TCR_Public/020911.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

           Wednesday, September 11, 2002, Vol. 6, No. 180


360NETWORKS: Wants to Assume & Assign Contracts & Leases to JMA
ADELPHIA BUSINESS: Seeks Declaratory Judgment vs ACOM & Insurers
ADELPHIA COMMS: Equity Committee Taps Sidley Austin as Counsel
AGRIFOS: Seeks New Bar Date on Sept. 30 for Affected Creditors
AIRGATE PCS: Weak Liquidity Spurs S&P to Junk Credit Rating

AMES DEPT: Resolves Shipment & Delivery Dispute with UPS Freight
ANC RENTAL: Alamo Wants Okay to Sell Tampa Property for $5.3MM
BELL CANADA: Remains Listed on Nasdaq After Meeting Requirements
BIGSTAR ENTERTAINMENT: Auditors Express Going Concern Doubt
BRANTLEY CAPITAL: Pinkas Says Liquidation "Not A Viable Option"

BRITISH ENERGY: Fitch Downgrades Ratings to B+/B from BBB/F3
BROOKFIELD: S&P Pegs Preferreds' Global Scale Rating at BB+
BUDGET GROUP: Bringing-In King & Spalding as Antitrust Counsel
BURLINGTON: Exclusivity Extension Hearing Set for Sept. 24, 2002
CGI HOLDING: Sells Safe Environment to SECO Management-Led Group

CHARMING SHOPPES: Reports Improved Sales Performance for August
CHILDTIME LEARNING: Fails to Satisfy Nasdaq Listing Requirements
COMM'L MORTGAGE: S&P Affirms Low-B Ratings on Class F to H Notes
CONSECO INC: Fitch Drops Corporate Ratings to Default Status
CONSECO INC: Continued Declines Concern Fitch on Other Ratings

CONSOLIDATED PROPERTIES: Closes on Asset Sale to St. James
COVANTA ENERGY: Intends to Enter into Insurance Financing Pact
DANA CREDIT: S&P Affirms BB/B Counterparty Credit Ratings
DPL CAPITAL: S&P Cuts Ratings on Three Related Synthetic Deals
ENGAGE INC: CMGI Divests Equity and Debt Ownership Interests

EMAGIN CORP: Ginola Secured Conv. Note Extended Until Sept. 30
EMAGIN CORP: Extends Rivkin Secured Conv. Note to September 30
ENRON CORP: Wins Approval to Consummate Asset Sale Deal with DAC
EXIDE TECHNOLOGIES: Judge Akard Approves Blackstone's Engagement
FOSTER WHEELER: Swedish Unit Wins CFB Boiler Plant Order

FRUIT OF THE LOOM: Court Okays Keen Realty as Trust's Auctioneer
GEERLINGS & WADE: Has Until February 26 to Meet Nasdaq Standards
GLOBAL CROSSING: Judge Gerber Appoints Fee Review Committee
GLOBALSTAR LP: Parties Continuing Tasks on Modified Workout Plan
HECLA MINING: Firms-Up Lease Agreement on Block B in Venezuela

HORSEHEAD INDUSTRIES: Asks Court to Appoint BSI as Claims Agents
INTEGRATED HEALTH: Wants to Keep Exclusivity Until January 27
INTEGRATED HEALTH: Omega Healthcare Says Terminate Exclusivity
JEFFERSON SMURFIT: S&P Rates New $700 Million Senior Notes at B
KMART CORP: Wants Approval to Assume 2 Ernst & Young Agreements

KMART CORP: Equity Committee Taps Saybrook for Financial Advice
KNOLOGY INC: Extends Exchange Offer for 11-7/8% Notes to Friday
LAIDLAW INC: Court Approves Settlement Pact with Safety-Kleen
LIFEGUARD INC: A.M. Best Lowers Financial Strength Rating to C+
LODGIAN INC: Court Okays Wallach as St. Louis Special Counsel

LORAL SPACE: Combines Two Operations of CyberStar & Skynet Units
LTV CORP: Steel Unit Selling Mahoning Land to Sherman for $2MM
MAGELLAN HEALTH: G. Fred DiBona & A.D. Frazier Resign from Board
MEADOWCRAFT INC: Case Summary & 20 Largest Unsecured Creditors
MED DIVERSIFIED: Accredo Files Sues President & COO John Collura

MORGAN STANLEY: Fitch Raises Ratings on Two Low B-Rated Notes
MT. MCKINLEY INSURANCE: S&P Withdraws Bpi Fin'l Strength Rating
N2H2 INC: Implementing Restructuring Plan to Reduce Costs by 11%
NATIONAL STEEL: Court Okays Sale of DNN Interest for C$6.1 Mill.
NORTHWEST AIRLINES: 7.05 Billion Revenue Passenger Miles in Aug.

OWENS CORNING: Seeks Approval of Settlement Pact with Oregon DEQ
POLAROID CORP: Keeps Plan Filing Exclusivity Until October 15
POTLATCH CORP: Reaches Agreement to Sell Bradley Hardwood Mill
PSINET INC: US Trustee Appoints Consulting Creditors' Committee
QUANTUM CORP: Takes Restructuring Actions to Improve Performance

SPORTS CLUB COMPANY: Raises $3MM from Sale of Texas Property
SUNBEAM CORP: Files Amended Plan of Reorganization in New York
TUCKAHOE CREDIT: S&P Affirms B- Pass-Through Certificates Rating
UNIROYAL TECHNOLOGY: Asks Court to Approve $15MM DIP Facility
UNITED AIRLINES: Passenger Load Factor Climbs to 79% in August

US AIRWAYS: Wants to Ink Bank of America Purchasing Agreement
US DATAWORKS: Independent Auditors Issue Going Concern Opinion
U.S. INDUSTRIES: Commences Exchange Offer for 7-1/8% Sr. Notes
VIZACOM INC: Nasdaq SmallCap Elbows-Out Shares Effective Sept. 9
VOLT INFORMATION: May Violate Covenant Under Credit Facility

WHEELING-PITTSBURGH: Court Okays Services Pact with Columbia Gas
WIDECOM GROUP: Zafar Husain Doubts Ability to Continue Operation
WILLIAMS COMMS: Asks Court to Enjoin SBC from Terminating Pact
WORLDCOM INC: BP Seeks Stay Relief to Setoff Mutual Obligations

* Meetings, Conferences and Seminars


360NETWORKS: Wants to Assume & Assign Contracts & Leases to JMA
360networks inc. Debtors, Carrier Center LA, Inc., Meet Me Room
LLC and 360networks (USA) inc., ask the Court to:

   (a) authorize the assumption and assignment of six leases
       related to the property of Carrier Center located at 600
       West Seventh Street, Los Angeles, California -- the
       Property -- to JMA Properties, Inc. or to a higher bidder
       for the Property;

   (b) authorize the assumption and assignment to JMA license
       agreements and contracts related to the maintenance of
       the Property;

   (c) find that JMA is a good faith purchaser within the
       meaning of Section 363(m) of the Bankruptcy Code with
       regard to the Agreement of Purchase and Sale and Joint
       Escrow Instructions between 360 and JMA; and

   (d) authorize 360USA to enter into a lease with JMA.

