors have put into place a case management schedule that
will establish a system to efficiently manage the adjudication
of the myriad of asbestos-related claims against their estates.

A further extension of the Debtors' exclusive periods will not
harm creditors and other parties-in-interest, Mr. Carickhoff
argues.  Indeed, Mr. Carickhoff says, a termination of the
exclusive periods would defeat the very purpose behind Section
1121 of the Bankruptcy Code, which is to afford the Debtors a
meaningful and reasonable opportunity to negotiate with their
creditors and to then propose and confirm a consensual plan of
reorganization.  Termination of the exclusive periods, Mr.
Carickhoff warns, would signal a loss of confidence in the
Debtors and their reorganization efforts.  The Debtors' core
businesses would deteriorate, value would evaporate, and
everybody would lose.

Mr. Carickhoff notes that extensions of the exclusive periods
are typical in multi-billion-dollar chapter 11 cases in
Delaware, like In re Harnischfeger Industries, Inc., Bankr. Case
No. 99-2171 (PJW) (multiple extensions totaling 20 months); In
re Loewen Group Int'l, Inc., Bankr. Case. No. 99-1244 (PJW)
(exclusive periods extended for 19 months); In re Montgomery
Ward Holding Corp., Bankr. Case No. 97-1409 (PJW) (exclusive
periods extended for 21 months); and In re Trans World Airlines,
Inc., Bankr. Case No. 02-115 (HSB) (exclusivity extended for 20
months).

By application of Del.Bankr.L.R. 9006-2, the Debtors' exclusive
period during which to file a plan of reorganization is
automatically extended through the conclusion of the September
23, 2002 hearing on this motion. (W.R. Grace Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WARNACO: Gets Open-Ended Prucenter Lease Decision Time Extension
----------------------------------------------------------------
Effective July 23, 2002, The Warnaco Group, Inc., its debtor-
affiliates, and BP Prucenter Acquisition LLC agree to further
extend the period within which the Debtors may assume or reject
their lease with Prucenter through and including the
confirmation of a reorganization plan.  The extension is without
prejudice to the Debtors' rights to seek further extensions or
the Lessor's right to object to any further extension.

Through a Stipulation, the Parties also agreed that, in the
event any Lease is not deemed rejected on or before October 1,
2002, the Debtors shall continue to operate the retail store
governed by the Lease through and including December 31, 2002
and shall timely pay Prucenter for the rent of the Lease and
comply with all other obligations under the Lease until the
Lease is rejected after the Holiday period.  If the Debtors
reject the Lease on or before October 1, 2002, the Debtors must
advise Prucenter's attorney.

The Leases subject to the Stipulation are:

    (1) Store No. 4005
        Prudential Center
        800 Boylston Street
        Boston, Massachusetts

    (2) Store No. 4017
        Embarcadero Center Reg. Selling
        One Embarcadero Center
        San Francisco, California
(Warnaco Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


WILLIAMS SCOTSMAN: S&P Ups Corporate Credit Rating to B+ from B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Williams Scotsman Inc., to single-'B'-plus from
single-'B' and its senior unsecured debt rating to single-'B'
from single-'B'-minus. These ratings are removed from
CreditWatch, where they were placed on March 13, 2002. At the
same time, the double-'B'-minus rating on the mobile office
leasing company's senior secured credit facilities is affirmed.
The outlook is stable. The rating upgrades are due to the
company's improved financial flexibility after the recent sale
of $150 million of senior unsecured notes and $670 million of
secured credit facilities; these actions had already been
factored into the rating on the secured credit facilities. The
company has about $1.2 billion of rated debt outstanding.

"Despite its privately held status, Williams Scotsman's
financial flexibility has improved after the recent successful
placement of $150 million of senior unsecured notes as well as
$670 million of secured credit facilities," said Standard &
Poor's credit analyst Betsy Snyder.

