TCR_Public/020815.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, August 15, 2002, Vol. 6, No. 161

                          Headlines

AT&T CANADA: June 30, 2002 Balance Sheet Upside Down by $3 Mill.
ACME METALS: Int'l Steel Group to Acquire Steel Unit's Assets
ADELPHIA BUSINESS: Committee Signs-Up Kasowitz Benson as Counsel
ADELPHIA COMMS: Proposes Uniform Compensation Procedures
AIR CANADA: Flight Attendants Willing to Follow Pilots' Lead

AIR CANADA: July 2002 Revenue Passenger Miles Slide-Down 0.8%
AMERICAN AIRLINES: Initiates Fundamental Business Changes
AMERICAN HOMEPATIENT: Look for Schedules & Statements on Aug. 30
AMERIGON INC: Must Secure New Financing to Meet Operating Needs
ARMSTRONG HOLDINGS: Seeks Fourth Extension of Exclusive Periods

ATCHISON CASTING: Forbearance Pact Further Extended to Oct. 15
AUGRID OF NEVADA: Completes 50-to-1 Reverse Stock Split
B/E AEROSPACE: USAir Bankruptcy Has Little Impact on Finances
BANYAN STRATEGIC: Net Assets in Liquidation Down by $8MM in Q2
BE INC: Intends to Distribute Remaining Cash to Shareholders

BERES INDUSTRIES: Withum Smith Expresses Going Concern Doubt
BRIDGE INFO: Court Okays Final Compensation of 8 Professionals
BUDGET GROUP: Hearing on $1.5BB Financing Continues on August 20
CALPINE CORP: CEO & CFO Submits Certification Statements to SEC
COLUMBIA LABORATORIES: June 30 Equity Deficit Reaches $5 Million

COVANTA ENERGY: Committee Gets Okay to Begin Prepetition Actions
DADE BEHRING: Wants More Time to File Schedules and Statements
DANIELSON HOLDING: Working Capital Deficit Tops $50MM at June 30
ENRON CORP: Teesside Unit Taps Close Brothers to Conduct Sales
ENVIROGEN INC: Fails to Comply with Nasdaq Listing Requirements

EXHIBITRON INC: Taps Sparks Exhibits as Exclusive Subcontractor
FEDERAL-MOGUL: Keeps Plan Filing Exclusivity Until Nov. 1, 2002
FLAG TELECOM: Asks Court to Bar Some Claims for Voting Purposes
FLAG TELECOM: Will Make Delayed Interim Form 10-Q Filing
GMAC COMMERCIAL: S&P Lowers Rating on Class H Certs to B- from B

GENUITY: Obtains 30-Day Extension of Standstill Pact with Banks
GLOBAL CROSSING: UST Amends Creditors' Committee Membership
ICG COMMS: Court Approves Settlement Agreement with Verizon
INTEGRA INC: Will Not Challenge AMEX Delisting Decision
INTEGRA INC: Ernst & Young Resigns as Independent Auditor

INTEGRATED HEALTH: Asks Court to Okay Glew Termination Agreement
INTELEFILM CORP: Seeks Court Nod to Use Lenders' Cash Collateral
INTELEFILM CORP: Wins Entry of Judgment Totaling $12 Million
INTELLIGROUP: Seeks Waiver of Covenant Default Under Credit Pact
INTERLIANT: Gets Go-Signal to Pay Vendors' Prepetition Claims

KAISER ALUMINUM: Second Quarter Net Loss Slides-Down to $50MM
KENTUCKY ELECTRIC: Must Raise New Funds to Meet Liquidity Needs
KMART CORP: Wants to Amend $2 Billion DIP Credit Facility
KOALA: Talking with Lenders on Restructuring Loan & Covenants
LTV CORP: Alixpartners Wants to Continue Work as Crisis Managers

LAIDLAW GLOBAL: AMEX Accepts Plan to Meet Listing Requirements
LAIDLAW INC: Files Amended Joint Plan & Disclosure Statement
LODGIAN: Has Until Sept. 10, 2002 to Use CCA's Cash Collateral
MAGELLAN HEALTH: Seeks Debt Refinancing to Dodge Covenant Breach
MIDWAY AIRLINES: Asks Court to Fix Oct. 1 Admin. Claims Bar Date

NQL INC: Court Approves DCi Asset Sale to Viewcast Corporation
NTL INCORPORATED: Turns to Kane Reece for Financial Advice
OWOSSO CORP: Nasdaq Extends Grace Period to Meet Requirements
PERKINELMER: Fitch Ratchets Senior Unsecured Debt Rating to BB+
PIONEER COMPANIES: Auditors Doubt Ability to Continue Operations

PUBLICARD INC: Auditors Express Going Concern Doubt
RECEIVABLES STRUCTURED: Fitch Junks 2001-Calpoint Notes
RELIANCE GROUP: Liquidator Sell Life Affiliate for $10.2 Million
ROHN INDUSTRIES: Posts $4MM Net Loss for Second Quarter 2002
ROTECH HEALTHCARE: Defaults on Bank Credit Facility & 9.5% Notes

RUSSIAN TEA ROOM: Taps Squire Sanders as Bankruptcy Counsel
SAFETY-KLEEN: Court Approves Connolly Bove as Special Counsel
SECURITY ASSET: Charles Brofman Discloses 7.1% Equity Stake
SENIOR RETIREMENT: Auditors Raise Going Concern Doubts
TANGRAM ENTERPRISE: Working Capital Deficit Tops $2MM at June 30

TELAXIS COMM: Taps Ferris Baker to Review Strategic Alternatives
THOMAS GROUP: Equity Deficit Narrows to $714K at June 30, 2002
US AIRWAYS: Moody's Further Junks Ratings of Company & Units
U.S. INDUSTRIES: Posts Improved Results for Third Quarter 2002
UTG COMMS: Working Capital Deficit Doubles to $13M at March 31

UNITED AIRLINES: Does Bankruptcy Loom, Following US Airways?
VERTEL CORP: Fails to Regain Compliance with Nasdaq Guidelines
WILLIAMS COMMS: New York Court Approves Disclosure Statement
WINFIELD CAPITAL: Has Until Oct. 21 to Meet Nasdaq Requirements
WINSTAR: Ch. 7 Trustee Taps Peisner Johnson as Tax Consultants

WORLDCOM: RHK Says No Bail Out for Company & It Must Shut Doors
XO COMMUNICATIONS: Court Okays Akin Gump as Committee's Counsel

* DebtTraders' Real-Time Bond Pricing

                          *********

AT&T CANADA: June 30, 2002 Balance Sheet Upside Down by $3 Mill.
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AT&T Canada Inc., (NASDAQ: ATTC) (TSX: TEL.B), Canada's largest
competitor to the incumbent telecom companies, reported
financial and operating results for the second quarter 2002.

        Q2 Financial and Operating Results

    - Revenues for the three months ended June 30, 2002, were
      $384.9 million, up $9.7 million, or 2.6% from second
      quarter 2001. Revenues from Local, Data, Internet, E-
      Business Solutions and Other services, represent 62% of
      the total revenue base versus 57% in second quarter 2001.
      Long Distance revenues represent 38% of the revenue base
      down from 43% in the same period last year.

    - Total revenue from Data and Internet increased by 9% from
      the same quarter in 2001. This increase was primarily the
      result of growth in E-Business Solutions. Local revenues
      increased by 15% from the second quarter in 2001,
      attributable to a year over year increase in linecount of
      86,003, or 18%. Local access lines in service at June 30,
      2002 were 556,128, with 52% of this total representing
      lines that are either on-net or on-switch. Revenue
      from long distance services decreased by 8% from the same
      period last year, the result of a 6% reduction in average
      price per minute and a 2% decrease in minute volume.

    - The Company's earnings before interest, taxes,
      depreciation, and amortization, provision for
      restructuring, and write-down of long-lived assets
      for the second quarter totaled $50.5 million, representing
      an increase of $24.9 million or 98% from second quarter
      2001. This improvement in EBITDA was primarily the result
      of lower SG&A costs and a small reduction in service
      costs related to the Price Cap decision.

"I am pleased with the Company's operating performance in the
quarter," said John McLennan, Vice Chairman and CEO of AT&T
Canada. "Not only have we significantly improved our financial
performance, we continue to expand our relationships, and win
new contracts with Canada's leading companies. These
accomplishments were the result of maintaining focus on our
customers, on growing revenues, and on significantly improving
our operational efficiencies. This is a considerable achievement
in light of the challenges facing the North American
telecommunications industry, and the many corporate issues that
AT&T Canada is currently addressing. I would like to recognize
our employees for their commitment and focus on the achievement
of our collective goals. And I would also like to extend our
great appreciation to our customers for their support and
confidence, as we continue to build upon our commitment to bring
real choice and innovation to Canadian businesses."

"I am also very pleased with the progress we are making towards
a consensual restructuring of our public debt," Mr. McLennan
added. "Our discussions with bondholders and bankers to date
have been very constructive. Likewise we continue to move
towards the completion of the back-end transaction under the
terms of the Deposit Receipt Agreement."

                 Property Plant & Equipment

    - In the second quarter, the Company performed an assessment
      for impairment of the carrying values of its property,
      plant and equipment that resulted in a charge of $1,095.0
      million to income. This assessment was performed due to
      the recent regulatory decisions affecting the Company's
      business plan, deterioration of the telecommunications
      environment, and the substantial decline in market value
      of companies in the telecom services sector. A provision
      for impairment was recorded measured as the difference
      between the net recoverable amount, based on projected
      future undiscounted cash flows of the Company, and the
      carrying value of these assets.

                       Goodwill

    - As reported last quarter, effective January 1, 2002 the
      Company adopted new accounting standards for Business
      Combinations and Goodwill and Other Intangible Assets. As
      a result, the Company no longer amortizes goodwill and
      indefinite life intangible assets to earnings. Instead,
      these assets must be reviewed periodically for impairment
      using a fair value approach. During the second quarter the
      Company completed its assessment of the quantitative
      impact of the required transitional impairment test on its
      financial statements. Accordingly an impairment totaling
      $1,530.8 million was charged to opening deficit as of
      January 1, 2002, with a corresponding reduction in
      goodwill. During the quarter, the Company performed an
      assessment for impairment of the carrying value of its
      remaining goodwill and it has determined that the
      remaining un-amortized balance of $108.2 million became
      fully impaired in the quarter under the fair value
      approach.

            Long-Term Investments & Other Assets

    - Also during the quarter, the Company determined there was
      an other than temporary decline in the value of its long-
      term investments and other assets, and recorded a write-
      down of $8.8 million and $3.1 million respectively.

                          Net Loss

    - The Company's Net Loss for the quarter totaled $1,353.4
      million, compared to a Net Loss of $174.7 million in the
      second quarter 2001. This increase in Net Loss was
      primarily the result of a $1,273.7 million charge
      related to the impairment of carrying values of the
      Company's property, plant and equipment ($1,095.0
      million), its remaining goodwill ($108.2 million), and
      a restructuring charge associated with workforce
      reductions and facilities consolidation costs ($70.5
      million). The Company also wrote-down the carrying value
      of its long-term investments, and other assets in the
      amount of $11.9 million. These increases to Net Loss were
      partially offset by a foreign currency translation gain of
      $79.6 million, lower amortization expense of $24.8
      million, associated with the Company's application of a
      new accounting standard to no longer amortize goodwill,
      and improved EBITDA of $24.9 million.

                    Other Developments

              Operating Cost Initiatives

    - On July 29th the Company announced further operating
      changes under its revised operating plan that reflect the
      impact of the recent CRTC regulatory ruling. These actions
      are an extension of the initiatives announced by AT&T
      Canada on May 2nd and are expected to produce annual
      operating cost savings of approximately $10 million
      through a further workforce reduction of approximately 270
      positions. These savings are in addition to the $80
      million of annual cost savings to be achieved through a
      series of initiatives, including the reduction of 1,017
      positions, announced on May 2. In conjunction with these
      plans, the company will reduce its 2002 capital spending
      from $220 million to a target of no more than $170
      million. At the end of the second quarter the Company had
      completed approximately two thirds of the 1,017 workforce
      reductions. The remainder of these reductions are expected
      to be complete by the end of the third quarter. The
      company has recorded a provision for the cost of these
      initiatives in the second quarter in the amount of
      $70.5 million. This charge is comprised of $39.7 million
      for employee severance costs, and $30.8 million for office
      space consolidation costs. The company will record a
      provision for the cost of the initiatives announced on
      July 29 in the third quarter. The additional 270 workforce
      reductions are expected to be complete by the end of the
      year.

                              Regulatory

    - As previously stated, the Company believes the regulator
      has significantly overstated the benefits of the recent
      price cap decision on AT&T Canada's business. Using the
      most positive assumptions on the overall impact of the
      decision on its business, the Company calculates savings
      in 2002 of $15 to $20 million. This translates to an 8%-
      10% annual reduction in the cost of all the facilities and
      services that AT&T Canada must buy from the telcos, as
      compared to the 15%-20% reduction cited by the CRTC. The
      Company is encouraged that the CRTC has recognized that
      the eligibility criteria for wholesale rates for Digital
      Network Access established in the Price Cap decision will
      be reviewed and potentially expanded, however the Company
      still believes the regulator fails to appreciate the true
      state of imbalance in the telecommunications industry in
      Canada and the necessity for competitors to have
      competitively neutral access to the existing network. As a
      result, AT&T Canada continues to seriously consider an
      appeal of the CRTC decision that would focus on the way
      the regulator addressed the goals and objectives of the
      telecommunications policy of the Government of Canada.

                        Liquidity

    - At June 30th the Company had in excess of $425 million in
      cash on hand, including $85.5 million raised in the
      quarter through the monetization of cross currency
      interest rate swaps. During the first half of 2002 the
      Company has received cash of $24 million from the exercise
      of employee stock options. Between the end of the second
      quarter and the closing of the back-end transaction under
      the Deposit Receipt Agreement expected on October 8,
      proceeds from employees exercising in the money stock
      options are expected to generate cash in excess of $240
      million, significantly improving the near term liquidity
      position of the Company.

    - During the last week of July, AT&T Canada delivered its
      revised operating plan to its banking syndicate. This plan
      will form the basis of discussions with the banks about
      the Company's bank credit arrangements as the Company
      moves forward. AT&T Canada reiterates that the actions it
      as taken over the past three months to improve the
      Company's operating efficiency, and to focus on higher
      margin products and services, will have a positive impact
      on the Company's expected 2002 EBITDA. AT&T Canada is
      currently in compliance with all of its financial
      covenants. The Company expects to complete the
      renegotiation of its bank and public debt arrangements by
      year-end. The Company's revised operating plan projects
      that the Company will not comply with the EBITDA covenant
      in its Senior Credit Facility in the fourth quarter
      of 2002. In that event, if the Company is unable to re-
      negotiate acceptable covenants, it may be required to
      repay all amounts drawn under the Senior Credit Facility.

                  AT&T/Brascan/CIBC Arrangement

    - On July 18th AT&T Corp. announced that it had arranged for
      Tricap Investments Corporation, a wholly owned subsidiary
      of Brascan Financial Corporation to purchase a 63% equity
      and a 50% voting interest in AT&T Canada upon closing.
      Also upon closing, AT&T Corp.announced that CIBC Capital
      Partners will acquire a 6% equity interest and a 27%
      voting interest in the shares of AT&T Canada. AT&T Corp.
      also announced that it will continue to hold an
      approximate 31% equity and 23% voting interest in AT&T
      Canada, and that AT&T has a call right on CIBC's voting
      shares. AT&T announced that it has agreed to pay the
      purchase price for the AT&T Canada shares, on behalf of
      Tricap and CIBC Capital Partners.

    - The Company believes that the AT&T, Brascan, CIBC
      Arrangement does not constitute a change of control under
      its Senior Credit Facility or the AT&T Canada Debt.
      However, the Company believes that the AT&T, Brascan, CIBC
      Arrangement could constitute a change of control as
      defined in the MetroNet Debt, but that this is not clear.
      In light of this uncertainty and its current financial
      circumstances, the Company does not intend to make a
      change of control offer to the holders of the MetroNet
      Debt, but will continue its discussions with
      representatives of its public debt holders, as well as the
      Company's bank lenders, with a view to reaching agreement
      on a consensual restructuring of all of the Company's
      public and bank debt. In the event that holders of
      MetroNet Debt, or lenders under the Senior Credit
      Facility, were to successfully assert that there was such
      a change of control, the Company's MetroNet Debt and the
      Senior Credit Facility would be in default and could be
      accelerated and declared to be immediately due and
      payable; in that event the AT&T Canada Debt could be
      accelerated and declared to be immediately due and
      payable. If there were found to be a change of control, in
      its present circumstances, the Company would not have the
      resources to repay the MetroNet Debt or the AT&T Canada
      Debt.

                      Bondholder Discussions

    - As reported during the quarter, the Company's Board of
      Directors has formally recognized an ad hoc committee
      representing holders of over 60% of AT&T Canada's
      outstanding public debt. The Company is currently meeting
      with representatives of the ad hoc committee with the goal
      of achieving a consensual restructuring of the Company's
      public debt. Also, those bondholders who initiated an
      oppression action against AT&T Canada have agreed to
      suspend litigation, pending progress in these discussions.

                   August 15 Interest Payment

    - The Company announced today that it will make its
      scheduled interest payment due August 15, 2002 on its US
      $250 million 12.0% Senior Notes, in the amount of
      approximately US$15 million.

               Foreign Currency Translation Gain

    - As the Company discussed last quarter, effective January
      1, 2002 AT&T Canada adopted new accounting standards that
      require foreign currency translation gains and losses be
      included in current earnings. In the second quarter the
      Company recorded a foreign currency translation gain of
      $79.6 million. This gain is the result of an appreciation
      in the Canadian dollar relative to the U.S. dollar during
      the quarter, and relates to the Company's un-hedged U.S.
      dollar denominated debt obligations.

McLennan concluded by saying that, "Considering the many
challenges facing the telecommunications industry, and the many
corporate initiatives we are undertaking to position AT&T Canada
for long-term success, the Company made significant progress on
its strategic priorities during the second quarter. Looking
ahead we will continue to focus on our strength as the national
telecommunications partner of choice to Canada's leading
businesses. We will compete with the incumbents in the areas of
our traditional strength in Long Distance, Data and Internet,
and continue to leverage our powerful and coordinated
relationship with AT&T Corp. to further enhance our competitive
position. And we will continue our efforts to position AT&T
Canada for long-term success."

                    Note to Investors

A number of the matters discussed herein are not historical or
current facts, but rather deal with potential future
circumstances and developments. The discussion of such matters
is qualified by the inherent risks and uncertainties surrounding
future expectations generally. Such discussion may materially
differ from AT&T Canada's actual future experience involving any
one or more of such matters. The operations and results of AT&T
Canada's telecommunications business may be subject to the
effect of other risks and uncertainties. Factors which could
cause results or events to differ materially from current
expectations include but are not limited to, the impact of the
transactions contemplated by the Deposit Receipt Agreement upon
AT&T Canada; the impact of the CRTC's decision concerning the
review of the price cap regime for local services in May 2002;
existing government regulations and changes in, or the failure
to comply with, government regulations; the significant
indebtedness of the Company; the Company's level of liquidity;
the level of expenditures necessary to expand operations,
increase the number of customers, provide new services, build
and update networks and maintain or improve quality of service;
the availability, terms and cost of capital required to fund
capital and other expenditures; the duration and extent of the
current economic downturn; the possibility of further
deterioration in the state of capital markets and the
telecommunications industry; current negative trends in global
market and economic conditions which impact the demand for, and
costs of, products and services; the financial condition and
credit risk of customers and uncertainties regarding
collectibility of receivables; the rate of decline of prices for
data and voice services; uncertainty as to whether AT&T Canada's
strategies will yield the expected benefits, synergies and
growth prospects; the ability to dispose of or monetize assets;
the ability to increase revenues from business segments other
than voice services (such as data and Internet services); the
Company's ability to access markets, design effective fibre
optic routes, install cable and facilities, including switching
electronics, interconnect to the Incumbent Local Exchange
Carriers' networks, satisfy the obligations imposed on
Competitive Local Exchange Carriers by the CRTC and obtain
rights-of-way, building access rights and any required
governmental authorizations, franchises and permits, all in a
timely manner, at reasonable costs and on satisfactory terms and
conditions; the intensity of competitive activity, and its
resulting impact on the ability to retain existing, and attract
new customers, and the consequent impact on pricing strategies,
revenues and network capacity; the ability to deploy new
technologies and offer new products and services rapidly and
achieve market acceptance thereof; the impact of adverse changes
in laws or regulations or of adverse regulatory initiatives or
proceedings and the ability to attract and retain qualified
personnel.

AT&T Canada is the country's largest competitor to the incumbent
telecom companies. With over 18,700 route kilometers of local
and long haul broadband fiber optic network, world class managed
service offerings in data, Internet, voice and IT Services, AT&T
Canada provides a full range of integrated communications
products and services to help Canadian businesses communicate
locally, nationally and globally. AT&T Canada Inc. is a public
company with its stock traded on the Toronto Stock Exchange
under the symbol TEL.B and on the NASDAQ National Market System
under the symbol ATTC. Visit AT&T Canada's web site,
http://www.attcanada.comfor more information about the
company.

AT&T Canada Inc.'s June 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $3.4 million.


ACME METALS: Int'l Steel Group to Acquire Steel Unit's Assets
-------------------------------------------------------------
The International Steel Group Inc., has reached an agreement
with Acme Metals Inc. and the Acme Senior Secured Creditors to
acquire the compact strip process mini-mill and certain other
related assets previously operated by Acme Steel Inc for a
purchase price of $65 million.

Rodney Mott, President and CEO of ISG, commented, "We are quite
excited about the addition of the Acme CSP at Riverdale to our
range of production facilities.  This state-of-the-art thin-slab
caster and hot strip mill fits perfectly with our iron
production capabilities at Indiana Harbor," adding, "It's the
type of facility we know well and have a lot of experience
operating."

ISG said the acquisition enables the company to expand its
annual hot band capacity to approximately 8 million tons and
support the ramp-up of its Hennepin cold rolling and galvanizing
facility, which the company is currently in the process of
starting up.  ISG also said the use of hot metal from its
Indiana Harbor blast furnaces at the Riverdale BOF will help
lower hot metal costs at Indiana Harbor.  It will also allow ISG
to broaden its product range and market scope into the marketing
of niche premium-priced products, such as mid- to high-carbon,
alloy and HSLA steels.

"We look forward to working with the United Steelworkers of
America on a quick restart that will result in bringing back to
work approximately 250 steelworkers," Mott said.  "We also want
to acknowledge the importance of the support of the State of
Illinois and the Village of Riverdale in helping return these
facilities to production."

Wilbur Ross, Chairman of ISG, commented, "In light of ISG's
highly successful start-up of the former LTV facilities and our
confidence in this management team, the Board of Directors is
quite happy to support ISG's further expansion through
acquisitions that are in line with our core competencies and
where ISG's unique culture can contribute to improved
performance."

The transaction is subject to preliminary approval of the
Bankruptcy Court presiding in Acme's Chapter 11 proceedings, to
a Hart Scott Rudino filing and to final Bankruptcy Court
approval following an auction pursuant to section 363(a) of the
U.S. Bankruptcy Code.

International Steel Group, Inc., is the newest competitor on the
global steel industry.  The Company was formed by WL Ross & Co.
LLC to create value through the profitable operation of globally
competitive steel plants.  ISG operates integrated flat rolled
steel plants located in Cleveland and East Chicago, Indiana and
a finishing plant in Hennepin, Illinois.  ISG also operates a
coke plant in Warren, Ohio and other facilities related to the
operations of its steel plants.


ADELPHIA BUSINESS: Committee Signs-Up Kasowitz Benson as Counsel
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The Official Committee of Unsecured Creditors of Adelphia
Business Solutions, Inc., seeks the Court's authority to retain
Kasowitz Benson Torres & Friedman LLP as counsel, nunc pro tunc
to July 11, 2002.  Kasowitz will perform legal services that
will be necessary during these Chapter 11 cases.

Committee Chairperson Joseph Thornton informs the Court that
Kasowitz is a law firm with 140 attorneys, having its principal
office in New York and offices in Houston, Texas, Atlanta,
Georgia and Newark, New Jersey.  The Committee seeks to retain
Kasowitz as its counsel because of the firm's extensive
experience and knowledge in the field of debtors' and creditors'
rights and business reorganizations under Chapter 11 of the
Bankruptcy Code.  In addition, Kasowitz has become familiar with
the Debtors' financial condition and businesses as a result of
its representation of an ad hoc committee of bondholders prior
to the Petition Date.  Accordingly, the Committee believes that
Kasowitz is well qualified and uniquely able to represent the
Committee effectively in these cases.

The professional services the Kasowitz will render to the
Committee include:

A. assisting, advising and representing the Committee with
   respect to the administration of these cases and the exercise
   of oversight with respect to the Debtors' affairs including
   all issues arising from or impacting the Debtors, the
   Committee or this Chapter 11 case;

B. providing all necessary legal advise with respect to the
   Committee's powers and duties;

C. assisting the Committee in maximizing the value of the
   Debtors' assets for the benefit of all creditors and other
   parties-in-interests;

D. pursuing confirmation of a plan of reorganization and
   approval of an associated disclosure statement;

E. conducting investigation as the Committee desires, concerning
   the assets, liabilities, financial conditions, claims and
   operations of the Debtors;

F. commencing and prosecuting any and all necessary and
   appropriate actions and proceedings on behalf of the
   Committee that may be relevant to these cases;

G. preparing on behalf of the Committee necessary applications,
   motions, answers, orders, reports, and other legal papers;

H. communicating with the Committee's constituents and others as
   the Committee may consider desirable in furtherance of its
   responsibilities;

I. appearing in Court and representing the interests of the
   Committee; and

J. providing any other legal services to the Committee that are
   appropriate, necessary and proper in these Chapter 11
   proceedings.

Kasowitz will be compensated on an hourly basis and reimbursed
of actual, necessary expenses incurred by the firm.  The current
standard hourly rates of Kasowitz's professionals are:

       Partners                  $475 - 690
       Associates                 200 - 450
       Paralegals                  95 - 150

Adam L. Shiff, Esq., a member of Kasowitz Benson Torres &
Friedman LLP, assures the Court that Kasowitz does not hold or
represent any interest adverse to the Committee in matters for
which it has been retained.  Kasowitz is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code,
Mr. Shiff asserts.  However, the firm currently represents
Salomon Smith Barney Inc., Societe Generale, CIBC Inc., and
Rabobank Nederland, all of whom are members of the Debtors'
lending group, in matters unrelated to the Debtors.  The Firm
has also represented Citibank N.A., Nationsbank of Texas N.A.,
and Merill Lynch Asset Management L.P. in matters totally
unrelated to the Debtors.

Mr. Shiff adds that Kasowitz has represented an informal
committee of bondholders, five of whom are members of the
Committee of Unsecured Creditors.  The ad hoc committee is
composed of W.R. Huff Asset management Co. LLC, Appaloosa
Management L.P., Franklin Advisors Inc., Fidelity Investments,
Capital Research & Management, Angelo Gordon & Co. LLP, Franklin
Mutual Advisors LLC, OZ Management Co., Oppenheimer Funds Inc.
and Alliance Capital Management.  In connection with its role as
counsel to the ad hoc committee, the Debtors paid the firm a
$250,000 retainer, all of which were exhausted prior to the
Petition Date. (Adelphia Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADELPHIA COMMS: Proposes Uniform Compensation Procedures
--------------------------------------------------------
Adelphia Communications Debtors want to establish procedures for
compensating and reimbursing the Professionals on a monthly
basis, comparable to those established in other large Chapter 11
cases in this Court.

Myron Trepper, Esq., at Willkie Farr & Gallagher, in New York,
tells the Court that the requested procedures would require each
Professional to present a detailed statement of services
rendered and expenses incurred for the prior month to:

  * the Debtors,

  * the Debtors' bankruptcy counsel,

  * the United States Trustee,

  * counsel to the Administrative Agents for the Debtors'
    prepetition lenders,

  * counsel to the Agents for the Debtors' postpetition lenders

  * counsel to the Committees,

If there is no timely objection, the Debtors would pay 80% of
the amount of fees incurred for the month, with a 20% holdback,
and 100% of disbursements for the month.  These payments would
be subject to the Court's subsequent approval as part of the
normal interim fee application process every 120 days.