The Debtors don't disclose how much money's changing hands in
this transaction.  Copies of the deal documents are "available
upon request" 360 says in papers filed with the Bankruptcy

Shelley C. Chapman, Esq., at Willkie Farr & Gallgher, in New
York, relates that prior to the Petition Date, Carrier Center
purchased the Property, a seven-story building with 482,200 net
rentable square feet and a four-story parking garage.  Carrier
Center serves as landlord to various tenants of the Property,
including 360USA wherein it operates a point of presence site on
the Property.  Carrier Center is also party to certain assumed
Contracts for the maintenance and the administration of the

Pursuant to the Court Order dated November 20, 2001, the Debtors
may sell the Property to the highest bidder.  Accordingly, on
June 12, 2002, Carrier Center entered into a Purchase Agreement
with JMA for the sale of the Property subject to a better offer.

Among other things, the Purchase Agreement provides that:

   (a) JMA will enter into a Lease with 360USA so that 360USA
       can continue providing telecommunications services to
       their customers through the site on the Property;

   (b) pursuant to the Assignment of Contracts Agreement between
       Meet Me Room and JMA, dated June 12, 2002, Meet Me Room
       will assume and assign certain license agreements to JMA;

   (c) Carrier Center will assume and assign to JMA these
       maintenance agreements related to the Property:

The leases to be assumed and assigned are:

     (1) ICG Netahead, Inc. -- Lease dated December 15, 1999;
         Guaranty; First Amendment to Lease dated December 1999;
         Second Amendment to Lease dated February 22, 2000;
         Estoppel dated July 20, 2000; Third Amendment to Lease
         dated April 30, 2002;

     (2) Thrifty/Rite Aid -- Lease dated December 1, 1998;
         Addendum to Lease; Guaranty; Memorandum of Lease; First
         Amendment to Lease dated July 14, 1999; Estoppel dated
         July 20, 2000; Letter dated January 22, 2001;

     (3) Qwest Communications Corporation -- Lease dated December
         15, 1999; Estoppel dated July 20, 2000;

     (4) XO Communications, Inc. -- Lease dated March 30, 2000;
         Estoppel dated July 20, 2000;

     (5) Meet Me Room LLC -- Lease dated April 25, 2000; Estoppel
         dated July 20, 2000; and

     (6) Equinix, Inc. -- Lease dated August 8, 1999; Memorandum
         of Lease dated August 8, 1999; Non-Disturbance and
         Attornment Agreement dated September 17, 1999; Letter
         Agreement modifying Lease dated August 24, 2000;
         Estoppel dated August 2000.

Ten license agreements will be assumed and assigned to JMA.
They are:

     (1) Fibernet Equal Access LLC, License Agreement dated
         September 14, 2000 with Exhibits 1, 2 and 3;

     (2) ICG Telecom Group, Inc. License Agreement dated October
         30, 2000 with Exhibits 1, 2 and 3; First Amendment to
         License Agreement dated April 2, 2001;

     (3) Level 3 Communications LLC License Agreement dated
         August 7, 2000 with Exhibits 1, 2 and 3;

     (4) Looking Glass Networks, Inc. License Agreement dated
         February 1, 2001 with Exhibits 1, 2 and 3;

     (5) Metropolitan Fiber Systems of California, Inc.
         Telecommunications Utility Access Agreement dated
         February 24, 1999 and Letter Agreement dated November
         19, 2001;

     (6) Qwest Communications Corporation License Agreement dated
         July 25, 2000 with Exhibits 1, 2 and 3;

     (7) Southern California Edison Company License Agreement
         dated November 20, 2000 with Exhibits 1, 2 and 3;

     (8) TCG Los Angeles License Agreement dated January 5, 2001
         with Exhibits 1, 2 and 3;

     (9) XO California Inc. License Agreement dated September 12,
         2001 with Exhibit 1; and

    (10) Wilshire Connection LLC License Agreement dated March
         16, 2000.

The Debtors will also assume and assign 11 maintenance
agreements to JMA and cure the defaults in these amounts:

   Contract                                           Cure Amount
   --------                                           -----------
   Management Agreement between Carrier Center LA as     $6,300
   Owner and CB Richards Ellis, Inc as Manager

   Work Order and Contract for Engineering Services      97,934
   Between Carrier Center and ABM Engineering Serv.

   Work Order and Contract between Carrier Center           789
   and Sidney Schiff for water treatment on cooling

   Alarm System Monitoring Agreement between Carrier          0
   Center Management Office and National Fail Safe

   Work Order and Contract between Carrier Center LA     19,684
   and American Commercial Security for security
   guard purposes

   Work Order and Contract between Carrier Center LA          0
   and Consolidated Services for trash removal

   Work Order and Contract with First Amendment               0
   Between Carrier Center LA and Central Parking
   Systems Inc. for management, operation and
   Maintenance of the parking garage

   Work Order and Contract between Corrigan Ent. and        918
   Carrier Center for providing safety manuals and
   Staff training

   Work Order and Contract between Carrier Center and     2,537
   Jack Ferguson for dayporter services

   Contract between Carrier Center and Otis Elevator          0
   For elevator maintenance on the parking garage

   Contract between Carrier Center and Guarantee Pest       387
   Control for elevator maintenance on three building

Pursuant to Section 365(a) of the Bankruptcy Code, Ms. Chapman
contends that the motion should be granted because:

   (a) the assumption of the contracts and leases would benefit
       the Debtors' estates in that the Debtors would then be
       able to assign the leases and contracts at or above the
       market value to JMA and complete the sale of the Property;

   (b) the Debtors will cure the defaults under the maintenance
       agreements prior to their assignment;

   (c) upon request of non-Debtors parties, the Debtors will
       promptly provide documentation sufficient to establish
       that adequate assurance of future performance would be
       satisfied by JMA; and

   (d) the sale of the Property would be in good faith pursuant
       to Section 363(m) of the Bankruptcy Code.

In the same manner, Ms. Chapman points out, the entry of 360USA
into a new lease arrangement with JMA is authorized under
Section 363(b)(1) of the Bankruptcy Code.  The Debtors believe
that the transaction is under an ordinary course of business
given that 360USA already occupies the premises.

Moreover, the lease would provide the Debtors with continued and
uninterrupted service to their telecommunications customers by
maintaining the POP site on the Property.  "The Debtors have a
substantial capital investment in this location, having
purchased and installed substantial equipment in the premises
and running fiber through the ground to the Property," Ms.
Chapman says.  In addition, the proposed lease is fair and
reasonable and that the rent and related charges are at or below
market value.  Thus, keeping the site would be most cost-
effective way to ensure continued operation.

                         Haim Revah Objects

Robert R. Leinwand, Esq., at Robinson Brog Leinwand Green
Genovese & Gluck, in New York, tells the Court that a day after
the August 22, 2002 bid deadline, Haim Revah submitted an offer
to purchase the Property for $27,200,000 cash in accordance with
the Bid Procedure.  The Debtors disqualified Mr. Revah's bid.

Mr. Revah believes that his bid was in fact a qualified bid,
with a higher and better monetary offer.

