TCR_Public/020820.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, August 20, 2002, Vol. 6, No. 164

                           Headlines

360NETWORKS: Court Approves Proposed Uniform Voting Procedures
AAMES FINANCIAL: Extends Exchange Offer for 5.5% Notes to Sept 6
ANC RENTAL: Franchisees Approve "Bitter Pill" Fee Increase
ACCRUE SOFTWARE: Fails to Meet Nasdaq Minimum Listing Standards
ADELPHIA COMMS: Obtains Approval of Consent Agreement with TCI

AIR 2 US: Fitch Cuts Classes C & D Notes Rating to Junk Level
AIRCRAFT INDEBTEDNESS: Fitch Junks Ratings on Class B & C Certs.
AMERICAN AIRLINES: First Half Net Loss Widens to About $1 Bill.
AMES DEPARTMENT: Wins Nod to Conduct GOB Sale & Close 327 Stores
AMSCAN HOLDINGS: S&P Keeping Watch on B+ Corporate Credit Rating

APPLIEDTHEORY: Wants Exclusivity Period Stretched Until Nov. 13
AVAYA: Lenders Consent to Amend $561 Million Credit Facility
BGF INDUSTRIES: June 30 Balance Sheet Upside-Down by $44 Million
BETHLEHEM STEEL: Seeking Appointment of Retirees' Committee
BUDGET GROUP: Asking Court to Extend Stay to Overseas Assets

BURKE INDUSTRIES: Solicitation Exclusivity Extended to Sept. 30
CTC COMMUNICATIONS: Nasdaq Knocks Off Shares Effective Today
CACHEFLOW INC: Fails to Comply with Nasdaq Listing Guidelines
CHAMPION ENTERPRISES: S&P Places Ratings on CreditWatch Negative
CHOICE ONE: June 30, 2002 Balance Sheet Upside-Down by $328MM

CLASSIC COMM: Reviewing Committee's Proposed Reorganization Plan
CLAXSON INTERACTIVE: Auditors Raise Going Concern Doubt
COMDISCO INC: Sungard Pressing for Prompt Transfer of Property
CONSOLIDATED CONTAINER: S&P Affirms B- Corporate Credit Rating
CUTTER & BUCK: Fails to Maintain Nasdaq Listing Requirements

DADE BEHRING: S&P Rates Credit at B+ Pending Bankruptcy Exit
DATATEC SYSTEMS: Plans to Appeal Nasdaq Delisting Determination
FIBERNET TELECOM: Taps Deloitte & Touche as Independent Auditors
FEDERAL-MOGUL: Court OKs Bifferato as Equity Committee's Counsel
FIFTH ERA: Settles $60K of Current Debt Under Debt Workout Plan

FLAG TELECOM: Deloitte & Touche Takes Over Andersen's Duties
FOXMEYER CORP.: Bart Brown Ready to Make 42.5% Distribution
FRANKLIN TELECOM: Will Leave AMEX & Return to OTCBB on August 26
GEMSTAR-TV: S&P Puts Ratings on Watch Neg. over Revenue Concerns
GLOBAL CROSSING: Pushing for Approval of IRU Break-Up Fees

GLOBAL LIGHT: Canadian Court Extends CCAA Protection to Aug. 29
GUILFORD MILLS: Has to Oct. 15 to Make Lease-Related Decisions
GUILFORD MILLS: Court to Consider Proposed Plan on September 19
HARDWOOD PROPERTIES: Expects All Assets To be Sold by Next Month
HEADWAY CORPORATE: Says Liquidity Sufficient to Meet Obligations

INTERPLAY ENTERTAINMENT: Nasdaq to Delist Shares on Thursday
KAISER ALUMINUM: Continuing JV Transactions with Affiliates
KITTY HAWK: Bank Group Appeals from Confirmation Order
KMART CORP: Court Okays Mechanics' Lien Settlement Procedures
LAIDLAW: Unveils Exit Financing Facility Plans

LEAR CORP: Names David Fry & Conrad Mallet Jr. as New Directors
LERNOUT & HAUSPIE: Solicitation Exclusivity Extended to Sept. 30
MERRILL LYNCH: Fitch Junks $32.3MM Class F Pass-Through Certs.
METALS USA: Obtains Approval to Amend DIP Financing with Lenders
NCS HEALTHCARE: June 30 Balance Sheet Upside-Down by $108 Mill.

NCS HEALTHCARE: Omnicare Sends Letter Detailing Merger Agreement
NTL INC: Court Approves Garden City as Noticing & Claims Agent
NATURADE INC: Equity Deficit Narrows to $3 Million at June 30
NETIA: Court Sets Creditors' Vote on Units' Plan for August 30
ONLINE POWER SUPPLY: Ehrhardt Keefe Raises Going Concern Doubt

OPEN PLAN: Court Okays Auction Procedures to Effect Asset Sale
OPTIO SOFTWARE: Fails to Meet Nasdaq Continued Listing Standards
ORBITAL IMAGING: Gets OK to Hire Rothschild as Financial Advisor
OWENS CORNING: Asks Court to Approve Stipulation re EPA Bar Date
PBG AIRCRAFT: S&P Ratchets Class B Aircraft Notes Down a Notch

PACIFIC GAS: Confirmation Hearing to Begin on November 12, 2002
PERSONNEL GROUP: Rebrands Three More Commercial Staffing Ops.
PROVANT INC: Commences Trading on Nasdaq SmallCap Market
PROVELL: Gets Lease Decision Period Extension Until October 8
QSERVE COMMS: Wants More Time to File Schedules & Statements

REPUBLIC TECHNOLOGIES: Closes Asset Sale to Republic Engineered
SAGENT: Fails to Comply with Nasdaq Minimum Listing Requirements
SAMSONITE CORP: Artemis Entities Disclose 29.9% Equity Stake
SHENANDOAH RESOURCES: Has Until August 27 to File CCAA Plan
STARMEDIA NETWORK: Needs New Financing to Continue Operations

STATIONS HOLDING: Has Until October 31 to File Chapter 11 Plan
T/R SYSTEMS INC: Fails to Maintain Nasdaq Listing Standards
TRUDY CORPORATION: Auditors Doubt Ability to Continue Operations
UCI MEDICAL: So. Carolina Court Confirms Plans of Reorganization
US AIRWAYS: Turns to Seabury for Financial Advice & Consulting

US PLASTIC LUMBER: Has Until Feb. 13 to Meet Nasdaq Requirements
VALEO ELECTRICAL: Disclosure Statement Hearing Set for August 21
WARNACO GROUP: SEC May Charge Debtor with Exchange Act Violation
WAYLAND INVESTMENT: Fitch Lowers $60MM Secured Sub Notes to BB
WEIRTON STEEL: S&P Raises Rating to CCC After Debt Restructuring

WHEELING-PITTSBURGH: Will Use Funds in Salaried Claims Trust
WILLIAMS COMMS: Court Sets Plan Confirmation Hearing for Sept 25
WORLDCOM INC: US Trustee Appoints Unsecured Creditors' Committee
WORKFLOW MANAGEMENT: Brings-In Jefferies as Financial Advisor

                           *********

360NETWORKS: Court Approves Proposed Uniform Voting Procedures
--------------------------------------------------------------
360networks inc., and its debtor-affiliates obtained Court
approval of uniform voting procedures and customized ballot
forms for creditors to use in voting on whether to accept or
reject the Company's chapter 11 Plan of Reorganization.

The Debtors proposed that each claim against the Debtors shall
be allowed for purposes of voting on the Plan only, in
accordance with these rules:

   (i) Undisputed Scheduled Claims.  For a Claim that appears on
       the Debtors' Schedules as undisputed, noncontingent, and
       liquidated, and no objection has been filed at least 10
       days prior to the end of the Voting Period, the amount
       and classification of the Claim shall be that specified
       in the Schedules;

  (ii) Undisputed Filed Claims.  For a liquidated, non-contingent
       Claim as to which a proof of claim has been timely filed
       and no objection has been filed at least 10 days prior to
       the end of the period fixed by the Court for voting on
       the Plan, the amount and classification of the Claim
       shall be that specified in the proof of claim as
       reflected in the records of Bankruptcy Services, LLC, the
       Balloting Agent, as agent for the Clerk of the Court
       subject to any applicable limitations;

(iii) Disputed Filed Claims.  For a Claim that is the subject
       of an objection filed at least 10 days prior to the end
       of the Voting Period, the Claim will be disallowed
       provisionally for voting purposes, except to the extent
       and in the manner that:

         (a) the Debtors agree the Claim should be allowed in the
             Debtors' objection to the Claim; or

         (b) the Claim is allowed temporarily for voting purposes
             in accordance with Bankruptcy Rule 3018;

  (iv) Claims Estimated for Voting Purposes.  For a Claim that
       has been estimated or allowed for voting purposes by
       order of the Court, the amount and classification of the
       Claim will be that set by the Court;

   (v) Wholly Unliquidated Claims.  For a Claim recorded in the
       Debtors' Schedules of Assets and Liabilities filed with
       the Court or in the Clerk's records as wholly
       unliquidated, contingent or undetermined will be accorded
       one vote valued at $1 for purposes of Section 1126(c) of
       the Bankruptcy Code, unless the Claim is disputed;

  (vi) Partially Unliquidated Claims.  For a Claim that is
       unliquidated, contingent or undetermined in part, the
       holder of the Claim will be entitled to vote that portion
       of the Claim that is liquidated, non-contingent and
       undisputed in the liquidated, non-contingent and
       undisputed amount, subject to any limitations and unless
       ordered by the Court;

(vii) Late Claims.  For a Claim as to which a proof of claim
       was not timely filed, the voting amount of the Claim will
       be equal to:

       (a) the amount listed in the Schedules, to the extent the
           Claim is not listed as contingent, unliquidated,
           undetermined or disputed; or

       (b) if not so listed, then the Claim will be disallowed
           provisionally for voting purposes;

(viii) Claims Limited to Setoffs.  For a Claim whose holder has
       agreed that the Claim may be asserted solely for purposes
       of setoff against claims the Debtors may have against the
       holder and not as an affirmative Claim against the
       Debtors' estates, the Claim will be disallowed
       provisionally for voting purposes; and

  (ix) Duplicate Claims.  A creditor will not be entitled to vote
       its Claim to the extent the Claim duplicates or has been
       superseded by another Claim of the creditor.

In addition, the Debtors proposed to promptly give notice to
holders of Claims that are wholly unliquidated, contingent or
undetermined, of the one dollar, one vote procedure, to be
served upon claimants by first class mail by the later of:

     (i) five business days after the entry of an order
         establishing voting procedures; and

    (ii) the deadline for transmitting the Plan, Disclosure
         Statement, and ballots to creditors voting on the Plan.

Any claimant wishing to challenge the valuation must file and
serve on counsel for the Debtors within 10 days of notice's
service, a motion for a hearing on the estimation of the claim
for voting purposes.

The Court also approved these rules, standards and protocols for
the tabulation of ballots:

   (i) for the purpose of voting on the Plan, BSI, as balloting
       agent, will be deemed to be in constructive receipt of any
       ballot timely delivered to any address that BSI designates
       for the receipt of ballots cast on the Plan;

  (ii) any ballot received by BSI after the end of the Voting
       Period shall not be counted;

(iii) whenever a holder of a Claim submits more than one ballot
       voting for the same claim prior to the end of the Voting
       Period, the first ballot sent and received shall count
       unless the holder has sufficient cause to submit, or the
       Debtors consent to the submission of, a superseding
       ballot;

  (iv) if a holder of a Claim casts simultaneous duplicative
       ballots voted inconsistently, then the ballots shall be
       counted as one vote accepting the Plan;

   (v) the authority of the signatory of each ballot to complete
       and execute the ballot shall be presumed;

  (vi) any ballot not signed shall not be counted;

(vii) any ballot received by BSI by telecopier, facsimile or
       other electronic communication shall not be counted;

(viii) a holder of a Claim must vote all of its Claims within a
       particular class under the Plan either to accept or reject
       the Plan and may not split its vote.  Accordingly, a
       ballot, or multiple ballots with respect to separate
       Claims within a single class, that partially rejects and
       partially accepts the Plan, or that indicates both a vote
       for and against the Plan, will not be counted; and

  (ix) any ballot that is timely received and executed but does
       not indicate whether the holder of the relevant Claim is
       voting for or against the Plan shall be counted as a vote
       for the Plan. (360 Bankruptcy News, Issue No. 30;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)


AAMES FINANCIAL: Extends Exchange Offer for 5.5% Notes to Sept 6
----------------------------------------------------------------
Aames Financial Corporation (OTCBB:AMSF) announced that the
expiration date of its offer to exchange its newly issued 4.0%
Convertible Subordinated Debentures due 2012 for any and all of
its outstanding 5.5% Convertible Subordinated Debentures due
2006 has been extended to 5:00 p.m., New York City time, on
Friday, September 6, 2002. The Exchange Offer was previously
scheduled to expire Friday, August 16, 2002, at 5:00 p.m., New
York City time. The Company reserves the right to further extend
the Exchange Offer or to terminate the Exchange Offer, in its
discretion, in accordance with the terms of the Exchange Offer.

To date, the Company has received tenders of Existing Debentures
from holders of approximately $42.7 million principal amount, or
approximately 37.5%, of the outstanding Existing Debentures.

As previously announced, Wilmington Trust Company, as successor
indenture trustee with respect to the Company's 9.125% Senior
Notes due 2003, brought an action against the Company seeking to
prevent the Company from consummating the Exchange Offer. On
July 1, 2002, the Supreme Court of the State of New York denied
the Trustee's request for an order preliminarily enjoining the
Company from proceeding with the Exchange Offer. On July 12,
2002, the Company filed a motion to dismiss the Trustee's
complaint. On August 1, 2002, the Trustee filed an amended
complaint seeking a declaratory judgment that if the Company
were to proceed with the Exchange Offer an event of default
would exist under the indenture governing the Senior Notes. On
August 14, 2002, the Company filed a motion to dismiss the
Trustee's amended complaint and request a declaratory judgment
that the Exchange Offer would not constitute an event of default
under the Senior Note indenture. Subsequent to the filing, the
Company recommenced discussions with holders of a majority of
the Senior Notes regarding the purchase of Senior Notes by the
Company. No offers have been made by any party and the Company
cannot guarantee that any offers will be made, or if made, will
lead to a purchase of any Senior Notes by the Company or the
settlement of the pending lawsuit.

The Company is a consumer finance company primarily engaged in
the business of originating, selling and servicing home equity
mortgage loans. Its principal market is borrowers whose
financing needs are not being met by traditional mortgage
lenders for a variety of reasons, including the need for
specialized loan products or credit histories that may limit the
borrowers' access to credit. The residential mortgage loans that
the Company originates, which include fixed and adjustable rate
loans, are generally used by borrowers to consolidate
indebtedness or to finance other consumer needs and, to a lesser
extent, to purchase homes. The Company originates loans through
its retail and broker production channels. Its retail channel
produces loans through its traditional retail branch network and
through the Company's National Loan Centers, which produces
loans primarily through affiliations with sites on the Internet.
Its broker channel produces loans through its traditional
regional broker office networks, and by sourcing loans through
telemarketing and the Internet. At March 31, 2002, the Company
operated 100 retail branches, 5 regional wholesale loan offices
and 2 National Loan Centers throughout the United States.

                           *    *    *

As reported in Troubled Company Reporter's June 19, 2002
edition, Moody's Investors Service took several rating actions
on Aames Financial Corporation. The investors service lowered
the company's Senior Debt Rating to Caa3 from Caa2. It also
affirmed its Ca rating on Aames' Subordinated Debenture. Rating
outlook stays at negative.

It is Moody's belief that potential loss severity to senior
unsecured bondholders would increase after Aames started its
previously announced exchange offer of its outstanding 5.5%
convertible subordinated debentures due 2006.

The company's liquidity and financial flexibility remain
constrained. It appears that Aames may have difficulty obtaining
the necessary resources to pay for its approximately $150
million unsecured senior debt maturing on November 15, 2003. It
also has short-term warehouse facilities with financial
covenants maturing before October 2003 and which critically
needed to be renewed to maintain its limited financial
flexibility.


ANC RENTAL: Franchisees Approve "Bitter Pill" Fee Increase
----------------------------------------------------------
The South Florida Sun-Sentinel reported on July 20, 2002 that a
group representing about 100 franchisees of National Car Rental
System has agreed to pay higher fees to parent company ANC
Rental Corp., which used its leverage in its current Chapter 11
bankruptcy reorganization to challenge the existing schedule of
fees.

The group decided a week before the Sentinel's report that it
had little bargaining power because under bankruptcy law, ANC
has the ability to reject contracts, including those with
franchisees.

As a result, the group agreed to renegotiate a 1997 legal
settlement that set fees at about 18 percent of revenues.  The
new agreement boosts fees by as much as 45 percent for larger
franchisees, and 15 to 20 percent for smaller ones. (ANC Rental
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ACCRUE SOFTWARE: Fails to Meet Nasdaq Minimum Listing Standards
---------------------------------------------------------------
Accrue Software, Inc. (Nasdaq:ACRU), a provider of enterprise-
level Internet analytics software, announced that on Aug. 14,
2002 it received a letter from the Nasdaq staff stating that the
Company has failed to comply with the $1.00 minimum bid price
required for continued listing of its common stock on the Nasdaq
SmallCap Market, as required by Nasdaq Marketplace Rule 4450(a),
and as a result the common stock is subject to delisting.

The Company intends to request a hearing before a Nasdaq Listing
Qualifications Panel to review the staff determination. Although
there can be no assurance that the Panel will grant the request
for continued listing by the Company, the hearing request will
stay the delisting of the Company's common stock pending the
Panel's decision.

Accrue Software(R), Inc., is a provider of Internet analytics
solutions that help companies worldwide understand, influence,
and respond to Internet customer behavior. Accrue's products are
designed to enable companies to increase the effectiveness of
Internet marketing and merchandising initiatives, better manage
customer interactions across multiple channels, and streamline
business operations. With Accrue's solutions, companies
transform volumes of complex Internet data into actionable
information that executives and managers can use to drive key
business decisions and improve the return on their Internet
investment. Accrue's customers include industry leaders such as
Citicorp, Dow Jones & Company, Eastman Kodak, Lands' End,
Macy's, Lycos Europe, and Deutsche Telekom.

Accrue Software was founded in 1996 and is headquartered in
Fremont, Calif., with regional sales offices throughout the U.S.
and international headquarters in Cologne, Germany. Accrue has
strategic application and platform partnerships with leading
technology companies such as IBM, Oracle, Sun Microsystems,
BroadVision, ATG and Vignette. Accrue Software can be reached at
1-888-4ACCRUE or 510/580-4500 and at http://www.accrue.com


ADELPHIA COMMS: Obtains Approval of Consent Agreement with TCI
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered an order approving:

   (1) a Consent Agreement dated June 25, 2002 among Adelphia
       Communications, TCI Adelphia Holdings LLC and TCI
       California Holdings LLC; and

   (2) specific amendments to partnership agreements.

The Consent Agreement and the Partnership Amendments embody a
complete resolution and settlement of various contested issues
among certain of the Debtors and the Non-Debtor Partners with
respect to the Debtors' authority to commence chapter 11
proceedings and to incur debtor-in-possession financing for
certain Partnership Debtors.

                        Consent Agreement

The Consent Agreement provides that the Non-Debtor Partners'
consent was effective immediately after the satisfaction of
these two conditions:

* execution of the Partnership Amendments to the Century-TCI
   Partnership Agreement, the Western NY Partnership Agreement
   and the Parnassos Partnership Agreement; and

* extension by the Partnership Debtors of an offer of employment
   to David R. Van Valkenburg to serve as an Independent Advisor
   to each of the Partnership Debtors in accordance with certain
   criteria.

These conditions have been satisfied.

                       Partnership Amendments

The amendments to the Partnership Debtors' Partnership
Agreements consist of:

   * Retention of Independent Advisor: Addition of provisions
     requiring the retention of an Independent Advisor to the
     Partnership Debtors.

   * Authority of Independent Advisor: Addition of provisions
     setting forth the scope of authority and responsibilities of
     the Independent Advisor including review, consultation and
     recommendations with respect to:

     a. operating and capital budgets, plans and projections;

     b. operations and finances;

     c. employment decisions;

     d. operational restructurings;

     e. strategic planning;

     f. contract assumption, rejection or termination;

     g. capital expenditures;

     h. asset disposition or acquisition;

     i. business combinations;

     j. certain conflict matters involving transactions, claims
        and management issues as between Adelphia and any of its
        subsidiaries and affiliates and the Partnership Debtors;
        and

     k. any and all other decisions concerning the business,
        operations and finances of the Partnership Debtors.

   * Conflict Matters: Addition of provisions specifying certain
     additional actions which cannot be taken by the General
     Partner Debtors with respect to their associated Partnership
     Debtor without the consent of the applicable Non-Debtor
     Partner including:

     a. assumption, rejection and amendment determinations with
        respect to agreements between the Partnership Debtors and
        Adelphia or any of its subsidiaries and affiliates;

     b. investigation and pursuit or settlement of claims the
        Partnership Debtors may have against Adelphia or any of
        its subsidiaries and affiliates;

     c. addressing claims Adelphia or any of its subsidiaries and
        affiliates may assert against the Partnership Debtors,
        including cost allocations and intercompany claims; and

     d. termination or amendment of the respective management
        agreements in place at the Partnership Debtors.

   * Budgets: Addition of provisions requiring the formulation of
     new operating budgets and capital budgets in consultation
     with the Non-Debtor Partners and the Independent Advisor
     prior to November 30, 2002.

   * DIP Financing: Addition of provisions pursuant to which the
     Non-Debtor Partners acknowledge their consent and
     authorization under the applicable Partnership Agreements to
     the Partnership Debtors' incurrence of DIP Financing on the
     terms and conditions as approved on an interim basis by this
     Court on June 28, 2002.

   * Bankruptcy Court Approval: Addition of provisions requiring,
     no later than 10 days prior to the entry of a final order
     approving the DIP Financing, that the parties obtain an
     order from this Court approving the retention of the
     Independent Advisor and the enforceability and binding
     effect of the amendments to the Partnership Agreements and
     the governance provisions contained therein. (Adelphia
     Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
     Service, Inc., 609/392-0900)

Adelphia Communications' 10.25% bonds due 2006 (ADEL06USR1),
DebtTraders says, are trading at 43.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL06USR1
for real-time bond pricing.


AIR 2 US: Fitch Cuts Classes C & D Notes Rating to Junk Level
-------------------------------------------------------------
Fitch Ratings downgrades the ratings of Air 2 US enhanced
equipment notes as follows: class A to 'A' from 'AA', class B to
'BBB' from 'A', class C to 'CCC+' from 'BBB' and class D to
'CCC' from 'BBB-'. The ratings are also removed from Rating
Watch Negative. The original EEN issuance amount was $1.07
billion compared to about $1 billion currently outstanding. Due
to the payment structure, only the class A EENs have amortized
from the original issuance amount. Air 2 US is a special purpose
Cayman Islands company created to issue the EENs, hold the
proceeds as Permitted Investments, and enter into a risk
transfer agreement with a subsidiary of Airbus S.A.S.

AIR 2 US has entered into a risk transfer agreement known as the
Payment Recovery Agreement with a subsidiary of Airbus. The
primary provision of the PRA states that if American Airlines,
Inc., or United Air Lines, Inc., fail to pay scheduled rentals
under existing subleases of 41 aircraft with subsidiaries of
Airbus, AIR 2 US will pay these rental deficiencies to a
subsidiary of Airbus. These deficiency payments will come from
the Permitted Investments.

Fitch's rating analysis involved a composite of portfolio lease
and enhanced equipment trust certificate approaches. The ratings
of the series A, and series B EENs are primarily based on 1)
expected present value of sublease rental payments from American
and United; 2) the Permitted Investment scheduled payments; 3)
the probability that the Permitted Investment payments will be
first directed to pay the scheduled sublease rentals as per the
PRA; 4) liquidity facilities to support EEN interest payments;
5) the ability of Airbus to provide support to the transaction
through the Airbus agreement and related agreements; and, 6) the
integrity of the EEN's legal structure.

The rating of the series C EENs is supported by the factors
mentioned above, but is based primarily on the credit quality of
the two sublessees. The rating of the series D EENs is solely
based on the unsecured credit of the two sublessees.

In November 2001, an event of loss occurred on one of the
aircraft underlying this transaction. The sublessee, American,
could have elected to replace the aircraft under the sublease,
but has opted not to do so. This has prompted a special payment
(amounting to the share allocable to the respective aircraft) on
the EENs, scheduled to be made in October 2002. While Fitch's
ratings incorporate the above events, they were not a factor in
our rating downgrades.

The above rating actions reflect Fitch's concern that the
effects of Sept. 11 and the recession have weakened the credit
quality of the sublessees, made it more difficult to replace a
defaulted sublessee, and lowered the values of the underlying
aircraft which in turn could affect the amount of cash flow that
could be provided by a replacement sublessee. These factors have
increased the likelihood that: 1) scheduled cash flows under the
Permitted Investments will be diverted from the noteholders to
Airbus due to either American or United defaulting under their
existing underlying subleases and, 2) the expected present value
of future projected sublease rental payments will be less than
when the transaction was first rated.

Airbus is one of only two aircraft manufacturers in the market
for large commercial airliners. It designs, builds, sells and
supports commercial aircraft with a capacity of 100 seats or
more. Airbus is owned by two global aerospace and defense
companies, 20% by BAE Systems of the UK and 80% by the European
Defense and Space Company. EADS is the end result of the merger
of three global aerospace companies: Aerospatiale-Matra of
France, DaimlerChrysler Aerospace of Germany, and CASA of Spain.


AIRCRAFT INDEBTEDNESS: Fitch Junks Ratings on Class B & C Certs.
----------------------------------------------------------------
Fitch Ratings has taken the following rating actions for
Aircraft Indebtedness Repackaging Trust, 1997-1:

   --Class A certificates are downgraded to 'B' from 'BBB-';

   --Class B certificates are downgraded to 'CCC' from 'B+';

   --Class C certificates are downgraded to 'CC' from 'B-'.

The above rating actions reflect the bankruptcy filing of US
Airways Group, Inc., as well as the outlook for the aircraft
that support the Aircraft Indebtedness Repackaging Trust
transaction. The ratings on the certificates address the timely
payment of interest and the ultimate payment of principal by the
final legal distribution dates which are December 1, 2014; June
1, 2013; and June 1, 2012, respectively, for the class A, B, and
C certificates.

During the first 60 days of its bankruptcy, US Air is not
required to make payments to support AIRT and many other
aircraft financings. According to United States Bankruptcy Law,
US Air must determine whether it will resume payments or
permanently stop payments during the 60 day period.
Renegotiations of payments could also occur. Permanent stoppage
of AIRT payments would trigger a return of the aircraft
collateral. Interest and principal on AIRT are paid every 6
months with the next payments due December 1, 2002. AIRT has
liquidity facilities sufficient to pay interest on the rated
classes for 3 payment periods.

While it is difficult to determine which payments US Air will
continue, renegotiate or stop permanently, Fitch expects that US
Air will not resume payments to support AIRT. As part of its
bankruptcy, US Air is expected to downsize its fleet and
eliminate non-core aircraft. The 757-200 aircraft backing the
AIRT transaction appear to be non-core given US Air's preference
for an all Airbus and regional jet aircraft fleet. If the 757-
200 aircraft are returned, the certificateholders will look to
sell the aircraft. During the sale period, principal will not be
paid, but liquidity facilities will be used to provide timely
interest for 3 interest payments on all three rated classes.

Although the short term prospects for the 757-200 aircraft are
poor, Fitch expects that a sale of the aircraft before liquidity
runs out is possible, but at a considerable discount of its
current base value. Values for the 757-200 will be under
considerable short term pressure due to expectations that other
North American users of the aircraft could be downsizing their
fleets in the next six months due to the deteriorating travel
markets. Long term, prospects are also weak given the
unprecedented imbalance of supply/demand that is effecting many
aircraft types, including the 757-200, and is likely to continue
for the next few years.

AIRT was established under the laws of the state of Delaware and
was formed primarily to issue the above referenced certificates
and to purchase and own fixed rate notes. The fixed rate notes
are supported by payments from US Air and the value of two
Boeing 757-200 aircraft. The fixed rate note payments match
those required by the certificates and are passed through to the
certificateholders.

AIRT has been structured as an enhanced equipment trust
certificate transaction. EETCs function as hybrid corporate
bonds, and Fitch's EETC ratings are linked to the unsecured
corporate rating of the underlying airline. The ratings on EETCs
can be significantly higher than those of the airline's
unsecured corporate obligations due to the structural features
of the transaction.


AMERICAN AIRLINES: First Half Net Loss Widens to About $1 Bill.
---------------------------------------------------------------
American Airlines' net loss for the six months ended June 30,
2002 was $1,028 million as compared to a net loss of $489
million for the same period in 2001.  American's operating loss
for the six months ended June 30, 2002 was $1,353 million,
compared to an operating loss of $713 million for the same
period in 2001.  American's 2002 results continue to be
adversely impacted by the September 11, 2001 terrorist
attacks and the resulting effect on the economy and the air
transportation industry.  On April 9, 2001, Trans World Airlines
LLC (TWA LLC, a wholly owned subsidiary of AMR Corporation)
purchased substantially  all of the assets and assumed certain
liabilities of Trans World Airlines, Inc.  Accordingly, the
operating results of TWA LLC are included in the Americans'
consolidated financial statements for the six month period ended
June 30, 2002 whereas for 2001 the results of TWA LLC were
included only for the period April 10, 2001 through June 30,
2001.   All references to American Airlines, Inc. include the
operations of TWA LLC since April 10, 2001 (collectively,
American).  In addition, American's 2001 results include: (i) a
$586 million charge ($368 million  after-tax) related to the
writedown of the carrying value of its Fokker 100 aircraft  and
related rotables in accordance with SFAS 121, "Accounting  for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of", and (ii) a $45 million gain ($29 million after-
tax) from the settlement of a legal matter related to the
Company's 1999 labor disruption.

