TCR_Public/020813.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, August 13, 2002, Vol. 6, No. 159     

                          Headlines

ANC RENTAL: U.S. Trustee Balks at NTRG's Terms of Engagement
ADELPHIA BUSINESS: Keeping Plan Filing Exclusivity Until Nov. 30
ADELPHIA COMMS: Wants More Time to Make Lease-Related Decisions
AMERICAN HOMEPATIENT: Court Okays Dix & Eaton as PR Consultants
ANNIE'S HOMEGROWN: KPMG LLP Expresses Going Concern Doubt

ARMSTRONG HOLDINGS: Second Quarter Operating Income Falls 10.5%
ASSISTED LIVING: Entry of Final Decree Delayed Until October 1
ASSISTED LIVING: June 30 Working Capital Deficit Narrows to $4MM
AVIATION GENERAL: Names Martinich as Strategic Jet Pres. & CEO
BUDGET GROUP: Obtains Okay to Honor Critical Partner Obligations

BUILDNET: Court Sets Plan Confirmation Hearing for August 20
CABLEVISION SYSTEMS: Liquidity Concerns Spur S&P to Keep Watch
CINEMARK: S&P Changes Outlook to Stable After IPO Postponement
COMMSCOPE INC: Board Accepts Edward D. Breen's Resignation
CONSECO FINANCE: Fitch Places Housing Bond Ratings on Watch Neg.

CONSECO FINANCE: Fitch Further Junks HE/HI Ltd. Guarantee Bonds
CONSECO INC: S&P Revises Counterparty Credit Ratings to SD
CONSECO INC: Fitch Cuts Long-Term Corporate Credit Rating to C
CONSECO INC: S&P Further Junks Various Related Transactions
COVANTA ENERGY: Seeks Okay to Sell Argentinean Casino Interests

DADE BEHRING: Wants to Continue Wind-Down Agreement with AHC
ENRON CORP: Wants to Sell Center South Building at Auction
ENRON CORP: Wants More Time to Remove Prepetition Lawsuits
FEDERAL-MOGUL: Asks Court to Fix March 3, 2003 Claims Bar Date
FLAG TELECOM: New York Court Approves Disclosure Statement

FLEMING COMPANIES: Plans to Expense Fair Value of Stock Options
FREDERICK'S OF HOLLYWOOD: Files Chapter 11 Plan in Los Angeles
FRUIT OF THE LOOM: Trust Wants to File Farley Docs. Under Seal
FUELNATION: Obtains $110 Million Letter of Credit from H&N LLC
GENESIS ENERGY: Reports Improved Fin'l Results for 2nd Quarter

GLOBAL CROSSING: Asks Court to Fix September 30 Claims Bar Date
GLOBAL CROSSING: Hutchison & ST Buying 61% Stake for $250MM
GLOBAL CROSSING: Court Okays Pact with Hutchison & ST Telemedia
HARVARD INDUSTRIES: Hilco Completes $9MM Funding for Buyout Deal
HAYES LEMMERZ: Asks Court to Allow D&O Defense Costs Payment

HAYES LEMMERZ: Names D. Zekind as Berea Facility Plant Manager
HI-TECH AMERICA: IHI Cancels Joint Venture Agreements in Default
ICG COMMS: Court Okays Stipulation Extending Cash Collateral Use
ICH CORPORATION: Wants to Extend Plan Exclusivity Until Oct. 15
IT GROUP: Obtains 2nd Extension of Removal Period Until Oct. 14

INNOVATIVE CLINICAL: Arthur Andersen Engagement Pact Terminated
INTEGRATED HEALTH: Sierra Wants Silvercrest's Case Dismissed
INTERLIANT INC: Look for Schedules and Statements on October 18
INTERNATIONAL TOTAL: Shoos-Away Arthur Andersen as Accountants
KINETICS: Fitch Downgrades Senior Secured Credit Facilities to B

KMART CORP: SEC Has Until October 28 to File Proof of Claim
LTV CORP: Blanking Selling 11.11% Interest in TWB for $4.5 Mill.
LEVEL 8 SYSTEMS: Will Publish Second Quarter Results Tomorrow
MTS/TOWER RECORDS: Hires KPMG to Replace Andersen as Auditors
MALAN REALTY: Closes Sale of 4 Kmart-Anchored Centers for $15MM

MANITOWOC COMPANY: Acquires Grove Investors Business for $271MM
MCDERMOTT: S&P Revises Outlook to Neg. on B&W's Cash Flow Issues
MICROCELL TELECOMMS: June 30 Balance Sheet Upside-Down by C$1BB
MIDWAY AIRLINES: Administrator Wants to Convert Case to Ch. 7
MILACRON INC: Closes Sale of Valenite to Sandvik for $175 Mill.

MYCOM GROUP: Adds New Hosting Option to Web Manager Software
NETBANK: S&P Affirms B+/B Ratings & Revises Outlook to Negative
OPTIMARK: Bankruptcy Filing Likely If Fund-Raising Efforts Fail
PAYSTAR CORPORATION: Auditors Raise Going Concern Doubt
PETROMINERALS CORP: Will Commence Trading on OTC Bulletin Board

PRINTWARE: Files Form 15 with SEC to End Reporting Obligations
RELIANCE GROUP: Seeking Fourth Extension of Exclusive Periods
SL INDUSTRIES: Appoints Imperial Capital as Financial Advisors
SVI SOLUTIONS: Will Release June Quarter Fin'l Results Tomorrow
SAFETY-KLEEN CORP: Committee Taps Rosenthal as Special Counsel

TRAILER BRIDGE: Says Liquidity Adequate to Meet All Obligations
US AIRWAYS: Receives Court Approval of First-Day Motions
VANGUARD AIRLINES: Court Okays Brownstein Hyatt as Co-Counsel
VENTURE CATALYST: Shareholders' Meeting to Convene in September
WEBLINK WIRELESS: L. Abramson Steps Down from Board of Directors

WEIRTON STEEL: Second Quarter Net Loss Narrows to $36 Million
WINSTAR: Ch. 7 Trustee Selling $1.35M AccelerNet Note for $270K
WORLDCOM INC: Seeks Court Approval to Hire BSI as Noticing Agent
X-CHANGE CORPORATION: Defaults on Agreement with WebIam Inc.
XO COMMS: Committee Bringing-In Jefferies & Co. for Fin'l Advice

                          *********

ANC RENTAL: U.S. Trustee Balks at NTRG's Terms of Engagement
------------------------------------------------------------
On behalf of the United States Trustee, Don A. Beskrone, Esq.,
in Wilmington, Delaware, asserts that the National Tax Resource
Group should not be exempted from filing fee applications and
from maintaining time records in accordance with the UST
Guidelines.

Mr. Beskrone insists that NTRG should be required to maintain
and file a record of activities undertaken on a daily basis in
relation to the engagement.  In addition, the firm should be
required to file regular fee applications in accordance with the
Administrative Order governing the compensation of professionals
in ANC Rental Corporation's cases or, at the very least, file
periodic reports with respect to the services provided and the
fees earned in connection with the engagement.  In any event,
NTRG should file a final fee application subject to the review
for reasonableness under the Bankruptcy Code.  Under no
circumstances, however, should NTRG be paid up to $1,000,000 in
professional compensation without any review by the Court, the
U.S. Trustee and other parties-in-interest.

The U.S. Trustee also finds it objectionable that the Debtors
are limiting NTRG's liability.  The Engagement Letter provides
that, "NTRG will not be responsible for penalties, interest, or
other charges resulting from late payment of taxes".  This
limitation, Mr. Beskrone says, is inconsistent with the
fiduciary duty of professionals providing assistance to debtors
in a Chapter 11 case.

Mr. Beskrone asserts that the Debtors are also trying to
circumvent the requirements of Sections 327(a), 328 and 330 of
the Bankruptcy Code by agreeing that NTRG will utilize, at its
own expense, the law firm of Brusniak Harrison & McCool, other
unidentified counsel and certain other unidentified local
consultants, to assist it in pursuing tax refunds.  The U.S.
Trustee demands that terms of retention and fee structure of
NTRG's assistants be fully disclosed so that the Court could
determine the term's reasonability and determine the
compensation's appropriateness in light of the Bankruptcy Code
prohibition of sharing of compensation, except in limited
circumstances.  The U.S. Trustee also asks the Court to strike
the provision in Clayton L. Wigley's declaration that NTRG has
agreed to share its compensation with "an outside brokerage
firm".

For these reasons, the U.S. Trustee asks the Court to deny the
Debtors' application. (ANC Rental Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADELPHIA BUSINESS: Keeping Plan Filing Exclusivity Until Nov. 30
----------------------------------------------------------------
Adelphia Business Solutions, Inc., and its debtor-affiliates
have obtained more time to file a plan of reorganization and
thus, retains control of the plan process.  The U.S. Bankruptcy
Court for the Southern District of New York grants the Debtors
the exclusive right to file a chapter 11 plan until November 30,
2002, and the exclusive right to solicit creditors' acceptances
of that plan until January 31, 2003.


ADELPHIA COMMS: Wants More Time to Make Lease-Related Decisions
---------------------------------------------------------------
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, relates that Section 365(d)(4) of the Bankruptcy Code
grants Adelphia Communications and its debtor-affiliates an
initial 60-day grace period before they must decide whether to
assume or reject leases for nonresidential real property.  As
these complex Chapter 11 cases are in their infancy, it would be
impossible for the ACOM Debtors to make reasoned decisions on
the leases during that 60-day period.

By this motion, the ACOM Debtors ask the Court to extend their
time to assume or reject all unexpired leases of nonresidential
real property until December 26, 2002.

Ms. Chapman tells the Court that the ACOM Debtors are party to
numerous Unexpired Leases.  The Unexpired Leases may be valuable
assets of the ACOM Debtors' estates and may be integral to the
continued operation of their businesses.

Since the Petition Date, Ms. Chapman relates that the Debtors
have started the process of analyzing and determining which of
the Unexpired Leases are critical to the Debtors' operations and
which of the leases are not necessary to the Debtors' future
business needs.  During the coming months, the Debtors will
continue to analyze their need for the Unexpired Leases.
However, the Debtors' ability to complete the task requires an
extension of time to enable them to evaluate the need for these
locations in the context of a business plan, which has yet to be
developed.

Ms. Chapman points out that the Debtors have focused their
efforts and energies on securing postpetition financing and
stabilizing their operations so they may pursue a successful
reorganization.  To require the Debtors to make significant
business decisions as to which of the Unexpired Leases will be
needed for their reorganization efforts at this early juncture
would be impractical and, more importantly, contrary to the best
interests of the Debtors' estates and all creditors.  The
Debtors should not be forced to choose between losing valuable
locations and assuming leases that ultimately should be
rejected. Accordingly, the Debtors require an extension to avoid
what would be a premature assumption or rejection of the
Unexpired Leases.

Granting this Motion would not prejudice the Lessors under the
Unexpired Leases because:

A. to the best of their knowledge, the Debtors are or shortly
   will be current on their postpetition rent under the
   Unexpired Leases;

B. the Debtors have the liquidity and intend to continue to
   perform timely all of their obligations under the Unexpired
   Leases as required by Section 365(d)(3) of the Bankruptcy
   Code; and

C. in all instances, individual Lessors may, for cause shown,
   ask the Court to fix an earlier date by which the Debtors
   must assume or reject an Unexpired Lease.

Nonetheless, the Debtors reserve all of their rights with
respect to the Unexpired Leases, including the right to
determine whether or not the Unexpired Leases are in fact true
leases. (Adelphia Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

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


AMERICAN HOMEPATIENT: Court Okays Dix & Eaton as PR Consultants
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Tennessee approved
American Homepatient, Inc., and its debtor-affiliates' motion to
bring-in Dix & Eaton Incorporated as their Public Relations
Consultants.

The Debtors tell the Court that they retained Dix & Eaton
because of the firm's familiarity with the Debtors' operations
and public relations needs.

As Public Relations Consultants, Dix & Eaton will provide:

     a) assistance with preparation of media materials,
        including local and national press releases and media
        lists;

     b) assistance with preparation of material for corporate
        and employee meetings regarding the initial chapter 11
        filing and periodic updates during the pendency of these
        cases;

     c) assistance with preparation of correspondence to
        management and staff, regulators, suppliers and vendors,
        and community and political leaders concerning the
        initial chapter 11 filing and periodic updates during
        the pendency of these cases;

     d) preparation of responses to frequently asked questions,
        information for key notification calls, instructions and
        talking points for employee and customer communications;
        and

     e) other public relations services that are necessary to
        assist the Debtors.

Dix & Eaton will charge for its services at their customary
hourly rates:

     Managing Directors               $230 - $275 per hour
     Other Account                    $200 - $235 per hour
        Executive Services
     Research Services                $ 75 - $125 per hour
     Client Administrative Services   $ 62.50 per hour

American Homepatient, Inc., provides home health care services
and products consisting primarily of respiratory and infusion
therapies and the rental and sale of home medical equipment and
home care supplies. The Company filed for chapter 11 protection
on July 31, 2002. Glenn B. Rose, Esq., at Harwell Howard Hyne
Gabbert & Manner, PC represents the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed $269,240,077 in assets and
$322,129,850 in debts.


ANNIE'S HOMEGROWN: KPMG LLP Expresses Going Concern Doubt
---------------------------------------------------------
Annie's Homegrown, Inc., is engaged in the manufacture,
marketing and sale of premium all natural and organic macaroni
and cheese dinners, all natural pasta meals and other all
natural and organic food products. The Company was founded in
January 1989 as a Delaware corporation.

The Company uses contract packers to manufacture its products
according to strict specifications, which include the recipes,
ingredients, graphics and packaging for its products. The
Company's products are sold primarily through distributors to
supermarkets and natural and specialty food stores. The Company
also manufactures private label macaroni and cheese house brands
for retailers. In the natural food class of trade, management
believes the Company products are sold in nearly all of the
stores nationwide. In supermarkets its products are sold in
approximately 40% of the stores nationwide. Annie's has the
highest market penetration in supermarkets in the Boston and San
Francisco metropolitan areas. Its products are sold through
approximately 99% of the supermarkets in the Boston area and
approximately 96% of the supermarkets in the San Francisco area.
It continues to expand into the  New York, Philadelphia, Denver
and Chicago metropolitan markets with both existing products as
well as new products. Company strategy is to expand its
supermarket distribution nationally in addition to developing
new and unique all natural and organic food products to sell to
its existing customer base. Its mission is to provide the
highest quality, all natural food products to its customers and
to serve as an ethically, socially, and environmentally
conscious business model for customers, other companies and the
food industry. It promotes environmental efforts to minimize the
consumption of resources and encourage individuals to make
personal commitments to social and environmental causes.

The Company's net sales increased by $2,678,110, or 23.52%, from
$11,387,724 in 2001 to $14,065,834 in 2002. The net sales
increase was primarily a result of sales growth of existing
products in existing accounts as well as growth through new
distribution.

As a percentage of net sales, gross profit decreased from 36.74%
in 2001 to 35.50% in 2002. This decrease was primarily the
result of the product mix by selling more products with a lower
gross profit margin in 2001 than 2002.

Selling expenses increased by $488,985, or 18.43%, from
$2,653,102 in 2001 to $3,142,087 in 2002 and decreased as a
percentage of net sales from 23.30% in 2001 to 22.34% in 2002.
The increase in selling expenses reflected an increase in
spending in marketing costs associated with the continued
rollout of Company products in 2002 and marketing programs to
increase public awareness of the Annie's brand. Warehousing
costs increased due to increased sales, increased costs, and to
increasing inventory at its public warehouses to be closer to
its customer base that is expanding across the country.

General and administrative expenses increased by $228,753, or
18.07%, from $1,266,093 in 2001 to $1,494,846 in 2002 and
decreased as a percentage of net sales from 11.12% in 2001 to
10.63% in 2002. The increase in general and administrative
expenses is primarily a result of legal fees relating to a
reverse split and retaining an investment banker for advisory
services.

Interest expense decreased by $10,940 from $48,785 in 2001 to
$37,845 in 2002 and decreased as a percentage of sales from
0.43% in 2001 to 0.27% in 2002. The decrease in interest expense
is the result of lower interest rate charged on the line of
credit.

Interest and other income decreased by $61,822, or 64.14%, from
$96,384 in 2001 to $34,562 in 2002 and decreased as a percentage
of sales from 0.85% in 2001 to 0.25% in 2002. The decrease was a
result of recognizing more income from coupon inserts in 2001
than in 2002 and recognizing losses from the joint ventures.

KPMG LLP of Boston has stated in its Auditors Report of May 21,
2002, that Annie's Homegrown has not secured a long-term
financing facility which raises substantial doubt about its
ability to continue as a going concern.


ARMSTRONG HOLDINGS: Second Quarter Operating Income Falls 10.5%
---------------------------------------------------------------
Armstrong Holdings, Inc., (NYSE: ACK) reported 2002 second
quarter net sales of $825.2 million as compared to $814.2
million in the second quarter of 2001.  Increases in Wood
Flooring and Cabinets were offset by declines in the other
business segments.

Operating income of $55.6 million in the second quarter of 2002
decreased 10.5% from $62.1 million in the second quarter of
2001.  The only product segment reporting higher operating
income was Wood Flooring.  Weak results in Europe, coupled with
a reduced pension credit, higher medical costs and competitive
pricing pressures in the U.S. were the primary causes for the
year-to-year decline.

Earnings from continuing operations for the second quarter of
2002 were $27.7 million, as compared to $34.5 million for the
second quarter of 2001.

Commenting on the second quarter performance, Armstrong Chairman
and CEO Michael D. Lockhart said, "Operating income in the
second quarter exceeded plan with the Wood Flooring business
performing very well.  Europe remains a difficult economic
environment for our businesses."

The Company recorded restructuring costs of $2.2 million in the
second quarter of 2002 in its European resilient flooring
business.  The second quarter of 2001 included a non-cash    
pre-tax charge of $6.0 million related to probable asbestos-
related insurance recoveries, a $1.3 million restructuring
reversal, and $5.7 million of goodwill amortization, which as a
result of adopting FAS 142, is no longer amortizable and has no
corresponding cost in 2002.  Operating income prior to these
items yields the following results:

                    Segment Highlights
       (using operating income prior to restructuring
                and goodwill amortization)

Resilient Flooring net sales of $303.5 million in the second
quarter of 2002 decreased from $308.3 million in the second
quarter of 2001. This 1.6% decline primarily resulted from a
decrease in the Americas net sales of 1.8%, due to lower net
sales of residential tile and laminate, offset by increased net
sales of residential sheet and commercial tile.  Excluding the
effects of favorable foreign exchange rates, Europe decreased
2.1%, primarily due to lower sales of linoleum products, while
the Pacific Area increased $1.5 million.  Operating income of
$23.0 million in the second quarter of 2002 compared to $28.0
million in the second quarter of 2001.  This decrease was due to
lower net sales, and higher manufacturing and medical expenses,
partially offset by lower raw material costs and lower selling
and advertising expenses.

Building Products net sales of $205.1 million in the second
quarter of 2002 decreased from $206.4 million in the second
quarter of 2001.  Excluding the effects of favorable foreign
exchange rates, net sales decreased 2.1%, primarily due to weak
construction markets in both the U.S. and Europe. Operating
income decreased $1.3 million to $24.5 million in the second
quarter of 2002 from $25.8 million in the prior year due to
decreased net sales and unfavorable product mix, partially
offset by lower energy costs.

Wood Flooring net sales of $190.0 million in the second quarter
of 2002 increased 9.1% from sales of $174.1 million in the
second quarter of 2001, driven primarily by increased volume in
large home center retailers. Operating income of $18.5 million
in the second quarter of 2002 compared to operating income of
$13.5 million in the second quarter of 2001.  The increase in
operating income was driven by higher net sales and lower lumber
costs, partially offset by increased personnel costs associated
with field sales and customer service.

Cabinets net sales of $66.5 million in the second quarter of
2002 increased from net sales of $60.3 million in the second
quarter of 2001 due to increased volume.  Operating income of
$0.6 million in the second quarter of 2002 compared to operating
income of $5.7 million in the second quarter of 2001. $2.5
million of the decrease was related to an inventory writedown,
resulting from the completion of a book-to-physical inventory
analysis. Substantially all of this inventory writedown relates
to prior periods.  Other factors leading to the decrease in
operating income were unfavorable product mix, an additional
accrual for product claims of $1.0 million and higher labor and
advertising costs.

Textiles and Sports Flooring net sales of $60.1 million
decreased 7.7% in the second quarter of 2002 compared to $65.1
million in the second quarter of 2001.  Excluding the effects of
favorable foreign exchange rates, net sales decreased 11.1% due
to the weak European market.  An operating loss of $0.3 million
in the second quarter of 2002 was incurred compared to operating
income of $3.6 million in the second quarter of 2001, primarily
due to the impact of lower sales volume and higher manufacturing
costs.

Unallocated corporate expense of $9.3 million in the second
quarter of 2002 compared to $4.6 million in the second quarter
of 2001.  The second quarter of 2002 included a reduced pension
credit of $4.2 million and higher unallocated administrative
expenses partially offset by a $2.0 million reversal of
previously accrued franchise taxes that are no longer necessary
based on a favorable tax ruling in the second quarter of 2002.

                       Year-to-Date Results

Net sales in the first half of 2002 of $1,572.8 million declined
1.3% from $1,594.1 million in the first half of 2001.  Increases
in the Americas, led by Wood Flooring and Cabinets, were offset
by decreases in Europe.

Operating income in the first half of 2002 was $96.1 million
compared to $105.4 million in the first half of 2001.  The first
half of 2001 includes $11.4 million of goodwill amortization,
which, as a result of adopting FAS 142, is no longer amortizable
and has no corresponding cost in 2002.  The decrease in
operating income is generally due to lower net sales, increased
medical expenses and a reduced pension credit of $9.1 million.

A net loss of $544.2 million, or $13.44 per share was recorded
for the first half of 2002.  The Company adopted FAS 142,
effective January 1, 2002. As a result of the required adoption,
the company recorded a non-cash cumulative transition charge of
$593.8 million (net of tax) as of January 1, 2002.

Net cash provided by operating activities in the first half of
2002 of $95.5 million increased 9.9% from $86.9 million for the
first half of 2001 and reflects better working capital
management.

Armstrong World Industries, the main operating subsidiary of
Armstrong Holdings, Inc., continues to operate under Chapter 11
of the U.S. Bankruptcy Code throughout 2002.

DebtTraders says that Armstrong Holdings Inc.'s 9% bonds due
2004 (ACK04USR1) are trading at 58.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ACK04USR1for  
real-time bond pricing.


ASSISTED LIVING: Entry of Final Decree Delayed Until October 1
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Assisted Living Concepts, Inc., and its debtor-
affiliates obtained an order delaying entry of a Final Decree.
Finding sufficient cause to delay the Final Decree, the Court
continues the life of the Company's chapter 11 cases through
October 1, 2002.

The company operates residences for seniors who do not need
full-time nursing care, filed for Chapter 11 bankruptcy on
October 1, 2001. When the company filed for protection from its
creditors, it listed $331,398,000 in assets and $252,035,000 in
debt. As of June 30 2002, the Debtors report consolidated assets
of $223,283,000 and consolidated debts of 194,564,000


ASSISTED LIVING: June 30 Working Capital Deficit Narrows to $4MM
----------------------------------------------------------------
QAssisted Living Concepts, Inc. (OTCBB:ASLC), a national
provider of assisted living services, announced its financial
results for the quarter ended June 30, 2002.

For the quarter ended June 30, 2002, the Company incurred a net
loss from continuing operations of $2.3 million as compared to a
net loss from continuing operations of $4.5 million for the
quarter ended June 30, 2001. Revenue increased $1.4 million to
$37.9 million, for the three months ending June 30, 2002, from
the comparable period of 2001. All figures are based on same
store operations for the Company's 178 residences, and do not
include results for the six residences which are held for sale.

For the quarter ended June 30, 2002, the Company incurred a net
loss of $2.6 million as compared to a net loss of $4.6 million
for the quarter ended June 30, 2001. Losses for the current
quarter include a write-down of $0.4 million for the Company's
five residences in Florida and Georgia, for which a sale is
currently pending. Also included in current quarter results is a
$1.0 million expense, which relates to the departure of several
former officers and recent staff reductions in the national
office.

At June 30, 2002, the Company's working capital deficit slides
down to about $4 million.

"The expected sale of the five Florida and Georgia residences
remains on track," said Steven L. Vick, President and Chief
Executive Officer. "Completion of this sale, as well as other
similar activities, will assist us in our goal of reducing debt
and insurance expense, creating interest savings and improving
operating results."

Mr. Vick continued: "We continue to make progress on our
initiatives to improve financial performance and increase the
quality of resident services. We believe that the specific
initiatives we have in place to manage occupancy and promote
revenue growth are taking hold and will continue in coming
quarters. Additionally, we see positive results from efforts to
focus on delivering quality care and services to our residents."

As previously announced, effective December 31, 2001, the
Company adopted the principles of fresh-start reporting as a
result of its emergence from bankruptcy. The adoption of fresh-
start reporting materially changed the amounts previously
recorded in the Company's consolidated financial statements.
Accordingly, operating results and cash flows for the quarter
ended June 30, 2002, are generally not comparable to the
Company's reported financial data for periods prior to December
31, 2001. As used in this release, the term "Predecessor
Company" refers to the Company and its operations for periods
prior to the adoption of fresh-start reporting, while the term
"Successor Company" is used to describe the Company and its
operations for the periods thereafter.

Assisted Living Concepts, Inc., owns, leases and operates 183
assisted living residences with 7,077 units for older adults who
need help with the activities of daily living, such as eating,
bathing, dressing and medication management. In addition to
housing, the Company provides personal care, support services,
and nursing services according to the individual needs of its
residents, as permitted by state law. This combination of
housing and services provides a home-like setting and cost-
efficient alternative that encourages independence for
individuals who do not require the broader array of medical and
health services provided by skilled nursing facilities. The
Company currently has operations in Oregon, Washington, Idaho,
Nebraska, Iowa, Arizona, Texas, New Jersey, Ohio, Pennsylvania,
Indiana, Louisiana, Florida, Michigan, Georgia, and South
Carolina.


AVIATION GENERAL: Names Martinich as Strategic Jet Pres. & CEO
--------------------------------------------------------------
Aviation General, Incorporated (NASDAQ:AVGE) appointed Keith A.
Martinich as President and CEO of its wholly owned subsidiary,
Strategic Jet Services, Inc.

He succeeds John H. deHavilland who has become Chairman.

Mr. Martinich joined Aviation General, Incorporated in 1999 as
Vice President of Sales and Marketing and has been instrumental
in the business development of all of the company's business
elements. Previously, he held sales and marketing positions with
Piedmont Hawthorne Aviation in Leesburg, Virginia and AVPRO in
Annapolis, Maryland.

Mr. Martinich is a graduate of Embry Riddle Aeronautical
University and received a degree in both Aeronautical Science
and Aviation Business Management. He is a commercial pilot with
instrument and multi engine ratings.

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.


BUDGET GROUP: Obtains Okay to Honor Critical Partner Obligations
----------------------------------------------------------------
Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, tells Judge Walrath that in order
to compete in the industry, Budget Group Inc., and its debtor-
affiliates must maintain the loyalty of their partners, by
paying obligation their obligations to them.  He describes the
Debtors' relationships with these partners:

A. Tour Operators

   In the ordinary course of business, $2,500,000 of the
   Debtors' annual revenue is generated through business
   referred by a select group of leisure tour operators.  Most
   of these accounts operate in a shared supplier environment,
   which permits tour operators to shift their business to the
   Debtors' competitors with relative ease.  Tour operators
   located both internationally and domestically earn overrides
   from bookings they make through various reservation systems,
   such as global distribution system reservation systems, phone
   reservations or reservations made for customers through the
   Internet. Overrides are based on individual tour operators
   meeting their contractual revenue requirements with the
   Debtors.  A percentage of the rental revenue is returned to
   the tour operator in the form of an override, which are
   accrued monthly and paid quarterly.  The Debtors estimate
   that tour operators have prepetition claims for $1,000.