The Debtors propose that the monthly payment of compensation and
reimbursement of expenses of the Professionals be structured as:

A. On or before the 30th day following the month for which
   compensation is sought, each Professional will serve a
   monthly statement for professional services rendered and
   reimbursement of expenses incurred during the relevant
   compensation period on:

     * the Debtors,

     * Counsel to the Debtors,

     * Counsel to Administrative Agents for prepetition lenders,

     * Counsel to the Administrative Agents for the Debtors'
       postpetition lenders,

     * Counsel to the Committee,

     * the Office of the United States Trustee, and

     * counsel to the Equity Committee;

B. The monthly statement need not be filed with the Court and a
   courtesy copy need not be delivered to chambers.  Payment of
   the statement under the procedures is not intended to alter
   the fee application requirements and the Professionals are
   still required to serve and file interim and final
   applications for approval of fees and expenses in accordance
   with the relevant provisions of the Bankruptcy Code, the
   Federal Rules of the Bankruptcy Procedure and the Local Rules
   of this Court;

C. Each monthly fee statement must contain:

     * a list of the individuals who provided services during
       the statement period,

     * their respective titles and billing rates,

     * the aggregate hours spent by each individual,

     * a reasonably detailed breakdown of the disbursements
       incurred, and

     * time entries for each individual in increments of 1/10 of
       an hour;

D. Each person receiving a statement will have 20 days after its
   service to review the statement and, if the person has an
   objection to the compensation or reimbursement sought in any
   particular statement, to serve upon the Professional whose
   statement is objected to, and the other Service Parties, a
   written "Notice of Objection to Fee Statement" setting forth
   the nature of the objection with particularity and the amount
   of fees of expenses at issue;

E. If no objection is served, at the expiration of the 20-day
   period, the Debtors will promptly pay 80% of the fees and
   100% of the expenses identified in each monthly statement;

F. If the Debtors receive an objection to a particular
   statement, then they will withhold payment on that portion of
   the fee statement to which the objection is directed and
   promptly pay the remainder of the fees and disbursements in
   the percentages set forth;

G. If the parties to an objection are able to resolve their
   dispute following the service of Notice of Objection to Fee
   Statement and if the party whose statement was objected to
   serves on all Service Parties a statement indicating that the
   objection is withdrawn and describing in detail the terms of
   the resolution, then the Debtors will promptly pay that
   portion of the fee statement that is no longer subject to an
   objection;

H. All objections that are not resolved by the parties will be
   preserved and presented to the Court at the next interim or
   final fee application hearing to be held by the Court;

I. The service of an objection will not prejudice the objecting
   party's right to object to any fee application made to the
   Court in accordance with the Bankruptcy Code on any ground,
   whether raised in the objection or not.  Further, the
   decision by any party not to object to a fee statement will
   not be a waiver of, or constitute prejudice to, that party's
   right to object to any fee application subsequently made to
   the Court in accordance with the Bankruptcy Code;

J. Every 120 days, but no more than every 150 days, each of the
   Professionals will serve and file with the Court an
   application for interim or final Court approval and allowance
   of the compensation and reimbursement of expenses requested;

K. Any Professional who fails to file an application seeking
   approval of compensation and expenses previously paid under
   the procedures set forth will be ineligible to receive
   further monthly payments of fees or expenses until the
   application is filed;

L. The pendency of an application or a Court order that payment
   of compensation or reimbursement of expenses was improper
   will not disqualify a Professional from the future payment of
   compensation or reimbursement of expenses unless otherwise
   ordered by the Court;

M. Neither the payment of, nor the failure to pay, in whole or
   in part, monthly compensation and reimbursement will have any
   effect on the Court's interim and final allowance of
   compensation and reimbursement of any Professional; and

N. Counsel for the Committees may collect and submit statements
   of expenses, with supporting vouchers, from members of the
   Committees, provided, however, that the committee counsel
   ensures that these reimbursement requests comply with the
   Court's Administrative Orders and any operative guidelines
   promulgated by the Office of The United States Trustee.

The Debtors ask the Court to limit notice of hearings to
consider interim applications to the Service Parties and all
parties who have filed a notice of appearance with the Clerk of
the Court and requested the notice prior to the day any
application is served. The notice should reach the parties most
active in these cases and will save the expense of undue
duplication and mailing.  The Debtors will include all payments
to Professionals on their monthly operating reports, indicating
the amount paid to each of the Professionals.  The procedure
would enable all parties to closely monitor costs of
administration and the Debtors to maintain a more level cash
flow throughout the pendency of these cases. (Adelphia
Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


AIR CANADA: Flight Attendants Willing to Follow Pilots' Lead
------------------------------------------------------------
Air Canada Component President Pamela Sachs, responding to
comments made by Air Canada President and CEO Robert Milton,
says the Union is "very interested" in following the lead of
airline pilots and agreeing to a similar deal for discount
carrier ZIP.  Ms. Sachs, whose union represents 8,500 cabin
crewmembers across Canada, said she hoped the comments made to
the media by Mr. Milton signals a new direction from the
company, which has so far demonstrated an unwillingness to treat
cabin personnel in the same manner as the pilots.

Ms. Sachs has presented Mr. Milton with a contract proposal that
is in line with the deal Air Canada and its pilots agreed to
last year.

The Union is presently before the Canada Labour Relations Board
on a common employer application in relation to ZIP.

    The following is the letter sent to Mr. Milton on August 8.

    Dear Mr. Milton:

    Re: ZIP AIR

    I had an opportunity to review the comments you made at your
    media conference on August 1, 2002 and take this opportunity
    to respond.

    I am very pleased to hear your opinion regarding the deal
    Air Canada signed with its pilots who will be flying ZIP
    flights beginning this fall. In response to a question, you
    stated that Air Canada's pilots "took a leadership position"
    in negotiating their agreement and that you believe the
    other unions will recognize the importance of the ZIP
    initiative and follow the pilots' lead.

    You may not be aware that the Air Canada Component of CUPE
    has clearly advised representatives from both Air Canada and
    ZIP that we are very interested in an agreement that is
    similar in form and content to the Letter of Understanding
    signed by Air Canada and the Air Canada Pilots' Association.
    Unfortunately, we have been advised that the Company is not
    interested in signing an agreement for cabin personnel that
    is similar to what the pilots negotiated. We have been very
    clearly told that it would be too expensive to treat cabin
    personnel in the same manner as the pilots.

    I hope that your statements to the media last week signal a
    new direction from the Company. I am happy to meet at any
    time with representatives from Air Canada and ZIP to
    negotiate an agreement comparable to that of the pilots. For
    your information, I have attached a copy of the offer we
    made to Air Canada in May 2002 and a more comprehensive
    version of that offer.

    I look forward to hearing from you in this regard.

    Yours truly,


    Pamela Sachs
    President, Air Canada Component

                       *   *   *

As reported in the December 4, 2001, edition of Troubled Company
Reporter, Standard & Poor's downgraded its senior unsecured debt
rating for Air Canada to 'B' from 'B+', reflecting reduced asset
protection for unsecured creditors and application of revised
criteria for "notching" down of such debt ratings based on the
proportion of secured debt in a company's capital structure.

According to the report, the rating actions did not indicate a
changed estimate of default risk, but rather poorer prospects
for recovery on senior unsecured obligations if the affected
airline were to become insolvent.


AIR CANADA: July 2002 Revenue Passenger Miles Slide-Down 0.8%
-------------------------------------------------------------
Air Canada flew 0.8 per cent less revenue passenger miles (RPMs)
in July 2002 than in July 2001, according to preliminary traffic
figures. Capacity decreased by 0.1 per cent, resulting in a load
factor of 76.2 per cent, compared to 76.8 per cent in July 2001;
a decrease of 0.6 percentage points.

"July's results reflected a continuation of softer domestic
traffic, albeit at improved yields, and a weak US transborder
marketplace offset by strong international traffic levels.
System revenue per available seat mile (RASM) for the month is
expected to show modest improvement," said Rob Peterson,
Executive Vice President and Chief Financial Officer. "Employee
and asset productivity continued to rise sharply as overall seat
mile capacity was essentially unchanged while aircraft hours
flown were reduced by 7.6% from the level of July 2001, said Mr.
Peterson".

                          *   *   *

As reported in the December 4, 2001, edition of Troubled Company
Reporter, Standard & Poor's downgraded its senior unsecured debt
rating for Air Canada to 'B' from 'B+', reflecting reduced asset
protection for unsecured creditors and application of revised
criteria for "notching" down of such debt ratings based on the
proportion of secured debt in a company's capital structure.

According to the report, the rating actions did not indicate a
changed estimate of default risk, but rather poorer prospects
for recovery on senior unsecured obligations if the affected
airline were to become insolvent.

Air Canada's 10.25% bonds due 2011 (AIRC11CAN1), DebtTraders
reports, are trading at 72 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AIRC11CAN1
for real-time bond pricing.


AMERICAN AIRLINES: Initiates Fundamental Business Changes
---------------------------------------------------------
American Airlines unveiled the latest in a series of short- and
long-term initiatives intended to further position American for
long-term competitiveness and profitability.

"We grasped the need for fundamental change in the airline
industry some time ago, and have undertaken both long-term
structural change and measures responsive to current industry
conditions.  This latest round of initiatives is yet another
step toward more solidly positioning American for success in the
long term," said Chairman and CEO Donald J. Carty.

"We believe our future lies in continuing to operate as the
world's leading network carrier -- but we must get our costs
down in order to compete and must focus on the products our
customers want and are willing to pay for. Our decisions going
forward will be framed around those objectives and geared toward
positioning American to succeed and be profitable," Carty said.

In the past 18 months, American has implemented a number of
changes:

     -- de-peaking its Chicago hub,

     -- simplifying its fleet,

     -- launching several automation initiatives that improve
customer service and enhance productivity,

     -- changing distribution methods,

     -- modifying its in-flight product, and

     -- initiating a broad range of cost savings programs.

The initiatives announced will increase scheduling efficiencies
at American's largest hub at Dallas/Fort Worth, further simplify
its fleet and sharply adjust capacity for the fall and winter.

"These are a combination of fundamental structural changes and
tactical moves to re-position and re-size the airline in light
of a continued sluggish economy and changes in consumer flying
behaviors," Carty said.  "We view change as an ongoing process
at American as we continue to evaluate every aspect of our
business."

The initiatives include:

     -- American will expand its successful April 2002 Chicago
hub "de-peaking" to its largest hub at Dallas/Fort Worth
beginning Nov. 1 to allow the airline to utilize people, gates
and aircraft more productively -- and to give customers better
flight options.  Since aircraft will be flying into and out of
the hub on a more continuous schedule, with flights spread out
more evenly throughout the day, spoke cities also will see
increased efficiency and productivity as a result of the DFW and
Chicago hub de-peaking initiatives.

"Our Chicago experience has improved customer service, reduced
costs, improved productivity and allowed us to fly the same
schedule with the equivalent of five fewer aircraft and four
fewer gates," Carty said.  "We expect the DFW and spoke de-peak
to allow us to fly an equivalent schedule with 11 fewer
aircraft, with an as-yet-undetermined number of gates saved as
well."

     -- American will retire its 74-jet Fokker 100 fleet --
furthering the fleet simplification efforts that had previously
cut fleet types from 14 to seven.  The first F-100 will leave
the fleet in the third quarter of 2003 and the last plane will
retire by the third quarter of 2005.

While regular maintenance will continue unabated, consistent
with AA's high standards and FAA and manufacturer procedures,
each Fokker aircraft will be retired before its next scheduled
major overhaul, resulting in major cost savings.  Further, since
the F-100 is not common with other aircraft types, crew-training
savings will be very significant.

"The Fokker is a small plane with very high operating costs,
complicated by the manufacturer's bankruptcy.  Its economics
simply no longer work for us," Carty said.

     -- American will standardize, reconfigure and consolidate a
number of its fleet types to realize greater scheduling
efficiencies, increase utilization and enhance its product in
international markets.

     -- With a total of 43 Boeing 777s now in its fleet,
American will concentrate this three-class premium aircraft to
serve its primary business markets in Europe, deep South America
and Asia.  The company will standardize and reconfigure its
fleet of 49 Boeing 767-300s to serve other markets in
continental Europe, Latin America and Hawaii.  The reconfigured
aircraft will feature 30 business-class seats with 60-inch
pitch, as well as 182 More Room Throughout Coach seats.  A
common 767-300 fleet will save the equivalent of two aircraft
because of routing efficiencies.

     -- In order to achieve greater scheduling efficiency from
the 777 fleet, the company will move to one standard
configuration, rather than operating separate configurations
across the Atlantic and Pacific.  The 777s will continue to
offer three-class service on all routings -- with fully flat
first class, 60-inch business class and More Room Throughout
Coach seating.  Carty said eliminating separate fleet types for
the 777 increases its utilization by an equivalent of two
aircraft.

"With these changes, we will actually be providing a superior
product in our international markets, which will be served
either with the three-class 777s or with an expanded business
class on the 767-300s," Carty said.  "As a result, we will have
a more efficient mix of aircraft ideally suited for a large,
international network carrier."

     -- In addition to reducing the number of fleets and sub-
fleets, American has deferred 35 aircraft deliveries in 2002 and
will seek every opportunity to defer or cancel new deliveries
going forward.

     -- Given recent economic and consumer confidence reports,
American will reduce capacity by 9 percent by November, versus
summer 2002.

     -- As part of the capacity reduction, American will
accelerate the retirement of its nine TWA 767-300 aircraft to
November 2002.

"While some of these reductions and changes are seasonal, this
more broadly represents a re-sizing of the airline to draw down
some of the excess capacity we see in the marketplace," Carty
said.  "American will remain the world's largest network
carrier, even after these changes, but we believe fundamental,
ongoing change is necessary for the company to return to
profitability and achieve long-term success."

     -- American will reduce, between now and March 2003, an
estimated 7,000 jobs in order to realign its workforce with the
planned fall capacity reductions, fleet simplification and hub
restructurings.

Once the October and November schedules are in place, the
company will be communicating specific job reduction impacts
internally to the affected workgroups and locations.

"As the company goes through fundamental and structural change,
one unpleasant reality, as we have said many times, is that we
simply will need fewer people to operate the airline.  We've
also said many times that we will be guided during these times
by a principle and commitment to do what we can to take care of
our people who are impacted.  Fortunately, in addition to a new
age-60 retirement plan, we have been able to fashion a number of
options, including selective voluntary programs, a variety of
leaves, part-time, and stand-in-stead programs to minimize the
impact on our people," Carty said.

Once fully implemented, the initiatives announced today --
coupled with those already implemented -- will result in
structural annual operating savings of more than $1.1 billion,
independent of capacity reductions.

"And, as I've said many times, we're going to see even greater
savings as a host of cost-saving suggestions from employees,
automation programs and additional structural and process
changes currently under review get implemented," Carty said.

In addition, the aircraft utilization efficiencies that result
from the de-peaking and fleet actions announced today create the
equivalent of 17 "new" aircraft, which save the company more
than $1.3 billion of capital spending in the future.  The
company already has cut or deferred an additional $5 billion in
capital spending since early 2001.

Carty said these initiatives also bolster American's substantial
liquidity.  The company ended the second quarter with $2.6
billion in cash and significant untapped financing capacity,
including approximately $6 billion in unencumbered aircraft and
several billion dollars in available non-aircraft assets.  In
July, American completed a $500 million tax-exempt financing at
JFK, further bolstering its cash balances.

"We were pleased with our JFK financing, which was larger than
expected," Carty said.  "We were able to place bonds with a 26-
year final maturity at less than 9 percent in a very difficult
market."

This transaction followed a number of other financings American
has completed in the period since September 2001, including a
$1.9 billion public secured financing, a $300 million tax-exempt
funding and several bank facilities.

"This breadth of financing demonstrates that the public and
private markets are open to us for a variety of different
transactions, which is important as we continue to make the
business changes that we see as crucial to our future success
and industry leadership," Carty said.

For more information about AMR Corp., visit
http://www.amrcorp.com

                         *    *    *

As reported in Troubled Company Reporter's July 22, 2002
edition, Standard & Poor's assigned its double-'B'-minus rating
to the $500 million New York City Industrial Development Agency
special facility revenue bonds (American Airlines Inc. John F.
Kennedy International Airport Project), series 2002A-D. Bonds
will be serviced by payments made by American Airlines Inc. (BB-
/Negative/--) under a lease between the airline and the agency.
Other ratings for American Airlines and its parent, AMR Corp.
(BB-/Negative/--) are affirmed.

"The JFK Airport bonds, like American Airlines' other airport
revenue bonds, are rated at the same level as its corporate
credit rating, and higher than its senior unsecured debt,
because bondholders are likely to fare better in any bankruptcy
than would general unsecured creditors," said Standard & Poor's
credit analyst Philip Baggaley. The terminal that the bonds are
helping to finance will replace American's existing facilities
at the airport, and serve as the airline's principal
international gateway to Europe. As such, American would likely
wish to preserve access to the terminal in a bankruptcy
reorganization.

Ratings of AMR Corp., and American Airlines Inc., were lowered
to current levels June 28, 2002, and removed from CreditWatch,
where they were placed September 13, 2001 (along with those of
other U.S. airlines). Ratings are supported by a solid
competitive position, an eroded but still better-than-average
balance sheet, and satisfactory financial flexibility in the
form of cash, bank lines, and unsecured assets. These positives
are more than offset by substantial financial damage and ongoing
risks relating to the industrywide crisis since Sept. 11, 2001,
and fairly high operating costs that could increase further with
an upcoming pilot contract likely to be negotiated later in
2002. American, with the April 2001 acquisition of the assets of
Trans World Airlines Inc., surpassed United Air Lines Inc.
as the world's largest airline. American has an extensive route
network: the largest in the U.S. domestic market, by far the
largest in Latin America, and one of the largest on routes to
Europe, though with a more limited presence in the Asia/Pacific
region.

AMR Corp.'s 9% bonds due 2012 (AMR12USR1), DebtTraders reports,
are trading at 89 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMR12USR1for
real-time bond pricing.


AMERICAN HOMEPATIENT: Look for Schedules & Statements on Aug. 30
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Middle District of
Tennessee, American Homepatient, Inc., and its debtor-affiliates
obtained an extension of time to file their Schedules and
Statement of Financial Affairs.  The Court gives the Debtors
until August 30, 2002 to file the financial disclosure documents
required of all debtors pursuant to 11 U.S.C. Sec. 521(1).

The Debtors are also authorized to file a single consolidated
matrix in lieu of filing a separate matrix in each of the
Debtors' respective cases.

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.


AMERIGON INC: Must Secure New Financing to Meet Operating Needs
---------------------------------------------------------------
Amerigon Incorporated (Nasdaq: ARGN) announced results for the
second quarter and six months ended June 30, 2002, with revenue
increasing 2-1/2 times in this year's second quarter from the
year-earlier period and up more than 26 percent from the first
six months of last year.  According to CEO Oscar (Bud) Marx,
this year's second quarter was also marked by initial shipments
of the Company's Climate Control Seat(TM) for use as an option
in the 2003 Infiniti Q45 and M45 luxury vehicles and the
production launch of CCS in the Company's first high volume
vehicle, the 2003 Ford Expedition Eddie Bauer Edition full-size
Sports Utility Vehicle.  During the quarter, Amerigon also
finalized the establishment of its Mexican manufacturing program
to support the Company's North American operations and made
solid progress with a number of vehicle and seat manufacturers
for future CCS programs.

Revenues for the 2002 second quarter were $2.8 million, compared
to revenues in the year-earlier period of $1.1 million.  The net
loss for the second quarter ended June 30, 2002 was $1.7 million
compared to a net loss of $1.7 million for the 2001 second
quarter.

Marx commented, "In addition to solid increases in revenue
during this year's second quarter, we made progress on a number
of key vehicle programs. I am pleased to report that we remain
on track to more than double our revenues this year compared to
2001, as we ramp up production for the new Infiniti models and
Eddie Bauer Edition of the Expedition, as well as launch CCS in
two additional vehicles in the next three or four months, one of
which is the all new 2003 Lincoln Aviator SUV."

For the six months ended June 30, 2002, revenues were $4.4
million, with a net loss of $3.8 million, as compared to
revenues of $3.5 million, with a net loss of $3.6 million for
the year-earlier period.  Gross margins for the 2002 second
quarter and first six months were 25.6 percent and 21.3 percent,
respectively, up from 22.1 percent and 15.8 percent,
respectively, for year earlier-periods.  The Company continues
to benefit from increased revenues.

The year-over-year increases in revenue in the 2002 second
quarter and first six months reflected continued demand for CCS
in four existing vehicle programs, the initial shipments of CCS
for use as an option in the 2003 Infiniti M45 and Q45 and the
commencement of production shipments of CCS as an optional
feature in the 2003 Ford Expedition Eddie Bauer Edition.

Since commercial production of CCS started in 1999, through June
2002, the Company has shipped more than 270,000 units of the CCS
for installation in the Lincoln Navigator luxury SUV, Ford
Expedition Eddie Bauer SUV, Lexus LS 430 and Toyota Celsior
luxury automobiles, the Lincoln Blackwood luxury utility truck
and the Infiniti Q45 and M45 luxury automobiles.  In addition to
the 2003 Ford Expedition Eddie Bauer Edition hitting dealer
showrooms this summer, the 2003 Infiniti Q45 and M45 are
expected to be available by fall 2002. Amerigon is continuing to
market CCS to virtually every major vehicle manufacturer and
seat supplier worldwide and currently has active development
programs on more than 20 vehicle platforms.

Research and development expenses for the 2002 second quarter
and six months increased 14 percent and 8 percent, respectively,
over year earlier periods due primarily to an increase in the
pace of the development efforts of the Company's subsidiary,
BSST, LLC, and prototype costs associated with the Company's
next generation CCS design.  BSST is engaged in a program to
improve the efficiency of thermoelectric devices and develop
products based on this new technology.

Selling, general and administrative expenses for the 2002 second
quarter and six months increased 22 percent and 8 percent,
respectively, over year earlier periods due primarily to higher
than expected costs associated with the outsourcing of
manufacturing for its North American customers.  This
outsourcing program is currently in place and the Company
believes these unexpected costs have been contained.

The Company has funded its financial needs from inception
through net proceeds received through its initial public
offering as well as other equity and debt financing.  At June
30, 2002, the Company had cash and cash equivalents of $1.3
million.  Based on the Company's current operating plan, it
believes cash at June 30, 2002 along with proceeds from future
revenues and borrowings from an anticipated accounts receivable-
based financing will be sufficient to meet operating needs
through the end of 2002.  The Company also needs to comply with
the November 2002 Nasdaq requirement of minimum shareholders'
equity of $2.5 million.  The outcome from the Company's efforts
to obtain additional debt financing and compliance with the
Nasdaq requirement cannot be assured.

The Company has previously announced plans to relocate its
corporate office to the Detroit area by December 2002 and to
cease all manufacturing operations at its Southern California
facility during the first quarter of 2003, with its technical
development remaining in Southern California.  By locating its
headquarters in the Detroit area, the Company will be closer to
its North American and European customers.

The number of shares used to calculate basic and diluted net
loss per share in the 2002 second quarter and six months was
10.8 million and 8.9 million, respectively, compared to 4.6
million and 4.5 million, respectively, for the prior year
periods.  The year-to-year increase in shares resulted primarily
from the sale of approximately 4.3 million shares of the
Company's common stock and warrants to purchase 2.2 million
shares of the Company's common stock in a private placement,
valued at approximately $6.5 million, to selected institutional
and other accredited investors.  In addition to the $6.5
million, a bridge loan and accrued interest of $2.6 million were
exchanged by Big Beaver Investments, LLC for 1.7 million shares
of common stock and warrants to purchase 860,000 shares of
common stock.

Amerigon develops and markets its proprietary Climate Control
Seat(TM) products for automotive original equipment
manufacturers. This product significantly enhances individual
driver and passenger comfort in virtually all climatic
conditions by providing cooling and heating to seat occupants,
as desired, through an active thermoelectric-based temperature
management system.  Amerigon is engaged in developing other
proprietary thermoelectric-based heating and cooling products
for the automotive and other market applications.  Amerigon
maintains sales and technical support centers in Los Angeles,
Detroit, Japan and Germany.

BBST is a development venture focused on advancing the
technology of thermoelectric devices.


ARMSTRONG HOLDINGS: Seeks Fourth Extension of Exclusive Periods
---------------------------------------------------------------
Rebecca L. Booth, Esq., at Richards Layton & Finger, in
Wilmington, Delaware, tells Judge Newsome that the Nitram
Liquidators, Armstrong World Industries, and Desseaux
Corporation of North America have been engaged in substantive
negotiations with the Unsecured Creditors' Committee and the
Asbestos PI Committee, and the legal representative for AWI's
future asbestos personal injury claimants.

Ms. Booth reports that the Debtors are making substantial
progress in these negotiations with respect to the principal
elements of a plan of reorganization.  "These negotiations are
ongoing and it is the Debtors' view that the maintenance of
status quo through a further extension of the exclusive periods
is critical to maintaining the delicate balance that will
maximize the potential that these negotiations reach a
successful conclusion," Ms. Booth says.

Although substantial progress has been made in these
negotiations, Ms. Booth explains that the parties have not yet
reached agreement on the principal elements of a reorganization
plan.  In an effort to resolve these differences, Ms. Booth
relates, the parties have participated in numerous status
conferences before Judge Wolin.  Most recently, Ms. Booth notes,
the parties have made certain requests to Judge Wolin in
connection with the pending case and are awaiting his input on
these requests.  The Debtors remain hopeful that, with Judge
Wolin's continuing oversight and assistance, they will be in a
position to propose a plan of reorganization that ultimately
will be accepted by all of the principal creditor constituencies
in these Chapter 11 cases.

Thus, the Debtors ask the Court to further extend their
exclusive period to file a plan through April 4, 2003, and their
exclusive period to solicit acceptances of that plan through
June 3, 2003, without prejudice to their right to request
further extensions. (Armstrong Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ATCHISON CASTING: Forbearance Pact Further Extended to Oct. 15
--------------------------------------------------------------
Atchison Casting Corporation has announced the execution of the
Thirteenth Amendment and Forbearance Agreement in which, among
other things, a date to reduce outstanding loan commitments was
extended from July 31, 2002 to October 15, 2002.

ACC produces iron, steel and non-ferrous castings for a wide
variety of equipment, capital goods and consumer markets.


AUGRID OF NEVADA: Completes 50-to-1 Reverse Stock Split
-------------------------------------------------------
Augrid of Nevada, Inc. (OTC:BB - AGNV), a manufacturer and
distributor of High- Tech electronic components and products,
announces the restructuring of the Company and the
implementation of the its new business model.

"With a recent majority shareholder approval, the Company has
successfully completed a 50-to-1 reverse stock split. This is
the first step in an extensive strategy to reorganize our
capital structure," stated M.J. Shaheed, President and CEO of
AuGRID Of Nevada Inc. "This is just the first phase of our new
plan, in which we have partnered with various investment
community specialists, who have guided us in the execution of
several changes that have started to take this company to the
next level."

Through the efforts of the organization, management reports that
its subsidiary, Summit Media Systems will provide AuGrid with
both immediate revenues and an existing distribution channel for
its FED screens. Summit Media has solidified a supply agreement
with Newcomm USA and has been awarded the exclusive distribution
rights of Luxman Products in the USA and Canadian markets. The
Company has currently secured purchase order financing that
shall fulfill the requirements of these newly obtained
agreements. In addition the Company has recently been contracted
to supply 1.4 million dollars worth of product to its existing
distribution network.

With this distribution network currently in place, AuGrid is
seeking to obtain additional technological advancements that
will compliment its current FED technology. To expedite the
manufacturing process of the Company's current product line,
AuGrid is currently considering two separate merger/acquisitions
candidates that could complete the puzzle. "If the Company
continues to implement its new model, we are on the edge of
achieving our new goals" confirmed Mr. Shaheed.


B/E AEROSPACE: USAir Bankruptcy Has Little Impact on Finances
-------------------------------------------------------------
B/E Aerospace, Inc., (Nasdaq:BEAV) commented on recent airline
industry developments and the outlook for B/E's financial
results.

Following inquiries from shareholders regarding US Airways'
filing for bankruptcy protection and other recent developments,
B/E stated that accounts receivable associated with US Airways
total less than $400,000. The airline represents less than 0.3
percent of B/E Aerospace's backlog.

B/E also commented on its exposure to two other U.S. airlines
which are currently experiencing financial difficulties.
Together, these two airlines represent less than 2 percent of
B/E's accounts receivable, and less than 1 percent of total
backlog.

Commenting on B/E's outlook, Mr. Robert J. Khoury, President and
Chief Executive Officer of B/E, stated: "We continue to expect
strong earnings growth in the second half of this fiscal year,
driven by expanding margins from our facility and workforce
consolidations, lean manufacturing and continuous improvement
initiatives."

B/E Aerospace, Inc., is the world's leading manufacturer of
aircraft cabin interior products, and a leading aftermarket
distributor of aircraft component parts. With a global
organization selling directly to the world's airlines, B/E
designs, develops and manufactures a broad product line for both
commercial aircraft and business jets and provides cabin
interior design, reconfiguration and conversion services.
Products for the existing aircraft fleet -- the aftermarket --
provide almost two-thirds of sales. For more information, visit
B/E's Web site at http://www.beaerospace.com

                          *   *   *

As previously reported, Standard & Poor's assigned a BB+
rating to B/E Aerospace's $150 million credit facility. However,
the international rating agency revised its ratings outlook to
negative following the September 11 terrorist attacks.


BANYAN STRATEGIC: Net Assets in Liquidation Down by $8MM in Q2
--------------------------------------------------------------
Banyan Strategic Realty Trust (OTC Bulletin Board: BSRTS)
announced that for the quarter ended June 30, 2002, its Net
Assets in Liquidation decreased by approximately $8.1 million,
from approximately $12.1 million at March 31, 2002, to
approximately $4.0 million at June 30, 2002.  The decrease was
primarily due to distributions that were paid and payable to
shareholders during the quarter in the amount of approximately
$7.7 million and an operating loss of approximately $0.7
million.  This amount was partially offset by net gain on the
disposition of investment in real estate held for sale of
approximately $0.2 million and approximately $0.1 million of
interest income on cash and cash equivalents.

For the three months ended June 30, 2001, the Trust reported
that Net Assets in Liquidation decreased by approximately $47.3
million, from approximately $65.4 million at March 31, 2001, to
approximately $18.1 million at June 30, 2001.  This decrease was
primarily due to the Trust's initial liquidating distribution to
shareholders of $4.75 per share, or $73.6 million, offset by the
gain of approximately $25.8 million (net of minority interest of
$6.4 million) from the sale of 27 of its 30 properties on May
17, 2001.  Also offsetting the reduction in net assets in
liquidation were operating income in the amount of approximately
$1.0 million, and interest on cash and cash equivalents and
employee notes of approximately $0.5 million, reduced by
depreciation expense of approximately $1.0 million.  These
results are not comparable to the results for the quarter ended
June 30, 2002.