The ratings reflect Baltimore, Md.-based Williams Scotsman's
strong number-two position in the somewhat recession-resistant
mobile office leasing business, offset by an aggressive
financial profile. The company's fleet consists of close to
94,000 units leased through a North American network of 88
locations. The company's market share is approximately 25%,
second to GE Capital Modular Space (approximate 28% market
share), with the third-largest competitor's market share less
than one-third the size of Williams Scotsman's. Williams
Scotsman and GE Capital Modular Space are the only two national
companies, with the balance of the industry highly fragmented.
The leasing of mobile units has tended to be somewhat recession-
resistant due to the wide customer base that operates in
approximately 470 industries, including construction, education,
healthcare, and retail. Leasing mobile office units offers
customers more flexibility and lower costs than building
permanent facilities for certain purposes. In addition, Williams
Scotsman has the flexibility to redeploy assets to different
geographic areas if demand and/or supply necessitates. As a
result, the company's utilization rates have tended to be
relatively stable in the low-to-mid 80% area, resulting in
predictable and stable cash flow.

Continued strong demand for mobile office units should result in
stable cash flow, with current ratings likely to support
increased capital spending or acquisitions if demand warrants.
However, if demand were to weaken, Williams Scotsman has the
ability to reduce capital spending to maintain its strong
utilization levels, as well as its credit ratios. Therefore, the
company's financial profile is expected to remain relatively
consistent over the next few years, whether the company
increases or reduces capital spending.


WORLDCOM INC: Look for Schedules and Statements by November 4
-------------------------------------------------------------
Worldcom Inc., and its affiliated debtors sought and obtained an
extension of the deadline when they must file their Schedules of
Assets and Liabilities, Schedules of Executory Contracts and
Unexpired Leases, Lists of Equity Security Holders, and
Statement of Financial Affairs. The Court sets the new deadline
to November 4, 2002, without prejudice to the Debtors' right to
request additional extensions.

Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of
the Federal Rules of Bankruptcy Procedure, the Debtors are
required to file the schedules within 15 days after the Petition
Date.  Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP,
in New York, explains that the Debtors need the additional time
because the complexity and diversity of the Debtors' operations
make it impossible for them to deliver the Schedules within the
prescribed time period.  To prepare the required Schedules and
Statements, the Debtors must compile information from books,
records, and documents relating to a multitude of assets at
numerous locations throughout the world for 179 separate
WorldCom entities.  Collection of the necessary information, Ms.
Goldstein emphasizes, requires an enormous expenditure of time
and effort.

And while the Debtors, with the help of their professional
advisors, are mobilizing their employees to work diligently and
expeditiously on the preparation of the Schedules and
Statements, Ms. Goldstein says, the resources are strained
because the Debtors are focusing more on cushioning the trauma
of the first critical months of Chapter 11. (Worldcom Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)  

Worldcom Inc.'s 10.875% bonds due 2006 (WCOM06USR2) are trading
at 14 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM06USR2
for real-time bond pricing.


XCEL: Lenders Strike Cross-Default Provision under Credit Pacts
---------------------------------------------------------------
Xcel Energy (NYSE:XEL) has signed agreements with its lenders to
eliminate a cross-default provision in its two bank lines-of-
credit for which Bank of New York serves as agent.

"We're delighted that we were able reach these agreements," said
Wayne Brunetti, Xcel Energy chairman, president and CEO. "This
was a critical step for the company and gives us the added
financial flexibility we need."

Brunetti emphasized that the core of Xcel Energy "will always be
its utility operations. This agreement should make it clear that
we have the needed financial and legal separation between NRG
and the Xcel Energy holding company."

These agreements remove a key provision that had constrained
Xcel Energy's ability to access capital markets due to NRG's
financial condition. Xcel Energy has access to about $200
million remaining on its lines of credit. These lines consist of
two bank facilities of $400 million each, one expiring in
November 2002 and the other in November 2005.