B. Travel Agents

   Travel agencies and other similar authorized rental agents
   represent a critical component of both the commercial and
   leisure segments of  the Debtors' business.  Travel agencies
   earn base commissions -- typically 5% to 10% -- which are
   based on a percentage of completed rental revenue from
   bookings they make through various reservation systems.
   Travel agency bookings account for $350,000,000 of the
   Debtors' revenue.  The Debtors estimate that travel agents
   and third party service providers have prepetition claims
   related to these programs for $3,150,000.

C. General Sales Agents

   General Sales Agents represent the sales and reservation link
   for the Debtors in the geographic markets they represent.
   GSAs sell and market the Budget brand and they process and
   fulfill GDS and voice reservations from travel agents and
   consumers in their territory.  The GSAs earn overrides from
   bookings they make through various reservation systems.
   Overrides are based on individual GSAs meeting and exceeding
   their contractual revenue requirements with the Debtors.
   These overrides are accrued monthly and paid quarterly.  GSAs
   are also reimbursed for brochures they create to promote the
   use of Budget by their customers, advertising to promote
   Budget, and miscellaneous promotional expenses related to
   trade shows.  The Debtors maintain two master GSA
   relationships on a global basis -- Jeiba, the Debtors' GSA in
   Japan, and International Marketing Associates (IMA), the GSA
   for Europe and Latin America.  Jeiba and IMA together book an
   estimated $20,000,000 in annual revenue for the Debtors.  The
   Debtors estimate that GSAs have prepetition claims for
   $235,000.

D. Affinity Groups

   In the ordinary course of business, the Debtors derive
   substantial revenue from certain member-based clubs and
   associations.  Affinity Groups offer travel benefits, like
   car rental discounts, to their customers.  The Debtors have
   negotiated arrangements with certain Affinity Groups that
   allow them opportunities to reach the Affinity Group's member
   base as a preferred provider.  The Debtors compensate the
   Affinity Groups for providing the Debtors with exposure to
   their members, usually in the form of a royalty payment based
   on a contracted percentage of completed rental revenue.  The
   royalty percentage varies based on the amount of revenue
   generated by the Affinity Group.  Payments to Affinity Groups
   are typically made on a quarterly basis, 45 to 60 days after
   the quarter ends.  The Debtors also use an outside vendor,
   Lettercom, to process credentials for distribution to
   Affinity Group members.  The Debtors' programs with Affinity
   Groups account for $168,000,000 of the Budget brand revenue.  
   The Debtors estimate that Affinity Groups and Lettercom have
   prepetition claims for $3,215,000.

E. Airline Partners

   Airline partnerships at the basic level allow members of each
   airline's frequent flyer program to earn miles for Budget
   vehicle rentals Members provide Budget with their frequent
   flyer number at the time of rental.  The number of miles
   earned depends on the length of the rental, but mileage
   awards are typically 50 miles per rental day.  Budget
   regularly transmits files to the Airline Partners of those
   customers that earned miles.  Based on those file
   submissions, the airlines then submit an aggregate bill to
   Budget Rent a Car Corporations on a monthly basis for miles
   awarded.  Costs per frequent flier mile range from $0.01 to
   $0.02 per mile plus 7.5% Federal Excise Tax for US-based
   programs.  The Debtors also use an outside vendor, Machine
   Systems, to provide data processing services in connection
   with the airline partnership programs.  The Debtors' frequent
   flyer programs with the Airline Partners account for
   $81,000,000 of the Debtors' annual revenue.  The Debtors
   estimate that Airline Partners have prepetition claims for
   $800,000.  However, the Debtors' licensees and franchisees
   ultimately reimburse the Debtors for their prorated portion
   of this amount -- 15% to 20%.

F. Corporate Partners

   The Debtors maintain programs and contracts with corporate
   partners that provide discounts, rebates and offer incentives
   based on the level of business provided.  Certain national
   CorpRate Partner accounts that will spend over $1,000,000 in
   annual time and mileage revenue with the Debtors may require
   a rebate, and in rare occasions, marketing dollars as part of
   their car rental agreement.  The Debtors provide a percentage
   rebate to these select accounts based on the net time and
   mileage revenue generated at the CorpRate contract rate.  The
   rebate percentage varies by contract, but typically does not
   exceed 5%, based on individual accounts meeting their
   contractual revenue requirements with the Debtors.  Rebate
   payments are made on an annual basis and are based on
   individual contract periods, not calendar years.  Funds are
   accrued monthly based on the expected payout to each account.
   The Debtors estimate that the CorpRate Partners account for
   $28,000,000 of their revenue.  The Debtors estimate that
   CorpRate Partners currently have accrued prepetition claims
   for $900,000.

G. Allstate

   The Debtors provide vehicles to Allstate Insurance renters
   pursuant to an arrangement with Allstate.  The Debtors pay a
   monthly fee to Allstate at $10 per transaction for those
   rentals that come to the Debtors through CARS, Allstate's
   computerized auto rental system.  The arrangement with
   Allstate provides a significant source of the Debtors'
   revenue -- $7,900,000 per year -- in the insurance
   replacement segment, and Allstate has the ability to shift
   its policyholders to the Debtors' competitors with relative
   ease. The Debtors estimate that Allstate has a $24,000
   prepetition claim.

H. Media Partners

   In the ordinary course of business, the Debtors derive
   substantial revenue from marketing and advertising programs
   placed through a variety of media partners.  For example,
   StarCom provides media buying and planning services through
   which the Debtors obtain placement of television and radio
   advertisements while TMP is a creative consultant and buying
   agent for the placement of yellow page advertisements.  The
   Debtors also maintain relationships with Internet portals
   like AOL, Yahoo! and moving.com by which the portals have
   agreed to advertise the Budget brand and generate traffic to
   the Debtors' web sites, budget.com and yellowtruck.com.  The
   Debtors estimate that the most valuable of their Media
   Partners have prepetition claims for $2,000,000.

The Debtors further seek the Court's authority to honor its
obligations to vendors that have administered the Debtors'
customer support programs:

1. Perfect Drive

   Perfect Drive is the Debtors' frequent renter program for
   consumers.  This program rewards members with points based on
   the value of the rental agreement as well as the type of
   rental booked -- commercial versus leisure -- and the
   reservation channel used -- budget. com versus all other
   reservation charnels.  The merchandise awards are provided by
   a limited group of vendors that have been carefully selected
   for their quality of goods and their compatibility with the
   preferences of the Debtors' customers.  The Debtors operate
   this program internally but outsource the marketing and IT
   infrastructure.  About $275,000,000 of revenue for the
   Debtors' corporate-owned locations is attributable to the
   Perfect Drive program annually.  Prepetition amounts are owed
   to these vendors:

         Carlson Marketing Group   $275,000
         Moore BCS                 $125,000


2. Unlimited Budget

   Unlimited Budget is a travel agent loyalty program that
   rewards travel agents for booking business with the Debtors.
   The program awards points that ultimately are converted into
   cash and applied to a MasterCard debit card account in the
   name of the individual travel agents that participate in the
   program.  Once the travel agent earns 25 points, their debit
   card account is opened and $25 is deposited.  They continue
   to earn points on all completed rentals.  Deposits are made
   into the accounts twice a month by the third party vendor
   that manages the program.  The infrastructure and management
   of this program is outsourced to three partners.  The Debtors
   estimate that the prepetition claims under this program is
   $525,000. The Debtors' Franchisees ultimately reimburse the
   Debtors for their prorated portion of this amount -- 15% to
   20%.  The Debtors estimate that $193,000,000 of revenue for
   the its corporate-owned locations is attributable to the
   Unlimited Budget program annually.  The Debtors have an
   income-producing partner in the program, a sub-group of the
   Hilton brand hotels.  Travel agents earn extra points if they
   book rooms at Hilton in addition to vehicle rentals through
   the Debtors.  Hilton pays a commission to the Debtors for
   their participation in the program.  The Debtors estimate
   that they earn $487,000 annually through Hilton.  The Debtors
   still have to make current payment under the program.

Mr. Kosmowski tells the Court that payment these obligations
will ensure the continuation of the Debtors' relationships with
these vendors and, in effect, the Debtors' business.  Any burden
to the estates, Mr. Kosmowski emphasizes, is significantly
outweighed by the benefits of maintaining relationships with the
Program Partners and Customer Support Vendors and the streams of
revenue provided, which is estimated to exceed $750,000,000
annually.  By this motion, the Debtors seek to honor
approximately $13,000,000 of these prepetition partner
obligations.

At the First Day Hearing, Judge Walrath approved the Debtors'
motion. (Budget Group Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1),
DebtTraders says, are trading at 15 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for  
real-time bond pricing.


BUILDNET: Court Sets Plan Confirmation Hearing for August 20
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina approved Buildnet, Inc., and its debtor-affiliates'
Disclosure Statement filed in support of the Company's plan of
reorganization.  The pland and disclosure statement will not be
transmitted to creditors for voting.  A hearing to consider
Confirmation of the Plan will be held on August 20, 2002 at
10:00 a.m. in U.S. Courtroom, 1st Floor, the Durham Centre, 300
W. Morgan St., Durham, NC.

BuildNet, which is engaged in the business of development and
sale of software primarily for the building industry, filed for
Chapter 11 protection on August 8, 2001 in the Middle District
of North Carolina.  John A. Northen, Esq., and Richard M.
Hutson, II, Esq., represent the Debtors in their restructuring
effort. As of August 23, 2001, the company reported $35,998,691
in assets and $79,614,191 in debt.


CABLEVISION SYSTEMS: Liquidity Concerns Spur S&P to Keep Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its double-'B'-plus
corporate credit rating on cable television operator Cablevision
Systems Corp., on CreditWatch with negative implications based
on Standard & Poor's heightened concerns about the company's
liquidity and business position.

Bethpage, New York-based Cablevision had about $7.4 billion of
total debt outstanding as of June 30, 2002.

"The level of operating cash flow for Cablevision's combined
cable, programming, and entertainment businesses in 2003 remains
uncertain, in light of ongoing competition from direct broadcast
satellite providers, and uncertain prospects for the company's
Madison Square Garden and The Wiz consumer electronics
operations," Standard & Poor's credit analyst Catherine
Cosentino said. "This is despite announced cost-cutting
initiatives, including capital expenditure and headcount
reductions, that are expected to reduce overall external funding
requirements through 2003."

"Moreover, to date Cablevision's roll-out of digital television
services has been very limited, and its ability to rapidly ramp
up this business, as well as provide Internet telephony services
to subscribers, remains unclear," Ms. Cosentino added.

Standard & Poor's said it would meet with management to discuss
its business strategies for the next 18 months and assess the
business risk facing the company in the current operating
environment, as well as analyze Cablevision's anticipated
financial profile before resolving the CreditWatch listing. The
current ratings had incorporated the expectation that the
company needed to maintain a consolidated debt-to-EBITDA ratio
of no more than 8 times, however, this threshold may be revised
to reflect a higher level of business risk for the overall cable
television industry given the sector's limited access to
capital.

Cablevision SA's 13.75% bonds due 2007 (CBVS07ARR1) are trading
at 13 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CBVS07ARR1
for real-time bond pricing.


CINEMARK: S&P Changes Outlook to Stable After IPO Postponement
--------------------------------------------------------------
Standard & Poor's Ratings Services has revised its outlook on
movie exhibitor Cinemark USA Inc., to stable from positive
following the company's postponement of its planned IPO and bank
loan refinancing.

Standard & Poor's has also withdrawn its double-'B'-minus bank
loan rating on the company's proposed $250 million bank
facility. All other ratings, including the single-'B'-plus
corporate credit rating, are affirmed. The Plano, Texas-based
company had $784 million in debt outstanding as of March 31,
2002.

"The postponement of the IPO, due to weak market conditions,
will delay the expected improvements to Cinemark's capital
structure and liquidity that were factored into the previously
assigned positive outlook," said Standard & Poor's credit
analyst Steve Wilkinson. Proceeds from the IPO were expected to
reduce the company's debt by about $180 million and, together
with the bank loan refinancing, would have reduced near term
debt maturities and increased revolving credit borrowing
capacity. Mr. Wilkinson added, "As a result, the likelihood of a
near-term upgrade has been pushed back, making a stable outlook
more appropriate." Cinemark expects to proceed with the IPO and
the bank loan refinancing when market conditions improve,
although timing is uncertain. Standard & Poor's will reevaluate
Cinemark's outlook upon the rescheduling of the stock offering
and bank debt refinancing.

Cinemark is one of the leading movie theater operators in the
U.S. with 2,203 screens in 188 theaters and also has a
significant presence in three Latin American countries as part
of its 811 international screens in 91 theaters.

Standard & Poor's said that its ratings continue to reflect
Cinemark's quality theater circuit, its favorable operating
performance relative to its peers, and its profitable
international operations. These positives are balanced by the
company's aggressive financial profile.


COMDIAL CORP: Nasdaq Delists Shares Effective August 7, 2002
------------------------------------------------------------
As anticipated, on August 6, 2002, Comdial Corporation was
advised that the Listing Qualifications Panel rendered its
decision delisting the Company's securities from the Nasdaq
Stock Market effective the opening of business on August 7,
2002.

In rendering its decision, the Listing Qualifications Panel,
while recognizing the particular facts and circumstances that
necessitated the Company completing a bridge loan transaction
without obtaining necessary shareholder approval, nevertheless
found that The Nasdaq Marketplace Rules were enacted to enable a
company to effect transactions without first obtaining
shareholder approval so long as the company obtained permission
from Nasdaq prior to the transaction and followed certain other
Nasdaq guidelines, which the Company failed to do. The Listing
Qualifications Panel was therefore unwilling to grant the
Company a waiver of the shareholder approval requirement on a
post-transaction basis and found that the fact that shareholder
ratification for the transaction was in the process of being
obtained was an insufficient remedy for the Company having not
complied with The Nasdaq Corporate Governance Standards. The
Company is considering a further appeal to The Nasdaq Listing
and Hearing Review Council, and is pursuing having its common
stock quoted on the OTC Bulletin Board.

Comdial Corporation, headquartered in Sarasota, Florida,
develops and markets sophisticated communications solutions for
small to mid-sized businesses, government, and other
organizations.


COMMSCOPE INC: Board Accepts Edward D. Breen's Resignation
----------------------------------------------------------
CommScope, Inc., (NYSE: CTV) a world leader in the design and
manufacture of high-performance, broadband communication cables,
announced that its Board of Directors had accepted the
resignation of Edward D. Breen.

Mr. Breen resigned due to his new commitments as Chairman and
Chief Executive Officer of Tyco International Ltd. (NYSE: TYC)
and to avoid any appearance of conflict of interest.  A Tyco
subsidiary competes with CommScope in the Local Area Network
market and Tyco has previously purchased products from CommScope
or its affiliates.  Mr. Breen indicated that his resignation was
not the result of any disagreements with the Company.

Mr. Breen was appointed Chairman and CEO of Tyco on July 25,
2002. Formerly, Mr. Breen served as the President and Chief
Operating Officer of Motorola, Inc. (NYSE: MOT).  Prior to a
merger with Motorola in January 2000, Mr. Breen was Chairman and
CEO of General Instrument Corporation (GI).

Frank M. Drendel, CommScope Chairman and Chief Executive Officer
said, "We would like to thank Ed for his tremendous
contributions to our Company and to the cable television
industry.  We wish him well in his new role at Tyco."

CommScope is the world's largest manufacturer of broadband
coaxial cable for Hybrid Fiber Coax applications and a leading
supplier of high-performance fiber optic and twisted pair cables
for LAN, wireless and other communications applications.

Visit CommScope at its Web site - http://www.commscope.com

As previously reported, Standard & Poor's raised the CommScope's
rating to BB+ owing to the company's solid performance.


CONSECO FINANCE: Fitch Places Housing Bond Ratings on Watch Neg.
----------------------------------------------------------------
Fitch Ratings places Conseco Finance & Green Tree Finance
Manufactured Housing Bonds on Rating Watch Negative and
downgrades certain limited guarantee bonds.

This action follows Fitch's downgrade of Conseco Finance Corp.'s
senior debt rating to 'CC' from 'CCC'.

These actions reflect Fitch's heightened concerns regarding
maintenance of the servicing quality in the manufactured housing
portfolio.

Except for securities rated 'AAA' all bonds in the following
series are placed on Rating Watch Negative:

      Green Tree Financial Corp. and Conseco Finance Corp.     
    manufactured housing contracts pass-through certificates:

                    --Series 1992-1;
                    --Series 1992-2;
                    --Series 1993-1;
                    --Series 1993-2;
                    --Series 1994-1;
                    --Series 1994-2;
                    --Series 1994-3;
                    --Series 1994-5;
                    --Series 1994-6;
                    --Series 1994-7;
                    --Series 1994-8;
                    --Series 1995-1;  
                    --Series 1995-2;
                    --Series 1995-3;
                    --Series 1995-4;
                    --Series 1995-5;
                    --Series 1995-6;
                    --Series 1995-7;
                    --Series 1995-8;
                    --Series 1995-9;
                    --Series 1995-10;
                    --Series 1996-1;
                    --Series 1996-2;
                    --Series 1996-3;
                    --Series 1996-4;
                    --Series 1996-5;
                    --Series 1996-6;
                    --Series 1996-7;
                    --Series 1996-8;
                    --Series 1996-9;
                    --Series 1996-1;
                    --Series 1997-1;
                    --Series 1997-2;
                    --Series 1997-3;
                    --Series 1997-4;
                    --Series 1997-5;
                    --Series 1997-6;
                    --Series 1997-8;
                    --Series 1998-1;
                    --Series 1998-3;
                    --Series 1998-4;
                    --Series 1998-6;
                    --Series 1998-7;
                    --Series 1999-1;
                    --Series 1999-2;
                    --Series 1999-3;
                    --Series 1999-4;
                    --Series 1999-5;
                    --Series 2000-1;
                    --Series 2000-2;
                    --Series 2000-4;
                    --Series 2000-5;
                    --Series 2000-6;
                    --Series 2001-1;
                    --Series 2001-2;
                    --Series 2001-4.

Additionally, Fitch downgrades the limited guarantee bonds of
the company's securitizations listed below to 'CC' from 'CCC'.
The bonds will remain on Rating Watch Negative.

                    --Series 1994-3;
                    --Series 1994-5;
                    --Series 1994-6;
                    --Series 1994-7;
                    --Series 1994-8;
                    --Series 1995-1;
                    --Series 1995-2;
                    --Series 1995-3;
                    --Series 1995-4;
                    --Series 1995-5;
                    --Series 1995-6;
                    --Series 1995-7;
                    --Series 1995-8;
                    --Series 1995-9;
                    --Series 1995-10;
                    --Series 1996-1;
                    --Series 1996-2;
                    --Series 1996-3;
                    --Series 1996-4;
                    --Series 1996-5;
                    --Series 1996-6;
                    --Series 1996-7;
                    --Series 1996-8;
                    --Series 1996-9;
                    --Series 1996-10;
                    --Series 1997-1;
                    --Series 1997-2;
                    --Series 1997-3;
                    --Series 1997-4;
                    --Series 1997-5;
                    --Series 1997-6;
                    --Series 1997-8;
                    --Series 1998-1;
                    --Series 1998-3;
                    --Series 1998-4;
                    --Series 1998-6;
                    --Series 1998-7;
                    --Series 1999-1;
                    --Series 1999-2;
                    --Series 1999-3;
                    --Series 1999-4;
                    --Series 1999-5.


CONSECO FINANCE: Fitch Further Junks HE/HI Ltd. Guarantee Bonds
---------------------------------------------------------------
Fitch Ratings downgrades 26 Conseco Finance Corp., (and
Greentree Financial Corp.) HE/HI limited guarantee bonds to 'CC'
from 'CCC'. These bonds will remain on Rating Watch Negative.

This action follows Fitch's downgrade of Conseco Finance Corp.'s
senior debt rating to 'CC' from 'CCC'.

The following limited guarantee classes (B-2's) are downgraded
to 'CC' from 'CCC':

     Green Tree Financial Corp. and Conseco Finance Corp.
              home equity loan certificates:

                    --Series 1996-C;
                    --Series 1996-D;
                    --Series 1996-F;
                    --Series 1997-A;
                    --Series 1997-B;
                    --Series 1997-C;
                    --Series 1997-D;
                    --Series 1997-E;
                    --Series 1998-B;
                    --Series 1998-C;
                    --Series 1998-D;
                    --Series 1998-E;
                    --Series 1999-C;
                    --Series 1999-D.

         Green Tree Financial Corp. and Conseco Finance Corp.
                home improvement loan certificates:

                    --Series 1996-C;
                    --Series 1996-D;
                    --Series 1996-E;
                    --Series 1996-F;
                    --Series 1997-A;
                    --Series 1997-C;
                    --Series 1997-D;
                    --Series 1997-E;
                    --Series 1998-B;
                    --Series 1998-D;
                    --Series 1998-E;
                    --Series 1999-E.


CONSECO INC: S&P Revises Counterparty Credit Ratings to SD
----------------------------------------------------------
Standard & Poor's Ratings Services revised its counterparty
credit ratings on Conseco Inc., and CIHC Inc., to 'SD'
(selective default) from triple-'C'-plus because of Conseco's
announcement that it is exercising a 30-day grace period on
upcoming bond interest payments. An 'SD' rating is assigned when
Standard & Poor's believes that the obligor has selectively
defaulted on a specific issue or class of obligations but will
continue to meet its payment obligations on other issues or
classes of obligations in a timely manner.

Standard & Poor's also said that it revised its ratings on the
five issues that will miss payment to 'D' (default). The ratings
on the remaining issues that do not have an interest payment due
in the near future have been lowered to double-'C' from triple-
'C'-plus. The preferred stock ratings on these issues remain
double-'C'.

In addition, Standard & Poor's lowered its counterparty credit
rating on Conseco Finance Corp to triple-'C'-minus/single-'C'
from triple-'C'-plus/single-'C'. The outlook is negative.

Standard & Poor's also placed its single-'B'-plus counterparty
credit and financial strength ratings on Conseco Inc.'s
insurance subsidiaries on CreditWatch with negative
implications.

The single-'B'-plus financial strength ratings on Conseco Inc.'s
life insurance subsidiaries will remain on CreditWatch negative
until there is clarity about the respective insurance
departments' actions. "Although the operating subsidiaries'
policyholders are obviously better positioned than the debt
holders of Conseco Inc., they will, nevertheless, be adversely
affected by the state of flux," said Standard & Poor's credit
analyst Jayan Dhru. "Likewise, although Conseco Finance has been
excluded from the announced restructuring, the uncertainty
created by the parent's difficulties and the fact that the
finance unit does not enjoy regulatory protection leave its
creditors significantly more vulnerable than those of the
insurance subsidiaries."

Conseco Inc.'s 10.5% bonds due 2004 (CNC04USR2) are trading at
25 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC04USR2for  
real-time bond pricing.


CONSECO INC: Fitch Cuts Long-Term Corporate Credit Rating to C
--------------------------------------------------------------
Fitch Ratings has lowered the corporate ratings of Conseco Inc.
This action follows the announcement that Conseco will pursue a
debt restructuring and has exercised its 30-day grace period on
upcoming bond interest payments.

The downgrade of Conseco's holding company ratings to 'C'
indicates imminent default. If the company does not cure the
delayed interest payments within the grace period, the affected
instruments will be downgraded to the 'Default' category. Even
if the delayed interest payments are cured, Fitch believes any
debt restructuring would be classified as a distressed debt
restructuring under Fitch's definition and therefore warrant a
'Default' rating. Fitch believes dividend deferral on preferred
securities is inevitable. Fitch has withdrawn the commercial
paper rating since there are no obligations outstanding
currently and no new issuance is expected.

Insurer financial strength ratings were downgraded to reflect
the distressed condition of the holding company. Although Fitch
believes the insurance companies have good capital adequacy and
liquidity, Fitch cannot predict how regulators may act in this
situation. Therefore, Fitch believes there is significant
uncertainty as to the ultimate status of the insurance
companies. The likelihood of policyholders being paid is higher
than indicated by the rating level because the rating reflects
the holding company condition. The ratings remain on Rating
Watch Negative. Conseco Variable Insurance Company (Conseco
Variable) remains on Rating Watch Evolving pending completion of
its sale to inviva Inc.

The senior rating for Conseco Finance Corp. has been downgraded
to 'CC' from 'CCC' and maintained on Rating Watch Negative owing
to uncertainty regarding Conseco and continued to access to
capital markets for ongoing financing. The short-term rating of
'C' has been withdrawn.

                        Rating Actions

                         Conseco Inc.

      --Long-term rating, lowered to 'C' from 'CCC'.

      --Senior debt issues lowered to 'C from 'CCC';

              --8.50% senior notes due 2003;

              --6.40% senior notes due 2004;

              --8.75% senior notes due 2006;

              --6.80% senior notes due 2007;

              --9.00% senior notes due 2008;

              --10.75% senior notes due 2009.

      --Senior debt issues downgraded to 'C' from 'CCC';

              --8.50% senior notes due 2002;

              --6.40% senior notes due 2003;

              --8.75% senior notes due 2004;

              --6.80% senior notes due 2005;

              --9.00% senior notes due 2006;

              --10.75% senior notes due 2008.

       --Preferred stock, lowered to 'C' from 'CC'.

       --Short-term rating 'C', Rating Withdrawn;

       --Commercial paper rating 'C', Rating Withdrawn.
   
               Conseco Financing Trust I-VII

       --Preferred securities lowered to 'C' from 'CC'.

                Insurer financial strength

       --Bankers Life & Casualty Co. lowered to 'B' from 'BB',
          Negative;

       --Conseco Annuity Assurance Co. lowered to 'B' from 'BB',
          Negative;

       --Conseco Direct Life Insurance Co. lowered to 'B' from
          'BB', Negative;

       --Conseco Health Insurance Co. lowered to 'B' from 'BB',
          Negative;

       --Conseco Life Insurance Co. lowered to 'B' from 'BB',
          Negative;

       --Conseco Life Insurance Co. of New York lowered to 'B'
          from 'BB', Negative;

       --Conseco Medical Insurance Co. lowered to 'B' from 'BB',
          Negative;

       --Conseco Senior Health Insurance Co. lowered to 'B' from
          'BB', Negative;

       --Conseco Variable Insurance Co. lowered to 'B' from
          'BB', Evolving;

       --Pioneer Life Insurance Co. lowered to 'B' from 'BB',
          Negative.

                       Conseco Finance Corp.

       --Senior debt rating, lowered to 'CC' from 'CCC',
          Negative;

       --Short-term rating 'C', Withdrawn.


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

Each of the certificates has credit support from a limited
guarantee provided by Conseco Finance Corp. and from monthly
excess spread. Because the interest payments to these
subordinate classes at the bottom of the waterfall and monthly
excess spread have been insufficient to protect against losses,
there have been draws on funds from the limited guaranty
policies during 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'-minus from triple-
'C'-plus, described in a separate Standard & Poor's press
release issued on Aug. 9, 2002.

The lowering of Conseco Finance Corp.'s rating is directly
linked to the rating action for Conseco Inc., which was lowered
because of Conseco Inc.'s announcement that it is exercising a
30-day grace period on upcoming bond interest payments. Standard
& Poor's believes the uncertainty created by Conseco Inc.'s
difficulties and the fact that Conseco Finance Inc. does not
enjoy regulatory protection leaves its creditors significantly
vulnerable.

                         Ratings Lowered

       Green Tree Financial Corp. Manufactured Housing Trust

                                        Rating

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

                                         Rating

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

                                         Rating

     Series    Class             To                 From
     1999-1    B-2               CCC-               CCC+
     1999-2    B-2               CCC-               CCC+
     1999-3    B-2               CCC-               CCC+
     1999-4    B-2               CCC-               CCC+
     1999-5    B-2               CCC-               CCC+
     
     Manufactured Housing Contract Senior/Sub Pass Thru Trust

                                         Rating

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


CONSECO INC: A.M. Best Places Revised Reorg. Plan Under Review
--------------------------------------------------------------
Friday, Conseco, Inc., (Carmel, IN) issued a statement to its
stakeholders outlining its intention to dramatically accelerate
its efforts in reorganizing the capital structure of the parent
holding company.