Although traffic has continued to increase on significantly
reduced capacity since the events of September 11, 2001, the
Company's 2002 revenues were down significantly year-over-year.
In addition to the residual effects of September 11, the
Company's revenues continue to be negatively impacted by the
economic slowdown, seen largely in business travel declines, the
geographic distribution of the Company's network and reduced
fares.  In total, the Company's revenues decreased $1,608
million, or 16.9 percent, in 2002 versus the same period in
2001.   American's passenger revenues decreased by 15.7 percent,
or $1,349  million in 2002 as compared to the same period in
2001. American's domestic revenue per available seat mile (RASM)
decreased 13.4 percent, to 8.58 cents, on a capacity decrease of
0.4 percent, to 61.3 billion available seat miles. International
RASM decreased to 8.67 cents, or 7.7 percent, on a capacity
decrease of 14 percent. The decrease in international RASM was
due to a 10.2 percent and 7.9 percent decrease in Latin American
and European RASM,respectively, slightly offset by a 5.6 percent
increase in Pacific RASM. The decrease in international capacity
was driven by a 36.4 percent, 15.2 percent and 8.2 percent
reduction in Pacific, European and Latin American ASMs,
respectively.

Cargo revenues decreased $88 million, or 24.3 percent, primarily
due to the same reasons noted above.

Other revenues decreased 29.3 percent, or $171 million, due
primarily to decreases in contract maintenance work that
American performs for other airlines, and decreases in codeshare
revenue and employee travel service charges.

As of June 30, 2002, the Company had commitments to acquire the
following aircraft: 47 Boeing 737-800s, 11 Boeing 777-200ERs and
nine Boeing 767-300ERs.   Deliveries of these aircraft are
scheduled to continue through 2008.  Payments for these aircraft
are expected to be approximately $210 million during the
remainder of 2002, $890 million in  2003, $390 million in 2004
and an aggregate of approximately $1.5 billion in 2005 through
2008.

In June 2002, Standard & Poor's downgraded the credit ratings of
American, and the credit ratings of a number of other major
airlines. The long-term credit ratings of American were removed
from Standand & Poor's Credit Watch with negative implications
and were given a negative outlook.   Any additional reductions
in American's credit ratings could result in increased borrowing
costs to the Company and might limit the availability of future
financing needs.

Capacity for American is expected to be down approximately two
percent in the third quarter of 2002 compared to last year's
third quarter levels.  For the third quarter of 2002, the
Company expects traffic to be about flat as compared to last
year's third quarter levels. Pressure to reduce costs will
continue, although the Company will continue to see higher
benefit and security costs, increased insurance premiums, and
greater interest expense. However, the Company expects to see a
slight decrease in fuel prices as compared to the third quarter
of 2001 and the continued decline in commission expense due to
the commission changes implemented earlier in 2002.   In total,
American's unit costs, excluding special items, for the third
quarter of 2002 are expected to be down approximately 3.5
percent from last year's third quarter level.  Notwithstanding
the expected decrease in unit costs however, given the revenue
pressures seen in the first half of the year and expected to
continue into the third quarter, the Company  expects to incur a
sizable loss in the third quarter and a significant loss for
2002.

In response to these financial challenges, the Company has
undertaken a comprehensive review  of its business to better
align its cost structure with the current revenue environment,
aimed at improving productivity, simplifying operations and
reducing costs.  The  Company has begun to implement certain of
these changes, including a fleet simplification program,
adjustments to its operating schedule and increased airport
automation, and will continue to refine its business throughout
the coming months.

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.


AMES DEPARTMENT: Wins Nod to Conduct GOB Sale & Close 327 Stores
----------------------------------------------------------------
Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP, in
New York, relates that, through July 2002, Ames Department
Stores, Inc., and its debtor-affiliates weathered their
anticipated low point in credit availability with the help of
certain asset sales and additional financing.  The Debtors,
together with the Creditors' Committee and the GE DIP Lenders,
all wanted the Debtors to operate through the summer, after
which the "back to school" and holiday seasons would generate
substantial profits.

Although the Debtors made it to their projected low point with
slightly better credit availability than their business plan
contemplated, in late July, sales dropped below plan despite
significant paper and television advertising.  Before a default
occurred, Mr. Bienenstock says, the Debtors, the Committee, and
the GE DIP Lenders weighed the risks to be incurred by
continuing operations against the prospects of a prompt wind
down.

"While the Debtors hoped to continue operating and to strengthen
through the holiday season, they recognized that the heightened
reluctance of trade vendors to ship and the very disappointing
sales made the risks of operating greater than the potential
benefits," Mr. Bienenstock states.

In the exercise of their fiduciary duties, the Debtors
concluded, with the concurrence of the GE DIP Lenders and the
Committee, to wind down operations in the hopes of paying all
postpetition allowed claims.  "The ultimate result will depend
on the values obtained for the Debtors' real estate.  However,
it appears the prospects for full payment are significantly
greater now than they would be if the Debtors continued to
absorb losses in normal operations," Mr. Bienenstock tells the
Court.

Mr. Bienenstock told Bloomberg that under the Debtors'
liquidation plan, the secured creditors will likely to be paid
in full.  Presently, Ames owes GE Capital and Kimco Investments
$452,000,000 from the $755,000,000 DIP credit agreement.  Ames
also owes Kimco another $73,000,000 for the rent on some stores.
Mr. Bienenstock estimates the cost of Ames' winding down to
total $131,000,000.  The sale of the real estates can fetch
$150,000,000.  Unsecured creditors will be left with $25,000,000
plus another $50,000,000 from the real estate proceeds to share
among themselves.

In view of that, the Debtors seek the Court's authority to
conduct GOB sales over a period of two and one half months
commencing on August 11, 2002 and ending on October 21, 2002, at
all the Debtors' remaining 327 stores and distribution centers.
The Debtors have determined that conducting the GOB Sales and
ultimately closing the Stores is appropriate and consistent with
the future configuration of the Debtors' retail operations.

The Debtors will sell all the merchandise and certain of the
Debtors' assets located at the Stores free and clear of liens,
claims, encumbrances, and other interests.  All amounts received
by the Debtors will be deposited and governed by the Debtors'
cash management system, the GE DIP Credit Agreement and the
final order approving this Motion.

In a separate application, the Debtors have engaged the services
of the joint venture -- The Nassi Group LLC, Gordon Brothers
Retail Partners LLC and SB Capital Group LLC, as their GOB Agent
pursuant to an Agency Agreement.

The Debtors ask the Court for:

1. notwithstanding anything in the Agency Agreement to the
    contrary, a confirmation that the federal bankruptcy power
    requiring the liquidation of assets to pay creditors
    supercedes and renders unenforceable state and local laws,
    statutes, rules, and ordinances restricting store closing or
    similar sales, as well as any restrictions in the leases
    governing the premises of the Stores regarding store closing
    or similar sales;

2. authority to conduct the GOB Sales without the necessity of,
    and the delay associated with, obtaining various state and
    local licenses, observing state and local waiting periods or
    time limits and satisfying any additional requirements in
    connection GOB Sales in order to ensure there will be no
    disruption or delay in the GOB Sales;

3. imposition of the Automatic stay against any act by a lessor,
    federal, state, or local agency, department, or governmental
    authority, and any other entity to prevent, interfere with,
    or otherwise hinder consummation of the GOB Sales or
    advertisement of the sales;

4. authority to pay common carriers in full as an administrative
    expense; and

5. authority for the Debtors' banks to continue to process,
    honor, and pay, to the extent of funds on deposit, any and
    all postpetition checks or wire transfer requests issued by
    the Debtors.

                             Objections

(1) POS Lessors

American Finance Group, Inc., and ORIX USA Corporation lease
point of sale equipment to the Debtors.  The POS Lessors object
to the proposed GOB sales at the stores where their equipment is
located unless the Court requires the Debtors and the Agents to
make monthly rent or adequate protection payments in advance,
for the duration of the GOB sales.

According to Daniel J. Carragher, Esq., at Day, Berry & Howard
LLP in Boston, Massachusetts, Guaranty Capital is currently the
lessor under five Rental Schedules:

              Schedule          Date
              --------     -----------------
                B-3        March 18, 1998
                B-7        June 15, 1998
                B-11       October 1, 1998
                B-13       December 31, 1998
                B-17       July 1, 1999

The equipment on schedules B-3, B-7 and B-11 are located in 58
stores.  Mr. Carragher maintains that, as of April 2, 2002, the
Debtors reported to Guaranty Capital that 45 of those stores
were still open.  The allocated monthly rent for the equipment
in the open stores was $46,204.  The equipment on schedules B-13
and B-17 were available for temporary use in various stores as
needed by Ames in its retail operations.

ORIX is also the lessor under two of the Rental Schedules, by
assignment from American Finance Group:

            Schedule          Date           Assigned on
            --------          ----           -----------
              B-5        June 15, 1998      June 30, 1998
              B-8        Sept. 24, 1998     Sept. 30, 1998

Mr. Carragher explains that the equipment on Schedules B-5 and
B-8 was located in 84 stores.  As of April 2, 2002, the Debtors
reported to ORIX that 75 of those stores were still open.  The
allocated monthly rent for the equipment in the open stores was
$75,547.

Mr. Carragher informs the Court that the Debtors have not made
any rental or adequate protection payments to Guaranty Capital
or ORIX since the filing of the petition but have retained and
continued to use the Lessors' Equipment.  The continued use and
retention of the Lessors' Equipment has caused and will continue
to cause significant harm to the POS Lessors' interest in the
Equipment.  The Agents will be using the Equipment during the
entire course of the GOB sales.

If the Court allows the Debtors to conduct the GOB Sales, Mr.
Carragher insists that the Debtors or the Agents be ordered to
make monthly payments to:

A. Guaranty Capital worth $46,204 plus an allocated amount for
    all equipment on Rental Schedules B-13 and B-17 actually used
    by Ames or the Agents; and

B. ORIX worth $75,547.

(2) 10 Landlords

Ten Store Space Lessors complain that the proposed GOB sales
could seriously damage their respective businesses.  The
Objecting Landlords believe that the GOB sales are detrimental,
not only to the shopping center, but also to other tenants of
the shopping center in question.  The Shopping centers are
designed and planned for the retail sale of merchandise by
numerous tenants operating in harmony with one another.

"The Objecting Landlords have designed well thought out shopping
centers with diverse tenant mixes.  When one tenant deviates
from customary operations by selling merchandise at liquidation
or drastically reduced prices, all tenants suffer," Kevin M.
Newman, Esq., at Menter, Rudin & Trivelpiece, P.C., in Syracuse,
New York, explains.

The Objecting Landlords are: Carousel Center Company, L.P.,
Pyramid Mall of Ithaca, L.L.C. Pyramid Company of Watertown,
Pyramid Champlain Company, Lanesborough Enterprises LLC
Eastpoint Partners, L.P., Associates of Lebanon, New Paltz
Properties, L.P., TP Associates Limited Partnership, and
Trexlertown Plaza Associates, successor in interest to
Trexlertown Limited Partnership.

Mr. Newman tells Judge Gerber that the Objecting Landlords lease
nonresidential real property to the Debtors under 10 separate
leases:

     Landlord        Shopping Center          Location
     --------        ---------------          --------
     Carousel        Carousel Center          Syracuse, NY
     Ithaca          Pyramid Mall - Ithaca    Ithaca, NY
     Watertown       Salmon Run Mall          Watertown, NY
     Champlain       Champlain Centre North   Plattsburgh, NY
     Berkshire       Berkshire Mall           Lanesborough, MA
     Eastpoint       Eastpoint Mall           Baltimore, MD
     Lebanon         Lebanon Valley Mall      Lebanon, PA
     New Paltz       New Paltz Plaza          New Paltz, NY
     TP Associates   Torrington Parkade       Torrington, CT
     Trexlertown     Trexlertown Plaza        Trexlertown, PA

In order to adequately safeguard the Objecting Landlords'
interests, Mr. Newman asserts that these conditions should be
imposed upon the Debtors and any Agent who is conducting the
sales:

A. Neither the Debtor nor its Agent should be permitted to post
    signs or otherwise advertise that the Debtors have "lost our
    lease" or use the term "bankruptcy" or "bankruptcy court
    authorized going out of business" to advertise the GOB sales.
    The word "bankruptcy" should not appear anywhere in any of
    the signage or media advertising.  The posting of these signs
    reflects negatively on the entire mall community;

B. There is no restriction on the colors of the signs.  No neon
    or day-glo signs should be permitted and all signage should
    be limited to two colors of either yellow or red on either
    white or black background or black on white background;

C. No banners or any other signage should be permitted outside
    of the store;

D. Each window sign should be set back at least one foot from
    the window and there should be signage in no more than 50% of
    the window area of any store;

E. In addition to the signs set back from the windows, no more
    than four signs for each 1,000 square foot of leaseable space
    will be posted in the interior of the store.  The Agent must
    use reasonable efforts to disburse these signs evenly
    throughout the store;

F. There will be no augmentation of inventory.  Only the
    Debtors' inventory should be sold during the sale;

G. Any removal of furniture and equipment should take place
    before or after the regular hours of the shopping center and
    through the service or other exits designated by the
    Objecting Landlords so as to not disrupt other tenant's
    operations or disturb customers of the center;

H. No auction of any property should be permitted; and

I. The sale should be conditioned upon the Debtors' prompt
    compliance with its ongoing rental and other obligations
    under the Leases to the Objecting Landlords.

(3) CIT

Marc L. Hamroff, Esq., at Moritt, Hock, Hamroff & Horowitz, LLP,
in Garden City, New York, relates that CIT Lending Services
Corporation is an assignee of American Finance Group's interest
in three point of sale Equipment Leases with the Debtors.  The
leases are actually separate and independent rental schedules
that obligated Ames to make 72 monthly payments on the first of
each month to CIT for use of the equipment covered by that
schedule.

                   Schedule       Payment
                   --------       -------
                     B-6          $35,003
                     B-9           37,123
                     B-12          18,683

The Debtors have failed to make any rental or adequate
protection payments to CIT since the filing of the petition, but
have retained and continued to utilize the Equipment.

Mr. Hamroff claims that the Debtors and CIT --- together with
Guaranty Capital --- had reached an agreement to settle the
claims of both CIT and Guaranty Capital arising out of the POS
leases.  The agreement should have been consummated by this
time.

"In light of the proposed GOB Sales, it is a fair assumption
that the Debtors will not consummate the settlement agreement,"
Mr. Hamroff infers.  "Moreover, it appears that the Equipment
will continue to be utilized without any form of compensation to
CIT."

In that case, Mr. Hamroff suggests that CIT must be compensated
for the Debtors' continued use of the POS Equipment.  There must
also be a mechanism put in place to allow CIT to repossess its
Equipment at the conclusion of the GOB Sales.

                               * * *

After due deliberation, Judge Gerber authorizes the Debtors and
the Agent to immediately conduct the GOB Sales without complying
with restrictive lease provisions, including, without
limitation, "going dark" provisions to the extent the provisions
purport to restrict or prohibit the GOB Sales at the Stores.
The lessors are enjoined from interfering with or otherwise
restricting the Debtors and the Agent from conducting the GOB
Sales and from seeking to recover damages for breach of
restrictive provisions. The Debtors can maintain their normal
cash management system during the GOB Sales.

Judge Gerber also allows the Debtors to pay the DIP Lenders,
headed by GE Capital, with the proceeds of the GOB Sales until
all obligations under the GE DIP Credit Agreement are paid in
full.  However, Judge Gerber makes it clear that nothing in the
Motion, this Order, or the Agency Agreement will be deemed to:

A. alter or amend any provision of the GE DIP Credit Agreement
    or the Final Order;

B. impair or affect any of the Lenders' rights under the GE DIP
    Credit Agreement or the Final Order; or

C. impose any obligations on the Lenders to fund any amounts or
    make any advances under the GE DIP Credit Agreement other
    than to release any Proceeds they receive under the Agency
    Agreement to pay actual Sales Expenses in an amount not to
    exceed the Sales Expense Cap and any other expenses
    specifically agreed to by the Lenders. (AMES Bankruptcy News,
    Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-
    0900)

Ames Department Stores' 10% bonds due 2006 (AMES06USR1) are
trading at 1 cent-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMES06USR1
for real-time bond pricing.


AMSCAN HOLDINGS: S&P Keeping Watch on B+ Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its single-'B'-plus
corporate credit and single-'B'-minus subordinated debt ratings
on decorative party-goods maker Amscan Holdings Inc., remain on
CreditWatch with positive implications.

The CreditWatch listing was revised to positive from developing
on June 14, 2002, following the company's filing with the SEC to
sell up to $180 million of common stock, including shares to be
sold by stockholders. The ratings were originally placed on
CreditWatch on May 28, 2002.

The Elmsford, New York-based company had $295 million of debt
outstanding as of June 30, 2002.

Amscan will not receive any proceeds from the sale by
stockholders. The company intends to use the net proceeds from
the offering to repay outstanding indebtedness, which will
strengthen the company's financial profile.

Standard & Poor's will evaluate the transaction when completed
and will review the company's financial policies and its ability
to sustain an improved credit profile prior to resolving the
CreditWatch listing.

"If current market conditions persist and Amscan is unable to
proceed with its planned initial public offering by yearend and
thereby reduce debt, the CreditWatch listing could be revised,"
said Standard & Poor's credit analyst Jean Stout.

Amscan recently amended its revolving credit facility, which
extended the maturity by one year to December 2003 and reduced
the maximum borrowing by $10 million to $40 million. Although
the reduced facility should be sufficient to fund interim
borrowing needs, the company's debt amortization requirements
will significantly increase in 2003.

Amscan Holdings Inc.'s 9.875% bonds due 2007 (AMSN07USR1) are
trading at 90 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMSN07USR1
for real-time bond pricing.


APPLIEDTHEORY: Wants Exclusivity Period Stretched Until Nov. 13
---------------------------------------------------------------
AppliedTheory Corporation and its debtor-affiliates seek an
extension from the U.S. Bankruptcy Court for the Southern
District of New York of their exclusive periods within which to
file their Chapter 11 Plan and solicit acceptances of that plan.
The Debtors want their exclusive right to file a plan extended
until November 13, 2002 and until January 13, 2003 to solicit
acceptances of that plan from creditors.

The Debtors assert that they have made substantial progress in
the relatively short period of time since filing these cases.
The Debtors have been focused primarily on the sales of the
Access Business and the Web Hosting Business.  Although the
Sales have been closed, significant follow-up work remains.

One of the major issues the Debtors must address in formulating
and proposing any plan of reorganization in these cases is the
nature and scope of the claim held by Palladin and its co-
lenders. The Debtors cannot prepare a rational plan until they
determine how this claim should be classified.

AppliedTheory Corporation provides internet service for business
and government, including direct internet connectivity, internet
integration, web hosting and management service. The Company
filed for chapter 11 protection on April 17, 2002. Joshua Joseph
Angel, Esq., and Leonard H. Gerson, Esq., at Angel & Frankel,
P.C., represent the Debtors in their restructuring efforts. When
the Company filed for protection from its creditors, it listed
$81,866,000 in total assets and $84,128,000 in total debts.


AVAYA: Lenders Consent to Amend $561 Million Credit Facility
------------------------------------------------------------
Avaya Inc. (NYSE: AV), a leading global provider of
communications networks for businesses, received consents from
the lenders in its bank group to amend an existing five-year,
$561 million credit facility, as disclosed in its Form 10-Q
filing with the Securities & Exchange Commission on August 14,
2002.  The amendments are subject to the execution of definitive
documentation, which the company expects to complete within the
next several days.

The company said it also decided not to renew a 364-day, $264
million credit facility that expires at the end of August. The
$561 million facility is available to the company for general
corporate purposes.  Avaya said it believes the facility is
adequate for current capital needs. The amended facility
requires the company to maintain a new ratio of consolidated
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) to interest expense, as well as a new minimum EBITDA.
For the company's current fiscal quarter, the amended facility
provides that the company must maintain a ratio of consolidated
EBITDA to interest expense of 1.7 to 1 for the four quarters
ending September 30, 2002, and consolidated EBITDA of $70
million for the three quarters ending September 30, 2002.

"The support we have received from our lenders through the
amended credit facility will help us implement the aggressive
actions we're taking to maintain Avaya's financial health as our
industry continues to face constrained customer spending," said
Garry McGuire, chief financial officer, Avaya.  "The new
commitments give us, along with our own cash resources, access
to a total of approximately $1 billion.   We intend to move
forward with our objective to return to profitability and
enhance liquidity by reducing expenses and improving working
capital."

Avaya noted it is permitted to exclude from the calculation of
consolidated EBITDA a total of $166 million of business
restructuring charges and related expenses to be taken no later
than the third fiscal quarter of 2003.  As a result, the company
can exclude from the definition of EBITDA the $150 million
business restructuring charge it announced in July plus
$15 million of period costs related to prior restructuring
initiatives.

The amended facility requires mandatory reductions of the $561
million of commitments beginning in December 2003.  In certain
circumstances, the proceeds from debt financings, certain asset
sales and repurchases of certain existing debt also must be used
to reduce the facilities.

Avaya Inc., designs, builds and manages communications networks
for more than one million businesses around the world, including
90 percent of the Fortune 500(R).  A world leader in secure and
reliable Internet Protocol telephony systems, communications
software applications and services, Avaya is driving the
convergence of voice and data applications across IT networks,
enabling businesses large and small to leverage existing and new
networks to enhance value, improve productivity and gain
competitive advantage.  For more information visit the Avaya Web
site at http://www.Avaya.com


BGF INDUSTRIES: June 30 Balance Sheet Upside-Down by $44 Million
----------------------------------------------------------------
BGF Industries, Inc., announced that net sales increased $0.1
million, or 0.3%, to $34.5 million in the three months ended
June 30, 2002, from $34.4 million in the three months ended June
30, 2001.

This increase was primarily due to sales of electronics fabrics
used in multi-layer and rigid printed circuit boards which
increased $0.9 million, or 10.0%, sales of filtration fabrics
which increased $1.0 million, or 20.4%, and sales of glass,
carbon and aramid fibers used in various composite materials
which decreased $2.0 million, or 15.4%, during the second
quarter of 2002 as compared to the second quarter of 2001. The
increase in sales of electronics fabrics was primarily a result
of diversification of customers within the electronics market as
well as product mix. The decrease in sales of glass, carbon and
aramid fibers was primarily the result of a decrease in the
aerospace markets. The increase in sales of filtration fabrics
was due to an increased demand for replacement filtration bags.

Gross profit margins decreased to negative 6.3% in the three
months ended June 30, 2002, from 11.7% in the three months ended
June 30, 2001, due primarily to charges to cost of goods sold
for additional inventory reserves of $4.5 million.

Selling, general and administrative expenses increased $3.2
million, or 168%, to $5.1 million in the three months ended June
30, 2002, from $1.9 million in the three months ended June 30,
2001. This was primarily due to an increase of $2.0 million in
the environmental reserve for estimated remediation costs at the
Altavista, Virginia facility, an increase in legal and
professional fees of $0.5 million due to BGF's attempted asset
based refinancing, and a charge of $0.5 million related to
severance costs.

During the second quarter of 2002, a $1.0 million impairment
charge was recorded due to the sale of equipment to an affiliate
and a $4.7 million impairment charge was recorded on machinery
and equipment at BGF's South Hill heavyweight fabric
manufacturing plant as a result of the decision to close this
facility.

As a result of the aforementioned factors, operating income
decreased $15.3 million to a loss of $13.1 million, or (38.0%)
of net sales, in the three months ended June 30, 2002, from $2.2
million, or 6.3% of net sales, in the three months ended June
30, 2001. Net loss decreased $27.3 million to a net loss of
$27.3 million in the three months ended June 30 2002, from
$19,000 in the three months ended June 30, 2001.

At June 30, 2002, the Company's balance sheet shows a working
capital deficit of about $88 million, and a total shareholders'
equity deficit of about $44 million.

As of June 30, 2002, BGF was in violation of certain financial
covenants under the senior credit facility. On July 10, 2002,
BGF received a default notice from its senior lenders as a
result of its failure to comply with covenants. Furthermore, as
permitted under the terms of the senior credit facility, the
lenders issued a payment blockage notice prohibiting BGF from
making a required interest payment on its senior subordinated
notes due on July 15, 2002.

On August 13, 2002, BGF and its senior lenders executed a
forbearance agreement with respect to breaches of these
financial covenants. This forbearance agreement is effective
until March 31, 2003. As a result, the senior lenders have
rescinded their payment blockage notice prohibiting BGF from
making the required interest payment on its senior subordinated
notes due on July 15, 2002. Accordingly, on August 14, 2002, BGF
made the above mentioned interest payment on the notes that was
due on July 15, 2002.

BGF continues to operate its business based on its belief that
the current economic conditions and the decline in the
electronics industry, which had an adverse affect on its
operations, is temporary. Accordingly, BGF has taken certain
steps to restructure its operations aimed at strengthening the
business including, but not limited to, (i) maintaining an
aggressive cost cutting program, (ii) announcing the closure of
its South Hill heavy weight fabrics facility and plans to
consolidate such operations into its newly constructed South
Hill multilayer facility to reduce excess capacity effective
October 1, 2002 and (iii) engaging the crisis management
consulting firm of Realization Services, Inc. to assist BGF in
formulating and implementing a plan to restructure operations
and explore other strategic alternatives including a possible
capital restructuring.

BGF, headquartered in Greensboro, NC, manufactures specialty
woven and non-woven fabrics made from glass, carbon, and aramid
yarns for use in a variety of electronic, filtration, composite,
insulation, construction, and commercial products.


BETHLEHEM STEEL: Seeking Appointment of Retirees' Committee
-----------------------------------------------------------
Bethlehem Steel has filed a motion with the United States
Bankruptcy Court for the Southern District of New York
requesting formation under Section 1114 of Chapter 11 of the
Bankruptcy Code of a Court-appointed committee composed of
Bethlehem Steel retirees to address modifications to health and
welfare benefits for current retirees, their spouses and
dependents.

"If Bethlehem is to survive and prosper, we must address the $3
billion legacy costs associated with providing health and
welfare benefits for over 95,000 retired employees, spouses and
dependents," said Robert S. "Steve" Miller, Jr., Chairman and
CEO of Bethlehem Steel Corporation. "Bethlehem is facing
substantial increases next year in health care-related costs--
and we must move forward with discussions on modified health
care coverage for retirees," he continued.

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


BUDGET GROUP: Asking Court to Extend Stay to Overseas Assets
------------------------------------------------------------
Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, relates that Budget Rent A Car
International Inc., Budget Rent A Car of Japan Inc., and Budget
Rent a Car Asia-Pacific, conduct substantially all of their
operations and hold all of their assets outside the United
States despite their status as Delaware corporations.

Thus, Budget Group Inc., and its debtor-affiliates ask the Court
to apply the automatic stay to debtor-affiliates operating
outside of the United States and prohibit all entities from
taking action against them.

According to Mr. Kosmowski, application of the automatic stay to
the Debtors' property located outside the U.S. and prohibiting
all entities from taking actions against the Debtors or property
of the Debtors' estates is essential to the success of the
Chapter 11 cases.  If the automatic stay is not applied, Mr.
Kosmowski anticipates that the Debtors' creditors, including
foreign creditors and other entities, may attempt to:

   * take actions against property of the Debtors' estates,

   * initiate and continue foreign proceedings against the
     Debtors, and

   * enforce prepetition date judgments against the Debtors.

Mr. Kosmowski asserts that any of these actions would likely
impact the value Debtors' foreign operations.  "This would be
detrimental to all parties-in-interest and almost certainly
would impede the Debtors' ability to complete a successful
Chapter 11 reorganization," Mr. Kosmowski says.  Although the
automatic stay arises by operation of law, the Debtors believe
that an order from the Court is necessary to ensure compliance
with the terms of the automatic stay.  Courts in foreign
jurisdictions, in particular, may not recognize the automatic
nature of the stay without tangible proof of its existence.
These courts, however, under principles of comity, may recognize
an order of the United States Bankruptcy Court that specifically
affirms the existence and application of the automatic stay.

Mr. Kosmowski points out that Section 362(a) of the Bankruptcy
Code applies to property of the Debtors' estates wherever
located, including property located outside the United States.
The Bankruptcy Code further provides that the Court in which a
bankruptcy case is commenced or is pending obtains "exclusive
jurisdiction of all of the property, wherever located, of the
debtor as of the commencement of [the] case, and of the property
of the estate".

Mr. Kosmowski notes that a number of courts, including those in
the Delaware district, have upheld that the automatic stay
applies outside the United States. (Budget Group Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


BURKE INDUSTRIES: Solicitation Exclusivity Extended to Sept. 30
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of New
Jersey, Burke Industries, Inc., and its debtor-affiliates
obtained an extension of its exclusive period to solicit
acceptances of their Chapter 11 Plan of Reorganization.  The
Court gives the Debtors until September 30, 2002 the exclusive
right to solicit acceptances of the Plan from their creditor
constituencies.