"It appears that the Debtors' basis for determining that Mr.
Revah's bid was not a Qualified Bid was due to the a caption in
the offer wherein the closing date will be no later than 60 days
after the Order of Sale is approved by the Bankruptcy Court,"
Mr. Leinwand states.  Mr. Revah doubts the JMA Closing will take
place 25 days after the Sale Order.

Accordingly, Mr. Revah is willing to give a back-up offer of
$27,500,000 with a closing date of no later than 45 days after
the Sale Order in the event that JMA's Sale does not close
within the 25-day period set forth in the JMA Agreement.

Thus, Mr. Revah asks Judge Gropper to direct the Debtors to deem
him to be a Qualified Bidder and require the Debtors to conduct
an auction sale for the Property.  Mr. Revah also asks the Court
to accept his back-up bid of $27,500,000 in the event that the
JMA transaction is not closed within 25 days after the Sale
Order becomes final. (360 Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

ADELPHIA BUSINESS: Seeks Declaratory Judgment vs ACOM & Insurers
Adelphia Business Solutions, Inc., and its debtor-affiliates ask
the Court for a declaratory judgment against defendants Adelphia
Communications, Associated Electric & Gas Insurance Services
Limited, Chubb Group of Insurance Companies, Federal Insurance
Company, Greenwich Insurance Company and XL Specialty Insurance
Company.  Specifically, the ABIZ Debtors want the Court to rule
that 18.6% of the limits under the D&O Policies, or $9,300,000,
should be reserved for its directors and officers for the
remainder of the policy.

The total coverage under the policies is $50,000,000.  In
exchange for this coverage, ABIZ paid premiums in the amounts

     -- $137,900 AEGIS,
     -- $75,845 Chubb/Federal, and
     -- $41,714 Greenwich.

ABIZ's coverage under these policies became effective as of
January 11, 2002 and applies to covered claims first asserted
during the period from January 11, 2002 through December 31,

According to Judy G.Z. Liu, Esq., at Weil Gotshal & Manges LLP,
in New York, the D&O Policies were originally issued to the ACOM
Debtors, the former parent company of ABIZ.  In January 2002,
after ABIZ was "spun-off" from ACOM, ABIZ paid three separate
premiums to the Carriers in exchange for an agreement that ABIZ
and its directors and officers would continue to have coverage
under the same D&O Policies as ACOM.  A separate premium was
assessed by the Carriers to add ABIZ to Adelphia's existing
policies and was paid by ABIZ in March 2002 for coverage as of
January 11, 2002.  In exchange for these additional premiums,
the Carriers amended the policies to expand their coverage to
include ABIZ, its subsidiaries and both companies' directors and

Ms. Liu explains that the D&O Policies provide coverage for
legal fees and costs and associated expenses incurred in
defending covered "Claims".  This coverage is provided directly
to or on behalf of current and former officers and directors of
ABIZ if the D&O Defense Costs are not reimbursed by ABIZ through
indemnification payments.  The AEGIS D&O Policy also provides
for reimbursement of the Debtors for indemnification payments
made to, or on behalf of, present and former officers and
directors under the Insuring Agreement and "entity" coverage for
the Debtors.  The Policies provide that, notwithstanding the
bankruptcy or insolvency of ABIZ, the carriers will not be
relieved of any of their obligations and, in fact, will directly
pay or advance the Defense Costs.

ABIZ seeks a declaration that 18.6% of the insurance coverage
that is available under the three "claims made" D&O Policies,
which policies jointly insure ABIZ and ACOM's directors and
officers, including ABIZ's outside directors, Patrick Lynch and
Edward Mancini:

     -- is property of ABIZ's estate, and

     -- is not the exclusive property of ACOM and its current and
        former directors.

ACOM's refusal to equitably allocate the coverage available
under the D&O Policies creates a risk that 100% of the coverage
will be exhausted for losses incurred solely by ACOM and its
current and former directors, including certain members of the
Rigas family.

Ms. Liu reports that ACOM and its current and former directors
have been named as defendants in over 24 shareholder class and
derivative action lawsuits.  The Actions allege that defendants
violated the federal securities laws and breached their
fiduciary duties.  Plaintiffs seek billions of dollars in
alleged damages. The lawsuits were filed following ACOM's
disclosure in March and April 2002 of its "off-the-books"
guarantees of certain borrowings by members of the Rigas family,
which borrowings exceed $3 billion.  Transactions between ACOM
and its former Chairman of the Board and Chief Executive Officer
are the subject of criminal and civil regulatory investigations
by the U.S. Department of Justice and the Securities and
Exchange Commission. In addition, at least four shareholder
class actions on behalf of ABIZ shareholders have been filed
against the Rigases in their capacity as ABIZ directors.  "There
is a substantial risk that the losses arising out of the Actions
will exceed $50,000,000," Ms. Liu notes.  ACOM and its directors
are likely to look to the D&O Policies to cover these losses.

Furthermore, Ms. Liu points out that numerous law firms have
been retained to represent ACOM and its current and former
directors in addition to other professionals.  The Boise,
Schiller firm, which was retained as special litigation counsel,
has already billed over $3,000,000 in fees and expenses for
services performed in 2002 alone.  The fees of some of these
firms likely will be submitted to the Carriers for payment
because ACOM has commenced a case under Chapter 11 of the
Bankruptcy Code and has stated that it will not advance the
Rigas' defense costs.

Naturally, the Outside Directors, who are insureds under the D&O
Policies, are concerned that there might not be enough insurance
funds available to advance the cost of defending these lawsuits
because the policy proceeds will have been entirely depleted.

Recognizing that there is a real risk that the jointly owned D&O
Policies will be exhausted entirely by the ACOM claimants,
ABIZ's two Outside Directors -- Patrick Lynch and Edward Mancini
-- have advised ABIZ that they will no longer serve on the ABIZ
Board unless they can be assured that a portion of the D&O
Policies will be available for ABIZ.

Although ABIZ has not been served with, nor is it aware of any
pending actions that name its Outside Directors as defendants,
there is real risk that claims against ABIZ's Outside Directors
will be asserted in these actions given the dragnet nature of
shareholder class action litigation.  However meritless these
claims would be, the cost of defending these claims could run in
the hundreds of thousands if not millions of dollars.

Thus, Ms. Liu contends, the Court should exercise its equitable
power to allocate ABIZ's and ACOM's respective ownership
interests in the D&O Policies.  "Equitably allocating the
policies will not only insure ABIZ the continued services of its
Outside Directors, but it will protect the Outside Directors
from the risk of having to reach into their own pockets to fund
their defense if they are named in a shareholder lawsuit," Ms.
Liu says.

If ABIZ's Outside Directors resign due to lack of D&O insurance
coverage, ABIZ will be left with no independent directors.
Without a board of directors, Ms. Liu explains that ABIZ cannot
complete its reorganization and will have no choice but to
convert its Chapter 11 bankruptcy reorganization to liquidation.
(Adelphia Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ADELPHIA COMMS: Equity Committee Taps Sidley Austin as Counsel
The Official Committee of Equity Security Holders of Adelphia
Communications and its debtor-affiliates seeks the Court's
authority to retain Sidley Austin Brown & Wood LLP, nunc pro
tunc to August 1, 2002, as counsel.