The announcement also stated that the company will be meeting
with stakeholders, rating agencies and regulators over the next
several days and weeks to provide further detail on the holding
company's restructuring alternatives.

On July 12, 2002, A.M. Best downgraded the financial strength
ratings of Conseco's primary insurance subsidiaries to B++ (Very
Good) in recognition of the deteriorating financial flexibility
of Conseco, Inc., and placed the ratings under review with
negative implications.  A.M. Best is aware of Conseco, Inc.'s
ongoing strategy toward restructuring its financial obligations
and will review the specifics of the company's revised
reorganization plan and the potential impact it may have on
policyholder security and the ability of the insurance entities
to operate independently from the corporate parent.

A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at
http://www/ambest.com


COVANTA ENERGY: Seeks Okay to Sell Argentinean Casino Interests
---------------------------------------------------------------
Ogden Central & South America, Inc. owns all of the issued and
outstanding shares of Compania Legir S.A., a company duly
incorporated and validly existing under the laws of Uruguay.
Compania Legir, on the other hand, owns all of the issued and
outstanding shares of Irodel S.A. and 0.5% of the issued and
outstanding shares of Casino Iguazu (CISA), a company duly
incorporated and validly existing under the laws of Argentina.
Irodel owns the remaining 99.5% of the issued and outstanding
shares of CISA.  CISA owns and manages the Iguazu hotel and
casino.  Legir, Irodel and CISA are non-debtor affiliates of
Covanta Energy Corporation.

According to Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen
& Hamilton, Esq., in New York, the Debtors have engaged the
services of Banc of America Securities, LLC in 1999 as their
Marketing Agent and advisor to sell all of Ogden Central's
Shares in Legir.  Since November 1999, the Marketing Agent
identified over 30 potential buyers in Argentina, Mexico, the
United States and elsewhere.  Of those, two formal competitive
written offers were received:

  (a) Juan Carlos Pellegrini and Norberto Mathov offered to
      purchase the Shares for $3,500,000 in cash as well as an
      additional assumption of liabilities valued at $6,500,000;
      and

  (b) Quintin Marshall offered $3,000,000 and the assumption of
      the liabilities.

The Debtors determined the offer of Mr. Pellegrini and Mr.
Mathov to be the best and highest offer for the Shares.  Prior
to Petition Date, the Parties executed a Purchase Agreement but
the Chapter 11 filing occurred prior to closing.  The Purchase
Agreement then went through a series of amendments until it was
signed on July 5, 2002.

Accordingly, the Debtors ask the Court to authorize Ogden
Central to sell the Shares to Mr. Pellegrini and Mr. Mathov and
assume the Shares Purchase Agreement, as amended.

The Shares Purchase Agreement provides that:

  (a) In exchange for acquiring the Shares free and clear of
      all liens, claims and encumbrances, the Buyers will pay
      Ogden Central $3,500,000 in cash.  On the Contract Date,
      the Buyers paid the Purchase Price to HSBC Bank U.S.A. --
      the Escrow Bank -- to be held in escrow for the benefit
      of the Seller, subject to the terms of an escrow
      agreement entered into by Ogden Central and the Buyers.
      The Purchase Price will be delivered to the Seller at
      Closing;

  (b) As a condition to the Parties' obligations, no
      litigation, suit, action or other proceeding or filing
      will be pending before any court or governmental agency,
      whether filed by a third party or by any of the Parties
      to the Purchase Agreement or by any parent company of any
      of the Parties, which in the opinion of counsel to either
      Party restrains, limits or conditions either Party's
      ability to perform its obligations under the Purchase
      Agreement;

  (c) Conditions precedent to Ogden Central's obligations
      include:

        (i) the representations and warranties of the Buyers
            must be true and correct as of the Closing Date;

       (ii) the Buyers will have performed all of their
            covenants in all material respects through the
            Closing;

      (iii) the Buyers will have obtained the Regulatory
            Consents, provided, however, that, if the Buyers
            have not obtained the Regulatory Consents by June
            30, 2002, the Debtors will waive this Condition;

       (iv) Ogden Central will have obtained the Credit
            Agreement Consent;

        (v) the Buyers will have complied with their
            obligations under the Purchase Agreement to make
            certain loan payments on Ogden Central's behalf, if
            applicable; and

       (vi) the Approval Order will have been entered by this
            Court;

  (d) Conditions precedent to the Buyers' obligations include:

        (i) the representations and warranties of Ogden Central
            must be true and correct as of the Closing Date;

       (ii) Ogden Central will have performed all of its
            covenants in al material respects through the
            Closing;

      (iii) Ogden Central's Board of Directors must have
            approved entry into the Purchase Agreement; and

       (iv) the Approval Order will have been entered by this
            Court;

  (e) If all conditions to Closing have been met or waived by
      the party in whose favor they have been stipulated, and
      the Buyers fail to close the transaction contemplated
      under the Purchase Agreement, the Buyers will pay
      liquidated damages in the amount of $3,500,000 to Ogden
      Central as its sole remedy against the Buyers;

  (f) The representations and warranties of Ogden Central in
      connection with Irodel, Legir and CISA relate to
      organization, capital structure, valid issuance of
      shares, title to the Shares, shareholding, authority
      relative to the Purchase Agreement, consents and
      approvals, title to and condition of the assets, annual
      accounts, dissolution or liquidation, permits and
      authorizations, employees, powers of attorney, loans and
      inter-company loans, guarantees, litigation and the
      payment schedule setting forth past due payments owned
      to IPLyC -- the gaming authority -- by CISA;

  (g) The Buyers have agreed to release Ogden Central and its
      affiliates from all indemnities, guaranties and guaranty
      obligations identified in the Purchase Agreement as of
      the Closing date and will themselves, as of the Closing
      Date, become liable for the indemnities, guaranties and
      guaranty obligations.  The Buyer will indemnify Ogden
      Central and its affiliates for any and all liabilities,
      losses, damages, and claims relating to events incurred
      due to the indemnity, guaranty or guaranty obligation;

  (h) Ogden Central agreed to cause each of Legir, Irodel and
      CISA to forgive or capitalize all existing intercompany
      loans, including those with Ogden Central, except for
      intercompany loans between Irodel and CISA;

  (i) The Parties agree that if, prior to the Closing Date,

       (i) CISA or the Buyers decide to terminate Mr. Carlos
           Lopez Ruiz's employment, Ogden Central will pay or
           refund CISA the lower of:

           -- 50% of the severance payment paid to Mr. Ruiz or

           -- $100,000; or

           -- $50,000 if the Buyers exercise their rights to
              the payment or refund of all or part of the
              severance corresponding to Mr. Louis Valera; and

      (ii) CISA or the Buyers decide to terminate Mr. Valera's
           employment, CISA or the Buyers will have the right
           to request Ogden Central to pay ore refund CISA or
           the Buyers as the case may be, an amount equal to
           the lower of:

           -- $50,000 or
           -- the amount of severance paid to Mr. Valera;

  (j) The Buyers have agreed to pay to Venado and UCC, on April
      1, 2003, the Fourth Contingent Payment Installment and to
      assume the obligations to deliver to Venado and UCC:

        (i) a financial statement of CISA for the fiscal year
            ended December 31, 2002;

       (ii) a calculation of EBIT for the same period; and

      (iii) a written opinion of CISA's auditors, in all cases
            pursuant to the Venado-UCC Agreement;

  (k) The Buyers will indemnify Ogden Central for all
      liabilities and claims relating to or resulting from:

        (i) any material inaccuracy of the representations and
            warranties made under the Purchase Agreement;

       (ii) the Buyers' failure to fulfill any covenants under
            the Purchase Agreement;

      (iii) all other obligations of the Buyers under the
            Purchase Agreement;

       (iv) the operations and ownership of Legir, Irodel or
            CISA;

        (v) the Buyers' failure to fulfill their assumed
            obligations under the Venado-UCC Agreement; and

       (vi) any act that IPLyC might take in relation to
           CISA's Gaming License and Internet Gaming License;

  (l) The Purchase Agreement may be terminated at any time
      prior to the Closing:

       (i) by either Party by mutual written consent or if a
           court of competent jurisdiction or other Governmental
           Body issues a non-appealable final order or takes
           any other non-appealable final action having the
           effect of permanently restraining, enjoining or
           otherwise prohibiting the transactions contemplated
           by the Purchase Agreement; or

      (ii) by Ogden Central if the Closing has not occurred by
           August 12, 2002, unless Ogden Central have extended
           the term by prior written consent.

The Debtors believe that the Buyers' Offer presents the highest
and best opportunity to realize value for the Shares because:

  (a) given that the sale process lasted over two years and was
      conducted by a reputable investment banking firm, it is
      unlikely that the Debtors would receive a better offer;
      and

  (b) unless the Shares are sold promptly, it is possible that
      the market value of the Shares, which has already dropped
      substantially since the sale process began, would drop
      further, given the highly unstable economic and political
      climate in Argentina.

Thus, Ms. Buell points out, all applicable legal standards of
Section 363 of the Bankruptcy Code have been satisfied.
Moreover, Ms. Buell contends that the relief requested is proper
since:

  (a) the Purchase Agreement does not dictate the terms of a
      plan of reorganization as it does not attempt to
      restructure the rights of the creditors; and

  (b) the Purchase Agreement was negotiated at arm's length and
      in good faith.

Pursuant to the retention of the Marketing Agent, Ms. Buell
reports that the Payment of the Marketing Agent has been amended
on July 26, 2002 to get approval of the Unsecured Creditors'
Committee, the 9.25% Debentures and the Debtors' prepetition and
postpetition Lenders.

The Debtors further seek the Court's authority to reject the
Engagement Letter Covanta executed with the Marketing Agent in
1999, by consent and without further claim.  Also, the Debtors
ask Judge Blackshear to affirm the Payment Letter for the
$75,000 compensation of the Marketing Agent in connection with
its efforts on the Proposed Sale.

Ms. Buell explains that because of the Marketing Agent, the
value realized by the Shares was materially and substantially
enhanced, not to mention the fact that the Marketing Agent has
agreed to lower its fee from $250,000 to $75,000.  Accordingly,
pursuant to Section 503(b) of the Bankruptcy Code, the Marketing
Agent is entitled to an administrative priority claim. (Covanta
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


DADE BEHRING: Wants to Continue Wind-Down Agreement with AHC
------------------------------------------------------------
Dade Behring Holdings, Inc., and its debtor-affiliates move the
U.S. Bankruptcy Court for the Northern District of Illinois to
authorize their assumption of an existing wind-down and agency
agreement between the Debtors and Allegiance Healthcare
Corporation, or in the alternative, authority to continue to
perform under the Wind-Down Agreement.

             The Wind-Down and Agency Agreement      

On December 19, 1994 (to expire on June 30, 2001), Dade
Behrings, Inc. entered into a distribution agreement with AHC
whereby AHC purchased products, including instruments, regents
and consumables from DBI. AHC subsequently leased or sold such
products to various customers. When the Distribution Agreement
expired, DBI and AHC entered into the Wind-Down Agreement that
governs ongoing relationship between the parties with respect to
the AHC purchased products.

Under the Wind-Down Agreement:

     a) AHC retains ownership of the instruments and the
        customer leases entered into during the tem of the
        Distribution Agreement; and

     b) DBI is required to sell reagents and other consumables
        directly to consumers pursuant to the pricing terms of
        the AHC Leases.

The Wind-Down Agreement appoints and authorizes DBI when
collecting the customer payments for reagent sales and service
contracts to also collect customer payments for the AHC Leases.

The Debtors submit that the Wind-Down Agreement is part of their
ordinary, usual and essential business practices. The Debtors
assert that the Wind-Down Agreement is an efficient and
beneficial arrangement for the financing of the purchase and
lease of instruments and the purchase of reagents and various
services. The Debtors tell the Court that they cannot afford a
substantial disruption to the arrangement currently in place.

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.


ENRON CORP: Wants to Sell Center South Building at Auction
----------------------------------------------------------
Enron Corp., Smith Street Land Company and Enron Net Works LLC,
seek the Court's authority to sell:

  (a) the Enron Center South office building, and real and
      personal property related to the use and operation of the
      building, including parking garage and skybridge
      connecting the Enron Center South office building to the
      Enron Center North office building across the street and
      to the parking garage, pursuant to a Purchase and Sale
      Agreement; and

  (b) a Day Care Center, and real and personal property related
      to the use and operation of the Day Care Center, located
      across the street from the Enron Center South office
      building, pursuant to a Purchase and Sale Agreement; and

  (c) furniture, fixtures, equipment related to the use and
      operation of the Office Building, pursuant to a bill of
      sale; and

  (d) Information Technology equipment related to the use and
      operation of the Office Building, pursuant to a bill of
      sale.

Proposed terms of the Sale are:

(1) Office Building Agreement

    (a) Consideration.  Purchase Price will be separated into:

        -- one purchase price of the Enron Center South, some of
           which may be subject to a lien held by General
           Electric Capital Corporation;

        -- one purchase price for the property owned by Enron
           Net Works; and

        -- one purchase price of all other property under the
           Office Building Agreement.

        A five percent earnest money must be paid upon the
        execution of the Office Building Agreement in a interest
        bearing account and will be applied to the Purchase
        Price at Closing.

    (b) Property Acquired.  The Land and:

        -- the improvements, including the Building, the Parking
           Garage, the Skybridge and all other improvements and
           fixtures now situated on the Land;

        -- the Personal Property;

        -- all easements, hereditaments and appurtenances
           pertaining to the Land, including all development
           rights, land use entitlements, air rights, water
           rights, sub-surface tunnel rights and agreements
           related to the use and operation thereof and
           Skybridge rights and agreements related thereto;

        -- the Leases, together with all rents and other sums
           due thereunder and any security deposits actually
           held by the Debtors as of the Closing with respect to
           the Leases;

        -- the Intangible Personal Property to the extent it may
           be assignable;

        -- all the Debtors' interest in all assignable contracts
           and agreements relating to the operation, repair or
           maintenance of the Land, Improvements or Personal
           Property;

        -- all of the Debtors' interest in all assignable
           warranties and guaranties issued in connection with
           the Improvements or Personal Property; and

        -- the Approvals, in an "as is, where is" condition and
           "with all faults" as of the date of the Office
           Building Agreement and as of the Closing date.

    (c) UBS Lease Disclosure.  The Purchaser agrees to assume
        the UBS Lease;

    (d) General Electric Disclosure.  Purchaser acknowledges
        that it is aware that General Electric is asserting a
        lien on the property pursuant to the Master Lease
        Financing Agreement dated March 29, 2001 between Enron
        Corp. and General Electric;

    (e) Assumed Contracts.  All contracts and obligations of the
        Office Building Agreement will be assumed by the Debtors
        pursuant to Section 365 of the Bankruptcy Code and
        assigned to Purchaser at Closing, unless Purchaser
        provides the Debtors within 10 days after execution of
        the Office Building Agreement a list of all contracts it
        elects not to assume;

    (f) New Contracts.  The Debtors will not enter into any
        third party contracts pertaining to the Office Building
        after the Execution Date, excepting only those third
        party contracts which are necessary to carry out their
        obligations under the Agreement;

    (g) New Leases.  The Debtors will not execute any new space
        leases or licenses or amend, terminate or accept the
        surrender of any existing tenancies or approve any space
        subleases without the prior written consent of the
        Purchaser;

(2) Day Care Center Agreement:

    (a) Consideration.  Purchase Price in cash with 5% earnest
        money deposit to be paid upon the execution of the Day
        Care Center Agreement in an interest bearing account and
        will be applied to the Purchase Price at Closing;

    (b) Property Acquired.  The Land and:

        -- the improvements like the Day Care Center;

        -- the Personal Property;

        -- all easements, hereditaments and appurtenances
           pertaining to the Land, including, all development
           rights, land use entitlements, air rights, water
           rights and agreements related thereto;

        -- all Intangible Personal Property to the extent it may
           be assignable;

        -- all of the Debtors' interest in all assignable
           contracts and agreements relating to the operation,
           repair or maintenance of the Land, Improvements or
           Personal Property;

        -- all of the Debtors' interest in all assignable
           warranties and guaranties issued in connection with
           the Improvements or Personal Property; and

        -- the Approvals, on an "as is, where is" condition and
           "with all faults" as of the date of the Day Care
           Center Agreement and of the Closing Date;

    (c) Assumed Contracts.  All related contracts and
        obligations;

    (d) New Contracts.  The Debtors will not enter into any
        third party contracts pertaining to the Day Care Center
        after the Execution Date, except those third party
        contracts which are necessary to carry out the Debtors'
        obligations; and

    (e) Leases.  The Debtors will not execute any space leases
        or licenses without the prior consent of the Purchaser.

(3) The Fixtures Bill of Sale:

    (a) Consideration.  $____ cash;

    (b) Property Acquired.  All of the identified furniture,
        fixtures and equipment on an "as is, where is" and "with
        all faults" condition; and

    (c) Debtors' Representations and Warranties.  None.

(4) The IT Equipment Bill of Sale:

    (a) Consideration.  $____ cash;

    (b) Property Acquired.  All of the furniture, fixtures
        equipment identified, sold on "as is, where is" and
        "with all faults" basis; and

    (c) Debtors' Representations and Warranties.  None.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that selling assets like the Enron Center South
may best benefit their respective estates.  Since the Debtors
have reduced their work force, they don't need the Enron Center
South and the Day Care Center anymore.  The Day Care Center and
the Parking Garage are already operational.  However, the Office
Building will be completed in August 2002.  UBS AG, a Swiss
Corporation, is a current tenant of the Office Building,
pursuant to a Lease Agreement dated February 8, 2002.

As a first step of the sale process, Mr. Rosen says, the Debtors
engaged Holliday Fenoglio Fowler LP as the property broker.
Smith Street has also executed 34 confidentiality agreements
with interested parties.

Since no definitive offer has been received to date, the Debtors
propose to Auction the assets.  To participate in the Auction,
Mr. Rosen explains, each prospective bidder will be provided
with the Proposed Agreements and Bills of Sale.  Each bidder
must then submit the Agreement and the Bill of Sale for the
assets it desires to purchase, marked to show proposed changes
on or before September 18, 2002.  The Debtors, in consultation
with the Creditors' Committee and prior to the Auction, will
evaluate all bids received and invite certain parties to
participate at the Auction.

Prospective bidders for the Office Building are requested to
allocate the Purchase Price to specify:

    (a) the purchase price for the personal property under the
        Office Building Agreement, some of which may be subject
        to a lien held by General Electric;

    (b) the purchase price for the personal property under the
        Office Building Agreement, which is owned by Enron Net
        Works; and

    (c) the purchase price for the remainder of the property to
        be purchased thereunder.

In addition, bidders must indicate whether they elect to offer
an extension to the UBS Lease after its expiry.

Mr. Rosen argues that the Court should authorize the sale
because:

    (a) the sale is an exercise of sound business judgment since
        the Assets are not integral to a successful
        reorganization of the Debtors' estate and they may not
        be able to successfully maintain the Assets without an
        infusion of a significant amount of new financing;

    (b) the sale through an auction will provide the greatest
        value realizable for the assets;

    (c) the Debtors' continued ownership of the Assets would
        bring continued expenses to the Debtors, including, but
        not limited to:

        -- janitorial, repair, security and maintenance
           services;

        -- property taxes;

        -- utilities;

        -- insurance;

        -- building improvements; and

        -- general and administrative expenses on the Parking
           Garage and Day Care Center;

    (d) the sale by Auction will be the result of arm's length,
        good faith negotiations between the parties.

Mr. Rosen recalls that General Electric may have a lien on some
of the Assets listed for sale.  The Debtors are in the process
of investigating the liens to determine their validity.
Nevertheless, the Debtors believe that the purchase price of the
Assets should not exceed the value of the valid liens, if any.
"The Debtors reserve their right to withdraw any or all of the
groups of Assets from the auction to the extend the bid amounts
are insufficient.

Furthermore, the Debtors ask the Court to consider the sale to
be exempt from applicable transfer taxes pursuant to Section
1146(c) of the Bankruptcy Code. (Enron Bankruptcy News, Issue
No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENRON CORP: Wants More Time to Remove Prepetition Lawsuits
----------------------------------------------------------
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
informs Judge Gonzalez that Enron Corporation and its debtor-
affiliates have not been able to fully evaluate the consequences
of removing certain prepetition actions pending before State or
Federal Courts.

Accordingly, pursuant to Section 105(a) of the Bankruptcy Code
and Bankruptcy Rule 9006(b), the Debtors ask the Court to
further extend their removal deadline to December 2, 2002 and
another 90 days for each Subsequent Debtor's deadline.

Since the Petition Date, Ms. Gray notes, the Debtors and their
personnel and professionals have been working diligently to
administer the Chapter 11 cases and to address a vast number of
administrative and business issues while a the same time
operating their business to maximize asset values and arranging
for the sale of certain assets.  "There was simply no time to
review the hundreds of pending prepetition actions," Ms. Gray
explains.  The Debtors recognize that their right to remove
civil actions is a valuable right, which they do not want to
lose inadvertently.  Therefore, in light of the present status
of these cases, the Debtors are seeking to preserve that right
by requesting a further extension of the Removal Period. (Enron
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

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


FEDERAL-MOGUL: Asks Court to Fix March 3, 2003 Claims Bar Date
--------------------------------------------------------------
After setting a bar date for filing proofs of claims related to
Asbestos-Related Property Damage, Federal-Mogul Corporation and
its debtor-affiliates now seek to establish these deadlines for
potential claimants to file their proofs of claim against U.S.
Debtors:

A. General Bar Date:  The Debtors propose March 3, 2003 as the
   deadline for filing General Claims, which include claims of:

   a. any entity whose prepetition General Claim against a U.S.
      Debtor is not listed in the applicable U.S. Debtor's
      Schedules or is listed therein as contingent, disputed or
      unliquidated and that desires to participate in that U.S.
      Debtor's Chapter 11 case or share in any distribution in
      that Debtor's Chapter 11 case; and

   b. any entity that believes its prepetition General Claim
      against a U.S. Debtor is improperly classified in that
      Debtor's Schedules or is listed therein in an incorrect
      amount and that desires to have its General Claim allowed
      in a classification or amount that is different than that
      shown in the applicable U.S. Debtor's Schedules;

B. Rejection Bar Date: Claim relating to a U.S. Debtor's
   rejection of an executory contract or unexpired lease
   pursuant to a Rejection Order entered before the confirmation
   of a reorganization plan of an applicable U.S. Debtor will be
   filed until the later of the General Bar Date or 30 days
   after the entry of the Rejection Order.  The U.S. Debtors
   will mention the Rejection Bar Date in any order approving
   the rejection of an executory contract or unexpired lease of
   a U.S. Debtor that is entered subsequent to the date of the
   Bar Date Order; and

C. Amended Schedule Bar Date: In the event a U.S. Debtor amends
   its Schedules of Assets and Liabilities to reduce the
   undisputed, non-contingent and liquidated amount or to change
   the nature or classification of a claim against that Debtor,
   the affected claimant will have until the later of the
   General Bar Date or 30 days after the date of notice of the
   applicable amendment to the Schedules is served on the
   claimant to file a proof of claim or to amend any previously
   filed proof of claim.

Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young &
Jones, PC, in Wilmington, Delaware, contends that establishing
March 3, 2003 as the General Bar Date in these cases will
provide those parties wishing to assert General Claims with five
to six months' notice of the General Bar Date.  That period is
significantly exceeds the 20 days' notice required under the
Federal Rules for Bankruptcy Procedures.

                      Claims Not Applicable

According to Ms. Jones, the entities that need not file proofs
of claim by the General Bar Date include:

A. any entity that has already properly filed a proof of claim
   against one or more of the U.S. Debtors in accordance with
   the procedures described;

B. any entity:

     * whose claim against a U.S. Debtor is not listed as
       contingent, unliquidated or disputed in that Debtors'
       schedules; and,

     * that agrees with the nature, classification and amount of
       its claim as identified in U.S. Debtor's Schedules;

     * any entity whose claim against a U.S. Debtor has
       previously been allowed by, or paid pursuant to, an order
       of the Court;

     * any of the Debtors or their affiliates, including any of
       the Debtors that hold claims against one or more of the
       U.S. Debtors;

     * any entity whose claim is limited exclusively to a claim
       for repayment by the applicable U.S. Debtor of principal,
       interest and other applicable fees and charges on or
       under the December 29, 2000 Fourth Amended and Restated
       Credit Agreement; provided, however, that:

       1. the Administrative Agent under the Prepetition Credit
          Agreement will be required to file a proof of claim on
          account of Bank Claims on or under the Prepetition
          Credit Agreement prior to the General Bar Date.  The
          Agent, however, will not be required to file with its
          proof of claim any instrument, agreements or other
          documents evidencing the obligations indicated in the
          proof of claim; and

       2. any holder of a Bank Claim under the Prepetition
          Credit Agreement that wishes to assert a claim against
          a U.S. Debtor arising out of or relating to the
          Prepetition Credit Agreement;

     * any entity whose claim is limited exclusively to a claim
       for repayment by the applicable U.S. Debtor of principal,
       interest and other applicable fees and charges under the
       Senior Note Indentures, and the Medium-Term Note
       Indentures, provided, however, that the Indenture
       Trustees under the Senior Note Indentures; the Indenture
       Trustees under the Medium-Term Note Indentures; and any
       holder of Senior Notes or Medium-Term Notes issued by
       Federal-Mogul Corporation that wishes to assert a claim
       against a U.S. Debtor arising out of or relating to the
       Senior Notes or Medium-Term Notes or their respective
       indentures, shall be required to file a proof of claim on
       account of those claim on or before the General Bar date;
       and

     * any entity whose claim against any of the U.S. Debtors is
       limited to an administrative expense of that U.S.
       Debtor's Chapter 11 case under Section 503(b) of the
       Bankruptcy Code.

In addition, the General Bar Date will not apply to:

A. any claims that holders seek to assert against any of the
   English Debtors;

B. any Asbestos-Related Property Damage or Personal Injury
   Claims;

C. any indirect claims against any of the Debtors related to
   Asbestos-Related Personal Injury Claims, like the warranty,
   restitution, conspiracy, contribution, guarantee, indemnity,
   or subrogation claims that might be asserted against any of
   the Debtors; and

D. any Interest Holders, whose interest is based solely upon:

     * the ownership of common or preferred stock;

     * a membership interest in a limited liability company; or

     * warrants or rights to purchase, sell or subscribe to that
       security or interest;

Ms. Jones explains that Interest Holders wanting to assert
claims against any of the U.S. Debtors arising out of, or relate
to, the ownership or purchase of an Interest, including claims
arising out of, or relating to, the sale, issuance or
distribution of an Interest, must file proofs of claim on or
before the General Bar Date.

Any entity that fails to file a proof of claim by the General
Bar Date on account of a General Claim shall be forever barred,
estopped and enjoined from:

A. asserting any General Claim against any of the U.S. Debtors:

     * in an amount that exceeds the amount, if any, that is
       identified in the Schedules on behalf of that entity as
       undisputed, noncontingent and unliquidated; or

     * is of a different nature or a different classification
       than any General Claim identified in the Schedules on
       behalf of that entity; or

B. voting upon, or receiving distributions under, any plan or
   plans of reorganization in these Chapter 11 cases in respect
   of an Unscheduled Claim. (Federal-Mogul Bankruptcy News,
   Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-
   0900)

Federal-Mogul Corporation's 8.8% bonds due 2007 (FMO07USR1),
DebtTraders reports, are trading at 20 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FMO07USR1for  
real-time bond pricing.


FLAG TELECOM: New York Court Approves Disclosure Statement
----------------------------------------------------------
Further to its filing of a Disclosure Statement and Plan of
Reorganization on July 3rd 2002, FLAG Telecom Holdings Limited
(OTCBB:FTHLQ), along with its group companies, announced that
the U.S. Bankruptcy Court for the Southern District of New York
issued an order approving its Disclosure Statement which
contains the Plan on August 8, 2002, as amended.

The Plan has the support of the company's main creditors. The
Court order contains the procedures and timing for FLAG
Telecom's emergence from Chapter 11 and its parallel Bermuda
insolvency proceedings, which will be held within a similar
timeframe to the U.S. process.