For the six months ended June 30, 2002 the Trust's Net Assets in
Liquidation decreased by approximately $8.4 million, from
approximately $12.4 million at December 31, 2001, to
approximately $4.0 million at June 30, 2002.  The decrease was
due primarily to distributions that were paid and payable to
shareholders during the six months in the amount of
approximately $7.7 million, an operating loss of approximately
$1.0 million and minority interest of approximately $0.1 million
offset by net gain on the disposition of investment in real
estate held for sale of approximately $0.2 million and
approximately $0.2 million of interest income on cash and cash
equivalents.

For the six months ended June 30, 2001, the Trust reported that
Net Assets in Liquidation decreased by approximately $46.1
million, from approximately $64.2 million at December 31, 2000,
to approximately $18.1 million at June 30, 2001.  This decrease
was primarily due to total distributions paid to shareholders of
$74.2 million including the Trust's initial liquidating
distribution offset by the gain of approximately $25.8 million
(net of minority interest of $6.4 million) from the sale of 27
of its 30 properties on May 17, 2001.  Also offsetting the
reduction in net assets in liquidation were operating income in
the amount of approximately $3.5 million, recovery of losses on
loans, notes and interest receivable of approximately $0.9
million and interest on cash and cash equivalents of
approximately $0.5 million, reduced by depreciation expense of
approximately $2.6 million.  These results are not comparable to
the results for the six months ended June 30, 2002.

               Status of Real Estate Asset Sales

On May 2, 2002, the Trust announced that it had signed a
contract to sell its Tucker (Atlanta), Georgia property, known
as Northlake Tower Festival Mall, for a gross purchase price of
$20.5 million.  If the transaction closes at the contract price,
the Trust expects to realize net proceeds of approximately $3.35
million, or approximately $0.215 per share, after crediting the
Purchaser the amount of the existing Northlake debt
(approximately $16.8 million) and paying related closing costs
and prorations (expected to be approximately $0.35 million).
The sale transaction is currently scheduled to close on
September 17, 2002, but remains subject to the buyer's ability
to assume the existing debt on the property.

                      Nasdaq Delisting

As previously announced on July 11, 2002, representatives of the
Nasdaq Listing Qualifications Panel notified the Trust that
Banyan's June 20, 2002 appeal of a determination to delist
Banyan's shares of beneficial interest had been denied.
Accordingly, the Trust consented to a delisting of its shares as
of the opening of the market on July 12, 2002.  Also previously
announced, Banyan was first notified on February 15, 2002, that
it would be subject to delisting if the closing price of its
shares did not exceed the $1.00 minimum bid price for ten
consecutive trading days during the 90-day period ending on May
15, 2002. In May, Nasdaq notified Banyan of the imminent
delisting, which Banyan appealed.

Banyan shares may now be quoted on the Over the Counter Bulletin
Board, but there can be no assurance that a market will continue
to exist for the shares.  Investors do not have direct access to
the OTCBB and must contact a broker/dealer to trade OTCBB
securities.  Further information about the OTCBB is available at
http://www.otcbb.com

Banyan Strategic Realty Trust is an equity Real Estate
Investment Trust that adopted a Plan of Termination and
Liquidation on January 5, 2001. On May 17, 2001, the Trust sold
approximately 85% of its portfolio in a single transaction.
Additional properties were sold on April 1, 2002 and May 1,
2002.  Banyan now owns a leasehold interest in one (1) real
estate property located in Atlanta, Georgia, representing
approximately 9% of its original portfolio. Since adopting the
Plan of Termination and Liquidation, Banyan has made liquidating
distributions totaling $5.45 per share.  As of this date, the
Trust has 15,496,806 shares of beneficial interest outstanding.


BE INC: Intends to Distribute Remaining Cash to Shareholders
------------------------------------------------------------
Be Inc., was founded in 1990 and prior to the cessation of its
business operations offered software  solutions designed for
Internet appliances and digital media applications.  On August
16, 2001, it entered into an asset purchase agreement with Palm,
Inc., to sell substantially all of its intellectual property and
other technology assets.  This transaction was approved by its
stockholders on November 12, 2001 and was completed on November
13, 2001.  On March 15, 2002, the Company filed a Certificate of
Dissolution with the Secretary of State of Delaware pursuant to
Section 275 of the Delaware General Corporation Law, closed its
transfer books and voluntarily delisted its common stock from
the Nasdaq National Market System.

Prior to 1998, the Company had no revenues and its operations
consisted primarily of research and  development.  In December
1998, it shipped the first version of BeOS, its desktop
operating system  targeted primarily to end users.  Prior
releases of BeOS were targeted primarily to software developers.
Throughout 1999 Be focused on delivering BeOS as a desktop
operating system to end users, but ultimately determined the
barriers to entry and the cost of intense competition in that
market was more than it could overcome.  In recognition of this,
and to address shareholder value, in 2000 Be shifted its
resources to focus primarily on the market for Internet
appliances and the further development, marketing and deployment
of BeIA, its software solution intended for Internet
appliances.  At the same time Be announced that it would be
making available at no charge a version of BeOS for personal
use, and a more fully featured version would be available for a
charge through third party publishers. Revenues in 2000 were
primarily generated from the sale of BeOS to its  licensed third
party publishers, and other resellers and distributors, and
direct sales of BeOS to end users through its BeDepot.com Web
site.  It also generated revenue by collecting commission from
sales of third party software through its BeDepot.com Web site.

In 2001, revenues were generated through royalty payments,
maintenance and support fees,  professional services and
integration fees and by revenue-related consulting services
performed after August 16, 2001 under a funding agreement with
Palm executed in connection  with the asset sale.  These
payments and fees were received from developers and
manufacturers of Internet appliances, as well as other systems
and hardware manufacturers incorporating BeIA into their
products.  However,  revenues from BeIA did not offset the loss
of revenues from sales of BeOS.  Upon the completion of the sale
of substantially all of its assets to Palm, Be received an
aggregate of 4,104,478 shares of Palm common stock and sold
these shares on November 13, 2001 for $10,100,772 in cash, net
of brokerage and transaction fees. As a result of the sale of
its assets and the cessation  of its business operations, Be
does not expect to generate any future revenues.

Since the completion of the Asset Sale to Palm on November 13,
2001, Be has generated no material revenues from operations and
the vast majority of expenses have been of a general and
administrative nature.  General and administrative expenses
decreased approximately $615,000, or 54%, to $531,000 for the
period from January 1, 2002 to March 15, 2002 from $1.1 million
for the three month period ended March 31, 2001. In 2002, such
expenses are primarily attributable to the rent costs of
approximately $242,000 for the lease of former headquarters in
Menlo Park. This lease expired on February 28, 2002. Other
expenses included salary costs of approximately $140,000 for the
5 person  transition team in charge of winding down operations.
After May 15, 2002, the Company intended for only one employee
to remain with the Compnay.  Remaining expenses were related to
professional fees and also to moving costs for the relocation of
the Company's offices.

Changes in net assets in liquidation for the period from March
16, 2002 to March 31, 2002 of $83,000 were primarily a result of
the early termination of a technology license agreement.

               Liquidity and Capital Resources

Since inception, Be traditionally financed operations primarily
through the sale of equity securities and through borrowing
arrangements. Cash and cash equivalents and short-term
investments decreased approximately $600,000 to $4.8 million at
March 15, 2002 from $5.4  million at December 31, 2001.  This
decrease is primarily attributable to the amounts used to fund
the winding down of the Company's operations.

Since November 2001, Be has been winding down business
operations and has substantially reduced its working capital
requirements. Its working capital requirements are now minimal
and the Company  believes that existing cash and cash
equivalents will be sufficient to meet the remaining operating
and capital requirements for at least the next twelve months or
until a final liquidation occurs. The Company has stated that,
as part of the winding down process, it intends to distribute
part of its remaining cash to its shareholders as soon as
practicable under Delaware law and dissolution procedures.
After that time,  Be intends to retain only a nominal amount of
cash to complete the winding down process.


BERES INDUSTRIES: Withum Smith Expresses Going Concern Doubt
------------------------------------------------------------
Beres Industries, Inc., was incorporated in the State of New
Jersey on June 23, 1960. Its two wholly owned subsidiaries,
Athenia Plastic Mold Corp., and Supply Dynamics, Inc., were
incorporated in the State of New Jersey on July 27, 1976 and
October 11, 1983, respectively. As of Beres' March 31, 1998
fiscal year end, Athenia was merged into Beres and as of Beres'
March 31, 1999 fiscal year end, Supply Dynamics was merged into
Beres. The foregoing mergers eliminated Beres' subsidiaries and
combined all operations into the parent company. The Company
recently completed a private placement in which the Company
raised $1,000,000 for acquisition of new equipment and other
costs involved with the Company's commencing a new line of
business. In the fiscal year ended March 31, 2001, the Company
changed its primary business to the manufacturing of plastic
pails, and phased out its injection molding business. As of
March 31, 2002, the Company has continued operating its Athenia
Plastic Mold Division.

The Company had working capital deficiency of approximately
$5,125,000 at March 31, 2002, as compared to working capital
deficiency of $2,797,000 at March 31, 2001. The decrease in
working capital is a result of expenditures the Company has made
for equipment to commence its new plastic pail manufacturing
operation. At March 31, 2002, the Company had cash and cash
equivalents of approximately $83,000, as compared to $51,000 a
year earlier. This is a result of deposits made and expenses
incurred in starting its plastic pail operations.

Management intends to make every effort to improve operating
cash flows including whatever cost cutting measures are
necessary until higher sales levels can be attained. Scheduled
debt re-payments are expected to be met by cash flow.

The Company has defaulted on the notes issued in its private
placement, although no noteholders have called their notes. As a
result of such default, the $1,230,000 in notes was reported as
current debt on the Company's financial statements. No interest
has been paid on the notes to date.

The Company's independent auditing firm, Withum, Smith & Brown
of Toms River, New Jersey, stated in its June 11, 2002 Auditors
Report that the Company has experienced significant operating
losses in the current and prior years, is in technical default
on covenants of certain loan agreements and has a significant
working capital deficiency at March 31, 2002. These conditions
raise substantial doubt about the Company's ability to continue
as a going concern.


BRIDGE INFO: Court Okays Final Compensation of 8 Professionals
--------------------------------------------------------------
Judge McDonald approves the final allowance of compensation of
eight professionals, and directs Bridge Information Systems,
Inc., to promptly make payments of the unpaid fees and expenses:

                                                 Expense
Professional                Fee Amount          Reimbursement
------------                ----------          -------------
PricewaterhouseCoopers      $2,975,013          $257,721

Cleary, Gottlieb, Steen      7,310,888           884,210
& Hamilton

American Express Tax &               0           576,754
Business Services, Inc.

Alvarez & Marsal, Inc.       6,116,451           219,872

Deloitte & Touche LLP        1,031,100             4,122

Foley & Lardner              1,473,939           105,079

Bryan Cave LLP               1,495,455           154,296

Stibble                     EUR 38,720            EUR 96

The Court further authorizes Cleary Gottlieb to apply any
remaining retainer amounts it holds from the Debtors against any
unpaid portion of its retainer inclusive of outstanding holdback
plus other fees and expenses incurred for services rendered.
(Bridge Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BUDGET GROUP: Hearing on $1.5BB Financing Continues on August 20
----------------------------------------------------------------
On an interim basis, Judge Walrath permits Budget Group Inc.,
and its debtor-affiliates to enter into and perform the
transactions under the fleet financing, provided that the
outstanding principal amount of the VFN will not exceed
$400,000,000 on any date prior to the entry of the Final Order.
Objections to the transaction or the terms of the proposed Final
Order must be received no later than August 13, 2002.  The
hearing to consider the final approval of the motion will be
held on August 20, 2002. (Budget Group Bankruptcy News, Issue
No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


CALPINE CORP: CEO & CFO Submits Certification Statements to SEC
---------------------------------------------------------------
Calpine Corporation (NYSE: CPN) announced that its Chairman and
Chief Executive Officer Peter Cartwright and Chief Financial
Officer and Executive Vice President Robert D. Kelly have signed
and submitted to the U.S. Securities and Exchange Commission
statements under oath certifying that Calpine's 2002 SEC
filings, as prescribed by the recent SEC order, contain no
material misstatements nor do they contain any material
omissions.

The SEC's June 27, 2002 order mandated CEOs and CFOs of
approximately 950 large publicly held companies to submit sworn
statements of certification for their 2002 SEC filings.  The
documents covered by this order consist of Calpine's Annual
Report on Form 10-K for 2001, the 2002 proxy statement and all
subsequent SEC periodic and current reports filed through August
9, 2002, the date of certification.

Cartwright and Kelly led a team that conducted a comprehensive
review of the company's 2002 SEC filings.  The results of this
review, along with the statements of certification, were
reviewed with the company's audit committee.

Based in San Jose, California, Calpine Corporation is a leading
independent power company that is dedicated to providing
customers with clean, efficient, natural gas-fired power
generation.  It generates and markets power through plants it
develops, owns and operates, in 23 states in the United States,
three provinces in Canada and in the United Kingdom.  Calpine is
also the world's largest producer of renewable geothermal
energy, and it owns 1.3 trillion cubic feet equivalent of proved
natural gas reserves in Canada and the United States.  The
company was founded in 1984 and is publicly traded on the New
York Stock Exchange under the symbol CPN.  For more information
about Calpine, visit its Web site at http://www.calpine.com

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


CANMINE RESOURCES: Retains Beacon Group for Financial Advice
------------------------------------------------------------
Canmine Resources Corporation (TSX Symbol: CMR) has retained
Beacon Group Advisors Inc., of Toronto, Ontario to act as
advisors in the restructuring of the company's financial
obligations under the Companies Creditors Arrangement Act
(CCAA).

On August 2, 2002 Canmine sought and obtained an Order for
protection under CCAA from the Ontario Superior Court of
Justice. The effect of the Order was to stay the Company's
current obligations to all creditors for a period of 30 days.
During this period, or any extensions granted, a Plan of
Compromise or Arrangement will be prepared for submission to the
interested parties and the Court for approval. The Order also
provided that up to $500,000 of Debtor in Possession financing
can be advanced to the company during the time period of the
initial order. PricewaterhouseCoopers Inc., London, Ontario, has
been appointed Monitor of the CCAA proceedings.

Beacon provides investment banking services and private research
to the mining, metals and fertilizer industries and has an
extensive international network of seasoned relationships with
companies and institutional investors around the world. With
strong technical and financial backgrounds, the principals of
Beacon have collectively advised on over US$8 billion of
transactions and have visited more than 200 mining properties.

Beacon's role will be to advise Canmine through the
restructuring process on all financial and industry related
matters including financing possibilities, strategic
partnerships, joint ventures or mergers.


COLUMBIA LABORATORIES: June 30 Equity Deficit Reaches $5 Million
----------------------------------------------------------------
Columbia Laboratories (AMEX: COB) announced financial results
for the second quarter and six months ended June 30, 2002.

For the second quarter of 2002, the company reported a loss of
$4,855,498 on sales of $2,225,378, as compared to a net loss of
$4,430,124 on sales of $427,554 in the second quarter of 2001.
After excluding the one-time charges and credit mentioned in the
following paragraph, the loss per share for the three months
ended June 30, 2002 would have been $1,344,987, compared with a
loss of $3,430,124 for the three months ended June 30, 2001.

The second quarter 2002 results reflect a one-time litigation
settlement expense of $3,960,000 resulting from the June 2002
settlement of litigation with Ares Trading S.A., and Serono,
Inc.  As a result of the settlement, the Company reduced
operating expenses in the second quarter of 2002 by $449,489,
reflecting a reduction in the accrual for product recall costs.
The original estimate of $1,500,000 for product recall costs was
booked in the first quarter of 2001. The second quarter 2001
results included a one-time restructuring expense of $1,000,000
to record the estimated costs of downsizing the Company's
presence outside the United States.

For the six-month period ended June 30, 2002, the net loss was
$8,236,441 on net sales of $2,717,770 as compared to a net loss
of $8,249,053 on net sales of $1,275,369 in the six months ended
June 30, 2001.

At June 30, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $5 million.

Over the last several months, Columbia has achieved a number of
significant accomplishments including:

     --  Resolution of the outstanding litigation with Serono
resulting in the reintroduction of Crinone 8% (progesterone gel)
to the "Infertility Specialist Market";

     --  Securing the rights to market 4% and 8% progesterone
gel under a second brand name, "Prochieve(TM)," to a defined
audience of obstetricians, gynecologists and primary care
physicians in the United States;

     --  Signing of an agreement with Quintiles Transnational
Corp., to commercialize Prochieve along with Advantage-S(R) and
RepHresh Vaginal Gel(TM) through a dedicated team of 55 sales
representatives commencing in the second half of 2002;

     --  Raising $10.0 million from PharmaBio, Quintiles'
strategic investment group, through a Stock Purchase Agreement
and an Investment and Royalty Agreement;

     --  Filing of a New Drug Application (NDA) with the FDA for
testosterone buccal bioadhesive product.

Fred Wilkinson, Columbia's president and chief executive
officer, stated, "We are extremely pleased with the progress the
Company has made and believe that these achievements create a
solid foundation from which to establish a growing revenue base
and a future earnings stream."

Columbia is providing initial guidance for the remainder of 2002
through 2004. Based on the launch of Prochieve and RepHresh, and
the re-launch of Advantage-S in the U.S., the company estimates
sales for 2002 in the range of $12 to 15 million. Assuming a
second-half 2003 approval and launch of testosterone buccal
bioadhesive product, the company estimates sales for 2003 in the
range of $32 to 40 million and sales in 2004 in the range of $75
to 100 million.

Operating expenses are expected to be in the range of $14 to 16
million in 2002, $27 to $31 million in 2003, and $36 to 40
million in 2004. Based on these estimates, profitability is
anticipated during the second half of 2003.

Columbia Laboratories, Inc., is an international pharmaceutical
company dedicated to research and development of women's health
care and endocrinology products, including those intended to
treat infertility, dysmenorrhea, endometriosis and hormonal
deficiencies. Columbia is also developing hormonal products for
men and a buccal delivery system for peptides. Columbia's
products primarily utilize the company's patented Bioadhesive
Delivery System (BDS) technology.


COVANTA ENERGY: Committee Gets Okay to Begin Prepetition Actions
----------------------------------------------------------------
The Official Committee of Unsecured Creditors sought and
obtained the Court's authority to commence and prosecute an
adversary proceeding regarding the avoidance of prepetition
liens, in the name of Covanta Energy Corporation, and its
debtor-affiliates.

Michael J. Canning, Esq., at Arnold & Porter, in New York,
recalls that the DIP Order gives the Committee the opportunity
and right to seek avoidance of prepetition liens.  Immediately,
the Committee has been engaged in:

  (a) a comprehensive review and analysis of the Prepetition
      Loan Documents and the Prepetition Security Agreement, as
      well as the Indenture dated March 1, 1992 pursuant to
      which Wells Fargo Bank Minnesota, National Association
      acts as successor Trustee to the Bank of New York on
      behalf of the holders of $100,000,000 in unsecured bonds
      bearing interest at a rate of 9.25% per annum, together
      with all information, documentation and instruments
      incident thereto made available to the Committee; and

  (b) an exhaustive effort to develop and analyze the facts and
      circumstances surrounding the granting of the Prepetition
      Liens in order to determine the validity, enforceability,
      non-avoidability, perfection or priority of the Claim.

Mr. Canning reports that the Committee has not yet finished its
investigation and analysis of the Claims.  The Committee
believes that certain viable causes of action do, in fact, exist
with respect to the validity and enforceability of certain
Claims. Thus, the Committee anticipates commencing an
appropriate adversary proceeding -- seeking a determination by
this Court that the claims of the 9.25% Debenture Holders were
not and are not secured by any lien on the assets of the
Debtors.

In connection with the extensive investigation of the
documentation, facts and circumstances surrounding the Claims,
the Committee has engaged in discussions with the lenders under
the Pooled Facilities, the lenders with the Revolving Loan
Exposure and the lenders under the Opt-Out Facilities regarding
possible challenges the Committee may assert relative to the
Claim of the Prepetition Lenders.  The Parties wish to further
explore and discuss issues with respect to the Claims.

Accordingly, Judge Blackshear further approves the Stipulation
Extending the Time to Commence Action from August 7, 2002 to
November 5, 2002 in order to facilitate further discussions
among the Committee and the Prepetition Lenders relative to the
Claims. The DIP Order is deemed amended and modified
accordingly. (Covanta Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


DADE BEHRING: Wants More Time to File Schedules and Statements
--------------------------------------------------------------
Dade Behring Holdings, Inc., and its debtor-affiliates want the
Court to extend their time period to file their schedules and
statements until November 1, 2002 -- and permanently waive the
requirement if confirmation of their Joint Prepackaged Plan of
Reorganization occurs before that date.

The Debtors tell the U.S. Bankruptcy Court for the Northern
District of Illinois that their request should be granted
because the purpose for filing the Schedules and Statements and
Statement largely has been fulfilled in these Prepackaged
Chapter 11 cases.  The Plan has been fully negotiated, and the
Ballots that the Debtors have received indicate that Class 2 and
Class 5B, the only voting impaired classes of claims, have voted
to accept the Plan. The remaining creditor classes are
unimpaired under the Plan and will be paid in full.

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.


DANIELSON HOLDING: Working Capital Deficit Tops $50MM at June 30
----------------------------------------------------------------
Danielson Holding Corporation (Amex: DHC) reported net income of
$4.3 million for the quarter ended June 30, 2002. That compares
with a loss of $5.6 million in the second quarter of 2001.  For
the first six months of 2002, the company generated net income
of $4.3 million versus a loss of $4.7 million in the first six
months of 2001.

The current quarter includes approximately one month of results
from American Commercial Lines LLC and three related companies -
- Global Material Services, a network of marine terminals
located on major river systems in the U.S., Europe and South
America, including Global Material Services de Venezuela CA, and
Vessel Leasing, LLC, a subsidiary that leases barges to ACL --
which were acquired by DHC on May 29, 2002.  Pro forma results
for DHC and its subsidiaries assume the acquisition and
recapitalization of ACL and its related companies took place as
of December 31, 2000.

At June 30, 2002, Danielson's balance sheet shows that its total
current liabilities exceeded its total current assets by about
$50 million.

"We are pleased to have completed the acquisition of ACL, the
leading marine transportation company operating on the rivers of
North and South America, during the second quarter," said DHC
President and Chief Executive Officer, Samuel Zell.  "We
recognize ACL is operating in a difficult business environment
and still carries significant leverage, but it remains an
excellent platform for growth for DHC shareholders."

                          Marine Services

Marine Services revenue and operating expense for the second
quarter and first half of 2002, which includes approximately one
month of operating results of Marine Services, was $60.9 million
and $58.8 million respectively. There were no operating results
for Marine Services in the prior periods.

Pro forma operating revenue from Marine Services for the quarter
ended June 30, 2002 was $183.6 million, a decrease of $20.0
million from the same period last year.  Pro forma operating
revenue for the first six months of 2002 was $367.0 million, a
decrease of $20.8 million from the same period last year.  These
decreases were due primarily to a year-over-year decline in
domestic barging freight rates, reduced volumes and lower marine
construction revenue as a result of a strike at Jeffboat, ACL's
inland shipyard which manufactures towboats and barges.  The
Jeffboat strike was settled on July 3, 2002.

Pro forma operating expense for Marine Services increased 1% to
$190.7 million in the second quarter from $188.3 million in the
second quarter of 2001.  Pro forma operating expense for Marine
Services decreased 3% to $374.7 million in the first six months
of 2002 from $385.6 million in the first six months of 2001.
The decrease was due mainly to improved operating conditions in
the first quarter of 2002 versus the prior period, lower marine
construction during the second quarter as a result of a strike
at Jeffboat and lower fuel prices over the first six months of
2002 versus the prior period.

                              ACL Unit

ACL pro forma revenue for the second quarter of 2002 was $169.9
million compared with $192.9 million in the second quarter of
2001. Pro forma operating expense for the second quarter of this
year was $176.7 million compared with $178.8 million in the same
period last year. ACL pro forma operating revenue for the first
half of 2002 was $340.8 million compared with $366.0 in the
first half of 2001. Pro forma operating expense for the first
half of this year was $349.3 million compared with $365.5
million in the same period last year. These changes were largely
attributable to the same factors that contributed to the changes
in the Marine Services' pro forma financial results.

ACL's EBITDA for the full second quarter of 2002, as defined in
ACL's senior secured credit facilities, was $9.6 million, a
decline of $26.0 million from the same period in 2001. ACL does
not consolidate GMS or GMSV, both of which are, however,
consolidated at the DHC level as a result of DHC's incremental
ownership stake in GMS. ACL's EBITDA for the first half of 2002
was $22.3 million.

"There is broad weakness in the entire inland river industry as
a result of poor general economic conditions.  The weak economy,
coupled with a severe supply-demand imbalance in the inland
river industry, has resulted in continuing downward pressure on
rates for covered and open barges.  We believe this situation
will persist if new barge construction continues at the same
high rate," said Michael C. Hagan, President and Chief Executive
Officer of ACL.  "Through continued focus on our long-term
strategies of overall cost reductions and efficiency
enhancements, we believe we will be in a position to take full
advantage of any market turnaround."

                         Insurance Services

Net premiums in the Insurance Services segment fell to $17.6
million in the second quarter of 2002 from $20.3 million in the
same period last year, primarily as a result of a decision in
2001 to exit certain automobile and workers' compensation
business lines. Investment income increased $3.2 million to $5.4
million in this year's second quarter, primarily due to realized
gains.  Expenses for Insurance Services fell 23% to $22.3
million from $28.8 million in 2001, due to cost reductions
relating primarily to the decision to exit the workers
compensation and certain automobile lines.  For the first six
months of 2002, the combined ratio, a key performance
measurement for the insurance industry, improved to 116.6% from
126.7% during the first six months of 2001.

NAICC, DHC's primary operating insurance subsidiary, decided to
increase the aggregate net written premium run rate of its non-
standard private passenger automobile insurance in California,
from $30.0 to $50.0 million, to capitalize on favorable loss
ratios occurring in its automobile insurance lines and to
solidify the distribution network of its insurance products.

                         Consolidated DHC

As of June 28, 2002, DHC's consolidated debt position was $660.9
million. Since ACL is applying push down accounting effective
with DHC's acquisition of ACL, ACL's debt was adjusted to fair
value at the acquisition date.  The difference between the
principal amount of the debt and its fair value is being
accreted as interest expense over the term of the debt under the
effective interest method.  DHC's consolidated debt includes the
following components adjusted to fair value: (i) $372.3 million
of senior bank debt at the ACL level, (ii) $127.9 million of new
senior notes at the ACL level, (iii) $65.8 million of senior
subordinated pay-in-kind notes at the ACL level, (iv) $4.9
million of old senior notes at the ACL level, (v) $41.1 million
of U.S. government guaranteed bonds at the Vessel Leasing level,
(vi) $42.0 million of bank debt and an industrial redevelopment
bond at the GMS level, and (vii) a $3.2 million International
Finance Corporation note at the GMSV level. The unamortized debt
discount as of June 28, 2002 was $59.9 million. None of the
aforementioned debt is guaranteed by DHC or NAICC and all of the
debt resides at various subsidiaries of DHC.

Interest expense increased to $5.0 million in the second quarter
of 2002 versus no interest expense in the same period last year.
Other income was $8.0 million in the second quarter of 2002
principally reflecting DHC's gain on old senior notes exchanged
for equity as part of the ACL recapitalization.

ACL has opened discussions with its administrative agent for its
senior credit facility to look into the possibility of seeking
an amendment and waiver.  Although ACL believes it is currently
in compliance with its debt covenants, there is a possibility
that ACL will not be able to comply with covenant requirements
in the future.  Management is working on operating and financial
plans to comply with its debt covenants, including a possible
sale-leaseback and/or other financial transactions.

ACL is amending certain portions of its Annual Report on Form
10-K for the fiscal year ended December 28, 2001 to restate Item
6 (Selected Financial Data), Item 7 (Management's Discussion and
Analysis of Financial Condition and Results of Operations) and
Item 8 (Financial Statements and Supplemental Data), each in its
entirety.  This restatement adversely impacts the recording of
certain non-cash minority interest income amounting to
approximately $2.96 million in 2000 and $2.12 million in 2001.

DHC is an American Stock Exchange listed company, engaging in
the financial services, specialty insurance business, and marine
transportation, through its subsidiaries.  DHC's charter
contains restrictions that prohibit parties from acquiring 5% or
more of DHC's common stock without its prior consent.

ACL, an indirect wholly-owned subsidiary of DHC and its
subsidiaries, is an integrated marine transportation and service
company operating approximately 5,100 barges and 200 towboats on
the inland waterways of North and South America.  ACL transports
more than 70 million tons of freight annually.  Additionally,
ACL subsidiaries operate marine construction, repair and service
facilities and river terminals.


ENRON CORP: Teesside Unit Taps Close Brothers to Conduct Sales
--------------------------------------------------------------
Following the placing of Enron Europe Limited into
Administration, Enron Teesside Operations Limited has continued
to operate as a stand-alone business and has the support of its
stakeholders.

Having received several expressions of interest, ETOL has
obtained the approval of its stakeholders to find a buyer that
will recognise its strategic value.

Close Brothers Corporate Finance has been appointed to conduct
the sales process and will be approaching potential purchasers
shortly.

ETOL owns and manages the Wilton Site on Teesside including the
Wilton Power Station, and supplies utilities and outsourced
services to chemical and other industrial businesses in the
area. It is anticipated that ETOL, which is a profitable and
cash generative business and employs around 530 people on
Teesside, will attract interest from both trade and financial
buyers in the UK and overseas.  ETOL markets its products and
services under the brand "Wilton International" and has other
major industrial customers on the neighboring Billingham and
North Tees sites.