Burke Industries Inc., a leading diversified manufacturer of
highly engineered organic, silicone and vinyl based products for
commercial construction, aerospace and other industrial markets,
filed for chapter 11 protection on June 25, 2001. Michael D.
Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard
represents the Debtor in its restructuring efforts.


CTC COMMUNICATIONS: Nasdaq Knocks Off Shares Effective Today
------------------------------------------------------------
CTC Communications Group, Inc. (Nasdaq: CPTL), has been informed
by Nasdaq that CTC's common stock will be delisted from The
Nasdaq National Market at the opening of business today, August
20, 2002, due to the Company's failure to comply with the
minimum bid price for continued listing as set forth in Nasdaq
Marketplace Rule 4450(b)(4). Nasdaq has also advised the Company
that it does not meet the continued listing standard for the
Nasdaq SmallCap Market in accordance with Nasdaq Marketplace
Rule 4310(C)(2)(B).

Upon the Nasdaq delisting, the CTC common stock will be traded
in the Over-the-counter market or on the OTC Bulletin Board.

CTC is a rapidly growing "next generation" Integrated
Communications Carrier utilizing advanced technology and
providing its customers with converged voice, data, Internet and
video services on a broadband, packet-based network, called the
PowerPath(R) Network. The Company serves medium and larger
business customers from Virginia to Maine, which includes the
most robust telecommunications region in the world--the
Washington D.C. to Boston corridor.

CTC's Cisco Powered IP+ATM packet network and its over 450
member sales and service teams, provide contiguous marketing and
technology coverage throughout the Northeast and Mid-Atlantic
States. The Company, through its dedicated commitment to
exceptional customer service, has achieved an industry-leading
market share in the Northeast. CTC can be found on the worldwide
Web at http://www.ctcnet.com


CACHEFLOW INC: Fails to Comply with Nasdaq Listing Guidelines
-------------------------------------------------------------
CacheFlow, Inc. (Nasdaq:CFLO), a worldwide provider of secure
content networking appliances, received a Nasdaq Staff
Determination letter indicating that the Company is not in
compliance with the minimum $1 bid price requirement for
continued listing as set forth in Nasdaq Marketplace Rule
4450(a)(5) and that such noncompliance has extended beyond the
90-day grace period provided by Nasdaq Marketplace Rule
4450(e)(2). As a result, unless CacheFlow appeals the Staff
Determination, which CacheFlow intends to do, CacheFlow's
securities will be delisted from The Nasdaq National Market at
the opening of business on August 22, 2002.

The company, which publicly disclosed the possibility of a
delisting notice earlier in the year, will request a hearing
before a Nasdaq Listing Qualifications Panel to appeal the Staff
Determination. CacheFlow expects a hearing to take place within
approximately 45 days of the date of the request. During the
appeal process, CacheFlow will continue to be listed on The
Nasdaq National Market.

On September 12, 2002, CacheFlow will conduct its annual meeting
of its stockholders. The CacheFlow stockholders have been asked
to approve a reverse stock split of CacheFlow's common stock in
a ratio of either 1-for-5, 1-for-10, or 1-for-15. If one or more
of the reverse splits is approved, the Board of Directors may
determine which one of the approved reverse splits it could
implement. If a reverse stock split is implemented, CacheFlow
anticipates that its common stock will then meet the minimum bid
price per share of $1.00 pursuant to Nasdaq Marketplace Rule
4450(a)(5), although there can be no assurance that the Nasdaq
Listings Qualification Panel will grant CacheFlow's request for
continued listing on the Nasdaq National Market after the
hearing, even if the Company is able to comply with Marketplace
Rule 4450(a)(5). If none of the reverse splits is approved, or
if the Board of Directors chooses not to implement a reverse
split, the Company expects to apply to move from the Nasdaq
National Market to the Nasdaq SmallCap Market.

CacheFlow develops and markets secure content networking
appliances designed to protect, control and accelerate business
communications. CacheFlow's family of optimized appliances and
its innovative suite of content control technologies enable
organizations to ensure web security and conduct e-business.
Based in Sunnyvale, California, with offices and partners
worldwide, CacheFlow can be contacted via telephone at
408.220.2200, fax at 408.220.2250 or email at info@cacheflow.com
More information on CacheFlow products and services can also be
found at http://www.cacheflow.com


CHAMPION ENTERPRISES: S&P Places Ratings on CreditWatch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Champion Enterprises Inc., and its subsidiary, Champion Home
Builders Co., on CreditWatch with negative implications. The
CreditWatch placements follow Champion's recent announcement
that it will incur significant restructuring charges as it
attempts to further rationalize its operations in the face of a
prolonged recession in the manufactured home building industry.

The manufactured housing industry has entered its fourth year of
a down cycle that was initially caused by poor lending
practices. A previously anticipated recovery continues to be
forestalled by the persistent scarcity of retail consumer
financing. According to the Manufactured Housing Institute,
manufactured home shipments were down another 2.6% during the
first five months of 2002. The Institute's current projections
of relatively flat shipments for the full year 2002 now appear
overly optimistic, given the continued limited availability of
consumer financing, and in particular, the present difficulties
faced by Conseco Inc. ('SD'), the nation's largest supplier of
retail consumer financing for the manufactured housing industry.

As the market leader, Champion's sales have been adversely
affected, falling from a peak of more than $2.5 billion in
fiscal year 1999 to $1.5 billion for the 12-months ended June
29, 2002. Despite operating inefficiencies due to materially
lower production volume, Champion's manufacturing segment has
managed to remain modestly profitable. In the most recent
quarter (ended June 29, 2002), Champion generated $10.4 million
of income on $313.7 million of revenues (a 3.3% margin).
However, the retail segment continues to operate at a loss,
losing $13.8 million in the same quarter. To complement and
support its manufacturing and retail operations, Champion
recently acquired CIT Group Inc.'s manufactured housing loan
origination business. The entrance into retail finance moved
Champion toward a fully integrated platform, as the company now
produces, sells, and finances manufactured housing. However,
this unit is not currently financing a material component of
Champion's sales.

In an effort to restore profitability and strengthen liquidity,
the company has announced that it will close an additional 64
retail centers and seven manufacturing plants, eliminating 1,500
jobs. In conjunction with these actions, the company will take
as much as $260 million in pre-tax charges; though all but $13
million of that amount will be noncash, as it relates primarily
to the write-down of goodwill ($97 million), deferred taxes
($110 to $120 million) and plant and retail store closing costs
($44 million). The company expects to generate approximately $30
million of annual cost savings, $27 million of inventory
reductions and a federal tax refund in excess of $40 million
through these actions. As of June 29, 2002, Champion had cash
balances of approximately $86 million and appears to have
sufficient financial flexibility to meet its near-term capital
needs.

Standard & Poor's will meet with Champion's management team to
reassess the impact of the longer-than-anticipated industry
downturn about the company's ability to return to profitability.
At present, the range of outcomes for Champion includes a
downgrade or an affirmation with a negative outlook.

              Ratings Placed On CreditWatch Negative

                                           Rating
                                     To               From
      Champion Enterprises Inc.
        Corporate Credit Rating          BB-/Watch Neg     BB-
        $200 mil. 7.625% senior unsecured
        notes due 2009                   B/Watch Neg       B
      Champion Home Builders Co.
        Corporate Credit Rating          BB-/Watch Neg     BB-
        $150 mil. 11.25% senior unsecured
        notes due 2007                   B/Watch Neg       B


CHOICE ONE: June 30, 2002 Balance Sheet Upside-Down by $328MM
-------------------------------------------------------------
Choice One Communications (Nasdaq: CWON), an Integrated
Communications Provider offering facilities-based voice and data
telecommunications services, web hosting, design and development
to small and medium-sized businesses, announced operating and
financial results for the second quarter ended June 30, 2002. In
a separate release, Choice One also announced it has received a
commitment for a total of $49 million in new debt financing.
Closing is subject to customary approvals and closing
conditions.

Second-quarter revenue was $73.2 million, up 75% from a year ago
and up 4% from first quarter 2002. Gross profits were $32.8
million, or 44.8% of revenue in the second quarter, compared
with $28.4 million, or 40.2% of revenue in the first quarter.
Gross profits were $12.2 million, or 29.2% of revenue in second
quarter 2001.

"Our ability to deliver positive top-line growth in this
difficult environment demonstrates there continues to be
substantial market demand for alternative telecommunications
solutions," commented Steve Dubnik, chairman and CEO. "Our gross
margins improved to 44.8% in the second quarter, reflecting
economies of scale from our continued growth, the full quarter
impact of UNE rate reductions in certain markets and the
rationalization of duplicate collocations acquired from
FairPoint Communications Solutions."

"The commitment for $49 million in new debt financing we
announced (Wednes]day is a tremendous display of confidence by
our existing investors. This commitment, combined with our
operational performance, should provide us the resources and
flexibility to effectively manage the cash requirements of our
business during this turbulent period in our industry."

Total selling, general and administrative (SG&A) expenses were
$49.2 million in the second quarter, compared with $37.7 million
in the first quarter. SG&A expenses include $12.4 million in the
second quarter and $0.8 million in the first quarter of non-
recurring charges principally related to bad debt expenses to
reflect potential write-offs of accounts receivable related to
switched access receivables from several carriers. Ongoing SG&A
expenses, which exclude the non-recurring expenses described
above, were $36.8 million in the second quarter, down slightly
from first quarter ongoing SG&A expenses of $36.9 million.

EBITDA (earnings before interest, taxes, depreciation and
amortization, excluding non-cash management carry, non-cash
deferred compensation and other non-cash charges) losses were
$16.4 million in the second quarter, compared with $9.3 million
in the first quarter. On an adjusted basis, excluding the non-
recurring expenses described above, EBITDA losses were $4.0
million in the second quarter, reflecting a 53% reduction from
first quarter EBITDA losses of $8.5 million.

Capital expenditures were $5.7 million in the second quarter,
compared with $6.5 million in the first quarter, reflecting the
company's continued tight control over spending, focus on
capital efficiency and the favorable pricing environment for
telecommunications equipment. Year ago capital expenditures were
$23.6 million, reflecting spending related to the company's
market build-out plan, which was complete at year end 2001.

"Our second quarter results demonstrate considerable operational
progress along with our continued diligence in managing expenses
and capital expenditures," commented Dubnik. "Our tight control
over operating expenses combined with our network cost
improvements more than offset the weakness in average revenue
per line, enabling us to reduce our operating losses by more
than 50% during the second quarter," commented Dubnik.

In accordance with the contingent consideration provision
outlined in the asset purchase agreement with FairPoint
Communications Solutions Corp., the company issued one million
additional shares of common stock to FairPoint Communications in
May 2002.

During the second quarter, Choice One recorded a non-cash charge
in the amount of $283.3 million to write-down the value of
certain intangible assets in accordance with Statement of
Financial Accounting Standards (SFAS) No. 142 and (SFAS) No.
144.  Excluding this write-down of intangible assets, the
company's second quarter net loss was $66.6 million, or $1.56
per share, compared with $1.37 in the first quarter and $1.87 in
second quarter 2001. Including the write-down of intangible
assets, the company's second quarter loss per share was $8.17.

Total cash utilization in the second quarter was $17.8 million,
a 46% decrease from first quarter cash utilization of $32.8
million. At June 30, 2002, Choice One had $18.8 million of cash
available, excluding the new debt financing commitment. Choice
One believes this will be sufficient to meet ongoing liquidity
needs until the company generates positive free cash flow.

The company's second quarter revenue was slightly less than the
minimum revenue required under the company's Senior Credit
Facility and the company has received a conditional waiver of
this revenue covenant. As a result, the company's debt
facilities have been temporarily classified as current
liabilities. Upon closing of the new $49 million in debt
financing, covenants will be revised going forward, the waiver
will become permanent and the company will reclassify this debt
as long term. The company expects to close on the new financing
by September 9, 2002. Closing is subject to final approvals from
the lenders and documentation including amendments to the
company's existing credit agreements, as well as satisfaction of
customary closing conditions.

As of June 30, 2002, the Company records a working capital
deficiency of about $543 million, and a total shareholders'
equity deficit of $328 million.

                          Operating Results

The company installed 38,177 net new lines on switch during the
second quarter, including 36,921 voice and 1,886 data lines. At
June 30, 2002, the company had 468,272 total lines in service,
91% of these were on-switch. The company had 7.5% on-switch
penetration of addressable lines at June 30, 2002, compared with
6.6% at March 31, 2002 and 6.1% at December 31, 2001. At June
30, 2002, the company had 530 collocations in service addressing
approximately 5.7 million business access lines.

During the second quarter, the company installed its 100,000th
business client. This represents a significant milestone for the
company, which activated its first client in February 1999, and
the company continues to experience demand for its bundled voice
and data services offering.

The company's average monthly attrition rate for facilities-
based lines was 1.4% and was consistent with the prior quarter.
Choice One continues to report one of the lowest attrition rates
in the industry, despite current economic conditions and the
turmoil within the telecommunications industry. This performance
can be attributed to the company's continued focus on client
service and loyalty programs combined with the value proposition
offered by the company's bundled voice and data services
offering.

Choice One sold 54,326 net new lines in the second quarter
compared with the company's record 65,368 net new lines sold in
the first quarter. The company believes that difficult economic
conditions and widespread malaise in the telecommunications
sector negatively affected sales and installations during the
second quarter. The company also believes the commitment of $49
million in new debt financing announced today should help
alleviate any funding concerns that may have adversely affected
sales productivity.

Headquartered in Rochester, New York, Choice One Communications,
Inc., (Nasdaq: CWON) is a leading integrated communications
services provider offering voice and data services including
Internet and DSL solutions, and web hosting and design,
primarily to small and medium-sized businesses in second and
third-tier markets.

Choice One currently offers services in 30 markets across 12
Northeast and Midwest states.  At June 30, 2002, the company had
468,272 lines in service, 102,111 accounts and 1,801 total
colleagues.

For further information about Choice One, visit its Web site at
http://www.choiceonecom.com


CLASSIC COMM: Reviewing Committee's Proposed Reorganization Plan
----------------------------------------------------------------
Classic Communications, Inc., (OTC Bulletin Board: CLSCQ)
announced that on August 14, 2002, the Official Committee of
Unsecured Creditors filed a proposed plan of reorganization
pursuant to Chapter 11 of the U.S. Bankruptcy Code and a related
disclosure statement.  Classic is undertaking a review of the
proposed plan of reorganization and disclosure statement.

On November 13, 2001, Classic and its subsidiaries filed
voluntary petitions for bankruptcy protection under Chapter 11
of the bankruptcy code in the United States Bankruptcy Court for
the District of Delaware.


CLAXSON INTERACTIVE: Auditors Raise Going Concern Doubt
-------------------------------------------------------
Claxson Interactive Group, Inc. (Nasdaq: XSON), announced
financial results for the three- and six-month periods ended
June 30, 2002.

                          Financial Results

Operating loss for the three-month period ended June 30, 2002
was $0.5 million, representing a 62% decrease from operating
loss of $1.3 million for the three month period ended June 30,
2001. Operating loss for the six-month period ended June 30,
2002 was $2.5 million compared to an operating loss of $1.8
million for the six-month period ended June 30, 2001.

Total net revenues for the second quarter of 2002 totaled $18.5
million, a 30% decrease from net revenues of $26.3 million for
the second quarter of 2001. Total net revenues for the six
months ended June 30, 2002 totaled $38.6 million compared to net
revenues of $52.7 million for the six months ended June 30,
2001. Net revenues earned in Argentina for the three months
ended June 30, 2002 were 21% of total net revenues compared to
44% for the same period in 2001. For the six months ended June
30, 2002, total net revenues in Argentina were 23% of total net
revenues compared to 45% for the same period in 2001.

Claxson's results were severely affected by the economic crisis
in Argentina and in particular by the massive devaluation of the
Argentine currency. During the second quarter of 2002, the
average exchange rate devalued 69% as compared to the same
period in 2001. For the six-month period ended June 30, 2002,
the average devaluation in Argentina was 62%.

"We are pleased to report that we have been able to reduce our
operational losses quarter to quarter and compared to the same
quarter of last year," said Roberto Vivo, Chairman and CEO of
Claxson. "In spite of the negative economic situation in the
market, we have been able to mitigate the adverse impact on our
earnings before depreciation, amortization and merger expenses
by rationalizing our operation and maintaining a lean operation
throughout the entire company."

Subscriber-based fees for the three-month period ended June 30,
2002 totaled $8.7 million, which comprised approximately 47% of
total net revenues and represented a 45% decrease from
subscriber-based fees of $15.9 million for the second quarter of
2001. The decrease is primarily attributed to the impact of the
devaluation of the Argentine currency of $6.8 million.
Subscriber-based fees for the six months ended June 30, 2002
totaled $18.4 million compared to subscriber-based fees of $31.0
million for the six months ended June 30, 2001.

Advertising revenues for the three-month period ended June 30,
2002 were $6.8 million, which comprised approximately 37% of
Claxson's total net revenues and represented a 19% decrease from
advertising revenues of $8.4 million for the second quarter of
2001. This decrease in advertising revenues in the second
quarter of 2002 was due primarily to a decrease in pay
television advertising of $1.3 million as a result of the
economic crisis in Argentina. Advertising revenues for the six
months ended June 30, 2002 totaled $14.1 million compared to
advertising revenues of $17.6 million for the six months ended
June 30, 2001.

Other revenues for the three-month period ended June 30, 2002
were $3.1 million, which represented a 55% increase compared to
other revenues of $2.0 for the second quarter of 2001. This
increase was primarily due to increased revenues from the
operations of The Kitchen, Inc., Claxson's Miami-based broadcast
and dubbing facility. Other revenues for the six months ended
June 30, 2002 totaled $6.1 million compared to other revenues of
$4.1 million for the six months ended June 30, 2001.

Operating expenses for the three months ended June 30, 2002 were
$19.0 million, representing a decrease of 31% from operating
expenses of $27.6 million for the second quarter of 2001, due
primarily to the rationalization of programming and marketing
expenditures to the new revenue levels, management's continued
efforts to rationalize the operations, the effect of the
Argentine devaluation on the expenses of our Argentine-based
subsidiaries and the ceasing of the amortization on goodwill in
accordance with the Statements of Financial Accounting Standard
No. 142 . Operating expenses for the six months ended June 30,
2002 totaled $41.2 million compared to operating expenses of
$54.5 million for the six months ended June 30, 2001.

Net loss for the three months ended June 30, 2002 was $26.7
million, which includes $19.9 million in foreign exchange losses
primarily due to certain U.S. dollar denominated debt held by
Claxson's Argentine subsidiary. Net loss for the three months
ended June 30, 2001 was $5.8 million.

For the six-month period ended June 30, 2002 net loss was $156.9
million, which includes a $74.8 million non-cash impairment
charge related to the adoption of Statements of Financial
Accounting Standard No. 142, Goodwill and Other Intangible
Assets, and $66.7 million in foreign exchange losses.
Amortization expense for the three months, and six months ended
June 30, 2001 was $2.5 million, and $4.9 million, respectively.

As of June 30, 2002, Claxson had a balance of cash and cash
equivalents of $16.1 million and $105.5 million in debt. Also,
as of the same date, the Company has a working capital deficit
of about $108 million, and a total shareholders' equity deficit
of about $4.6 million.

                Independent Auditors "Going Concern"

The independent auditors report with respect to Claxson's
financial statements included in Claxson's Form 20-F filed with
the Securities and Exchange Commission included a "going
concern" explanatory paragraph, indicating that its potential
inability to meet its obligations as they become due, raises
substantial doubt as to Claxson's ability to continue as a going
concern. In an effort to improve its financial position, Claxson
is taking certain steps, including the restructuring of its
subsidiaries' debt and renegotiation of applicable covenants.
Its failure or inability to successfully carry out these plans
could ultimately have a material adverse effect on its financial
position and its ability to meet its obligations when due.

                  Update on Debt Renegotiation

On April 30, 2002, Imagen Satelital S.A., an Argentina-based
Claxson subsidiary, announced that it would not make an interest
payment of US $4.4 million on its 11% Senior Notes due 2005. On
June 27, 2002, Claxson announced that it had commenced an
exchange offer and consent solicitation for all US$80 million
outstanding principal amount of these notes. Further, on August
1, 2002 Claxson announced the extension of the pending exchange
offer and consent solicitation. The expiration date for the
exchange offer was extended from July 31, 2002, to August 14,
2002.. Simultaneously with this release, the Company has
announced the further extension of the offer until August 28,
2002.

Claxson is currently not in compliance with the coverage ratios
required under its Chilean syndicated credit facility, primarily
as a result of the 17% decrease in the value of the Chilean Peso
against the U.S. Dollar in 2001. Failure to comply with the
financial covenants set forth in the Chilean syndicated credit
facility could result in the acceleration of all amounts due and
payable thereunder. Claxson has been actively negotiating with
the lenders to amend the credit facility to modify this
financial covenant in order to bring it into compliance. Until
negotiations are final, this debt will be classified as short
term in the balance sheet.

                     Playboy TV International

PTVI and its affiliates incurred net losses of $3.2 million and
$5.6 million for the three and six-month periods ended June 30,
2002. Unless PTVI's financial obligations can be restructured,
PTVI will remain primarily dependent on capital contributions
from Claxson to fund shortfalls. The report of PTVI's
independent auditors with respect to its financial statements
for the years ended December 31, 2001 and 2000 include a "going
concern" explanatory paragraph, indicating that PTVI's reliance
on capital contributions from its partners to meet its
obligations as they become due, raises substantial doubt as to
its ability to continue as a going concern.

Since January 2002, Claxson has been negotiating a possible
restructuring of the PTVI joint venture to adjust the fixed cost
structure and obligations to Playboy Enterprises, Inc due to
PTVI's lower than anticipated revenues. Negotiations are in
progress, however, no assurances can be made that Claxson will
be successful in restructuring the PTVI joint venture. If
Claxson does not reach a successful agreement with Playboy
Enterprises, Inc., Claxson could be required to fund the
additional $21.4 million of capital contributions required
pursuant to the operating agreement. If Claxson is not able to
fund the additional capital contributions, Playboy Enterprises,
Inc. or PTVI may seek, among other things, the dilution of
Claxson's membership interest.

                          Other matters

In line with Claxson's goal of reducing operating losses and due
to the weakness in the advertising sales market for print media
in Chile, on June 12, 2002 Claxson decided to terminate the
newspaper El Metropolitano operation. Net losses recorded by the
El Metropolitano operation for the three and six months ended
June 30, 2002 were $0.7 million, and $1.9 million, respectively.

On July 24, 2002, Ibero American Media Holdings Chile, Claxson's
Chilean subsidiary, announced that, as of August 30, 2002, Jaime
Vega would step down as Chief Operating Officer of Claxson's
Broadcasting Division and President of the Company's operations
in that market. Mr. Vega will remain as a consultant to Mr.
Vivo, who will personally oversee the Chilean operation together
with the current management.

Claxson (Nasdaq-SCM: XSON) is a multimedia company providing
branded entertainment content targeted to Spanish and Portuguese
speakers around the world. Claxson has a portfolio of popular
entertainment brands that are distributed over multiple
platforms through its assets in pay television, broadcast
television, radio and the Internet. Claxson was formed on
September 21, 2001 in a merger transaction, which combined El
Sitio, Inc., and other media assets contributed by funds
affiliated with Hicks, Muse, Tate & Furst Inc., and members of
the Cisneros Group of Companies. Headquartered in Buenos Aires,
Argentina, and Miami Beach, Florida, Claxson has a presence in
all key Ibero-American countries, including without limitation,
Argentina, Mexico, Chile, Brazil, Spain, Portugal and the United
States.


COMDISCO INC: Sungard Pressing for Prompt Transfer of Property
--------------------------------------------------------------
On November 9, 2001, the Court approved Acquisition Agreement
between Comdisco, Inc. Debtors and SunGard Data System, Inc.,
under which SunGard purchased the Debtors' Availability
Solutions Business for $825,000,000.  Pursuant to the
Acquisition Agreement, the Debtors agreed to transfer, convey
and deliver to SunGard "all right, title and interest to any and
all assets of every kind and description that is owned, directly
and indirectly, lease or otherwise held by the Debtors for use
in the Business."

Malcolm M. Gaynor, Esq., at Schwartz Cooper Greenberger & Krauss
Chartered, in Chicago, Illinois, informs the Court that one of
the transferred properties is the property at Grand Prairie
where an Availability Solutions Facility is located.

By this motion, SunGard asks the Court to compel the Debtors to
transfer any ownership interest on a parcel of land that is
adjacent to SunGard's property located at 3001 Red Hawk Drive in
Grand Prairie, Texas.

Mr. Gaynor explains that SunGard is seeking the Court's
intercession because the Debtors refused to transfer ownership
of the property adjacent to the Availability Solutions Facility,
contending that the property is "primarily used for the
business," and thus, the transfer of the property to SunGard is
not required.

Mr. Gaynor insists that the Debtors' position is baseless,
unjustifiable and contravenes the express terms of the
Acquisition Agreement because:

   (a) The only business conducted by the Debtors on Red Hawk
       property was related to the Availability Solutions
       Business, inasmuch as the adjacent property was primarily
       and continuously used by the Debtors as a parking lot;

   (b) The Debtors' expansion plans for the Availability
       Solutions Business contemplated an enlarged facility
       encompassing both the Red Hawk Property and the adjacent
       property;

   (c) All of the costs and expenses for the adjacent property
       were traditionally charged to the Debtors' Availability
       Solutions Business;

   (d) None of the Debtors' other businesses used or
       contemplated use of the property in any way;

   (e) None of the Debtors' business activities in any of their
       businesses involved real estate speculation; and

   (f) The Debtors did not list the adjacent property as real
       estate specifically excluded from the transaction, as
       they did with numerous other properties they owned or
       leased.

Mr. Gaynor informs the Court that the adjacent property
has been, for some time now, used by the Debtors as a parking
lot in connection with their operation of the Availability
Solutions facility located on the Red Hawk property.  At the
time of executing and closing the Acquisition Agreement, SunGard
believed that the adjacent property was actually part of the Red
Hawk Drive Property and that it would be conveyed along with the
other properties.  Mr. Gaynor notes that the adjacent property
is not referred in a list of real estates the Debtors
specifically excluded from the Debtors' transaction with
SunGard. (Comdisco Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


CONSOLIDATED CONTAINER: S&P Affirms B- Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its single-'B'-minus
corporate credit rating on Consolidated Container Company LLC,
reflecting the company's announcement that it is in compliance
with the financial covenants related to its bank facilities.

At the same time, Standard & Poor's affirmed its single-'B'-
minus corporate credit rating on the company's wholly owned
subsidiary, Consolidated Container Capital Inc. In addition, the
ratings were removed from CreditWatch, where they were placed on
April 30, 2002. Atlanta, Georgia-based Consolidated is a
domestic producer of rigid plastic containers. Total outstanding
debt at June 30, 2002, was about $573 million. The outlook is
negative.

"This disclosure provides a measure of relief from immediate
liquidity pressures, particularly in view of sequential
improvement in financial performance in the second quarter of
2002," said Standard & Poor's credit analyst Liley Mehta. "The
negative outlook reflects Standard & Poor's concerns regarding
the company's still subpar liquidity, its ability to fund an
increasing debt amortization schedule, and limited room under
tightening financial covenants in the near term."

The ratings reflect the company's very aggressive financial
leverage and weak financial flexibility, which overshadows its
below-average business position in relatively stable beverage
and consumer product markets.

Near-term operating performance reflects sequential improvement
in operating margins supported by partial benefits of ongoing
restructuring efforts, offset by increased plant labor, repairs
and maintenance costs, and lower-than-expected volumes from new
projects and certain key customers. Rising raw material prices
(although still below previous year's levels) could cause
temporary margin compression until the company passes through
higher resin costs to customers under contractual relationships.

The timely completion of management's restructuring initiatives
is expected to gradually support improvement in profitability
and cash generation in the intermediate term. Availability under
the company's recently amended revolving credit facility is
expected to provide for immediate-term liquidity needs, although
increasing debt maturities and stringent financial covenants may
limit financial flexibility in the absence of improved operating
performance.


CUTTER & BUCK: Fails to Maintain Nasdaq Listing Requirements
------------------------------------------------------------
Cutter & Buck, Inc., (Nasdaq:CBUK; now CBUKE) has received a
letter from the NASDAQ National Market informing the Company
that it is in violation of NASDAQ Rule 4310(C)(14), which
requires the Company to maintain at least three years of audited
financial statements. NASDAQ has determined that the Company is
in violation of this rule as a result of the planned restatement
of the Company's financials for the fiscal years ended April 30,
2000 and 2001 and as a result of the Company's delay in filing
its Annual Report on Form 10-K for the fiscal year ended April
30, 2002, as previously announced.

While the NASDAQ letter points out that a continuation of this
violation could subject the Company's securities to delisting,
Cutter & Buck will be requesting a hearing on this matter, which
will automatically stay the delisting process. The Company
expects its audit for fiscal year 2002 and the restatement of
its financial statements for fiscal years 2000 and 2001 to be
completed by mid September, which would bring the Company in
compliance with NASDAQ Rule 4310c(14).

Pending the hearing, the Company's Common Stock will continue
trading on the NASDAQ National Market under the symbol "CBUKE."
After the Company's Annual Report is filed and the restatements
completed, the Company will then seek NASDAQ approval to again
trade under the symbol "CBUK."

Cutter & Buck designs and markets upscale sportswear and
outerwear under the Cutter & Buck brand. The Company sells its
products primarily through golf pro shops and resorts, corporate
sales accounts and specialty retail stores. Cutter & Buck
products feature distinctive, comfortable designs, high quality
materials and manufacturing and rich detailing.