This approval is another major milestone for FLAG Telecom in its
reorganization. The Plan is still to be confirmed at a
Confirmation Hearing, which the Court has scheduled for
September 26, 2002. Following this hearing, the company expects
to emerge from Chapter 11 on its previously expected date of
October 7, 2002.

During the intervening period the creditors will go through the
formal process of voting on the Plan. FLAG Telecom expects to
complete this procedure and emerge from Chapter 11 with its
entire network intact and continue to service its customers
around the globe.

The FLAG Telecom Group is a leading global network services
provider and independent carriers' carrier providing an
innovative range of products and services to the international
carrier community, ASPs and ISPs across an international network
platform designed to support the next generation of IP over
optical data networks. On April 12 and April 23, 2002, FLAG
Telecom Holdings Limited and certain of its subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. Also, FLAG Telecom
Holdings Limited and the other companies continue to operate
their businesses as Debtors In Possession under Chapter 11
protection. FLAG Telecom Holdings Limited and certain of its
Bermuda-registered subsidiaries - FLAG Limited, FLAG Atlantic
Limited and FLAG Asia Limited - filed parallel proceedings in
Bermuda to seek the appointment of provisional liquidators to
obtain a moratorium to preserve the companies from creditor
actions. Provisional liquidators were appointed and part of
their role is to oversee and liaise with the directors of the
companies in effecting a reorganization under Chapter 11. Recent
news releases and further information are on FLAG Telecom's Web
site at http://www.flagtelecom.com


FLEMING COMPANIES: Plans to Expense Fair Value of Stock Options
---------------------------------------------------------------
Fleming (NYSE: FLM) will expense the fair value of stock options
pursuant to SFAS No. 123, "Accounting for Stock-Based
Compensation," effective in fiscal year 2003, which begins
December 30, 2002.

Fleming Chairman and Chief Executive Officer Mark Hansen said,
"Stock options are an important part of the company's
compensation program and closely align management compensation
with shareholder value.  Beginning with fiscal year 2003 we will
record stock option awards as compensation expense in our
results of operations.  This action is consistent with the
interests of today's investors and the right thing to do.  We
are committed to building long-term shareholder value through
integrity and performance, and we are pleased to be taking this
action on behalf of our shareholders."

Fleming has been disclosing the effects of stock-based
compensation in the company's Form 10-K report.  If stock
options issued by Fleming had been expensed, the disclosed
impact on recent historical earnings would have been reductions
ranging from $1.5 million to less than $3 million.

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.  Fleming serves more than
600 North American stores of global supermarketer IGA.  In
addition, Fleming is the nation's leading distributor to
Hispanic markets.  Fleming also has a 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.


FREDERICK'S OF HOLLYWOOD: Files Chapter 11 Plan in Los Angeles
--------------------------------------------------------------
Frederick's of Hollywood has filed a reorganization plan with
the U.S. Bankruptcy Court.  The plan filed by the company
provides for the creditors to consensually convert substantial
debt to equity, and provides a platform for the company to
emerge from Chapter 11 bankruptcy following bankruptcy court
approval.

The key elements of the plan include: the conversion of
significant debt to equity by the company's lender group and
general unsecured creditors, a liquidity provision established
by members of the company's lender group, budgeted capital and
marketing expenditures and the anticipated continuation of the
company's senior management team.

Both the unsecured creditors' committee and the company's
secured lenders are expected to support the proposed plan.

Frederick's CEO and President Linda LoRe stated, "We are excited
about this plan, it will allow an icon of American retailing to
emerge from Chapter 11 and continue on a path of growth and re-
branding.  This is a sensible plan which includes investment for
future growth of the company, including capital expenditures for
new stores, new merchandise and marketing."

The plan anticipates that the current management team will
remain with the company focusing their efforts on the important
upcoming holiday selling season.

"It will be business as usual for the 172 stores nationwide, the
catalog and the website," stated Michael Tuchin of Klee, Tuchin,
Bogdanoff & Stern LLP, bankruptcy counsel for Frederick's of
Hollywood.  "We anticipate that the court will approve this
consensual plan within the next three months.  The company fully
expects to emerge from Chapter 11 well before the end of the
year."

Frederick's has been operating under Chapter 11 bankruptcy
protection since July 2000.  Under Chapter 11, the company has
been implementing its turnaround, opening or remodeling over 20
stores, introducing numerous new product lines, and building its
website into one of the top 10 online retailers in the US.

Since 1946, Frederick's of Hollywood has been the leading
innovator in the lingerie industry, creating many of today's top
lingerie merchandise such as the push-up bra and thong panty.  
Customers can shop for Frederick's of Hollywood merchandise at
its 172 stores, via catalog and online at
http://www.fredericks.com


FRUIT OF THE LOOM: Trust Wants to File Farley Docs. Under Seal
--------------------------------------------------------------
Fruit of the Loom, Ltd., Liquidation Trust, William Farley and
several related entities have reached a Settlement Agreement.  
The Trust wants the information contained in exhibits to the
Settlement Motion filed under seal.  Only the Court, the U.S.
Trustee, the FOL Trust Advisory Committee, the Unsecured
Creditors Trust, the Unsecured Creditors Trust Advisory
Committee and their respective counsel and Trust Administrators
can access these documents.

Risa M. Rosenberg, Esq., at Milbank, Tweed, Hadley & McCloy,
points out that Section 107(b) of the Bankruptcy Code provides
that:

      On request of a party in interest, the bankruptcy court
      shall, and on the bankruptcy court's own motion, the
      bankruptcy court may . . . (2) protect a person with
      respect to scandalous or defamatory matter contained in
      a paper filed in a case under this title.

Similarly, Ms. Rosenberg adds, Bankruptcy Rule 9018 provides
that:

      On motion or on its own initiative, with or without
      notice, the court may make any order which justice
      requires . . . (2) to protect any entity against
      scandalous or defamatory matter contained in any
      paper filed in a case under the Code.

Ms. Rosenberg explains that the exhibits contain personal
confidential financial information about Mr. Farley.  This
information was integral in determining the reasonableness of
the relief requested in the Settlement Agreement.  This
information was provided to the Trust on a confidential basis.  
Thus, disclosure of the information would be prejudicial to the
Trust, the Debtor's estates and Mr. Farley. (Fruit of the Loom
Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


FUELNATION: Obtains $110 Million Letter of Credit from H&N LLC
--------------------------------------------------------------
On August 2, 2002, FuelNation entered into a letter agreement
with H&N LLC to provide a cost of issuance and shortfall letter
of credit for up to $110 million of the Company's proposed $330
million taxable municipal bond issue in amounts equal to
approximately 3.5% of the bond amount for a total of
approximately $3,500,000 in one installment.

FuelNation intends to issue a taxable Municipal Bonds in the
amount of $330 million in three series of approximately $110
million each, for the purpose of developing a public purpose
travel and transportation center in Davie, Florida and the
acquisition and consolidation of five petroleum
marketers/petroleum transporters and centralize the acquisitions
with automation and tracking of petroleum from the state of
Ohio. This letter agreement, along with a letter agreement
previously entered into and filed, will be used to pay the fees
due with respect to the transaction and such amount will be
repaid at the time of funding of the bonds.

The fees for this letter agreement include shares of common
stock of FuelNation representing 9.9% of the outstanding common
stock and $1,000,000 in cash.

FuelNation is required to make a draw on the bonds within 25
business after the letter of credit is drawn down. The letter of
credit will expire 30 days after issuance unless a draw is made
prior to that date.

                         *    *    *

As reported in Troubled Company Reporter's July 4, 2002,
edition, the Rosen Law Firm -- http://www.rosenlegal.com--  
filed a lawsuit on behalf of a purchaser of a convertible
promissory note of FuelNation, Inc. (OTC BB:FLNT.OB).

The lawsuit alleges that FuelNation failed to pay interest on
the note when due. The noteholder subsequently declared
FuelNation in default on the note and has demanded full payment
of the principal and interest owed thereon. The complaint titled
Gianoukas v. FuelNation, Inc., was filed on June 21, 2002 in the
Superior Court of New Jersey, County of Hudson.


GENESIS ENERGY: Reports Improved Fin'l Results for 2nd Quarter
--------------------------------------------------------------
Genesis Energy, L.P. announced that its net income before the
change in the fair value of derivatives for the quarter ended
June 30, 2002, was $2,461,000, or $0.28 per unit. This compares
to income for the quarter ended June 30, 2001, of $822,000, or
$0.09 per unit. Minority interests had no effect on the reported
income for either period. The Partnership recorded an unrealized
loss, net of minority interest effect, of $355,000 in 2002, or
$0.04 per unit, for the second quarter effect of marking
contracts to fair value in accordance with Statement of
Financial Accountings Standards No. 133 ("SFAS 133"). In the
2001 period, the effect of marking contracts to fair value was
an unrealized gain net of minority interest effect of
$1,678,000, or $0.19 per unit.

Income before the effect of marking contracts to fair value in
accordance with SFAS 133 for the six months ended June 30, 2002,
was $4,477,000, or $0.51 per unit. Income before the cumulative
effect adjustment and the change in the fair value of
derivatives for the six months ended June 30, 2001, was
$817,000, or $0.09 per unit. Minority interests had no effect on
either reported amount. The Partnership recorded an unrealized
loss of $1,057,000, or $0.12 per unit, for the six months ended
June 30, 2002, for the effects of SFAS 133. Minority interests
had no effect on this loss. The Partnership recorded an
unrealized gain, net of minority interest effect, of $5,087,000,
or $0.58 per unit, for the effect of marking contracts to fair
value for the six-month period in 2001. The Partnership adopted
SFAS 133 on Jan. 1, 2001, and recorded an adjustment to net
income for the cumulative effect of the adoption. That
adjustment, net of minority interests was a gain of $467,000, or
$0.05 per unit.

As previously announced, Genesis will not pay a distribution for
the second quarter due to a restrictive covenant in the
Partnership's Credit Agreement. Under this covenant, the
Partnership may not pay a distribution for any quarter unless
the borrowing base exceeds usage under the Credit Agreement by
at least $20 million plus the amount of the distribution.

"I am pleased to report that Genesis continued to generate
strong cash flow during the second quarter under the new
business model adopted in 2002," said Mark Gorman, president and
chief executive officer of Genesis. "Available Cash per common
unit was $0.375 for the second quarter, or $0.175 above the
minimum quarterly distribution target of $0.20 per unit.

"Based on year to date results, there is an increased likelihood
that the Partnership will meet the $20 million restrictive
covenant under the Credit Agreement by the third or fourth
quarter of 2002 and not be restricted from making a
distribution. While we are encouraged by the prospects for
restoring the distribution sooner than expected, any decision to
restore the distribution will take into account the ability of
the Partnership to sustain the distribution on an ongoing basis.
If distributions are resumed, such distributions may be for less
than $0.20 per unit."

Genesis Energy, L.P. ,will broadcast its Second Quarter Earnings
Announcement Conference Call tomorrow, Aug. 14, 2002, at 10:00
a.m. Central. This call can be accessed at
http://www.genesiscrudeoil.com Choose the Investor Relations  
button. Listeners should go to this Web site at least fifteen
minutes before this event to download and install any necessary
audio software. For those unable to attend the live broadcast, a
replay will be available beginning approximately one hour after
the event.

Genesis Energy, L.P., operates crude oil common carrier
pipelines and is an independent gatherer and marketer of crude
oil in North America, with operations concentrated in Texas,
Louisiana, Alabama, Florida and Mississippi.

At March 31, 2002, Genesis Energy's total current liabilities
exceeded its total current assets by about $5 million.


GLOBAL CROSSING: Asks Court to Fix September 30 Claims Bar Date
---------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates ask the Court to
establish September 30, 2002 at 5:00 p.m., Eastern Time, as the
last date and time by which proofs of claim must be filed in the
Debtors' Chapter 11 cases.  The fixing of September 30, 2002 as
the Bar Date will enable the Debtors to receive, process and
begin their initial analysis of creditors' claims in a timely
and efficient manner. It will also give all creditors ample
opportunity to prepare and file proofs of claim.

Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York, tells the Court that each person or entity that asserts a
prepetition claim against the Debtors must file an original,
written proof of the claim that substantially conforms to
Official Form No. 10.  The proof of claim must be received on or
before the Bar Date by the Debtors' claims agent, Bankruptcy
Services LLC, either by mailing, or delivering by messenger or
overnight courier, the original proof of claim to:

      Global Crossing Claims Processing
      c/o United States Bankruptcy Court
      Southern District of New York
      P.O. Box 5014
      Bowling Green Station
      New York, New York 10274-5014

Proofs of Claim sent by facsimile or telecopy will not be
accepted.  The Debtors request that all proofs of claim be
deemed timely filed only if actually received by the Global
Crossing Claims Processing Center on or before the Bar Date.

These persons or entities are not required to file a proof of
claim on or before the Bar Date:

A. any person or entity that has already properly filed, with
   the Clerk of the United States Bankruptcy Court for the
   Southern District of New York, a proof of claim against the
   Debtors, utilizing a claim form which substantially conforms
   to the Proof of Claim or Official Form No. 10;

B. any person or entity whose claim is listed on the Debtors'
   Statements of Financial Affairs, Schedules of Assets and
   Liabilities and Schedules of Executory Contracts; whose claim
   is not described as "disputed," "contingent," or
   "unliquidated"; and who does not dispute the amount or nature
   of the claim for the person or entity as listed in the
   Schedules;

C. any person holding a claim for an administrative expense;

D. any person or entity whose claim has been paid by the
   Debtors;

E. any person or entity that holds a claim arising out of or
   based upon an equity interest in the Debtors;

F. any person or entity whose claim is limited exclusively to
   the repayment of principal, interest, and other applicable
   fees and charges under any bond or note issued by the
   Debtors; provided, however, that:

    1. the exclusion will not apply to the Indenture Trustee
       under the applicable Debt Instruments,

    2. the Indenture Trustee will be required to file one proof
       of claim, on or before the Bar Date, on account of all of
       the Debt Claims on or under each of the Debt Instruments
       and

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

G. any person or entity that holds a claim that has been allowed
   by an order of the Court entered on or before the Bar Date;

H. any person or entity that holds a claim solely against any of
   the Debtors' non-debtor affiliates; and

I. a Debtor in these cases having a claim against another
   Debtor.

Mr. Walsh relates that the proposed Proof of Claim form conforms
to Official Form 10, but has been tailored for the circumstances
of the Debtors' cases.  The substantive modifications to the
Official Form proposed by the Debtors include:

A. allowing the creditor to correct any incorrect information
   contained in the name and address portion;

B. adding additional categories to the Basis of Claim section;
   and

C. including certain instructions.

In accordance with the proposed Bar Date Order, each proof of
claim filed must:

A. be written in the English language;

B. be denominated in lawful currency of the United States;

C. conform substantially with the Proof of Claim provided or
   Official Form No. 10; and

D. indicate the particular Debtor against whom the claim is
   being filed.

According to Mr. Walsh, claimants that fail to file a proof of
claim on or before the Bar Date will be forever barred from
asserting a claim against the Debtors.  The Debtors and their
property will be forever discharged from any and all
indebtedness or liability with respect to the claim, and the
holder will not be permitted to vote to accept or reject any
plan of reorganization filed in these chapter 11 cases, or
participate in any distribution in Debtors' chapter 11 cases on
account of the claim or to receive further notices regarding the
claim.

The Debtors propose to mail a bar date notice and a Proof of
Claim form to:

  * the U.S. Trustee;

  * each member of the Committee appointed in these chapter 11
    cases and the attorneys for the Committee;

  * the attorneys for the Debtors' prepetition secured lenders
    on behalf of each of the prepetition secured lenders;

  * the Joint Provisional Liquidators and their attorneys;

  * all employees and directors of the Debtors;

  * all known holders of claims listed on the Schedules at the
    addresses stated therein;

  * the District Director of Internal Revenue for the Southern
    District of New York;

  * the Securities and Exchange Commission; and

  * all persons and entities requesting notice pursuant to
    Bankruptcy Rule 2002 as of the date of entry of the order
    approving this Application.

Mr. Walsh explains that the proposed Bar Date Notice notifies
the parties of the Bar Date and contains information regarding
who must file a proof of claim, the procedure for filing a proof
of claim and the consequences of failure to timely file a proof
of claim.

The Debtors propose to notify their current employees of the Bar
Date by distributing an Employee Notification via electronic
mail.  The Debtors do not believe that their employees hold
claims for prepetition wages and benefits -- the Schedules
reflect the absence of these claims.  Nonetheless, the Debtors
propose to notify their employees of the Bar Date so that any
employees who believe that they have claims can obtain
information regarding whether the Company has been authorized to
pay these claims and the procedures for filing a proof of claim,
and the consequences of failing to timely file a proof of claim.

Holders of an equity interest need not file a proof of claim.
The Debtors' common stock, of which 910,668,000 shares were
outstanding as of November 1, 2001, is held by thousands of
different individuals and entities.  The Debtors contend that
notice to these holders is unnecessary because the Debtors
possess or can obtain a list of all record holders of the
Debtors' equity interests as of the Petition Date.

Together with the Bar Date Notice and the Proof of Claim form,
the Debtors propose to include a statement indicating how the
Debtors have listed each creditor's respective claim on the
Schedules, including the amount of the claim and whether the
claim has been listed as contingent, unliquidated or disputed.
The Debtors further propose to send a Bar Date Notice to certain
entities not listed on the Schedules, but with whom the Debtors
had done business with or who may have asserted a claim against
the Debtors in the recent past.  Mr. Walsh believes that
providing this notice will enable any creditor who was
inadvertently omitted from the Schedules to be informed of the
Bar Date.  It will also enable the Debtors to determine the
amount and magnitude of all prepetition claims against their
Chapter 11 estates.

The Debtors also seek the Court's authority to publish the Bar
Date Notice on one occasion at least 25 days prior to the Bar
Date in these newspapers:

    -- The New York Times (National Edition),
    -- The Wall Street Journal (International Edition),
    -- Financial Times of London,
    -- The Times of London,
    -- Cyprus Weekly,
    -- Bermuda Sun,
    -- Het Financielle Dagblad-Netherlands, and
    -- Luxemburger Wort.

Mr. Walsh tells the Court that the Publication Notice will
include a telephone number so that creditors may call to obtain
copies of the Proof of Claim form and information concerning the
procedures for filing proofs of claim.

To facilitate and coordinate the claims reconciliation and bar
date notice functions, Mr. Walsh informs the Court that BSI will
mail the Proof of Claim forms together with the Bar Date Notice
and Claim Notice.  This will ensure that each creditor whose
claim is listed on the Schedules will receive a "personalized"
Proof of Claim form printed with the appropriate creditor's
name; and facilitate the matching of scheduled and filed claims
and the claims reconciliation process.

By establishing the Bar Date in accordance with these
provisions, Mr. Walsh anticipates that all potential claimants
will have 45 days' notice of the Bar Date for filing their
proofs of claim. This is more than enough time required under
Bankruptcy Rule 2002(a)(7), which mandates 20 days' notice.
(Global Crossing Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Hutchison & ST Buying 61% Stake for $250MM
-----------------------------------------------------------
Global Crossing has signed a definitive agreement under which
Hutchison Telecommunications Limited, a wholly owned subsidiary
of Hutchison Whampoa Limited, and Singapore Technologies
Telemedia Pte. Ltd., will invest a total of $250 million for a
61.5 percent majority interest in a newly constituted Global
Crossing on its emergence from bankruptcy.  Global Crossing's
creditor groups support the agreement.

The agreement was approved Friday in a hearing before the
Bankruptcy Court for the Southern District of New York.

Global Crossing is also preparing a Chapter 11 plan of
reorganization. Global Crossing expects to file its plan in
September and to emerge from bankruptcy in early 2003, subject
to satisfying various contractual closing conditions, including
regulatory approvals and confirmation of its plan of
reorganization by the bankruptcy court.

The terms of the Hutchison and ST Telemedia agreement provide
that Global Crossing's banks and creditors will receive 38.5
percent of the common equity in the newly constituted Global
Crossing, $300 million in cash and $200 million of new debt in
the form of senior notes.  Existing common equity and preferred
shareholders of Global Crossing will not participate in the new
capital structure.

Under the agreement, Global Crossing will retain its UK national
business, its conferencing division, and Global Marine -- three
businesses which it had previously considered selling in order
to maximize its cash position. Customers of these businesses, as
well as Global Crossing's other customers, can expect service to
continue without disruption.

The agreement with Hutchison and ST Telemedia follows several
months of discussions with a large number of bidders.  After
reviewing and negotiating all the bids submitted, Global
Crossing and its creditors entered into separate negotiations
with Hutchison and ST Telemedia.  These negotiations resulted in
the agreement announced today.  As a result of the agreement,
Global Crossing has cancelled the auction scheduled for August
14, 2002.

"This is a textbook model for a successful strategic
investment," said Mr. John Legere, CEO of Global Crossing.  
"Hutchison Telecommunications and Singapore Technologies
Telemedia are highly respected telecom companies with assets and
skills that complement Global Crossing's unmatched global
network. With our turnaround well under way, and the support of
strong new strategic partners, Global Crossing is poised to
become the global leader providing networking services to
enterprises and carrier customers in more than 200 of the
world's top cities."

Mr. Canning Fok, Group Managing Director of Hutchison Whampoa,
said, "We have confidence in the Global Crossing management team
and look forward to working with them.  Global Crossing presents
an attractive business prospect for Hutchison and our investment
in the company, which owns substantial broadband network
capacity, is in line with our vision to be a leading global
telecommunications player."

"Customers will be the real winners in this agreement," said Mr.
Lee Theng Kiat, President and CEO of ST Telemedia.  "Our three
companies will be able to provide continuity on Global
Crossing's international networks and expanded service offerings
to benefit all our customers.  As the telecom market stabilizes,
there will be significant opportunities for the new Global
Crossing, its creditors and employees.  This investment will
accelerate ST Telemedia's goal to become a significant global
data and IP-centric communications group."

The Blackstone Group, L.P. and Weil, Gotshal & Manges LLP
provided advice and counsel to Global Crossing regarding the
agreement announced Friday.

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

On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda. On the same date,
the Bermuda Court granted an order appointing joint provisional
liquidators with the power to oversee the continuation and
reorganization of the Bermuda-incorporated companies' businesses
under the control of their boards of directors and under the
supervision of the U.S. Bankruptcy Court and the Supreme Court
of Bermuda. On April 23, 2002, Global Crossing commenced a
Chapter 11 case in the United States Bankruptcy Court for the
Southern District of New York for its affiliate, GT UK, Ltd. On
August 4, 2002, Global Crossing commenced a Chapter 11 case in
the United States Bankruptcy Court for the Southern District of
New York for its affiliate, SAC Peru Ltd. Global Crossing does
not expect that any plan of reorganization, if and when approved
by the Bankruptcy Court, would include a capital structure in
which existing common or preferred equity would retain any
value.

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


GLOBAL CROSSING: Court Okays Pact with Hutchison & ST Telemedia
---------------------------------------------------------------
Hutchison Telecommunications Limited and Singapore Technologies
Telemedia Pte Ltd have signed an agreement with Global Crossing
to invest US$250 million for 61.5 percent majority interest in
the company as newly constituted. Global Crossing's creditor
groups support the agreement.

The agreement was approved Friday (9 August, 2002 U.S. Eastern
Daylight Time) in a hearing before the US bankruptcy court.

Hutchison and ST Telemedia are confident that this proposal
represents the best outcome for Global Crossing's creditors,
customers and employees and it is an important milestone to
assist Global Crossing to emerge successfully from its
bankruptcy process.

Hutchison and ST Telemedia are in the process of working with
Global Crossing's management and creditors to facilitate a quick
reorganization of the business to restore confidence and ensure
continued service to Global Crossing's customers.

Hutchison, ST Telemedia and Global Crossing will immediately
embark on the process for obtaining all necessary regulatory
approvals. Subject to these approvals being obtained and the
satisfaction of other closing conditions, the transaction is
expected to be completed in early 2003.

Hutchison Telecommunications Limited is a wholly owned
subsidiary of Hutchison Whampoa Limited. Hutchison Whampoa is a
Hong Kong-based multinational conglomerate with origins dating
back to the 1800s. Hutchison is also part of the Li Ka-shing
group of companies, which together represent about 15% of the
total market capitalization of the Hong Kong stock market. In
2001, HWL's consolidated turnover (including associates) was
HK$89,038 million and net profit was HK$12,088 million.

With over 120,000 employees worldwide, Hutchison operates and
invests in five core businesses in 37 countries:
telecommunications; ports and related services; property and
hotels; retail and manufacturing; and energy and infrastructure.
For more information, please visit
http://www.hutchison-whampoa.com  

Incorporated in 1994, Singapore Technologies Telemedia is a
leading information-communications group in Singapore. The
company has three major business focuses: Data & Voice,
Broadband & Multimedia and e-Services.

Through its diverse group of leading innovative companies, ST
Telemedia provides such services as fixed and mobile telecom
services, wireless data communications services, Internet mobile
services, managed IP network services, managed hosting services,
satellite services, and enhanced broadband and multimedia
services.

ST Telemedia aims to become a significant global data and IP-
centric info communications group. It is a wholly-owned
subsidiary of the Singapore Technologies group, a technology-
based multinational conglomerate, with core businesses in
engineering, technology, infrastructure & logistics, property
and financial services. ST's turnover (revenue) for 2001 was S$9
billion and it employs 54,000 people worldwide. For more
information, visit http://www.stt.st.com.sg


HARVARD INDUSTRIES: Hilco Completes $9MM Funding for Buyout Deal
----------------------------------------------------------------
Theodore L. Koenig, President and CEO of Hilco Capital LP,
announced the completion and funding of a $9 million credit
facility for the benefit of Durable Metals Enterprises, LLC.  
Durable Metals obtained the Hilco Capital facility in order to
fund the acquisition of the St. Louis Die Casting and Arnold
Manufacturing divisions of Harvard Industries, Inc.  Harvard
Industries is a diversified tier 1 auto components manufacturer
currently the subject of Chapter 11 bankruptcy proceedings in
Trenton, New Jersey.

St. Louis Die Casting, LLC was founded in 1943. It provides
aluminum and zinc die castings, machining and surface finishing,
along with assembly operations to Caterpillar, major OEMs and
other industrial customers. It specializes in products requiring
pressure sensitive, high quality castings to the construction
equipment, agricultural, and industrial markets. St. Louis Die
Casting is a registered QS 9000 and ISO 9002 provider and
employs over 160 people in its Bridgeton, Missouri plant.

Arnold Defense and Electronics, LLC traces its roots back to the
early 1900s. The company has provided armaments to military
users since 1960. It has also provided electronic circuit
boards, assemblies, wire harnesses, other electronic devices,
and contract services since 1971. In 1998, the company began the
machining and assembly of primer pumps for a major OEM company.
Arnold Defense and Electronics is a certified QS 9001 company
and employs over 50 people in its Arnold, Missouri plant.

Mr. Koenig said, "We are excited that we could back Del Mullens
and his team in acquiring St. Louis Die Casting and Arnold
Defense. Both of these companies have a long history of
excellent customer relationships and hard working, knowledgeable
and dedicated employees."

Delbert Mullens, President and CEO of Durable Metals, LLC, said,
"Hilco Capital stepped up in a difficult financing environment
and did the deal. The creativity and flexibility of Hilco
Capital and their executives was the key to getting this deal
done. We could not have closed this transaction without them."

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 www.hilcocapital.com.


HAYES LEMMERZ: Asks Court to Allow D&O Defense Costs Payment
------------------------------------------------------------
Gulf Insurance Company issued a director and officer liability
insurance policy to Hayes Lemmerz International, Inc., and its
debtor-affiliates for claims made from July 2, 1999 through July
2, 2002.  The D&O Insurance Policy's coverage limit, including
litigation defense costs, is $15,000,000.  Some present and
former directors and officers of the Debtors who also are
insureds under the D&O Insurance Policy are defendants in
several putative class action lawsuits currently pending in
federal court in Michigan that were filed during the coverage
period under the D&0 Insurance Policy.  Under the D&O Insurance
Policy, Gulf has an obligation to advance the defense costs the
D&O Defendants incur in connection with the Securities Actions
to the D&O Defendants.