Xcel Energy renegotiated its $800 million bank credit facilities
when it appeared that NRG would be unable to meet cash
collateral demands in the event it were downgraded to below
investment grade. NRG's debt recently was downgraded to below
investment grade by three credit rating agencies.

In the coming weeks, Xcel Energy will continue to focus on
improving NRG's financial strength. NRG is actively working with
its lenders to modify the cash collateral requirements in its
current arrangements. Xcel Energy's immediate goal is to obtain
extensions of NRG's collateral obligations in anticipation of
asset sales and other cash generating measures. As part of the
agreements with its lenders, the company has agreed that its
board of directors will review the company's dividend policy.
While the board could decide to alter the dividend, no decision
has been made by the board.

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 Allows Forstmann Little Break-Up Fee Payments
-------------------------------------------------------------
The Forstmann Investors assert that the Stand-Alone Plan and the
various documents that have been executed or generated with
respect to the Stand-Alone Plan, when taken together, constitute
a proposal that may have already given rise to XO
Communications' obligation to pay Forstmann Little's Break-Up
Payment, in the absence of the motion.

The Investors note that the Investment Agreement is a
prepetition executory contract that contemplates:

(i) the Investors extending financial accommodations to, or for
     the benefit of, the Debtor, and

(ii) the issuance of the Debtor's securities to the Investors.

Therefore, the Investment Agreement is not assumable by the
Debtor and is not enforceable against the Investors, pursuant to
Section 365(c)(2) of the Bankruptcy Code.

In addition, the Investors tell the Court that they do not
consent to the Debtor's assumption of the Investment Agreement
under Section 365(c)(2) of the Bankruptcy Code.

The Debtor's plan is not feasible and it, therefore, makes no
sense for the Court to approve the break-up fee, the Investors
argue.

The Investors also allege that the Motion does not accurately
reflect the Investment Agreement's terms and conditions.

                      Creditors' Committee

The Committee notes that ordinarily, Investment Protections are
intended to compensate a would-be investor in the event that the
target company chooses to walk away from the deal to accept a
higher and better offer from another investor.  In this case,
the Forstmann Investors have made it clear that they plan to
terminate the investment agreement with the Debtor.  Therefore,
the deal may be doomed whether or not the $44,000,000 payment is
made and the Debtor's motion should be denied because the
payment will not benefit the estate, the Committee argues.

What is worse, the Committee says, is that the Investors have
advised the Debtor that they plan on collecting the $44,000,000
Investment Protection anyway.  According to the Investors,
submission by the Debtor to the Court of an alternative stand-
alone restructuring plan triggered the Investors' entitlement to
payment of the $44,000,000.

The Committee raises these questions to the Court:

(1) Why would the company have negotiated terms that would give
    the Forstmann Investors the windfall? and

(2) Why, when given the opportunity to escape such onerous
    terms, would the Debtor ask the Court to sanction their
    payment under Chapter 11?

The Committee contends that the Investment Protections should be
denied because it:

(a) give a windfall for an insider of the Debtor that is likely
    to provide no value to this estate;

(b) not only do not provide any prospect of enhanced bidding
    but may have hampered competing proposals by raising the
    bar by $44,000,000;

(c) are unreasonably large relative to the proposed $800,000,000
    investment.

The Committee suggests that, if the Court approves the
Investment Protections, it should do so in a way that protects
the estate. In this regard, the Committee suggests that the
Break-Up Fee should not be paid until:

(i) the Debtor has fulfilled its fiduciary duty to its estate
     by pursuing all potential alternatives to maximize value to
     its estate, including, but not limited to, the pursuit of
     restructuring alternatives that will benefit all creditors
     of the estate, and an appropriate auction process within
     this Chapter 11 proceeding; and

(ii) a plan of reorganization, other than Plan B, is
     consummated.