Equity Committee Co-Chairperson Van Greenfield tells the Court
that Sidley was chosen for its extensive experience and
knowledge in the field of bankruptcy and creditors' rights, and
in the other fields of law that are expected to be involved in
these cases.  Sidley has appeared in numerous proceedings under
Chapter 11 of the Bankruptcy Code before this and other courts.

Sidley will be compensated on an hourly basis and will be
reimbursed for actual and necessary expenses incurred.  Sidley's
hourly rates for work of this nature currently range from:

        Partners and Senior Counsel       $410 - 675
        Associates                         175 - 375
        Paralegals                          80 - 160

These hourly rates are subject to periodic adjustments to
reflect economic and other conditions.

As counsel, Sidley is expected to:

-- advise the Equity Committee and representing it with respect
    to proposals submitted to the Equity Committee and pleadings
    submitted by the Debtors or others to the Court;

-- represent the Equity Committee with respect to any plans of
    reorganization or disposition of assets proposed in these

-- attend hearings, draft pleadings and generally advocate
    positions which further the interests of the equity
    holders represented by the Equity Committee;

-- examine the Debtors' affairs and reviewing the Debtors'

-- investigate any potential causes of action which the Debtors
    or the Equity Committee may bring against any third-party;

-- advise the Equity Committee as to the progress of the
    Chapter 11 proceedings; and

-- perform any other professional services as are in the
    interests of those represented by the Equity Committee.

The Equity Committee believes that it is necessary to employ
attorneys to render these professional services because without
their assistance, neither the Equity Committee's evaluation of
the Debtors' activities nor its meaningful participation in the
negotiation, promulgation, and evaluation of a plan of
reorganization or liquidation would be possible.

Sidley Partner Norman N. Kinel, Esq., assures the Court that the
Firm has had no other prior connection with the Debtors, their
creditors or any other party-in-interest.  Mr. Kinel asserts
that the Firm does not hold or represent any interest adverse to
the Debtors' estates or the Equity Committee or the equity
holders in matters upon which it has been and is to be engaged.
Sidley is "disinterested" within the meaning of Section 101(14)
of the Bankruptcy Code, Mr. Kinel says.  However, Mr. Kinel
tells the Court that Sidley currently represents these parties
in matters totally unrelated to these Chapter 11 cases:

A. Indenture Trustees/Bank Lenders:  Long Term Credit Bank of
    Japan Ltd., Merrill Lynch, Mitsubishi Trust & Banking
    Corporation, Morgan Stanley, Natexis Banque, NationsBank
    N.A., Oppenheimer & Co. Inc., Pilgrim Prime Rate Trust, PNC
    Bank N.A., Robobank Nederland, Royal Bank of Canada, Salomon
    Brothers Holding Company Inc., Societe Generale, Summit
    Bancorp, Sumitomo Bank, SunTrust Bank, Toronto-Dominion
    Securities (USA) Inc., U.S. Bank National Association,
    Principal Mutual Life Insurance Company, Salomon Smith
    Barney, Royal Bank of Scotland PLC, Sakura Bank Limited,
    Travelers Insurance Company, Union Bank of California, US
    Trust, Webster Bank, Mutual of Omaha Life Insurance Company,
    Van Kampen American Capital, Wellington Management, Lehman
    Brothers, Long Term Credit Bank, Bank of Canada, NatWest, AMN
    Amro Bank N.V., All First Brokerage Corporation, LaSalle Bank
    N.A., Bank Boston N.A., Bank of America N.A., NationsBank,
    Bank of Hawaii, Bank of Montreal, Bank of New York, Bank of
    Tokyo Mitsubishi Trust Company, Bankers Trust Company, Banque
    Nationale de Paris, Banque Paribas, Barclays Bayerische Hypo-
    UND Verinbank AG, Bayerische Landesbank Girozentrale, Chase
    Securities Inc., Chase Manhattan Bank, J.P. Morgan, Chemical
    Bank, CIBC Inc., Citibank N.A., Citicorp USA Inc., Corestates
    Bank N.A., Cooperative Centrale Raiffeisen, Credit Lyonnais,
    Credit Agricole Indosuez, Credit Local de France, Credit
    Suisse First Boston, Dai-Ichi Kangyo Bank Limited, DZ Bank AG
    Deutsche Zentral-Genossenschafts Bank, Dresdner Bank AG,
    Fidelity Management, Fifth Third Bank, DLJ Capital Funding
    Inc., Deutsche Bank AG, Deutsche Bank Securities Inc., First
    National Bank of Boston, First National Bank of Maryland,
    First National Bank of Chicago, First Union National Bank,
    First Union Securities Inc., Fleet National Bank, Fuji Bank
    Limited, General Electric, Goldman Sachs & Co., Industrial
    Bank of Japan, Harris Trust Company of New York, Jackson
    National Life Insurance Company, Key Corporate Capital Inc.,
    KZH Holding Corporation, Mellon Bank N.A., TD Securities
    (USA) Inc., Toronto Dominion (Texas) Inc., Protective Life
    Insurance Company, Citizens Bank, Crestar Bank, Firstar Bank,
    and Stein Roe Floating Rate LLC;

B. Cable TV Programmers:  Tribune Media Service, WGN, CNBC/NBC,
    MTV Networks, Time Warner Inc., The Sci-Fi Channel, BET
    (Black Entertainment Television), A & E Television Networks,
    Disney, ESPN, Fox, National Broadcasting Company, SSI,
    Viacom, HBO (Home Box Office), The Discovery Channel,
    National Geographic Society, KTLA, AT&T, Lifetime
    Entertainment Services, USA (Network), ESPN News, New England
    Cable News, News America Publishing, Sportschannel
    Associates, Cox Cable Communications, and S.T.A.R.Z.;

C. Largest Unsecured Trade Creditors:  Black Entertainment
    Television, CNBC/NBC, Fijitsu, PPC, Pirelli Cable Corp., DST,
    Home Box Office (HBO), Lifetime Entertainment Services, A&E
    Television Networks, Disney, USA Network, E.S.P.N. News, and
    Motorola Corporation;

D. Equity Holders:  Cablevision Systems Corporation, JP Morgan
    Chase & Co., Morgan Stanley, Wellington Management, Fidelity
    Management, Citigroup Inc., Oppenheimer, Barclays, Wachovia
    Corporation, General Electric, State Street Corporation,
    Goldman Sachs Group, Deutsche Bank AG, Bank of America,
    Columbia Management Company, Vanguard, Loomis Sayles &
    Company, TCW Group Incorporated, and United States Trust

E. Professionals:  Bank of America Securities, Credit Suisse
    First Boston, Salomon Smith Barney, Deloitte & Touche,
    Lazard, PricewaterhouseCoopers, and Clifford Chance;

F. Noteholders:  Q Investments, Camden Asset Management,
    Alliance Capital, Angelo Gordon, Oppenheimer, Fidelity
    Investments, Franklin Funds, and Franklin Advisors; and

G. Litigation Claimants: Ohio Power Company, Quantum Corporate
    Funding Ltd., Southern American Insurance Company, State Farm
    Mutual Automobile Insurance Company, Syncom Capital
    Corporation, Syndicated Communicates Inc., Toledo Edison
    Company, WTMV-TV Acquisition Company, Allstate Insurance,
    Arizona Public Service Company, At Home Corporation, Detroit
    Edison, and State Farm Insurance Company.