Thus, the Debtors seek the Court's authority to allow Gulf to
advance and pay defense costs incurred in connection with the
Securities Actions to the D&0 Defendants.  Michael W. Yurkewicz,
Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington,
Delaware, emphasizes that the Debtors only seek the authority to
allow Gulf to advance and pay the amounts it deems reasonable,
necessary and covered.  "The Debtors are not asking the Court to
approve or be involved in the determination of amounts to be
paid," Mr. Yurkewicz says.

The Debtors believe the insurance proceeds are property of their
estates.

Without an order allowing Gulf to pay the defense costs, Mr.
Yurkewicz says:

  * Gulf has stated it will not advance the defense costs
    because such advancements potentially violate the automatic
    stay; and

  * the Debtors would be faced with potentially having to
    indemnify the D&O Defendants for defense costs and having
    their current directors distracted from the over-arching
    goal of confirming a plan of reorganization.

Mr. Yurkewicz tells the Court that the Debtors want to reduce
potential indemnification claims against their estates.  The
Debtors have certain obligations to indemnify the D&O Defendants
and advance their expenses in connection with these Securities
Actions to the extent provided under their bylaws and state law.
With the pending Securities Actions, Mr. Yurkewicz notes, the
D&O Defendants are likely to incur significant defense costs,
potentially resulting in significant indemnification claims
being asserted by some or all of the D&O Defendants against the
Debtors' estates.  The D&O Defendants also are insured under the
D&O Insurance Policy for up to $15,000,000 of coverage and can
draw upon the D&O Insurance Policy to pay their defense costs.
If this Motion is granted, Gulf will agree to advance the costs
to the D&O Defendants directly, thus saving the Debtors' estates
from the burden of additional, and potentially significant,
indemnification claims.

Mr. Yurkewicz explains that the Debtors also want to avoid the
distraction of their directors from the reorganization effort
due to the directors' concerns about personally having to
advance litigation defense costs.  This distraction could impair
the Debtors' ability to reorganize.  The current directors need
to focus on developing and implementing a successful plan of
reorganization.  The Debtors' estates will not have to expend
any funds to advance defense costs to its directors because the
funds will be provided by Gulf.  In fact, allowing Gulf to
advance legal fees in the present situation can only help
preserve the Debtors' estates by avoiding unnecessary
indemnification claims.

If Gulf won't pay, Mr. Yurkewicz speculates that the D&O
Defendants may decide to commence an action seeking a
determination that Gulf is required to pay them.  Again, Mr.
Yurkewicz says, this is another distraction that needs to be
avoided. (Hayes Lemmerz Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


HAYES LEMMERZ: Names D. Zekind as Berea Facility Plant Manager
--------------------------------------------------------------
Hayes Lemmerz International, Inc., (OTC Bulletin Board: HLMMQ)
announced that Diane Zekind, currently Director of Technical
Services has been named Plant Manager for the Company's
Commercial Highway facility in Berea, Kentucky, effective
September 1, 2002.   Ms. Zekind will have overall responsibility
for the Berea and Chattanooga, Tenn., facilities, and will
report directly to Business Unit President Fred Bentley.   Ms.
Zekind replaces Bill Stacy who has opted for early retirement.  
Mr. Stacy will stay on through the end of October 2002, to
assist with the transition.

Ms. Zekind began her career at General Motors Central Foundry
Division Saginaw Metal Casting Operations.  She worked as a
Process Engineer, Industrial Engineer, and a Senior
Manufacturing Engineer.  After almost nine years with General
Motors, Ms. Zekind joined CMI International, as Manager of
Product Planning at the Technical Center in Ferndale, Mich.  She
was promoted to Director of Advance Planning and Administration,
then to Vice President. As a result of Hayes Lemmerz'
acquisition of CMI in 1999, Ms. Zekind was named Director of
Technical Services.  Ms. Zekind holds a bachelor of science
degree in Industrial Engineering and a master of science degree
in Manufacturing Management from General Motors Institute (now
Kettering University), in Flint, Mich.

In a related move, Greg Guilliams, currently Director of
Advanced Manufacturing Engineering for the Suspension Components
Business Unit has been named Director of Technical Services,
effective September 1, 2002.  Mr. Guilliams will report directly
to Business Unit President Scott Harrison.  Mr. Guilliams will
assume the overall responsibility of the Technical Center, in
Ferndale, Mich., which provides advanced engineering, design,
development and testing services to all of Hayes Lemmerz' North
American Operations.  He'll also have responsibility of the
Center's facilities and maintenance functions. Additionally, Mr.
Guilliams will continue to fulfill the responsibilities of his
current position.

Mr. Guilliams began his career at General Motors Central Foundry
Operations in 1975.  He worked as a Production Supervisor, Plant
Engineer, and Maintenance General Supervisor.  Mr. Guilliams
joined CMI International's Cadillac Operations in 1993 as the
Manager of Engineering and Maintenance.  In 1995, he was
promoted to Plant Manager of the Bristol Operations, and in
2000, Plant Manager of the Petersburg Operations.  Mr. Guilliams
holds a bachelor of science degree in Electrical Engineering
from General Motors Institute.

Hayes Lemmerz International, Inc., is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components.  The Company has 42 plants, 3 joint venture
facilities and approximately 12,000 employees worldwide.

On December 5, 2001, Hayes Lemmerz International, Inc., all of
its U.S. subsidiaries and one Mexican subsidiary filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code, to
reduce their debt and strengthen their competitive position.  
These filings include 22 facilities in the United States and one
plant in Mexico.

More information about Hayes Lemmerz International, Inc., is
available at http://www.hayes-lemmerz.com

Hayes Lemmerz Int'l Inc.'s 11.875% bonds due 2006 (HLMM06USS1)
are trading at 67 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HLMM06USS1
for real-time bond pricing.


HI-TECH AMERICA: IHI Cancels Joint Venture Agreements in Default
----------------------------------------------------------------
Further to its news release of April 30, 2002, IHI (TSX
VENTURE:IHI; OTC BB:IHITF) announced that it and its majority
owned subsidiary, IHI International Holdings Ltd., have
exercised their respective rights to cancel, suspend or extend
certain Interim Joint Venture Agreements and related licenses to
use the IHI Building Technology. The affected agreements involve
potential joint venture partners who have failed to satisfy
their financial and other commitments to IHI and IHI
International. The interim agreements affected by the actions
taken IHI and IHI International are as follows:

The Interim Agreements made with Hi-Tech America Development
Corp., HAD 2000 Corp. and HAD THREE Corp., in 1998, 1999 and
2000 were in default and were, therefore, cancelled. All initial
irrevocable down payments made under those agreements have been
forfeited to IHI International. IHI International has advised
the HAD Group that IHI International may be prepared (in its
sole discretion) to apply some or all of the amounts forfeited
by the HAD Group towards financial obligations still to be
satisfied by the HAD Group under interim agreements dated
January 28, 2001 and covering the States of Michigan and
Illinois. IHI International has also advised the HAD Group that
IHI International would only be willing to consider the
application of the forfeited funds if the HAD Group can
demonstrate to IHI International's satisfaction by September 30,
2002 the HAD Group's ability to fund all of its obligations
under those agreements.

The Interim Agreements made with International Trade Circle SARL
announced in 1997 and 2001 were in default and were, therefore,
cancelled. All initial irrevocable down payments made under
those agreements have been forfeited to IHI International. IHI
International has advised ITC that IHI International may be
prepared (in its sole discretion) to apply some or all of the
amounts forfeited by ITC towards financial obligations under a
proposed Interim Agreement to be established to cover only the
United Arab Emirates. ITC must be prepared to demonstrate to IHI
International's satisfaction by Sept 30, 2002 ITC's ability to
provide the full funding to cover its obligations under the
proposed agreement.

The Cascade Group Pty. Ltd., has completed negotiations with IHI
International to allow for an extension of the date by which CGP
must fulfill its obligations under the interim agreement related
to the territory that comprises Australia. All license payments
must now be paid by June 30, 2003.

The potential IHI License involving Hi-Tech Development France
has been suspended by IHI International. However, IHI
International has advised HDF that IHI International is willing
to reinstate HDF's license rights if HDF can demonstrate to IHI
by September 30, 2002 HDF's ability to provide the full funding
to cover its obligation with respect to establishing an IHI J.V.
factory for the region covered by interim agreement.

Further to an agreement dated August 1st, 2002 between IHI and
Hi-Tech Canada Development Inc., IHI wishes to announce that HCD
has agreed to forfeit its rights to the potential IHI licenses
to the territories comprised by Honduras and Atlantic Canada.
Those potential IHI Licenses, were contemplated by interim
agreements with IHI announced in 1999. HCD has now agreed to
concentrate its efforts on establishing joint ventures related
to the territories that comprise Ontario and the Canadian
Prairies. IHI has agreed to apply the irrevocable deposits
(totaling approx. US$200,000) against the final balance of the
Ontario license. HCD did earlier pay approximately US$800,000
towards the Ontario license. IHI has agreed to grant an
extension to HCD (until December 31st, 2003) to fulfill its
obligations, as per the interim agreement, to the full
satisfaction of IHI. IHI also agreed to grant HCD a first right
of refusal to establish an IHI J.V. Factory in Atlantic Canada,
based on the last interim agreement between HCD and IHI for
Atlantic Canada.

"I am pleased that we have made an accommodation with HCD," Mr.
Rached said. "It is through HCD's marketing efforts that we were
able to proceed with our initial commercial sales of IHI's
product in 2001 and 2002 out of our Delta Factory."

               New Potential Joint Venture Licenses
             With US$1 Million Payment Received By IHI

During the first week of August 2002 IHI International has
concluded 3 licenses for The Kingdom of Saudi Arabia and has
received an irrevocable USD$1 million deposit, as full payment
for the first license, as per IHI International's interim
agreement. IHI International expects to receive the balance of
the second and third license fees by October 30th, 2002. If the
payment is received on or before October 30th, 2002, the total
balance amount will be reduced to US$1 million , or otherwise it
will remain at US$2 million for the potential Joint Venture
partners to pay. IHI strongly expects to receive an order to
establish and build the first IHI J.V. Factory (outside of
Canada) by October 30th, 2002 and to be completed by July 2003,
provided that a suitable property can be purchased in Saudi
Arabia by the JV partnership on or before October 30th , 2002.
"My father has designed and supervised construction projects in
Saudi Arabia beginning in 1948. His expertise was an important
factor that allowed us to conclude this significant
transaction," Mr. Rached explained.

IHI is also pleased to announce that Earthquake Resistant
Structures Inc., of Delaware, a company owned by the president's
mother, has expanded its territory in the US and entered into an
agreement to purchase two additional licenses and to establish
two more potential Joint Ventures Factories. The first covers
New England and the second covers Arizona, New Mexico and
Nevada. ERS is required to pay an initial payment of US$200,000
by December 31st, 2002, as per the form of interim agreements
established earlier between IHI and ERS that were approved by
the shareholders and accepted for filing by Exchange.

Finally, IHI wishes to announce that it has implemented a policy
whereby a parties wishing to enter into interim joint venture
agreements must have considerable financial qualifications,
namely net assets of $50 million or$100 million in annual sales.
Except as set forth in this release, all interim joint venture
agreements not specifically mentioned above are currently valid
and in good standing.

International Hi-Tech Industries Inc., is a Company whose
principal business is the development and commercialization of a
new building system in Canada, and internationally through its
subsidiary, IHI International Holdings Ltd. To date, IHI's
building system (which is held under license) has attracted
interest from more than 65 different countries worldwide.


ICG COMMS: Court Okays Stipulation Extending Cash Collateral Use
----------------------------------------------------------------
Judge Walsh put his stamp of approval on a Stipulation entered
into by ICG Communications, Inc., and the Royal Bank of Canada,
as the Agent for the lenders under the $200,000,000 Credit
Agreement dated as of August 12, 1999. The Stipulation provides
for:

  -- continued adequate protection of the Banks' prepetition
     liens,

  -- the Debtors' continued use of the Lenders' cash collateral,
     and

  -- modifying the exclusivity periods during which only the
     Debtors may file and solicit acceptances for a plan.

With the approval, thus, the Debtors maintain the status quo,
from a financing point-of-view, through October 31, 2002.

The Stipulation provides that:

    (1) The Debtors are authorized to use cash collateral in
        accord with the revised budget, and subject to the
        conditions of the account set-asides and transfers,
        up to October 31, 2002;

    (2) To the extent that the revised budget provides for
        accrual of intercompany equipment lease payments,
        rather than payment, or that any other intercompany
        post-petition claims are to arise in favor of any of
        the Debtor Obligors, these intercompany accruals are
        to be afforded superpriority claim status in accord
        with the Final Order of December 2000;

    (3) At all times during the Debtors' use of cash collateral,
        the Debtors must maintain, in one or more segregated
        accounts, subject to the first-priority lien and
        security interest of the Agent, an aggregate amount of
        not less than $90,000,000 in cash as security for
        repayment to the Lenders;

    (4) The Debtors must maintain all their cash, other
        than the Holdings Operations Cash, in one or more
        bank accounts in the names of Debtors that are obligors
        under the Credit Agreement, each subject to the
        first-priority lien and security interest of the Agent
        on behalf of the Lenders.  To the extent that the
        Holdings Operations Cash exceeds $10,000,000 at any
        time, the Debtors shall promptly transfer the excess
        to one or more of the Debtor Obligors' bank accounts;

    (5) In the event that an Order of the Bankruptcy Court
        confirming the Plan as modified has not been entered
        before the [October] Termination Date, the Debtors'
        exclusive periods for filing a plan and soliciting
        acceptances shall terminate automatically with respect
        only to the Agent and the Lenders to permit the Agent
        and Lenders to file a plan of reorganization,
        including a liquidating plan, with the Bankruptcy Court;

    (6) In the event that any of the Debtors shall fail to
        comply with any term of this Stipulation, the Final
        Cash Collateral Order will be in default, and the
        Debtors and the Lenders agree that the matter will be
        presented to the Court at an expedited hearing for
        determination of the parties' respective rights,
        including the Debtors' rights, if any, to continue
        the use of cash collateral;

    (7) In accordance with the Final Cash Collateral Order, the
        Debtors are to pay all unpaid out-of-pocket costs and
        expenses of the Agent and the Lenders, including
        professional fees incurred in connection with matters
        related to the Credit Agreement, the Lenders'
        collateral, and these bankruptcy cases, and the Debtors
        agree to pay these costs and fees that are outstanding
        within three days of their signature on the Stipulation;

    (8) The Debtors' use of cash collateral may be modified or
        extended upon written agreement among the Debtors and
        the Lenders upon notice to the Official Committee of
        Unsecured Creditors in these cases;

    (9) Unless the Debtors' use of cash collateral is extended
        or modified by agreement, that use will terminate on
        the Termination Date; however, in the absence of the
        Lenders' consent to an extension beyond the Termination
        Date, the Debtors may seek Judge Walsh's approval for
        the continued use of cash collateral on not less than
        two business days' written notice to the attorneys for
        the Agent and Lenders; and further provided that if the
        Debtors file a motion for the continued use of cash
        collateral not less than two business days before the
        Termination Date, and Judge Walsh has not heard the
        Motion before the Termination Date, the Debtors are
        authorized to continue to use cash collateral, but only
        in accordance with the Revised Budget, through and
        including November 10, 2002, or if a hearing is held
        prior to that date, through the date of the hearing;

   (10) Notwithstanding any to the contrary, the Lenders
        reserve the right at any time to seek to prohibit or
        further condition the Debtors' use of cash collateral on
        not less than two business days' prior written notice to
        counsel for the Debtors; and

   (11) Upon the Termination Date, the Debtors' exclusivity
        periods will terminate automatically with respect to the
        Agent and the Lenders only to permit the Agent and
        Lenders to file a plan of reorganization, including any
        liquidating plan, and solicit acceptances of that plan.
        (ICG Communications Bankruptcy News, Issue No. 28;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)  


ICH CORPORATION: Wants to Extend Plan Exclusivity Until Oct. 15
---------------------------------------------------------------
ICH Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
the time period in which they have the exclusive right to
propose and file a plan and solicit acceptances of that plan
from their creditors.  The Debtors ask for an extension until
October 15, 2002 of their Exclusive Plan Filing Period and until
December 16, 2002 to solicit acceptances of that plan.

The Debtors relate that after the Petition Date, RTM, the
largest Arby's franchisee, submitted a binding offer to purchase
the Debtors' restaurant operations through the sale of newly-
issued common and preferred stock and the assumption of various
liabilities pursuant to a plan of reorganization.  The Debtors
then initiated a process to solicit competing offers wherein
Triarc Companies, Inc., submitted a competing proposal to
acquire the capital stock of Sybra.

By the July 17, 2002 deadline for potential bidders submitted
their final proposals, the Debtors received two proposals --
both of which are materially better than those submitted
previously.

The Debtors argue that their motive in requesting the extension
is to obtain the time necessary to complete the negotiations
with the final bidders, arrive at definitive documentation, and
then proceed to plan preparation, solicitation, and confirmation
-- not to pressure any constituency in any way.

ICH Corporation, a Delaware holding corporation, which operates
Arby's restaurants, located primarily in Michigan, Texas,
Pennsylvania, New Jersey, Florida and Connecticut. The Company
filed for chapter 11 protection on February 05, 2002. Peter D.
Wolfson, Esq., at Sonnenschein Nath & Rosenthal represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed debts and assets of
over $50 million.


IT GROUP: Obtains 2nd Extension of Removal Period Until Oct. 14
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends,
for the second time, the period within which The IT Group, Inc.,
and its debtor-affiliates may remove pending prepetition State
Court Actions to the Bankruptcy Court. The Debtors' new deadline
is now moved to the earlier of:

    -- October 14, 2002, or

    -- 30 days after the entry of an order terminating the
       automatic stay with respect to any particular action
       sought to be removed.


INNOVATIVE CLINICAL: Arthur Andersen Engagement Pact Terminated
---------------------------------------------------------------
The Securities and Exchange Commission notified Innovative
Clinical Solutions Ltd., that the SEC had been notified by
Arthur Andersen LLP, the Company's auditor of record, that
Arthur Andersen LLP is unable to perform future audit services
for the Company and, as a result its relationship with the
Company is effectively terminated. Innovative Clinical Solutions
is currently in the process of identifying qualified independent
auditors to replace Arthur Andersen and anticipates that it will
have retained a new audit firm within 60 days.

The audit reports of Arthur Andersen LLP on the consolidated
financial statements of Innovative Clinical for the fiscal years
ended January 31, 2002 and 2001 contained a going concern
opinion explanatory paragraph. The Company has attempted to
obtain a letter from Arthur Andersen indicating  its concurrence
with the disclosure, however, Arthur Andersen LLP has closed its
Boston office, which had responsibility for the audit of
Innovative Clinical Solutions' financial statements and,
accordingly, the Company is unable to provide such a letter from
Arthur Andersen.

Innovative Clinical Solutions, Ltd., headquartered in
Providence, Rhode Island, provides services that support the
needs of the pharmaceutical and managed care industries.


INTEGRATED HEALTH: Sierra Wants Silvercrest's Case Dismissed
------------------------------------------------------------
Sierra Health Services, Inc. asks the Court to dismiss the
Chapter 11 bankruptcy case of debtor, Integrated Health Services
at SilverCrest, Inc.

Sierra, which owns 25% of SilverCrest, does not consent to the
filing.

IHS owns only 75% of the common stock of SilverCrest.  The other
25% is held by three wholly owned subsidiaries of Sierra:

    -- Southwest Medical Associates, Inc.,
    -- Health Plan of Nevada, Inc., and
    -- Sierra Health and Life Insurance Company, Inc.

Sierra tells the Court that, IHS, SilverCrest, Sierra and the
Sierra Subsidiaries entered into an Amended and Restated
Stockholders Agreement in 1997 that set forth a change in
SilverCrest's by-laws.  Pursuant to this Agreement, the Sierra
Subsidiaries appoint one of the four directors of SilverCrest.
The presence of this director is required to form a quorum for
voting purposes at meetings of the Board of Directors.  
Moreover, certain major decisions or actions, among them the
institution of bankruptcy proceedings, require unanimity.

Pursuant to the Stockholders' Agreement, the Sierra Subsidiaries
appointed John Bunker as a SilverCrest director.  Sierra notes
that, accompanying SilverCrest's Chapter 11 petition was a
Certificate of Resolution signed by Marc B. Levin, as corporate
Secretary.  This Certificate states that a corporate resolution
authorizing the filing was adopted on February 1, 2000 by the
Board of Directors of each and every one of the hundreds of
companies affiliated to Integrated.

However, IHS did not notify Mr. Bunker of any meeting at which
bankruptcy was being considered, and Mr. Bunker did not consent
to SilverCrest's bankruptcy filing.  According to Sierra, no
meeting in which a quorum was present ever took place
authorizing the bankruptcy filing of SilverCrest or outlining
the need for bankruptcy protection.  Neither Sierra's director
on the SilverCrest board nor the Sierra Subsidiaries consented
to SilverCrest' s bankruptcy filing, Sierra asserts.

"SilverCrest is not now, nor has it ever been in need of
protection under, or reorganization through Chapter 11 of the
Bankruptcy Code," Sierra tells the Court.  "SilverCrest is
current on all payments to its creditors, and has been since it
began operating."

"SilverCrest filed its voluntary Chapter 11 bankruptcy petition
without proper corporate authority to do so," Sierra argues.  
"Its petition was an ultra vires act." (Integrated Health
Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


INTERLIANT INC: Look for Schedules and Statements on October 18
---------------------------------------------------------------
Interliant, Inc., and its debtor-affiliates secured permission
from the U.S. Bankruptcy Court for the Southern District of New
York to extend their time period to file the lists, schedules
and statements required under 11 U.S.C. Sec. 521(1) and Rule
1007 of the Federal Rule of Bankruptcy Procedure.  The Court
grants the Debtors until October 18, 2002 to file their
Schedules and Statements.

The Debtors tell the Court that they need to gather information
from books and records relating to thousands of transactions in
order to complete the Schedules and Statements.  The Debtors
admit that collection of the information necessary to complete
the Schedules and Statements will require an expenditure of
substantial time and effort on the part of the Debtors'
management and employees.

Interliant, Inc., is a provider of Web site and application
hosting, consulting services, and programming and hardware
design to support the information technologies infrastructure of
its customers. The Company filed for chapter 11 protection on
August 5, 2002. Cathy Hershcopf, Esq., and James A. Beldner,
Esq., at Kronish Lieb Weiner & Hellman, LLP represent the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $69,785,979 in
assets and $151,121,417 in debts.


INTERNATIONAL TOTAL: Shoos-Away Arthur Andersen as Accountants
--------------------------------------------------------------
On or about August 1, 2002, International Total Services, Inc.
ceased its client-auditor relationship with Arthur Andersen LLP,
the independent accountant which had been engaged by the Company
for prior fiscal years. This change occurred as a result of
Andersen being unable to perform future audit services for the
Company.

The report on the Company's financial statements prepared by
Andersen for the fiscal years ending March 31, 2002 and March
31, 2001 contained a "going concern" qualification.

The decision to change independent accountants was approved by
the Audit Committee of the Company's Board of Directors. The
Company has not yet engaged a new independent accountant and is
uncertain as to the timing or scope of such a possible
engagement.

In accordance with temporary regulation 304T of Regulation S-K,
the Company has used reasonable efforts to obtain from Andersen
a letter stating whether Andersen agrees with the above
statements. The Company understands that it will be unable to
obtain that letter.

ITS is a leading provider of airport service personnel and
staffing and training services and commercial security services.
As previously announced, the company filed for protection under
chapter 11 on September 13, 2001. ITS services include, among
other things, airport passenger checkpoint screening for
airlines. The company has more than 12,000 employees at
operations throughout the United States, and in Guam and the
United Kingdom.

On September 13, 2001, a voluntary petition was filed by
International Total Services, Inc., and certain of its
subsidiaries in the United States Bankruptcy Court, Eastern
District of New York, Case # 01-21812 CBD, which case has been
assigned to Judge Conrad B. Duberstein.


KINETICS: Fitch Downgrades Senior Secured Credit Facilities to B
----------------------------------------------------------------
Fitch Ratings has downgraded the rating on Kinetics Group,
Inc.'s senior secured credit facilities to 'B' from 'BB-.' The
Rating Outlook is Negative.

The downgrade reflects a significant weakening of credit
protection measures and increasingly limited financial
flexibility. Kinetics' profitability has declined due to a
significant downturn in capital expenditures from semiconductor
manufacturers resulting in deteriorating credit protection
measures and pressure on bank financial covenants. Projected
EBITDA for the LTM ending June 30, 2002 has decreased to
approximately $38 million from $74 million for the LTM ending
September 28, 2001. As a result, while debt has decreased to an
estimated $251 million at June 30, 2002 from $279 million at
September 28, 2001, leverage has increased significantly to 6.6x
from 3.8x. However, including $44 million of PIK seller notes at
Kinetics' parent, Kinetics Holding Corporation, leverage
increases to 7.7x and 4.4x for the LTM ending June 30, 2002 and
September 28, 2001, respectively. Kinetics' cash interest
coverage declined to 1.4x for the LTM ending June 30, 2002
versus 2.7x for the LTM ending September 28, 2001.

The negative outlook reflects uncertainty as to the timing and
extent of any near term recovery in semiconductor capital
equipment expenditures. In addition, while Kinetics was in
compliance with financial covenants at June 30, 2002, the
company had to use a mechanism under the credit facilities that
allowed for $5 million of additional EBITDA ('EBITDA Cure') to
be factored into the covenant calculations for the quarters
ending March 31, 2002 and June 30, 2002. Any amount used as an
EBITDA Cure must also be used to pay down the term loan. As a
result, Kinetics made unscheduled term loan principal payments
of $5 million for the quarters ending March 31, 2002 and June
30, 2002. The EBITDA Cure will be limited to $2.5 million in
aggregate for the remaining two quarters of 2002, while the
financial covenant ratios increasingly become more restrictive.
Fitch believes it is likely that Kinetics will need to seek a
future amendment or waiver for additional covenant relief.

Kinetics had planned to repay all existing debt in August 2002
with proceeds from an initial public offering of its Celerity
subsidiary in conjunction with the syndication of $210 million
in new senior secured credit facilities which were fully
underwritten by The Bank of Nova Scotia. However, due to the
current equity market conditions, these transactions have been
delayed.

Kinetics current liquidity comes from an estimated $42 million
of cash and $35 million of revolver availability at June 30,
2002. Debt maturities over the next year include a $13 million
note maturing on December 11, 2002 and term loan amortization of
$21 million. The senior secured credit facilities are comprised
of an amortizing term loan maturing December 31, 2005 with an
estimated outstanding balance of $111 million as of June 30,
2002, and a $95 million revolving credit maturing February 28,
2006 with approximately $60 million outstanding as of June 30,
2002. The borrowing capacity of the revolver will be reduced to
$85 million and $75 million on June 30, 2003 and December 31,
2003, respectively. The majority of other debt in Kinetics'
capital structure is $62 million of senior sub notes due 2006.

The ratings continue to reflect Kinetics' strong position in
high-purity process piping systems, process equipment and
components manufacturing, and operating services for the
electronics, biotechnology and pharmaceutical industries, and
junior capital support. Rating concerns take into account the
company's leveraged profile, the cyclical nature of Kinetics'
semiconductor-related business, and significant customer
concentration.


KMART CORP: SEC Has Until October 28 to File Proof of Claim
-----------------------------------------------------------
Pursuant to an Agreed Order, the Court gives the SEC until
October 28, 2002 to file its proof of claim against Kmart
Corporation and its debtor-affiliates in this proceeding. This
extension of time is without prejudice to the SEC's right to
seek any further extensions of time to file its proof of claim.
(Kmart Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


LTV CORP: Blanking Selling 11.11% Interest in TWB for $4.5 Mill.
----------------------------------------------------------------
LTV Blanking Corporation intends to sell its 11.11% limited
liability company membership in TWB Company LLC, a Michigan
limited liability company.