DADE BEHRING: S&P Rates Credit at B+ Pending Bankruptcy Exit
------------------------------------------------------------
Standard & Poor's Ratings Services assigned a single-'B'-plus
corporate credit rating to Dade Behring, pending the company's
successful emergence from a pre-packaged bankruptcy. At the same
time, Standard & Poor's assigned a single-'B'-plus to the
proposed $575 million credit facility and a single-'B'-minus to
the proposed $315 million senior subordinated note offering.
Post-bankruptcy, Dade Behring will have about $820 million of
debt outstanding. The outlook is stable.

Deerfield, Illinois-based Dade Behring is a leading manufacturer
of systems and related products and service for in vitro
diagnostic (IVD) testing, involving routine and specialized
analyses of bodily fluids such as blood and urine. The
speculative-grade ratings reflect Dade's concentrated business
base in the face of stronger competitors, and Standard & Poor's
concern about market reaction to the company in its immediate
post-bankruptcy period. These challenges are partly offset by
Dade's leading business positions, broad product offerings, and
the relatively predictable reagent revenue stream tied to its
installed specialty medical equipment.

"Standard & Poor's has taken into account possible operational
difficulties associated with Dade Behring's pre-packaged
bankruptcy. However, it is expected that Dade will be able to
perform at a level commensurate with the assigned rating," said
Standard & Poor's credit analyst Jordan Grant.

IVD systems are composed of instruments, consumable reagents,
service and data management systems. Instruments typically have
a five-year life and require replenishing of reagents, which are
typically exclusively related to instruments and therefore
generate significant ongoing revenue. Although Dade has a
relatively young installed base and spends 8% of its revenue on
R&D, technology risk is a factor, as it has larger competitors
with greater financial capabilities in each of its markets.
Performance success will ultimately hinge on how well Dade can
continue to sell new instruments and, as the current installed
base ages, launch its new generation of instruments and increase
market penetration despite formidable competition.


DATATEC SYSTEMS: Plans to Appeal Nasdaq Delisting Determination
---------------------------------------------------------------
Datatec Systems, Inc. (Nasdaq: DATC), a leading provider of
technology deployment services and software tools, announced
that the Company has been formally advised by its auditors,
Deloitte & Touche, that they are required under new draft
regulations to reaudit Datatec's fiscal 2000 and 2001 financial
statements.

The Company was also informed by Nasdaq today that since it has
not filed its Form 10-K on time, its trading symbol will carry
the "E" designation beginning August 19, 2002 and that its
securities will be delisted beginning August 23, 2002 unless
Datatec has filed an appeal not later than the close of business
on August 22, 2002. The Company intends to file such an appeal
and the delisting will be stayed during pendancy of the appeal
process. There can be no assurance that Nasdaq will permit
continued listing following Datatec's appeal.

In completing the 2002 audit, the Company determined and
Deloitte & Touche agreed that certain costs that had previously
been charged to SG&A expenses should have been more
appropriately charged to Cost of Sales. Datatec management
believes the effect would be that both gross margins and SG&A
expenses would be equally reduced and therefore have no impact
on either revenue or operating loss.

Ordinarily when there is a change of auditors, errors in
presentation of this nature that are discovered are discussed
with the former auditors, who would in all probability, agree to
take responsibility for that change. However, as Arthur Andersen
can no longer provide an opinion, it has become incumbent on
Deloitte & Touche to take responsibility for those prior year
changes. In order to take on this responsibility, Deloitte and
Touche is required to carry out full reaudits for the prior two
years.

"Datatec is suffering as a result of circumstances and events
totally outside its control," said Isaac Gaon, Chairman and
Chief Executive Officer. "While we believe that there will be no
material changes to the 2000 and 2001 fiscal years' financial
statements other than those already mentioned, we cannot provide
assurances that the audit of these prior years will not result
in any adjustments."

Mr. Gaon continued, "We have, however, been given assurances by
Deloitte & Touche that the audit will be carried out as
expeditiously as possible, thus allowing the Datatec management
team to again exclusively focus our efforts on growing the
business. Our fiscal 2003 prospects for a sales growth of 25%
and a return to profitability remain solidly intact, especially
when we consider that the 12 month backlog now stands at a
record level of $75.7 million."

Datatec will continue to fully inform the investing public with
updated information as it becomes available.

Fairfield, NJ-based Datatec Systems specializes in the rapid,
large-scale market absorption of networking technologies.
Datatec's deployment services utilize a software-enabled
implementation model to configure, integrate and roll out new
technology solutions using a "best practices" structured
process. Its customers include Fortune 1000 companies and world-
class technology providers. Datatec stock is listed on the
Nasdaq Stock Market (DATC). For more information, visit
http://www.datatec.com/


FIBERNET TELECOM: Taps Deloitte & Touche as Independent Auditors
----------------------------------------------------------------
FiberNet Telecom Group, Inc. (Nasdaq: FTGX), a leading provider
of metropolitan optical connectivity, announced that its Board
of Directors has engaged Deloitte & Touche LLP to serve as
FiberNet's independent auditor for 2002. FiberNet's prior
engagement of Arthur Andersen LLP as its independent auditor has
terminated.

FiberNet has filed a Current Report on Form 8-K with the
Securities and Exchange Commission relating to the change of its
auditor.

FiberNet Telecom Group, Inc., enables carriers to connect
directly with one another with unprecedented speed and
simplicity over its 100% fiber optic networks.  FiberNet manages
high-density short-haul networks between carrier hubs within
major metropolitan areas. By using FiberNet's next-generation
infrastructure, carriers can quickly and efficiently deliver the
full potential of their high bandwidth data, voice and video
services directly to their customers. FiberNet has lit multiple
strands of fiber on a redundant and diversely routed SONET ring
and IP architecture throughout New York City, Chicago and Los
Angeles.  FiberNet sets a new standard for the fastest local
loop delivery and connectivity in carrier hubs and Class A
commercial buildings, at speeds up to OC-192 SONET and Gigabit
Ethernet.  For more information on FiberNet, please visit the
Company's Web site at http://www.ftgx.com

Fibernet's working capital deficiency reaches $108 million, as
of June 30, 2002.


FEDERAL-MOGUL: Court OKs Bifferato as Equity Committee's Counsel
----------------------------------------------------------------
The Official Committee of Equity Security Holders of Federal-
Mogul obtained permission from the Court to retain and employ
Bifferato, Bifferato & Gentilotti as its counsel, nunc pro tunc
to June 17, 2002.

Bifferato will bill the estates for legal services on an hourly
basis at its customary hourly rates:

                       Professionals       Hourly Rate
                    ------------------     -----------
                         Directors            $275
                        Associates             195
                     Paraprofessionals          95

The Equity Committee anticipates Bifferato will be:

A. giving legal advice with respect to the Equity Committee's
    powers and duties in the context of the Debtors' bankruptcy
    cases;

B. assisting, advising and representing the Equity Committee in
    its consultations with the Debtors and other statutory
    committees regarding the administration of the cases;

C. assisting, advising and representing the Equity Committee in
    any investigation of the acts, conduct, assets, liabilities
    and financial conditions of the Debtors and their affiliates
    (including investigation of transactions entered into or
    completed before the Petition Date), the operation of the
    Debtors' businesses, and any other matter relevant to the
    case or to the formulation of a plan of reorganization;

D. preparing on behalf of the Equity Committee necessary
    applications, motions, answers, orders, reports and other
    legal papers in connection with the administration of the
    estates in these cases;

E. reviewing and responding on behalf of the Equity Committee to
    motions, applications, complaints and other documents service
    by the Debtors or other parties in interest on the Equity
    Committee in this cases;

F. participating with the Equity Committee in the formulation of
    a plan of reorganization; and

G. performing any other legal services for the Equity Committee
    in connection with these Chapter 11 cases. (Federal-Mogul
    Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
    Inc., 609/392-0900)

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


FIFTH ERA: Settles $60K of Current Debt Under Debt Workout Plan
---------------------------------------------------------------
Fifth Era Knowledge (TSX Venture: FER.CX) announces a debt
restructuring program in order to meet the current market
conditions. As a part of this reorganization, on August 13, 2002
Fifth Era Knowledge Inc., has settled approximately $60,000 of
its current debt through the issuance of 1,112,000 common
shares. The restructuring is subject to regulatory approval.

Fifth Era Knowledge says it appreciates the support received
from the creditors and suppliers through a very difficult
financial period.

Fifth Era Knowledge is an industry leader in innovative
technology training solutions that quickly and cost-effectively
build the critical skills to move clients forward to capitalize
on new revenue producing opportunities. The company's e-learning
and Instructor-led products and services are focused into the
fields of software engineering, telecommunications and specific
customer skills development. The key competitive advantages are
an extensive warehouse of pre-built portable multimedia training
content; a high volume content production factory; an industry
leading Internet content distribution technology; and a fusion
of online learning with Instructor-led Training. Fifth Era's
flexible combination of people, process and technology is the
catalyst for companies to achieve competitive advantage through
knowledge. For more information, visit http://www.fifthera.com


FLAG TELECOM: Deloitte & Touche Takes Over Andersen's Duties
------------------------------------------------------------
Arthur Andersen has resigned as auditor of FLAG Telecom Holdings
Ltd., FLAG Ltd., and FLAG Atlantic Ltd., effective July 31,
2002. The resignation results from an agreement under which
Andersen-UK will merge into the operations of Deloitte & Touche
starting August 1, 2002.  Andersen's partners and staff have
since joined Deloitte & Touche. (Flag Telecom Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FOXMEYER CORP.: Bart Brown Ready to Make 42.5% Distribution
-----------------------------------------------------------
Six years after FoxMeyer Corporation and its debtor-affiliates
filed for bankruptcy, Bart A. Brown, Jr., the chapter 7 trustee
overseeing of the company's estates, tells the U.S. Bankruptcy
Court for the District of Delaware that he's ready to make a
42.5% distribution to unsecured creditors.

On August 27, 1996, the Debtors filed voluntary chapter 11
petitions.  Less than three months later, the Debtors sold
substantially all of their business operations and business-
related assets to McKesson Corporation.  On March 18, 1997, the
Debtors' chapter 11 cases were converted to chapter 7
liquidation proceedings.  On May 19, 1997, the Court confirmed
Mr. Brown's election as the permanent trustee in FoxMeyer's
chapter 7 cases.  David M. Friedman, Esq., at Kasowitz, Benson,
Torres & Friedman LLP represents Mr. Brown.

                      The Mountain of Debt

The Trustee was charged with analyzing, reconciling and
resolving unsecured claims asserting a total of $5.2 billion in
claims, plus unliquidated amounts.  In addition to the unsecured
claims, secured claims totaling approximately $505 million,
administrative claims totaling approximately $146 million,
priority claims totaling approximately $52 million, and
reclamation claims totaling approximately $138 million had been
filed against the estates.  As a result, since his appointment,
one of the Trustee's main activities was to work with his Claims
Team to analyze the nature and validity of all of these claims,
and to resolve them as favorably as possible for the estates.

                       Available Assets

The estates' assets at the time of the Trustee's appointment
consisted primarily of minimal residual cash proceeds, avoidance
causes of actions, the rights to certain chargeback credits and
debit balances, and other causes of action. At the time of the
Trustee's appointment, the FoxMeyer bankruptcy estates had
approximately $16.3 million of cash on hand. Accordingly, one of
the Trustee's other primary functions has been to investigate,
develop a strategy, and pursue the estates' causes of action
and claims against third parties.

                     Reconciling Claims

During his tenure, the Trustee and his Claims Team have been
highly successful in resolving the vast majority of claims
against the estates. Specifically, the Trustee has resolved
2,278 of the 2,468 general unsecured claims for approximately
$448 million, and further reduced the net agreed unsecured
amount of these $448 million of claims to $380 million after
accounting for chargeback and preference offsets. Thus, in
total, the Trustee has eliminated nearly $5 billion of estate
liability with respect to the general unsecured claims. At
present, there are allowed unsecured claims of approximately
$380 million and 190 unresolved general unsecured claims
asserting a total of approximately $25 million.

The Trustee also has disposed of nearly all of the other claims
asserted against the estates. The Trustee has eliminated
approximately $505 million of secured claims, so that only ten
secured claims asserting a total of $341,000 are unresolved.
The Trustee has eliminated approximately $141 million of
administrative claims, so that 30 administrative claims
asserting approximately $4.3 million are unresolved, and $48
million of priority claims, so that 70 priority claims asserting
a total of $3.8 million are unresolved. The Trustee is currently
negotiating with the holders of all of the unresolved secured,
administrative and priority claims.

The Trustee also successfully reduced the estates' liability
with respect to the reclamation claims by approximately $100
million. Specifically, of the $138 million of reclamation
claims asserted against the estate, the Trustee has settled
nearly all of the claims for $61.7 million, which amount, after
accounting for chargeback and preference offsets, was further
reduced to $36.7 million. Moreover, the Trustee has reached
agreements with respect to nine other reclamation claims
in the total amount of approximately $264,000, although those
claims have not been paid pending the Trustee's resolution of
other issues with those claimants. At present, there are four
unresolved reclamation claims asserting an aggregate of
approximately $3.1 million.

                   Additional Asset Recoveries

Since his appointment, the Trustee has been actively liquidating
the estates' significant assets. The Trustee has initiated,
prosecuted and settled several major litigations which have
provided a substantial cash benefit to the estates. Most
significantly, the Trustee obtained a $173 million pre-trial
settlement of a preference case against the Debtors' former bank
lenders led by Citibank and a group of other institutional
Noteholders.  Pursuant to settlements approved by this Court,
the majority of the Noteholders paid $71.5 million to the
estates on or about March 12, 2002, and the Bank Defendants and
the remaining Noteholders paid an additional $101.6 million to
the estates on May 23, 2002.

The Trustee also has settled other major lawsuits for
significant cash payments to the estates, including those
against (i) Avatex, the Debtors' parent company, alleging that
its receipt of a dividend from the Debtors shortly before the
Petition Date constituted a  fraudulent conveyance, (ii)
Deloitte & Touche, FoxMeyer's accountant, for negligence and
professional malpractice, (iii) McKesson and twelve major drug
manufacturers, for conspiracy, unfair competition and breach of
contract and (iv) CD Smith, a competitor of FoxMeyer, for
tortious interference with business relations. The Trustee was
able to resolve all of these litigations without incurring the
expense of trial, and the estates received, in total, $38.3
million cash from these settlements.

The Trustee also has resolved most of the chargeback,
preference, and debit balance claims against FoxMeyer vendors on
terms that greatly benefited the estates.  Specifically, the
Trustee settled 183 of 205 chargeback claims, which asserted $82
million in chargebacks, with a recovery to the estates to date
of more than 99% of the asserted amounts. The Trustee also
resolved 488 preference claims for a total of $29 million in
cash, $1 million in administrative claim offsets, and $24.3
million in unsecured claim offsets, and 79 debit balance claims
for a total of $527,000.

              Administrative Claims Already Paid

As a result of the Trustee's efforts, by February, 2000, the
Trustee had collected approximately $70 million on behalf of the
estates. Following Bankruptcy Rule 3009's directive that
distributions shall be made as "promptly as practicable," on
February 2, 2000, the Trustee filed a Motion for Order
Authorizing Distributions to Holders of Allowed Chapter 11
Administrative Expense Claims, pursuant to which he sought to
distribute approximately $38 million to administrative claimants
(which consisted of approximately $21 million to holders of
allowed administrative claims and approximately $17 million to
holders of unresolved administrative claims at the time such
claims were to become allowed). On March 2, 2000, the Court
approved the Administrative Expense Distribution Motion, and
shortly thereafter, the Trustee and his Claims Team completed
the first distribution to creditors holding allowed
administrative claims. The Trustee also is authorized pursuant
to that Court order to make distributions to holders of pending
administrative claims following entry of final orders allowing
such claims in whole or in part, in the amounts such claims are
allowed.

                 $204 Million in the Bank Today

Today, Mr. Brown reports that the estates have approximately
$204 million in cash for the benefit of creditors.
Approximately $380,853,470 in general unsecured claims have been
allowed pursuant to orders of the Court entered during the
chapter 7 case.  There are approximately $25,196,001 of
unsecured claims that remain unresolved, which include claims
where the original holder of such claim is a defendant in a
lawsuit commenced by the Trustee (or party to a pending tolling
agreement) or the original holder has asserted other unresolved
claims against the estate.

The Trustee is now prepared to make a first distribution of
42.5% to the Current Holders of all Allowed Unsecured Claims
against FoxMeyer's estates, which will deplete cash on hand by
up to $172,571,026.  Of the total amount, $161,862,725 will be
distributed to Current Holders of Allowed Unsecured Claims, and
up to $11,008,301 will be distributed to holders of Pending
Unsecured Claims (if and when those Pending Unsecured Claims are
resolved).

                What About those Big Lawsuits?

Mr. Brown advises the Bankruptcy Court that he is continuing to
litigate:

      (1) fraudulent conveyance and preference claims against
          General Electric Capital Corporation and other lenders
          who received a lien and facilitated the payment of a
          dividend to Avatex on June 19, 1996,

      (2) contract and tort claims against Anderson Consulting,
          SAP American, Inc, SAP AG and the Buschman Companies,
          arising in connection with FoxMeyer's failed technology
          upgrade, and

      (3) claims against the Debtors' former officers and
          directors arising out of their breaches of fiduciary
          duty in permitting a dividend while the Debtors were
          insolvent.

"The Trustee is optimistic that the estates will obtain
additional cash recoveries from these litigations," Mr. Friedman
tells Judge McCullough, "although there can be no assurance of
any additional recoveries."


FRANKLIN TELECOM: Will Leave AMEX & Return to OTCBB on August 26
----------------------------------------------------------------
Franklin Telecommunications Corp., a manufacturer of high speed
VoIP (Voice over Internet Protocol) telephony equipment and a
provider of next generation IP-based telecommunications
services, today announced that it will leave the American Stock
Exchange on August 26, 2002 and return to the OTC Bulletin
Board. Franklin Telecom joined the American Exchange March 18,
1999.

AMEX cites four areas of concern about Franklin Telecom in a
letter dated August 2, 2002. The complete text of this letter
and its attached Company Guide may be viewed on Franklin's Web
site at http://www.ftel.com/newsoftheday.html

First, relating to Section 1003(a)(iv) of the Company Guide,
Franklin's financial results as presented in its most recent SEC
filings show a steep decline in revenues during the last two
years. In response to this, Frank Peters, Franklin's Executive
Chairman, points out that Franklin's percentage of decline is
very comparable to many larger and better known telco companies.
Furthermore, Franklin's management has been forthright and
honest in releasing its financial results, unlike some of its
telco counterparts. Despite the hard times which have pressured
the telco sector, Franklin Telecom has continued in business
without resort to bankruptcy.

Secondly, in regards to Sections 131 and 301 of the Company
Guide, Franklin Telecom is out of compliance for failing to file
a Listing of Additional Shares Application with the Exchange.
Peters comments that while these shares were included in all
appropriate public disclosures to the SEC, the filing to AMEX
was delayed for two reasons: the Company intended, for
simplicity's sake, to make one filing that encompassed several
issues. Also, the filing requires a substantial fee to the
Exchange; it has been necessary to allocate Franklin's cash
assets to bills directly related to keeping the Company in
business.

Franklin is also out of compliance with Section 704 of the
Company Guide for failing to hold a Shareholder's Meeting in a
timely fashion. Marty Albert, Franklin's CEO explains that this
is entirely a matter of finance. "Meeting the disclosure
requirements for an annual meeting is very expensive. In fact,
it has cost well into six figures for the last two meetings. We
haven't had that kind of money at our disposal. When money is
tight, you pay the rent before you pay for activities, which
however worthy, are not required for survival.

"In addition," he continued, "we have had realistic expectations
of a merger for several months. When this occurs, a Shareholder
vote will be required and we have included financial planning
for this in merger negotiations."

Lastly, Franklin's share price is very low, which concerns
Section 1003(f)(iv) of the Company Guide. Again, Franklin
management states that the loss in value of Franklin stock is
consistent with percentage averages for its sector. "As a small
Company, we started from a smaller number than the "big guys,"
Peters said. "However, again I want to emphasize that we are
still in business, where some of the giants are not."

Peters continued, "At this point in time, there are some
definite advantages for our return to the Bulletin Board. With
the chaos in the overall market today, it is reassuring to deal
with people you actually know and who actually know and pay
attention to your Company. The market maker system in the
Bulletin Board allows for this. Some of the market makers we
will be using have followed Franklin for many years. It is a
much less impersonal environment than the larger exchanges can
offer."

In closing Peters added, "Franklin Telecom has been in business
for twenty two years. I hope that those who follow our Company
will see the opportunities that this move to the Bulletin Board
offers. It immediately frees us from a large financial
obligation (the AMEX is quite expensive) and as stated, will
return our trading to an environment where we have done well in
the past."

Franklin Telecom's trading symbol on the OTC:BB will be issued
shortly.

Franklin Telecommunications Corp., is a maker of high-speed VoIP
telephony equipment, which enables high-quality transmissions of
data, voice, fax and email over the Internet. Franklin's next
generation telephone company subsidiary, FNet, offers global IP-
based telecommunications services and complete, interoperable
networking system solutions utilizing Franklin equipment and
software.


GEMSTAR-TV: S&P Puts Ratings on Watch Neg. over Revenue Concerns
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its double-'B'-plus corporate credit rating, on Gemstar-TV Guide
International Inc., on CreditWatch with negative implications,
based on the company's announcement that it is delaying the
release of its 2002 second-quarter earnings and filing of its
Form 10-Q with the SEC, and that the company is reviewing how it
recognizes revenue. Pasadena, California-based Gemstar also
reported it is restating its 2001 financial results to reverse a
nominal amount of revenue recognized at its TV Guide subsidiary.
Total debt outstanding at March 31, 2002, was about $302.7
million.

"Standard & Poor's believes the disclosure heightens concerns
about the company's reported financial results and escalating
investor uncertainty", said Standard & Poor's credit analyst
Alyse Michaelson. She added that, "The ratings are already
vulnerable to mounting business risk. Recent announcements of an
ongoing review of how advertising was recorded and allocated,
and the potential for management instability, exert further
downward pressure on the ratings despite adequate cash
resources."

Standard & Poor's said that the ratings could be negatively
affected by adjustments to revenue and cash flow guidance, an
eroding cash cushion, additional accounting issues, a negative
outcome of patent litigation, or other unexpected developments.


GLOBAL CROSSING: Pushing for Approval of IRU Break-Up Fees
----------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates reserve the
right to enter into and designate one or more so-called
"stalking horse" agreements for one or more of the IRUs at any
time prior to the date of the Auction.  The Debtors will provide
notice of each Stalking Horse Agreement prior to or at the
Auction to all Qualified Bidders, all parties that have
expressed an interest in purchasing an IRU, and all parties
served with notice of the Sale Motion.  For each agreement that
is designated by the Debtors as a Stalking Horse Agreement,
certain bidding protections will apply in the event the
Qualified Bidder that entered into a Stalking Horse Agreement is
not a Successful Bidder, including:

     1. a break-up fee in an amount of up to 3% of the Qualified
        Bid price for each IRU set forth in the Stalking Horse
        Agreement, and

     2. a minimum overbid amount requiring an initial minimum
        overbid for each IRU set forth in the Stalking Horse
        Agreement.

The Break-Up Fee will be payable only from the proceeds actually
received by the Debtors as a result of the Auction, and the
Minimum Overbid Amount will apply to each individual IRU.
(Global Crossing Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

Global Crossing Holdings Ltd.'s 9.625% bonds due 2008
(GBLX08USR1) are trading at about 1.25, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1
for real-time bond pricing.


GLOBAL LIGHT: Canadian Court Extends CCAA Protection to Aug. 29
---------------------------------------------------------------
Global Light Telecommunications Inc., reports that the order
granting it certain relief, including a stay of proceedings and
protection from creditors, under the Companies' Creditors
Arrangement Act issued on June 28, 2002 and subsequently
extended has been further extended until August 29, 2002 to
allow the Company and its principal creditors and the Monitor to
discuss the terms upon which the present stay may be extended
beyond August 29, 2002.


GUILFORD MILLS: Has to Oct. 15 to Make Lease-Related Decisions
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Guilford Mills, Inc.'s motion to extend their lease
decision period.  The Court gives the Debtors until the earlier
of the effective date of a confirmed Chapter 11 plan of
reorganization, or October 15, 2002, to determine whether to
assume, assume and assign, or reject its unexpired
nonresidential real property leases.

Guilford Mills, Inc., a worldwide producer and seller of warp
knit, circular knit, flat-woven and woven velour fabric filed
for chapter 11 protection on March 13, 2002. Albert Togut, Esq.,
at Togut, Segal & Segal LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed $551,064,000 in total assets and
$409,555,000 in total debts.


GUILFORD MILLS: Court to Consider Proposed Plan on September 19
---------------------------------------------------------------
Guilford Mills, Inc., (OTC Bulletin Board: GFDM) said it will
commence solicitation of votes from creditors and stockholders
on its plan to emerge from bankruptcy proceedings.

A federal judge approved on Thursday the Company's disclosure
statement. The approval allows Guilford Mills to begin the
solicitation of votes on its reorganization plan, which was
submitted to the bankruptcy court in July.

A confirmation hearing on the plan is scheduled for Sept. 19.

"We're pleased with the results of [Thurs]day's hearing. The
process continues to move forward quickly," said John A. Emrich,
Guilford Mills' President and Chief Executive Officer.  "I
continue to expect that our plan will win approval and we will
be able to complete our reorganization by the end of September."

Guilford Mills is an integrated designer and producer of value-
added fabrics using a broad range of technologies.  Guilford
Mills serves a diversified customer base in the automotive,
industrial and apparel markets.


HARDWOOD PROPERTIES: Expects All Assets To be Sold by Next Month
----------------------------------------------------------------
Hardwood Properties Ltd., (TSX:HWP) announced its financial
results for the six months ended June 30, 2002. Hardwood
realized a net loss of $305,468 on total revenues of $4,003,609.
For the three months ended June 30, 2002, Hardwood realized a
net loss of $201,875 on total revenues of $2,476,797.

Condominium sales produced profit margin of $23,219 for the
first two quarters. These sales allowed Hardwood to retire the
remainder of its mortgage debt and, as at June 30, 2002,
Hardwood had a positive cash balance of $830,090. During the six
month period, Hardwood did not acquire any units and sold a
total of 51 units in three different projects, including 33
units in the second quarter. Hardwood exited the second quarter
with an inventory of 81 units in three buildings.

Hardwood continues to implement its previously announced and
approved plan for the voluntary liquidation and dissolution of
the Corporation. It is anticipated that all real estate assets
will be sold by September 2002 and that an initial cash
distribution to shareholders will be made later in that month.

Hardwood Properties Ltd., is a Calgary based real estate company
that specializes in the acquisition, re-construction, management
and sale of multi-family residential properties.


HEADWAY CORPORATE: Says Liquidity Sufficient to Meet Obligations
----------------------------------------------------------------
Headway Corporate Resources, Inc., and its wholly owned
subsidiaries provide strategic staffing solutions and personnel
worldwide. Its operations include information technology
staffing, temporary staffing,  human resource staffing,
permanent placement and executive search. Headquartered in New
York, the Company has temporary staffing offices in California,
Connecticut, Florida, New Jersey, North Carolina, Virginia,
and Texas and executive search offices in New York, Illinois,
Massachusetts, the United Kingdom, Japan, Hong Kong and
Australia.

The financial results for Headway Corporate Resources for the
first quarter reflect a significant reduction in the demand for
the Company's staffing and executive search services. The
Company says this trend is a direct result of the soft economy
and is consistent with the performance of the other staffing and
executive search companies in the sector.  Many companies have
instituted hiring freezes for both temporary and permanent
positions.  The financial services industry has reduced its
demand for the Company's executive search services as a direct
result of the poor financial performance across the financial
services industry.  The Company believes that the performance
for the balance of the year will continue to be impacted by the
performance in the general economy. The performance in executive
search for the balance of the year will depend in part on the
financial services industry.  The Company has taken steps to
reduce costs and is constantly looking for growth opportunities.

Revenues decreased $20,072,000, or 22.4%, to $69,641,000 for the
three months ended March 31, 2002, from $89,713,000 for the same
period in 2001. The decrease was attributable to an overall
decline in the demand for the Company's taffing and executive
search services as a direct result of weakness in the economy.

The executive search subsidiary, Whitney Partners, LLC
contributed $4,326,000 to consolidated revenues in the first
quarter of 2002, a decrease of $9,594,000 from $13,920,000 for
the same period in 2001. The decrease reflects a sharp decline
in the demand for new hires in the financial services industry.

The staffing subsidiary, Headway Corporate Staffing Services,
Inc. contributed revenues of $65,315,000  to consolidated
revenues in the first quarter of 2002, a decrease of $10,478,000
from $75,793,000 for first quarter of 2001.  The decline in
revenues was a result of the negative impact of the unfavorable
economic conditions on the demand for information technology and
clerical staffing services.

The Company's net loss for the three months ended March 31, 2002
was $49,006 as compared to a net gain of $1,609 for the
comparable period of 2001.

The Company's working capital was $32,609,000 at March 31, 2002,
compared to $34,813,000 at December 31, 2001.  Management
expects that the Company's working capital position will be
sufficient to meet all of its working capital needs for the
remainder of the year.