                          XO Responds

"It is ironic that Forstmann Little/Telmex, the putative
recipients of the break-up fee payment, and the Committee, which
stands to lose the most if the Break-Up Payment is disapproved,
are objecting to the Motion," Bruce R. Kraus, Esq., at Willkie
Farr & Gallagher, in New York, observes.

The Debtor believes that the Forstmann Little/Telmex Investment
Agreement is by far the best restructuring plan available to XO
and its various creditor constituencies, especially the
Bondholders represented by the Committee.

Mr. Kraus relates that it is a virtual certainty that the Break-
Up Payment will never even become payable.  There are only two
circumstances under which the fee could be payable:

  (1) if the Debtor terminates the Investment Agreement in order
      to accept a superior proposal; and

  (2) if the Debtor enters into a written agreement with respect
      to an alternative proposal.

If neither occurs, Mr. Kraus says, XO has the right to terminate
the Investment Agreement for any reason or no reason, without
paying the Break-Up Payment.

Mr. Kraus points out that neither circumstance, giving rise to a
Break-Up Payment obligation, has occurred or will occur.  First,
after months of effort to find a better deal, none has emerged.
Second, the Debtor has not entered into any written agreement
with respect to the Stand-Alone Plan, and will not do so unless
and until the Investment Agreement is terminated in accordance
with its terms.  "That would leave XO free to enter into any and
all agreements necessary or appropriate to implement its stand-
alone contingency plan," Mr. Kraus says.

Since approval of the Break-Up Payment cannot be anything other
than a benefit to the Debtor, one may question how the Committee
can even rationally oppose it.  Perhaps, there was a mistaken
reading of the Investment Agreement to the effect that the
Break-Up Payment is likely payable upon implementation of the
Stand-Alone Plan and may have already been triggered.  "This
assertion is dead wrong," Mr. Kraus tells the Court.  According
to Mr. Kraus, the Investors are not entitled to the investment
protections if the Stand-Alone Plan is implemented.  The
implementation of the Stand-Alone Plan not and cannot trigger a
Break-Up Payment, Mr. Kraus explains, because the written
agreement that triggers a Break-Up Payment obviously
contemplates an agreement for a superior deal, not a plan to
implement the less attractive Stand-Alone Plan in the event the
Investment Agreement is first terminated.

On the assumption that the Investors can collect the Investment
Protections irrespective of whether the Debtor ever receives a
better offer, again, this is simply wrong, Mr. Kraus says.

The Forstmann Investors contend that the Debtor's actions in
arranging for the Stand-Alone Plan -- if and only if the
Forstmann Little/Telmex fails to close -- may constitute a
"written agreement" with respect to an alternative proposal that
"may have already given rise" to the Debtor's obligation to pay
the Break-Up Payment.  But there is no such written agreement,
Mr. Kraus insists.

"It remains to be seen whether the Investors will actually make
good on the Investment Agreement or risk a suit for breach of
contract," Mr. Kraus says.  But what is clear is that if the
Investment Agreement fails to close for any reason prior to the
applicable drop-dead dates, then the Debtor is free to terminate
the agreement after the applicable drop-dead dates without
triggering the Break-Up Payment and without relieving the
Investors of liability for any breach.

             Judge Gonzalez Okays Break-Up Fee Payment

After due deliberation, the Court finds and concludes that the
approval of the Break-Up Payment:

(a) is in the best interests of the Debtor, its estates and all
    of the Debtor's various creditor constituencies,

(b) was negotiated and proposed in good faith and not the
    product of self-dealing,

(c) encourages competitive bidding for the purchase of the
    Debtor's assets, and

(d) is reasonable relative to the size of the transaction.

The Court also approves the Expense Reimbursements in favor of
the Investors.

                         *    *    *

As previously reported, XO Communications, Inc., entered into
an Investment Agreement with Forstmann Little and Telmex which
provides for an $800 million equity investment in exchange for,
among other things, 80% of the common stock of Reorganized XO.
The Investment Agreement is included in the Plan and the related
disclosure statement already filed with the Court.  