The members of TWB Company LLC are:

    ThyssenKrupp Steel North America, Inc.   33.33%
    Worthington Steel of Michigan, Inc.      33.33%
    Bethlehem Blank Welding, Inc.            11.11%
    QS Steel                                 11.11%
    LTV Blanking Corporation                 11.11%

According to Leah J. Sellers, Esq., at Jones Day Reavis & Pogue,
in Cleveland, Ohio, the LLC is governed by an Operating
Agreement dated April 15, 1997.  Ms. Sellers tells the Court
that the LLC, ThyssenKrupp, Worthington, Bethlehem and QS are
not affiliated in any way with the Debtors, except for:

    (a) the respective interests of LTV Blanking, ThyssenKrupp,
        Worthington, Bethlehem and QS in the LLC;

    (b) other past or present business relationships among the
        parties; and

    (c) a prepetition claim held by the LLC against Debtor LTV
        Steel Company.

Under the terms of the proposed sale, LTV Blanking would
withdraw from the LLC, and the LLC simultaneously would purchase
the membership interests of LTV Blanking.

The economic terms and conditions of the proposed sale are
governed by the Limited Liability Company Withdrawal Agreement
dated July 16, 2002, among LTV Blanking, the LLC, ThyssenKrupp,
Worthington, Bethlehem and QS.  The total cash consideration to
be paid on the closing date by the LLC to LTV Blanking for the
membership interest aggregates $4,500,000. At the closing of the
proposed sale:

    (a) LTV Blanking will sign an instrument of withdrawal to
        effectuate its withdrawal from the LLC; and

    (b) LTV Blanking and the LLC concurrently will sign a mutual
        release of the parties' claims and causes of action
        against each other relative to LTV Blanking's membership
        interest.

Ms. Sellers contends that the conveyance of the membership
interest in connection with this sale does not require the
consent of the applicable lenders under the Revolving Credit and
Guaranty Agreement dated March 20, 2001, among LTV Corporation
as Borrower; the subsidiaries of the Borrower as Guarantors; The
Chase Manhattan Bank now known as JPMorgan Chase Bank, as
Administrative, Documentation and Collateral Agent; and Abbey
National Treasury Services plc, as co-Agent, nor are any foreign
or domestic governmental or regulatory approvals of the proposed
sale required.

Ms. Seller relates that this sale will be free and clear of all
liens, claims, encumbrances, or other interests in the property
to be conveyed as part of the proposed sale.  The parties that
might be holding liens, claims or encumbrances against this
property are:

      Worthington Steel of Michigan, Inc.
      Columbus, Ohio

      Bethlehem Blank Welding, Inc.
      Bethlehem, Pennsylvania

      ThyssenKrupp Steel North America, Inc.
      Detroit, Michigan

      QS Steel LLC
      Dearborn, Michigan

Ms. Sellers assures Judge Bodoh that all of these liens or
interests either can be extinguished, or are capable of monetary
satisfaction. (LTV Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


LEVEL 8 SYSTEMS: Will Publish Second Quarter Results Tomorrow
-------------------------------------------------------------
Level 8 Systems, Inc. (Nasdaq: LVEL), a global provider of high
performance eBusiness integration software, will release fiscal
2002 second quarter financial results at the close of market on
tomorrow, August 14, 2002, followed by a conference call at 4:30
p.m. (Eastern) for the investment community.  The Company's
Chairman & CEO Anthony Pizi and Chief Financial Officer John
Broderick will host the conference call.

The earnings teleconference will take place beginning at 4:30
p.m. EDT. Participants can access the call by dialing (800) 450-
0821 in the US and (612) 332-0725 for International callers.  
Participants are asked to call the assigned numbers
approximately 10 minutes before the conference call begins. In
addition, a live audio web cast can be accessed by logging onto
http://www.firstcallevents.com/service/ajwz364439127gf12.html  
or http://www.level8.comat 4:30 p.m. EDT, August 14.

Beginning at 7 p.m. EDT, a replay of the audio web cast can be
accessed by logging onto
http://www.firstcallevents.com/service/ajwz364439127gf12.html  
or http://www.level8.com  The telephone replay begins at 7:00  
on August 14, 2002, through midnight August 22. Dial (800) 475-
6701 for US callers and International callers can dial (320)
365-3844.  Please refer to access code number 648693.

Level 8 Systems, Inc., (Nasdaq: LVEL) is a global business
integration software provider that enables organizations to
seamlessly integrate enterprise applications, information and
processes within an existing infrastructure.  The Company
markets it's products and services to a variety of industries
including financial services, telecommunications, utilities,
transportation and retail.  More information is available on the
Level 8 Web site at http://www.level8.com

Level 8 Systems is a registered trademark of Level 8 Systems,
Inc.  Level 8 and the Level 8 Systems logo are trademarks of
Level 8 Systems, Inc.  All other product and company names
mentioned herein are for identification purposes only and are
the property of, and may be trademarks of, their respective
owners.

                         *    *    *

As reported in Troubled Company Reporter's July 30, 2002
edition, Level 8 Systems was notified by Nasdaq that the bid
price of the Company's common stock has remained below the
minimum $1.00 per share bid price requirement for more than 30
consecutive trading days. The Company has until October 14, 2002
to regain compliance or the Company risks having its common
stock delisted from the Nasdaq National Market.

The bid price of the Company's common stock must close at $1.00
per share or more for a minimum of ten consecutive trading days
to regain compliance and maintain its listing on the Nasdaq
National Market. Under certain circumstances, Nasdaq may require
that the closing bid price exceed $1.00 per share or more for
more than ten consecutive trading days before notifying the
Company that it has regained compliance.

If the bid price of the Company's common stock does not comply
with the minimum bid price requirement prior to October 14,
2002, the Company expects to apply for transfer to The Nasdaq
SmallCap Market. To transfer, the Company must satisfy the
continued inclusion requirements for the SmallCap Market, which
makes available an extended grace period for meeting the minimum
$1.00 bid price requirement. If the transfer application is
approved, the Company will be afforded the 180-calendar day
SmallCap Market grace period, or until January 13, 2003, to
demonstrate compliance. The company may also be eligible for an
additional 180-calendar day grace period provided that it meets
the initial listing criteria for the SmallCap Market.

At March 31, 2002, Level 8's balance sheet shows a working
capital deficit of about $6 million.


MTS/TOWER RECORDS: Hires KPMG to Replace Andersen as Auditors
-------------------------------------------------------------
On July 31, 2002, MTS, Incorporated dismissed Arthur Andersen
LLP as independent auditors for the Company. The decision to
dismiss Andersen and to seek new accountants was approved by the
Company's Board of Directors.

Andersen's opinion issued with the Company' financial statements
for the fiscal year ended July 31, 2001 was modified as to the
Company's ability to continue as a going concern. At July 31,
2001, the Company had a Senior Revolving Credit Facility with a
maturity date in April 2002. As of July 31, 2001, the Company's
future operating performance was dependent on the Company's
ability to refinance this Credit Facility as well as other
factors.

Effective July 31, 2002, the Company has engaged KPMG LLP to
serve as the Company's independent auditors.


MALAN REALTY: Closes Sale of 4 Kmart-Anchored Centers for $15MM
---------------------------------------------------------------
Malan Realty Investors, Inc. (NYSE: MAL), a self-administered
real estate investment trust (REIT), has completed the sale of
four Kmart-anchored shopping centers for $14.8 million.  The
company also announced that it had utilized a portion of the net
proceeds, along with the net proceeds from three separate loan
transactions, to repay its $57.85 million securitized mortgage
loan in full.

The properties sold -- Sherwood Plaza in Springfield, Illinois;
Kmart Plaza in Salina, Kansas; South City Center in Wichita,
Kansas; and Kmart Plaza in Jefferson City, Missouri -- consist
of 467,685 square feet of gross leasable area.  The balance of
the funds from the sale will be utilized for general working
capital purposes and to further reduce the company's outstanding
debt obligations.

The loan transactions were completed with Salomon Brothers
Realty Corp., JDI Loans LLC and Cohen Financial for $23 million,
$13.5 million and $9.1 million, respectively.  All are short-
term bridge loans of one year or less, carry a weighted average
interest rate of approximately 7.1 percent per annum and are
collateralized by 20 of the company's properties.

Malan Realty Investors, Inc. owns and manages properties that
are leased primarily to national and regional retail companies.  
The company owns a portfolio of 52 properties located in nine
states that contains an aggregate of approximately 4.6 million
square feet of gross leasable area.

More information about Malan Realty Investors are available on
the company's Web site at http://www.malanreit.comor through  
Company News On-Call by fax at (800) 758-5804, ext. 114165.


MANITOWOC COMPANY: Acquires Grove Investors Business for $271MM
---------------------------------------------------------------
The Manitowoc Company, Inc. (NYSE: MTW), the leading worldwide
manufacturer of high-capacity lattice-boom crawler cranes and
tower cranes, has completed the acquisition of Grove Investors,
Inc.  The final purchase price was $271 million, funded by a
combination of cash to be paid at a later date, a private
offering of senior subordinated notes due 2012, and Manitowoc
common stock.

"We're pleased to officially welcome Grove to the Manitowoc
family," said Terry D. Growcock, Manitowoc's president and chief
executive officer. "The acquisition represents a strong growth
opportunity for Manitowoc by adding mobile cranes to our product
offering.  In addition, it confirms our position as the world's
leading provider of lifting equipment for the construction
industry and allows us to provide equipment and lifting  
solutions for virtually any construction application."

Grove will become part of Manitowoc's Crane segment, adding its
line of mobile hydraulic cranes, truck-mounted cranes, and boom
trucks to Manitowoc's existing line of lattice-boom crawler
cranes and tower cranes.  The combination makes Manitowoc a
leader in all three major crane categories: crawler cranes,
tower cranes, and mobile hydraulic cranes.

Carl J. Laurino, treasurer and interim chief financial officer,
added: "As we've stated previously, we anticipate that Grove
will be neutral to earnings in 2002 and accretive to earnings in
2003 of $0.20 to $0.30 per diluted share, based on modest
revenue increases and multiple synergies between Manitowoc and
Grove.  We also expect the transaction to be EVA positive within
the next 18 to 24 months.  These projections are not materially
affected by the upcoming sale of Manitowoc Boom Trucks, which
was announced last week as a condition to completing the
acquisition, per an agreement reached with the U.S. Department
of Justice."

Grove Worldwide is a leading provider of mobile hydraulic
cranes, truck-mounted cranes, and aerial work platforms for the
global market. The company's products are used in a wide variety
of applications by commercial and residential building
contractors as well as by industrial, municipal, and military
end users.  Grove's products are marketed to independent
equipment rental companies and directly to end users under the
brand names of Grove Crane, Grove Manlift, and National Crane.  
Grove products are sold in more than 50 countries.

The Manitowoc Company, Inc., is a leading producer of lattice-
boom cranes, tower cranes, mobile hydraulic cranes, boom trucks,
and related products for the construction industry.  It is also
a leading manufacturer of ice-cube machines, ice/beverage
dispensers, and commercial refrigeration equipment for the
foodservice industry, and is the leading provider of ship
repair, conversion, and new-construction services for the Great
Lakes maritime industry.

                            *    *    *

As reported in Troubled Company Reporter's July 25, 2002
edition, Standard & Poor's Ratings Services assigned its single-
'B'-plus rating to The Manitowoc Company Inc.'s proposed
offering of $175 million senior subordinated notes due 2012.

At the same time, the double-'B' corporate credit rating was
affirmed on the Manitowoc, Wisconsin-based company. In addition,
the rating was removed from CreditWatch where it was originally
placed on March 19, 2002, following the company's announcement
of the acquisition of Grove Investors Inc. The outlook is
negative. Manitowoc is a provider of cranes, food service
equipment, and marine services. The company has total debt of
about $700 million (pro forma the Grove acquisition).

"The rating reflects Manitowoc's leading positions in niche
markets, well-known brands and product diversity, and low-cost
and efficient global manufacturing operations, offset by
competitive pressures in the highly cyclical construction and
industrial end markets, and aggressive financial profile," said
Standard & Poor's credit analyst John Sico.


MCDERMOTT: S&P Revises Outlook to Neg. on B&W's Cash Flow Issues
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
McDermott International Inc. to negative from developing because
cash flow from Babcock & Wilcox Co. (B&W; McDermott's
Subsidiary) will not become available due to potential key
settlement terms of B&W's bankruptcy negotiations, eliminating
upside ratings potential for McDermott.

At the same time, Standard & Poor's affirmed its single-'B'
corporate credit rating on McDermott and related entities. The
New Orleans, Louisiana-based firm is a leading provider of
marine construction services, and government operations. About
$100 million in consolidated debt was outstanding at March 31,
2002.

Moreover, when a settlement becomes probable, McDermott
estimates that it may have to record an after-tax charge against
earnings of between $100 million and $130 million, reflecting
the present value of contributions and contemplated payments to
the created trusts.

"The ratings reflect McDermott's below-average business profile
as a leading player in intensely competitive and volatile
markets, poor operating performance, and weak credit measures,"
said Standard & Poor's credit analyst Dan DiSenso.

During the past few years, management has restructured
operations, especially the marine construction business, by
selling inefficient assets, reducing overhead and implementing
better controls over bidding and project management processes.
Although McDermott's government operations are stable and
profitable, intense competitive pressure at the firm's volatile
marine construction services operation limits profit potential.

Liquidity is currently satisfactory relative to operating needs.
At June 30, 2002, the company had unencumbered cash and
investment securities balances of $50 million, and had $144
million in bank line availability. The firm has no near-term
debt maturities, and received some cash proceeds from July 2002
asset sales.

Failure to improve operating performance during the next year at
its marine construction services unit could reduce the firm's
liquidity cushion, resulting in a downgrade.


MICROCELL TELECOMMS: June 30 Balance Sheet Upside-Down by C$1BB
---------------------------------------------------------------
Microcell Telecommunications Inc., (TSX:MTIb) announced its
consolidated financial and operating results for the second
quarter ended June 30, 2002. Total revenues for the second
quarter of 2002 were $145.6 million, compared with $133.6
million for the same quarter last year, while total operating
expenses before depreciation and amortization, which included
the reversal of a $13.8 million handset subsidy tax provision,
decreased by 16% to $119.5 million. On a consolidated company
basis, and before a $223.4 million non-cash charge to account
for an impairment in the value of the Company's multipoint
communications systems (MCS) licences, earnings before interest,
taxes, depreciation and amortization (EBITDA) was $26.1 million
for the second quarter, compared with negative $9.4 million for
the same quarter in 2001. For PCS-related operations, EBITDA
expanded by $32.7 million to $27.9 million for the three months
ended June 30, 2002, compared with negative $4.8 million for the
second quarter of last year.

Other operating and financial highlights in the quarter
included:

     -- Total retail gross customer activations for the three
months ended June 30, 2002 were 155,260, an increase of 16% over
the 133,464 gross activations attained in the same quarter in
2001. Postpaid subscriber additions in the quarter represented
95,468, or 61% of the total gross additions for the second
quarter, while prepaid accounted for the remaining 59,792 new
wireless gross activations.

     -- The blended retail post-guarantee-period average monthly
churn rate was 3.0%, compared with 2.3% reported in the second
quarter of 2001. The increase in the churn rate was due
primarily to continuing high Company-initiated churn to
disconnect non-paying customers, as well as to the high level of
gift-related activations during the fourth quarter of last year.

     -- New retail net additions totaled 42,978 for the second
quarter of 2002, compared with 63,297 for the same quarter one
year ago. Postpaid accounted for 11,922 of the new net retail
customers acquired in the second quarter, while prepaid
accounted for the remaining 31,056. Higher churn, particularly
within the postpaid customer base, was the primary contributor
to lower net subscriber additions in the second quarter of 2002
compared with the second quarter of 2001.

     -- As at June 30, 2002, the Company provided wireless
service to 1,188,754 retail Personal Communications Services
customers, with a 54%/46% mix of postpaid and prepaid customers,
following the removal of 90,000 inactive prepaid customers as
described in the Company's news release of July 10, 2002.
Microcell also provided digital PCS services to 21,870 wholesale
subscribers as at the end of the second quarter of 2002.

     -- Service revenue in the second quarter increased 15% to
$143.3 million from $124.6 million in the second quarter of
2001. The improvement can be attributed primarily to customer
base expansion and a higher proportion of postpaid subscribers
in the retail customer base. Equipment sales were $2.3 million
in the second quarter, compared with $9.0 million last year, due
primarily to a postpaid marketing promotion that featured a
zero-cost handset, and to discounts on new handset models
offered to existing customers in association with the Company's
customer retention initiatives.

     -- The Company's combined retail postpaid and prepaid
average revenue per user for the second quarter was $41.48,
compared with $42.15 for the same quarter in 2001. Retail
postpaid ARPU was $59.95 for the second quarter of 2002,
compared with $61.73 for the same three-month period in 2001.
The decrease in postpaid ARPU was due mainly to the high take-up
rate of promotional price plans in prior quarters, which
included an unlimited evening and weekend usage option. This
option resulted in lower billable minutes of usage, as well as
higher off-peak airtime usage. Accordingly, average postpaid MoU
for the second quarter was 369 minutes, compared with 318
minutes for the same quarter last year.

     -- Retail prepaid ARPU for the three months ended June 30,
2002 was $18.90, compared with $22.89 for the second quarter of
2001. This decrease was due primarily to lower average monthly
usage of 57 minutes per customer compared with 69 minutes per
customer for the same period last year. The reduced prepaid MoU
resulted mainly from the migration of high-usage prepaid
customers to postpaid monthly plans.

     -- The Company continued to efficiently manage its cost
structure with the objective of yielding better operating cash
flow. Operating expenses, excluding depreciation and
amortization, decreased to $119.5 million in the second quarter
of 2002 from $143.0 million for the same quarter one year ago.
This 16% improvement was due primarily to the markedly lower
cost of products and a decrease in selling and marketing
expenses.

The total cost of products and services of $63.5 million for the
second quarter of 2002 included $17.5 million for cost of
products and $46.0 million for cost of services, compared with
cost of products of $35.8 million and cost of services of $50.4
million for the same quarter one year ago. The 51% year-over-
year improvement in cost of products resulted mainly from lower
per-unit handset costs, the recent clarification of provincial
sales tax legislation related to wireless equipment subsidies
that resulted in the reversal of a previously accounted for
provision of $13.8 million, and reduced prepaid voucher
production costs. Excluding the one-time tax provision reversal,
cost of products for the second quarter improved 13%, year-over-
year. The decrease in cost of services was due primarily to a
lower contribution revenue tax rate for 2002 compared with 2001
and lower trunking costs resulting from reduced interconnection
fees.

The retail cost of acquisition (which consists of a handset
subsidy and related selling and marketing expenses) decreased by
24% to $294 per gross addition for the second quarter of 2002,
compared with $385 per gross addition for the same three-month
period in 2001. The year- over-year improvement was due to a
higher number of gross activations and tight control over
spending on advertising and promotions. As a result of careful
management of marketing-related costs, selling and marketing
expenses amounted to $31.7 million for the three-month period
ended June 30, 2002, compared with $31.1 million for the second
quarter of 2001.

General and administrative expenses in the second quarter of
2002 were $24.4 million, compared with $25.8 million for the
same quarter one year ago. This decrease was due primarily to
lower salaries and benefits resulting from a reduced workforce,
which were partially offset by a higher bad debts expense.

     -- Capital expenditures of $64.2 million in the second
quarter of 2002 were primarily network related, and included the
replacement of obsolete infrastructure, coverage in-filling, as
well as further signal improvement in areas where digital
service is currently provided.

     -- For a number of months, the Company has been pursuing
negotiations with potential business partners to finance the
Company's MCS project to be carried out by Inukshuk Internet
Inc.  During the second quarter, the likelihood of concluding
such an agreement became uncertain. Therefore the value of the
MCS licenses was estimated using the expected present value of
future discounted cash flows. Given this context, the
unlikelihood of concluding an agreement with potential business
partners, as well as the increasing cost of financing associated
with the MCS project, the Company has written down the value of
the MCS licenses to nil, which represents a non-cash charge of
$223.4 million.

     -- Excluding the favorable impact from the reversal of the
cumulative handset sales tax provision and the impairment of
intangible assets, the Company posted its fourth consecutive
quarter of positive EBITDA. Normalizing second quarter results
for these one-time non- recurring events, consolidated EBITDA
improved by $21.7 million, year-over-year, to $12.3 million from
negative $9.4 million in 2001, while EBITDA from the Company's
PCS-related operations was $14.1 million, compared with negative
$4.7 million for the same periods.

     -- The Company posted consolidated net losses of $199.2
million, or $0.83 per share, for the quarter ended June 30,
2002, compared with net losses of $75.2 million, or $0.72 per
share, for the same quarter last year. The net loss figures for
the second quarter of 2002 included a $150.5 million non-cash
net charge to account for the impairment in the value of the
Company's MCS licenses. This non-cash charge represented a
$223.4 million write-down in the value of the Company's MCS
licences, as mentioned previously, net of related income tax
benefits of $72.9 million arising from the difference between
the carrying value of the licences and the tax basis of the
intangible assets acquired.

As of June 30, 2002, the Company had cash and cash equivalents
of $121.7 million and short-term investments and marketable
securities of $0.2 million. In addition, the Company has a
$264.0 million senior secured revolving credit facility, the
availability of which is subject to certain conditions. In order
to maintain the availability of its senior secured revolving
credit facility, and in order to avoid default under its long-
term debt agreements, the Company must comply with certain
covenants. The Company is not certain that it will be able to
comply with some of its covenants in the foreseeable future. If
one or more covenants are not met, the Company may be in default
of its long-term debt agreements, in which case the senior
secured lenders may choose not to provide the Company with
further access to funds under the senior secured revolving
credit facility; this may also result in an acceleration of debt
repayment requirements.

At June 30, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about C$1 billion.

Given this context, there is significant uncertainty regarding
the Company's ability to continue as a going concern; the
Company's ability to continue as a going concern depends, among
other things, on its ability to reduce its financing costs and
improve its liquidity and operating performance.

Financial advisor retained and Special Committee of the Board
formed Microcell also announced today that it has retained the
services of Rothschild to act as its financial advisor, and has
formed a Special Committee of its Board of Directors, composed
of independent directors. In light of the going concern
uncertainty, the mandate of the Special Committee is to review
and evaluate the alternatives of the Company to reduce its
financing costs and improve its liquidity. These may take the
form of a debt restructuring, recapitalization, potential
capital infusion, or other type of transaction. To this end, the
Special Committee will obtain the advice and recommendations of
the Company's financial advisor.

"We believe this is a step we must take to remain a strong
competitor and enable the Company to grow in the long term,"
stated Andre Tremblay, President and Chief Executive Officer of
Microcell Telecommunications Inc. "During this process, a top
priority will be to continue providing a high quality service to
our customers with the strong commitment of our employees. Going
forward, we will continue to maintain strict financial
discipline by controlling costs and tightly managing our cash."

Microcell Telecommunications Inc. is the only major provider of
telecommunications services in Canada dedicated solely to
wireless. The Company offers a wide range of voice and high-
speed data communications products and services to more than 1.2
million customers.

Microcell operates a GSM network across Canada and markets
Personal Communications Services and General Packet Radio
Service under the Fido(R) brand name. Microcell
Telecommunications has been a public company since October 15,
1997, and is listed on the Toronto Stock Exchange under the
stock symbol MTIb.TO.


MIDWAY AIRLINES: Administrator Wants to Convert Case to Ch. 7
-------------------------------------------------------------
The Bankruptcy Administrator for the Eastern District of North
Carolina, moves this Court for an order converting the chapter
11 case of Midway Airlines Corporation to proceedings under
Chapter 7 Liquidation of the Bankruptcy Code. In the
alternative, the Bankruptcy Administrator wishes this Court to
dismiss this Case pursuant to 11 U.S.C. Sec. 1112(b).

The Bankruptcy Administrator reminds that the Local Bankruptcy
Rule No. 4002-1(b)(1)(A), EDNC, requires the debtor-in-
possession to submit monthly operating reports to the Bankruptcy
Administrator and shall be in a format prescribed by the
Bankruptcy Administrator. The Bankruptcy Administrator tells the
Court that the Debtor failed to file its reports in the
prescribed manner and continued to do so until now. The
Bankruptcy Administrator asserts that this makes them impossible
to monitor the financial condition of the Debtor.

The Bankruptcy Administrator relates to the Court that the
Debtor has ceased operations and conveyed its flight routes to
US Airways. The Debtor failed to seek a court approval for this
action. The Bankruptcy Administrator reminds the Court that this
is a violation of 11 U.S.C. Sec. 363.

The Bankruptcy Administrator believes that the Debtor is
disregarding its responsibilities under the Bankruptcy Code, the
Local Rules and orders of this Court. The Bankruptcy
Administrator further believes that a Chapter 7 trustee could
more efficiently and judiciously liquidate the remaining assets
of the Debtor.  Alternatively, the Bankruptcy Administrator asks
the Court that this case be dismissed to avoid further loss to
the estate and at least to allow some recovery to the creditors.

Midway Airlines filed for chapter 11 protection on August 13,
2001. Immediately following the tragic events on September 11,
Midway shut down. Gerald A. Jeutter, Jr., Esq., at Kilpatrick
Stockton LLP, represents the Debtors in their restructuring
efforts.


MILACRON INC: Closes Sale of Valenite to Sandvik for $175 Mill.
---------------------------------------------------------------
Milacron Inc. (NYSE: MZ) has completed the sale of Valenite, its
North American metalcutting insert tool business, to Sandvik, a
global producer of metalcutting tools headquartered in Sweden,
for $175 million in cash, subject to post-closing adjustments.

As previously reported, Milacron expects to record an after-tax
gain on the sale of $27 million to $30 million, or $0.80 to
$0.90 per share, in the third quarter. Net cash proceeds, after
taxes, transaction fees and related expenses, are approximately
$150 million, the bulk of which will be used to pay down bank
debt.

Valenite, a manufacturer of carbide insert tools, steel tool
holders and carbide die and wear parts, employs about 1,300
people, with major facilities in Michigan, Texas and South
Carolina, as well as operations in Japan. In 2001, a down year,
the unit had sales of just under $200 million and operating
earnings before interest and taxes of about $3 million,
excluding restructuring charges.

The sale of Valenite is one of two major steps Milacron is
taking in support of its recently announced shift in strategic
focus. On May 6, the company announced an agreement to sell its
Widia and Werko metalcutting tool businesses in Europe and India
to Kennametal (NYSE: KMT) for EUR 188 million. That transaction
is now expected to close in a few weeks.

"These actions support Milacron's strategic focus on plastics
processing technologies and industrial fluids," said Ronald D.
Brown, chairman, president and chief executive officer. "They
also strengthen our balance sheet and significantly improve our
financial flexibility."

Credit Suisse First Boston advised Milacron on both
transactions.

First incorporated in 1884, Milacron is a leading global
supplier of plastics-processing technologies and industrial
fluids with major manufacturing facilities in North America,
Europe and Asia. For further information, visit the company's
Web site at http://www.milacron.com or call the toll-free  
investor hot line: 800-909-MILA (800-909-6452).

Sandvik is a high-technology engineering group with advanced
products and world-leading positions in selected areas: tools
for metalworking, machinery and tools for rock excavation,
stainless steel, special alloys and resistance heating materials
and process systems. The Group has 36,000 employees, with annual
sales of approximately SEK 50,000 M, or about US $5 billion.

                            *    *    *

As reported in Troubled Company Reporter's May 8, 2002, edition,
Standard & Poor's affirmed its double-'B'-minus corporate credit
rating on Milacron Inc. following the company's announcement
that it is selling the Widia Group, its European and Indian
metalworking tools operation, to Kennametal Inc.,
(BBB/Negative/--) for Euro 180 million (about $170 million).

Most of the sale proceeds will be used to reduce bank debt but
Milacron still needs to demonstrate profitability in its core
plastics machinery business.

The Cincinnati, Ohio-based company with $1.3 billion sales in
2001, participates in the plastics machinery sector (injection
molding, blow molding, extrusion, mold bases), where demand can
swing widely, and in the cyclical industrial products market
(metalcutting tools, metalworking fluids).

The ratings on Milacron reflect an average business risk profile
and an aggressive financial profile. Milacron's current
profitability has declined materially because of the sharp
downturn in North American demand for plastics machinery and
metalworking tools; the timing and extent of market recovery
remains highly uncertain.