Immediately upon retaining Sidley on August 1, 2002, the Equity
Committee directed Sidley to commence work on several matters
requiring immediate attention in connection with the Debtors'
cases, including reviewing all "first day orders" and various
significant motions pending before the Court.  Accordingly, the
Equity Committee emphasize that the Court should approve
Sidley's retention effective August 1, 2002. (Adelphia
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Adelphia Communications' 9.375% bonds due 2009 (ADEL09USR2),
DebtTraders reports, are trading at 42 cents-on-the-dollar. See
for real-time bond pricing.

AGRIFOS: Seeks New Bar Date on Sept. 30 for Affected Creditors
Agrifos Fertilizer LP and its debtor-affiliates seek a new bar
date -- a deadline for creditors to file claims -- from the U.S.
Bankruptcy Court for the Southern District of Texas, for those
creditors affected by the amendments to the Debtors' Schedules
of Assets and Liabilities.

Historically, Debtors' management has authorized the Debtors to
make a voluntary contribution on behalf of certain employees to
one or more of the ERISA plans.  Subsequently it was determined
that such Employer Contributions for the year were not
authorized.  In this connection, the Debtors amended their
respective Schedules to reduce the previously scheduled Employer
Contribution claims to zero.

The Debtors want the Court to set September 30, 2002 bar date to
allow the Affected Creditors -- the ERISA Plan participants:

      - who did not file a proof of claim by the respective bar
        date; and

      - were not listed on the Schedules and did not receive
        notice of the respective bar date; or

      - were listed on the Schedules, not as contingent,
        unliquidated or disputed, and with respect to which claim
        either the First Amended Schedules or the Second Amended
        Schedules reflect a change.

to file proofs of claim.

Affected Creditors who are exempted from the New Bar Date are

      a. that already properly filed a proof of claim;

      b. that were scheduled as contingent, unliquidated or
         disputed, regardless of the change subsequently made to
         the Schedules;

      c. that were scheduled on the Schedules and the amendment
         was only to increase the amount of the creditor's claim.

The Debtors are producers of phosphate fertilizers that operate
a 600,000 thousand ton per year phosphate fertilizer processing
plant in Pasadena, Texas and a 1.2 million ton per year
phosphate rock mine located in Nichols, Florida. They filed for
chapter 11 protection on May 8, 2001. Christopher Adams, Esq.,
and H. Rey Stroube, III, Esq., at Akin, Gump, Strauss, Hauer &
Feld, LLP represent the Debtors in their restructuring efforts.

AIRGATE PCS: Weak Liquidity Spurs S&P to Junk Credit Rating
Standard & Poor's Ratings Services lowered its corporate credit
rating on wireless carrier AirGate PCS Inc., to triple-'C'-plus
from single-'B'-minus. The downgrade of AirGate reflects
concerns over weak liquidity, problems at iPCS Inc. distracting
management, and the need to improve EBITDA to meet leverage
covenants that become effective in the quarter ending on March
31, 2003. The rating on AirGate was also removed from
CreditWatch and the outlook is now negative.

The corporate credit rating on AirGate's wholly owned subsidiary
iPCS Inc., was lowered to triple-'C'-minus from single-'B'-minus
and remains on CreditWatch negative. The downgrade of iPCS is
based on Standard & Poor's concern that it is at substantial
risk of violating three maintenance covenants under its bank
agreement, as well as the company's weak liquidity.

"We do not believe AirGate's liquidity, comprised of about $4
million in cash and $22 million in available bank credit at the
end of its third fiscal quarter, provides adequate cushion
against risks relating to competition and the weak economy,"
Standard & Poor's credit analyst Michael Tsao said. "Maintenance
of the rating is dependent on AirGate significantly improving
EBITDA and achieving and sustaining positive free cash flow in
the near term without any deterioration in operating metrics."

"Due to competition and the weak economy, iPCS could violate the
minimum subscriber, minimum revenue, and maximum EBITDA loss
covenants under its bank agreement in the very near term," Mr.
Tsao added. "Independent of covenants, iPCS's liquidity of about
$19 million in cash and $30 million in available bank credit at
the end of the third fiscal quarter provides little margin of
safety against execution risks, in particular because the
company is not expected to generate free cash flow in the near

Standard & Poor's said the ratings on iPCS will likely be
lowered if the company is unable to put in place a realistic
plan to improve its liquidity. Assuming no significant
deterioration in financial and operating metrics, Standard &
Poor's will likely resolve the CreditWatch listing following a
favorable amendment to iPCS's credit agreement.

Standard & Poor's said it had previously rated AirGate on a
consolidated basis but now rates AirGate and iPCS separately
under a revised analytical framework. The revised framework is
due to consideration of factors such as distinct geographic
markets, restrictions in AirGate's bond indenture that would
prevent AirGate from providing credit support to iPCS, the fact
that a default at iPCS would not trigger a default under
AirGate's separate bank facility, and management's lack of
intention for AirGate to financially support iPCS in the future.
Because AirGate on a stand-alone basis is not at risk of
immediately violating any bank covenant, its ratings were
removed from CreditWatch.

AMES DEPT: Resolves Shipment & Delivery Dispute with UPS Freight
Ames Department Stores, Inc., and its debtor-affiliates sell
various goods that are manufactured overseas. Some of goods:

   -- have been shipped from overseas locations and are currently
      in transit to the United States; or

   -- are currently in the United States awaiting delivery to the
      destination point or clearance through U.S. Customs.

The goods are delivered by UPS Freight Services Inc. and UPS
Ocean Freight Services Inc.  Pursuant to written and oral
contracts between UPS Freight and Ames, and specific
instructions issued by Ames, UPS Freight:

    (i) acts as a forwarder of the Goods in Transit;

   (ii) arranges for the transportation of the Goods in Transit
        from their overseas locations to the United States;

(iii) clears the Goods in Transit through U.S. Customs; and

   (iv) on behalf of Ames, takes whatever steps are necessary to
        facilitate delivery of the Goods in Transit to Ames,
        including, but not limited to, the surrender of
        negotiable bills of lading to the ocean carrier.

UPS Ocean Freight is the non-vessel operating common carrier.

The Goods in Transit are held in 414 containers with a cost
value of $14,000,000.  Most of the Containers have arrived in
the United States and are ready to be delivered to the Debtors
following their clearance through U.S. Customs.

Lately, the UPS-Freight Services have received requests from
certain Vendors demanding the return of their Goods in Transit.
The Stop Transit Requests have been made in some cases, under
rights alleged under foreign laws.  For instance, in one
shipment, the UPS-Freight Services were served with an order
from a China Court ordering them to deliver documents -- like
the negotiable bills of lading -- to a Chinese party.  The
documents would enable that party to get the shipment.