Paul Gavens, ETOL's Chief Executive, said: "This is an exciting
time for Wilton International and our employees.  ETOL has
invested substantially at Wilton in the last three years.  We
have some exciting development opportunities that we would like
to pursue and we see the sale of the business as the best way of
achieving this objective.  We are committed to finding the right
buyer at the right price."

ETOL has been indirectly owned by Enron Europe (now in
Administration) and certain financial institutions since it
acquired ICI's Teesside Utilities and Services businesses in
December 1998.  It is a UK company that supplies business-
critical utilities and services to its customers on Teesside and
employs around 530 people in that area. The company owns many of
the assets required for the generation and delivery of
utilities, including the Wilton Power Station, the UK's largest
demineralised water plant and pipework for electricity, steam
and water supply. The support services offered to its customers
include security, asset management, infrastructure, stores and
warehousing, effluent services, fire protection, health and
safety services and public relations.

The Wilton site is marketed by ETOL under the "Wilton
International" brand.  The site is one of the largest of the few
sites in Europe capable of servicing the needs of large chemical
and industrial plants.  It has significant capacity for
expansion, both in terms of generation and distribution
capability, and land availability.  The Company owns 465 acres
of land readily connectable to services, with existing planning
permission for development, and operates in a supportive
regulatory environment with incentives and tax breaks consistent
with Teesside's EU classified "objective 2" regional assistance
status.

The plants and equipment owned by ETOL's customers are regarded
as some of the most efficient in the world, and are mostly core
assets for their owners.  The owners of these plants are
themselves blue-chip international organizations.  The majority
of ETOL's revenues are derived from long-term contracts with its
largest customers, which provide stable and predictable income
and profits.

ETOL continues to be a profitable and cash generative business
with a stable platform of core business and a variety of
projects at various stages of development to provide growth
opportunities.

ETOL's assets include:

    -- One of the few sites in Western Europe which has
       pre-approved development status for up to 465 acres of
       currently unused land;

    -- Wilton Power Station, capable of producing 600 tonnes of
       steam per hour and 133 MW of power;

    -- A de-mineralised water plant (largest in UK), reservoirs
       and access to an abundant water supply;

    -- Utility distribution networks, rail infrastructure,
       weighbridges, roads and site effluent systems;

    -- Pipeline corridors and under-river tunnels connecting the
       Wilton, Billingham and North Tees sites;

    -- Emergency response, security services and equipment; and

    -- Warehouses, laboratories, workshops and associated
       buildings and vehicles.

    For inquiries, contact:

    Terry Waldron
    Public Relations Manager
    Enron Teesside Operations Limited
    Tel: 01642 459 955

    Martin Gudgeon
    Director
    Close Brothers Corporate
    Tel: 020 7655 3100
(Enron Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ENVIROGEN INC: Fails to Comply with Nasdaq Listing Requirements
---------------------------------------------------------------
Envirogen, Inc., (Nasdaq: ENVG) has been notified by Nasdaq that
for a period of 30 consecutive trading days the price of the
Company's common stock has closed below the minimum $1.00 per
share requirement for inclusion in the Nasdaq SmallCap Market
listing.  In accordance with its Marketplace Rule, if the
Company's common stock closes at $1.00 per share or more for a
minimum of ten consecutive trading days before January 27, 2003,
the Company will be in compliance with the rule.  If compliance
with the Marketplace Rule is not demonstrated by January 27,
2003, Nasdaq will determine if Envirogen, Inc., meets the
initial listing criteria to determine if a further 180-calendar-
day grace period to demonstrate compliance will be granted.
Alternatively, Nasdaq will provide notification that the
Company's securities will be delisted subject to appeal by the
Company.  In 2002 the Company's shares have closed between $1.56
and $.70.

Envirogen is a broad-based environmental systems and services
company providing its customers with the lowest total project
cost for environmental protection.  Through the application of
its industry leading technologies, Envirogen provides cost-
effective means to remove pollutants from the air, water and
soil.


EXHIBITRON INC: Taps Sparks Exhibits as Exclusive Subcontractor
---------------------------------------------------------------
Marlton Technologies, Inc., (ASE:MTY) announced that its San
Diego trade show exhibit subsidiary, Sparks Exhibits and
Environments, Ltd., entered into an interim operating agreement
to manufacture and service trade show exhibit projects as the
exclusive subcontractor for Exhibitron, Inc., a San Diego area
trade show exhibit company currently in Chapter 11 proceedings.

Exhibitron specializes in the design and sale of trade show
exhibits in a wide range of industries including electronic
games, communications and entertainment, and had sales of
approximately $6 million in 2001. Under this interim operating
agreement, Sparks will fulfill Exhibitron's production needs,
and Exhibitron will continue as a sales and design entity.

Sparks also has had discussions regarding the acquisition of
Exhibitron's assets as part of Exhibitron's plan of
reorganization, but any acquisition would be subject to future
mutual agreement and approval through the Exhibitron bankruptcy
proceedings.

Marlton Technologies, Inc., through its Sparks Exhibits &
Environments and DMS Store Fixtures subsidiaries, is engaged in
the design, marketing and production of trade show, museum,
theme park and themed interior exhibits and store fixture and
point of purchase displays, both domestically and
internationally.


FEDERAL-MOGUL: Keeps Plan Filing Exclusivity Until Nov. 1, 2002
---------------------------------------------------------------
For a second time, Federal-Mogul Corporation and its debtor-
affiliates obtained an extension of their exclusive periods to
file a Chapter 11 plan and solicit acceptances of that plan.

The Debtors have until November 1, 2002, to exclusively propose
and file a plan of reorganization. The Debtors' exclusive period
to solicit acceptances of that plan from their creditors has
also been extended through and including January 3, 2003.

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: Asks Court to Bar Some Claims for Voting Purposes
---------------------------------------------------------------
FLAG Telecom Holdings Limited, and its debtor-affiliates ask the
Court to disallow certain claims for voting purposes.  The
Debtors make it clear that they are not seeking to object to
disputed claims for purposes of allowance, although they reserve
their rights to assert additional objections.

The Debtors seek to disallow any claim that:

  (1) is not listed on the Schedules,

  (2) is listed on the Schedules as contingent, unliquidated or
      disputed, or

  (3) if the claim is reflected on the Schedules and not listed
      as contingent, liquidated or disputed, but is asserted in
      an amount greater than the scheduled amount, then to the
      extent of such asserted excess.

Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, relates
that the Debtors will give notice to affected creditors by
including a copy of the objection in each solicitation package,
information package, and shareholder information package.

Mr. Reilly asserts tat the noncontingent, liquidated and
undisputed claims against the Debtors, as shown in the
schedules, represent the compilation of a review of the Debtors'
books and records conducted over a month, and the Debtors
believe that the disputed claims are not legitimate claims
against the Debtors.

Holders of disputed claims, however, may seek an order that will
provisionally allow the disputed claim for purposes of voting.

The Debtors propose that unless an order is obtained by
September 6, 2002, ballots returned by holders of disputed
claims will not be counted or will be counted only in the amount
of claims listed on the Schedules as non-contingent, liquidated
and undisputed. (Flag Telecom Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FLAG TELECOM: Will Make Delayed Interim Form 10-Q Filing
--------------------------------------------------------
FLAG Telecom Holdings Limited (OTCBB: FTHLQ), along with its
group companies, announced that the filing of its interim
financial statement on Form 10-Q for the quarter ended June 30,
2002 has been delayed due to the closure of Arthur Andersen's UK
Office.

As reported by FLAG Telecom in a Current Report on Form 8-K
filed on August 7, 2002, Arthur Andersen resigned as FLAG
Telecom's auditor effective July 31, 2002. Most of the staff and
partners of Arthur Andersen UK have agreed to join Deloitte &
Touche, in effect causing the closure of the Arthur Andersen UK
office. The Company is in the process of appointing new auditors
and seeking the required U.S. Bankruptcy Court approval of the
appointment. FLAG Telecom anticipates that it will complete its
10-Q filing as soon as reasonably practical after the
appointment of its new auditors is approved by the Court. FLAG
Telecom will file a separate report on Form 8-K when a new
auditor is appointed.

FLAG Telecom's most recent financial information can be found in
the Disclosure Statement containing the Plan of Reorganisation
which was approved by the Court on August 8, 2002. FLAG Telecom
has filed a Current Report on Form 8-K with the SEC,
incorporating the Disclosure Statement as an exhibit item.

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


GMAC COMMERCIAL: S&P Lowers Rating on Class H Certs to B- from B
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class H
of GMAC Commercial Mortgage Securities Inc.'s mortgage pass-
through certificates series 1997-C1 and removed it from
CreditWatch negative, where it was placed on November 27, 2001.
At the same time, the rating on class G of the same series is
affirmed.

The rating changes reflect, in part, the appraisal reductions
taken since November 2001, and increasing delinquent loans that
total $59.32 million, or 4.3% of the loan pool. Since November
2001, cumulative appraisal reductions on two loans total $11.79
million. Of greatest concern to Standard & Poor's is the second
largest loan in the pool ($29.3 million, 2.1%), which received a
$10.2 million appraisal reduction. The loan is secured by a
$31.0 million promissory note, which is secured by a deed of
trust on six properties in Connecticut that are leased to a
tenant, Pegasus, that operates five skilled nursing facilities.
The borrower has closed the sixth facility and has it on the
market for sale. Pegasus sought bankruptcy protection in May
2001. Consequently, a state court-appointed receiver has
operated the properties since October 2001. The state of
Connecticut continues to fund operating shortfalls of the
nursing facilities. In January 2002, the master and special
servicer, GMAC Commercial Mortgage Corp. (GMAC), received a
$24.75 million appraisal on the properties. GMAC anticipates
additional losses of approximately $2.0 million on this loan.

Furthermore, there are four other loans that are 90-plus days
delinquent, which total $23.26 million, or 1.7% of the pool. Of
the four loans, one is expected to produce a loss of about $1.1
million, and one received an appraisal reduction of $1.6
million. GMAC does not have recent financial information on two
of the four loans. The four loans are:

A $9.3 million loan secured by Holiday Inn Hotel located in
Fishkill, N.Y. The fiscal year-end debt service coverage (DSC)
ratio on April 30, 2002 was 1.48 times. GMAC is in discussions
with the borrower regarding the required property improvements
to maintain the flag at the hotel;

A $6.7 million loan secured by 47,454-square-foot (sq. ft.)
retail facility in Phoenix, Ariz. A $1.6 million appraisal
reduction was applied in February 2002. The year-end 2001 DSC
ratio was 0.68x. There is one tenant remaining at the property,
resulting in 15% occupancy. The borrower has filed for
bankruptcy;

A $4.9 million loan, secured by vacant single-tenant retail
property located in Miami, Fla., formerly occupied by Kmart.
GMAC recently received a $3.9 million appraisal on the property;
and

A $2.3 million loan, secured by 148-unit multifamily property in
Grand Prairie, Texas. The year-end 2001 DSCR was 0.18x. GMAC
recently received a $2.5 million appraisal on the property. A
trustee sale is scheduled in August 2002.

As of August 2002, the 30-day delinquent loan is current. In
addition, there are three other loans ($5.3 million, 0.38%)
being specially serviced. However, all the loans are current and
no losses are anticipated.

The lowered rating on class H is warranted given the potential
losses to the trust associated with the above loans.

As of July 2002, GMAC placed 28 loans ($143.99 million, 10.3%)
on its watchlist, an increase from the 28 loans on its watchlist
(6.9%) in November 2001. Eight loans ($46.2 million, 3.3%)
secured by health care properties that were placed on the
watchlist are of greatest concern. Six of the properties
reported negative DSC ratios or DSC ratios below 1.0x. Five
loans ($36.45 million, 2.6%) secured by retail properties where
Kmart is a tenant are also of concern. The Kmart store in
Reading, Penn. closed in July 2002, which will push the DSC
ratio below 1.0x. The year-end 2001 DSC ratio for that loan was
1.38x. The borrower is actively searching for another tenant.
Standard & Poor's will continue to closely monitor the watchlist
loans.

The weighted average DSC for the remaining loans (61% of loan
pool reporting year-end 2001 financials) increased to 1.57x from
1.33x at issuance. At the last review, the DSC ratio was 1.58x
(based on 92% of loans reporting, 85% year-end 2000, and 7%
year-end 1999). Standard & Poor's excluded the credit leases
from the weighted average DSC ratio calculations. As of July
2002, the mortgage pool balance decreased to 307 loans totaling
$1.39 billion, from 314 loans totaling $1.43 billion since
Standard & Poor's last review in November 2001.

                      RATING LOWERED

          GMAC Commercial Mortgage Securities Inc.
         Mortgage pass-through certs series 1997-C1

                      Rating
      Class    To         From            Credit Support (%)
      H        B-        B/Watch Neg      3.65


                      RATING AFFIRMED

      Class     Rating           Credit Support (%)
      G         BB               7.92


GENUITY: Obtains 30-Day Extension of Standstill Pact with Banks
---------------------------------------------------------------
Genuity Inc. (Nasdaq: GENU), a leading provider of enterprise IP
networking services, has received an additional 30-day
extension, or "standstill," from the global consortium of banks
that provided the company with a $2 billion line of credit and
from Verizon Communications Inc., which loaned Genuity $1.15
billion. In exchange for the extension, Genuity will make a
payment of $50 million to the bank group, with the commitment
that the banks, Verizon and Genuity will pursue a binding term
sheet on revisions to its credit facilities.

"We are pleased that all three parties have agreed to work
toward a mutually beneficial resolution," said Paul R. Gudonis,
chairman and CEO of Genuity. "While we still have a ways to go,
we believe that by renegotiating our credit facilities and
continuing to restructure our business plan, Genuity will be
positioned for future success. In the meantime, we still have
sufficient cash on hand to operate our business, and we continue
to sell to and serve our customers with high-quality Internet
services."

The extension follows a two-week standstill agreement that was
reached on July 29, 2002. The banks and Verizon entered into the
standstill agreements following Verizon's decision to relinquish
its option to acquire a controlling interest in Genuity. This
action resulted in an event of default for Genuity under its
credit facility with Verizon and its credit facility with the
banks.

Also, Genuity announced that as a first step in the
restructuring of its business plan, the company is refocusing
its operations and will no longer fund European hosting company,
Integra S.A. Genuity, which owns 93 percent of Integra, made the
decision after Genuity's management and Board of Directors
examined Integra's overall financial position and determined
that it would be in the best interest of Genuity's investors,
creditors, customers and employees to reprioritize Genuity's
investments.

"As part of our restructuring process, we've been reviewing our
portfolio of services to find ways to reduce cash consumption
while capitalizing on our core markets," said Gudonis. "This was
a difficult decision to make because, while Integra was on track
to meet its corporate financial goals, it still would have taken
some time before it was able to fund the business on its own. We
believe it is the right long-term decision for us, and one that
should have minimal impact on Genuity's customers."

Genuity had provided financing to Integra since September 2001.

Genuity is a leading provider of enterprise IP networking
services. The company combines its Tier 1 network with a full
portfolio of managed Internet services, including dedicated and
broadband access, Internet security, Voice over IP (VoIP), and
Web hosting to provide converged voice and data solutions. With
annual revenues of more than $1 billion, Genuity (NASDAQ: GENU
and NM: Genuity A-RegS 144) is a global company with offices and
operations throughout the U.S., Europe, Asia and Latin America.
Additional information about Genuity can be found at
http://www.genuity.com


GLOBAL CROSSING: UST Amends Creditors' Committee Membership
-----------------------------------------------------------
Pursuant to Sections 1102(a) and 1102(b) of the Bankruptcy Code,
the U.S. Trustee amends, for the third time, the appointments to
the Official Committee of Unsecured Creditors in the chapter 11
cases involving Global Crossing Ltd., and its debtor-affiliates.
The Knights of Columbus is replaced by Wells Fargo Bank.  This
change in the Committee's membership was effective July 29,
2002.  The Committee is now composed of:

      A. Alcatel and affiliates
         15540 North Lombard Street, Portland, OR 97203-6428
         Attention: Mr. Richard Nilsson, President
         Phone: (503) 240-4010

      B. Aegon USA Investment Management, LLC
         4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499
         Attention: Mr. Brian Elliott
         Phone: (319) 398-8988  Telecopier: (319) 369-2009

      C. The Bank of New York as Indenture Trustee
         5 Penn Plaza, 13th Floor, New York, New York 10001
         Attention: Mr. Gary Bush, Vice President
         Phone: (212) 896-7260  Telecopier: (212) 328-7302

      D. DuPont Capital Management
         One Righter Parkway, Suite 3200, Wilmington, DE 19803
         Attention: Mr. Ming Shao, Senior Portfolio Manager
         Phone: (302) 477-6070  Telecopier: (302) 677-6370

      E. Hartford Investment Management Company
         55 Farrington Avenue, 10th Floor, Hartford, CT 06105
         Attention: Mr. Mark Niland
         Phone: (860) 297-6175  Telecopier: (860) 297-8885

      F. Lucent Technologies Inc.
         600 Mountain Avenue, Murray Hill, New Jersey 07974-0636
         Attention: Mr. Rob Slater, Managing Director
         Phone: (908) 582-6687  Telecopier: (908) 582-6069

      G. Morgan Stanley Investment Management
         One Tower Bridge, West Conshohocken, PA 19428-2881
         Attention: Ms. Deanna L. Loughnane, Executive Director
         Phone: (610) 940-5000  Telecopier: (610) 260-7088

      H. Wilmington Trust Company, as Indenture Trustee
         520 Madison Avenue, New York, New York 10022
         Attention: Mr. James D. Nesci, Vice President
         Phone: (212) 415-0508

      I. Wells Fargo Bank Minnesota, as Indenture Trustee
         Sixth and Marquette, Minneapolis, MN 55479
         Attention: Mr. Lon P. LeClair, Corporate Trust Services
         Phone: (612) 667-4803   Telecopier (612) 667-9825

      J. PPM America
         225 West Wacker, Suite 1200, Chicago, IL 60606
         Attention: Mr. Joel Klein, Senior Managing Director
         Phone: (312) 634-2559  Telecopier: (312) 634-0728

      K. Teachers Insurance and Annuity Association of America
         730 Third Avenue, New York, New York 10017-3206
         Attention: Mr. Roi G. Chandy, Director
         Phone: (212) 916-6139  Telecopier: (212) 916-6140

      L. U.S. Trust Company
         499 Washington Blvd, Jersey City, New Jersey 07310
         Attention: Mr. Corwin Chen, Senior Vice President
         Phone: (201) 533-6875  Telecopier: (212) 597-0160

      M. Verizon Communications, Inc. c/o William Cummings
         1095 Avenue of the Americas, New York, New York 10036
         Phone: (212) 395-0802  Telecopier: (212) 302-9177
(Global Crossing Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ICG COMMS: Court Approves Settlement Agreement with Verizon
-----------------------------------------------------------
ICG Communications, Inc., and certain of its subsidiaries and
affiliates obtained Court authority from Judge Walsh to enter
into a settlement agreement with Verizon Communications, Inc.,
f/k/a/ Bell Atlantic Corporation and GTE Corporation.  Prior to
the Petition Date, Verizon and the Debtors entered into certain
interconnection agreements.

In addition, Verizon and the Debtors are parties to contracts
for wholesale access services that are governed by applicable
tariffs.

Verizon has asserted that certain of the Debtors owe Verizon
certain prepetition and postpetition amounts under the
Verizon/ICG Agreements.

The salient terms and conditions of the Verizon Stipulation are:

     (1) Pre-Petition Claims.  Verizon California, Inc. will
         sustain the pre-petition billing credit claims asserted
         by the Debtors against pre-petition access charges that
         were subject to investigation in Verizon California,
         Inc.'s proof of claim. The Debtors agree to lift the
         administrative hold on pre-petition reciprocal
         compensation. Verizon California, Inc. will withdraw
         its proof of claim against the Debtors, and pay the
         Debtors $1,520,489.56 within three business days after
         the Verizon Stipulation is approved by Judge Walsh.

     (2) Post-Petition Amounts.  Verizon agrees to pay the
         Debtors $4,315,099.96, the resulting net undisputed
         post-petition amount owed to the Debtors, within three
         business days after the Verizon Stipulation is approved
         by Judge Walsh. In addition, Verizon will make certain
         other reciprocal compensation payments to the Debtors.

     (3) Mutual Release.  Excluding certain specified back-
         billing claims and disputed claims, the parties
         mutually release each other from any claims each party
         may have against the other as of April 30, 2002 in
         connection with or in any way relating to the
         Verizon/ICG Agreements. (ICG Communications Bankruptcy
         News, Issue No. 28; Bankruptcy Creditors' Service,
         Inc., 609/392-0900)


INTEGRA INC: Will Not Challenge AMEX Delisting Decision
-------------------------------------------------------
On August 5, 2002, Integra, Inc., was advised by the American
Stock Exchange that the Company will receive official
notification from AMEX that the Company's common stock will be
delisted from AMEX. The Company does not plan to challenge the
delisting and believes that the delisting will be imminent.

As a result of the Company's recently filed voluntary petition
for protection under chapter 11 of title 11 of the United States
Code, the Company determined that appealing AMEX's determination
would not likely result in a positive outcome and believes that
the Company's constituents will be better served by having the
Company focus on its efforts to maximize recovery by its
unsecured creditors.

Following the delisting of the Company's common stock from AMEX,
the Company cannot make any assurances that there will be a
market maker for the Company's common stock or that the
Company's common stock will be traded on any market. The
Company's common stock may be quoted in the National Daily
Quotation Sheets, commonly referred to as the "pink sheets,"
published by the National Quotation Bureau LLC or traded over
the counter on the Bulletin Board.


INTEGRA INC: Ernst & Young Resigns as Independent Auditor
---------------------------------------------------------
On August 2, 2002, Integra, Inc., received a letter from Ernst &
Young, LLP dated July 31, 2002, notifying the Company that it
was resigning as the Company's independent auditor, effective
immediately.

Ernst & Young was engaged on April 11, 2001 as the Company's
independent auditor to replace the Company's former independent
auditor and as such, Ernst & Young did not report on the
Company's financial statements for the fiscal year ended
December 31, 2000.


INTEGRATED HEALTH: Asks Court to Okay Glew Termination Agreement
----------------------------------------------------------------
Leslie A. Glew was Integrated Health Services, Inc., Senior Vice
President and Associate General Counsel until January 1, 2001.
IHS terminated Glew's Employment Agreement without cause.  Glew
worked for IHS for 10 years.

But a simple termination fails to resolve issues related to tax
and Glew's execution of a $500,000 Note.

Under his Employment Agreement, Glew is entitled to, inter alia:

    (i) a base salary,

   (ii) a discretionary bonus,

  (iii) additional benefits separate and apart from the cash
        compensation, and

   (iv) a severance package in the event of termination without
        cause.

After the Petition Date, Glew became entitled to receive
additional payments pursuant to the Court-approved Retention
Plan. The aim of the Retention Plan is to encourage key
employees to continue to provide integral management and other
necessary services to the Debtors during the Chapter 11 cases.

In addition, Glew also participated in an Employee Loan Plan.
Pursuant to this Plan, Glew and other senior personnel were
advanced loans to be used for the purchase of IHS common stock.
In this connection, Glew executed a $500,000 Note.  By its term,
the Note is automatically and immediately forgiven in its
entirety upon the occurrence of certain events, including IHS'
termination of the obligor's employment.  Glew's termination
triggered IHS' severance obligations to Glew under the
Employment Agreement and the forgiveness of the Glew Note.

Upon consultation with their financial and legal advisors, the
Debtors understand that the forgiveness of the Note is likely to
be deemed employee compensation for federal, state and local
income tax purposes.  So if the Debtors were to pay withholding
tax obligations on the forgiven Note obligations, the payments
would also be subject to withholding taxes.  The Debtors and
Glew disagree as to whether payment of the taxes is the
exclusive obligation of Glew or whether the Debtors' are also
liable by virtue of their obligation to withhold taxes.

                The Proposed Termination Agreement

To settle the dispute, the Debtors and Glew entered into a
formal Termination Agreement that replaces the terms of Glew's
severance entitlement under the Employment Agreement, and deals
with the tax ramifications for the forgiveness of the Glew Note
in a manner consistent with the Court-approved resolutions
reached between the Debtors and other critical senior officers.

The Termination Agreement provides for:

a. Severance Payment

    Glew will be entitled to a $275,000 cash payment, less
    applicable payroll withholdings and deductions.

b. Retention Payment

    Glew will be entitled to a $206,250 cash payment, less
    payroll withholdings and deductions.

c. Loans and Withholding Taxes

    The Termination Agreement affirms the forgiveness of the
    Glew Note -- $500,000, plus $63,616 interest.  The total
    amount forgiven -- $563,616 -- was subject to Withholding
    Taxes. The Company will recover Withholding Taxes paid --
    $327,947 -- on the loan forgiveness.

d. Provision re Confidentiality and Conflict of Interest

    Glew acknowledges and agrees that the Employment Agreement
    with respect to Confidentiality and Conflict of Interest
    remain in full force and effect in accordance with its
    terms.

e. Cooperation

    Glew agrees to provide assistance to the Company with
    respect to matters related to pending litigation at a rate
    of $200 per hour.

By this Application, the Debtors ask the Court to approve the
Termination Agreement in all respects.

The Creditors' Committee has indicated it will not object to
this settlement. (Integrated Health Bankruptcy News, Issue No.
40; Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTELEFILM CORP: Seeks Court Nod to Use Lenders' Cash Collateral
----------------------------------------------------------------
iNTELEFILM Corporation asks for authority from the U.S.
Bankruptcy Court for the District of Minnesota to use its
lenders' cash collateral.

The Debtors relate to the Court that it was indebted to:

     a) Westminster Properties, Inc., in the amount of
        approximately $175,000 -- is secured by liens on all of
        Debtor's property, including accounts, inventory,
        general intangibles, equipment, instruments, deposits
        and records and proceeds of the foregoing

     b) Ronald C. Breckner (for himself and as agent for others)
        in the amount of approximately $1,585,000 -- secured by
        a security interest in the Collateral.

     c) LawFinance Group, Inc., in the amount of $1,000,000
        contingent on collection in the Disney Litigation.

The Debtor tells the Court that it needs to use cash collateral
securing these claims through August 23, 2002.  Otherwise, the
Company will suffer immediate and irreparable harm and will be
forced to close down completely and cease its efforts to
reorganize.  The Debtor further explains to the Court that it
has no alternative borrowing source and cannot continue its
operations without the use of cash collateral.

The Debtors present the Court with a Three-Week Cash Budget
showing:

                               Week Beginning
                               --------------
                   Aug. 5      Aug. 12     Aug. 19     Aug. 26
                   ------      -------     -------     -------
Beginning Cash     $757,550    $756,750    $731,650    $727,550
Total Cash Inflow     2,300      ----        ----         7,000
Total Cash Outflow   (3,100)    (25,100)     (4,100)    (17,600)
Ending Cash        $756,750    $731,650    $727,550    $716,950

In exchange, the Debtors offer to grant adequate protection to
Breckner and Westminster.  The Debtor proposes that Westminster
be paid interest of $5,250 per quarter beginning September 30,
2002.

A final hearing is scheduled on August 26, 2002 at 3:00 p.m.
before the Honorable Gregory F. Kishel, Courtroom 228B, 200
Federal Building, St. Paul, Minnesota 5501.

iNTELEFILM Corporation, a holding company for software
development, sales & products, filed for chapter 11 protection
on August 5, 2002. Michael L. Meyer, Esq., at Ravich Meyer
Kirkman McGrath & Nauman PA represents the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed $10,516,867 in assets and
$7,929,375 in debts.


INTELEFILM CORP: Wins Entry of Judgment Totaling $12 Million
------------------------------------------------------------
iNTELEFILM Corporation (OTCBB:FILM) announced that United States
District Judge Ann D. Montgomery ordered entry of a judgment
totaling $12,067,082 in favor of the Company. The judgment,
issued on August 12, 2002 in connection with the Company's long-
running litigation against ABC Radio Networks, Inc., and the
Walt Disney Company, is comprised of the May 2002 jury award of
$9,500,000 and prejudgment interest of $2,567,082. The timing of
a final resolution of the litigation is uncertain due to the
possibility that an appeal will be taken.

Mark A. Cohn, Chairman and CEO said, "The court's ruling in this
matter is a very positive development. The successful conclusion
of our Chapter 11 case and the collection of this judgment would
allow for full repayment of iNTELEFILM's obligations to its
creditors and a cash distribution to our shareholders. Once
again, we are very appreciative of the effort and diligence of
the jury, and the court, in this matter."

iNTELEFILM Corporation FILM is based in Minneapolis, trades on
the Over-the-Counter Bulletin Board under the symbol "FILM.". On
August 5, 2002 the Company filed a Chapter 11 bankruptcy
petition in the United States Bankruptcy Court for the District
of Minnesota, case no. 02-32788, and will continue to pursue the
ABC Radio Networks, Inc. and the Walt Disney Company litigation
as a debtor in possession. Additional information on the Company
can be found in the Company's filings with the Securities and
Exchange Commission, which ceased effective August 5, 2002, or
through the bankruptcy court at http://mnb.uscourts.gov


INTELLIGROUP: Seeks Waiver of Covenant Default Under Credit Pact
----------------------------------------------------------------
Intelligroup, Inc. (Nasdaq: ITIG), a leading global technology
solutions and services provider, reported results for its second
quarter and six-month period ended June 30, 2002.