MYCOM GROUP: Adds New Hosting Option to Web Manager Software
------------------------------------------------------------
Mycom Group, Inc. (OTCBB:MYCO), a technology products, services,
and software development company headquartered in Cincinnati,
Ohio, has added a hosting option to mycomPRO(TM) Web Manager
software.

The new option allows you to operate your web site on a Mycom
server using mycomPRO(TM) Web Manager to develop and manage the
site. MycomPRO(TM) Web Manager software is priced starting at
just $399.

With mycomPRO(TM) Web Manager software, life just got easier for
novice and expert web site managers and content authors. Even if
you have little to no web publishing experience, you can quickly
and easily design, develop, publish, and maintain an Internet,
intranet, or extranet Web site. If you have more programming
experience, you will enjoy Web Manager's advanced features that
allow you to customize your site's look and feel effortlessly.

Go to http://www.mycom.comfor a free trial, a quick review of  
the product or to make an online purchase.

Mycom's President, Jim Bobbitt stated, "The new mycomPRO Web
Manager and hosting system is a great example of the kind of
mycomPRO products Mycom is developing. With the economy starting
to improve, we are speeding up our product development efforts.
We have other new software and service products being built
which are scheduled to hit the market by the end of the year.
Most of our new software products will be sold by a reseller
network, and on line."

Mycom Group, Inc., provides a complementary mix of technology
products and services. It markets a wide range of software,
hardware and enterprise solutions to a base of more than 20,000
customers throughout North America. Mycom develops and markets
new software applications using the mycomPRO(TM) brand name. The
company's technical and communications services include
networking; systems security; design, development and web
enabling of e-business applications; database applications;
online and classroom training and instructional design;
communications services for large and medium-sized businesses;
and technical marketing and documentation services. Mycom is
headquartered in Cincinnati, Ohio.

Mycom Group is on the Web at http://www.mycom.comand  
http://www.broughton-int.com  

                            *    *    *

As reported in Troubled Company Reporter's August 6, 2002
edition, Mycom restructured its debt facility on July 10, 2002
with Provident Bank of Cincinnati, Ohio.  The Bank increased the
Company's long-term debt facility by $211,000, and increased the
Company's line of credit from $1,000,000 to $1,200,000.  Each of
the two debt instruments bear interest at a rate of two
percentage points above the Bank's prime rate.  The Company has
a net working capital deficiency as of June 30, 2002, of
approximately $1.5 million that includes a renewable bank line
of credit of $1,200,000 due in January of 2003. Mycom expects
continued improvement in operating performance, and if achieved,
expects the Bank to extend its $1.2 million line of credit next
January.   In addition, management is pursuing remedies that
include private placements of additional equity capital, and
sold $175,000 of preferred shares since December 31, 2001.

However, Schumacher & Associates, Inc., Certified Public
Accountants, and the Company's independent auditors, in its July
19, 2002 Auditors Report, stated:  "As discussed in the notes to
the financial statements, certain conditions raise substantial
doubts about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements do
not include any adjustments to the financial statements that
might be necessary should the Company be unable to continue as a
going concern."


NETBANK: S&P Affirms B+/B Ratings & Revises Outlook to Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Alpharetta, Ga.-based NetBank Inc., with $3.6 billion in total
assets, to negative from stable. At the same time, the ratings,
including the single-'B'-plus/'B' counterparty credit ratings,
were affirmed. The negative outlook is due to NetBank's sizable
net loss in second-quarter 2002, and declines in capital ratios.
Standard & Poor's is also concerned that the increased exposure
to business lines such as leasing and nonconforming mortgage
origination indicates a heightened level of risk tolerance by
management.

The net loss of $31.3 million was the result of $59.9 million in
pretax charges, which the company classified as nonoperating.
"Although the charges include several nonrecurring items such as
severance costs, they also reflect premium impairments on
purchased mortgage loans, and increased loan loss provisions for
leases, second mortgages, home equity lines of credit, and
commercial loans," said credit analyst Baylor A. Lancaster.

The recent charges have translated into incremental declines in
total capital ratios from prior-quarter levels. With its
announcement of a stock buyback program, capital levels may
trend even lower. Ratings may be lowered if there is continued
pressure on earnings, credit quality, or capital ratios.


OPTIMARK: Bankruptcy Filing Likely If Fund-Raising Efforts Fail
---------------------------------------------------------------
On September 19, 2000, Optimark Holdings Inc., discontinued its
US Equities Business.  The Company has discontinued all
operations of the equities trading system for the US Equities
Business and terminated all communications networks and other
related systems that were necessary to support  that business.
The Company expects the process of disposing of the net
liabilities of the discontinued  business to be completed by
December 31, 2002 as a result of the continuing settlement
negotiations  with certain companies from which the Company had
previously leased equipment.  This disposition  includes
negotiated payments to be made after December 31, 2002.

In January 2002, the Company effectively suspended development,
sales and marketing efforts related to its Exchange Solutions
Services Business. As of that date, OptiMark became a company
whose  primary purpose is to hold the securities of Innovations
and to consummate financing and strategic transactions with
other parties.  OptiMark continues to attempt to solicit
interest from or opportunities with third parties concerning
possible additional investments or strategic alliances.  
However, no binding or definitive arrangements have been reached
with any third parties and there can be no assurances that any
such transactions will be consummated.  OptiMark's VWAP assets
utilized in the Ashton transaction were part of a general effort
to determine ways to utilize OptiMark's  technology for trading
venues to be owned and operated by OptiMark.  OptiMark has
continued to develop additional concepts with a very limited
team. There is no assurance that these limited  development
efforts will result in new products or receive the funding
necessary for them to continue.  

The Company has realized net losses from operations each year
since inception. Although the Company has restructured its
business and discontinued the one segment, losses are likely to
continue for the foreseeable future.  As of December 31, 2001,
the accumulated deficit was approximately $362,907,000. The
Company's current cash and cash equivalents, plus the expected
cash flows for 2002, are not expected to be sufficient to meet
its 2002 operating and financial commitments. Accordingly, if
the Company is unable to raise additional cash either directly
or through sale or borrowing against Innovations' holdings of
Ashton stock, the Company would face the imminent and likely
potential for bankruptcy or liquidation.  If the Company is
forced to declare bankruptcy or pursue liquidation, the value of
the Company's assets may not be sufficient to pay its creditors
in full and, accordingly, the Company's common and preferred
stock would have no value.


PAYSTAR CORPORATION: Auditors Raise Going Concern Doubt
-------------------------------------------------------
Paystar Corporation, was originally incorporated under the laws
of the State of Nevada on June 16, 1977.

During 2001 the Company engaged in a number of acquisitions, the
result of which has been to focus its business in four areas:  
cashless teller machine services, which is managed by its wholly
owned subsidiary, U.S. Cash Exchange, Inc.; wholesale carrier
services, switching platforms, and software support, which is
managed by its wholly owned subsidiary, SHS Communications,
Inc.; Internet ATM and prepaid debit card services, which is
managed by its wholly owned subsidiary, GLOBALCash, Inc.; and
Internet kiosk services, which is managed by its wholly owned
subsidiary, PayStar InfoStations, Inc.  In addition, during
2001, it substantially ceased its pay telephone operations by
transferring all of its service and maintenance agreements for
the pay telephones not owned by it to Tri-Tech Communications,
LLC.  The Company continued to manage the approximately 300 pay
telephones owned by it until they were sold during second
quarter of 2002. It has retained ownership of 750 pay telephones
which were acquired during 2001 and which are currently managed
by an unrelated third party.  These 750 pay telephones are
subject to pending litigation.  Paystar is also proposing to
change the method of operation of its CTM business by limiting
operations to management of CTMs owned by Paystar only.  It
intends either to acquire ownership of the CTMs or transfer
management to another management company.

Paystar will need to increase revenue to become profitable.  If
revenues do not increase as much as the Company expects or if
expenses increase at a greater pace than revenues, the Company
may not achieve profitability, further, it expects to incur
additional costs and expenses in 2002.

Revenue increased by approximately 35% to $14,474,742 for the
year ended December 31, 2001 from $10,749,879 for the year ended
December 31, 2000.  Revenue from the payphone subsidiary
decreased from $5,671,000 to $4,592,338, or 19%, for the years
ended December 31, 2000 and 2001 respectively.  The revenue
increase from the CTM subsidiary was from $3,768,000 to
$6,378,910 for the years ended December 31, 2000 to 2001. The
bulk of the increase was realized in the wholesale of CTMs,
which sales ceased in August 2001.  Paystar realized revenue of
$3,092,494 from sales generated by a 2001 acquisition - SHS
Communications.  The remainder of the increase relates to web
design ($147,000), prepaid calling cards ($140,000) and kiosks
($124,000).

As of December 31, 2001 Paystar had $178,093 in cash.  Operating
activities generated a negative cash flow of $422,494 for the
year ended December 31, 2001.  The cash used from investing
activities of $319,586 was primarily used for the purchase of
equipment and other assets.  Financing activities generated cash
of $235,849 as of December 31, 2001. The principal reason for
the cash generated was from the issuance of common stock and
corporate debentures, which in turn, was offset by a decrease in
notes payable and leases payable.

Future capital requirements will depend on numerous factors,
including:

     *  Ability to succeed in the prepaid ATM/debit cards
        marketplace.

     *  An increase in placing and managing Internet kiosks.

     *  Greater efficiency of operations

     *  Increase in the acquisition of CTMs

Paystar expects to fund operations through profits from the
above factors as well as from future private and public
financing.

However, in the May 17, 2002 Auditors Report for the period
ended December 31, 2001, the Company's independent auditors
said,  "[T]he Company has suffered recurring losses from
operations.  In addition, total current liabilities exceeds its
total current assets by $7,401,405.  This raises substantial
doubt about the Company's ability to continue as a going
concern."


PETROMINERALS CORP: Will Commence Trading on OTC Bulletin Board
---------------------------------------------------------------
Petrominerals Corporation (OTC Bulletin Board: PTRO) announced
on April 9, 2002 that as a result of reserving for certain EPA
liabilities, the Company was no longer in compliance with the
Nasdaq Small Cap minimum equity standard and was subject to
being delisted from the Nasdaq Stock Market.  Accordingly, the
Company was notified by the Nasdaq staff, on April 26, 2002,
that the Company no longer complied with the net tangible
assets/shareholders' equity/market value of listed
securities/net income requirement and was subject to being
delisted.

On May 30, 2002, the Company announced that Company's
representatives appeared before the Nasdaq Hearing Panel to
request additional time to return to compliance with the Nasdaq
standards and to complete its due diligence regarding the
acquisition of Hero Nutritional Products, LLC.  The Hearing
Panel rejected the Company's request and delisted the Company's
securities effective July 9, 2002.  The Company's securities,
however, were immediately eligible to trade on the OTC Bulletin
Board.

The Company was in the process of appealing the decision of the
Hearing Panel within the 15 day appeal period when its due
diligence review of the acquisition of Hero Nutritional
Products, LLC revealed that completion of the acquisition would
not be in the best interests of the Company.  Consequently the
Company terminated both the appeal and the acquisition of Hero
Nutritional Products, LLC.

The Board, at its July meeting, accepted with regret the
resignation of the Company's President and Chief Financial
Officer, Mr. Morris V. Hodges, tendered for personal reasons and
effective June 30, 2002.  Mr. Everett L. Hodges, Vice President,
was elected to serve as President and Chief Financial Officer
for the remaining term.  Subsequently, Mr. Morris V. Hodges also
resigned as a Director of the Company for health reasons.

The Board of Directors also set the date for the Annual
Shareholder Meeting to be held on October 25, 2002.

For further information, please contact Everett L. Hodges,
President of Petrominerals Corporation, +1-949-588-2645, or fax,
+1-949-588-2647.


PRINTWARE: Files Form 15 with SEC to End Reporting Obligations
--------------------------------------------------------------
Printware, Inc., (OTC Bulletin Board: PRTWZ) has filed Form 15
with the Securities and Exchange Commission to terminate its
ongoing reporting obligations under the Securities Exchange Act
of 1934.

Under applicable sections of the Securities Exchange Act of
1934, Printware, Inc., is no longer obligated to file periodic
information, documents and reports with the Commission.  As
previously reported, Printware, Inc., is currently winding down
its business affairs, and this step is consistent with the
approved Plan of Complete and Voluntary Liquidation of the
Company.

The common stock of Printware, Inc., was delisted from the
Nasdaq stock exchange on April 16, 2002.


RELIANCE GROUP: Seeking Fourth Extension of Exclusive Periods
-------------------------------------------------------------
Steven R. Gross, Esq., at Debevoise & Plimpton, in New York,
tells the Court that due to the time and resources spent
responding to the various objections and motions filed by the
Pennsylvania Insurance Department in their ongoing disputes,
Reliance Group Holdings, Inc., its debtor-affiliates, and the
Committees have not had the opportunity to engage in meaningful
restructuring negotiations.  According to Mr. Gross, Reliance
Group Holdings has made progress in formulating a plan, but has
not gotten a chance to negotiate with its creditors groups,
until recently.

"A Plan will have to address the substantial priority claims for
prepetition taxes submitted by the Internal Revenue Service,"
Mr. Gross explains.  The IRS has filed a proof of claim for
$433,600,000.  Due to the enormity of this claim, Mr. Gross
says, it is unproductive to propose a plan without first
resolving the issues in the IRS claim.  According to Mr. Gross,
the Debtors have engaged in negotiations with the IRS and have
finalized a settlement to be presented to the Court for
approval.

So, for the fourth time, Reliance Group Holdings and Reliance
Financial Services Corp. ask Judge Gonzalez to extend their
exclusive period to file a Plan until November 4, 2002 and their
exclusive period to solicit acceptances to that Plan until
January 6, 2003.

Mr. Gross assures Judge Gonzalez that an extension not prejudice
creditors since the Debtors have continued to preserve the
assets of their estates and have attempted to minimize
administrative expenses.  Indeed, the Debtors' greatest
expenditures have been incurred in fighting off the Pennsylvania
Insurance Department's barrage of litigation.

On the other hand, Mr. Gross believes that termination of the
exclusive periods at this juncture will result in substantial
harm to creditors, as it would destabilize the Chapter 11
process.

The Court will convene a hearing to consider the Debtors'
request today, August 13, 2002 at 9:30 am.  The current deadline
for the Debtors to file a plan is extended until then. (Reliance
Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service,
Inc., 609/392-0900)    


SL INDUSTRIES: Appoints Imperial Capital as Financial Advisors
--------------------------------------------------------------
SL Industries, Inc. (NYSE and PHLX:SL) announced that SL
Industries, Inc., has retained Imperial Capital, LLC to act as
its financial advisor.

Imperial Capital, LLC will spearhead the Company's initiative to
explore a sale of some or all of its businesses and will also
assist management in its ongoing efforts to secure new long term
debt to refinance the Company's current revolving credit
facility which matures on December 31, 2002.

Warren Lichtenstein, Chairman and Chief Executive Officer of the
Company, stated, "Imperial Capital is an outstanding
organization with expertise in and a commitment to middle market
transactions. Their team of professionals has almost completed
its due diligence review of the Company. We look forward to
working with them to evaluate opportunities to maximize
shareholder value."

Lichtenstein continued, "While the transition to Imperial
Capital has caused some delay in the potential sales process, we
are confident that we have the right team in place to
aggressively explore a sale of some or all of the business of
the Company as well as assisting the Company in obtaining a new
long term debt facility. We expect the confidential offering
memorandum to be completed promptly and that Imperial will
shortly start contacting potential acquirers. Imperial has
already begun to assist the Company in discussions with
potential lenders."

SL Industries, Inc., designs, manufactures and markets Power and
Data Quality equipment and systems for industrial, medical,
aerospace, telecommunications and consumer applications. For
more information about SL Industries, Inc., and its products,
please visit the Company's Web site at http://www.slpdq.com

                          *    *    *

As reported in Troubled Company Reporter's July 30, 2002,
edition, Andersen's reports on SL Industries' financial
statements for the two years ended December 31, 2000 and
December 31, 2001, showed an impairment charge related to the
write off of intangible assets of a subsidiary of the Company
recognized at December 31, 2001, and, as a result, the Company
was in violation of its net income covenant for the fourth
quarter of 2001 under the Company's Revolving Credit Facility.
Additionally, on March 1, 2002 the Company received a notice
from its lenders under the Revolving Credit Facility stating
that it is currently in default under the Revolving Credit
Facility due to its failure to meet a scheduled debt reduction.

Consequently, Andersen's report for the period ended December
31, 2001 dated March 15, 2002 did contain the following
paragraph: "The accompanying financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial
statements, the Company was in technical default under its
revolving credit facility at December 31, 2001 and an additional
event of default occurred on March 1, 2002. Due to these events
of default, the lenders that provide the revolving credit
facility do not have to provide any further financing and have
the right to terminate the facility and demand repayment of all
amounts outstanding. The existence of these events of default
raises substantial doubt about the Company's ability to continue
as a going concern. Management's plans in regard to this matter
are also described in Note 1. The consolidated financial
statements do not include any adjustments that might result from
the outcome of this uncertainty."

On May 23, 2002, the Company and its lenders reached an
agreement, pursuant to which the lenders granted a waiver of
default and amended certain financial covenants of the Company's
revolving credit facility, so that the Company is in full
compliance with the revolving credit facility after giving
effect to the Amendment.


SVI SOLUTIONS: Will Release June Quarter Fin'l Results Tomorrow
---------------------------------------------------------------
SVI Solutions, Inc. (Amex: SVI), will report financial results
for the first quarter ended June 30 tomorrow, August 14, 2002.  
The Company will discuss these results in a conference call
scheduled for 4:00 p.m. Eastern Daylight Time, August 14,
2002.

Interested parties can access the call by dialing (800) 210-9006
or by accessing the web cast at
http://www.vcall.com/EventPage.asp?ID=82204 A replay of the  
call will be available at (719) 457-0820, access number 478642,
for 7 days following the call; and the web cast can be accessed
at http://www.rcgonline.comfor 30 days.

SVI's retail divisions provide multi-channel technology
solutions to retail market segments.  The company's suite of
offerings includes store systems as well as enterprise
management, merchandising and direct-to-consumer solutions.  
Complementing these offerings, the Company provides an expansive
menu of professional services including consulting and
implementation services, as well as technical and project
management services.  SVI's subsidiary, SVI Training Products,
is a leading provider of state-of-the-art PC courseware,
customization tools and skills assessment software for
educational institutions and government entities.  Headquartered
in Carlsbad, CA, SVI maintains offices in the United States and
the United Kingdom.  Its worldwide customer base includes major
retailers such as American Eagle Outfitters, Charming Shoppes,
Chick's Sporting Goods, The Limited, Chico's, VANS and Nike.  
More information about SVI can be obtained on their Web site at
http://www.svisolutions.com

As reported in Troubled Company Reporter's July 18, 2002
edition, SVI renegotiated an extension on its bank loan to
August 31, 2003.  The Company has also renegotiated a $1.25
million interest bearing note and warrants associated with a
previous equity offering.  The note was extended by two years
and the interest rate reduced from 17 percent to 8 percent.  In
return the conversion price was reduced and warrants were
reduced from 3.0 million to 1.6 million.

SVI's December 31, 2001, balance sheet shows that the company's
total current liabilities exceeded its total current assets by
about $13 million.


SAFETY-KLEEN CORP: Committee Taps Rosenthal as Special Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors' local counsel --
Morris Nichols Arsht & Tunnell -- in the Chapter 11 cases
involving Safety-Kleen Corp., will not be able to continue its
capacity as special litigation counsel in the adversary
proceeding styled, "Official Committee of Unsecured Creditors v.
Toronto Dominion (Texas) Inc.  It was not explained why.

According to Committee Co-Chair Sharon Manewitz of the Teachers
Insurance & Annuity Association of America, Rosenthal, Monhait,
Gross & Goddess PA is eyed as the replacement for Morris Nichols
Arsht & Tunnell.

By this application, the Committee seek the Court's authority to
retain Rosenthal, Monhait, Gross & Goddess PA, nunc pro tunc to
June 19, 2002, as special litigation counsel in the adversary
proceeding against Toronto Dominion.

Ms. Manewitz explains that this application was not made sooner
because the complexity, tremendous dollar amounts, and break-
neck speed, which have characterized these cases, have
necessitated the Committee and its professionals, to focus their
immediate attention on time-sensitive matters.

The firm will charge its fees on an hourly basis.  Among the
Rosenthal professionals who will be representing the Committee,
and their current hourly rates are:

           Kevin Gross         $325
           Herbert Mondros     $250
           Edward Rosenthal    $200

These hourly rates are subject to periodic increases in the
firm's ordinary course of business.

Kevin Gross, a director at Rosenthal, Monhait, Gross & Goddess
PA, tells Judge Walsh that the firm has no interest materially
adverse to the estates or any class of their creditors or equity
interest holders by reason of any direct or indirect
relationship to, or connection with, the Debtors, their
creditors, or equity holders, or for any other reason, with
respect to the matters for which it is to be employed. (Safety-
Kleen Bankruptcy News, Issue No. 43; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    


TRAILER BRIDGE: Says Liquidity Adequate to Meet All Obligations
---------------------------------------------------------------
Trailer Bridge, Inc. (NASDAQ National Market: TRBR) reported
financial results for the second quarter ended June 30, 2002
highlighted by a significantly reduced losses, profits in the
months of May and June and the beginning effects from what is
anticipated to be sharp and continuing improvements in market
conditions in the Puerto Rico lane.

When the Company released its first quarter results, it
disclosed a just announced transaction where a competitor with a
27% market share and operating under Chapter 11 of the
bankruptcy code had sold its vessel assets to another
competitor. Shortly after that transaction was finalized in mid-
May, the purchaser began taking steps that effectively resulted
in two-thirds of the capacity of the purchased vessels that were
deployed being permanently removed from the Puerto Rico market.
Trailer Bridge believes this action addresses some two-thirds of
the excess capacity in the lane, which was previously
approximately 30%. The Company believes that this previous level
of excess capacity has been the root cause of the hyper-
competitive conditions in the Puerto Rico market. With this
change, Trailer Bridge believes it and the other remaining
carriers in the lane will benefit from greater asset utilization
and an unwinding of the unsustainable pricing characteristic of
recent years. Trailer Bridge's own effective yield on core
southbound loads is down approximately 25% from five years ago.

The discontinuance of the direct Northeast service at the end of
last year, while significantly reducing costs, reduced revenues
in Q2 2002 and led to an overall reduction in vessel capacity
deployed of 26.3% this quarter when compared to the second
quarter of 2001. Total revenue for the three months ended June
30, 2002 was $18,116,637, a decrease of $3,542,547 or 16.4%
compared to the prior year period; revenues in the second
quarter of 2001 included sales related to the now closed
Northeast service. The Company's total volume of freight moving
to and from Puerto Rico decreased 17.3% compared to the year
earlier period.

Due to the discontinuance of the Northeast service, the Company
believes that volume and yield comparisons solely related to
freight moving via Jacksonville are most relevant. For the three
months ended June 30, 2002, total southbound volume over
Jacksonville increased 3.0% compared to the year earlier period
and 0.3% sequentially from the first quarter of 2002.
Northbound, total volume through Jacksonville decreased 7.5%
from the year ago period and increased 30.8% sequentially from
the first quarter. The effective yield of all of the southbound
freight moving via Jacksonville represented a decrease of 3.5%
from the year earlier period and an increase of 2.1%
sequentially from the first quarter. Northbound, the effective
yield on all cargo moving via Jacksonville increased 8.4% from
the year ago period and 0.3% sequentially from the first quarter
of 2002.

Trailer Bridge's deployed vessel capacity utilization overall
during the second quarter was 75.5% to Puerto Rico and 21.3%
from Puerto Rico, compared to 65.6% and 19.5% overall,
respectively, during the second quarter of 2001. Compared
sequentially, the second quarter of 2002 capacity utilization
figures represented a slight decline southbound and a meaningful
increase northbound from the first quarter when deployed vessels
were utilized 76.3% southbound and 18.3% northbound. The Company
had an average of 179 tractor units operating on the mainland
during the quarter, generating an average of 9,370 miles per
month of which 81.4% were loaded, an improvement in both
productivity and efficiency from the year earlier period (8,814
miles and 77.8% loaded, respectively) as well as sequentially
from the first quarter of 2002 (9,076 miles and 79.2% loaded,
respectively).

The Company's operating loss for the second quarter ended June
30, 2002 narrowed significantly to $461,949 from an operating
loss of $4,131,848 in the year earlier period. This improvement
was due to discontinuing the direct Northeast service,
reductions in headcount and equipment, other cost-cutting
initiatives and the absence of the $667,335 dry-docking charge
that burdened the year earlier period. Compared sequentially to
the first quarter, operating loss improved by $57,076. As a
result of the above, Trailer Bridge had an operating ratio of
102.5% during the second quarter of 2002 compared to 119.1%
during the year earlier period and 103.0% sequentially during
the first quarter. Net interest expense of $806,489 was down
slightly from the year earlier period. Trailer Bridge also
realized a net gain of $133,867 from equipment sales during the
quarter compared to a loss of $218,419 from equipment sales
during the year earlier quarter.

For the second quarter ended June 30, 2002, Trailer Bridge's
loss before income taxes was $1,130,298, an improvement of
$4,030,647 compared to the $5,160,945 pre-tax loss in the second
quarter of 2001. Sequentially compared to the first quarter, the
pre-tax loss improved by $180,236. After a full valuation
allowance for income tax credits, the net loss for the second
quarter remained at $1,130,298 as compared to a net loss of
$5,160,945 for the year earlier period and a net loss of
$1,310,534 sequentially in the first quarter.

Trailer Bridge has experienced a significant reduction in
operating losses since early 2002 driven by the previously
disclosed actions taken at the end of last year. While no one
month should be looked at in isolation, the intra-quarter trend
in the second quarter was encouraging with both May and June
showing profits.

The overall second quarter results build on the first quarter
results, which themselves were encouraging given the market
conditions at the time. Similar to the first quarter, the year-
to-year comparisons for the second quarter show operating
expense reductions from implementing various actions were more
than twice the revenue reduction.

At June 30, 2002, Trailer Bridge had total cash of $2,143,679
and current assets of $14,271,126, slightly below current
liabilities of $14,489,570. Compared sequentially to March 31,
2002, that represents an increase of $1,986,872 in cash and
$4,766,811 in working capital. Trailer Bridge's working capital
has improved even more dramatically since the beginning of the
year. The Company believes its liquidity is more than sufficient
to meet all of its obligations, including all scheduled long-
term principal payments. Trailer Bridge has received a formal
waiver of all past financial covenant violations through the end
of 2001 from its senior lender, has remained in compliance with
the new, reset financial covenants during the first and second
quarter of 2002 and believes it will maintain compliance going
forward.

Related to the previously disclosed appeal by the Company of the
Nasdaq staff notification regarding the delisting of the
Company's common stock from the Nasdaq National Stock Market, on
June 27, 2002 the Company had a hearing before the listing
qualification panel, where it proposed a course of action to
attain full compliance with the applicable maintenance standard.
The Company proposed to issue $20.3 million of non-convertible
preferred stock in payment of an equal face amount of the
Company's debt to its affiliate Kadampanattu Corp. This
transaction has been approved by both the Company and
Kadampanattu Corp. and will be consummated immediately upon a
decision of the listing qualification panel that such
transaction cures the Company's non-compliance with NASDAQ
maintenance standards thereby permitting the Company's continued
listing on the NASDAQ National Stock Market. The Company has not
yet received the decision of the listing qualification panel.

John D. McCown, Chairman & CEO, said, "We are pleased with the
continuing improved results from the array of initiatives
management has implemented and grateful for the tireless efforts
of the entire Trailer Bridge team. Importantly, the market
conditions for increasingly profitable operations are now at
hand. We see it in the trends of our various indicators. The
bubble that characterized a unique and specific business cycle
is dissipating and I believe that will lead to sequential
improvement in our actual results for many quarters to come."