In response to UPS-Freight Services' dilemma, the Debtors assert
that they now hold the title to the shipment because the Goods
in Transit were sold F.O.B. place of shipment.  Therefore, the
Vendors' remedy to assert a right to stop the Goods in Transit
is not available.  The Debtors also contend that the
superpriority, collateral lien of the Postpetition Date secured
lenders attach to the Goods in Transit the moment title passed
to the Debtors. Given that, the Debtors told UPS-Freight
Services to deliver or facilitate the delivery of the Goods in
Transit to the Debtors notwithstanding the Stop Transit

The Debtors claim that there is an immediate and urgent need for
the Goods in Transit to be delivered in order to maximize the
recovery for their estates.  The GOB sales are being conducted
in a manner whereby each week the retail price of merchandise is
discounted from the prior week, so that as the sales progress,
the profit generated for the Debtors decreases.  Consequently,
the longer the Goods in Transit remain undelivered to Ames, the
more the value lost by the Debtors and their estates from the
sale of those goods.

Accordingly, the Debtors and the UPS-Freight Services have come
up with a settlement to resolve the compelling shipment and
delivery issues.  As approved by the Court, the Agreement
provides that:

A. UPS Freight and UPS Ocean Freight are directed to immediately
    deliver or facilitate the delivery of the Goods in Transit to
    Ames, except for:

    (a) Goods in Transit that are subject to the Chinese Court
        Order or any other order of a court of competent
        Jurisdiction that is served upon UPS Freight or UPS Ocean
        Freight before August 29, 2002; and

    (b) any Goods in Transit that Ames specifically rejects,
        provided Ames advises UPS Freight or UPS Ocean Freight
        that it will not accept delivery of those Goods;

B. UPS Freight and UPS Ocean Freight will have the right to
    assert or file a request for allowance as an administrative
    expense incurred during the Debtors' Chapter 11 cases for any
    loss or damage, including but not limited to attorneys' fees
    and costs, as a result of their compliance;

C. This Stipulation will not impair the right of any Vendor to
    file or assert any claim for damages against the Debtors in
    the Chapter 11 cases regarding the Goods in Transit;

D. The Debtors will serve a copy of this Stipulation and Order
    upon all Vendors who have sent Stop Transit Requests and all
    other Vendors with an interest in the Goods in Transit in the
    Containers by first class mail. (AMES Bankruptcy News, Issue
    No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Ames Department Stores' 10% bonds due 2006 (AMES06USR1), an
issue in default, are trading at a penny to the dollar,
DebtTraders reports. For real-time bond pricing, see

ANC RENTAL: Alamo Wants Okay to Sell Tampa Property for $5.3MM
Alamo Rent-A-Car LLC owns a 9.48-acre real property located at
5124 and 5402 West Spruce Street in Tampa, Florida.  Bonnie
Glantz Fatell, Esq., at Blank Rome Comisky & McCauley LLP,
in Wilmington, Delaware, relates that Alamo vacated the property
in June 2001.  Now, Alamo wants to sell the Tampa Property to
Tampa Airport Parking LLC, free and clear of any and all liens,
claims, encumbrances and interests.

Pursuant to their Purchase Agreement, ANC Rental Corporation and
its debtor-affiliates will receive $5,368,334.40 or $13 per
gross square foot from Tampa Airport Parking in exchange for the

Ms. Fatell tells the Court that the Debtors have marketed the
property with the assistance of DeLaVergne & Company to a large
number of potential buyers.  A number of offers were made on the
property.  The Debtors accepted the offer of Tampa Airport
Parking, which they believe is the highest and best bid for the
entire property.  But, if prior to the entry of an Order
approving the agreement the Debtors receive a higher and better
offer for the property, the Debtors will withdraw or amend this
Motion and seek to sell the property pursuant to the terms of
the higher offer.

The sale of the property is conditioned upon the approval of the
assumption of the Marketing Agreement with DeLaVergne and the
purchase agreement.

The purchase agreement provides that Tampa Airport Parking will
have a 60-day Inspection Period to perform due diligence with
respect to the transaction.  During the Inspection Period, Tampa
Airport Parking, in its sole and absolute discretion, will have
the right to terminate the purchase agreement.  Tampa Airport
Parking will also have the right to extend the Inspection Period
for up to two 30-day periods at a cost of $20,000 per extension.
The extensions will only be granted for reasons related to
zoning, licensing, permitting or environmental matters.  Should
the results of the inspection be satisfactory, the closing will
occur 30 days following the completion of the Inspection Period.

In addition, the purchase agreement provides that Alamo will
have the exclusive, non-revocable right to use at least 100
parking spaces on that portion of the Property located at 5402
W. Spruce Street.  Ms. Fatell informs the Court that Alamo and
Tampa Airport Parking should have agreed upon the terms of the
use of the property, including price and location, on or before
the expiration of the Inspection Period.  The satisfactory
resolution of the terms of the use is a condition to Alamo's
obligation to sell the property.  The Debtors expect that the
cost of the spaces to be significantly below the current market
rate for daily parking.

Ms. Fatell assures the Court that the purchase agreement was
proposed, negotiated and entered into by the Debtors and Tampa
Airport Parking without collusion, in good faith and is a result
of arm's-length bargaining. (ANC Rental Bankruptcy News, Issue
No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)

BELL CANADA: Remains Listed on Nasdaq After Meeting Requirements
Bell Canada International Inc., (NASDAQ:BCICF) (TSX:BI)
announced that a NASDAQ Listing Qualifications Panel has issued
a decision allowing BCI's shares to remain listed on the NASDAQ
National Market. On May 17, 2002 NASDAQ gave notice to BCI that
its shares were subject to delisting for failure to meet certain
minimum listing requirements. BCI requested and subsequently
attended a hearing before a NASDAQ Listing Qualifications Panel
at which it set out its plan to regain compliance with the
minimum listing requirements. All of these requirements have now
been met.

BCI is operating under a court supervised Plan of Arrangement to
dispose of its remaining assets, settle all claims against the
company and make a final distribution to stakeholders.

BCI is a subsidiary of BCE Inc., Canada's largest communications
company. BCI is listed on the Toronto Stock Exchange under the
symbol BI and on the NASDAQ National Market under the symbol
BCICF. Visit its Web site at

BIGSTAR ENTERTAINMENT: Auditors Express Going Concern Doubt
Bigstar Entertainment, Inc., had been an online retailer of
filmed entertainment products and a provider of entertainment
industry information. Through its website,, Bigstar
had been selling videos and digital video discs or DVDs,
including feature films, children's movies, and educational,
health and fitness, and instructional videos, and provided
information on these products. In addition to selling filmed
entertainment, featured biographies, movie stills
and star interviews. also hosted Bigstar Broadband
Theater which offered visitors to its website the ability to
stream and view on their computer movie trailers and feature
films. As of December 31, 2001, the Company has ceased operating
its Web site.

Bigstar is continuing to pursue other opportunities. The
Company's management will consider recommending to the Board of
Directors alternative plans which may include, but not be
limited to, redeployment of the remaining cash assets into a new
business venture, liquidation of all corporate assets and
distribution of remaining proceeds to its stockholders or some
other alternative to be determined. There can be no assurance
that Bigstar will be successful in this regard or be able to
continue in existence.