If the Investment Agreement is terminated, or XO, after
discussions with the Administrative Agent under the Senior
Credit Facility, determines that the transactions under the
Investment Agreement will not be completed, XO presently intends
to implement the transactions contemplated by the Stand-Alone
Term Sheet, unless a superior alternative emerges.

To compensate the Investors for their investment of time and
resources in the event that the Debtor were to accept an
alternative Proposal, the Investors demanded, and the Debtor
accepted, that the Investment under the Investment Agreement be
contingent upon the provision of investment protections in the
form of a "Break-up Payment" and "Expense Reimbursements".

The Investment Agreement requires that, within three business
days after the Petition Date, the Debtors must seek, and within
45 days after the Petition Date, the Debtors must obtain, the
Court's approval of the Break-Up Payment and Expense
Reimbursement that would be payable to the Investors under the
circumstances set forth in the Investment Agreement. (XO
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


* Meetings, Conferences and Seminars
------------------------------------
August 7-10, 2002
   AMERICAN BANKRUPTCY INSTITUTE
      Southeast Bankruptcy Conference
         Kiawah Island Resort, Kiawaha Island, SC
            Contact: 1-703-739-0800 or http://www.abiworld.org

August 21-25, 2002
     NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
          Annual Conference
               Cascades Resort
                    Contact: 803-252-5646 or fax 803-765-9860
                         or info@nabt.com

August 26-28, 2002
     NEW YORK UNIVERSITY SCHOOL OF LAW
          Workshop of Bankruptcy and Reorganizations
               Contact: Bobbie Glover 212-998-6414

August 27, 2002
     NATIONAL BUSINESS INSTITUTE
          Advanced Consumer Bankruptcy Issues in Florida
               Radison Mart Plaza Hotel, Miami, Florida
                    Contact: 1-800-930-6182 or fax 715-835-1405
                         or http://www.nbi-sems.com/

September 12-13, 2002
     FARM, RANCH, AGRI-BUSINESS BANKRUPTCY INSTITUTE
          18th Annual Meeting
               Holiday Inn Park Plaza, Lubbock, TX
                    Contact: 806-765-9199

September 12-13, 2002
     ASSOCIATION OF CHAPTER 12 TRUSTEES (ACT2)
          ACT2 Meeting
               Holiday Inn Park Plaza, Lubbock, TX
                    Contact: 806-765-9199

September 12-13, 2002
     STATE BAR OF TEXAS
          Consumer Bankruptcy Course 2002
               San Antonio, TX
                    Contact: 800-204-2222 (x1574)

September 19 - 20, 2002
     AMERICAN CONFERENCE INSTITUTE
          Accounting and Financial Reporting
               Marriott East Side New York, New York
                    Contact: 1-888-224-2480 or 1-877-927-1563 or
                         mktg@americanconference.com

September 19 - 20, 2002
     AMERICAN CONFERENCE INSTITUTE
          Securities Enforcement and Litigation
              The Russian Tea Room Conference Facility, New York
                    Contact: 1-888-224-2480 or 1-877-927-1563 or
                         mktg@americanconference.com

September 24 - 25, 2002
     AMERICAN CONFERENCE INSTITUTE
          OTC Derivatives
               Marriott East Side New York, New York
                    Contact: 1-888-224-2480 or 1-877-927-1563 or
                             mktg@americanconference.com

September 26-27, 2002
     ALI-ABA
          Corporate Mergers and Acquisitions
             Marriott Marquis, New York
               Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

September 30 - October 1, 2002
     AMERICAN CONFERENCE INSTITUTE
          Outsourcing in the Consumer Lending Industry
               The Hotel Nikko, San Francisco
                    Contact: 1-888-224-2480 or 1-877-927-1563 or
                         mktg@americanconference.com