Operational highlights:

     *  12-month revenue backlog remains strong at $51 million;

     *  Won 68 new or expanded consulting services projects
since first quarter 2002, including 14 HotPac and Uptimizer
projects;

     *  Won 17 new application management and offshore projects
since first quarter 2002.

Second quarter financial highlights:

     *  Second quarter revenue increased $1.9 million over the
prior quarter to $26.5 million;

     *  Gross profit margin increased from 30.2% in Q1 2002 to
31.2% in Q2 2002;

     *  Improvement in second quarter EBITDA to $1.4 million
(excluding special charges);

     *  Increase in quarterly operating income to $546,000
(excluding special charges);

     *  Cash earnings per share of $0.05 for Q2 2002 (net income
excluding special charges, plus appropriately tax-effected
depreciation and amortization expense divided by diluted shares
outstanding).

The Company reported revenues of $26.5 million for second
quarter 2002, compared to $24.6 million in first quarter 2002,
and $28.7 million in second quarter 2001.

Gross profit margin for second quarter 2002 was 31.2% of
revenue, compared with 30.2% for first quarter 2002, and 32.7%
for second quarter 2001.

As of June 30, 2002, the Company recorded approximately $8.4
million in special charges associated with the note receivable
from SeraNova Inc., the Company's former Internet services
subsidiary, and certain other related issues. While the Company
has aggressively pursued its various legal options to obtain
payment from SeraNova, Silverline Technologies Inc. and
Silverline Technologies Ltd., the Company believes that the
current liquidity issues plaguing the SeraNova Group requires a
reassessment of the realizability of these outstanding amounts.
Accordingly, the Company has recognized an impairment charge in
the amount of $5.1 million related to the note. In addition, the
Company recorded a write- off of $1.3 million related to
interest on the note and other receivables due from the SeraNova
Group.  The Company also recorded $1.5 million in costs required
to exit certain lease obligations related to the SeraNova Group,
and approximately $464,000 related to legal fees and other
costs.

The Company recorded an additional $464,000 in unanticipated
charges during second quarter of 2002 related to the proxy
contest initiated by a dissident shareholder.  These charges
included legal fees of approximately $324,000, proxy
solicitation services of approximately $100,000, and printing,
mailing and other costs of approximately $40,000.  The Company
expects to incur an additional $350,000 in third quarter 2002,
comprised of legal fees and other costs associated with the
proxy contest.

Excluding the special charges noted above, the Company reported
second quarter operating expenses (selling, general,
administrative and depreciation expenses) of $7.7 million,
compared with $7.2 million for first quarter 2002, and $9.0
million for second quarter 2001.

Excluding Special Charges, the Company reported second quarter
2002 operating income of $546,000, and earnings before interest,
taxes, depreciation and amortization of $1.4 million, compared
with second quarter 2001 operating income of $409,000 and EBITDA
of $1.5 million. Including all Special Charges, the Company's
second quarter 2002 operating loss was $8.3 million, with
negative EBITDA of $7.4 million.

Excluding Special Charges, second quarter 2002 net income was
$266,000 compared with net income for first quarter 2002 of
$11,000 and compared to second quarter 2001 net income of
$179,000.  The Company's second quarter 2002 net loss, including
the Special Charges, was $8.6 million.

For the six-month period ended June 30, 2002, revenues were
$51.1 million, compared to $59.5 million for the same period in
2001.  The Company's net income, excluding Special Charges, was
$277,000 in the first six months of 2002, as compared with net
income of $367,000 in the corresponding period of 2001.
Including the Special Charges, the Company's six-month period
ended June 30, 2002 net loss was $8.5 million.

Commenting on the second quarter 2002 results, Arjun Valluri,
Chairman and CEO, said, "Our Q2 results were very solid, as
reflected in an 8 percent growth in revenue over the prior
quarter, an increase in our gross margin, and improvement in our
bottom line results. Despite the difficult economic environment
and diversion of a contentious proxy contest, we have met our
income expectations for the eighth consecutive quarter."

Valluri continued, "However, the disruption of the proxy contest
is expected to have some adverse impact on short-term
performance. Longer term, we believe our ability to convert new
prospects into customers, and to expand the scope of services
with existing customers, will drive continued performance and
enhance our competitive position in the marketplace.  We believe
our focus on execution of our business strategy is the
foundation for increasing long-term shareholder value."

Nick Visco, the Company's Chief Financial Officer, commented,
"As a result of the charges associated with the proxy contest,
the Company has determined that as of June 30, 2002, it is in
technical default of the EBITDA covenant under the current line
of credit with its bank. We have requested a waiver of this
technical default, and an appropriate amendment to the
agreement."


INTERLIANT: Gets Go-Signal to Pay Vendors' Prepetition Claims
-------------------------------------------------------------
Interliant, Inc., and its debtor-affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the Southern
District of New York to pay the prepetition claims of its
essential trade creditors.

The Court agrees that if the Debtors lost their relationships
with the Essential Trade Creditors, the Debtors' ability to
create future revenue would suffer.  The Debtors' obligations to
the Essential Trade Creditors include obligations owed for goods
and services provided in the direct delivery of the Company's
products and services to its customers, and the ongoing
management of the Company's infrastructure.

The Court gives the Debtors limited discretionary authority to
pay certain prepetition trade claims of the Essential Trade
Creditors, up to an aggregate amount of $500,000.  This Trade
Claims Cap represents approximately 2.5% to 4.5% of the Debtors'
total prepetition trade and vendor obligations (totaling
approximately $11.1 million to $20 million).

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.


KAISER ALUMINUM: Second Quarter Net Loss Slides-Down to $50MM
-------------------------------------------------------------
Kaiser Aluminum reported a net loss of $50.4 million for the
second quarter of 2002, compared to a net loss of $64.1 million
for the second quarter of 2001. Results for the year-ago quarter
included a number of special items and significant adjustments,
as detailed in tables accompanying this press release.

For the first six months of 2002, Kaiser reported a net loss of
$114.5 million, compared to net income of $55.5 million for the
first six months of 2001. The year-ago period included a number
of special items and significant adjustments.

Net sales in the second quarter and first six months of 2002
were $386.3 million and $756.9 million, compared to $446.8
million and $927.1 million, for the comparable periods of 2001.

In commenting on the company's performance in the second quarter
of 2002, Kaiser President and Chief Executive Officer Jack A.
Hockema said, "The company continued to experience very
challenging business conditions characterized by substantially
lower realized prices and lackluster demand in many market
segments, especially aerospace. In addition, primary aluminum
shipments were lower than those of the year-ago period because
of the March 2002 curtailment of one potline at the 90%-owned
Valco smelter in Ghana. Further, the 65%-owned Alpart alumina
refinery experienced unfavorable cost performance in connection
with higher fuel oil prices and maintenance and turnaround
work."

"On a more favorable note," said Hockema, "despite experiencing
lower realized prices, the Engineered Products business unit
reported operating income more than triple that of the year-ago
period due to a reduction in energy and overhead costs combined
with improved demand in certain market segments, particularly
ground transportation and electrical markets. In fact, this was
the strongest earnings performance by this business unit since
the second quarter of 2000. Also, the Gramercy alumina refinery
reached a generally sustained operating rate of 100% of its
rebuilt capacity during the quarter, and Valco continued to
operate at record levels of efficiency despite the recent
curtailment of one potline.

"I want to emphasize again that the company's Chapter 11 filing
on February 12, 2002 has not affected the way we are operating
our plants. We remain as focused as ever on meeting the needs of
our customers through such programs as 'Best in Class,' where we
have maintained on-time delivery performance that's unmatched by
our competitors in the fabricated products business," said
Hockema. "At the risk of repeating myself, I thank the
customers, suppliers, employees and others who have demonstrated
their ongoing support as we work to strengthen the company and
emerge from Chapter 11.

"The Chapter 11 process continues as expected. We have
established productive relationships with the unsecured
creditors committee and the asbestos claimants committee and
appreciate their support of our initial efforts," said Hockema.

As of July 31, 2002, the company had approximately $115.9
million of cash and cash equivalents and unused availability of
$204.6 million under its Debtor-in-Possession (DIP) credit
facility. This amount compares with cash and cash equivalents of
$147.3 million and unused DIP availability of $204.8 million at
June 30, 2002. The change in the cash position from June to July
is primarily due to $30 million in payments to the company's
20%-owned affiliate, Queensland Alumina Limited (QAL), in July
2002 to fund the company's share of QAL's scheduled debt
maturities.

At June 30, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $582 million.

Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading producer
of alumina, primary aluminum and fabricated aluminum products.


KENTUCKY ELECTRIC: Must Raise New Funds to Meet Liquidity Needs
---------------------------------------------------------------
Kentucky Electric Steel, Inc., (NASDAQ: KESI) announced the
results for its fiscal 2002 third quarter and first nine months.
Net sales for the quarter ended June 29, 2002 were $23.0
million, an increase of $3.6 million or 18.2% as compared to the
third quarter of the prior fiscal year. Finished goods shipments
of 55,200 tons for the third quarter of fiscal 2002 reflected an
increase of 24.8% from the comparable quarter in fiscal 2001.
Shipments for the third quarter of fiscal 2002 included billet
shipments (semi-finished product) of 1,700 tons as compared to
300 tons for the third quarter of fiscal 2001. Loss before
income taxes for the third quarter of fiscal 2002 was $1.4
million versus a loss before taxes for the third quarter of
fiscal 2001 of $2.2. The Company reported a net loss of $1.4
million in the third quarter of fiscal 2002 versus a net loss of
$1.3 million in the third quarter of fiscal 2001. The net loss
for the third quarter of fiscal 2002 included three special
items that increased income by a net amount totaling $480,000
which consisted of business interruption insurance reimbursement
of $880,000 related to the March flood offset by an increase of
$200,000 in bad debt expense related to a customer which filed
bankruptcy, and a $200,000 charge related to a four-year sales
and property tax audit.

For the nine months ended June 29, 2002 net sales were $58.2
million, down 2.1% from fiscal 2001 first nine months net sales
of $59.5 million. Finished goods shipments of 140,600 tons for
the first nine months of fiscal 2002 were 2.0% higher than for
the first nine months of fiscal 2001; however, the average
selling price per ton was down 5.3% from the first nine months
of fiscal 2001. Shipments for the first nine months of fiscal
2002 included billet shipments of 4,200 tons as compared to 700
tons for the first nine months of fiscal 2001. Loss before
income taxes for the first nine months of fiscal 2002 was $7.6
million versus a loss before taxes of $6.4 million for the
comparable period of fiscal 2001. Net loss for the nine months
ended June 29, 2002 was $7.6 million versus net loss of $4.0
million for the comparable period of fiscal 2001. In addition,
the first nine months of fiscal 2002 do not include any deferred
tax benefits and, as previously reported, the Company will not
record any deferred tax benefits until it returns to an
appropriate level of profitability.

The Company experienced a flood on March 20, 2002 which shut
down operations in the melt shop until April 1 and rolling mill
until April 5. The Company currently estimates that the total
cost to clean, repair, and replace its damaged equipment and
facilities to be approximately $4.0 million. The Company
maintains flood insurance, including business interruption
coverage, and expects substantially all such costs to be covered
by insurance except for the $125,000 deductible. Through June
29, 2002, the Company had incurred cleanup and other costs of
approximately $3,320,000. The accompanying statements of
operations for the quarter and nine months ended June 29, 2002
include a credit of $880,000 for the currently estimated and
agreed upon reimbursement for business interruption claims with
the insurance carrier, which is included in the calculation of
cost of goods sold. The accompanying statement of operations for
the nine months ended June 29, 2002 also include the Company's
deductible for this claim of $125,000. As of June 29, 2002, the
Company had a net receivable of $2,575,000; the insurance
carrier had advanced the Company $1.5 million on this claim as
of June 29, 2002. Subsequent to June 29, 2002 the insurance
carrier advanced the Company an additional $1.5 million on this
claim. All remaining major repairs were completed during the
July 2002 major maintenance shutdown. The Company expects
to finalize the settlement with the insurance company during the
fourth quarter of fiscal 2002 and does not anticipate a material
effect on fourth quarter operating results.

Charles C. Hanebuth, President and Chief Executive Officer of
Kentucky Electric Steel, Inc., commented, "Our operating results
continue to improve in the third quarter as compared to the
first two quarters of fiscal 2002, reflecting higher shipments
and selling prices, despite the squeeze on margins due to higher
scrap metal prices. In addition to the special income items
discussed above, operating results were positively impacted by
lower per ton manufacturing costs due to higher production
levels offset somewhat by higher scrap metal prices. Also, per
ton manufacturing costs reflects the benefits of the work force
restructuring implemented in fiscal 2001."

Mr. Hanebuth, commenting on current market conditions, stated,
"Demand and pricing for our products improved during the third
quarter of fiscal 2002 as compared to the first half of 2002. We
believe that both demand and pricing should continue to improve
in the coming months." Mr. Hanebuth further stated, "If our
business does continue to improve, we anticipate the need for
additional financing to accommodate any associated growth in our
accounts receivable and inventory levels. We will continue
working with our lenders to attempt to insure that adequate
financing is available to meet any such increased working
capital needs, as well as to make the scheduled $1,500,000
principal payment due on November 1, 2002 under our existing
debt obligations."

Kentucky Electric Steel, Inc., is a publicly held company which
operates a specialty steel mini-mill manufacturing special
quality steel bar flats for the leaf-spring suspension, cold
drawn bar conversion, truck trailer support beam, and steel
service center markets. Kentucky Electric Steel, Inc.'s common
stock (symbol: KESI) is traded on the NASDAQ SmallCap Market.


KMART CORP: Wants to Amend $2 Billion DIP Credit Facility
---------------------------------------------------------
Kmart Corporation (NYSE: KM) has filed a motion with the U.S.
Bankruptcy Court for the Northern District of Illinois seeking
to amend the Company's $2 billion debtor-in-possession credit
facility.

The proposed amendment provides for an adjustment of the
covenant pertaining to the Company's cumulative earnings before
interest, taxes, depreciation, amortization and other charges
(EBITDA) over specified periods to provide Kmart with additional
flexibility and better reflect the Company's sales performance
since its bankruptcy filing.

The amendment also seeks lender permission to increase the size
of the DIP in an amount to be designated by the Company, not to
exceed $500 million.

"In order to ensure that we are optimally positioned to succeed
during the critical holiday season, we are asking our lenders to
approve a potential increase in the DIP," said Al Koch, Chief
Financial Officer of Kmart Corporation.  "We believe that
seeking this increase will provide additional comfort to our
suppliers and the factor community, although Kmart does not
project the need to use this additional liquidity.  In fact,
our latest projections show that during the peak seasonal
inventory build we will have more than several hundred million
dollars available in liquidity under our DIP facility as
currently sized."

The Company anticipates having an amendment in place before the
end of August with respect to the EBITDA covenant.  In addition,
the Company is optimistic that at the same time its lenders will
authorize the increase in the DIP.

Kmart's liquidity continues to be strong, with approximately
$400 million in available cash and more than $1.5 billion in
available credit from the DIP facility.

Kmart Corporation is a mass merchandising company that serves
America with more than 1,800 Kmart and Kmart SuperCenter retail
outlets.  Kmart in 2001 had sales of $36 billion.


KOALA: Talking with Lenders on Restructuring Loan & Covenants
-------------------------------------------------------------
Koala Corporation (Nasdaq: KARE), a diversified business-to-
business provider of family friendly products and solutions,
announced financial results for its second quarter and six-month
period ended June 30, 2002.

Second quarter sales were $12,153,179 compared with $15,411,348
in the comparable quarter a year ago. Sales within the Company's
convenience and activity product segment, which markets Koala's
flagship Baby Changing Station, were comparable to those in the
same period a year ago.  However, the Company experienced a 27%
decline in sales from its modular play equipment segment, which
was negatively impacted by continued weakness within key target
markets.

The Company reported a second quarter loss from operations of
$2,793,627 versus income from operations of $701,335 in last
year's second quarter.  The decline was partially attributable
to lower gross margins, which were impacted by lower sales
relative to the Company's fixed production costs, as well as a
comprehensive inventory management program that involved the
sale of non-core, slow-moving inventory at low margins.
Operating profits were also impacted by higher legal, auditing
and accounting expenses, one-time costs related to settlement of
contract and other disputes, and expenses associated with the
separation agreement of the former president and CEO, which was
primarily a non-cash item.

Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standard No. 142, which, among other
things, changes the method for evaluating the impairment of
goodwill.  The implementation of SFAS 142 resulted in a non-cash
transitional impairment charge of $21,838,717 after tax.  After
the effect of this accounting change, the Company incurred a net
loss of $24,901,535, or $3.64 per share assuming dilution,
versus a net loss of $57,462, or $.01 per share assuming
dilution, in the second quarter last year.

"The implementation of SFAS 142 is having a significant impact
on the financial statements of many companies during 2002, and
Koala is no exception," said Jim Zazenski, president and chief
operating officer. "Although we were not required to record the
goodwill impairment charge until the end of the year, we took
the initiative to fully reflect the impact of this adjustment in
our second quarter results.  In addition, our senior lenders
have agreed to exclude the impact of the goodwill impairment in
our financial covenant calculations."

Through six months, Koala reported sales of $24,413,002 versus
$29,715,483 at the mid-year mark last year.  Loss from
operations was $2,087,056 versus income from operations of
$2,264,843 in the comparable year-ago period.  The Company
reported a net loss of $24,894,897, or $3.63 per diluted share,
versus net income of $417,466, or $.06 per diluted share, for
the same period last year.

"The second quarter was a challenging period for the Company and
certain industries in which we compete," Zazenski said.  "The
playground equipment industry is down year over year, and this
environment has clearly had a negative impact on our modular
play segment, which represents approximately 70% of our overall
revenues."

Zazenski added, "Fortunately, during the second quarter, we
resolved several administrative issues that have required
significant time and attention from management, but also have
been largely unrelated to the core operations of the Company.
With many of these challenges behind us, we are now prepared to
capitalize on our strong brand name and the opportunities
available in the market. We believe we are building positive
momentum in the marketplace and the entire management team is
optimistic about our prospects for returning the Company to
profitability.  We look forward to demonstrating the results of
our efforts in coming quarters."

Zazenski continued, "We have changed and strengthened the
management team and completed a detailed strategic assessment of
each of our business units. Additional improvements have been
made to our corporate efficiencies and we have begun to
implement 'Lean Manufacturing' techniques within certain units,
which builds on the success we have achieved at our SCS
division.  We also have added a number of talented individuals
to our sales and customer service teams, and we are highly
focused on refining and improving our marketing programs."

Zazenski said the Company continues to receive a high level of
quotation requests, which are translating into improved order
flow within certain divisions.  "While the second quarter was a
sluggish period for our water play division, SCS is now
receiving an improved flow of orders from the municipal market.
SCS will soon launch an important new product line, which we
anticipate will maintain this sales momentum in the coming
quarters."

At June 30, 2002, the Company was in non-compliance with the
financial covenants in the loan agreement from Koala's senior
lenders.  The senior lenders have waived the non-compliance,
have extended until July 15, 2003, the due dates on Koala's line
of credit and the requirement to obtain an additional $10
million in capital, and have eliminated the impact of the
goodwill impairments on the covenant calculations.  The total
commitment available under the Company's line of credit has been
reduced to $12.5 million, which better matches the projected
needs of the business. In accordance with accounting rules,
Koala has classified the entire balance of the credit facility
as a current liability as a result of the potential for future
non-compliance with its current financial covenants.

Zazenski said, "Our senior lenders have been very supportive of
the Company as evidenced by the waivers and extensions they have
granted.  We are currently in discussions with our lenders
regarding a further restructuring of our loan agreement and
covenants, and we look forward to reporting the results of these
discussions sometime during the third quarter."

Through the first six months of 2002, Koala reported positive
cash flow from operations of $2.6 million, which represents a
more than $3.0 million improvement from the negative cash flow
from operations reported during the comparable period last year.
The Company currently has approximately $1.8 million in
available capital under its revolving line of credit.  "Our
improved cash flow performance was a result of our focus on
balance sheet management and our efforts to efficiently employ
the capital we have invested in our business," noted Zazenski.

On August 8, 2002, Koala was notified that it was not in
compliance with Nasdaq's continued listing requirements for the
Nasdaq National Market because the bid price of the Company's
common stock had traded below $1 for 30 consecutive trading
days.  Management is contemplating various options for
maintaining its Nasdaq National Market listing.  Additionally,
the Company may apply for a transfer to the Nasdaq SmallCap
Market.  If Koala transfers to the SmallCap Market, it expects
to have until August 4, 2003, to regain compliance with certain
bid-price requirements, and transfer back to the Nasdaq National
Market listing provided the Company continues to meet certain
other listing standards.

Founded in 1986, Koala Corporation is an integrated provider of
products and solutions designed to help business become "family
friendly" and allow children to play safely in public.  The
Company develops and markets a wide variety of infant and child
protection and activities products, which are marketed under the
Company's recognizable "Koala Bear Kare" brand name. Koala's
strategic objective is to address the growing commercial demand
for safe, public play environments for children, as well as
products and solutions that help businesses create family
friendly atmospheres for their patrons.

At June 30, 2002, Koala's total current liabilities exceed its
total current assets by about $20 million.


LTV CORP: Alixpartners Wants to Continue Work as Crisis Managers
----------------------------------------------------------------
Effective July 1, 2002, Jay Alix & Associates, a Michigan
corporation, transferred substantially all of its assets and
liabilities to AlixPartners LLC, a Delaware limited liability
company.

By this application, AlixPartners LLC seeks the Court's
authority to continue the financial advisory and consulting
services for The LTV Corporation and its debtor-affiliates
previously performed by Jay Alix & Associates on the same terms
and conditions. (LTV Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


LAIDLAW GLOBAL: AMEX Accepts Plan to Meet Listing Requirements
--------------------------------------------------------------
Laidlaw Global Corporation (Amex: GLL) states that on April 26,
2002 it received notice from the American Stock Exchange Staff
indicating that the Company was below certain of the Exchange's
continued listing standards due to losses from continuing
operations and/or net losses in two of its three most recent
fiscal years with shareholders' equity less than $2,000,000, as
set forth in Section 1003(a)(i) of the AMEX Company Guide. The
Company was afforded the opportunity to submit a plan of
compliance to the Exchange and on May 28, 2002 presented its
plan to the Exchange.  On August 9, 2002, the Exchange notified
the Company that it accepted the Company's plan of compliance
and granted the Company an extension of time to regain
compliance with the continued listing standards.  The Company
will be subject to periodic review by Exchange Staff during the
extension period.  Failure to make progress consistent with the
plan or to regain compliance with the continued listing
standards by the end of the extension period could result in the
Company being delisted from the American Stock Exchange.


LAIDLAW INC: Files Amended Joint Plan & Disclosure Statement
------------------------------------------------------------
Laidlaw Inc., and its debtor-affiliates filed their Amended
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy
Code and Disclosure Statement on August 6, 2002, pursuant to
Section 1125 of the Bankruptcy Code.

Laidlaw Inc.'s reorganization plan aims to alter the company's
debt and capital structures to permit them to emerge from
Chapter 11 with viable capital structures; maximize the value of
the ultimate recoveries to all creditor groups on a fair and
equitable basis; and, settle, compromise or otherwise dispose of
certain claims and interests on terms that they believe to be
fair and reasonable and in the best interests of their
respective Estates, creditors and other parties in interest.

The Plan provides for:

  (1) transactions that will result in the ultimate parent
      company in the corporate structure being New LINC, a
      Delaware corporation;

  (2) the implementation of the Guaranty Coverage Dispute
      Settlement among the Debtors, the Lenders and the
      Prepetition Noteholders;

  (3) the implementation of the Safety-Kleen Settlement and the
      Bondholders Litigation Settlement;

  (4) the cancellation of the Old Common Stock of Laidlaw Inc.,
      a Canadian corporation, and one of the Debtors;

  (5) the exchange of the Prepetition Notes and the debt issued
      under the Prepetition Credit Facility for Cash and New
      Common Stock;

  (6) the cancellation of certain other indebtedness in exchange
      for Cash and New Common Stock;

  (7) the assumption, assumption and assignment, or rejection of
      all Executory Contracts and Unexpired  Leases to which any
      Debtor is a party; and

  (8) the selection of the board of directors of New LINC.

                Changes to Corporate Structure

Pursuant to the Plan, Ivan R. Cairns, Senior Vice President and
General Counsel of Laidlaw Inc., states that the Restructuring
Transactions will have these principal effects:

  (a) LINC will engage in an internal restructuring designed to
      modify the ownership structure of its Canadian assets and
      to cause Laidlaw Investments Ltd. to become a direct,
      wholly owned subsidiary of LINC;

  (b) Laidlaw Investment will acquire from LINC, in
      consideration for a combination of Cash and common stock
      of Laidlaw Investment, all of LINC's assets, including
      all of the equity and debt of LINC's Canadian and non-U.S.
      operations, Greyhound Canada Transportation Corp. and
      Laidlaw Transit Ltd.  As a result, Laidlaw Investment
      will own all of the U.S. and non-U.S. operations of LINC;

  (c) Laidlaw Investment will be continued into the United
      States as a Delaware corporation in accordance with the
      applicable provisions of the Delaware General Corporation
      Law and the Business Corporations Act (Ontario).  As a
      result of the continuance, Laidlaw Investment will become
      New LINC, a Delaware corporation, and all of Laidlaw
      Investment's outstanding shares of common stock will
      become shares of New Common Stock.  LINC will transfer a
      combination of Cash and New Common Stock that LINC
      received from Laidlaw Investment in the Restructuring
      Transactions to the existing creditors of LINC in full
      satisfaction and discharge of all claims, liabilities and
      debts against LINC.  The Unsecured Bank Debt of LINC and
      Laidlaw Transportation, Inc. as well as the Prepetition
      Noteholder Claims of LINC and Laidlaw One, Inc. will be
      satisfied and discharged.  The outstanding stock of LINC
      and rights to acquire stock will be canceled for no
      consideration.

As a result of the foregoing transactions, the ultimate parent
company in the Reorganized Debtors' corporate structure will be
New LINC, a Delaware corporation.

                    New LINC Board of Directors

According to Garry M. Graber, Esq., at Hodgson Russ LLP, in
Buffalo, New York, the Bylaws of New LINC will provide that the
business and affairs of New LINC will be managed under the
direction of the New LINC Board of Directors:

  Name                Anticipated Position
  ----                --------------------
  John R. Grainger    President and Chief Executive Officer
  Ivan R. Cairns      Senior Vice President and General Counsel
  Wayne R. Bishop     Vice President and Controller
  Jeffrey Cassell     Vice President, Risk Management
  D. Geoffrey Mann    Vice President, Treasurer

Under the New LINC Bylaws, the New LINC Board of Directors may
establish directorate committees as it may from time to time
determine.  It is presently contemplated that the New LINC Board
of Directors will establish the these committees on or promptly
after the Effective Date:

    (a) the Audit Review Committee,

    (b) the Compensation Committee,

    (c) the Nominating and Corporate Governance Committee, and

    (d) the Ethics and Compliance Committee.

However, Mr. Graber notes, the composition of the Committees has
not been determined, but each Committee will be comprised solely
of non-employee directors who satisfy stock exchange
independence and other requirements for the committees, and the
chair of the Audit Review Committee will have accounting or
financial management experience.

         Confirmation and the Effective Date of the Plan

The Bankruptcy Court will not enter the Confirmation Order
unless and until the conditions have been satisfied or duly
waived.  The conditions are:

  -- the Confirmation Order is reasonably acceptable in form and
     substance to the Debtors and the Subcommittees;

  -- the Debtors shall have received a binding, unconditional
     except for a normal "market-out" condition and for
     conditions relating to the occurrence of the Effective
     Date commitment for the Exit Financing Facility from the
     Exit Financing Facility Agent Bank on terms and conditions
     satisfactory to the Debtors and the Subcommittees;

  -- the Confirmation Hearing has been commenced by October 18,
     2002;

  -- the Debtors shall have sufficient Cash to make the
     distributions required under the Plan;

  -- the aggregate amount of Allowed Unsecured Trade Debt Claims
     and Disputed Unsecured Trade Debt Claims does not exceed
     the Unsecured Trade Debt Claims Cap;

  -- the Bankruptcy Court has entered the Governmental Unit
     Estimation Order, which order shall be acceptable in form
     and substance to the Debtors and the Subcommittees; and

  -- the Bankruptcy Court has entered the Class 6 Estimation
     Order, which order shall be acceptable in form and
     substance to the Debtors and the Subcommittees.

Mr. Graber adds that the Effective Date will not occur unless
and until each of these conditions has been satisfied or duly
waived:

  -- the Confirmation Order has been entered, has not been
     reversed, stayed, modified or amended and has become a
     Final Order;

  -- the Ontario Superior Court of Justice shall have entered an
     order, which order shall be acceptable in form and
     substance to the Debtors and the Subcommittees, under the
     Canada Business Corporations Act or the CCAA effecting
     certain elements of the Restructuring Transactions and of
     the Plan;

  -- the CCAA Order has not been reversed, stayed, modified or
     amended and has become final, binding and non-appealable;

  -- the Restructuring Transactions have been consummated;

  -- the shares of New Common Stock shall have been registered
     under the Exchange Act pursuant to either a Registration
     Statement on Form 8-A or a Registration Statement on Form
     10 that has become effective under the Exchange Act;

  -- the shares of New Common Stock to be issued pursuant to the
     Plan shall have been authorized for listing on the New York
     Stock Exchange, subject to official notice of issuance;

  -- the issuance and resale of the New Common Stock issued
     under the Plan shall be exempt from the dealer registration
     and prospectus requirements of applicable Canadian
     securities laws or the requisite discretionary orders or
     rulings from applicable Canadian provincial securities
     regulatory authorities shall have been obtained in form and
     substance acceptable to the Subcommittees, except to the
     extent that holders of New Common Stock are control block
     holders for purposes of applicable Canadian securities
     laws;

  -- the documents effectuating the Exit Financing Facility are
     in form and substance satisfactory to the Subcommittees,
     the documents have been executed and delivered and all
     conditions to funding have been satisfied or waived;

  -- the Governmental Unit Estimation Order has become a Final
     Order;

  -- the Class 6 Estimation Order has become a Final Order;

  -- the Debtors shall have sufficient Cash to make the
     distributions required under the Plan; and

  -- the Effective Date has occurred by October 31, 2002.