Since as of December 31, 2001, the Company ceased operating its
website there were no revenues, or cost of revenues, for the six
months ended June 30, 2002.

Bigstar has an accumulated deficit of approximately $47,738,000
as of June 30, 2002. The Company has incurred a loss from
operations in all periods since inception and has funded
operations to date primarily through the sale of common stock,
however, the Company has been unsuccessful in raising additional
funding. The Company may seek additional funding through public
or private financing or other arrangements to pursue new
business opportunities. Adequate funds may not be available when
needed or may not be available on terms acceptable to the
Company. If additional funds are raised by issuing equity
securities, dilution to existing stockholders will result. If
funding is insufficient at any time in the future, the Company
may be unable to take advantage of business opportunities which
could have a material adverse effect on its business and
financial condition. These matters raise substantial doubt about
the Company's ability to continue as a going concern.

BRANTLEY CAPITAL: Pinkas Says Liquidation "Not A Viable Option"
Brantley Capital Corporation (Nasdaq: BBDC) sent the following
letter to stockholders:

"Dear Fellow Brantley Stockholder,

"The date of Brantley's Annual Meeting of Stockholders is
rapidly approaching.  As you know, dissident stockholder Phil
Goldstein, who is seeking support for his own hand-picked slate
of nominees in opposition to your Board of Directors, argues
that the liquidation of Brantley's assets is the best way to
achieve a reduction in the discount between Brantley's stock
price and its NAV (net asset value).  We believe that Mr.
Goldstein is simply wrong about the relationship of NAV to
Brantley's stock price and that he misunderstands the likely
consequences of the forced liquidation of Brantley's
investments.  After well over a year of careful review and
analysis, Brantley's Board believes that the best way to achieve
a higher stock price is for Brantley to continue to pursue the
Company's business plan to expand its mezzanine investments.

                Liquidation Is Not a Viable Option

"The NAV of Brantley's assets reflects the 'fair value' of our
investments as determined according to our valuation guidelines
which have been developed based on generally accepted accounting
principles and current SEC guidelines. Brantley's investment
valuations are required by law to be approved by its Board of
Directors.  In fact, these valuations have been approved
unanimously each quarter since its inception by the Company's
Board.  The fair value of an investment is determined based upon
what we could reasonably expect to receive if that investment
were sold in a 'current sale' -- that is, in a transaction
negotiated between a willing buyer and a willing seller over a
reasonable period of time.  Sellers who can choose their timing
have a higher likelihood of maximizing proceeds than those
forced to divest.  The investment valuation assessment does not
contemplate a forced liquidation.  Furthermore, the nature of
Brantley's portfolio necessitates consideration of several other
important factors:

      -- Brantley's investments are in private companies.  Unlike
investments in publicly-traded equities, private investments
have no liquid market value.

      -- Brantley owns on average an 8% minority interest in its
portfolio companies.  Minority positions in private companies
generally take longer to sell.

"We believe that the amount that can be realized upon the forced
liquidation of our minority stake private company investments
would be considerably less than the amount that could be
realized if the Company were able to proceed in a planned and
deliberate manner to sell its interests.

"As people familiar with business development companies know,
Mr. Goldstein's proposal to liquidate our Company reflects a
limited understanding of both Brantley and the private equity
industry.  Mr. Goldstein has provided no substantive basis for
his assumptions on value creation. Given the nature of
Brantley's investments, liquidation is not a viable option and
we believe will not maximize stockholder value.  Rather, we
believe that Mr. Goldstein's proposal is short-sighted and self-
serving and is not in the long term best interests of the
Company or its stockholders.

"Your management's plan, on the contrary, contemplates building
a mezzanine debt portfolio that is expected to result in the
payment of a regular dividend.  Our management team and its
advisors have presented your Board of Directors -- including Mr.
Goldstein -- with a substantial amount of data that supports the
premise that BDCs that pay a dividend typically trade at
premiums to their NAVs per share.  Therefore, management
believes that the execution of its plan provides the best
opportunity for stockholder value to be maximized.

         Phil Goldstein Offers Only Rhetoric, Not a Plan

"You may already have received proxy materials from dissident
director Phil Goldstein.  In an effort to divert stockholders
from focusing on the real issues, Mr. Goldstein resorts to scare
tactics and personal attacks on the Company's management and
Board.  You should know that Mr. Goldstein has a history of
making baseless personal attacks.  In fact, some of Mr.
Goldstein's bluster is lifted directly from one of his prior
unsuccessful proxy contests.

"We do not believe Mr. Goldstein's name-calling and fear-
mongering has any place in discussions about something as
important as the future strategic direction of a publicly traded
company.  We ask that you ignore

"Mr. Goldstein's ravings and focus on what matters -- creating
value for all Brantley stockholders.  We think it is abundantly
clear that when you strip out the hyperbole and insults from Mr.
Goldstein's position, he has no workable plan to enhance value
for you, our stockholders.  Moreover, we believe the glaring
lack of experience of Mr. Goldstein's hand-picked nominees, who
have no business experience or any track record with BDCs, will
not benefit the Company or its stockholders.

"In anticipation of the forthcoming Annual Meeting and this
important vote, Brantley management and directors have been
meeting with our stockholders.  We have appreciated this
opportunity to discuss our strategic plan and to learn from our
investors.  We are pleased with the responses we have received
from stockholders regarding our plans to maximize stockholder

"Time is short and your vote is extremely important - no matter
how many or how few shares you own.  To vote your shares, please
sign, date and return the enclosed WHITE proxy card and mail it
promptly in the enclosed self-addressed, stamped envelope.  We
strongly encourage you not to support the dissident nominees for
Brantley's Board of Directors. Please discard any green proxy
card and any other materials that may be sent to you by Mr.

"Thank you for your continued support."

On behalf of your Board of Directors,


Robert P. Pinkas

Brantley Capital Corporation is a publicly traded business
development company primarily providing equity and long-term
debt financing to small and medium-sized private companies
throughout the United States.  The Company's investment
objective is to achieve long-term capital appreciation in the
value of its investments and to provide current income primarily
from interest, dividends and fees paid by its portfolio
companies.  For further information, please visit the Company's
Web site at

BRITISH ENERGY: Fitch Downgrades Ratings to B+/B from BBB/F3
Fitch Ratings lowered the ratings of British Energy plc to
'B+/B' from 'BBB/F3'. A Rating Watch Evolving has replaced the
previous Rating Watch Negative. The rating action follows the
company's announcement Thursday that it was in discussions with
the UK Government with a view to seeking "immediate financial
support" and "to enable a longer term restructuring to take
place". BE's Board has stated that it has "reasonable grounds"
for believing these discussions will be successful.
Notwithstanding this, BE also warned that if the discussions are
not successful, the company may be unable to meet its financial
obligations as they fall due, and therefore the company "may
have to take appropriate insolvency proceedings."