Trailer Bridge provides integrated trucking and marine freight
service to and from all points in the lower 48 states and Puerto
Rico, bringing efficiency, environmental and safety benefits to
domestic cargo in that traffic lane. This total transportation
system utilizes its own trucks, drivers, trailers, containers,
U.S. flag vessels and marine facilities in Jacksonville and San
Juan. Additional information on Trailer Bridge is available at
its Web site at http://www.trailerbridge.com


US AIRWAYS: Receives Court Approval of First-Day Motions
--------------------------------------------------------
US Airways said that its first full day in operation since
filing Chapter 11 was nearly flawless.  As of 5 p.m., Monday,
Eastern time, the company reported that it had completed 97
percent of its flights on time, and a 12-percent increase in
normal Monday call volume, with no customer calls placed on
hold.

"We are pleased to report that our operations throughout the
U.S. and internationally ran smoothly [Sun]day and [Mon]day,
without interruption, and our passengers are seeing no
difference in the quality of our service," said President and
Chief Executive Officer David Siegel.

"[Mon]day's seamless performance is due in the greatest degree
to the hard work and dedication of our employees and the support
of our vendors," Siegel said.

Meanwhile, the U.S. Bankruptcy Court Monday took important steps
to ensure that normal operations continue, giving its approval
to, among other things, pay pre-petition and post-petition
employee wages, salaries, workers compensation, health benefits
and other employee obligations during its voluntary Chapter 11
case.  At Monday's hearing on first-day motions, the Court also
approved the Company's request to honor all existing customer
programs, including its Dividend Miles Program.

On Sunday evening, the Court had entered a series of eight
essential "bridge" orders granting relief with respect to US
Airways' employees, customers, fuel suppliers, interline
agreements with other airlines, critical trade vendors, foreign
vendors and governments and cash management systems. The Court
granted further relief on these and other first-day motions at a
hearing before the Honorable Robert G. Mayer in Alexandria, Va.

The Court Monday also approved interim use of $75 million of
debtor-in-possession financing to continue operations, pay
employees, and purchase goods and services going forward.  In
conjunction with the filing, US Airways received commitments for
$500 million in DIP financing from a group of financial
institutions led by Credit Suisse First Boston and Bank of
America Corp., to fund operations during the restructuring.  The
final hearing on the DIP agreement has been set for Sept. 26,
2002.

Also on Sept. 26, the Court will consider the proposal under
which Texas Pacific Group will make a $200 million investment in
the equity of the airline upon its emergence from Chapter 11.  
This investment, which remains subject to continuing diligence
and final documentation, competing and/or higher offers, and
court approval, would result in Texas Pacific Group owning about
38 percent of the airline, post-emergence.

Siegel said he was extremely pleased by the first-day orders
entered by the Court, as well as the support received at the
first-day hearing by the Company's employee labor unions.  
"While we restructure, our operations continue, and we will
continue to purchase and pay for goods and services from our
suppliers," he said, noting that US Airways has already
contacted a number of its major vendors, who have indicated
their support of the Company's restructuring initiatives.

"With our first-day motions approved, we can now direct our
focus on securing the cost-savings from aircraft lessors and
financiers necessary to complete our restructuring initiatives,
and concentrate on our key constituencies -- our customers, our
employees and our vendors.  We will continue our restructuring
initiatives aimed at restoring US Airways to profitability with
a capital structure able to support today's air travel
environment," Siegel said.

The Company filed its Chapter 11 petitions on Aug. 11, 2002, in
the U.S. Bankruptcy Court for the Eastern District of Virginia
in Alexandria.

US Airways continues its exceptional service record,
consistently placing near the top in the DOT's monthly
statistics for on-time performance, baggage delivery, and
customer service throughout 2002.  In 2001, US Airways finished
first in three of the four DOT quality measurements and was
ranked as the top network carrier by the Airline Quality Rating
index.  The largest air carrier east of the Mississippi where
more than 60 percent of the U.S. population resides, US Airways
operates the seventh largest airline in the United States and
the fourteenth largest airline in the world with approximately
40,000 full-time and part-time employees.  US Airways carried
approximately 56 million passengers last year with regularly
scheduled service to approximately 200 destinations in 38 states
across the United States and in Canada, Mexico, the Caribbean
and Europe.  Operating revenues for the year ended December 31,
2001 were approximately $8.3 billion.


VANGUARD AIRLINES: Court Okays Brownstein Hyatt as Co-Counsel
-------------------------------------------------------------
Vanguard Airlines, Inc., sought and obtained approval from the
U.S. Bankruptcy Court for the Western District of Missouri to
employ Michael J. Pankow, Esq., and the Firm of Brownstein Hyatt
& Farber, P.C., as Co-Counsel for the Debtor regarding airline-
related Matters. BHF will work with Polsinelli Shalton & Welte,
P.C.

Vanguard will employ BHF to provide professional services and
advice regarding specialized issues pertaining to Vanguard's
airline operations. BHF will also assist Vanguard on matters in
which PSW has a conflict.

In conjunction with its representation of Vanguard prior to
commencement of these proceedings, the Firm provided advice
pertaining to bankruptcy and restructuring issues. As of July
29, 2002, during the period preceding the filing of the petition
herein, the Firm had billed and received from Vanguard an
aggregate amount of $80,000.00 in payment of professional fees
and expenses previously provided by the Firm to Vanguard. The
Firm waives any claim that may exist for unpaid fees or expenses
existing as of the petition date herein. In addition, the Firm
has received a retainer of approximately $ 100,00.00 for fees
and expenses to be rendered to Vanguard in these proceedings.
The Firm has deposited the retainer in its interest bearing
IOLTA trust account.

The amount of fees and expenses to be paid in the future will be
on a basis of hourly rates. Compensation will range from:

           a. Partners:                $240.00 - $510.00

           b. Associates:              $155.00 - $240.00

           c. Legal Assistants and
              Law Clerks:               $70.00 - $135.00

Vanguard Airlines, currently shut-down, used to provide all-jet
service to 14 cities nationwide: Atlanta, Austin,
Buffalo/Niagara Falls, Chicago-Midway, Dallas/Ft. Worth, Denver,
Fort Lauderdale, Kansas City, Las Vegas, Los Angeles, New
Orleans, New York-LaGuardia, Pittsburgh and San Francisco. The
Company filed for Chapter 11 protection on July 30, 2002 at the
U.S. Bankruptcy Court for the Western District of Missouri. When
the company filed for protection, it listed total assets of
$39.7 million and total debts of $95.9 million.


VENTURE CATALYST: Shareholders' Meeting to Convene in September
---------------------------------------------------------------
The Board of Directors of Venture Catalyst Incorporated, will be
inviting its shareholders to attend its special meeting in lieu
of annual meeting of shareholders. The special meeting will be
held at 10:00 A.M., California time, on a date in September
which is yet to be determined, at the offices of Paul, Hastings,
Janofsky & Walker LLP at 695 Town Center Drive, Seventeenth
Floor, Costa Mesa, California.   

At the special meeting, shareholders will be asked to consider
and vote in favor of an Agreement and Plan of Merger pursuant to
which Venture Catalyst will merge with and into Speer Casino
Marketing, Inc., a corporation owned by Venture's Chairman of
the Board, Chief Executive Officer and President, L. Donald
Speer, II. In addition, at the special meeting, shareholders
will be asked to consider and vote upon the election of seven
directors to the Board of Directors for a term of one year,
until their respective successors are elected and qualified, or
until completion of the merger. The special meeting will serve
as the annual meeting of shareholders for the fiscal year ended
June 30, 2001.    

If the Company's shareholders approve the merger by the
requisite vote and the merger is completed, each issued and
outstanding share of Venture's common stock, other than (a)
shares of its common stock held by the Buyer, which shares shall
be cancelled without any payment therefor, and (b) shares of
Venture's common stock held by shareholders who properly
exercise dissenters' rights, which shares will be subject to
appraisal in accordance with Utah or California law, will be
converted into the right to receive: (i) $0.65 in cash, without
interest, and (ii) additional contingent payments, if any, over
the first five years following the effective time of the merger.
Holders of Venture's stock options or warrants who exercise
their stock options or warrants prior to completion of the
merger will receive shares of the Company's common stock which,
upon completion of the merger, will be converted into the right
to receive the consideration described above. Any stock option
or warrant which has not been exercised prior to completion of
the merger will be cancelled in the merger without any payment
therefor.    

The contingent payments for each year will be calculated based
on the amount by which Buyer's revenues in the year from the
following sources exceed specified thresholds: (a) Buyer's
consulting and other agreements with the Barona Group of Capitan
Grande Band of Mission Indians, (b) any sale or license by Buyer
of Venture's client relationship management software, and (c)
all interest, dividends, sales proceeds and other payments
realized by Buyer in connection with securities which Venture
held for investment immediately prior to the effective time of
the merger. The maximum contingent payments that may be made
under the merger agreement is $45 million. Venture is unable to
determine the amount of any contingent payments that will be
paid over the five-year period, if any. The right to receive
contingent payments may not be assigned or transferred, except
by operation of law or by will or intestate succession.

The Special Committee of Venture's Board of Directors, and the
Board of Directors, have each concluded that the terms of the
Agreement and Plan of Merger and the proposed merger are
advisable and are fair to, and in the best interests of, all of
Venture's shareholders (other than Buyer and Mr. Speer).

During the course of the Company's fiscal years ended June 30,
2001 and 2002 and during the current fiscal year, Venture's
business has suffered a number of significant setbacks resulting
from a variety of factors, including the decrease in revenues
from its only client, the Barona Tribe. In response to these
setbacks, the Company established an independent Special
Committee of its Board of Directors to oversee and conduct a
thorough and comprehensive process, with the assistance of its
financial and legal advisers, to evaluate the strategic
alternatives available to it and to choose the alternative that
the Special Committee believes offers the best opportunity to
maximize shareholder value.

Venture Catalyst Incorporated is a service provider of gaming
consulting, infrastructure and technology integration in the
California Native American gaming market.

As of March 31, 2002, Venture Catalyst listed in its balance
sheet a total shareholders' equity deficit of about $9 million.


WEBLINK WIRELESS: L. Abramson Steps Down from Board of Directors
----------------------------------------------------------------
As previously reported on May 23, 2001, Weblink Wireless, Inc.,
and two of its subsidiaries, PageMart PCS, Inc., and PageMart
II, Inc., filed voluntary petitions for relief under chapter 11
of title 11 of the United States Code in the United States
Bankruptcy Court for the Northern District of Texas. In order to
reduce operating expenses in line with the Company's Plan of
Reorganization and to permit the Company to emerge from
bankruptcy, the Company will, effective August 30, 2002, reduce
its workforce by approximately 20%. These reductions will impact
all areas and levels of the Company and will result in severance
costs in the third quarter of 2002 of approximately $1.5
million.

Effective as of July 23, 2002, Leigh J. Abramson resigned as a
director. There were no disagreements with the Company on any
matter relating to the Company's operations, policies or
practices.

WebLink Wireless, Inc., is a leader in the wireless data
industry, providing wireless email, wireless instant messaging,
information on demand and traditional paging services throughout
the United States.


WEIRTON STEEL: Second Quarter Net Loss Narrows to $36 Million
-------------------------------------------------------------
Weirton Steel Corporation (OTC Bulletin Board: WRTL) reported a
net loss of $35.8 million for the second quarter of 2002. During
the quarter, the Company completed its senior note and bond
exchange that resulted in an extraordinary gain on the early
extinguishment of debt of $0.2 million.  The quarterly results
also included the sale of the Company's excess nitrogen oxide
allowances for $4.4 million and a tax refund of $3.5 million.  
Excluding the effects of these items, the net loss for the
second quarter of 2002 was $43.8 million.  This compares with a
net loss of $217.8 million for the second quarter of 2001, which
included a non-cash charge of $153.8 million to fully reserve
Weirton's deferred tax assets.  Excluding this item, Weirton's
net loss for the second quarter of 2001 was $64.1 million.  Net
sales in the second quarter of 2002 were $251.0 million on
shipments of 579,300 tons, compared to $240.2 million on 575,400
tons of shipments for the same period in 2001.

The Company recorded a net loss of $80.4 million for the first
half of 2002.  The first half results included an extraordinary
gain of $0.2 million on the early extinguishment of debt, the
sale of excess allowances for $4.4 million, the sale of
Prudential common stock for $3.2 million as a result of
Prudential's demutualization, and a tax refund of $3.5 million.  
Excluding the effects of these items, the net loss for the first
half of 2002 was $91.6 million. Last year's first six months
resulted in a net loss of $293.1 million, which included a non-
cash charge of $153.8 million to fully reserve the Company's
deferred tax assets, a restructuring charge of $12.3 million
associated with an involuntary reduction program for exempt
employees and the write-off of the Company's remaining interests
in certain joint ventures totaling $18.0 million.  Excluding the
effects of these items, the Company's net loss for the first
half of 2001 was $108.9 million.  Net sales for the first half
of 2002 were $487.0 million on shipments of 1,145,000 tons
compared to $492.3 million on shipments of 1,162,500 tons for
the same period last year.

"Selling prices and order rates for sheet products improved
during the second quarter.  However, our operating performance
was adversely affected due to reassigning of employees because
of our restructuring plan.  We expect improvement during the
third quarter with the completion of our restructuring plan and
continuing strong fundamentals in the flat rolled steel market,"
said John H. Walker, President and CEO.

On June 18, 2002, the Company completed its exchange offer
relating to a total of approximately $300 million of publicly
held debt.  The exchange resulted in the reduction of
approximately $115 million in indebtedness.  The Company's
annual cash interest obligation will be reduced by 84% from
approximately $32 million to $5 million per year through 2004,
assuming the Company is not required to make contingent interest
payments.

Total liquidity at June 30, 2002, was $38.5 million compared to
$42.6 million at March 31, 2002.

Weirton Steel is a major integrated producer of flat rolled
carbon steel with principal product lines consisting of tin mill
products and sheet products.  The Company is the second largest
domestic producer of tin mill products with approximately 25% of
the domestic market share.

Weirton Steel Corporation's 11.375% bonds due 2004 (WRTL04USR1)
are trading at 34.5 cents-on-the-dollar, DebtTraders says. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WRTL04USR1
for real-time bond pricing.


WINSTAR: Ch. 7 Trustee Selling $1.35M AccelerNet Note for $270K
---------------------------------------------------------------
Winstar Communications, Inc.'s Chapter 7 Trustee Christine C.
Shubert seeks the Court's approval to sell and assign a
$1,350,000 13% Senior Secured Convertible Note to Dublind
Partners Inc. for $270,000, without subjecting the sale to an
auction process.  U.S. Interactive LLC, doing business as
AccelerNet, issued the note to Winstar Wireless Inc.

Ms. Shubert also asks the Court to allow her to consummate any
other related transactions.  The Trustee wants the notice period
shortened so that a hearing on the proposed sale can be held on
August 14, 2002.

Sheldon K. Rennie, Esq., at Fox, Rothschild, O'Brien & Frankel
LLP, in Wilmington, Delaware, informs the Court that since the
conversion of the Debtors' cases, the Chapter 7 Trustee and her
professionals have been diligently marketing the Note.  The
emergency nature of the Chapter 7 Trustee's request arises from
the fact that AccelerNet needs to close the sale of the
AccelerNet Note as part of a larger funding package that is
essential to AccelerNet's ongoing operations.  Once the sale has
been consummated, additional funding will be provided to
AccelerNet.  During the marketing and the sale negotiations on
the Note, a Winstar business representative inadvertently
advised Dublind, which in turn advised AccelerNet, that the sale
of the Note would occur by August 1, 2002, because the sale was
not reportedly subject to Court approval.  AccelerNet relied on
that statement to advise certain of its critical vendors that it
would be getting an additional infusion of capital as a result
of the Note sale and that it could use certain of those proceeds
to make vendor payments.

Mr. Rennie explains that the failure of AccelerNet to make
accommodations to its creditors could cause a further
deterioration in AccelerNet's financial condition and put the
sale in jeopardy.  The Trustee is extremely concerned that if
she is not authorized to immediately sell and assign the Note to
the AccelerNet, AccelerNet will be unwilling to consummate the
sale on account of a material change in its financial condition.  
This would render the Note valueless to the estate because of
Winstar's junior collateral position in AccelerNet's assets.
While the Note, in theory, is secured by certain assets of
AccelerNet, it is subordinate in priority to a secured note held
by ING High Yield Opportunities Fund for $8,500,000 plus
interest in excess of $3,200,000.  The Note, then, would be
valueless in an AccelerNet liquidation scenario. (Winstar
Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


WORLDCOM INC: Seeks Court Approval to Hire BSI as Noticing Agent
----------------------------------------------------------------
Worldcom Inc., seeks the Court's authority to employ Bankruptcy
Services LLC as the claims and noticing agent in these Chapter
11 cases.

According to WorldCom Senior Vice President Susan Mayer, the
Debtors do not want to unduly burden the Court Clerk's Office.
The number of creditors and other parties-in-interest in these
Chapter 11 cases is estimated to exceed 1,000.  Many of them are
expected to file proofs of claim.  The noticing that would be
required as well as the receiving, docketing and maintenance of
proofs of claim would be time-consuming and burdensome for the
Clerk's Office.

Ms. Meyer tells the Court that BSI is a nationally recognized
specialist in Chapter 11 administration and has considerable
experience in noticing and claims administration.

BSI will be providing these services to the Debtors:

A. Notifying all potential creditors of the bankruptcy petitions
   filing and the setting of the first meeting of creditors
   pursuant to Section 341(a) of the Bankruptcy Code, under the
   proper provisions of the Bankruptcy Code and the Federal
   Rules of Bankruptcy Procedure,

B. Maintaining an official copy of WorldCom's Schedules of
   Assets and Liabilities and statements of financial affairs
   listing WorldCom's known creditors and the amounts owed
   thereto,

C. Notifying all potential creditors of the existence and amount
   of their respective claims as evidenced by WorldCom's books
   and records and as set forth in the Schedules,

D. Furnishing a form for the filing of a proof of claim, after
   the notice and form are approved by this Court;

E. Filing with the Clerk a copy of any notice served by BSI, a
   list of persons to whom it was mailed and the date the notice
   was mailed, within 10 days of service;

F. Docketing all claims received, maintaining the official
   claims register for each Debtor, on behalf of the Clerk, and
   providing the Clerk with certified duplicate unofficial
   Claims Registers on a monthly basis, unless otherwise
   directed,

G. Specifying in the applicable Claims Register, the following
   information for each claim docketed: (i) the claim number
   assigned, (ii) the date received, (iii) the name and address
   of the claimant and agent, if applicable, who filed the
   claim, and (iv) the classification of the claim,

H. Relocating, by messenger, all of the actual proofs of claim
   filed to BSI, not less than weekly,

I. Recording all transfers of claims and providing any notices
   of transfers required by Bankruptcy Rule 3001,

J. Making changes in the Claims Registers pursuant to an order
   of the Court,

K. Upon completion of the docketing process for all claims
   received to date by the Clerk's office, turning over to the
   Clerk copies of the Claims Registers for the Clerk's review,

L. Maintaining the official mailing list for each Debtor of all
   entities that have filed a proof of claim, which list shall
   be available upon request by a party-in-interest or the
   Clerk,

M. Assisting with, among other things, the solicitation and the
   tabulation of votes, the distribution as required in
   furtherance of confirmation of plan(s) of reorganization and
   the reconciliation and resolution of claims,

N. Thirty days prior to the close of these cases, submitting an
   Order dismissing BSI and terminating the services of BSI upon
   completion of its duties and responsibilities and upon the
   closing of these cases, and

O. At the close of the case, boxing and transporting all
   original documents in proper format, as provided by the
   Clerk's office, to the Federal Records Center.

WorldCom proposes to compensate and reimburse BSI in accordance
with the payment terms of the BSI Agreement for all services
rendered and expenses incurred in connection with the Debtors'
Chapter 11 cases.  The Debtors believe the compensation rates
are reasonable and appropriate for the nature of the services,
and are comparable to those charged by BSI in other Chapter 11
cases in which it has served as claims and noticing agent.  BSI
maintains these charges for its services:

                      As Claims Agent

          Tape/Diskette             $0.10/each
          Other Data Formats        125/hour
          Input Filed Claims         0.95/claim + hourly rates
          Database Maintenance       0.08/creditor/mo.
            and Claims Tracking

                     As Balloting Agent

          Per check or Form 1099    $1.50/each
          Per record                 0.25/each
          Special reports            0.10/page

                For Mailing/Noticing Services

          First Page Print & Mail   $0.10/page
          Photocopies                0.10/page
          Labels                     0.05/each
          Fax                        0.50/page
          Document Imaging           0.40/image

                   Fees for Professional

           Kathy Gerber             $175 per hour
           Senior Consultants        150 per hour
           Programmer                125 per hour
           Associate                 110 per hour
           Data Entry/Clerical        35-55 per hour

BSI President Ron Jacob, meanwhile, assures the Court the
company is a disinterested person and has no interest adverse to
the Debtors, their creditors, or any other party in interest, or
their respective attorneys and accountants. (Worldcom Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)  

Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USA1), DebtTraders
reports, are trading at about 22.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USA1
for real-time bond pricing.


X-CHANGE CORPORATION: Defaults on Agreement with WebIam Inc.
------------------------------------------------------------
The X-Change Corporation (OTCBB:XCHC), which operates an
Alternative Trading System under the name WEBIXTRADER for stocks
quoted on the Over-the-Counter Bulletin Board, announced that
its efforts to raise $500,000 in a private offering of
subordinated notes has been unsuccessful and that the offering
has been terminated. The Company said that it intends to
continue to operate its System, but has taken steps to reduce
expenses, including terminating employees.

The Company said that several principal shareholders have
provided it with funds to continue operating the WEBIXTRADER
System. The Company intends to complete certain enhancements to
WEBIXTRADER and to explore strategic alternatives, including
discussions with joint venture partners and investors.

The Company also announced that it is in default under an
agreement between it and WebIam, Inc., under which WebIam
granted the Company a license to the software underlying the
WEBIXTRADER System, along with other software. However, the
Company believes that the default results in the revocation of
the license with an exception allowing the Company to use the
software necessary to operate the WEBIXTRADER System for two
years. Accordingly, the Company does not believe that the
default will impair its ability to operate the WEBIXTRADER
System. The Company is in discussions with WebIam to resolve the
license issue. Eric Nissan, who recently resigned from the
Company's Board of Directors, is a major shareholder of WebIam.

The Company said that WEBIXTRADER has been successfully
operating since its launch on July 2, 2002. There are
approximately 2,200 OTCBB issues available on WEBIXTRADER for
market makers and brokers to post orders. At the present time,
five market makers and two brokers are participating in the
System. To participate, a broker/dealer must sign a subscriber
agreement. Participants are charged $1.25 per transaction
executed.


XO COMMS: Committee Bringing-In Jefferies & Co. for Fin'l Advice
----------------------------------------------------------------
XO Communications, Inc.'s Official Unsecured Creditors'
Committee seeks the Court's authority to employ and retain
Jefferies & Company Inc., as financial advisor, nunc pro tunc to
June 24, 2002.

The Committee needs a financial advisor to assist in the
evaluation of the complex financial and economic issues raised
by the Debtor's reorganization proceedings.

The Committee selected Jefferies because of its expertise in
providing financial advisory services to debtors and creditors
in restructurings and distressed situations.

Jefferies is an investment banking firm with its principal
office located at Madison Avenue, New York.  Founded in 1962,
Jefferies is a wholly owned subsidiary of Jefferies Group Inc.  
Since 1990, professionals at Jefferies have been involved in
over 100 restructurings representing over $75 billion in
restructured debt.

Prior to the Petition Date, Jefferies served as financial
advisor to an ad hoc committee of senior noteholders of XO
Communications, Inc. The Committee has decided to engage
Jefferies as financial advisor on the same terms and conditions
under which the Ad Hoc Committee formerly engaged Jefferies.

At the request of the Committee, Jefferies has been rendering
services since June 24, 2002.  Pursuant to the Jefferies
Engagement Letter, Jefferies will provide postpetition services
to:

(a) become familiar with and analyze the business, operations,
    properties, financial condition and prospects of the
    Company;

(b) advise the Committee on the current state of the
    restructuring market;

(c) assist and advise the Committee in developing a general
    strategy for accomplishing a restructuring; and

(d) assist and advise the Committee in evaluating and analyzing
    a restructuring including the value of the securities, if
    any, that may be issued under any restructuring plan.

William Q. Derrough, a Managing Director of Jefferies, tells the
Court that to the best of his knowledge, Jefferies, its
principals and professionals are "disinterested persons" under
section 101(14) of the Bankruptcy Code.

From time to time, Jefferies has provided investment banking,
financial advisory and consulting services to certain creditors
and other parties-in-interest in matters unrelated to this case.
In particular, Jefferies has no further or ongoing obligations
related to its employment as financial advisor to the Ad Hoc
Committee.  Mr. Derrough assures the Court that Jefferies will
not provide services to any parties-in-interest in connection
with any matters relating to this case.

Prior to the Petition Date, Jefferies received $890,323 in
monthly retainer payments from the Debtor for services rendered
and expenses incurred in connection with its representation of
the Ad Hoc Committee.

In return for its services, Jefferies will be compensated:

(a) a monthly cash retainer fee equal to $150,000 per month;

(b) at the closing of a Restructuring completed by the
    Committee, a fee in cash -- or at the Committee's option, in
    like-kind securities -- equal to the sum of:

      (i) 0.50% of that portion of the Total Consideration paid
          or delivered to the holders of the Senior Notes in
          respect of their Senior Notes above $464,400,000 up
          to and including $893,000,000, plus

     (ii) 1.0% of that portion of the Total Consideration paid
          or delivered to the holders of the Senior Notes in
          respect of their Senior Notes above $893,000,000 up
          to and including $1,786,000,000, plus

    (iii) 2.0% of that portion of the Total Consideration paid
          or delivered to the holders of the Senior Notes in
          respect of their Senior Notes above $1,786,000,000.

Total Consideration will mean the total proceeds and other
consideration in cash or, in the form of notes, securities and
other property, in connection with a Restructuring, including
amounts in escrow.

Non-cash consideration will be valued:

(x) publicly traded securities will be valued at the average of
    their closing prices -- as reported in The Wall Street
    Journal -- for the five trading days prior to the closing of
    a Restructuring; and

(y) any other non-cash consideration will be valued at the fair
    market value on the day prior to closing as determined in
    good faith by the Company and Jefferies.

If the parties are unable to agree on the value of any other
property, its value will be determined by arbitration in
accordance with the rules of the American Arbitration
Association and judgement upon the award entered by the
arbitrators may be entered in any court having jurisdiction.

In addition, the Debtor and its estate will reimburse Jefferies
for all reasonable out-of-pocket expenses.

The Debtor and its estate are to indemnify Jefferies, its
agents, principals and employees for all claims, damages,
liabilities and expenses incurred as a result of the parties'
involvement with the provision of financial advisory services,
except to the extent these liabilities resulted from gross
negligence or willful misconduct.  The Committee tells Judge
Gonzalez that indemnification is a standard term of the market
for investment bankers and financial advisors.

Jefferies has indicated to the Committee that it is not the
general practice of investment banking firms to keep detailed
time records similar to those customarily kept by attorneys.
However, in Chapter 11 cases when so required, Jefferies
restructuring professionals do keep time records.  In addition,
Jefferies will provide a list of the non-restructuring
professionals who assist the restructuring department on this
matter but who are not capable of keeping the records in the
same manner.  But Jefferies' restructuring personnel do not
maintain their time records on a "project category" basis.  At
the request of Jefferies, the Committee contends that the
detailed time descriptions that Jefferies' restructuring
personnel will provide should suffice for an application for
compensation.

Jefferies intends to apply to the Court for payment of
compensation and reimbursement of expenses.

The Committee asserts that the proposed Fee Structure is both
fair and reasonable under the standards set forth in Section
328(a) of the Bankruptcy Code.  It is comparable to those
generally charged by financial advisory and investment banking
firms of similar stature to Jefferies.  The Committee points out
that the proposed Fee Structure reflects a balance between a
fixed, monthly fee, and a contingency amount tied to the
consummation of the services to be performed. (XO Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-
0900)

                          *********

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

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

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

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

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

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

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

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

This material is copyrighted and any commercial use, resale or
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contained herein is obtained from sources believed to be
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                *** End of Transmission ***