Judge Kaplan will convene a hearing on September 5, 2002 at
10:00 a.m. to consider the entry of an order, among other
things:

  -- finding that the Disclosure Statement contains "adequate
     information" within the meaning of Section 1125 of the
     Bankruptcy Code to enable the Debtors' creditors, who are
     entitled to vote, to make an informed decision on whether
     to accept or reject the Plan of Reorganization, and

  -- approving the Disclosure Statement.

Responses and objections, if any, to the approval of the
Disclosure Statement or any of the other relief sought by the
Debtors in connection with approval of the Disclosure Statement,
must be filed, together with proof of service, with the Court
and served so as to be actually received, on or before 4:00 p.m.
(Eastern Time) on September 3, 2001 by:

    (a) attorneys for the Debtors;

    (b) the attorneys for the Creditor's Committee;

    (c) the attorneys for the DIP Lenders;

    (d) the attorneys for the Bank Group;

    (e) attorney for the Noteholders' Committee; and

    (f) the United States Trustee for the Western District of
        New York, Christopher K. Reed.
(Laidlaw Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


LODGIAN: Has Until Sept. 10, 2002 to Use CCA's Cash Collateral
--------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates sought and obtained a
Court order extending the time to use the CCA cash collateral on
the earliest of:

  * September 10, 2002,

  * the effective date of a plan of reorganization confirmed in
    the chapter 11 cases of the CCA Borrowers,

  * the conversion or dismissal of any of the cases of the CCA
    Borrowers, and

  * a Termination Event and receipt by the Debtors of a written
    notice from CCA that a Termination Event has occurred.
    (Lodgian Bankruptcy News, Issue No. 14; Bankruptcy
    Creditors' Service, Inc., 609/392-0900)


MAGELLAN HEALTH: Seeks Debt Refinancing to Dodge Covenant Breach
----------------------------------------------------------------
Magellan Health Services, Inc., (NYSE:MGL), reported operating
results for the third quarter of fiscal year 2002.

In addition, the company provided guidance for the fourth
quarter and for fiscal year 2003.

Magellan reported net revenues for the quarter of $437.1 million
and segment profit (net revenues less cost of care, direct
service costs and other operating expenses plus equity in
earnings of unconsolidated subsidiaries) of $43.0 million. For
the same period a year ago, revenues were $432.9 million and
segment profit was $55.5 million.

Income from continuing operations was $3.4 million or $0.06 per
share for the quarter on a fully diluted basis. Excluding
restructuring charges incurred in the current quarter of
approximately $1.3 million pre-tax ($0.8 million after tax),
income from continuing operations would have been $4.2 million,
or $0.08 per share.

Cash flow from operations for the quarter was approximately
$35.0 million compared to $33.3 million in the prior year
quarter. The company ended the quarter with $34.2 million in
unrestricted cash and restricted cash of $116.8 million.

"Magellan's third quarter results were impacted by slightly
lower than forecasted membership, partly due to higher than
anticipated Aetna membership losses as well as higher care costs
in one contract in our public sector division," said Daniel S.
Messina, president and chief executive officer of Magellan.
"Nonetheless, we are pleased by the progress we have made on a
number of initiatives that will bode well for the company over
both the short and long term.

"During the quarter we broadened our business improvement action
plan to include an examination of our corporate and information
technology areas," Messina said. "As part of this enterprise-
wide effort, we are continuing to take a hard look at how we
conduct business, how we are structured and what changes we can
make to improve service and further reduce costs. These changes
will help us to fully achieve the economies of scale that were
originally envisioned when we merged the three legacy behavioral
health care companies. I'm pleased to say that these business
improvement efforts are already beginning to bear fruit, as we
have seen improvement in productivity in a number of areas and
have reduced expenses by approximately $5 million on an
annualized basis.

"We continue to renew business with many long time customers and
are actively engaged in productive discussions on renewal with
other customers," Messina added. "We have also made some initial
progress on appropriately aligning our pricing with our current
care cost trend. We were successful during the quarter on an
agreement for an off-cycle rate increase with a large health
plan customer and are generally encouraged by our customers'
understanding of the current care cost trend's implications and
their receptiveness to addressing the issue. In addition to
working on business improvements and realigning our pricing, we
are aggressively pursuing opportunities to refinance our debt in
order to provide a longer term solution to the financial
challenges we face."

"We continue to seek to refinance our bank debt to obtain a
longer-term revolving credit facility, improved liquidity, and
the additional financial flexibility that we need while we
continue to implement our key operational initiatives," said
Mark S. Demilio chief financial officer of the company. "A
successful refinancing of our debt would prevent a covenant
breach on the company's bank credit agreement that Magellan
estimates it will face in the fourth quarter and beyond, which,
if not remedied, could result in an acceleration of our debt
maturities. In the absence of such refinancing of our bank term
debt with our current bank group or third parties, there would
be no assurance that we would meet our covenant and liquidity
requirements. Without such assurance, we anticipate that our
auditors would need to include a going concern modification in
their opinion on our audited financial statements for September
30, 2002. We have been working diligently to address these debt
compliance and liquidity issues and we hope to have some
resolution by the end of September."

"Looking ahead, we estimate that segment profit in the fourth
quarter will be in the range of $42 million to $45 million,"
Messina said. "We see the fourth quarter and fiscal year 2003 as
a recovery period during which we will continue to work to
improve our rates and execute our business improvement efforts
and we would expect to see some steady, modest improvements from
our current run rates as our initiatives take hold and begin to
offset the continued pressure we will see from further Aetna
membership losses and cost of care trends. We will give further
2003 guidance during our fourth quarter and year end conference
call later this year."

Headquartered in Columbia, Md., Magellan Health Services, Inc.,
(NYSE:MGL), is the country's leading behavioral managed care
organization, with approximately 68.7 covered lives. Its
customers include health plans, government agencies, unions, and
corporations.


MIDWAY AIRLINES: Asks Court to Fix Oct. 1 Admin. Claims Bar Date
----------------------------------------------------------------
Midway Airlines Corporation and its debtor-affiliate, Midway
Airlines Parts, LLC want the U.S. Bankruptcy Court for the
Eastern District of North Carolina to fix October 1, 2002 as the
Administrative Claims Bar Date.

The Debtors relates that on July 17, 2002, they entered into a
Letter of Intent and special Protection Agreement with US
Airways, Inc. which provides for the Debtor to be a regional jet
service provider to US Airways.  The Debtors point out that the
Agreement will form the foundation of their plan of
reorganization and addressing the claims of the creditors and
parties in interest.

The Debtors argue that it is imperative for them to determine
the amounts that the Debtors owe the creditors for the
postpetition period. The Administrative Bar Date will enable the
Debtor to propose a confirmable plan of reorganization, and be
in a position to re-commence flight operations on or before
October 1, 2002, the Debtors concede.

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.


NQL INC: Court Approves DCi Asset Sale to Viewcast Corporation
--------------------------------------------------------------
ViewCast Corporation (OTCBB:VCST), announced that the United
States Bankruptcy Court in the bankruptcy case of NQL Inc. has
approved the intended purchase by ViewCast Corporation of
virtually all of the assets of NQL's wholly-owned subsidiary,
Delta Computec Inc.  ViewCast, NQL and DCi entered into an asset
purchase agreement on May 31, 2002, pending approval from the
Bankruptcy Court.  DCi is a provider of professional information
technology and customized network support services to Fortune
500 and Fortune 1000 corporations, mid-sized companies,
hospitals, health care facilities and financial institutions
primarily in the Northeast.

"We are pleased to receive the positive ruling from the
bankruptcy court and look forward to expediting the process of
acquiring the assets of DCi," stated George Platt, President and
CEO. "We believe that DCi is a great investment for ViewCast due
to their impressive customer satisfaction track-record and
complementary capabilities, which address a variety of target
markets, plus the expectation of a positive financial impact
from their operations. This acquisition adds depth and breadth
to our current product offerings, as well as expands our
existing customer base."

ViewCast's purchase of the DCi's assets remains subject to
various terms and closing conditions of the asset purchase
agreement. Further details regarding DCi and the acquisition
will be released following the close of the transaction, which
is expected to occur in September 2002.

ViewCast develops products and services that provide video
networked solutions. ViewCast maximizes the value of video
through its core businesses: Osprey(R) Video provides the
streaming media industry's de facto standard capture cards and
ViewCast Systems integrates turnkey streaming and video
distribution systems and software. From streaming digital video
on the Internet to distribution of broadcast-quality video
throughout the corporate enterprise, plus comprehensive video
software applications, ViewCast provides the complete range of
video solutions.

Visit the company's Web site at http://www.viewcast.comfor more
information.


NTL INCORPORATED: Turns to Kane Reece for Financial Advice
----------------------------------------------------------
NTL Incorporated and its debtor-affiliates sought and obtained
approval from the U.S. Bankruptcy Court for the Southern
District of New York to employ Kane Reece Associates, Inc., as
their financial advisors.

Kane Reece will provide:

     a) Assistance in the preparation and review of reports or
        filings as required by the Bankruptcy Court or the
        Office of the United States Trustee, including mailing
        matrix and monthly operating reports;

     b) Review of and assistance in the preparation of financial
        information for distribution to creditors and other
        parties-in-interest, including analyses of cash receipts
        and disbursements, financial statement items, and
        proposed transactions for which Bankruptcy Court
        approval is sought;

     c) Assistance with analysis, tracking, and reporting
        regarding cash collateral and any debtor-in-possession
        financing arrangements and budgets;

     d) Review and critique of the Debtor's financial
        projections and assumptions;

     e) Assistance in the preparation of the liquidation
        analysis for inclusion in the Debtors' disclosure
        statement;

     f) Assistance in preparing documents necessary for
        confirmation of the Plan, including financial and other
        information contained in the plan of reorganization and
        disclosure statement;

     g) Advice and assistance to the Debtor in negotiations and
        meetings with bank lenders, creditors, and any official
        or informal committees;

     h) Other functions as requested by the Debtor or its
        counsel to assist the Debtor in its business and
        reorganization.

The Debtors will pay Kane Reece a minimum of $100,000 to a
maximum of $110,000, exclusive of expenses and court preparation
and appearances.

NTL is the largest cable television operator and a leading
provider of business and broadcast services in the UK, and the
owner of 100% of Cablecom in Switzerland and Cablelink in
Ireland. Kayalyn A. Marafioti, Esq., Jay M. Goffman, Esq., and
Lawrence V. Gelber, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP represent the Debtors in their U.S. Bankruptcy
proceedings and Jeremy M. Walsh, Esq., at Travers Smith
Braithwaite serves as U.K. Counsel. At December 31, 2001, the
Company's books and records reflected, on a GAAP basis,
$16,834,200,000 in total assets and $23,377,600,000 in
liabilities.


OWOSSO CORP: Nasdaq Extends Grace Period to Meet Requirements
-------------------------------------------------------------
Owosso Corporation (Nasdaq: OWOS) received a letter from the
Nasdaq Stock Market indicating that the Company had met certain
initial listing criteria of the Nasdaq SmallCap Market, and
under current Nasdaq policy was granted an additional 180
calendar day grace period, or until February 10, 2003, to
demonstrate compliance with Nasdaq's $1.00 minimum bid price
requirement.  In addition, the Nasdaq Listing Qualifications
Panel extended until September 11, 2002 the date by which Owosso
is required to make a public filing of a balance sheet with the
Securities and Exchange Commission and Nasdaq evidencing
shareholders' equity of at least $7.0 million dollars in order
to avoid the delisting of Owosso's securities from the Nasdaq
SmallCap Market.  Owosso can make no assurances that it will be
able to demonstrate compliance with the minimum $1.00 bid price
requirement or be able to meet the requirements of the filing
with the Commission and Nasdaq.

Owosso is a manufacturer of engineered component motor products.
To receive additional information on Owosso Corporation visit
Owosso's Web site http://www.owosso.com


PERKINELMER: Fitch Ratchets Senior Unsecured Debt Rating to BB+
---------------------------------------------------------------
Fitch Ratings has downgraded PerkinElmer's existing bank and
senior unsecured debt rating to 'BB+' from 'BBB+', and
commercial paper debt rating to 'B' from 'F2'. The debt rating
of 'BB+' applies to $115 million of outstanding unsecured notes
due 2005, and approximately $490 million of zero coupon
convertible debentures due 2020. The company has no outstanding
commercial paper at the end of the second quarter. PerkinElmer
maintains a $270 million credit facility that expires in March
2003 and a $100 million credit facility that expires in March
2006. Fitch has placed the ratings of PerkinElmer on Rating
Watch Negative.

The placement of PerkinElmer on Rating Watch Negative has
occurred due to uncertainty associated with the possible
violation of a financial covenant in the company's revolving
credit facilities, the timing and use of proceeds from asset
sales, the company's zero coupon convertible debenture put-
option in August 2003, and the recovery of key end-markets
affecting global sales.

Fitch is concerned that the financial covenant, minimum interest
coverage (rolling four-quarter EBITDA to interest of 5:1 times),
listed in PerkinElmer's revolving credit facilities may be
violated in the coming quarters. The company has experienced
continued lower-than-expected revenues and earnings, negatively
affected by lower demand from key end-markets, such as the
pharmaceutical industry (representing approximately 28% of the
global customer base). Fitch anticipates that the terms of the
credit facility agreement may need to be re-negotiated with the
current bank group in the near-term horizon.

The company has approximately $490 million in zero convertible
debentures (due in 2020) that are deeply-out-of-the-money
(PerkinElmer's share price is down approximately 80% since the
beginning of the year) and can be put to the company in cash or
equity in August 2003. Fitch expects that the put option will be
exercised on the majority of the debentures which places
pressure on the company to purchase or replace the securities
prior to the put date.

Fitch anticipates a further decline in the PerkinElmer credit
rating if the financial covenant within the company's credit
facility is not met or if the company is unable to pay or
replace the zero-coupon convertible debt. Fitch will monitor the
status of the asset sales and the use of the proceeds for debt
reduction, the outcome class action litigation and if it becomes
material, and the overall sales performance through the fourth
quarter, which typically is strongest for revenue generation.

The company had cash and cash equivalents of approximately $143
million at the end of the second quarter, with additional
sources of cash that include proceeds from asset sales. A
potential cash outflow exists in the form of a ratings trigger
in the Account Receivables agreement, which permits the agent
bank to specify liquidation timing of all borrowings under the
program ($36 million at the end of the second quarter) in the
event of a downgrade below investment grade.

Leverage, determined by debt-to-EBITDA, has increased over
anticipated levels and is appropriate for the new credit rating.
Improvement in credit metrics is anticipated in the
intermediate-term, as proceeds from the sales of the Fluid
Sciences and Entertainment Lighting businesses are expected to
be used for debt reduction. The current rating accounts for
weakness in various industrial markets, as well as cautiousness
in capital spending from the pharmaceutical and biotechnology
industries. The current rating also reflects the strong
reputation and market leading positions in instrumentation, in
addition to the benefit of the aggressive efforts of PerkinElmer
to increase operating margins through working capital
improvements, headcount reductions, facility rationalization,
and Asian manufacturing and raw materials sourcing.


PIONEER COMPANIES: Auditors Doubt Ability to Continue Operations
----------------------------------------------------------------
Pioneer Companies, Inc., (OTC Bulletin Board: PONR) reported
that for the three months ended June 30, 2002, it incurred a net
loss of $6.7 million on revenues of $74.2 million.  Results were
after giving effect to a gain of $5.0 million from the change in
fair value of derivatives.  In the second quarter of 2001,
Pioneer had revenues of $103.3 million and a net loss of $44.9
million, after giving effect to a $29.8 million loss from the
change in fair value of derivatives.

Revenues during the second quarter of 2002 were $2.4 million
more than the first quarter of 2002.  Key factors involved were
higher caustic soda and bleach volume and higher chlorine sales
prices largely offset by lower sales prices for caustic soda.
The average ECU price during the quarter was $225, a decrease of
$15 from the previous quarter.  Cost of sales increased $10.5
million to $77.7 million for the current quarter, compared with
$67.2 million for the previous quarter.  The increase was
principally due to greater sales volume, a $4.9 million realized
loss on derivatives in the second quarter of 2002 in comparison
with a $1.5 million realized gain on derivatives in the first
quarter of 2002 and a $1.1 million pension plan curtailment gain
recorded during the same period.  Beginning with this press
release, EBITDA is being reported using the same definition as
in the Company's Form 10-K for 2001, namely, net earnings before
extraordinary gains, interest, income taxes, depreciation and
amortization.  EBITDA under this definition was $1.6 million for
the second quarter of 2002 and $21.7 million for the first six
months of 2002.

Included in the Company's EBITDA for the second quarter of 2002
was a net gain from derivatives of $0.1 million.  The net gain
from derivatives for the first six months was $19.6 million.
Therefore, EBITDA without these gains would have been $1.5
million for the second quarter and $2.1 million for the first
half of 2002.

Revenues during the 2002 second quarter of $74.2 million
decreased approximately 28% compared to the second quarter of
2001 primarily due to lower caustic soda sales prices.  The 2002
second quarter average ECU price of $225 was $134 less than the
ECU price of $359 in the second quarter of 2001. Cost of sales
for the 2002 second quarter decreased in comparison with the
2001 second quarter principally because of substantially lower
power costs and reduced fixed costs.  The Company's EBITDA
increased to $1.6 million for the 2002 second quarter from a
negative EBITDA of $17.8 million for the 2001 second quarter
primarily because there was a net gain on derivatives in the
2002 period in comparison with a loss on derivatives in the 2001
period.  In addition, in the 2002 quarter, there were lower
power costs, operating and selling, general and administrative
expenses, and the absence of professional fees incurred in the
second quarter of 2001 related to Pioneer's reorganization,
somewhat offset by lower ECU prices.

Based on derivative valuations as of June 30, 2002, the
aggregate mark-to-market value of the cost to close the
derivatives at their maturities over the next five years would
be approximately $87.8 million, compared with $92.8 million as
of March 31, 2002.

Selling, general and administrative expenses decreased by $4.2
million, or approximately 43%, for the three months ended June
30, 2002 as compared with the corresponding period in the prior
year.  The decrease was primarily attributable to non-cash
items, including $3.5 million from reduced depreciation and
amortization largely attributable to the adoption of fresh start
accounting.

Interest for the 2002 second quarter was substantially less than
for the corresponding 2001 period because less debt was
outstanding as a result of the implementation of the Company's
Plan of Reorganization.  Second quarter 2002 results include a
foreign tax benefit of $2.7 million on the carryforward of the
operating loss from Pioneer's Canadian operations.  Because of
uncertainties regarding the application of U.S. net operating
loss carryforwards, the related U.S. tax benefit has been offset
by a 100% valuation allowance.

At June 30, 2002, Pioneer had cash of $5.4 million and a
borrowing base under its revolving credit facility of
approximately $22.3 million.  At that date, borrowings under the
revolver were $5.4 million.  Borrowing availability, after
borrowings, letters of credit and reserves, was $12.3 million
which, when added to the cash position, resulted in liquidity of
$17.7 million.

Pioneer, based in Houston, manufactures chlorine, caustic soda,
hydrochloric acid and related products used in a variety of
applications, including water treatment, plastics, pulp and
paper, detergents, agricultural chemicals, pharmaceuticals and
medical disinfectants.  The Company owns and operates four
chlor-alkali plants and several downstream manufacturing
facilities in North America.  Other information and press
releases of Pioneer Companies, Inc., can be obtained from its
Internet Web site at http://www.piona.com

Pioneer adopted fresh start accounting in connection with its
emergence from bankruptcy on December 31, 2001.  Accordingly,
financial statements for periods after emergence are not
comparable to those of prior periods.  The Company's financial
statements are prepared on a going concern basis.  As noted in
Pioneer's Annual Report on Form 10-K for the year ended December
31, 2001, and its Quarterly Reports on Form 10-Q for 2002, the
Company's emergence from bankruptcy, its financial condition and
other items disclosed in its recent SEC filings raise concern
about the Company's ability to continue as a going concern.  The
financial statements included in those filings do not include
any adjustments that may result from the outcome of the
uncertainties.


PUBLICARD INC: Auditors Express Going Concern Doubt
---------------------------------------------------
PubliCARD, Inc., (Nasdaq: CARD) reported its financial results
for the three and six months ended June 30, 2002.

Sales for the second quarter of 2002 were $1,016,000, compared
to $1,339,000 a year ago.  The 2001 figure includes $286,000 of
revenues associated with the smart card reader and chip
business, which the Company exited in July 2001.  Sales related
to smart card platform solutions for educational and corporate
sites for the second quarter of 2002 were comparable to the
prior year period.  The net loss from continuing operations for
the quarter ended June 30, 2002 was $1,083,000 compared with
$9,510,000 a year ago.  The results for 2001 reflect a
repositioning charge of $6,085,000 principally reflecting the
non-cash write-offs of goodwill, fixed assets and inventories
relating to the July 2001 decision to exit the smart card reader
and chip business.  As of June 30, 2002, cash and short-term
investments totaled $2,520,000, exclusive of approximately
$2,100,000 of escrow deposits established in connection with
prior dispositions.

For the six months ended June 30, 2002, sales were $2,215,000
compared to $2,859,000 a year ago.  Excluding revenues from
smart card readers and chips, sales for the period increased 6%
over the prior year.  The net loss from continuing operations
for the six months ended June 30, 2002 was $2,208,000 or $.09
per share compared with $13,019,000 in 2001.  Operating
expenses, excluding the repositioning charge and other non-cash
charges, decreased from $6,866,000 in 2001 to $2,840,000 in
2002.  The decline in operating expenses is attributable
primarily to work force reductions associated with the Company's
exit from the smart card reader and chip business and other
corporate cost containment measures.

Headquartered in New York, NY, PubliCARD, through its Infineer
Ltd. subsidiary, designs smart card platform solutions for
educational and corporate sites.  PubliCARD's future plans
revolve around an acquisition strategy focused on businesses in
areas outside the high technology sector while continuing to
support the expansion of the Infineer Ltd., business.  More
information about PubliCARD can be found on its Web site
http://www.publicard.com

           Liquidity and Going Concern Considerations

The consolidated statements of operations and consolidated
balance sheets of the company contemplate the realization of
assets and the satisfaction of liabilities in the normal course
of business.  The Company has incurred operating losses, a
substantial decline in working capital and negative cash flow
from operations for the six months ended June 30, 2002 and the
years 2001, 2000 and 1999.  The Company has also experienced a
substantial reduction in its cash and short-term investments,
which declined from $17.0 million at December 31, 2000 to $2.5
million at June 30, 2002, and has an accumulated deficit of $107
million at June 30, 2002.

Although the Company believes that existing cash and short term
investments may be sufficient to meet the Company's obligations
and capital requirements at its currently anticipated levels of
operations through December 31, 2002, additional working capital
will be necessary in order to fund the Company's current
business plan and to ensure it is able to fund its pension,
environmental and other obligations. See Notes 6 and 8 to the
Consolidated Financial Statements contained in PubliCARD's
Annual Report on Form 10-K for the fiscal year ended December
31, 2001, as amended, and Notes 8 and 9 to the Condensed
Consolidated Financial Statements contained in the Quarterly
Report on Form 10-Q for the period ended June 30, 2002, as well
as the respective Management's Discussion and Analysis of
Financial Condition and Results of Operations sections of such
reports, which have been filed with the SEC. While the Company
is actively considering various funding alternatives, the
Company has not secured or entered into any arrangements to
obtain additional funds.  There can be no assurance that the
Company will be able to obtain additional funding on acceptable
terms or at all.  If the Company cannot raise additional capital
to continue its present level of operations, it may not be able
to meet its obligations, take advantage of future acquisition
opportunities or further develop or enhance its product
offering, any of which could have a material adverse effect on
its business and results of operations and could lead to the
Company being required to seek bankruptcy protection.  These
conditions raise substantial doubt about the Company's ability
to continue as a going concern.  The Consolidated Financial
Statements do not include any adjustments that might result from
the outcome of this uncertainty.  The auditors' report on the
Company's Consolidated Financial Statements for the year ended
December 31, 2001 contained a qualified opinion raising
substantial doubt about the Company's ability to continue as a
going concern.


RECEIVABLES STRUCTURED: Fitch Junks 2001-Calpoint Notes
-------------------------------------------------------
Fitch Ratings has downgraded the Receivables Structured Trust
2001-Calpoint Notes to 'CCC+' from 'B'. The rating addresses the
likelihood that a noteholder will receive timely payment of
interest and ultimate payment of principal in accordance with
the terms of the related indenture, issued by Receivables
Structured Trust 2001-Calpoint.

The rating is based on and will move with the rating of the
guarantor, Qwest Communications International, Inc.

Fitch downgraded Qwest Communications International, Inc., to
'CCC+' from 'B', with a Negative Rating Outlook.


RELIANCE GROUP: Liquidator Sell Life Affiliate for $10.2 Million
----------------------------------------------------------------
M. Diane Koken, Insurance Commissioner of Pennsylvania and
Liquidator of Reliance Insurance Company, has sold RIC's wholly-
owned subsidiary -- Reliance Life Insurance Company for
$10,250,000 to Combined Insurance Company of America, a
subsidiary of Aon Corporation of Chicago.

Reliance Life Insurance Company is a life insurance shell
corporation organized under the laws of Delaware.  Licensed to
operate in 44 states and the District of Columbia, RLIC
maintained statutory deposits totaling $8,000,000.  Other than
the licenses and deposits, RLIC held no other assets with
significant value.

In September 2000, RIC sold its Reliance Integramark line of
business to Aon.  As part of this transaction, it was agreed
that Aon would later purchase Reliance Life Insurance Company,
by December 31, 2000.  Ann B. Laupheimer, Esq., at Blank, Rome,
Comisky & McCauley, relates that the negotiations encountered
unexpected delays and it was not until April 2001, that the
parties concluded negotiations on the Stock Purchase Agreement.
Since then, the transaction was delayed because the Delaware
Department of Insurance did not immediately grant regulatory
approval.  In June 2001, the DDI filed a request for additional
information.  On October 12, 2001, the DDI sent Aon a letter
indicating that it would convene a hearing on the RLIC
transaction on October 31, 2001.  The transaction was completed
after the DDI and the Commonwealth Court granted their approval.

Aon agreed to pay $10,250,000.  Ms. Laupheimer explains to the
Commonwealth Court that this price reflects:

    1) $2,250,000 for RLIC's licenses (45 licenses at $50,000
       per license); and

    2) $8,000,000 for RLIC's statutory deposits.

Ms. Laupheimer assured the Commonwealth Court that her client
took the necessary steps to determine that the purchase price
constituted fair value for RLIC's assets.  The Liquidator
reviewed the terms of the transaction and obtained independent,
professional advice.  For example, two consulting firms were
retained.  They informed the Liquidator that statutory deposits
are customarily sold at face value and that state licenses
typically fetch from $35,000 to $75,000 per license.  Therefore,
the Liquidator is confident that the RLIC transaction yielded
fair value to RIC. (Reliance Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ROHN INDUSTRIES: Posts $4MM Net Loss for Second Quarter 2002
------------------------------------------------------------
ROHN Industries, Inc. (Nasdaq: ROHN), a global provider of
infrastructure equipment for the telecommunications industry,
announced today that it has lowered its previously announced
second quarter net earnings by approximately $0.5 million as a
result of a recently discovered accounting error.  As a result
of an accounting process error, during the second quarter the
Company inadvertently over absorbed labor and overhead costs
into inventory for its galvanizing department.  Because of a
discrepancy between the value of inventory in the general ledger
and the value of perpetual inventory records, the Company
initiated a review of the inventory accounting process.  The
review, conducted with the full participation of the Company's
external auditors, PricewaterhouseCoopers, LLP, identified the
accounting process error.

As a result of this error, the Company's net earnings for the
second quarter of 2002, previously announced on July 17, 2002,
are being revised to a loss of $4.0 million as compared to the
previously released loss of $3.5 million.  Net sales for the
second quarter of $31.9 million, as previously released, are not
impacted by this revision.  As previously released, net income
for the second quarter of 2002 includes charges (net of tax
effects) of $1.7 million for the testing and repairs of internal
flange poles and $0.5 million for the restructuring of the
Company's operations in Mexico.

Brian B. Pemberton, President and Chief Executive Officer of the
Company, said, "The Company is committed to delivering accurate
and reliable financial information to its stakeholders.  The
Company believes that no other material accounting errors have
occurred."

ROHN Industries, Inc., is a leading manufacturer and installer
of telecommunications infrastructure equipment for the wireless
and fiber optic industries. Its products are used in cellular,
PCS, fiber optic networks for the Internet, radio and television
broadcast markets. The company's products include towers,
equipment enclosures, cabinets, poles and antennae mounts, as
well as design and construction services.  ROHN has
manufacturing locations in Peoria, Ill.; Frankfort, Ind.; and
Bessemer, Ala., along with a sales office in Mexico City,
Mexico.