                          *   *   *

Late last year, the Company said that it was in violation of a
non-financial covenant of its Senior Credit Facility, creating
an event of default. The existence of events of default under
the Senior Credit Facility creates cross-defaults under the
Senior Subordinated Notes and the Preferred Stock.  At that
time, the Company was negotiating with the Senior Lenders, the
Senior Subordinated Notes holders and the Preferred Stockholders
to resolve the default.

Headway Corporate Resources, Inc. is a leader in providing
strategic staffing solutions and personnel worldwide. Its
operations include information technology staffing, temporary
staffing, executive search, permanent placement and outsourced
human resources administration. Headquartered in New York, its
offices span the nation, with offices in California,
Connecticut, Florida, New Jersey, North Carolina, Texas and
Virginia. It also operates in Illinois, Massachusetts, the
United Kingdom, Japan, Hong Kong and Singapore through the
Whitney Group, its high-end executive search division.


INTERPLAY ENTERTAINMENT: Nasdaq to Delist Shares on Thursday
------------------------------------------------------------
Interplay Entertainment Corp., (Nasdaq: IPLY) received a Nasdaq
Staff Determination letter on August 14, 2002 indicating that
the company failed to regain compliance with the minimum $1.00
bid price per share requirement for continued listing on The
Nasdaq SmallCap Market set forth in Marketplace Rule
4310(C)(8)(D).  Pursuant to an earlier grace period granted by
Nasdaq, the company had until August 13, 2002 to regain
compliance with the minimum bid price per share requirement.

Additionally, the Staff informed the company that it was not
eligible for an additional 180 calendar day grace period given
that the company does not meet the initial inclusion
requirements of The Nasdaq SmallCap Market under Marketplace
Rule 4310(C)(2)(A).  Specifically, the company does not qualify
with the $5,000,000 stockholders' equity, $50,000,000 market
value of listed securities, or $750,000 net income from
continued operations requirement.

Nasdaq informed the company that its securities will be delisted
from The Nasdaq SmallCap Market at the opening of business on
August 22, 2002, unless the company appeals the Staff's
determination no later than 4:00 p.m. Eastern Time on August 21,
2002.  The company has requested a hearing before a Nasdaq
Listing Qualifications Panel to review the Staff's
determination.  The hearing request will stay the delisting of
the Company's securities pending the Panel's decision.  There
can be no assurance, however, that the Panel will grant the
company's request for continued listing.

Interplay Entertainment is a leading developer, publisher and
distributor of interactive entertainment software for both core
gamers and the mass market.  Interplay develops games for
personal computers as well as next generation video game
consoles, many of which have garnered industry accolades and
awards.  Interplay releases products through Interplay, Digital
Mayhem, Black Isle Studios, its distribution partners, and its
wholly owned subsidiary Interplay OEM Inc.


KAISER ALUMINUM: Continuing JV Transactions with Affiliates
-----------------------------------------------------------
In a Final Order, Judge Fitzgerald rules that any of these Joint
Venture Transactions of Kaiser Aluminum Corporation after July
23, 2002 will require the approval of the Official Committee of
Unsecured Creditors, or, in the absence of the Committee's
approval, the approval of this Court:

A. any capital investment over $2,000,000 to be made, other than
    any amounts paid directly or indirectly to Alumina Partners
    of Jamaica in connection with their indebtedness with respect
    to the Caribbean Basin Projects Financing Authority CBI
    Industrial Revenue Bonds 1991 Series A and Series B;

B. any incurrence of indebtedness wherein the approval of the
    Board of Directors of either Kaiser Aluminum & Chemical Corp.
    or Kaiser Aluminum Corp. is sought and obtained after July
    23, 2002, except for the Queensland Alumina Limited Debt
    Obligations;

C. any contract to be entered:

      * which requires any Debtor to pay in excess of $75,000,000
        to any unaffiliated third-party for the purchase of goods
        or services; or

      * pursuant to which any Debtor would receive in excess of
        $75,000,000 from the sale to an unaffiliated third-party
        of goods obtained form a Joint Venture; and

D. any other contract, transaction or expenditure to by any
    Joint Venture for which the approval of the Board of
    Directors of either Kaiser Aluminum & Chemical Corp. or
    Kaiser Aluminum Corp., is sought and obtained after July 23,
    2002.

Otherwise, the Debtors are permitted to continue Joint Venture
Transactions without further approval by the Official Committee
of Unsecured Creditors or by the Court. (Kaiser Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


KITTY HAWK: Bank Group Appeals from Confirmation Order
------------------------------------------------------
Wells Fargo Bank (Texas), N.A., individually and as agent for
Daystar L.L.C., as agent for an on behalf of Yale University
(successor to Bank One, Texas, N.A.), Comerica Bank, Wingate
Capital Ltd. (successor to Nelson Partners, Ltd., an assignee of
Heller Financial, Inc.'s original interest), CoMac Endowment
Fund, L.P. (successor to Heller Financial, Inc.), and Bear,
Stearns & Co., Inc. (successor to Union Bank of California,
N.A.), or their successors, are owed money on account of loans
extended to Kitty Hawk, Inc., et al., for the purchase of 14
Boeing 727 aircraft.

Those loans, are secured by prepetition security interests in
the Aircraft.  The value of the collateral's been a topic of
heated debate throughout Kitty Hawk's two-year chapter 11
restructuring.

Under the terms of the Debtors' Plan of Reorganization the
aircraft collateral can be abandoned to the Bank Group
in exchange for credit against the Bank Group's claims.  The
Bank Group told Judge Houser at the Confirmation Hearing that
the Plan, among other things, violates 11 U.S.C. Sec. 506(a).
Judge Houser confirmed the Plan over the Bank Group's objections
on August 5, 2002.

James Donnell, Esq., and Paul D. Moak, Esq., at Andrews & Kurth
L.L.P., advises the U.S. Bankruptcy Court in Fort Worth, Texas,
that the Bank Group intends to take an appeal from the
Confirmation Order to the U.S. District Court for the Northern
District of Texas for judicial review.

Robert D. Albergotti, Esq., John D. Penn, Esq., and Sarah
Foster, Esq., at Haynes & Boone, LLP, represent Kitty Hawk and
Kyung S. Lee, Esq., and Chris Johnson, Esq., at Diamond McCarthy
Taylor & Finely, L.L.P., represent the Official Committee of
Unsecured Creditors of Kitty Hawk, Inc.

The Indenture Trustee for the holders of $340 million of 9.95%
Senior Secured Notes due 2004 and an Unofficial Noteholders'
Committee are represented by a team of lawyers from four firms:
William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum
Perlman & Nagelberg in Chicago; Jeffrey M. Schwartz, Esq., at
Gardner, Carton & Douglas in Chicago; Amy R. Wolf, Esq., and
Scott K. Charles, Esq., at Wachtell, Lipton, Rosen & Katz in New
York; and Marcy Kurtz, Esq., and William A. (Trey) Wood, III,
Esq., at Bracewell & Patterson LLP in Houston.


KMART CORP: Court Okays Mechanics' Lien Settlement Procedures
-------------------------------------------------------------
Kmart Corporation and its 37 debtor-affiliates obtained Court
approval to establish procedures for:

     (a) liquidating and settling Mechanics' Lien Claims, and

     (b) staying the enforcement of Mechanics' Lien Claims
         pending resolution of disputed claims pursuant to
         Section 105 and 362 of the Bankruptcy Code to allow
         orderly liquidation of Mechanics' Lien Claims.

                Proposed Claims Resolution Procedure

The principal features of the proposed Claims Resolution
Procedure are:

   (a) Payment of Valid Claims:

       The Debtors will continue to pay valid Mechanics' Lien
       Claims when they are resolved in a manner suitable to the
       Debtors pursuant to the Debtors' first day order;

   (b) Notice of Claims Resolution Procedure and Stay:

       If the Debtors dispute a Mechanics' Lien Claim (whether on
       the basis of amount or the validity of the lien itself),
       the Debtors may (but are not compelled to) send a notice
       of Claim Resolution Procedures to the holder of any
       Mechanics' Lien Claim that is disputed.  The service of
       the notice on the Claimant and the applicable Landlord
       (and the filing of the notice if the Mechanics' Lien Claim
       is already the subject of pending litigation) will
       constitute a stay of enforcement of the Mechanics' Lien
       Claim or any default arising from it pending further order
       of the Court.  This  stay will proscribe the enforcement
       of the Mechanics' Lien Claims against the Debtors, the
       applicable Landlords and any property of the estate.  The
       Debtors may include in the notice a proposal as to the
       portion of the Mechanics' Lien Claim that the Debtors are
       willing to pay to discharge the lien or that the lien
       should be discharged for no cash consideration.  During
       the pendency of stay, the Debtors' Landlord is precluded
       from exercising any default rights arising as a result of
       the Mechanics' Lien Claim, which -- if resolved -- will be
       deemed to have been cured;

   (c) Claimant's Response Statement:

       Within 30 days of mailing the notice of the Claims
       Resolution Procedure and stay, the Claimant must provide
       its written response clearly indicating its acceptance,
       rejection or disagreement with the Debtors' proposal, if
       any.  If the Claimant disagrees with the Debtors'
       proposal, the Claimant will be required to provide
       invoices and supporting documentation containing adequate
       detail to substantiate its Mechanics' Lien Claim with its
       response.  If the Claimant fails to reply to the Debtors'
       notice of the Claims Resolution Procedures and proposal
       within 30 days of mailing, the Debtors shall be authorized
       to pay the amount or otherwise discharge the lien as set
       forth in the proposal as full satisfaction and final
       payment to the title company that is administrating the
       lien releases as full satisfaction and final payment of
       any and all claims or Mechanics' Lien Claims asserted by
       the Claimant and submit an order to the Court, which order
       if approved -- the Debtors may record in the appropriate
       recording office to discharge the lien.  The order may
       include any language required by the title company or
       local law as necessary to be in recordable form to
       discharge the lien; and

   (d) Adjudication Procedure:

       If the Claimant timely responds to the Debtors' notice of
       the Claims Resolution Procedures with its disagreement to
       the Debtors' proposal in writing stating with reasonably
       specificity the basis therefore, then the Debtors shall
       have 60 days from receipt of the Claimant's response to
       further negotiate a settlement with the Claimant.  The
       Debtors will consult with the Committees regarding any
       settlements as reasonably requested by the Committees.  If
       the Debtors and the Claimant do not resolve the Mechanics'
       Lien Claims within the 60-day time period then, the
       Debtors must, within five business days from the 60th day
       following the receipt of the Claimants' response by the
       Debtors, file an objection in this Court to one or more of
       the unresolved Mechanics' Lien Claims in an omnibus
       objection or otherwise or the stay will be deemed lifted.
       Claimants will have 30 days from the filing of the
       Debtors' objection to respond to the objection.  For any
       remaining contested Mechanics' Lien Claims not resolved
       pursuant to these procedures, the Debtors will request a
       hearing date from this Court for consideration of the
       objections. (Kmart Bankruptcy News, Issue No. 30;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)

Kmart Corp.'s 9.0% bonds due 2003 (KM03USR6), DebtTraders
reports, are trading at 17 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6for
real-time bond pricing.


LAIDLAW: Unveils Exit Financing Facility Plans
----------------------------------------------
Laidlaw Inc., and its debtor-affiliates currently contemplate
that the Exit Financing Facility will be a credit facility
consisting of:

   (a) a senior secured revolving credit facility in the amount
       of not less than $350,000,000 with a $150,00,000 letter
       of credit subfacility; and

   (b) a senior secured six to six and one-half year term loan
       in the anticipated principal amount of up to $950,000,000
       bearing interest at the London Interbank Offered Rate --
       LIBOR -- plus 2.5% per annum, with required aggregate
       principal repayments of $8,750,000 per year, due on the
       anniversary of the Effective Date, in each of the first
       six years after the Effective Date and an $822,500,000
       balloon payment due at maturity.

All Excess Cash will be distributed Pro Rata to holders of
Allowed Claims in Classes 4, 5 and 6.  Because an Excess Cash
distribution will be made, the aggregate principal amount of the
senior secured term loan of the Exit Financing Facility will be
reduced by the first $75,000,000 of the Excess Cash
distribution. Accordingly, subject to the amount of consolidated
Cash of the Debtors as of the Effective Date, the amount of the
senior secured term loan of the Exit Financing Facility could be
reduced by up to $75,000,000 from $950,000,000.  The reduction
would reduce the amount of the balloon payment due at maturity
by a corresponding amount.

                   Sources and Uses of Cash

The principal sources and uses of Cash expected to be available
to the Reorganized Debtors on the Effective Date are:

Sources of Cash

    Cash generated from operations                  $253,000,000
    Proceeds from exit financing term loans
    and revolving credit facility                    920,000,000
                                                 ----------------
    Total sources                                 $1,173,000,000
                                                 ----------------

Uses of Cash

     Cash distributions in respect of Class 4       $407,000,000
     Cash distributions in respect of Class 5        608,000,000
     Cash distributions in respect of Class 6        110,000,000
     Cash distributions in respect of Class 3                  0
     Administrative claims, financing fees and other
        reorganization expenses                       48,000,000
     Working capital                                           0
                                                 ----------------
     Total uses                                   $1,173,000,000
                                                 ----------------

It is anticipated that, on the Effective Date, an additional
$350,000,000 will be available to the Reorganized Debtors
pursuant to the senior secured revolving credit facility under
the Exit Financing Facility to assist the Reorganized Debtors in
meeting their respective working capital needs and paying
administrative claims, financing fees and other reorganization
expenses, including any outstanding indebtedness under the DIP
Facility and related fees and expenses. (Laidlaw Bankruptcy
News, Issue No. 21; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


LEAR CORP: Names David Fry & Conrad Mallet Jr. as New Directors
---------------------------------------------------------------
Lear Corporation (NYSE: LEA) announced the appointment of two
new members to its board of directors -- Dr. David Fry,
president and chief executive officer of Northwood University
and Conrad Mallett Jr., president and general counsel of La-Van
Hawkins Food Group.

"Dr. Fry and Justice Mallett bring to our Board of Directors
strong expertise in the areas of corporate governance, business
acumen and civic responsibility, and we are very pleased they
are joining our team," said Bob Rossiter, president and chief
executive officer.  "Their appointments to our board reinforce
Lear's commitment to customer satisfaction, shareholder value,
business integrity and community involvement."

As president and CEO of Northwood University, a position he has
held since 1982, Dr. David E. Fry oversees three campuses and 31
extension centers located throughout the United States.
Northwood operates an automotive aftermarket management program
designed to prepare students for professional careers in the
automotive industry.

In addition to his responsibilities at Northwood, Dr. Fry is
past president and current director of the American Association
of Independent Colleges and Universities; director and member of
executive committee, Automotive Hall of Fame; director, Reynolds
& Reynolds Company; director, Chemical Bank & Trust (Midland,
Mich.); director, Decker Energy International and chairman of
the Michigan Higher Education Facilities Authority.

Dr. Fry earned a B.A. from Hillside College, an M.B.A. from
Wayne State University and a D.B.A. from Kent State University.

In his role as president and general counsel of La-Van Hawkins
Food Group, Justice Mallett oversees a franchisee of more than
117 Pizza Hut locations with approximately 4,000 employees and
$250 million in sales.  Pizza Hut is the largest pizza chain in
the United States.

Immediately prior to his current responsibilities he was the
chief operating officer for the City of Detroit and has held a
variety of civic and private legal positions including the role
of Chief Justice of the Supreme Court of the State of Michigan
from 1997 to 1999.

Justice Mallett holds a B.A. from the University of California,
master's and juris doctorate degrees from the University of
Southern California and an M.B.A. from Oakland University.

Lear Corporation, a Fortune 150 company headquartered in
Southfield, Mich., USA, focuses on integrating complete
automotive interiors, including seat systems, interior trim and
electrical systems.  With annual net sales of $13.6 billion in
2001, Lear ranks as the world's largest automotive interior
supplier and the world's fifth-largest automotive supplier.
Lear's world-class products are designed, engineered and
manufactured by over 115,000 employees in more than 300
facilities located in 33 countries.  Information about Lear and
its products is available on the Internet at http://www.lear.com

                               *    *    *

As reported in Troubled Company Reporter's July 25, 2002,
edition, Standard & Poor's revises its outlook on Lear Corp.'s
BB+ corporate credit rating to positive.


LERNOUT & HAUSPIE: Solicitation Exclusivity Extended to Sept. 30
----------------------------------------------------------------
According to Gregory W. Werkheiser, Esq., at Morris Nichols
Arsht & Tunnell, in Wilmington, Delaware, Lernout & Hauspie
Speech Products N.V. has made significant progress toward
bringing closure to its Chapter 11 case.

L&H NV has nearly completed negotiations among the L&H
Creditors' Committee, the Curators, and certain other parties-
in-interest regarding the terms of an acceptable Chapter 11
plan.  L&H NV intends to finalize its Chapter 11 plan, which
entails modifying the Joint Plan, shortly in light of the recent
resolution of certain litigation pending before the Belgian
Court.

Thus, L&H NV asks Judge Wizmur to further extend its exclusive
solicitation period to September 30, 2002.

Recently, Mr. Werkheiser relates, the Belgian Court issued a
decision determining that certain substantial claims that have
been asserted against L&H NV's estate were not secured by liens
on its assets.  "This decision is important both to L&H NV and
the L&H Creditors' Committee in their negotiations concerning
the terms of an acceptable chapter 11 plan relating to L&H NV,"
Mr. Werkheiser says.

With the resolution of this litigation, L&H NV now stands ready
to finalize its negotiations with the L&H Creditors' Committee
and file its own chapter 11 plan -- based on revisions to the
Joint Plan.  L&H NV will need time to complete modifications to
the Joint Plan so as to file, solicit, and seek confirmation of
its Chapter 11 plan.

Convinced by the arguments presented, the Court extends L&H NV's
exclusive solicitation period to September 30, 2002.
(L&H/Dictaphone Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MERRILL LYNCH: Fitch Junks $32.3MM Class F Pass-Through Certs.
--------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc.'s mortgage pass-through
certificates, series 1996-C1, $32.3 million class F is
downgraded to 'C' from 'B-' by Fitch Ratings. In addition, Fitch
upgraded the $38.8 million class B to 'AA+' from 'AA' and the
$38.8 million class C to 'A+' from 'A'. Fitch affirmed the
following ratings: the $203.1 million class A-3 at 'AAA', the
interest-only class IO at 'AAA', the $32.3 million class D at
'BBB', the $48.5 million class E at 'BB'. Classes A-PO, A-1 and
A-2 have paid off and the rating has been withdrawn. Fitch does
not rate the $10.4 million class G certificates. The rating
actions follow Fitch's annual review of the transaction, which
closed in April of 1996.

The ratings downgrades are a result of further deterioration in
the real estate owned property in the pool, a retail property
located in Eddyville, KY. The loan currently has a balance of
$8.6 million with approximately $3.9 million in advances. An
appraisal dated February 2002 indicates a current value of $3.2
million. The property was the subject of a lawsuit as a result
of multiple encroachments being present at the time of
origination. At present the special servicer has cleared all
encroachments and is now marketing the property for sale. In
addition to the potential high loss anticipated on the loan,
class F has also been shorted interest, which is unlikely to be
recoverable.

Despite the concern with the REO loan, the remainder of the
transaction has performed well. As of year-end 2001, the
weighted average DSCR for the pool has increased to 1.77 times
(x), from 1.61x as of year-end 2000 and 1.39x at issuance. The
weighted average DSCR was calculated using financial statements
collected by the master servicer, GMAC commercial mortgage for
62% of the loans remaining in the pool. As of the July
distribution date the transaction has amortized 37.5% to $404.5
million from $647.2 million at issuance, increasing credit
enhancement levels on the senior rated classes. The rating
upgrades are a result of the improved performance in conjunction
with the paydown of the transaction.

The certificates are collateralized by 113 fixed-rate mortgage
loans consisting mainly of multifamily (53.7%) and retail (39%)
properties. The pool's geographic concentrations include Nevada
(16%), Texas (15%) and California (13%). Fitch's weighted
average Property Market Metric score for the pool is '3.2'.

Fitch analyzed each loan in the pool and assumed greater than
expected probability and loss severity for loans of concern and
the expected liquidation scenario of the REO loan. The required
credit enhancement that resulted from this remodeling of the
pool warranted the upgrades on the senior classes B and C while
the expected losses warranted the downgrades to the class F.
Fitch will continue to monitor this transaction, as surveillance
as on going.


METALS USA: Obtains Approval to Amend DIP Financing with Lenders
----------------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates sought and obtained
Court approval of the first amendment to the Postpetition Loan
Agreement with the Postpetition Lenders with Bank of America
N.A. as administrative agent.

Zack A. Clement, Esq., at Fulbright & Jaworski LLP, in Houston,
Texas, admits that the Debtors' performance since the Petition
Date has been below expectations.  The Debtors are currently in
default of certain financial covenants under the Postpetition
Loan Agreement.  Through Bank of America, the Debtors have
negotiated with the Postpetition Lenders for a modification of
the terms of the Postpetition Loan Agreement to prevent
foreclosure on the collateral securing the Debtors' obligations.

The salient terms of the first amendment to the Postpetition
Loan Agreement are:

A. Reduction in the Maximum Revolver Amount:  from $350,000,000
    to $275,000,000;

B. Tax Refunds:  The Debtors are obligated to apply all tax
    refunds to reduce the Equipment Sublimit and Real Estate
    Sublimit;

C. Reduction of Minimum Average Availability Requirement:
    $10,000,000 through October 2002 and $15,000,000 through
    March 2003 -- rather than $5,000,000 through May 31, 2002
    with a maximum of $20,000,000 in 2003;

D. Reduction of Equipment Sublimit/Real Estate Sublimit:  The
    Debtors are obligated to make a $500,000 month payment to
    reduce either the Equipment Sublimit or Real Estate Sublimit;

E. Amendment Fee:  $350,000; and

F. Financial Covenants:  Replaces fixed-charge coverage ratio
    covenant with a minimum operating cash flow covenant that is
    more favorable to Debtors. (Metals USA Bankruptcy News, Issue
    No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NCS HEALTHCARE: June 30 Balance Sheet Upside-Down by $108 Mill.
---------------------------------------------------------------
NCS HealthCare, Inc., (NCSS.OB) announced financial results for
its fiscal fourth quarter and full year ended June 30, 2002.

For the three months ended June 30, 2002, revenues increased
4.8% to $162,396,000 from $154,955,000 recorded in the fourth
quarter of the previous fiscal year.  Net loss for the quarter
was $700,000 as compared to net loss of $8,387,000 for the
fiscal fourth quarter of the previous year.

For the twelve months ended June 30, 2002, revenues increased
3.1% to $645,756,000 from $626,328,000 recorded in the twelve
months ended June 30, 2001.  Net loss for the twelve months
ended June 30, 2002, excluding the effect of the adoption of
Statement of Financial Accounting Standards (SFAS) No. 142, was
$12,441,000 as compared to net loss of $43,510,000 for the prior
fiscal year.  Including the effect of the adoption of SFAS No.
142, net loss for the twelve months ended June 30, 2002 was
$234,557,000.

On July 28, 2002, the Company entered into a definitive merger
agreement with Genesis Health Ventures, Inc.  In the merger,
each share of NCS common stock will be exchanged for 0.1 of a
share of Genesis common stock, and Genesis will repay in full
the outstanding debt of NCS, including $206 million of senior
debt, and will redeem $102 million of 5.75% convertible
subordinated debentures, including any accrued and unpaid
interest.

Kevin B. Shaw, President and Chief Executive Officer of NCS
commented, "During the past thirty-six months, we have
accomplished our key operating objective: to establish a
successful and efficient operating model.  Within this past
year, NCS grew its revenues, reduced its inventory and accounts
receivable by $10 million and streamlined its central processes.
Through these improvements we have reduced operating expenses to
14.5% of revenues from 15.9% last year."

Mr. Shaw added, "NCS' proposed merger with Genesis will create
additional scale and brings the opportunity to further leverage
our central processes. While we are addressing all operating,
employee, legal and financial issues related to the proposed
Genesis transition, customer satisfaction remains our number one
priority.  In our operating model, NCS' starting point and its
end point is with the customer.  This focus has led NCS to
continue to develop its eASTRAL information offering and we are
encouraged by the acceptance of these innovations."

Gross margin for the three months ended June 30, 2002 was 16.5%
of revenues as compared to 16.1% of revenues for the previous
quarter.  The increase in gross margin was due primarily to
purchasing efficiencies partially offset by the continued shift
toward lower margin payer sources such as Medicaid and third
party insurance.  Medicaid and insurance revenues accounted for
61.0% of revenues in the fiscal 2002 fourth quarter versus 60.1%
in the previous quarter and 59.0% in the fourth quarter of
fiscal 2001.

As of June 30, 2002, the Company has a working capital deficit
of about $203 million, and a total shareholders' equity deficit
of about $108 million.

Selling, general and administrative expenses as a percent of
revenues increased slightly to 13.4% for the fiscal 2002 fourth
quarter as compared to 13.2% of revenues during the previous
quarter due primarily to one additional calendar day during the
most recent quarter. Depreciation and amortization expense of
$3.3 million for the three months ended June 30, 2002 was
consistent with the previous quarter.

The Company elected early adoption of Statement of Financial
Accounting Standards (SFAS) No. 142 "Goodwill and Other
Intangible Assets" effective July 1, 2001.  In accordance with
SFAS No. 142, goodwill and other indefinite lived intangible
assets will no longer be amortized.  Under this non-
amortization approach, SFAS No. 142 requires that goodwill and
other indefinite lived intangible assets be reviewed for
impairment using a fair value based approach upon adoption and
annually thereafter.  The Company has completed the transitional
impairment test required by SFAS No. 142 and has recorded a non-
cash charge of $222.1 million as of July 1, 2001 to reduce the
carrying value of its goodwill.  In accordance with the
requirements of SFAS No. 142, the charge has been recorded as a
cumulative effect of accounting change in the Company's
consolidated statement of operations.

Selling, general and administrative expenses for the three and
twelve month periods ended June 30, 2002 exclude goodwill
amortization in accordance with the Company's adoption of SFAS
No. 142.  In accordance with SFAS No. 142, the results for the
three and twelve month periods ended June 30, 2001 are as
originally reported and include goodwill amortization.  If SFAS
No. 142 would have been effective for the quarter ended June 30,
2001, net loss would have been $5.8 million and net loss per
share would have been $0.24, excluding $2.6 million of goodwill
amortization.  If SFAS No. 142 would have been effective for the
twelve months ended June 30, 2001, net loss would have been
$33.1 million and net loss per share would have been $1.41,
excluding $10.4 million of goodwill amortization.

Fiscal 2001 full year results included approximately $10 million
of additional bad debt expense to fully reserve for remaining
accounts receivable of exited businesses, approximately $1
million of charges associated with the continuing implementation
and execution of strategic restructuring activities and a $2.1
million fixed asset impairment charge recorded in accordance
with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long Lived Assets to be
Disposed Of" (SFAS No. 121).

NCS HealthCare, Inc., is a leading provider of pharmaceutical
and related services to long-term care facilities, including
skilled nursing centers, assisted living facilities and
hospitals.  NCS serves approximately 202,000 residents of long-
term care facilities in 33 states and manages hospital
pharmacies in 14 states.


NCS HEALTHCARE: Omnicare Sends Letter Detailing Merger Agreement
----------------------------------------------------------------
Omnicare, Inc. (NYSE: OCR), a leading provider of pharmaceutical
care for the elderly, sent a letter to the Board of Directors of
NCS HealthCare, Inc. (NCSS.OB).  The full text of the letter
follows:

August 15, 2002
BY FACSIMILE AND OVERNIGHT COURIER

Board of Directors
NCS HealthCare, Inc.
3201 Enterprise Parkway
Suite 220
Beachwood, Ohio 44122

Gentlemen:

"As stated in our letter to you dated August 8, 2002, in an
effort to quickly consummate a mutually beneficial transaction
that will provide the greatest value to NCS and its
stockholders, as well as NCS bondholders and other creditors, we
are prepared to execute a merger agreement substantially
identical to the NCS/Genesis Merger Agreement, except that the
Omnicare merger agreement will reflect our $3.50 per share cash
offer.  A modified version of the NCS/Genesis Merger Agreement
in a form that Omnicare is prepared to sign is attached to this
letter.

"The NCS/Omnicare Merger Agreement reflects a 'one-step' merger
transaction, which is the structure contemplated by the proposed
NCS/Genesis transaction.  As we have mentioned in our earlier
letters, however, we are willing to discuss alternative
transaction structures with you, including the use of a 'two-
step' transaction structure, which contemplates a tender offer
followed by a back-end merger.  In addition, as we have stated
before, we are also willing to discuss all other aspects of our
proposal, including price and form of consideration.

"Under the Omnicare proposal, as we have stated, NCS bondholders
and other creditors would be treated the same as they are
proposed to be treated in the NCS/Genesis transaction.

"As you will see, the NCS/Omnicare Merger Agreement has been
modified to not only reflect Omnicare's $3.50 per share all-cash
proposal, but also to remove the 'break-up' fee provisions in
the NCS/Genesis Merger Agreement and the references in the
merger agreement to the voting agreements executed by Messrs.
Outcalt and Shaw.  Omnicare's proposal does not require that any
stockholder sign a voting agreement or otherwise irrevocably
lock-up their shares of NCS common stock.  The NCS/Omnicare
Merger Agreement also includes a 'fiduciary-out,' which would
enable NCS to terminate the agreement if it receives a 'Superior
Proposal,' as defined in the agreement.