October 1-2, 2002
    INTERNATIONAL WOMEN'S INSOLVENCY AND RESTRUCTURING
            CONFEDERATION
          International Fall Meeting
               Hyatt Regency, Chicago, IL
                    Contact: 703-449-1316 or fax 703-802-0207
                         or iwirc@ix.netcom.com

October 2-5, 2002
     NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
          Seventy Fifth Annual Meeting
               Hyatt Regency, Chicago, IL
                    Contact: http://www.ncbj.org/

October 3, 2002
     INTERNATIONAL INSOLVENCY INSTITUTE
          Member's Meeting (III)
               Chicago IL
                    Contact: http://www.ncbj.org/

October 7-13, 2002
     ASSOCIATION OF BANKRUPTCY JUDICIAL ASSISTANTS
          13th Annual Educational Conference and Meetings
               Regency Plaza Hotel, Mission Valley
                    Contact: 313-234-0400

October 9-11, 2002
   INSOL INTERNATIONAL
      Annual Regional Conference
         Beijing, China
            Contact: tina@insol.ision.co.uk
                         or http://www.insol.org

October 24-25, 2002
    NATIONAL BANKRUPTCY CONFERENCE
        Member's Meeting
            Sidley Austin Brown & Wood Offices, Washington D.C.
                Contact: http://www.law.uchicago.edu/NBC/NBC.htm

October 24-28, 2002
   TURNAROUND MANAGEMENT ASSOCIATION
      Annual Conference
         The Broadmoor, Colorado Springs, Colorado
            Contact: 312-822-9700 or info@turnaround.org

November 21-24, 2002
   COMMERCIAL LAW LEAGUE OF AMERICA
      82nd Annual New York Conference
         Sheraton Hotel, New York City, New York
            Contact: 312-781-2000 or clla@clla.org
                         or http://www.clla.org/

December 2-3, 2002
   RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
          Distressed Investing 2002
               The Plaza Hotel, New York City, New York
                    Contact: 1-800-726-2524 or fax 903-592-5168
                         or ram@ballistic.com  

December 5-7, 2002
    STETSON COLLEGE OF LAW
          Bankruptcy Law & Practice Seminar
               Sheraton Sand Key Resort
                    Contact: cle@law.stetson.edu

December 5-8, 2002
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         The Westin, La Paloma, Tucson, Arizona
            Contact: 1-703-739-0800 or http://www.abiworld.org

February 22-25, 2003
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Litigation Institute I
         Marriott Hotel, Park City, Utah
            Contact: 1-770-535-7722 or
                         http://www.nortoninstitutes.org


March 27-30, 2003
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Litigation Institute II
         Flamingo Hilton, Las Vegas, Nevada
            Contact: 1-770-535-7722
                         or http://www.nortoninstitutes.org

April 10-13, 2003
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         Grand Hyatt, Washington, D.C.
            Contact: 1-703-739-0800 or http://www.abiworld.org

May 1-3, 2003 (Tentative)
   ALI-ABA
      Chapter 11 Business Organizations
         New Orleans
            Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

May 8-10, 2003 (Tentative)
   ALI-ABA
      Fundamentals of Bankruptcy Law
         Seattle
            Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

June 26-29, 2003
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Western Mountains, Advanced Bankruptcy Law
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 1-770-535-7722
                         or http://www.nortoninstitutes.org

July 10-12, 2003
   ALI-ABA
      Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
           Drafting,
         Securities, and Bankruptcy
            Eldorado Hotel, Santa Fe, New Mexico
               Contact: 1-800-CLE-NEWS or http://www.ali-aba.org

December 3-7, 2003
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         La Quinta, La Quinta, California
            Contact: 1-703-739-0800 or http://www.abiworld.org

April 15-18, 2004
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or http://www.abiworld.org

December 2-4, 2004
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Marriott's Camelback Inn, Scottsdale, AZ
            Contact: 1-703-739-0800 or http://www.abiworld.org

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to conferences@bankrupt.com are encouraged.

                          *********

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 ***