                         *    *    *

As reported in Troubled Company Reporter's July 19, 2002
edition, ROHN Industries entered into an amendment to its credit
agreement with its bank lenders that reduced the Company's
revolving loan facility from $25 million to $23 million and
provided the Company with up to $1,500,000 of additional
liquidity, and an amendment to its forbearance agreement with
its bank lenders that extended the forbearance period in respect
of existing defaults until August 31, 2002. In addition, on July
1 the Company announced that it has engaged Peter J. Solomon
Company Limited to assist the Company in exploring strategic
alternatives.  "We are in the early stages of exploring
strategic alternatives for the Company," said Pemberton.  "The
amendments to our credit and forbearance agreements should
provide us adequate liquidity to pursue this process through the
end of the forbearance period."

On June 20 the Company announced it had received a letter dated
June 13 from the NASDAQ National Market, Inc., advising the
Company that unless the price per share of the Company's
common stock closed at $1.00 or more on the Nasdaq National
Market for at least 10 consecutive trading days before September
11, 2002, the Company's common stock would be delisted from the
Nasdaq National Market.  The Company is considering various
options in response to the possible delisting from the Nasdaq
National Market, including listing its common stock on the
Nasdaq SmallCap Market.  The Company will make an announcement
at the appropriate time regarding which course of action it
intends to follow.


ROTECH HEALTHCARE: Defaults on Bank Credit Facility & 9.5% Notes
----------------------------------------------------------------
Rotech Healthcare Inc., will delay submitting its second quarter
financial report to creditors.

Rotech's auditor, KPMG, has informed the Company that it will
not complete its review of the report by August 14, 2002.

In July, the Company announced that it had uncovered a pattern
of falsified sales by an independent contractor, who is a former
Rotech employee, with respect to bulk sales to the Department of
Veterans Affairs. The Company terminated the contractor and, to
ensure proper accounting treatment of the sales, is currently
reviewing its financial results for the affected periods.

KPMG has since been conducting a review of the Company's
financial records. Rotech has engaged the government contracts
consulting firm Navigant Consulting, Inc. and the law firm of
Latham & Watkins to conduct an internal investigation, which is
nearing completion.

The Company will issue a report on its historical and second
quarter results as soon as they are available. While the process
is taking longer than expected, the Board absolutely requires
that it be thorough and accurate.

The delay in reporting places Rotech in technical default under
its bank credit facility and 9-1/2% Senior Subordinated Notes.
The Company has 30 days in which to cure such default without
penalty and has put the banks on notice as to this matter.

Rotech Healthcare Inc., is a leading provider of home
respiratory care and durable medical equipment and services to
patients with breathing disorders such as chronic obstructive
pulmonary diseases. The Company provides its equipment and
services in 47 states through over 600 operating centers,
located principally in non-urban markets. Rotech's local
operating centers ensure that patients receive individualized
care, while its nationwide coverage allows the Company to
benefit from significant operating efficiencies. In 2001 the
Company had revenues in excess of $600 million.


RUSSIAN TEA ROOM: Taps Squire Sanders as Bankruptcy Counsel
-----------------------------------------------------------
Russian Tea Room Realty LLC and its debtor-affiliates ask for
permission from the U.S. Bankruptcy Court for the Southern
District of New York to engage Squire, Sanders & Dempsey LLP as
bankruptcy attorneys.

Squire Sanders will be required to:

     a) advise the Debtors with respect to the powers and duties
        of debtors-in-possession;

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

     c) take all necessary action to protect and preserve the
        Debtors' estates, including the prosecution of actions
        on their behalf, the defense of any actions commenced
        against them, negotiations concerning all litigation in
        which the Debtors are involved and objections to claims
        filed against their estates;

     d) assist the Debtors in preparing, or prepare on the
        Debtors' behalf, all motions, applications, answers,
        orders, reports and papers necessary to the
        administration of the estates;

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

     f) advise the Debtors in connection with the sale of
        assets;

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

     h) perform all other necessary legal services and provide
        all other necessary legal advice to the Debtors.

Squire Sanders agrees to render these services on its customary
hourly rates:

          legal assistants      $65 to $250
          associates            $130 to $390
          partners              $275 to $550

The Debtor is a Delaware limited liability company, the owner of
the Russian Tea Room, one of New York City's most famous and
distinguished restaurants.  As of the Petition Date, the Debtor
believes that its aggregate unsecured debt -- comprised mostly
of trade debt, banquet deposits, and unsecured loans -- is
approximately $6,000,000.


SAFETY-KLEEN: Court Approves Connolly Bove as Special Counsel
-------------------------------------------------------------
Connolly Bove Lodge & Hutz has represented Safety-Kleen Corp.,
and its debtor-affiliates in connection with the PwC Claims.
The Debtors want to expand this present working relationship to
include the commencement and prosecution of avoidance actions on
behalf of the Debtors and their estates.

By this Application, the Debtors sought and obtained Court
authority to employ and retain Connolly Bove Lodge & Hutz, nunc
pro tunc to May 13, 2002, as special litigation counsel to
commence and prosecute avoidance actions.  The firm will be
assisting Bifferato, Bifferato & Gentilotti, which is the
Debtors' lead avoidance counsel.

The Debtors assure Judge Walsh that Connolly will not perform
services duplicate those performed by the Debtors' general
bankruptcy counsel, Skadden, Arps, Slate, Meagher & Flom.  The
Debtors contend that Connolly is well qualified to act as their
local avoidance counsel because of:

    -- the firm's experience and knowledge in the field of
       creditors' rights and business reorganizations under
       chapter 11 of the Bankruptcy Code,

    -- its experience and knowledge in commercial litigation,

    -- its proximity to the Court,

    -- its ability to respond quickly to emergency hearings
       and other emergency matters in this Court,

    -- its current working relationship with Debtors as
       their special litigation counsel, and

    -- efficiencies which result from having Connolly, rather
       than Debtors' general bankruptcy counsel, commence and
       prosecute the Avoidance Actions.

Connolly began its preparation to commence the Avoidance Actions
on May 13, 2002.

This Court has previously approved procedures for payment to
Connolly in accordance with section 330(a) of the Bankruptcy
Code.  Compensation will continue to be payable to Connolly on
an hourly basis, plus reimbursement of actual, necessary
expenses incurred by the firm.  The primary attorneys and
paralegals professionals at Connolly involved in the
commencement and prosecution of avoidance actions are:

           Craig B. Young, Esq.         $325
           Jeffrey C. Wisler, Esq.       325
           Gregory Weinig, Esq.          185
           Gwendolyn Lacy, Esq.          150
           Marc Phillips, paralegal      110
           Sandy McCollum, paralegal     110

Other attorneys and paralegals may, from time to time, serve the
Debtors in connection with the defense of PwC claims and
prosecution of the Avoidance Actions.  Additionally, the Debtors
may call upon the specialized knowledge and skills of other
attorneys at Connolly to provide related services, as necessary.

As part of its diverse practice, Jeffrey C. Wisler, Esq.,
advises that Connolly appears in cases, proceedings and
transactions involving many different professionals, including
attorneys, accountants, financial consultants and investment
bankers, some of which may be or represent claimants and
parties-in-interest in the Debtors' cases.  Based on current
knowledge of the professionals involved, the firm does not
currently represent or have a relationship with any attorneys,
accountants, financial consultants or investment bankers that
would be adverse to the Debtors, their creditors or equity
security holders, except that Connolly may in the past have
acted, or may presently be acting, as counsel or co-counsel with
some of those attorneys, accountants, financial consultants or
investment bankers in matters wholly unrelated to this case.

Mr. Wisler asserts that Connolly does not hold or represent any
interest adverse to the Debtors.  The firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code. (Safety-Kleen Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SECURITY ASSET: Charles Brofman Discloses 7.1% Equity Stake
-----------------------------------------------------------
As of July 23, 2002, the aggregate number and percentage of the
common stock of Security Asset Capital Corporation beneficially
owned by Charles S. Brofman is 3,000,000 shares, or 7.1% of the
outstanding common stock shares of Security Asset Capital.  Mr.
Brofman has the sole power to vote or dispose of all of the
shares beneficially owned by him.

Mr. Brofman's acquisition of these shares was part of a
Consulting Agreement dated July 18, 2002. As set forth in the
Consulting Agreement, Mr. Brofman shall provide the Company with
consulting services that include assisting the Company in
developing its technology process specifically for its Debt
Registry function which has been created by the Company for the
purposes of registering consumer debt considered in default by
various creditors including banks and other lending
institutions; developing a potential insurance product which
will insure that proper title has passed from sellers of bulk
consumer debt to buyers of bulk consumer debt; assisting in
introductions to lending institutions which are in the business
either selling or buying consumer debt; assisting in the
development of pricing strategies; assistance in the development
of marketing strategies for the Company; assistance in the
preparation of financial projections; assistance in procuring
investors and/or lenders for the company either through private
placements or through the public offering of securities which
shall always be in conformity with law.

Mr. Charles S. Brofman's principal occupation is President and
Director of Arisean Capital Ltd., a New York corporation and
President and Chief Executive Officer of Cybersettle, Inc., and
his business address is 105 South Bedford Road, Mt. Kisco, New
York, 10549.

Security Asset Capital Corporation operates through its wholly
owned subsidiaries. Security Asset Management, Inc. acquires,
manages, collects and markets distressed consumer credit
portfolios for their own account and third parties. Security
Asset Properties, Inc. owns and operates 14 income producing
residential properties in San Diego County, California.
Broadband Technologies, Inc. was capitalized by the contribution
from the Company of a patent and certain patents pending and
licensing for direct online full screen video technology.
TheDebtTrader.com holds certain technology and rights related to
an online market place for buyers and sellers of distressed debt
portfolios, internally known as theDebtTrader.com. The Debt
Registry, uses the acquired broadband technology, develops it
further and applies it to the registration and tracking of
individual debt accounts sold by lending institutions to third
parties.

                        *   *   *

As reported in the June 3, 2002 edition of the Troubled Company
Reporter, results of operations of Security Asset Capital
Corporation for the three months ended March 31, 2002 and 2001
show revenue for the three months ended March 31, 2001 was
$11,146 as compared to $120,135 for 2001. The decrease in
revenues resulted from the sale of SAP, the slowdown within the
United State's economy, in particular collections following the
events of September 11, 2001, the decrease in Loan Portfolio
sales due to management's emphasis on development of the Debt
Registry and fund raising efforts.

Net loss for the three months ended March 31, 2002 was $527,953
as compared to 941,877 for 2001, a decrease of $413,924 when
compared to the first three month of 2001. This decrease is
primarily due to the decline in general and administrative
expenses resulting from the issuance of common stock for
services, and the decrease in interest expense.

The Company plans to continue funding its operations and
proceeds from additional debt and equity capital offerings.
There is no assurance that management will be successful in
these endeavors.


SENIOR RETIREMENT: Auditors Raise Going Concern Doubts
------------------------------------------------------
Senior Retirement Communities Inc., is a Louisiana corporation
established to develop assisted living centers and dementia
facilities for the housing and care of senior citizens in
Ruston, Bossier City, and Shreveport, Louisiana.

As a result of continuing operating losses as a result of not
achieving desired occupancy levels, the Company filed a request
on February 27, 2001 with Colonial Trust Company, who acts as
agent for the  bondholders, a request to extend all principal
and interest for four years.  This request includes amounts
which were already past due and amounts which would have become
due by February 1, 2002. In accordance with the trust indenture,
the request was submitted to the bondholders for a vote on the
proposed extension.  The votes were due to be returned by March
27, 2001.  As of March 27, 2001, bondholders representing
$122,250 of bonds out of the total of $8,150,000 bonds
outstanding voted to reject the plan.  As a result of this vote,
the request to postpone certain payments for a period of four
years was approved.  This proposal is intended to provide the
Company additional time to achieve full occupancy which should
allow for the future payments to be paid as they become due.
Should the Company fail to increase its occupancy levels,
additional measures would become necessary for the Company to
remain a going concern.

As a continuing part of the Company's effort to improve cash
flow and provide working capital for its operations, the Company
has adopted a plan to refinance the debt on the Ruston facility
by selling the facility to a related party who would obtain
permanent financing and liquidate the bond debt on that
facility. In contemplation of this move, the Company had planned
to transfer the operations of the Ruston facility to the related
entity effective January 1, 2002. The transfer did not take
place as planned. The Company hopes the sale can be completed in
the summer of 2002.

Management is encouraged by progress being shown in occupancy
levels and corresponding financial gains.  While occupancy
continues to lag behind projection and operating losses
continue, management believes the future is good for the
company.  In the second quarter of the year, operating losses
were approximately $75,000 less than the same period last year.
The losses for the first six months of 2002 were approximately
$131,000 less than the same period in 2001.  Revenues were
almost 140% greater than the same periods in 2001. Major
increases in expenses occurred in food costs,  management fees
(which are based on revenues), payroll expenses, taxes and
insurance. As expected, the majority of the increased expenses
occurred in variable costs which are a result of increased
occupancy.  The entire industry was hit with large increases in
insurance rates and the expectation  is that increases will
occur again this year.

The company showed a cash increase for the period as opposed to
cash losses for previously reported periods.


TANGRAM ENTERPRISE: Working Capital Deficit Tops $2MM at June 30
----------------------------------------------------------------
Tangram Enterprise Solutions, Inc. (Nasdaq: TESI), a leading
provider of IT asset management software and services, announced
operating results for the second quarter ended June 30, 2002.

Revenues for the second quarter of 2002 were $2.6 million
compared with revenues of $3.4 million in second quarter of
2001, a decrease of 24%.  The company went on to report a net
loss of $1.1 million for the three months ended June 30, 2002,
compared to a net loss of $771,000 for the three months ended
June 30, 2001.

For the six months ended June 30, 2002, the company reported a
net loss of $1.5 million on revenues of $5.7 million, compared
to a net loss of $1.3 million on revenues of $7.0 million for
the six months ended June 30, 2001.

The Company's June 30, 2002 balance sheet shows that its total
current liabilities eclipsed its total current assets by about
$2.3 million.

Norm Phelps, president and CEO of Tangram, said that the
company's performance is reflective of the continued lag in
technology spending, coupled with substantial vendor confusion
and uncertainty in the IT asset management market.  "In this
time of market disarray and economic instability, many
organizations are deferring IT asset management purchasing
decisions into future quarters," said Phelps.  "To address this
situation in the near term, Tangram has implemented highly
attractive pricing incentives designed to encourage asset
management purchasing decisions.  Additionally, we will continue
to expand our product and services offerings, while closely
managing our financial resources.  As a result, when the economy
and the market recover, we believe that we will be well
positioned to build revenues and resume financial growth."

                Annual Meeting of Shareholders

Tangram will host its Annual Meeting of Shareholders on
September 12, 2002.  The meeting, scheduled for 10:00 a.m. ET,
will be held at the company's headquarters, 11000 Regency
Parkway, Suite 401, Cary, N.C.  Current and prospective
shareholders who are unable to attend the Annual Meeting may
listen to the proceedings by visiting www.tangram.com.
Additionally, a replay of the meeting will be available on the
company's Web site immediately following the meeting.

          Where You Can Find Additional Information

"We strongly advise all our shareholders to read our proxy
statement, which was filed with the Securities and Exchange
Commission on August 12, 2002.  Our proxy statement contains
important information that you should consider before making any
decision about the proposals to be voted on at our Annual
Shareholder Meeting.  Our proxy statement is being mailed to all
our shareholders and will be available, together with the annual
report, quarterly reports, current reports and other documents
we filed, at no charge at the SEC's web site at www.sec.gov or
from us by contacting John N. Nelli at 919-653-1265.

"The company and our current directors (Christopher J. Davis,
Norman L. Phelps, Jonathan Costello, David P. Kennealy, John F.
Owens, Carl G. Sempier, Frank P. Slattery, Jr. and Carl Wilson),
all of whom are nominees for director, may be deemed to be
participants in the solicitation of proxies under the rules of
the SEC.  Collectively, as of July 30, 2002, our directors and
executive officers beneficially owned approximately 2.0% of the
outstanding shares of our Common Stock.  Other than shares of
Common Stock owned by each of the directors as described in the
proxy, none of the directors has any interest in the proposals
to be voted on at the Company's Annual Meeting of Shareholders.
Additional information with respect to any interests that these
persons have in proposals to be voted on at our shareholder
meeting is available in the proxy statement."

Tangram Enterprise Solutions, Inc., is a leading provider of IT
asset management solutions for large and midsize organizations
across all industries, in both domestic and international
markets.  Tangram's core business strategy and operating
philosophy center on delivering world-class customer care,
creating a more personal and productive IT asset management
experience through a phased solution implementation, providing
tailored solutions that support evolving customer needs, and
maintaining a leading-edge technical position.  Today, Tangram's
solutions manage more than 2 million workstations, servers, and
other related assets.  Tangram is a partner company of Safeguard
Scientifics, Inc. -- http://www.safeguard.com-- (NYSE: SFE), a
leading technology operating company that seeks to create long-
term value through superior operations and management.
Safeguard focuses on acquiring and developing companies in three
areas: business and IT services, software, and technology
products.  To learn more about Tangram, visit
http://www.tangram.com or call 1-800-4TANGRAM.


TELAXIS COMM: Taps Ferris Baker to Review Strategic Alternatives
----------------------------------------------------------------
Telaxis Communications Corporation (Nasdaq:TLXS), a developer of
wireless fiber optic connectivity products, is exploring a wide
variety of strategic opportunities and alternatives. As part of
this process, Telaxis is investigating and having discussions
concerning possible strategic combinations.

Telaxis has retained the investment banking firm Ferris, Baker
Watts as its financial adviser to assist with the consideration
of the various options.

There can be no assurance whatsoever that any transaction or
other corporate action will result from this exploration of
alternatives. Further, there can be no assurance whatsoever
concerning the type, form, structure, nature, results, timing,
or terms and conditions of any such potential action, even if
such an action does result from this exploration. Telaxis does
not intend to make any additional comments regarding this matter
unless and until a definitive transaction agreement has been
reached, the exploration of alternatives has been terminated, or
there are other definitive developments warranting further
disclosure.

Telaxis is developing its FiberLeap(TM) product family to enable
direct fiber optic connection to wireless access units and to
transparently transmit fiber optic signals over a wireless link
without the use of conventional modems. Taking advantage of
Telaxis' high-frequency millimeter-wave expertise, the
FiberLeap(TM) product family is being developed to use the large
amounts of unallocated spectrum above 40 GHz to provide data
rates of OC-3 (155 Mbps), OC-12 (622 Mbps), and Gigabit
Ethernet. For more information about Telaxis, please visit its
Web site at http://www.tlxs.comor contact the company by
telephone at 413-665-8551 or by email at IR@tlxs.com.


THOMAS GROUP: Equity Deficit Narrows to $714K at June 30, 2002
--------------------------------------------------------------
Thomas Group, Inc., (Nasdaq:TGIS) announced the second
consecutive quarter that the Company has achieved improvement in
its core operating results. For the second quarter 2002 the
Company had a net loss from core business operations of $1.3
million compared to net loss from core business operations of
$4.3 million in the first quarter of 2002 and $5.5 million in
the fourth quarter of 2001. Core earnings excludes expenses
related to the Company's re-financing activities and
restructuring changes. The following table shows the Company's
success in controlling costs, while operating in a difficult
selling market for consulting services.

The Company had a net loss of $2.3 million on revenue before
reimbursements of $8.0 million. These results compare favorably
to the first quarter of 2002 net loss of $3.8 million on revenue
before reimbursements of $8.3 million.

At June 30, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $714,000.

Controlling Costs: The Company has made significant improvement
in bottom line results by continuing to reduce costs. Total core
operating loss, net of restructuring charges of $0.4 million and
expenses related to the Company's current liquidity position of
$0.3 million, decreased $3 million when comparing the second
quarter of 2002 to the first quarter of 2002. Additionally, the
Company has decided to continue into the third quarter of 2002
salary cuts of 25% for all senior management and 15% for
selected other employees. Also, the Company continues to execute
its strategy of restricting its consultant payroll only to those
professional employees who are directly involved with revenue
producing activities. Commenting on the Company's ability to
control costs, John Hamann, Thomas Group's President and CEO
said, "Keeping costs in line with revenues, while preserving the
depth of our professional workforce is an ongoing challenge. I
am pleased with the progress we have made on the cost side of
the business in the past six months and I am very pleased by the
continued support of our people in this most difficult market
environment."

Restructuring Charge: Included in the operating results for the
second quarter of 2002 is $0.4 million of restructuring charges
related to losses from the expected closure and liquidation of
the Company's German subsidiary. Quarterly cost savings from
this action are expected to be approximately $0.7 million per
quarter. Thomas Group will continue to provide services for
European clients, including German clients, from its Swiss
offices in Zug. John Hamann commented, "The restructuring
activities in Germany were necessary to align the cost structure
of the European region with the near term business to be billed.
The actions in Europe, though painful, will allow the European
region to focus more of its resources on selling activities."

Business Development and Backlog: The Company continues to
implement its new selling process in an intensely competitive,
and significantly reduced global market for consulting services.
Currently the Company maintains a business under development
list of clients representing in excess of $50 million in
potential contract values. This represents the highest level in
potential business opportunities for the Company in the last 18
months. Additionally, the Company has made significant strides
in winning new business, particularly in the government sector
of the North American region. Recently, the Company announced an
agreement with the United States Navy to conduct an analysis of
their Surface Ship Maintenance Process. As of June 30, 2002, the
Company also had an additional $16.0 million in backlog for
other government programs. Total Backlog at June 30, 2002 was
$27 million.

Hamann said, "While our top line results remained flat in Q2, at
approximately eight million in revenue, I believe we will see
revenue improvements in the remaining two quarters of 2002 for
two reasons: first, several programs that were expected to begin
in June have, in fact, begun in July and August. Second, I
believe that our improved pipeline, as measured by our business
under development metric, will drive additional sales wins in
the second half of this year."

Commenting on its global selling efforts, Hamann said, "The
Asian and European regions are seeing progress in their selling
efforts. In Asia we have just started a supply chain assessment
for a new, prestigious client. In Europe we have established an
intense program to win new business in the near-term, which I am
managing personally."

Commenting on global selling conditions Hamann said, "Despite
our intense efforts to win new business, overall prospects for
future business are still being negatively impacted by the slow
recovery of the economic environment globally. We have seen
reports from various industry sources reporting that the global
market size for operational consulting services has shrunk by
25% to 40% compared to last year. In our Company we have
definitely seen a pickup in competition and we have also seen an
increased reluctance of prospective clients to commit to and
then start new programs. These factors have made it much more
difficult for us, along with all of our competitors, to win new
business and to begin promptly programs that have been committed
to by clients."

Financing Activities: The Company continues to seek to raise
additional equity and subordinated debt to satisfy the Company's
current liquidity needs and the requirements of its credit
facility. Currently, the Company is in discussions with several
interested parties. Jim Taylor, the Company's Chief Financial
Officer said, "The commitment from our board and a positive
working relationship with our lender as allowed the Company the
flexibility to entertain the most advantageous offers of equity
or debt infusion available." Since March, the Company has been
able to obtain $1.5 million of subordinated debt from members of
the board of directors.

Founded in 1978, Thomas Group, Inc., is an international,
publicly traded professional services firm (Nasdaq:TGIS). Thomas
Group focuses on improving enterprise wide operations,
competitiveness, and financial performance of major corporate
clients through proprietary methodology known as Process Value
Management(TM), process improvement, and by strategically
aligning operations and technology to improve bottom line
results. Recognized as a leading specialist in operations
consulting, Thomas Group creates and implements customized
improvement strategies for sustained performance improvement.
Thomas Group, known as The Results Company(SM), has offices in
Dallas, Detroit, Zug, Singapore and Hong Kong. For additional
information on Thomas Group, Inc., please visit the Company on
the World Wide Web at http://www.thomasgroup.com


US AIRWAYS: Moody's Further Junks Ratings of Company & Units
------------------------------------------------------------
Moody's Investors Service took several downward ratings on US
Airways Group, Inc. and its subsidiaries.

                    Affected Ratings are:

                    US Airways Group, Inc.

             Senior Implied Rating: Caa3 from Caa2
             Long Term Issuer Rating: C from Ca

                       US Airways, Inc.

             Long Term Issuer Rating: Ca from Caa3

                  Equipment Trust Certificates

           1987 Series A through F: Caa3 from Caa1
           1988 Series A through L: Caa3 from Caa1
               1989 Series A: Caa3 from Caa1
           1990 Series A through D: Ca from Caa2
           1991 Series A and B: Confirmed at Ca
               1993 Series A: Ca from Caa2

          Enhanced Equipment Trust Certificates;
                   Series 1996

            Class A: Confirmed at Baa3
             Class B: Ba3 from Ba2
             Class C: Caa3 from B3

                  Series 1998-1

           Class A: Confirmed at Baa3
           Class B: Confirmed at Ba2
           Class C: Confirmed at B3

                  Series 1999-1

           Class A: Confirmed at Baa3
           Class B: Confirmed at Ba2
           Class C: Confirmed at B3

                  Series 2000-3

            Class C: Confirmed at B3

                  Series 2001-1

            Class C: Confirmed at B3

         Industrial Revenue Bonds C from Ca

                Piedmont Aviation:

      Pass through certificates: Ca from Caa2

        ETC Repackaging Trust, Series 1998 -1

             Class B: Caa1 from B3
             Class C: Caa2 from Caa1
             Class D: Ca from Caa3

The ratings reflect the low recovery potential each class of
debt holder, especially the unsecured creditors, can expect.

Moody's speculates that the airline will dispose of its Boeing
aircraft types and move to being a primarily airbus mainline
fleet. But until negotiations are over, it is hard to determine
which individual aircraft will be returned to debt holders for
liquidation.

The Investors Service believes that a government guaranteed loan
could be used by the company as it emerges from bankruptcy.

US Airways Group, headquartered in Arlington, Virginia, is a
major US air carrier.


U.S. INDUSTRIES: Posts Improved Results for Third Quarter 2002
--------------------------------------------------------------
U.S. Industries, Inc., (NYSE-USI) announced quarterly and year
to date results for the period ended June 30, 2002.

Income from continuing operations for the third quarter of 2002
was $7.0 million compared to a loss of $115.0 million in the
prior year. Included in the third quarter of 2002 are
restructuring charges of $6.4 million within the Bath & Plumbing
segment. The third quarter of 2001 included impairment charges
of $119.3 million. For year to date 2002, the Company reported
income from continuing operations of $3.0 million compared to a
loss of $119.7 million for the prior year. Excluding the
restructuring and impairment charges mentioned above, the income
from continuing operations in year to date 2002 was $9.4
million, compared to a loss in year to date 2001 of $0.4
million.

Income from continuing operations for the third quarter and year
to date of 2002 included the operating results of Rexair Inc.,
which was acquired in August 2001. Rexair generated operating
income of $7.5 million and $22.8 million in the third quarter
and year to date of 2002, respectively. As a result of adopting
SFAS No. 142 "Goodwill and Other Intangible Assets", the Company
no longer records goodwill amortization. Goodwill amortization
totaled $2.6 million and $7.8 million in the third quarter and
year to date periods of 2001, respectively. Interest expense
incurred in the third quarter of 2002 and 2001 was $17.6 million
and $22.4 million, respectively. Interest expense is expected to
continue to decrease as the Company sells its non-core assets
(which are recorded as discontinued operations) and utilizes net
proceeds to satisfy debt amortization requirements under the
Restructured Debt Facility. As of this date, the Company has
made, through its Disposal Plan and operating cash flows,
approximately $523 million of amortization payments, including
amounts deposited into escrow for the benefit of the holders of
the Company's Senior Notes and certain other creditors.

Net income for the third quarter and year to date periods of
2002 was $22.0 million and $18.0 million, respectively, compared
to net losses of $243.4 million and $247.0 million in the
comparable periods of the prior year. For the third quarter and
year to date periods of 2002, net income includes income from
discontinued operations of $15.0 million, as the Company
decreased the estimated loss on disposal of its discontinued
operations. This was primarily due to changes in the estimated
proceeds expected from the remaining transactions. The third
quarter and year to date periods of 2001 include losses from
discontinued operations of $128.4 million and $126.6 million,
respectively. These losses include goodwill impairment charges
of $121.4 million as well as a $29.4 valuation allowance for a
deferred tax asset related to goodwill impairment charges
recorded on Spear & Jackson in fiscal 2000.

Sales for the third quarter and year to date periods of 2002
were $319.0 million and $849.7 million, respectively. This
compares to sales of $308.1 million for the third quarter and
$826.4 million for year to date periods of 2001. The increases
in the third quarter and year to date 2002 periods are
attributable to the acquisition of Rexair which was partially
offset by a decrease in sales in the Bath & Plumbing segment.
Rexair contributed sales of $23.5 million and $76.5 million for
the third quarter and year to date periods of 2002,
respectively. The decrease in sales for the Bath & Plumbing
segment for the year to date period was affected by the disposal
of the segment's European HVAC businesses and the discontinued
product lines in the segment's U.S. Brass operations, which
contributed $14.4 million to year to date sales in fiscal 2001.
The remaining decreases for both the year to date and third
quarter periods are largely related to decreased sales in the
non-premium spa, whirlpool bath and above-ground pools
businesses partially offset by sales increases in the U.K. bath
and sink and the domestic premium spa businesses. The non-
premium spa and whirlpool bath businesses were affected by
reduced sales of certain product lines for which the Company
declined requests for price and service concessions. The above-
ground pools business was negatively affected by excess
inventory levels experienced by their distributor network. The
U.K. bath and sink business experienced improved weather
conditions and implemented customer programs that have increased
sales to existing customers. The premium spa business has been
successful in adding a number of new products and dealers for
its premium spa brands.