"As we have mentioned in our prior correspondence, Omnicare is
in a position to quickly consummate a transaction with NCS.  We
believe that our proposal to purchase all of the outstanding
shares of Class A common stock and Class B common stock of NCS
for $3.50 per share in cash constitutes a 'Superior Proposal'
under the NCS/Genesis Merger Agreement.

"Consequently, you are now in a position to discuss Omnicare's
proposal with Omnicare and its advisors.  We believe that we can
execute the NCS/Omnicare Merger Agreement prior to August 22,
2002, the date by which NCS has indicated that it will advise
NCS stockholders of its position with respect to Omnicare's
offer and reasons for its position.

"We look forward to discussing our offer with you and setting up
a schedule for finalizing the NCS/Omnicare Merger Agreement."

Sincerely,

/s/ Joel F. Gemunder
President and Chief Executive Officer

Dewey Ballantine LLP is acting as legal counsel to Omnicare and
Merrill Lynch is acting as financial advisor.  Innisfree M&A
Incorporated is acting as Information Agent.

Omnicare, based in Covington, Kentucky, is a leading provider of
pharmaceutical care for the elderly.  Omnicare serves
approximately 738,000 residents in long-term care facilities in
45 states, making it the nation's largest provider of
professional pharmacy, related consulting and data management
services for skilled nursing, assisted living and other
institutional healthcare providers.  Omnicare also provides
clinical research services for the pharmaceutical and
biotechnology industries in 28 countries worldwide.  For more
information, visit the company's Web site at
http://www.omnicare.com


NTL INC: Court Approves Garden City as Noticing & Claims Agent
--------------------------------------------------------------
NTL Incorporated and its debtor-affiliates sought and obtained
approval from the U.S. Bankruptcy Court for the Southern
District of New York to appoint The Garden City Group, Inc., as
special noticing and claims agent of the Bankruptcy Court.

The Debtors relate that they have thousands of Holders and
potential Holders to whom notice of the securities claims bar
date in these cases must be sent. The number of Holders makes it
impracticable for the Clerk of the Bankruptcy Court to send
notices to the Holders.

Under the Agreement, The Garden City Group will:

      a) Research the names and addresses of all Holders;

      b) Prepare and serve the notices and pleadings required to
         be served upon the Holders in these Chapter 11 cases;

      c) Within five business days after the service of a
         particular notice, file with the Clerk's Office an
         affidavit of service;

      d) Maintain copies of all proofs of claim and proofs of
         interest filed in these cases;

      e) Maintain an official claims registers of Holders in
         these cases by docketing all proofs of claim and proofs
         of interest of such Holders in a claims database;

      f) Implement necessary security measures to ensure the
         completeness and integrity of the claims registers;

      g) Transmit to the Clerk's Office a copy of the claims
         registers as requested by the Clerk's Office;

      h) Maintain a current mailing list for all Holders that
         have filed proofs of claim or proofs of interest and
         make such list available upon request to the Clerk's
         Office or any party in interest;

      i) Provide access to the public for examination of copies
         of the proofs of claim or proofs of interest filed in
         these cases without charge during regular business
         hours;

      j) Record all transfers of claims pursuant to Bankruptcy
         Rule 3001(e);

      k) Comply with applicable federal, state, municipal, and
         local statutes, ordinances, rules, regulations, orders,
         and other requirements;

      l) Provide temporary employees to process claims, as
         necessary;

      m) Promptly comply with such further conditions and
         requirements as the Clerk's Office or the Court may at
         any time prescribe; and

      n) Provide such other claims processing, noticing and
         related administrative services as may be requested from
         time to time by the Debtors.

The fees and expenses of The Garden City Group incurred in this
engagement will be treated as an administrative expense of the
Debtors' Chapter 11 estates. The Garden City Group's Consulting
& General Project Management rates are:

           Supervisor                 $75-95 per hour
           Senior Supervisor/
              Bankruptcy Paralegal    $95 per hour
           Senior Project Manager     $125 per hour
           Senior VP Systems and
              Managing Director       $250 per hour

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.


NATURADE INC: Equity Deficit Narrows to $3 Million at June 30
-------------------------------------------------------------
Naturade, Inc. (OTCBB:NRDC), a leading marketer of soy protein
products under the brand name Naturade Total Soy(TM), reported
net sales of $3,352,400 for the three months ended June 30,
2002, a decrease of 24% over the same period in 2001 and net
sales of $6,836,600 for the six months ended June 30, 2002, down
21% over the same period in 2001. This slowdown in volume for
the first half comes after two years of above-market growth
during which the Company added major new mass market accounts
and new product placements that were not repeated in 2002.

The sales decline which began in the first quarter is almost
entirely attributable to the completion in 2001 of the new
distribution phase of building pipeline inventory and to a minor
channel shift in which certain mass accounts began buying direct
in 2001 rather than through health food distributors. Repeat
(turn) business in the mass market increased 1.2% to $2,887,500
compared to a 94.2% decline in new distribution to $66,000 for
the first six months of 2002.

For the latest quarter, mass market sales were 38% below the
year-ago period. As a result of the K-mart bankruptcy
restructuring and sub-par drug store channel performance, repeat
sales from mass market customers also showed a modest 5.9%
decline for the second quarter. Sales to health food accounts
were off 8% in the second quarter, reflecting the continuing
underlying weakness in that channel and the company's decision
to discontinue certain lower volume products. The health food
channel accounted for 56% of net sales in second quarter 2002.

The Company's number one brand of soy protein meal replacements,
Naturade Total Soy, which was launched in early 1999, accounted
for 58.1% of revenue during the second quarter of 2002. Naturade
sales of soy protein powders grew 16% in actual consumer cash
register sales in supermarket, drug store and mass merchandiser
accounts for the latest 24 weeks ending June 16, 2002 as
reported by Information Resources, Inc., an independent research
organization. Naturade continues to maintain its market share
leadership as the number one brand of natural soy protein
powders in the mass market.

The Company reported an operating loss of $660,300 for the
second quarter and $1,326,100 for the first six months of 2002,
compared to operating losses of $742,700 and $1,379,700,
respectively in 2001. The decline in operating loss reflects a
significant reduction in interest expense due to a previously
reported financial restructuring in January 2002. Significantly
lower selling and general and administrative expenses for the
second quarter were offset by a decline in gross profit from
47.2% to 41.1% of second quarter net sales compared to the same
period of 2001.

The Company's June 30, 2002 balance sheets show a working
capital deficit of about $800,000 and a total shareholders'
equity deficit of about $3 million (as compared to $7 million
recorded at December 31, 2001).

According to Naturade CEO Bill Stewart, "Our management team has
taken aggressive steps to control spending and launch new growth
initiatives. We've just completed the reformulation of Naturade
Total Soy powder with an improved soy protein technology that
makes the product easier to mix and significantly improves the
taste.

"We've also expanded the brand's positioning to promote it for
weight loss as well as for cholesterol reduction," he adds. "We
expect this major restage on Naturade Total Soy, plus the
introduction of two entirely new brands, to have a measurable
impact on second half sales."

Headquartered in Irvine, Calif., Naturade -- since 1926 -- has
been committed to marketing innovative natural products to
improve the health and well being of consumers. Well-known for
its 50 years of leadership in soy protein, Naturade is the
number one brand name of natural soy protein powders sold in
food, drug and mass merchandise stores. Its premier product,
Naturade Total Soy, is a complete line of ready-to-drink, bars
and shake mix meal replacement products sold at major
supermarkets and drug, health food, club and mass merchandise
stores throughout the U.S. The Company's other products include,
Power Shake(R), Quick Fizz(TM) and Aloe Vera 80(R). For more
information, visit http://www.naturade.com


NETIA: Court Sets Creditors' Vote on Units' Plan for August 30
--------------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIAQ/NTIDQ, WSE: NET), Poland's
largest alternative provider of fixed-line telecommunications
services, announced that the creditors' meeting to accept the
composition plans of its three Dutch subsidiaries, Netia
Holdings B.V., Netia Holdings II B.V. and Netia Holdings III
B.V., were opened Thursday last week.

In consideration of the timing of arrangement proceedings in
Poland and in order to obtain confirmation with respect to tax
matters relating to the restructuring, the court adjourned the
meeting and scheduled the creditors' vote on the composition
plans for the companies for August 30, 2002. The verification
hearings in the Netherlands have been provisionally fixed by the
court for September 11, 2002.


ONLINE POWER SUPPLY: Ehrhardt Keefe Raises Going Concern Doubt
--------------------------------------------------------------
OnLine Power Supply, Inc., a Nevada corporation, is focused on
research, development, and sales of technology related to
improving the performance of AC-DC power supplies for
applications in the industrial, data storage, commercial,
communications, computer, governmental, medical and military
markets. OPS has completed (December 2001) the development of a
technology platform that is proprietary, patented, patent-
pending, and intellectually protected pertaining to unique power
supply design. Its stock is publicly traded (OPWR-OTC).

Since January 1997, OnLine Power Supply, Inc., has been engaged
in research and product development leading to breakthroughs in
the functionality of AC to DC power conversion devices. This
process has involved significant new discovery in the following
design areas: non-saturating magnetics, circuit design, layouts,
artwork, thermal management, topology design, and strategic
implementation of advantageous signal processing. OPS introduced
its first product, the power factor corrected front end module
and began manufacturing it in March 2001. The design, research
and development of the second OPS product, a 48 volt 1000 watt
power supply, was substantially completed in December 2001 with
the beginning of prototype units being tested in the Company's
laboratory and independently undergoing tests by some of its
potential customers in their labs.

Final design modifications will be incorporated into the 48 volt
1000 watt power supply and OPS  anticipated that the new product
would be submitted to Underwriters Laboratory for safety
certification and testing in April 2002 and be finally certified
by them in May 2002. The Company anticipated, but did not
guarantee, that it would be manufacturing and shipping the 48
volt 1000 watt units to distributors and others in limited
quantities starting June, 2002.

As a result of continuing losses from operations, costs to
expand the offices and laboratory, the addition of 6 more
employees and the purchase of additional furniture and
equipment, the level of cash and short term investments
decreased from $8,898,884 at December 31, 2000 to $3,501,375 at
December 31, 2001, a decrease of $5,397,509. The purchases of
furniture and equipment totaled $702,896 and the cost to improve
the leasehold space was $132,230. Operations consumed $4,491,615
in cash resources.

Sales of the PFC unit contributed $141,515 in gross profits
towards operating costs with interest and investment income
generating another $303,179 in non-operating income. The cash
burn fluctuated in 2001 between $380,000 and $810,000 per month
varying with the purchases of laboratory equipment and payments
for leasehold improvements during any one month. The cash burn
in 2000 averaged $289,000 monthly and included $274,437 in
purchases of furniture and equipment. The average monthly burn
rate for the first two months of 2002 was $542,000 per month.
This burn rate in 2002 is higher due to non-recurring costs: a
separation payment to an officer of the Company of $100,000 in
January, 2002, a $51,000 contractual bonus payment to an officer
of the Company earned in 2001 and paid in January 2002 and
$65,000 of foreign patent applications deposits paid in February
2002. Additional working capital will be required to sustain the
present level of operations during 2002 unless the sales of the
PFC and the new 48 volt products (to be released from R & D) can
generate revenues in the third and fourth quarters to achieve
revenue goals.

The Company's current ratio (current assets over current
liabilities) is 4:1. Its quick ratio (defined as cash over
accounts payable) is 5:1. Shareholders' equity at December 31,
2001 was $4,437,481 after the reductions caused by operating
losses and growth during the past year. OPS has incurred no
significant debt or raised equity capital this year to support
operations; its plan is to achieve sustaining revenues during
the year ending 2002 to avoid the necessity of relying on
working capital over and above internally generated cash
resources.

The revenue results for 2001 reflect the sales to one very large
OEM customer who has designed in OPS' PFC front end module for
powering the base stations being constructed for their customers
world wide. Sales for 2000 were $104,441 and consisted mainly of
small quantities of the PFC after it was certified and released
to the market that year. The $2,253,295 in 2001 sales of the PFC
product validated the commercial viability of the new unit, but
was only one fourth of Company revenue expectations set prior to
adverse events and forces affecting all companies in 2001,
especially OPS' wireless telecommunications customer.

Revenue expectations for 2002 will consist of a level monthly
quantity of the PFC sales and the possibility of getting several
design in contracts with the customers now evaluating the 48
volt prototypes. Volume revenues from the sales of the 48 volt
1000 watt unit is expected to start in the third quarter 2002
producing profits and operating cash flows when OPS achieves
monthly expected volumes of 2,000 to 4,000 units per month. The
volume production of all of its units is scheduled at the Saturn
Electronics Monterrey, Mexico facility and will be manufactured
to the highest standards as demonstrated and certified during
the inaugural year of the business relationship.

It should be noted that the statements in the preceding
paragraph are the Company's expectations, not forecasts; OPS
does not have orders (or contracts) for the PFC units beyond
May, 2002 nor does it have any orders for the 48 volt units yet.

In its February 8, 2002 Auditors Report for Online Power Supply,
Ehrhardt, Keefe, Steiner & Hottman PC of Denver, Colorado has
noted that the Company has suffered recurring losses from
operations, which raise substantial doubt about its ability to
continue as a going concern.


OPEN PLAN: Court Okays Auction Procedures to Effect Asset Sale
--------------------------------------------------------------
Open Plan Systems, Inc., (OTC Bulletin Board: PLAN) announced
that Chief Judge Douglas O. Tice, Jr., of the United States
Bankruptcy Court for the Eastern District of Virginia, Richmond
Division, has authorized the sale of substantially all the
Company's assets and has established auction procedures to
effect such sale.

On July 31, 2002, the Company entered into a preliminary, non-
binding letter of intent with TSRC, Inc., to sell substantially
all of its assets to TSRC.  Headquartered in Ashland, Virginia,
TSRC has interests in retailers of office furniture and supplies
in Virginia and Maryland.  Pursuant to the Letter of Intent,
TSRC would purchase substantially all of the Company's assets,
including inventory, furniture, machinery and various
intangibles, and would assume selected leases.  The Company
would retain all other assets, including cash and accounts
receivable, and liabilities not purchased or assumed by TSRC.

The auction procedures established by the Bankruptcy Court
Friday will permit bidders other than TSRC to submit a higher
bid to purchase the Company's assets.  All such bids must be
received by the Company on or before September 3, 2002, the
auction date set by the court.  The Letter of Intent provides
that TSRC would receive a break up fee in the amount of $30,000
in the event a bidder submits a higher qualified bid which is
approved by the Bankruptcy Court and such approved sale is
ultimately consummated.  As part of Friday's actions, the
Bankruptcy Court approved the proposed break up fee.  A hearing
has been scheduled for September 4, 2002 for the Bankruptcy
Court to approve the sale to TSRC or an alternate purchaser, if
any, who submits a higher qualified bid at the scheduled
auction.

Pursuant to the terms of the Letter of Intent, the closing of a
sale of substantially all the Company's assets to TSRC would
occur five days following the date on which the order from the
Bankruptcy Court approving the sale becomes final and
nonappealable.  Subsequent to such closing, the manufacturing
operations of the Company would cease and the Company would
administer its remaining assets and liabilities in accordance
with the procedures established by the Bankruptcy Code.  If a
sale of substantially all of the Company's assets to TSRC as
proposed in the Letter of Intent is approved by the Bankruptcy
Court, it is anticipated that the proceeds of the sale would not
be sufficient to pay all the Company's creditors and that no
distribution of any kind would be made for the benefit of the
Company's common shareholders.

Anyone interested in participating in the auction to be held
September 3rd or who would like additional information about the
auction is encouraged to contact Mr. Thomas M. Mishoe, Jr., the
Company's President and Chief Executive Officer, at (804) 228-
5600.

Open Plan Systems, Inc., remanufactures and markets modular
office workstations through a network of Company-owned sales
offices and selected dealers.  Workstations consist of movable
panels, work surfaces, storage units, lighting and electrical
distribution combined into a single integrated unit.  On May 30,
2002, the Company filed a voluntary petition for reorganization
under Chapter 11 of Title 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Eastern
District of Virginia, Richmond Division. Since filing its
petition with the Bankruptcy Court, the Company has operated as
a debtor in possession and has had its business and affairs
managed by its directors and officers, subject to the
supervision of the Bankruptcy Court.


OPTIO SOFTWARE: Fails to Meet Nasdaq Continued Listing Standards
----------------------------------------------------------------
Optio Software, Inc., (Nasdaq: OPTO) announced that on August
14, 2002, it received a Nasdaq Staff Determination indicating
that Optio Software fails to comply with the minimum bid price
requirement of the Nasdaq Marketplace Rule 4310(C)(8)(D), which
requires that the minimum bid price for Optio Software's common
stock be at least $1.00 per share. As a result, the common stock
is subject to delisting from the Nasdaq SmallCap Market.

Optio Software has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination and to
request continued listing. The date for the hearing has not been
established. Optio Software has been advised that Nasdaq will
not take any action to delist the common stock pending the
conclusion of that hearing. There can be no assurance, however,
that Optio Software will be successful with the Nasdaq Listing
Qualifications Panel, and the common stock may be delisted from
The Nasdaq SmallCap Market if the Nasdaq Listing Qualifications
Panel accepts the administrative staff's determination and/or
Optio Software decides, for business reasons, not to effectuate
alternative remedies. In such event, Optio Software would apply
to list the common stock on the OTC Bulletin Board or other
quotation system on which the common stock would qualify.

Optio Software, Inc., provides infrastructure software that
enables organizations to capture information from disparate
systems and networks, transform it into formats needed by
various recipients, and deliver it via print and to a global
network of digital destinations. Optio's software improves the
organization's ability to communicate and connect with their e-
commerce constituents, including customers, suppliers, partners
and employees. With headquarters in Atlanta and offices in
Europe, Optio has more than 4,000 customers serving the
manufacturing, healthcare, retail, distribution and financial
industries. For more information, please visit
http://www.optiosoftware.comor contact Optio Software:
ifo@optiosoftware.com


ORBITAL IMAGING: Gets OK to Hire Rothschild as Financial Advisor
---------------------------------------------------------------
Orbital Imaging Corporation sought and obtained approval from
the U.S. Bankruptcy Court for the Eastern District of Virginia
to hire Rothschild Inc., as its financial advisor and investment
banker, ninc pro tunc to the Petition Date.

The professional services that Rothschild will be employed to
perform include:

      a. reviewing and analyzing the Debtor's operating and
         financial strategies;

      b. reviewing and analyzing the business plans and financial
         projections prepared by the Debtor, including testing
         assumptions and comparing those assumptions to
         historical Debtor and industry trends;

      c. evaluating the Debtor's debt capacity in light of the
         projected cash flows and assisting in the determination
         of an appropriate capital structure for the Debtor;

      d. assisting the Debtor and its other professionals in
         developing the terms of proposal regarding a
         Restructuring Transaction;

      e. determining a range of values for the Debtor and any
         securities that the Company offers in connection with a
         Restructuring Transaction;

      f. advising the Debtor with respect to its intermediate and
         long-term business prospects and strategic alternatives
         that may be available to the Debtor to maximize the
         business enterprise value of the Debtor;

      g. reviewing and analyzing any proposals the Debtor
         receives from third parties regarding a Restructuring
         Transaction;

      h. assisting or participating in negotiations with the
         Debtor and/or any other parties in interest regarding a
         Restructuring Transaction;

      i. advising and attending meetings of the Debtor's Board of
         Directors, as necessary;

      j. assisting in obtaining financing and in negotiating with
         prospective lenders of financing;

      k. assisting in the plan of reorganization negotiation and
         confirmation process, including preparing and delivering
         expert testimony relating to financial matters, if
         required; and

      l. rendering such other financial advisory and investment
         banking services as may be requested by the Debtor.

The Debtors will pay Rothschild:

      a. A $75,000 monthly cash advisory fee (discounted from
         $150,000 per month);

      b. A transaction fee equal to 1.25% of the total face
         amount of the Debtor's public debt as of the date of the
         Rothschild Engagement Letter

      c. A new capital fee equal to

           (i) 1.0% of any senior secured debt,
          (ii) 3.5% of the face amount of any junior secured or
               senior or subordinated unsecured debt, and
         (iii) 5.0% of any equity or hybrid capital raised,
               excluding any capital provided by the existing
               shareholders of the Debtor.

Orbital Imaging Corporation filed for chapter 11 protection on
April 5, 2002 in the U.S. Bankruptcy Court for the Eastern
District of Virginia. Geoffrey A. Manne, Esq., Shari Siegel,
Esq., and William Warren, Esq., at Latham & Watkins represent
the Debtor in its restructuring efforts. When the Company filed
for protection from its creditors, it listed assets and debts of
over $100 million.


OWENS CORNING: Asks Court to Approve Stipulation re EPA Bar Date
----------------------------------------------------------------
J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, tells the Court that the United States Environmental
Protection Agency and Owens Corning, and its debtor-affiliates,
have been engaged in extensive discussions concerning potential
environmental claims under the Comprehensive Environmental
Response, Compensation ad Liability Act.  The process of these
discussions has resulted in the narrowing of claims.

In the attempt to reach further agreements on the treatment of
environmental claims, the Debtors and the EPA ask the Court to
approve their stipulation extending the General Claims Bar Date
by which the EPA must file any proofs of claim arising to
December 15, 2002.  It does not, however, extend the General
Claim Bar Date by which EPA must file prepetition penalty
claims. (Owens Corning Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PBG AIRCRAFT: S&P Ratchets Class B Aircraft Notes Down a Notch
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
aircraft notes issued by PBG Aircraft Trust as follows: to
triple-'B'-minus from triple-'B' on the Class A Aircraft Notes
due 2012, and to double-'B' from double-'B'-plus on the Class B
Aircraft Notes due 2011. The ratings were also placed on
CreditWatch with negative implications.

"The downgrades are based on the downgrade of United Air Lines
Inc. (CCC/Watch Dev/--), which is the lessee on about one-
quarter of the leveraged lease debt in the PBG Aircraft Trust
portfolio," said Standard & Poor's credit analyst Philip
Baggaley. PBG Aircraft Trust is a Delaware trust formed by PBG
Capital Partners LLC, which is in turn owned equally by units of
Pitney Bowes Credit Corp. (PBCC, AA/Stable/A-1+) and GATX
Financial Corp. (formerly GATX Capital Corp., BBB/Negative/A-3).
The 14 aircraft that are owned directly or indirectly (through
owner trusts) by PBG Aircraft Trust were acquired in 1986-1989
by PBCC and are leased to five U.S. airlines, a U.S. airline
holding company (Air Wisconsin Inc., related to United Air
Lines) that subleases to a U.S. airline, and a unit of debis
AirFinance N.V. (N.R.; originally GPA Group Ltd.), which in turn
leases that aircraft to a seventh U.S. airline.

Standard & Poor's estimates that the Class A Aircraft Notes
overall loan-to-value is currently in the 70%-80% range
(compared with 53% initially) and that of the Class B Aircraft
Notes 85%-95% (compared with 63% initially) using conservative
long-term values, though valuation using current depressed
market values would produce higher (worse) loan-to-values. The
diversity of airline lessees and aircraft models, and the role
of PBCC as servicer were viewed as positive factors in Standard
& Poor's review of PBG Aircraft Trust.

The ratings were placed on CreditWatch with negative
implications because United Air Lines remains on CreditWatch and
warned of a possible bankruptcy filing as early as this autumn.


PACIFIC GAS: Confirmation Hearing to Begin on November 12, 2002
---------------------------------------------------------------
At a status conference held on August 1, 2002, the Bankruptcy
Court ordered, at the request of Pacific Gas and Electric
Company and the California Public Utility Commission, that
confirmation hearings on both the PG&E Plan and the CPUC Plan
will begin on November 12, 2002 -- starting with the CPUC's
plan. (Pacific Gas Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PERSONNEL GROUP: Rebrands Three More Commercial Staffing Ops.
-------------------------------------------------------------
Personnel Group of America, Inc., (NYSE:PGA) has rebranded its
commercial staffing operations in three additional markets. Each
of these operations has been renamed "Venturi Staffing Partners"
and "Venturi Career Partners" for its temporary staffing and
permanent placement practices, respectively.

Participating PGA operations included: Fox Staffing in Richmond,
VA, and Washington, DC, and West Personnel and Profile Temporary
Staffing in Chicago. PGA's commercial staffing operations are
veterans of the staffing industry, with over 22 years of
experience, on average, in their respective markets, and provide
a wide range of temporary staffing, permanent placement, and
staffing management solutions.

Speaking from PGA headquarters in Charlotte, Tom
Wittenschlaeger, PGA's SVP of Corporate Development and Chief
Technical Officer, noted, "Adding these operations to the
Venturi brand family furthers our development of a national
commercial staffing practice embodying the flexibility and
customer-centric orientation of the highest quality local
service operation and the reach and competitive breadth of a
national branch network. Our rebranding efforts continue to go
well, and as previously disclosed we expect to complete the
rebranding of all of our Commercial Staffing operations by the
end of this year."

Personnel Group of America, Inc., is a nationwide provider of
information technology consulting and custom software
development services; high-end clerical, accounting and other
specialty professional staffing services; and technology systems
for human capital management. The Company's IT Services
operations now operate under the name "Venturi Technology
Partners" and its Commercial Staffing operations are being
rebranded "Venturi Staffing Partners" over the balance of 2002.

                          *     *     *

As previously reported in Troubled Company Reporter, Personnel
Group of America said it is "working hard to remain in
compliance with the New York Stock Exchange listing standards."
The Company continues to be monitored by the NYSE for compliance
with the business plan we submitted to the NYSE earlier this
year. The weak equity market and the balance sheet reduction in
shareholders' equity caused by the adoption of SFAS 142 have now
resulted in the Company dipping below the NYSE's $1.00 minimum
trading price and $50.0 million total shareholders' equity
requirements.

"We are in ongoing discussions with the NYSE and are committed
to taking appropriate action to ensure that PGA's common shares
remain listed for trading, either on the NYSE or on another
stock exchange."

"Our quarterly results reflect improvements in a great many
areas," stated James C. Hunt, PGA's Chief Financial Officer. "We
are pleased with the improvements in our commercial staffing
overall business performance and with the increase in the
Company's overall EBITDA to $4.2 million in the second quarter,
up from $3.7 million in the first quarter. This increase and
strong balance sheet management allowed us to repay an
additional $6.3 million in senior debt this quarter.
Additionally, we had cash on hand at the end of the second
quarter of $25.3 million, which preserves the Company's
negotiating options during discussions examining alternatives
for debt restructuring. Should those discussions not lead to a
near-term outcome, that cash on hand will be applied to debt
repayment. Adopting SFAS 142 will not have an impact on our cash
flow or continued compliance with the financial covenants in our
bank credit agreement."


PROVANT INC: Commences Trading on Nasdaq SmallCap Market
--------------------------------------------------------
Provant, Inc. (NASDAQ: POVT), a leading provider of performance
improvement training services and products, announced that the
listing of its common stock was transferred from The Nasdaq
National Market to The Nasdaq SmallCap Market effective as of
the opening of the market on August 15, 2002.

As previously announced, the Company had received notification
from The Nasdaq Stock Market that it intended to delist the
Company's common stock from The Nasdaq National Market, due to
the Company's failure to comply with the U.S. $1.00 minimum bid
price requirement for continued listing on that market. In
response, the Company requested to have its common stock listed
on The Nasdaq SmallCap Market and its request has been approved.
The Company's continued listing on The Nasdaq SmallCap Market is
subject to Nasdaq's approval of the Company's application
materials that the Company will file with Nasdaq on or before
August 19, 2002.

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

More information is available on the World Wide Web at
http://www.provant.com


PROVELL: Gets Lease Decision Period Extension Until October 8
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Provell, Inc., and its debtor-affiliates obtained
an extension of their lease decision period.  The Court gives
the Debtors until October 8, 2002, to determine whether they
want to assume, assume and assign, or reject their unexpired
nonresidential real property leases.

Provell, Inc., develops, markets and manages an extensive
portfolio of membership and customer relationship management
programs that provide discounts and other benefits to members in
the areas of shopping, travel, hospitality, entertainment,
health/fitness, finance, cooking and home improvement.  The
company filed for chapter 11 protection on May 9, 2002.  Alan
Barry Hyman, Esq., Jeffrey W. Levitan, Esq., David A. Levin,
Esq., at Proskauer Rose LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for protection
from its creditors, they listed $40,574,000 in total assets and
in $82,964,000 total debts.


QSERVE COMMS: Wants More Time to File Schedules & Statements
------------------------------------------------------------
qSERVE Communications, Inc., tells the U.S. Bankruptcy Court for
the Western District of Missouri that it needs additional time
to file its Schedules and Statements required by 11 U.S.C. Sec.
521(1).

The Debtor relates that its remaining employees, its counsel and
the Chapter 11 Trustee have been working diligently on the
Schedules of Assets and Liabilities and Statements of Financial
Affairs and all supporting documents.  The Schedules are
substantially complete. However, certain information is still
outstanding and portions of the Schedules still require
additional time to complete.

The Debtor's counsel, John J. Cruciani, Esq., at Lentz & Clark,
PA, asks the Court for a short extension through August 20,
2002, to make final revisions and file Debtor's Schedules and
Statement.

qServe Communications, Inc., is an engineering and construction
firm serving the wireless and broadband industries offering
management, installation, erection, inspection, testing and
maintenance services to the communications industry. The Company
filed for chapter 11 protection on June 21, 2002. John Joseph
Cruciani, Esq., at Lentz & Clark, PA represents the Debtor in
its restructuring efforts. When the Company filed for protection
from its creditors, it listed an estimated debt of over $10
million.


REPUBLIC TECHNOLOGIES: Closes Asset Sale to Republic Engineered
---------------------------------------------------------------
Republic Engineered Products LLC, a company sponsored by KPS
Special Situations Fund, L.P. and Hunt Investment Group, L.P.,
announced today it has completed the acquisition of a
substantial portion of the assets of Republic Technologies
International LLC pursuant to a Section 363 sale of assets in a
Chapter 11 bankruptcy proceeding.

As a result of this transaction, Republic Engineered Products
LLC -- http://www.republicengineered.com-- based in Fairlawn,
Ohio, is the nation's leading producer of high-quality steel
bars.  The Company's products are used in demanding applications
in the automotive, agricultural, aerospace, off- highway,
industrial machinery and energy industries. With approximately
$1 billion of revenue and 2,500 employees, Republic Engineered
Products LLC operates plants in Canton, Massillon, and Lorain,
Ohio; Gary, Indiana; and Lackawanna, New York.

Republic Engineered Products LLC purchased a substantial portion
of the operating assets of Republic Technologies International
LLC, free and clear of all liabilities except for those
expressly assumed, for approximately $430 million.  In
connection with the transaction, Fleet Capital agented a $336
million senior credit facility.

Mr. Joseph Lapinsky, Chief Executive Officer, said "We are
extremely excited to complete the KPS/Hunt transaction.  Our new
company, Republic Engineered Products, has a leading market
share in the industry, superior technology and a tremendously
loyal customer base.  Free of over $1.3 billion of debt and
other liabilities that encumbered Republic Technologies, the
Company is well positioned for growth.  Our new collective
bargaining agreement with the United Steelworkers provides the
new company with the flexibility required to operate a
competitive, world class bar company.  Our new capital structure
provides the financial resources to advance our position as the
premier provider of special bar quality products in the North
American marketplace."

Michael Psaros, a managing principal of KPS, said "Republic
Engineered Products is well situated to expand its leading
position in the special bar quality industry, continue its
commitment to innovation, and provide its customers with high
levels of quality and service."

Very important to the success of the transaction were new
collective bargaining agreements with locals of the United
Steelworkers of America. These new collective bargaining
agreements, coupled with the extinguishment of approximately
$1.3 billion of debt and other liabilities, constitute an
essential component of the Company's turnaround plan.

KPS Special Situations Fund, L.P. -- http://www.kpsfund.com--
is a private equity fund focused on constructive investing in
turnarounds, restructurings, bankruptcies and other special
situations. KPS seeks to realize significant capital
appreciation by making controlling equity investments in
companies engaged in manufacturing and transportation industries
challenged by the need to effect immediate change.  This
transaction is the fourth bankruptcy-related acquisition
completed by KPS in the past two years.  KPS has invested in
eight portfolio companies, with combined revenues of
approximately $2.3 billion and employing 10,000 employees,
including thousands of employee owners.

Hunt Investment Group, L.P. -- http://www.huntivestment.com--
is a private investment company focused on middle-market direct
equity investments in a variety of industries including
manufacturing, distribution, and business services.  The group
proactively seeks growth capital and management buyout
investments requiring up to $50 million of invested equity.
Hunt Investment Group, L.P., typically seeks majority or
significant minority positions in U.S. based companies.  Hunt
Investment Group, L.P., is affiliated with Hunt Consolidated,
Inc., a privately held family enterprise directed by Ray L. Hunt
with global operations in oil and gas, residential and
commercial real estate, electric power, agriculture and private
equity investing.


SAGENT: Fails to Comply with Nasdaq Minimum Listing Requirements
----------------------------------------------------------------
Sagent (Nasdaq:SGNT), a leading provider of enterprise business
intelligence solutions, has received notification from The
Nasdaq Stock Market that it is out of compliance with the
minimum bid price requirement of $1.00 per share set forth in
Marketplace Rule 4450(a)(5). Sagent's securities are therefore
subject to delisting from The Nasdaq National Market. Sagent is
requesting a hearing with Nasdaq, and the stock will remain
listed on The Nasdaq National Market at least until the date of
the hearing, which has not yet been determined. There can be no
assurance the Nasdaq Listing Qualifications Panel will grant the
company's request for continued listing after the hearing.

In order to bring the company into compliance with the minimum
bid price, Sagent has begun the process of effecting a reverse
stock split, which is subject to stockholder approval and
expected to be completed in the fourth quarter of 2002.

Sagent provides a complete software platform for business
intelligence, enabling companies to reduce operational costs,
increase profitability and improve customer relationships.
Sagent employs a unique business intelligence life-cycle process
that facilitates the rapid development of custom analytic
solutions and helps bridge the gap between business users and
information technology. Through its technology, services and
business expertise, Sagent simplifies business intelligence for
more than 1,500 customers worldwide. Sagent customers include:
AT&T, Boeing Employees Credit Union, BP Amoco, Carrefour,
Citibank, GPU Energy, Guinness UDV, Heineken, Kawasaki, Kemper
National Insurance, La Poste, Novartis, NTT-DoCoMo, Sara Lee,
Siemens, and Singapore Telecom.

Sagent technology is also embedded in multiple partner solutions
that address the needs of specific vertical and functional
application areas; key ISV partners include Advent Software,
Hyperion Solutions and HAHT Commerce. Sagent technology has been
adopted by leading regional and global systems integrators, such
as Cap Gemini Ernst & Young, Satyam and Unisys, to address
customer needs within their business intelligence practices. In
addition, Sagent has built alliances with numerous technology
vendors to cooperatively market solutions; alliance partners
include Microsoft, Business Objects and Sun Microsystems. Sagent
is headquartered in Mountain View, California. For more
information about Sagent, please visit http://www.sagent.com


SAMSONITE CORP: Artemis Entities Disclose 29.9% Equity Stake
------------------------------------------------------------
On July 19, 2002, Samsonite Corporation, Artemis and Ares
entered into a letter agreement pursuant to which, among other
things, Samsonite agreed to enter into an up to 45-day exclusive
negotiating period with Artemis and Ares with respect to a
potential deleveraging or recapitalization transaction for
Samsonite. The restrictions agreed to by Samsonite are similar
to the exclusivity provisions proposed in the June 27 Letter
from Ares and Artemis to the Company. The Exclusivity Period,
which commenced on July 22, 2002, will terminate after 30 days
(absent an extension from Samsonite) if Ares and Artemis do not
provide joint written notification to the it by the thirtieth
day that Ares and Artemis have completed their due diligence and
all material terms relating to a Recapitalization Transaction
have been agreed upon by such date. In connection with entering
into the Exclusivity Agreement and to facilitate due diligence
by Artemis, on July 22, 2002, Samsonite and Artemis America also
entered into a customary confidentiality agreement. Among other
matters, that agreement provides that for a period of 18 months
from July 22, 2002, Artemis and Ares will not, without the
Company's prior approval, acquire additional shares of Samsonite
common stock or, under some circumstances participate in
solicitations of proxies to vote, or to seek to advise or
influence any person with respect to the voting of, Samsonite
securities with respect to certain types of competing
transactions unless Artemis and Ares' designees on Samsonite's
Board of Directors have determined that any such relevant
competing transaction was not in the best interest of the
Company's stockholders, and have so informed the Company's Board
of Directors.

Artemis and Ares retain the right to withdraw, amend or modify
the proposal. Artemis or its representatives may engage in
negotiations with Samsonite's Board of Directors, or in
discussions with other stockholders of the Company, concerning a
Recapitalization Transaction or other possible transactions.
There can be no assurance that a Recapitalization Transaction,
or any other transaction, will occur.

Subject to the foregoing, Artemis and Ares retain the right to
change their investment intent, to propose one or more
transactions to the Company's Board, to acquire, sell or dispose
of shares of common stock or other securities of the Company
from time to time in any manner permitted by law.

Artemis America Partnership, Artemis Finance SNC, and Artemis
S.A., consequently report the beneficial ownership of 5,945,189
sharesof the common stock of Samsonite Corporation, representing
29.9% of the outstanding common stock of Samsonite.  The
entities share voting and dispositive powers over the total
amount of stock held.

Samsonite, the world's #1 luggage maker, makes softside and
hardside suitcases, garment bags, and business cases under three
primary brands: Samsonite, designed for business travelers;
American Tourister, for leisure travelers; and Lark, for the
premium market. Samsonite also licenses its name for non-luggage
products and has introduced designer clothing to its product
mix. Its products are available in more than 100 countries and
through about 200 company-owned stores. More than half of its
sales come from outside the US. At January 31, 2002, Samsonite
Corp. had a total shareholders' equity deficit of about $124
million.


SHENANDOAH RESOURCES: Has Until August 27 to File CCAA Plan
-----------------------------------------------------------
Shenandoah Resources Ltd., (CDNX: "SNN") announces that it will
not be proceeding with its previously announced (July 17, 2002)
business combination with LongBow Energy Corp.

Shenandoah also announced that the Court of Queen's Bench of
Alberta today granted a further extension to August 27, 2002 of
the Interim Order previously granted under the Companies'
Creditors Arrangement Act providing for creditor protection to
Shenandoah and to permit it to continue to develop a financial
restructuring plan to present to its creditors.  Canadian
Western Bank, Shenandoah's secured creditor, supported this
application.  During this extension period, Shenandoah will
reopen its data room for review by interested parties effective
Monday, August 19, 2002.  Parties interested in viewing the data
room should contact Shenandoah directly.

Shenandoah's shares continue to be halted by the TSX Venture
Exchange pending review of its tier maintenance requirements.


STARMEDIA NETWORK: Needs New Financing to Continue Operations
-------------------------------------------------------------
Since March 31, 2002, StarMedia Network has experienced the
following developments:

          -- Effective April 19, 2002, Enrique Narciso resigned
as CEO, President and director of the Company. In tendering his
resignation Mr. Narciso informed the Company that he needed to
focus on a personal matter that resulted in his pleading guilty
to a tax violation involving his 1998 individual federal tax
return. Mr. Narciso joined the Company in October 1999.
Following Mr. Narciso's resignation, Jose Manuel Tost was
appointed President of the Company and Jorge Rincon was
appointed Chief Operating Officer of the Company.

          -- Effective April 29, 2002, Ana Maria Lozano-Stickley
was appointed as Chief Financial Officer of the Company. Prior
to that time Ms. Lozano-Stickley had been Acting Vice President
of Accounting and Administration of the Company since January
2002.

          -- The Company has continued to undertake a realignment
for the purposes of focusing its resources on its mobile
solutions business. As part of this realignment, the Company
reduced its number of full-time employees from 520 as of close
of business on December 31, 2001 to 391 as of June 21, 2002. In
addition, following the Company's change of its headquarters in
late 2001 from New York to Miami, Florida, which was previously
the headquarters of the Company's mobile solutions business, the
Company has substantially reduced its presence in New York. As
of June 21, 2002, the Company had 30 employees based in its New
York City offices, as compared to 118 employees based in such
office as of close of business on December 31, 2001.

          -- In late 2001 and early 2002, eleven lawsuits were
filed against the Company in the Southern District of New York
in connection with the Company's announcement relating to the
Restatement. A lead plaintiff for the class and lead plaintiff's
counsel were subsequently selected and a motion filed to
consolidate the various claims. The Consolidated Amended
Complaint was filed on May 31, 2002 in the Southern District of
New York under the caption In re StarMedia Network, Inc.
Securities Litigation 01 Civ. 10556 (S.D.N.Y.). In June 2002,
the lead plaintiffs and all defendants executed a settlement
agreement that resolves all claims in the consolidated action.
The settlement amount will be paid by the Company's directors
and officers liability insurance carrier. This settlement
agreement is subject to review and ratification by the Honorable
Denny Chin of the United States District Court for the Southern
District of New York.

          -- On July 1, 2002, Fernando Espuelas notified the
Company that effective as of that date he resigned as a director
of the Company.

          --  On July 3, 2002 the Company sold most of its assets
associated with starmedia.com, its Spanish- and Portuguese-
language portal, and LatinRed, its Spanish language online
community, to eresMas Interactive S.A. Following the sale of
starmedia.com and LatinRed to EresMas, the Company is
principally engaged in the business of providing integrated
Internet solutions to wireless telephone operators targeting
Spanish- and Portuguese-speaking audiences, principally in Latin
America, and the Company retains only the following Internet
media services:

                   * batepapo.com.br, a Brazilian chat service,
which the Company is considering either selling or closing;

                   * the local city guides such as
nacidade.com,.br; guiasp.com.br; guiarj.com.br; paisas.com;
openchile.cl; panoramas.cl and AdNet.com.mx, which the Company
anticipates that it will continue to operate in support of its
mobile solutions business.

As part of the terms of the sale, the Company agreed to cease
using the "StarMedia" brand commercially and, subject to
shareholder approval, to amend its certificate of incorporation
to change its name. Following the sale, the Company operates
commercially under the name "CycleLogic."

The Company has incurred recurring operating losses and may have
insufficient capital to fund all of its obligations. These
conditions raise substantial doubt about the Company's ability
to continue as a going concern. While management believes that
additional financing or proceeds from the sale of the Company's
Internet media services business will be available, there can be
no assurance that the Company will obtain such additional
capital or that such additional financing will be sufficient for
the Company's continued existence. Furthermore, there can be no
assurances that the Company will be able to generate sufficient
revenues from the operation of the mobile solutions business to
meet the Company's obligations.

Total revenues decreased to $2.5 million for the three months
ended March 31, 2002 from $8.9 million, for the three months
ended March 31, 2001. This decrease is mainly attributed to a
decline in the volume of revenue-producing advertising
impressions and sponsorships. Barter revenue for the three
months ended March 31, 2002 and 2001 were 13% and 35%,
respectively.

For the three months ended March 31, 2002, one advertiser
accounted for more than 10% of total revenues. For the three
months ended March 31, 2001, two advertisers, individually,
accounted for more than 10% of  total revenues.

For the three months ended March 31, 2002, the top five
customers accounted for 45% of total revenues. For the three
months ended March 31, 2001, the top five customers accounted
for 49% of total revenues.

While the Company has reduced operating expenses significantly,
through a reduction of its work force and other operating costs,
its current cash and cash equivalents may not be sufficient to
meet anticipated cash needs for working capital and capital
expenditures for the next 12 months. If working capital is
insufficient to satisfy liquidity requirements, the Company may
seek to sell additional equity or debt securities or establish
an additional credit facility. The sale of additional equity or
convertible debt securities could result in additional dilution
to stockholders. The incurrence of additional indebtedness would
result in increased fixed obligations and could result in
operating covenants that would restrict operations. There is no
assurance that financing will be available in amounts or on
terms acceptable to StarMedia, if at all. While management
believes that additional financing or proceeds from the sale of
the Company's Internet media services business will be
available, there can be no assurance that the Company will
obtain such additional capital or that such additional financing
will be sufficient for the Company's continued existence.
Furthermore, there can be no assurances that the Company will be
able to generate sufficient revenues from the operation of the
mobile solutions business to meet the Company's obligations.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern.


STATIONS HOLDING: Has Until October 31 to File Chapter 11 Plan
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Stations Holding Company, Inc., obtained an extension
of its exclusive periods.  The Court gives the Debtor, until
October 31, 2002, the exclusive right to file a plan of
reorganization and until December 31, 2002 to solicit
acceptances of that Plan from creditors.

Stations Holding Company, Inc., is a holding company with
minimal operations other that from its non-debtor, wholly-owned
subsidiary, Benedek Broadcasting Corporation. Benedek
Broadcasting owns and operates 23 television stations located
throughout the United States. The Company filed for chapter 11
protection on March 22, 2002. Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young & Jones and James H.M. Sprayregen,
Esq. at Kirkland & Ellis represent the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed estimated debts and assets of more
than $100 million.


T/R SYSTEMS INC: Fails to Maintain Nasdaq Listing Standards
-----------------------------------------------------------
T/R Systems, Inc. (NASDAQ: TRSI), a leader in developing
innovative solutions for the management and production of
digital documents, announced that on August 14, 2002 it received
notification from the Listing Qualifications Department of The
Nasdaq Stock Market, Inc., indicating that the Company's common
stock has not maintained the required minimum bid price for
continued quotation on the Nasdaq National Market and is
therefore subject to delisting.

NASD Rule 4450(a)(5) requires that, for continued quotation on
the Nasdaq National Market, a company must maintain a minimum
bid price of $1 for at least one day during any period of thirty
consecutive business days. Nasdaq rules provide that a listed
company is given a period of ninety calendar days to achieve
compliance with the minimum bid requirement in order to maintain
its listing on the Nasdaq National Market. During the ninety day
period, a company would be considered to be in compliance with
Nasdaq's minimum bid price requirements if its minimum bid is $1
or greater for any ten consecutive business days.

"We are reviewing all options available to us to return to
compliance with Nasdaq's continued listing requirements,
including requesting a hearing before the Listing Qualifications
Department," said Mike Kohlsdorf, President and Chief Executive
Officer of T/R Systems. "We wish to maintain a listing on Nasdaq
and will take whatever actions that are appropriate to maintain
our listing."

There can be no assurance that T/R Systems will be able to take
actions sufficient to bring it back into compliance with the
Nasdaq National Market continued listing criteria within the
allotted period of time.

T/R Systems -- http://www.trsystems.com-- is a leader in
developing innovative software solutions for the management and
production of digital documents that optimize workflow from the
point of document creation until the document reaches its final
destination. T/R Systems' software products overcome the
limitations of hardware through advanced functionality and
superior design so that customers benefit from easy-to-use,
easy-to-grow and easy-to-manage applications.

T/R Systems solutions are used by a broad spectrum of customers,
including corporations, colleges and universities, facilities
managers and print-for-pay service providers. Despite the
seemingly different requirements of each of these groups, the
one constant is their desire to provide effective and efficient
document production services to their customers.

T/R Systems has more than 30 patents issued, allowed or pending
that protect its intellectual property.

For additional information, contact Lyle Newkirk of T/R Systems,
Inc. at 1300 Oakbrook Dr., Norcross, Georgia 30093, USA; Phone:
+1 770-448-9008; Fax: +1 770-448-3202; e-mail:
lnewkirk@trsystems.com or visit T/R Systems' home page:
http://www.trsystems.com


TRUDY CORPORATION: Auditors Doubt Ability to Continue Operations
----------------------------------------------------------------
Trudy Corporation, which does business under the name
Soundprints, publishes children's storybooks, audiocassettes and
CD's that are sold in conjunction with contract-manufactured
educational toys to the retail, education, and mail order
markets.

The Company was organized as a Connecticut corporation under the
name Norwest Manufacturing Corporation on September 14, 1979,
changed its name to Trudy Toys Company, Inc. on December 5,
1979, changed its name to Trudy Corporation on March 27, 1984
and was re-incorporated as a Delaware corporation on February
25, 1987.

After failed merger discussions with Futech Interactive
Products, the Company sought new working capital to rebuild. On
November 1, 2000, the Company announced the approval of a
recapitalization plan that was structured to eliminate the
impact of the past merger attempts and to allow the Company to
move forward. This plan led to the Burnham Family lending the
Company an additional $900,000. The proceeds of these loans were
taken in by the Company during the period from November 15, 2000
to March 19, 2001.

On March 19, 2001, the Company announced that its Board of
Directors had approved the conversion of $2.1 million of debt
owed by the Company to William W. Burnham, President and Chief
Executive Officer of the Company, and to members of his family
into 70.8 million newly issued shares of the Company's
common stock. An independent committee of the Board of Directors
valued the Company at $0.03 per share for purposes of the
conversion of the debt.

After this conversion and the issuance of the Company's common
stock, Mr. Burnham, Alice Burnham, his wife and also a director
of the Company, and their children owned 55.1% of the
outstanding common stock in the Company.

On November 13, 2001 Trudy Corporation announced the signature
of an agreement with The Chart Studio (Pty.) Ltd., a privately
held South African company, to form a joint venture. The new
Company, Studio Mouse, LLC, is registered in the state of
Connecticut and was formed with the goal of maximizing the
combined intellectual assets of each company, including Trudy's
license with the Smithsonian Institution, by creating new
product formats utilizing a fresh approach to creating book and
"book plus" merchandise.

The execution of the final operating agreement was subject to
the completion of the following conditions:

      1.  Approval by the appropriate South African governmental
authorities, including, but not limited to, the South African
Reserve Bank and the South African Department of Trade and
Industry.

      2.  Approval by the Smithsonian Institution of a subsidiary
rights license by Soundprints, a division of Trudy Corporation,
to Studio Mouse under the existing License Agreement between
Soundprints and the Smithsonian Institution.

      3.  Execution of a subsidiary rights license agreement
between Studio Mouse and each of Trudy Corporation and Chart
Studio (Pty) Ltd., for the use of proprietary content owned by
each respective licensor.

      4.  Prompt determination by Chart Studio that the capital
structure of the Company envisioned is satisfactory to Chart
Studio from a tax and financial viewpoint under the laws,
including, without limitation, the tax laws, of the Republic of
South Africa and of the United States.

As of July 10, 2002, ratification of the joint venture operating
agreement conditions were as follows:

      1.  On April 8th, 2002 Trudy issued a press release stating
that the Chart Studio (Pty) Ltd. had advised Soundprints that
the Reserve Bank of South Africa disapproved of its application
to form a joint venture with Trudy in the name of Studio Mouse,
LLC. The Chart Studio (Pty) Ltd., stated that it intends to
resubmit its application with the guidance of RMB Corvest, the
investment banking arm of Rand Merchant Bank, Johannesburg,
which is a minority stockholder in Chart Studio.

      2.  The subsidiary rights licensing agreement between Trudy
Corporation and Studio Mouse, concerning content created under
the existing license by the Smithsonian Institution to Trudy
d/b/a Soundprints was approved in a License Amendment between
the Smithsonian Institution and Soundprints dated April 30th,
2002.

      3.  The subsidiary rights license agreement between Studio
Mouse and Trudy Corporation has been executed and signed by both
parties. The subsidiary rights license agreement between Studio
Mouse and Chart Studio (Pty) Ltd. is currently pending.

      4.  Chart Studio's approval of Studio Mouse's capital
structure as explained in Point four above is pending.

Soundprints holds a 45% interest in the joint venture and thus
Soundprints consolidates 45% of Studio Mouse's net income on its
income statement.

Since the execution of the operating agreement, Studio Mouse has
developed a customer base including both North American and
international accounts in the trade, mass market, door-to-door,
and educational distributor sales channels, to which Studio
Mouse ships products non-returnable, directly from the factory
of manufacture. This model alleviates the majority of the need
for the financing and storage of inventory.

Net sales for the year ended March 31, 2002 were $3,392,808
compared to $1,447,931 for the prior year ended March 31, 2001,
an increase of $1,944,877, or 134%.

The significant increase in sales was supported by a $900,000
capital and debt infusion in March of 2001. After 2 years of
protracted negotiations with a company which eventually filed
for bankruptcy, Trudy Corporation entered FY 2002 without a
working capital credit line from a viable lending source.
Drawing upon the capital resources of its closely held
shareholders, the Company embarked on a strategy to rebuild
confidence among its vendors, sales force and customers to
demonstrate that it was "back in business." In this regard, the
following strategic actions were taken:

      1.  A significant amount of creditor debt was adjudicated
either by 50% compromise or issuing Trudy common stock for the
portion compromised. By July 2001, virtually all of the
creditors whose debt had been compromised had placed the Company
back on credit terms at least as favorable as those offered
prior to the merger discussions.

      2.  In order to provide "critical mass" to the company's
publishing schedule by beefing up its new product offerings,
sell products with a wider age profile and expand distribution
to 60% of the book trade (the mass market) were the company had
little or no distribution, Trudy licensed a nursery rhyme
property from a packager in the U.K. entitled, Mother Goose. The
Mother Goose acquisition enabled the Company to take advantage
of the interest of nursery rhymes through highly creative
illustrations, plush finger puppets and musical audio. A total
of sixty illustrated rhymes and audio together with caricature
finger puppets were purchased, of which 30 were formatted into
six illustrated 36 page "puffy padded" board books with CD and
finger puppets.

      3.  A joint venture, Studio Mouse LLC, was formed with
Chart Studio (Pty) Ltd., a South African publisher, at an
initial $50,000 investment in debt and equity. Studio Mouse's
publishing charter was to service the United States mass market
and worldwide English and foreign language markets at low cost
with formats containing repurposed high quality content from
both partners, shipped FOB factory origin on a non-returnable
basis.

      4.  A mass market independent sales representative was
hired to call on mass market accounts in the United States.

      5.  A cost reduction initiative was taken to source book
printers and plush suppliers at lower manufacturing costs
without compromise to quality. Over the year such efforts
resulted in savings of 30% to 65% on reprints of back list book
titles and plush purchases.

The above strategic actions resulted in sales to mass merchants
and warehouse clubs of $1,382,561. The launch of Mother Goose
resulted in 125,000 copies sold into Wal-Mart, Meijers, Books-A-
Million, and the three warehouse clubs for delivery in January
2002.

Direct mail related revenue was $624,917 compared to $136,346
last year, an increase of $488,571. In the prior year the
company did not conduct a direct mail program. It should be
noted that the 2001 direct mail campaign did not reach its
objectives. The catalogs were mailed over the Labor Day and
October 6th weekends and reached homes the week of September
10th when terrorists struck New York and Washington D.C. and
when the Anthrax mail scare surfaced.

Sales in all other categories (primarily the book, toy and
museum trades) reached $1,385,330 which represents a 6% increase
in sales to these accounts versus the prior year. Fiscal year
2002 was a rebuilding year to toy and gift, bookstore
distributor and museum categories. The impact of the Company's
recapitalization was not evident until the first and second
calendar quarter of 2002 when sales were up 236% and 107%
respectively.

For Studio Mouse, the year ending March 31, 2002 was the first
year of sales.  Its major customers during the year included
McGraw-Hill Children's Publishing, Advanced Marketing Services,
and Empire Toys & Stationary. Studio Mouse revenues were
$577,000. Trudy Corporation received 45% of Studio Mouse's net
income on its consolidated income statement.

The net loss for the year ended March 31, 2002 was $40,170. In
FY 2001, net income was $356,353 after adjusting for an
extraordinary gain.  The net loss in FY 2001 before adjusting
for the extraordinary item was $1,043,871.

The Company continues to experience a severe working capital
deficiency and negative cash flow from operations. In August
2001, the Company received a 6 month term loan in the amount of
$475,000 to help finance inventory to support Christmas sales.
The loan was repaid in full in January. On January 24th the
Company received a bridge loan in the amount of $300,000 to
finance the purchase of inventory to meet its Spring backlog of
orders. The Company's open sales order backlog as of July 10,
2002 is $285,727

The Company's ultimate ability to continue as a going concern is
dependent upon the market acceptance of its products, an
increase in revenues coupled with continuing licensing support
from its primary licensor, the Smithsonian Institution, and
positive cash flow. The Company will also require additional
financial sources to provide near term operating cash to move
toward profitability. The Company believes that improvement in
sales, consummation of the formation of its joint venture with
Chart Studio, and its ability to borrow money, albeit not at
past levels from its shareholders, will be sufficient to allow
the Company to continue in operation.


UCI MEDICAL: So. Carolina Court Confirms Plans of Reorganization
----------------------------------------------------------------
As of August 8, 2002, the U.S. Bankruptcy Court for the District
of South Carolina in Columbia, South Carolina issued orders
confirming all of the Plans of Reorganization filed as of May 6,
2002 by UCI Medical Affiliates, Inc., (OTC Bulletin Board: UCIA)
and its wholly-owned subsidiaries, UCI Medical Affiliates of
South Carolina, Inc. and UCI Medical Affiliates of Georgia,
Inc., and its affiliates, Doctor's Care, P.A., Doctor's Care of
Tennessee, P.C., and Doctor's Care of Georgia, P.C.

The company believes that the reorganization under Chapter 11
should enable the company to immediately address its liquidity
and debt restructuring challenges.  Jerry F. Wells, Jr., CPA,
the company's Executive Vice President of Finance and Chief
Financial Officer, stated, "The company is very pleased with the
approval by the Court of the plans of reorganization, which we
believe will enable us to increase profitability and shareholder
value."

Headquartered in Columbia, South Carolina, UCI Medical
Affiliates, Inc., provides non-medical management and
administrative services for freestanding medical centers located
in South Carolina and Tennessee.  These medical centers operate
as Doctor's Care urgent care centers and Progressive Physical
Therapy Services.


US AIRWAYS: Turns to Seabury for Financial Advice & Consulting
--------------------------------------------------------------
US Airways Group Inc., and its debtor-affiliates seek the
Court's authority to employ Seabury Advisors LLC, Seabury
Securities LLC, Seabury Solutions LLC, and Seabury Airport
Advisory Services LLC, as their financial advisors, investment
bankers and consultants.

According to USAir's Chief Executive Officer, David N. Siegel,
Seabury's resources, capabilities and experience are crucial to
the Debtors' successful restructuring.  Seabury and their
current professionals have extensive experience working with
financially troubled companies in complex financial
restructurings, out-of-court and in Chapter 11 cases and have
been involved as advisors with respect to financial
restructurings, new capital raising, aircraft advisory services
and other advisory assignments to numerous airlines including
various Chapter 11 cases.  Seabury and their current
professionals also have extensive experience in dealing with
airport-related and other special purpose tax-exempt bond
financings, airport facility planning and other similar work
and have advised a number of airlines and airport authorities in
matters including the Port Authority of New York and New Jersey
and Massport.