Operating income was $31.3 million and $72.4 million for the
third quarter and year to date of 2002, respectively, compared
to operating losses of $68.7 million and $38.5 million for the
comparable periods in fiscal 2001. Fiscal 2002 operating income
includes the $6.4 million in restructuring charges mentioned
earlier. The losses in 2001 include $100.2 million of goodwill
impairment charges. Excluding these charges, the increase in the
third quarter and year to date of 2002 was attributable to the
acquisition of Rexair and the adoption of SFAS No. 142. This
increase was partially offset by the decrease in sales in the
Bath and Plumbing segment. Also contributing to the decrease for
the year to date period were the costs of consolidating selected
whirlpool bath manufacturing facilities and a reduction in
margins experienced by the European whirlpool bath and shower
businesses as a result of increased competition.

On December 28, 2001, the Board of Directors approved a formal
Disposal Plan for five businesses (Ames True Temper, Lighting
Corporation of America, Selkirk, Spear & Jackson and SiTeco
Lighting) in connection with the Company's obligation to pay
debt amortization as set forth in its restructured debt
agreements. Results for these operations are not included in the
Company's results from continuing operations discussed above.
The Company has completed the sales of Ames True Temper,
Lighting Corporation of America, Selkirk and certain other
assets, including the Strategic notes, and has used the proceeds
to pay debt amortization and reduce its commitment under its
Restructured Debt Facility. On August 5, 2002, the Company
announced that it signed an agreement relating to the sale of
SiTeco, its European lighting division, for approximately EUR
120 million. The sale, which is subject to customary closing
conditions, is expected to close by the end of the fiscal year.
Proceeds will be used as amortization under the Restructured
Debt Facility including escrow deposits in respect of the
Company's Senior Notes.

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

As reported in Troubled Company Reporter's August 9, 2002,
edition, Fitch Ratings assigned its B- rating on U.S.
Industries' $375 million senior secured notes.


UTG COMMS: Working Capital Deficit Doubles to $13M at March 31
--------------------------------------------------------------
UTG Communications International, Inc., commenced operations in
April 1996 and is currently a holding company with minority
interests in a number of operating subsidiaries.

UTG's operations are, to a large extent, dependent on UTG's
ability to obtain additional financing. There can be no
assurance that UTG will obtain the financing necessary to
support its plan of operation. At March 31, 2002, UTG had an
accumulated deficit of $13,066,298 and net income of $4,372,798
for the fiscal year ended March 31, 2002. Cash used in
operations for the fiscal year ended March 31, 2002 was
$1,266,810.

The Company's current line of continuing business through an
equity investment in another corporation is the sale of prepaid
long distance phone cards and mobile phone cards in the United
Kingdom. UTG currently has no operating subsidiaries.

Based upon UTG's plan of operation, UTG estimates that existing
resources, together with funds generated from operations may not
be sufficient to fund UTG's working capital requirements. UTG is
actively seeking additional equity financing. There can be no
assurances that sufficient financing will be available on terms
acceptable to UTG or at all. If UTG is unable to obtain such
financing, UTG  will be forced to scale back operating costs and
ultimately terminate operations.

UTG's principal executive offices are located in Geroldswil,
Switzerland. At this location, UTG leases approximately 2,000
square feet from a company where Mr. Ueli Ernst, UTG's Chairman
and Chief Executive Officer is a member of the Board of
Directors, for which UTG pays CHF 5,000 (approximately $2,870)
per month. UTG considers such rent to be at arm's length. As of
March 31, 2002, UTG had 1 full-time employee, based in
Switzerland. UTG has never experienced a work stoppage and its
employees are not represented by a labour union or covered by a
collective bargaining agreement. UTG considers its employee
relations to be satisfactory.

At March 31, 2002, UTG had working capital of $164,453 and an
accumulated deficit of $13,066,298, as compared to working
capital deficit of $5,424,061 and an accumulated deficit of
$17,439,096, at March 31, 2001, respectively.

At March 31, 2002, UTG's bank overdraft balance relative to
continuing operations was $0 compared to $213,518 at March 31,
2001.

Accounts payable and accrued expenses of continuing operations
amounted to $298,581 at March 31, 2002 compared to $2,430,395 at
March 31, 2001, a decrease of $2,131,814, or 87.8%. This
decrease is the result of the sale of Starpoint Card Sales in
fiscal 2002 which was recorded as a sale of subsidiary, but in
which an equity interest was retained.

As stated above, if UTG is unable to obtain financing, UTG will
be forced to scale back operating costs and ultimately terminate
operations.


UNITED AIRLINES: Does Bankruptcy Loom, Following US Airways?
------------------------------------------------------------
With US Airways now in bankruptcy, many are wondering if United
Airlines might be next, reported the Associated Press. Even
though the nation's No. 2 carrier has implemented a financial
recovery plan to stem losses from September 11, United faces
several obstacles including high labor costs and losses of more
than $1 million a day, reported AP.  According to the newswire,
United officials have declined discussing the prospects of a
chapter 11 filing.  But interim CEO Jack Creighton told United
employees on Sunday that the government appears likely to reject
the company's application for a $1.8 billion loan guarantee,
which it considers key to its ability to compete in a struggling
market, reported. (ABI World, Aug. 13, 2002)


VERTEL CORP: Fails to Regain Compliance with Nasdaq Guidelines
--------------------------------------------------------------
Vertel Corporation (NASDAQ:VRTL), a leading provider of
convergent service management mediation solutions, reported net
revenues of $2.1 million for the quarter ended June 30, 2002, a
42% decrease from the $3.5 million reported for the same period
in 2001. Sequentially, net revenues for the second quarter of
2002 were 3% higher than the $2.0 million reported in the first
quarter of 2002.

Vertel posted a net loss for the second quarter of 2002 of $7.3
million, which includes the non-cash charge of $4.8 million for
the impairment of goodwill described below. This compares to a
net loss for the second quarter of 2001 of $1.9 million.
Excluding the goodwill impairment charge, Vertel's net loss was
$2.5 million for the second quarter of 2002.

"During the six months ended June 30, 2002, the
telecommunications sector continued to be adversely impacted by
the worst economic environment the U.S. economy has experienced
in the last decade. The market price of our common stock, and
consequently our market capitalization, declined steadily during
the quarter ended March 31, 2002. Although our market
capitalization approximated our carrying value as of March 31,
2002, during the quarter ended June 30, 2002 it declined
further. We believe these circumstances indicated goodwill might
be impaired as of June 30, 2002. As a result, we engaged a
third-party valuation consultant to assist us in making this
determination, which resulted in our recording a goodwill
impairment charge of $4,795,000 in the second quarter of 2002.
The primary method used to determine the amount of the charge
was the discounted cash flow method," said Craig Scott, Vice
President of Administration and CFO of Vertel.

Gross profit margins improved to 55 percent for the second
quarter of 2002, compared to 46 percent for the first quarter of
2002. "We continue to make steady operational and financial
progress," Marc Maassen, President and CEO of Vertel, said.
"Despite a very challenging environment, we were able to keep
sales stable for the quarter, our operational metrics are
improving, and we continue to aggressively restructure the
company to align with our new market initiatives.

"We believe, moreover, that revenues should continue to improve
this year as our M*Ware product offerings, combined with our
professional service competencies, continue to gain acceptance
and expand our customer base," Maassen said.

Although net revenues for the second quarter of 2002 were
slightly higher than the first quarter of 2002 and gross margins
improved, Vertel has reported operating losses from operations
for the six months ended June 30, 2002. Furthermore, Vertel
posted negative cash flows from operations of $5.3 million for
the six months ended June 30, 2002. As of June 30, 2002 Vertel
had an accumulated deficit of $92.4 million and negative working
capital of $570,000, which includes cash of $714,000. During the
first quarter of 2002, we received net proceeds of approximately
$3.4 million from the sale of a promissory note to SDS Merchant
Fund, LP, an accredited investor. Substantially all of the
proceeds from this transaction were used by us during the six
months ended June 30, 2002. On July 2, 2002, we announced a
second financing transaction with SDS Merchant Fund, LP. On
August 13, 2002 we closed the transaction and received net
proceeds of approximately $1.4 million.

Effective May 23, 2002, our common stock began trading on The
Nasdaq SmallCap Market(SM). Prior to that date, our common stock
traded on The Nasdaq National Market(R). As of May 23, 2002, we
met all of the continued inclusion criteria for The Nasdaq
SmallCap Market, except for the minimum $1.00 bid price per
share requirement. Nasdaq granted us an extension until August
13, 2002 to regain compliance with the $1.00 minimum bid price
requirement.

We have not regained compliance with the $1.00 minimum bid
requirement. As a result, The Nasdaq Stock Market, Inc. will now
evaluate whether to grant us an additional grace period of up to
180 days to regain compliance with the $1.00 minimum bid
requirement. Generally, we would be granted such an extension
under our circumstances. However, because of our non-cash charge
for goodwill impairment taken by us for the second fiscal
quarter of 2002 our Shareholders' Equity does not satisfy the
initial listing requirement for The Nasdaq SmallCap Market.
Nasdaq has indicated that they would be looking at the SmallCap
initial listing requirements when evaluating whether to grant us
the additional 180-day grace period to regain compliance with
the $1.00 minimum bid price rule. If Nasdaq denies us an
additional 180-day grace period, and our appeal of such denial
is unsuccessful, our common stock would be delisted from The
Nasdaq SmallCap Market and we may be unable to have our common
stock listed or quoted on any other organized market. Even if
our common stock is quoted or listed on another organized
market, an active trading market may not develop.

Vertel is a leading provider of convergent service management
mediation solutions. Vertel's high performance solutions enable
customers to quickly and cost effectively introduce new
services, networks and OSSs while leveraging existing
investments. Using the M*Ware driven Development Environment
(DE), Vertel has created a full suite of mediation based
applications that can address protocol translation, data
transformation, element and network management, OSS application
integration, and OSS exchange services.

Vertel's product offerings allow seamless management in multi-
technology and multi-vendor environments. Vertel also develops
communications software solutions that fit individual customer
requirements through its Professional Services organization. For
more information on Vertel or its products, contact Vertel at
21300 Victory Boulevard, Suite 700, Woodland Hills, California
91367; telephone: 818/227-1400; fax: 818/598-0047 or visit
http://www.vertel.com


WILLIAMS COMMS: New York Court Approves Disclosure Statement
------------------------------------------------------------
Williams Communications Group, Inc., (OTC Bulletin Board: WCGRQ)
announced that its Disclosure Statement has been approved by the
United States Bankruptcy Court for the Southern District of New
York.  The Company expects to distribute the disclosure
statement and ballots by Aug. 19 for voting.  The Court has also
set a hearing date of Sept. 25 on the confirmation of the
company's consensual plan of reorganization.

"This is another significant step in our reorganization," said
Howard E. Janzen, chairman and chief executive officer of
Williams Communications. "While some challenges remain, we
continue to work closely with all parties and continue to be on
track to emerge from Chapter 11 protection this fall."

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


WINFIELD CAPITAL: Has Until Oct. 21 to Meet Nasdaq Requirements
---------------------------------------------------------------
Winfield Capital Corp., (WCAP-Nasdaq National Market) announced
a net loss of $1,908,129 for the quarter ended June 30, 2002
versus a net loss of $2,248,926 for the same quarter in 2001.

This net loss in the first three months of fiscal year 2003 was
primarily attributable to an increase in unrealized depreciation
in the value of investments (excluding short-term marketable
securities) totaling $1,183,698 compared with an increase in the
first three months of fiscal year 2002 in the unrealized
depreciation in the value of investments (excluding short-term
marketable securities) totaling $2,070,407. Unrealized
depreciation in fiscal year 2003 was principally related to the
decrease in the market price of seven investments in publicly-
traded portfolio companies versus the decrease in market price
of six investments in publicly-traded portfolio companies in
fiscal year 2002. In fiscal 2003, the net loss included a
realized net loss of $45,423 on the sale of the Company's equity
position in one of its portfolio companies as compared to a
realized net gain of $363,253 for the fiscal year 2002.

The Company's investment income decreased by $241,912 to
$139,711 for the first three months of fiscal year 2003 compared
with investment income of $381,623 for the same period in fiscal
2002. The decrease in investment income was largely attributable
to a decrease in earnings from temporarily invested funds of
$183,129 as a result of decreases in interest rates and in the
idle funds that were invested. Operating expenses decreased by
$52,979 from $425,466 for the quarter ended June 30, 2001 to
$372,487 for the quarter ended June 30, 2002. This decrease was
primarily due to decreases in legal-related professional fees
and miscellaneous expenses totaling $69,038 partially off-set by
an increase of $16,059 due to salary increases and a matching
401(k) expense (the 401(k) Plan was first implemented in October
2001). Interest expense decreased from $484,816 for the three
months ended June 30, 2001 to $438,955 for the same period ended
June 30, 2002 due to a repayment of $900,000 to the Small
Business Administration.

The Company is required to be in compliance with the capital
impairment rules, as defined by Regulation 107.1830 of the SBA
Regulations. As of June 30, 2002, the Company had an impairment
of its capital. As such, the SBA could declare the entire
indebtedness including accrued interest immediately due and
payable. In addition, the SBA could avail itself of any remedy
available to the SBA to effect the repayment of the Debentures,
including transferring the Company to the SBA's Office of
Liquidation. If the SBA were to require the Company to
immediately pay back the entire indebtedness including accrued
interest, certain private security investments would need to be
disposed of in a forced sale which may result in proceeds less
than their carrying value. As such, this impairment could have a
material adverse effect on the Company's financial position,
results of operations and cash flows. The Company is in
discussions with the SBA to cure this impairment.

The Company also announced that on July 23, 2002, the Company
received notice from the Nasdaq Stock Market, Inc., that for the
preceding 10 consecutive trading days, the Company's common
stock had not closed at the minimum $1.00 per share as required
for continued inclusion by Marketplace Rule 4450(a)(5) on the
Nasdaq National Market. Therefore, in accordance with
Marketplace Rule 4450(e)(2), subject to appeal, the Company had
90 calendar days, or until October 21, 2002, to regain
compliance. If compliance with the Rule cannot be demonstrated
by October 21, 2002, the Company's securities will delisted from
the Nasdaq National Market. If the Company's securities are
delisted, the Company will seek to list its securities on the
Nasdaq SmallCap Market, which the Company had previously listed
on prior to listing on the Nasdaq National Market. The Company
cannot predict what effect, if any, such delisting would have on
the trading of its securities.

Winfield Capital is a small business investment company that
makes equity investments and loans pursuant to funding programs
sponsored by the SBA and is a non-diversified, closed-end
investment company that is a business development company under
the Investment Company Act of 1940. The Company's common stock
is traded on the Nasdaq National Market under the symbol "WCAP".
For more information, visit Winfield Capital's Web site at
http://www.winfieldcapital.com/


WINSTAR: Ch. 7 Trustee Taps Peisner Johnson as Tax Consultants
--------------------------------------------------------------
Winstar Communications, Inc.'s Chapter 7 Trustee Christine C.
Shubert seeks the Court's authority to employ and retain Peisner
Johnson & Company LLP as Special Tax Consultant.

For its services, Peisner will be paid a 50% commission of any
actual cash tax refund it identifies and obtains.  All of
Peisner's expenses will be paid in advance as part of its
commission.

As Special Tax Consultant, Peisner will:

A. conduct a detailed review and analysis of the Debtor's sales
   and tax records,

B. copy those invoices and other documents that may qualify for
   a tax refund,

C. research the applicable issues and schedule those items
   qualifying for refunds and provide Trustee with a detailed
   report of all areas of state and federal tax relief, along
   with the documentation in support of its position,

D. upon Trustee's approval, to file the appropriate refund
   claims or amend state, local or excise tax returns as
   necessary, and

E. perform any other services commensurate with Trustee's needs
   and Peisner's expert knowledge in connection with sales/tax
   use and excise tax matters.

Andrew Johnson, Esq., a partner at Peisner, assures the Court
that the firm is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.  Peisner has no interest adverse
to the Debtors, its creditors, any other party-in-interest,
their respective attorneys and accountants, Mr. Johnson adds.
(Winstar Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WORLDCOM: Asks Court to Okay Wilmer Cutler as Special Counsel
-------------------------------------------------------------
On June 25, 2002, WorldCom's Board of Directors reported that an
internal investigation of the company's accounting practices had
revealed irregularities with respect to the accounting of over
$3,800,000,000 in expenses.  WorldCom reported its discovery to
the Securities and Exchange Commission.  As a result, the SEC
opened a formal investigation on WorldCom.

The Board requested that its Audit Committee investigate and
examine these accounting irregularities and recommend
appropriate actions.  The Board also authorized the Audit
Committee to retain accounting and legal professionals to assist
in the Accounting Review Matters.

Hence, the Audit Committee retained Wilmer, Cutler & Pickering
to assist with disclosure and related issues, and to conduct an
independent internal investigation of certain issues relating to
WorldCom's financial reporting.  In an engagement letter sent to
Wilmer Cutler, the Audit Committee wrote:

    "The Committee agrees that [Wilmer Cutler] may continue
    to represent, and may undertake in the future to represent,
    existing or new clients in any matter (including, without
    limitation, any litigation, regulatory, bankruptcy or
    collection matter) that is not substantially related to
    our work for you even if such interests of such clients in
    those matters are directly adverse to [the Committee] or
    to WorldCom."

The Audit Committee also suggested in the letter that Wilmer
Cutler institute walling-off procedures reasonably designed to
prevent the use of proprietary and nonpublic information about
WorldCom or the Committee, which the firm might obtain as a
result of its representation of the Committee.  If another
client learns of the information, the Committee explained, that
information might be used at the Committee or WorldCom's
material disadvantage.

Wilmer Cutler agreed with the walling-off procedures.

Thus, the Debtors ask the Court to permit the continued
retention of Wilmer Cutler as the Audit Committee's special
counsel.  The Debtors want Wilmer Cutler to continue assisting
the Committee in examining those Accounting Review Matters.  The
Debtors seek to retain Wilmer Cutler effective as of the
Petition Date.

To the extent that the Board reassigns responsibility for the
Accounting Review Matters to another committee, and that
committee desires to continue to employ Wilmer Cutler, the
Debtors ask the Court to authorize such retention as well.

According to WorldCom Senior Vice President Susan Mayer, the
Audit Committee selected Wilmer Cutler as its counsel because of
the firm's reputation and extensive experience and knowledge,
and in particular, its national reputation and recognized
expertise in the field of securities law.  Ms. Mayer also notes
that Wilmer Cutler has become familiar with the factual and
legal issues relevant to the Accounting Review Matters.

If the Audit Committee or the Debtors were required to retain
counsel other than Wilmer Cutler with respect to those matters,
Ms. Mayer says, the Debtors, their estates and all parties-in-
interest would be unduly prejudiced by the time and expense
necessarily attendant to the counsel's familiarization with the
intricacies of the factual and legal issues associated those
matters, including the SEC's investigation.

Ms. Mayer, however, makes it clear that the proposed employment
of Wilmer Cutler is solely in connection with the Accounting
Review Matters during the Debtors' Chapter 11 cases.

Wilmer Cutler will be compensated for its services based on the
firm's standard hourly rates and will be reimbursed of out-of-
pocket expenses.  Wilmer Cutler's current rates are:

               $430 - 715      partners
                405 - 530      counsel
                225 - 435      associates
                 90 - 220      paraprofessionals

The principal attorneys and paralegals designated to represent
the Committee and their current hourly rates are:

                   William McLucas      $715
                   Charles Davidow       615
                   Mark Cahn             515
                   Robert Hoyt           490
                   Stuart Delery         455
                   Gregory Ewald         430
                   Andrew Herman         405
                   Jeffrey Ayer          405
                   Cynthia Clark         325
                   Allison Drimmer       295
                   Paul Eckert           385
                   Ellen Fulton          275
                   Stephen Heifetz       385
                   Eric Hougen           335
                   Jeffrey Hydrick       385
                   Peter Lee             335
                   Joel Nichols          270
                   E. Stuart Parker      270

Ms. Mayer informs the Court that, prior to the Petition Date,
Wilmer Cutler received a $300,000 retainer from WorldCom --
$239,447 has been applied and $60,533 remains unapplied.
WorldCom also paid Wilmer Cutler $269,331 in additional fees and
expenses.

After a reasonable conflicts search, William R. McLucas, Esq., a
partner at Wilmer Cutler, names interested parties that the firm
has prior connection with, currently represents or has current
non-client connection.

A. The Debtors' Top 50 Bondholders: JP Morgan Chase and
   affiliates, Bear Stearns, Bank of New York and affiliates,
   State Street Bank, Morgan Stanley and affiliates, Goldman
   Sachs and affiliates, CitiGroup and affiliates, Boston Safe
   Deposit Trust Co., Deutsche Bank and affiliates, ABN AMRO,
   Northern Trust, UBS and affiliates, Wells Fargo, CS First
   Boston and affiliates, Lehman Brothers and affiliates, Banc
   of America, Merrill Lynch Safekeeping, Icahn, UMB Bank,
   American Express, PNC Bank, Spear Leeds & Kellogg, Charles
   Schwab, Prudential, Liberty National Bank and Trust Co.,
   Suntrust Bank, First Union, National Financial Services
   Corp., A.G. Edwards & Sons, SG Cowen Securities, Lasalle
   Bank, Bank of Nova Scotia;

B. Bank Lenders: AllFirst Bank, Arab Bank PLC, Bank One NA,
   Bayerische Landesbank, BNP Paribas, Credit Lyonnnais, Fleet
   National Bank, Fortis Capital Corp., Lloyds TBS Bank PLC,
   Mellon Bank NA, Bank of Tokyo--Mitsubishi, Nord LB, Royal
   Bank of Scotland, West LB, WestPac;

C. Underwriters: Arthur Andersen, CIBC World Markets, Legg Mason
   Wood Walker, NationsBanc Montgomery Securities LLC, Robertson
   Stephens International Limited, Warburg Dillon Read LLC,
   Westdeutsche Landesbank Girozentrale;

D. TOP 50 Unsecured Creditors: Verizon Communications, Inc.
   (includes GTE), Electronic Data Systems Corporation,
   Telefonos de Mexico, SA de CV (TELMEX), AT&T Corp. (includes
   ATT TAT Cable Systems), Qwest Communications International,
   Inc., Messner Vetere Berger/McNamee Schmetterer EURO BSCG
   (includes Fuel N. America & Media Planning Group), Cisco
   Systems Inc./Vietnam Telecom International (VTI Ltd., Hanoi),
   GC Services Inc., Motorola Inc., BT Global Communications -
   UK, Sprint Corporation (includes United), Telecom Italia
   International Settlements Dept., AMR Corporation (American
   Airlines, Inc.), Citizens Communications Co. (includes
   Frontier), Hewlett Packard (includes Compaq Computer,
   TELEFONICA DE ESPANA - Spain, Gemini;

E. Other: Acme Widget, America Online, Inc., PSINet Inc.,
   Richard Breeden;

F. Officers and Directors (last 3 years): Jared E. Abbruzzese,
   James C. Allen, Francesco Galesi, Gregory B. Maffei, Susan
   Mayer, David F. Myers;

G. Affiliation of Officers and Directors: Digex, Incorporated,
   MCI Communications Corporation, MicroStrategy Incorporated,
   The News Corporation Limited, WorldCom;

H. Significant Shareholders: AXA Financial, Inc.,

I. Accountants (three year): Accenture LLP, Andersen Consulting,
   Arthur Andersen LLP, Deloitte Consulting, Ernst & Young LLP,
   KPMG, PricewaterhouseCoopers LLP; and,

J. Indenture Trustees: NationsBank of Texas, N.A.

Mr. McLucas assures that Court that the Firm does not have any
connection with, or any interest adverse to, the Debtors, their
creditors, or any other party in interest, or their respective
attorneys and accountants. (Worldcom Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLDCOM: RHK Says No Bail Out for Company & It Must Shut Doors
---------------------------------------------------------------
RHK, strategic advisors to the telecom industry Monday argued
that telecom and U.S. industry would be better off if WorldCom,
now in bankruptcy, did not return to business.

Instead, RHK Principal & Chief Analyst Dr. John Ryan said
WorldCom should be broken up and its key elements sold off. RHK
identifies four principal reasons why WorldCom should shut its
doors.

     --  First, WorldCom's self-inflicted damage should not be
repaired when its competitors are trying to run honest
operations and would not benefit from rescue attempts.

     --  Second, rescuing WorldCom would bring back to life a
firm with significant unresolved inefficiencies. Many of the
company's financial woes stemmed from its focus on increasing
top-line revenues via acquisitions, rather than on the more
complex, less glamorous task of integrating these operations.

     --  Third, the industry needs capacity to disappear. Over-
investment during telecom's bubble years has created a surfeit
of capacity and service providers. The recycling of assets from
bankrupt service providers is an astonishing way of preserving
the industry's pain.

     --  Fourth, there may well be further rot to find, as
suggested by the recent announcement of an additional $3.3
billion of misreported expenses on top of the $3.8 billion
already revealed.

RHK's Ryan Perspective report presents strong supporting
evidence for these assertions and argues that the temptation to
rescue WorldCom, and so preserve jobs, should be resisted.

"If a concerted effort, with tacit or explicit Federal support,
is launched to rescue WorldCom, then it rewards firms that self-
destruct -- and, in contrast, punishes their competitors that
are using such out-of-fashion techniques as cash-flow
management, and honest balance sheets," remarks Dr. Ryan.

Job losses are unfortunate, on any scale, Ryan adds. However,
had WorldCom attacked the task of properly integrating its many
acquisitions, it would have laid off perhaps thousands of
workers, or more. "WorldCom as it stands is bloated and
inefficient. There remain many distinct network operations
within the whale that WorldCom became. Rescuing the company
would only prop up its inefficient operations and postpone the
day of reckoning when lay offs would be inevitable. Just don't
do it".

RHK's view is that any funds the Government might offer to
"rescue" WorldCom would be better used to help heal the wounds
of the firms and individuals WorldCom hurt -- or to launch an
accelerated U.S. broadband campaign to encourage the nation's
Internet economy.

RHK's Ryan Perspective, Four Reasons Why WorldCom Should Go Out
of Business, explains the rationale behind allowing WorldCom to
disappear. It also outlines the implications for the industry if
this were to happen, and looks at the damaging consequences of
keeping the company alive, including potential disruption to
customer services.

For more information about this report and other RHK services,
please contact Mike Mahan, in the United States, at 650/737-
9600; Takashi Kimura, in Japan, at +81.3492.1341; George
Stojsavljevic, in Europe at +44.1462.485440, and Jim Kent for
Asia-Pacific, at +650.737.9600.

RHK helps guide equipment vendors, service providers, and
financial institutions in making sound business decisions at
every level of the telecommunications value chain. Through
subscription programs, strategic advisory support, and
consulting services, RHK delivers unbiased, third-party
perspectives on the markets, trends, and technologies shaping
the global telecom infrastructure. RHK's areas of expertise
include: Broadband Access, Communications Semiconductors,
Network Traffic, Mobile Communications, Operational Support
Systems, Optical Components, Optical Networks, and Switching &
Routing. The company also provides Financial and Telecom
Economic Programs as well as an Executive Strategic Partnership
service designed for CEOs. For more information, visit
http://www.rhk.com


XO COMMUNICATIONS: Court Okays Akin Gump as Committee's Counsel
---------------------------------------------------------------
The Official Unsecured Creditors' Committee in the chapter 11
case involving XO Communications, Inc., obtained permission from
the Court to retain Akin Gump Strauss Hauer & Feld LLP as its
counsel, nunc pro tunc to June 24, 2002.

Akin Gump is expected to:

(a) advise the Committee with respect to its rights, duties and
    powers in this Case;

(b) assist and advise the Committee in its consultations with
    the Debtor relative to the administration of this Case;

(c) assist the Committee in analyzing the claims of the Debtor's
    creditors and the Debtor's capital structure and in
    negotiating with holders of claims and equity interests;

(d) assist the Committee in its investigation of the Debtor's
    acts, conduct, assets, liabilities and financial condition
    and the Debtor's operation of its businesses;

(e) assist the Committee in its analysis of, and negotiations
    with the Debtor or any third party concerning matters
    related to, among other things, the assumption or rejection
    of leases of non-residential real property and executory
    contracts, asset dispositions, financing of other
    transactions and the terms of a plan of reorganization for
    the Debtor;

(f) assist and advise the Committee as to its communications to
    the general creditor body regarding significant matters in
    this Case;

(g) represent the Committee at all hearings and other
    proceedings;

(h) review and analyze applications, orders, statements of
    operations and schedules filed with the Court and advise the
    Committee as to their propriety;

(i) assist the Committee in preparing pleadings and
    applications; and

(j) perform other legal services as may be required.

Akin Gump intends to charge for its legal services on an hourly
basis.  Akin Gump will also maintain detailed records of actual
and necessary costs and expenses incurred in connection with the
legal services in this case.

The current hourly rates, subject to periodic adjustments, are:

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

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

      Daniel H. Golden (Partner)         - $675;
      David H. Botter (Partner)          - $450;
      Christopher A. Provost (Associate) - $350; and
      Kenneth Davis (Associate)          - $280.
(XO Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Crown Cork & Seal     7.125%  due 2002  97.5 - 99.5      0
Federal-Mogul         7.5%    due 2004    22 - 24        0
Finova Group          7.5%    due 2009    25 - 27        0
Freeport-McMoran      7.5%    due 2006    89 - 91        0
Global Crossing Hldgs 9.5%    due 2009   1.5 - 2.5       0
Globalstar            11.375% due 2004     3 - 5         0
Lucent Technologies   6.45%   due 2029    59 - 61        0
Polaroid Corporation  6.75%   due 2002   5.5 - 7.5       0
Terra Industries      10.5%   due 2005    81 - 83        0
Westpoint Stevens     7.875%  due 2005    50 - 52        0
Xerox Corporation     8.0%    due 2027    38 - 40        0

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

                          *********

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

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

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

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

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

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

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

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

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

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

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