Mr. Siegel relates that Seabury's worked with the Debtors since
March 2002, providing a variety of financial advisory,
investment banking and consulting services.  Consequently,
Seabury is familiar with the Debtors' books, records, and
financial affairs. Experienced financial advisors, investment
bankers, and consultants like the professionals at Seabury,
fulfill a critical service that complements the services
provided by the Debtors' other restructuring professionals.
Broadly speaking, Mr. Siegel explains, Seabury will concentrate
their efforts on formulating strategic alternatives and
assisting the Debtors in their efforts with regard to a
restructuring and financing or sale if requested to do so by the
Debtors.

Seabury will perform these services:

   (i) Restructuring Services.  Seabury will provide the Debtors
       with investment banking services with respect to
       successfully arranging either an "out-of-court"
       restructuring of certain of its vendor and aircraft
       related debt and lease obligations or a restructuring
       through a judicial proceeding under a Chapter 11 of the
       Bankruptcy Code.  In connection with a Restructuring,
       Seabury will:

       (a) provide financial advice to the Debtors in developing
           and soliciting agreement to a Restructuring plan,
           which may be a plan under Chapter 11 of the Bankruptcy
           Code;

       (b) negotiate modifications to the Debtors' material debt
           and lease obligations relating to aircraft financings;

       (c) provide financial advice and assistance to the Debtors
           in structuring any new securities to be issued under
           the Plan;

       (d) assist the Debtors in negotiations with entities or
           groups affected by the Plan; and

       (e) in a Chapter 11 proceeding, participate in hearings
           before the bankruptcy court with respect to the
           matters upon which Seabury has provided advice.

  (ii) Financing Services.  Seabury will provide the Debtors
       with investment banking services with respect to a
       Financing:

       (a) in connection with an out-of-court restructuring,
           assisting the Debtors in applying for a U.S.
           government-guaranteed credit facility under the Air
           Transportation Stabilization Act;

       (b) in connection with a Chapter 11 proceeding, assisting
           the Debtors in arranging and negotiating a debtor-in-
           possession loan facility; and

       (c) in connection with successfully reorganizing under the
           Bankruptcy Code, assisting the Debtors in arranging
           "Exit Financing" in connection with a Plan of
           Reorganization, which may include an ATSB Loan
           Facility, other forms of debt financing or new equity
           capital from an equity plan sponsor.

(iii) Fleet Restructuring/Divestment Activities.  Seabury will
       provide the Debtors with certain financial advisory and
       consulting services related to:

       (a) fleet restructuring;

       (b) restructuring existing agreements with airframe and
           power plant manufacturers;

       (c) negotiating with BFE vendors; and

       (d) sale, divestment or sale/leaseback of the Debtors'
           flight equipment.

  (iv) Strategic Advice.  If requested by the Debtors, Seabury
       will provide the Debtors' executive management and their
       board with strategic advice on its network, business
       strategies and related matters;

   (v) Sale Transaction Advisory.  If requested by the Debtors,
       Seabury will provide investment banking advisory services
       with respect to a sale of the Debtors, its assets,
       operations, business interests, trademarks, intangible
       assets or any other assets;

  (vi) New Aircraft Acquisition & Financing.  Seabury will
       provide the Debtors with certain financial advisory and
       consulting services related to:

       (a) assisting in negotiating principal terms and
           conditions of new aircraft financings; and

       (b) arranging and closing financing for additional flight
           equipment delivered to the Debtors.

(vii) Airport Advisory Services.  Seabury will provide the
       Debtors with advisory services in connection with
       assisting the Debtors in:

       (a) securing concessions from airport authorities;

       (b) negotiating for the return of surplus gates, ticket
           counter space and other terminal facilities;

       (c) evaluating prospective opportunities to re-finance
           certain airport-related bond issues; and

       (d) other similar matters as identified by the Debtors.

       The services will be covered under that certain agreement
       between the Debtors and Seabury Airport Advisory Services
       LLC.

(viii) Credit Card Agreements.  Seabury will assist the Debtors
       in arranging a new Visa/MasterCard processor including:

       (a) assessing the Debtors' needs for a processor;

       (b) assisting the Debtors in preparing a request for
           proposal;

       (c) assisting the Debtors in identifying potential credit
           card processors; and

       (d) assisting the Debtors in soliciting, securing
           commitments, negotiating, and closing an agreement
           with a credit card processor.

       In connection with work associated with the EDS Contract
       only Seabury may contract to provide certain of these
       services with third parties for which the Debtors will
       agree to reimburse Seabury's direct costs.  Third-party
       retentions must have the prior approval of the Debtors;

  (ix) Business & Operations Restructuring/Reengineering.  If
       requested by the Debtors, Seabury will provide the
       Debtors' executive management and its board with advisory
       services with respect to restructuring and reengineering
       the Debtors' businesses and operations;

   (x) IT Consulting; Flight Profitability System Development.
       Seabury Solutions will build a new flight profitability
       system for the Debtors as covered under that certain
       agreement between Seabury Solutions LLC and the Debtors.

       In addition, Seabury Solutions LLC agrees to assist the
       Debtors in evaluating the adequacy, cost, and
       competitiveness of the Debtors' contractual rights and
       obligations with EDS Corporation.  If requested by the
       Debtors, Seabury Advisors LLC and Seabury Solutions LLC
       will assist the Debtors in negotiating and structuring a
       revised agreement with EDS, and, in the alternative,
       assisting the Debtors in:

       (a) preparing a request for proposal and soliciting a
           replacement for EDS;

       (b) evaluating the alternative bids; and

       (c) if appropriate, assisting the Debtors in negotiating a
           service agreement with an alternative provider.

       In connection with work associated with the EDS Contract
       only Seabury may contract to provide certain of these
       services with third parties for which the Debtors will
       agree to reimburse Seabury's direct costs.  Third-party
       retentions must have the prior approval of the Debtors.

Seabury will be paid, through wire transfer, a $250,000 monthly
retainer fee.  Of this amount, 50% will be creditable to success
fees.  The Debtors will pay Seabury debt or lease obligation
restructuring success fees.  However, this amount will be capped
at $10,000,000.  Seabury will be paid a success fee, based on
the aggregate of the Net Present Value cash liquidity
improvement over the seven years, following the restructuring of
debt, lease or other cash obligations of the Debtors relating to
aircraft, spare engines or related flight equipment as:

          for amounts up to the first $500,000,000    0.75%
          for the next $500,000,000                   0.6250%
          for the next $500,000,000                   0.50%
          for all amounts beyond $1,000,000,000       0.40%

These fees will be capped at $6,500,000.

If US Airways Group receives financial assistance from the Air
Transportation Stabilization Board, or the Debtors secure
alternative credit facilities as a result of the concessions
negotiated by Seabury, Seabury will be paid a success fee equal
to the greater of $1,750,000 million or 20 basis points of the
principal amount of the credit facility.

For assisting the Debtors in arranging a DIP Loan Facility,
Seabury will be paid, upon execution of the financing
commitments, a success fee 0.50% of the commitments.

For assisting the Debtors in arranging equity commitments in
connection with exit financing, Seabury will be paid a success
fee of 1.50% of the Equity Financing.

For assisting the Debtors in arranging an M&A Transaction,
Seabury will receive success fees 0.50% of the total Transaction
Value up to the Net Book Value of the Debtors' assets that are
subject to the Transaction and 0.625% of the Transaction Value
in excess of the Net Book Value of the Debtors' assets.  The
fees are capped at $7,500,000.

Seabury will receive $50,000 monthly for advising on aircraft
financing transactions.  The Debtors will pay Seabury advisory
fees for debt or lease financing of new aircraft.  The amounts
are based on the size and cost of each transaction.  Seabury
will be paid a fixed fee of $1,750,000, with reasonable out-of-
pocket expenses, for the development of a Flight Profitability
System.

The Debtors will also reimburse Seabury for all reasonable
actual out-of-pocket expenses in connection with the services.

John E. Luth, the President and Chief Executive Officer of
Seabury Advisors LLC, Seabury Securities LLC, and Seabury
Solutions LLC and a Managing Partner of Seabury Airport Advisory
Services LLC, relates that they intend to apply to the Court for
compensation, including retainer and success fees, and
reimbursement of expenses.

The Debtors contend that the fee arrangement, which is similar
to fee arrangements which have been authorized in other Chapter
11 cases in which Seabury has rendered services, is reasonable
in light of industry practice, market rates both in and out of
Chapter 11 proceedings, Seabury's experience in reorganizations,
and the scope of work to be performed.  The Debtors believe that
given the nature of the services to be provided, the fee
structure is both fair and reasonable.  Furthermore, both
parties agree that the Debtors will indemnify Seabury and
certain related persons under certain circumstances.

Mr. Luth assures the Court that the members, counsel and
associates of the firm does not have any connection with the
Debtors, their affiliates, their creditors or any other parties
in interest in these cases.  Accordingly, Mr. Luth asserts
that Seabury is a "disinterested person" as the term is
defined in the Bankruptcy Code. (US Airways Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

US Airways Inc.'s 10.375% bonds due 2013 (U13USR2), DebtTraders
reports, are trading at 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=U13USR2for
real-time bond pricing.


US PLASTIC LUMBER: Has Until Feb. 13 to Meet Nasdaq Requirements
----------------------------------------------------------------
U.S. Plastic Lumber Corp.,(Nasdaq:USPL) has received notice from
the Nasdaq SmallCap Market advising that the Company's stock
will continue to be listed on the Nasdaq SmallCap Market until
Feb. 13, 2003.

USPL previously announced that it would be permitted to trade on
the Nasdaq SmallCap Market until Aug. 13, 2002, at which point
it must be in compliance with the minimum bid price requirement
of $1.00. The Company failed to regain compliance with the bid
price requirement by Aug. 13, 2002; however, Nasdaq determined
that the Company otherwise met the initial listing requirements.
Therefore, Nasdaq has provided the Company with an additional
180 calendar days, or until Feb. 10, 2003, to regain compliance.
If at anytime before Feb. 10, 2003, the bid price of USPL's
common stock closes at $1.00 per share or more for a minimum of
10 consecutive trading days, Nasdaq will notify the Company that
it is in compliance and therefore can maintain its listing. If
compliance with all of the Nasdaq SmallCap requirements cannot
be attained by Feb. 13, 2003, the Company will be delisted from
the SmallCap Market.


VALEO ELECTRICAL: Disclosure Statement Hearing Set for August 21
----------------------------------------------------------------
On July 30, 2002, Valeo Electrical Systems Sales & Marketing LLC
and Valeo Electrical Systems, Inc., filed their Joint Plan of
Reorganization with an accompanying Disclosure Statement with
the U.S. Government Bankruptcy Court for the Southern District
of New York.  A hearing to consider the motion for the approval
of the Disclosure Statement shall be held before the Honorable
Stuart M. Bernstein at 10:00 a.m. on August 21, 2002.

Any objection to the Disclosure Statement must be have been
filed with the Office of the United States Trustee before noon
of today, August 19, 2002, with copies served to:

       (i) Counsel for the Debtors
           Greenberg Taurig, LLP
           200 Park Avenue
           New York, New York 10166
           Attn: Richard S. Miller, Esq.
                 Thomas J. Weber, Esq.

      (ii) Counsel for the Official Committee of Unsecured
            Creditors
           Otterbourg, Steindler, Houston & Rosen, P.C.
           230 Park Avenue
           New York, New York 10169
           Attn: Scott L. Hazan, Esq.
                 Brett H. Miller, Esq.

If the Disclosure Statement is approved, the hearing to consider
the confirmation of the Plan will commence on September 25, 2002
at 10:00 a.m. or as soon thereafter as counsel can be heard.

Valeo Electrical Systems Sales & Marketing, LLC filed for
chapter 11 protection on December 14, 2001 in the U.S.
Bankruptcy Court for the Southern District of New York. Richard
Steven Miller, Esq., and Thomas J. Weber, Esq., at Greenberg
Traurig, LLP represent the Debtors in their restructuring
effort. When the Company filed for protection from its
creditors, it listed and estimated assets and debts of more than
$100 million.


WARNACO GROUP: SEC May Charge Debtor with Exchange Act Violation
----------------------------------------------------------------
As previously disclosed, Antonio C. Alvarez, II, President and
Chief Executive Officer of The Warnaco Group, Inc., relates that
the staff of the Securities and Exchange Commission has been
conducting an investigation to determine whether there have been
any violations of the Exchange Act in connection with the
preparation and publication of various financial statements and
other public statements.  The Company has cooperated in that
investigation. On July 18, 2002, the SEC staff informed the
Company that it intends to recommend that the SEC authorize an
enforcement action against the Company and certain persons who
have been employed by or affiliated with the Company since prior
to January 3, 1999 alleging violations of the federal securities
laws.  The SEC staff has invited the Company to make a so-called
Wells Submission describing the reasons why no action should be
brought.  Accordingly, the Company intends to make a Wells
Submission.  The Company does not expect the resolution of this
matter to have a material effect on the Company's financial
condition, results of operation or business. (Warnaco Bankruptcy
News, Issue No. 30; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


WAYLAND INVESTMENT: Fitch Lowers $60MM Secured Sub Notes to BB
--------------------------------------------------------------
Fitch Ratings downgrades the senior secured revolving credit
facility and the secured subordinated notes issued by Wayland
Investment Fund, LLC, a market value collateralized debt
obligation. The following rating actions are effective
immediately:

       --$390,000,000 senior secured revolving credit facility to
         'BBB' from 'A';

       --$60,000,000 secured subordinated notes to 'BB' from
         'BBB'.

This rating action results from the relative illiquid nature of
the majority of the portfolio assets. Currently, the fund
maintains roughly $148 million of the portfolio investments in
relatively liquid assets. This represents approximately 32% of
the total capitalization of the fund and 44% of the aggregate
market value of the portfolio assets as of the Aug. 9, 2002
valuation report. The remainder of the portfolio is relatively
illiquid, with special situation investments representing 43% of
the fund's total capitalization and 58% of the market value of
the portfolio assets. The fund's special situation investments
currently exceed the structure's portfolio limitation of 40% of
total capitalization.

Additionally, the fund's obligor exposures exceed the portfolio
limitations of the transaction. The single largest obligor,
which is limited to 10% of total capitalization, accounts for
12% of the fund's total capitalization and 16% of the aggregate
market value of the portfolio. The largest three obligor
exposures, which are limited to 25% of the fund's total
capitalization, account for 28% of total capitalization and
contribute 38% to the aggregate market value of the portfolio
assets.

The larger concentrations in illiquid assets and single obligors
are a direct result of the de-levered nature of the structure.
Given the challenging economic environment and the volatile
market prices of the portfolio assets, the manager has reduced
its exposure to unstable names which causes the balance of the
portfolio assets to represent a larger proportion of the total
value. As a result, the fund has exceeded its limitation of
special situation investments and single issuer exposures. The
excess amounts above the limitations are excluded from the
portfolio borrowing base. At the August 9, 2002 valuation date,
$14 million of assets were excluded from the borrowing base.

At the August 9, 2002 valuation date, the exclusion of these
assets did not have a significant impact on the senior over
collateralization test, which passed by a margin of
approximately $14 million. The subordinate over
collateralization test was affected, failing by roughly $10
million.

Fitch originally rated the liabilities of Wayland Investment
Fund, LLC on December 23, 1997. Fitch will continue to monitor
and review this transaction for future rating adjustments.


WEIRTON STEEL: S&P Raises Rating to CCC After Debt Restructuring
----------------------------------------------------------------
Standard & Poor's Ratings Services has raised its corporate
credit rating on integrated steel producer Weirton Steel Corp.
to triple-'C' from 'D' following the company's debt
restructuring.

Standard & Poor's also assigned its triple-'C'-minus rating to
the Weirton, West Virginia-based company's new senior secured
facilities. The current outlook is developing.

The restructuring involved Weirton's exchange of its existing
senior notes for a combination of senior notes and preferred
stock. The company also replaced its senior secured borrowing
base facility with a larger facility, which is also secured and
subject to a borrowing base.

"The bank loan has a first security interest in accounts
receivable, inventory, the company's number-nine tandem rolling
mill, hot-strip mill, and tin mill assets", said Standard &
Poor's credit analyst Eugene Williams. "The senior secured notes
and bonds have a second-security interest in the tin mill assets
and the hot-strip mill that are deemed by Standard & Poor's to
offer insufficient value in the event of liquidation".

As with other steel producers, Weirton's performance in the past
three years was negatively affected by high levels of steel
imports and intense competition from minimills. Indeed, since
1999 Weirton has recorded approximately $600 million in
operating income losses. These factors, combined with a high
debt load, resulted in the default. Under the resulting
restructuring, Weirton has reduced annual operating costs by
approximately $51 million beginning in third quarter of 2002.
The company has also negotiated a new labor agreement that will
has allowed for reductions in both union and management
personnel. The company's strategic plan involves attracting an
equity partner, completing an expensive polymer process
commercialization, and attempting to resolve legacy liabilities.
Given the high degree of uncertainties associated with its plan,
resolving these issues will be difficult.

"Weirton faces a challenging period over the next year", Mr.
Williams said. "Successful implementation of its strategic plan
is not assured and the success of the plan relies on conditions
in the steel industry not deteriorating".

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


WHEELING-PITTSBURGH: Will Use Funds in Salaried Claims Trust
------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation asks the Court to
authorize WesBanco, the successor-in-interest to Wheeling Dollar
Bank, in its capacity as Trustee of the Wheeling-Pittsburgh
Steel Salaried Claims Settlement Trust dated December 14, 1990,
to distribute all remaining funds in the Trust to WPSC.

Scott N. Opincar, Esq., at Calfee Halter & Griswold, in
Cleveland, Ohio, explains that, on November 8, 1995, WPSC
terminated various defined benefit pension plans covering
salaried employees during the pendency of its prior bankruptcy
case.  The WPSC, the Official Committee of Salaried Employees,
and the Pension Benefit Guaranty Corporation later settled
various claims asserted relating to the termination of the
Salaried Defined Benefit Plans.  Specifically, the parties
entered into a Salaried Claims Settlement Agreement dated June
13, 1990.  Under the Settlement Agreement, WPSC agreed to
purchase annuities to pay certain claims of the salaried
employees:

     -- who were eligible for an immediate pension under the
        Salaried Defined Benefit Plans as of November 8, 1995,
        and their beneficiaries, and

     -- who retired after June 13, 1990.

In order to fund its obligations under the Settlement Agreement,
WPSC established the Trust on December 14, 1990.

Mr. Opincar reports that all obligations under the Salaried
Claims Settlement Agreement to the Trust Beneficiaries have been
satisfied. According to Mr. Opincar, the trust document provides
that:

     (a) when all payments required under the Trust are made
         by WPSC, any excess assets remaining in the Trust,
         net of expenses, shall be returned to WPSC;

     (b) WPSC will be considered "insolvent" for purposes of
         the Trust, among other things, in the event of the
         voluntary commencement, after the date of the Trust,
         by WPSC of any proceeding under title 11 of the
         United States Code; and

     (c) once the Trustee determines that WPSC is insolvent
         under the Trust, the Trustee will deliver any
         undistributed principal and income in the Trust to
         satisfy the claims of WPSC's "general creditors", as
         directed by a court of competent jurisdiction.

General Creditors are defined in the Trust as "an unsecured
creditor, irrespective of whether such creditor may by law have
a priority claim to distribution of, but not a security interest
in, assets of an insolvent debtor's estate".

WPSC asserts that it is entitled to the distribution of any
remaining funds in the Trust, which totaled $144,075.38 as of
June 30, 2002.  Mr. Opincar points out that the payment of the
remaining funds in the Trust to WPSC will improve WPSC's
liquidity and help sustain WPSC's continued operations for
sufficient time to enable it to consummate a plan of
reorganization.  Thus, the distribution of all remaining funds
in the Trust to WPSC will benefit WPSC, its estate, and its
creditors.

                         *     *     *

In the absence of objections, the Court grants WPSC's motion.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WILLIAMS COMMS: Court Sets Plan Confirmation Hearing for Sept 25
----------------------------------------------------------------
The Court fixes September 19, 2002 at 5:00 p.m., Eastern Time as
the voting deadline.

The Confirmation Hearing to consider the merits of Williams
Communications Group, Inc.'s Plan will be on September 25, 2002
at 10:00 a.m.  All confirmation objections must be filed and
served by 4:00 p.m. on September 13, 2002.  Confirmation
objections not timely filed and served will not be considered.
(Williams Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WORLDCOM INC: US Trustee Appoints Unsecured Creditors' Committee
----------------------------------------------------------------
Pursuant to Section 1102(a) and 1102(b) of the Bankruptcy Code,
the United States Trustee for the Southern District of New York
appoints these 15 creditors to the Official Committee of
Unsecured Creditors of Worldcom Inc., effective July 29, 2002:

   1. Metropolitan West Asset Management LLC
      11766 Wilshire Blvd., Suite 1580, Los Angeles, CA 90025
      Phone: (310) 966-8920
      Telecopier: (310) 966-8955
      Attention: Mr. Tad Rivelle, Managing Director

   2. Cerberus Capital Management, L.P.
      450 Park Avenue, 28th Floor, New York, New York 10022
      Phone: (212) 891-2100
      Telecopier: (212) 891-1540
      Attention: Mr. Mark A. Neporent, Managing Director

   3. Blue River, LLC
      360 East 88th Street, Suite 2D, New York, New York 10128
      Phone: (212) 426-7038
      Telecopier: (212) 426-5677
      Attention: Mr. Van Greenfield, Managing Member

   4. ESL Investments
      1 Lafayette Place, Greenwich, CT 06830
      Phone: (203) 861-4600
      Telecopier: (203) 861-0115
      Attention: Mr. William C. Crowley, President

   5. GSC Partners
      500 Campus Drive, Suite 220, Florham Park, New Jersey 07932
      Phone: (973) 437-1010
      Telecopier: (973) 437-1037
      Attention: Mr. Robert Hamwee, Managing Director

   6. Wilmington Trust Company, as Indenture Trustee
      1100 North Market Street, Wilmington, DE 19890
      Phone: (302) 636-6058
      Telecopier: (302) 636-4143
      Attention: Mr. Steven Cimilore

      and

      520 Madison Avenue, 33rd Floor, New York, New York 10022
      Phone: (212) 415-0522
      Telecopier: (212) 415-0513
      Attention: Mr. James Nesci and Mr. James J. McGinley

   7. Law Debenture Corporate Services, Inc., Indenture Trustee
      767 Third Avenue, New York, New York 10017
      Phone: (212) 750-6474
      Telcopier: (212) 750-1361
      Attention: Daniel Fisher, Esq.

   8. Metropolitan Life Insurance Company
      334 Madison Avenue, P.O. Box 633, Convent Station, NJ 07961
      Phone: (212) 578-9038
      Telecopier: (212) 251-1563
      Attention: Lisa Glass, Esq., Assistant General Counsel

   9. New York Life Investment Management LLC
      51 Madison Avenue, New York, New York 10010
      Phone: (212) 576-7585
      Telecopier: (212) 447-4166
      Attention: Mr. Ronald G. Brandon, Vice President

  10. Elliott Management Corp.
      713 Fifth Avenue, New York, New York 10019
      Phone: (212) 506-2999
      Telecopier: (212) 974-2092
      Attention: Mr. Dan Gropper, Portfolio Manager

  11. Sun Trust Bank, as Indenture Trustee
      225 E. Robinson Street, Suite 250, Orlando, FL 32801
      Phone: (407) 237-4164
      Telecopier: (407) 237-4041
      Attention: Ms. Geraldine P. Kail, Senior Vice President

  12. Deutsche Bank AG
      31 W. 52nd Street, New York, New York 10019
      Phone: (646) 324-2273
      Telecopier: (646) 324-7441
      Attention: Mr. David J. Bell, Director

  13. ABN AMRO Bank N.V.
      55 East 52nd Street, 32nd Floor, New York, New York 10055
      Phone: (212) 409-6804
      Telecopier: (212) 409-6802
      Attention: Mr. Steven C. Wimpenny, Senior Vice President
                 Mr. William J. Teresky, Jr., Vice President

  14. Electronic Data Systems Corporation
      5400 Legacy Drive, Mail Stop: H3-3A-05, Plano, Texas 75204
      Phone: (972) 605-5507
      Telecopier: (972) 605-5616
      Attention: Ayala Hassell, Esq., Litigation Counsel

  15. AOL Time Warner, Inc.
      75 Rockefeller Plaza, New York, New York 10019
      Phone: (212) 484-8000
      Telecopier: (703) 265-1808
      Attention: Mr. A. Brian Dengler, Vice President

At its first meeting, the Creditors' Committee selected Akin,
Gump, Strauss, Hauer & Feld LLP as its lawyers and Los Angeles-
based investment banking firm Houlihan, Lokey, Howard & Zukin as
financial advisers. (Worldcom Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORKFLOW MANAGEMENT: Brings-In Jefferies as Financial Advisor
-------------------------------------------------------------
Workflow Management, Inc., (NASDAQ: WORK) one of the nation's
leading outsourcers of printed products, announced that a
Special Committee comprised of independent members of its board
of directors is actively considering various restructuring and
other strategic and financial alternatives.

The Special Committee has engaged Jefferies & Company, Inc., the
principal operating subsidiary of Jefferies Group, Inc. (NYSE:
JEF), as its financial and strategic advisor.

Workflow Management also announced that due to unfavorable
market conditions, the Company is not actively pursuing a
private placement of senior secured notes. If market conditions
improve, the Special Committee, at its discretion, may elect to
pursue this alternative.

The Company previously announced an agreement with its secured
lenders that waives certain covenant defaults under the
Company's secured credit facility. The Company also previously
announced an agreement in principle with its lenders to enter
into a new credit facility that would bear interest at 12% and
provide access to working capital based on a borrowing base
formula. However, as part of its consideration of various
financial and strategic alternatives, the Special Committee and
its advisors are actively engaged in further discussions and
negotiations with the Company's secured lenders. As a result,
the Company's lenders have extended the waiver of the covenant
defaults until October 15, 2002 so that the Company and the
Special Committee, in consultation with its financial advisors,
can consider and analyze various financial and strategic
alternatives. As part of the current agreement between the
Company and its lenders, the Company's outstanding borrowings on
its existing credit facility bear interest at 12%.

Tom D'Agostino, Sr., Chairman, President and CEO stated, "The
work of the Special Committee and the hiring of Jefferies should
be beneficial as we solidify the capital structure of the
Company. The Special Committee, with the assistance of its
financial advisors, will consider a number of financial and
strategic alternatives designed to stabilize the Company and
position management to deliver value over time."

The Company also announced that it expects to record net non-
recurring operating expenses of approximately $225,000 and
non-recurring, non-operating expenses of approximately $6.0
million in the first quarter. In the aggregate, these expenses
represent ($0.31) after-tax per diluted share. The specific non-
recurring items are:

      --  $1.7million of transaction costs incurred in connection
with a proposed private placement of senior secured notes, which
the Company has expensed as a result of the Company's decision
not to actively pursue the transaction.

      --  $4.3 million of expense related to the Company's
interest rate swap agreement. This was expensed because the swap
can no longer be designated as a cash flow hedge of variable
rate debt. This is due to the fact that the Company's borrowings
under its credit facility currently bear a non-LIBOR based fixed
interest rate.

      --  $1.5 million in restructuring costs associated with the
exploration of other financial, restructuring and strategic
alternatives.

      --  The reversal to income of a $1.3 million restructuring
charge, taken in the three months ended April 30, 2001, that is
no longer required since the Company recently settled the
underlying contract dispute.

The Company now expects to report revenues in the range of
$154.0 million to $156.0 million for the first quarter ended
July 31, 2002, versus $155.2 million for the corresponding
period in the previous year. In addition, the Company now
expects to report diluted earnings per share of approximately
$0.11 to $0.13 for the first quarter, excluding the one-time
expenses discussed above, compared to earnings per share of
$0.18 for the same period last year. Including one-time
items, Workflow Management expects the loss per share for the
first quarter to range from ($0.18) to ($0.20).

Mr. D'Agostino, Sr. concluded, "Over the past several years we
have successfully expanded our business to the point where we
are currently one of the largest print outsourcers in North
America. We recognize that the difficult economic conditions
have magnified the competitive landscape and put additional
pressure on our operations. We also understand that we must
raise the bar with regard to our sales effort and execution to
react to these circumstances. Although it is difficult to
predict how quickly these trends will reverse, we are committed
to implementing the necessary changes to take advantage of
our human capital and industry experience."

Workflow Management, Inc., will release its fiscal first quarter
2003 results after the market closes on Thursday, September 12,
2002. A conference call to discuss first quarter financial
results will be held at 4:45 pm EDT that same afternoon. The
call will be hosted by Thomas D'Agostino Sr., Chief Executive
Officer, and Michael L. Schmickle, Chief Financial Officer.

The call will also be broadcast live over the Internet and can
be accessed at http://www.workflowmanagement.com

Workflow Management, Inc., is a leading provider of end-to-end
print outsourcing solutions. Workflow services, from production
of logo-imprinted promotional items to multi-color annual
reports, have a reputation for reliability and innovation.
Workflow's complete set of solutions includes document design
and production consulting; full-service print manufacturing;
warehousing and fulfillment; and iGetSmart(TM) - the industry's
most comprehensive e-procurement, management and logistics
system. Through custom combinations of these services, the
Company delivers substantial savings to its customers -
eliminating much of the hidden cost in the print supply chain.
By outsourcing print-related business processes to Workflow,
customers streamline their operations and focus on their core
business objectives. For more information, visit
http://www.workflowmanagement.com

                           *********

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

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

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

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

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

                           *********

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

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

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

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

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

                 *** End of Transmission ***