Prior to Friday's rating action, BE's ratings had been lowered
by Fitch twice this year, reflecting a combination of continuing
stress on UK wholesale prices, and reductions in output
forecasts, variables to which BE is extremely sensitive.
Friday's rating action has been triggered by a chain of events
including the breakdown of negotiations between BE and state-
owned company British Nuclear Fuels Ltd.  These negotiations had
focused on amendments to the index-linked fuel reprocessing
contract between BNFL and BE, representing an expense of
c.GBP250m p.a., which BE has argued are significantly more
expensive than similar contracts in international markets.

Having reconsidered the long-term implications of continued
deadlock over issues with BNFL, and the continued depressed
state of the UK wholesale power market, the board of BE formed
the view that, while technically not prevented from doing so, it
would not be appropriate for BE to draw further under existing
committed bank facilities, totaling GBP615m, given the degree of
uncertainty over future UK cash flow levels from which proceeds
could be repaid. The expected effective loss of these committed
facilities is a primary driver behind the "immediate support"
requested from the UK Government, rather than any sudden deficit
in operational cash flows, or unanticipated or as yet
unannounced outages.

Fitch has also spoken with the UK Government, which has
confirmed that discussions commenced Friday with a view to
addressing the requests made of it by BE. The Government is
committed to enter into negotiations to find a solution which
maintains BE in the private sector, and will examine a variety
of options to assist BE. The UK Government has made it clear
that support will be focused on safety and security of supply,
and that there can be no certainty that its actions will
preserve value for either equity or debt investors.

                     Rating Rationale

The 'B+' rating reflects the significant risks, which now
surround the company. Yesterday's action by the company
effectively crystallized the increasing liquidity risks which BE
was facing in refinancing both a committed facility in January
2003 and eventually an outstanding bond in March 2003. The risks
can now be separated into near-term and medium-term in nature.
While the elevated likelihood that near-term support will be
furnished by the government may have supported a higher rating
than 'B+', the degree of complexity and extended timeline likely
involved in addressing the restructuring which BE have now said
is required, involving substantial execution risk, nonetheless
mitigate against a rating in the 'BB' category. At this time, it
seems unlikely that a restructuring will be achieved within the
standard timeline for a Rating Watch action i.e. within three to
six months, and this has also informed the rating decision.
Fitch would also note that, absent the elevated likelihood of
immediate support in some form from the UK Government, ratings
would have been lowered significantly below the new level, and
thus due account has been taken of the government's potential
support. While there are no rating triggers in BE's bank
facilities or bond documents, they do contain Material Adverse
Change clauses.

                          Near-Term Risks

In the near-term, execution risks exist over the requested
support from the UK Government. In this regard, the risks, while
clear, are not insurmountable. BE does not carry a very high
gross indebtedness in absolute terms, relative to other
distressed credits in the current environment. However, the
absolute amounts of support to permit continued operation of the
group are yet to be quantified as the extent of the requirements
to post collateral in support of its trading operations will
need to be determined. In addition, while the government will be
constrained by European Commission rules on state aid, typically
these rules do not place material constraints on short-term or
'emergency' funding, and thus should not be a major obstacle to
timeliness of any government support. Against this, trading
counterparty credit requirements, other supplier credit and the
ability to attract bank, capital markets or other sources of
financing have all been materially impaired by current events,
and a rapid solution which ensures no loss for current unsecured
creditors to the group cannot be taken for granted by any means.

                          Medium-Term Risks

Medium-term risks are a greater concern. Fitch takes the term
'restructuring' as used by the Government and BE to refer to
restructuring in a wider sense, incorporating contractual and
structural elements of BE's current profile. As such it is
obvious that this process could be a lengthy one. The UK
government has been subjected to sustained pressure from BE over
recent months to take steps that would improve the generator's
credit profile, including the possibility of exempting that
proportion of BE's production destined to non-commercial
customers from the new Climate Change Levy; a review of recent
business rate increases (though this is generally outside the
purview of central government); a commitment in practical terms
to match policy statements that nuclear should remain part of
the nation's energy mix going forward; a commitment to review
market trading mechanisms which BE believe act to penalize
nuclear generations; and a review of how nuclear liabilities are

This pressure has not resulted in supportive action as yet. The
February 2002 interim findings of a government review on
national energy policy, which indicated that 'the nuclear option
should remain open', but with no suggestion as to how this would
be achieved, was described as "woefully inadequate" by BE at the
time. The Climate Change Levy and BNFL contracts have been on
the table for many months with no positive movement. On the
wholesale market in general, UK regulator Ofgem has signalled a
strong reluctance to revisit the mechanisms recently introduced.
Despite Fitch's concerns over the sustainability of the NETA
system, in sending the correct supply/demand signals and in
supporting the government's own targets on renewable generation
(20% by 2020), the agency regards a near-term revision of the
system as highly unlikely. In addition, any medium-term
solutions that involve direct financial support or indirect
financial support (including guarantees and/or material contract
revisions) would most likely face scrutiny from the European
Commission, as indicated above.

                      Government Support

Although the UK government retains a Special Share in BE, this
does not impute any support in itself, and by restricting the
ownership by any individual party to 15%, currently mildly
complicates one possible 'exit route' - acquisition by a third
party. In its discussion with Fitch, the government indicated,
prudently, that any support extended would not guarantee the
position of equity or debt investors. The moral hazard argument
of using taxpayers' money to compensate private sector investors
has been exhaustively rehearsed during the administration of
Railtrack, although government support in that case has been a
source of material assistance.

There is a strong argument that it is also in the interests of
the UK Government to offer support of some form to BE, at least
in the near term. BE is the UK's largest electricity generator
with a 21% market share. It operates six nuclear power stations
in England and two in Scotland as well as the Eggborough coal-
fired power station. For obvious reasons, it is undesirable from
a public policy perspective to have a material portion of this
capacity either unavailable or subject to involuntary outage
(due to lack of financial resources).

While it is possible to maintain a level of operational
stability at BE in the near-term without meeting obligations to
financial creditors as they fall due, the amounts of debt
involved are modest by market standards. Gross debt in the UK
business amounted to GBP958m at end-March 2002, GBP550m of which
is technically non-recourse to BE (though incorporated by Fitch
in its debt analysis, following a review of the agency's view on
the strategic significance of Eggborough to BE). Leverage ratio
measures have suffered as a result of the pronounced fall in
cash flow, rather than a significant ramp-up in debt in recent
years. This low level of indebtedness in absolute terms has
positive implications for bond creditors, should a restructuring
eventually place BE's cash flows on a level commensurate with
their current market share and strategic significance to the
country's power market. The decision to seek a buyer for the
AmerGen joint venture in the US, although disposing of a future
source of cash flow from dividends, could represent a timely
injection of liquidity.

Normally, despite the underlying weakening of BE's credit
profile, the above factors could have supported a higher (though
still speculative grade) credit rating. As noted above, the
arguments of strategic significance and relatively modest
indebtedness are currently outweighed by concerns over the scale
of the restructuring which is now contemplated, with execution
risk amplified by the number of market mechanisms and
participants whose input will most likely be required. Rating
Watch Evolving acknowledges that positive developments in a
significant number of these areas may permit improvement from
the current rating levels, but also that a 'rescue' will remain
challenging. For example, it is unlikely that a favorable
settlement with BNFL alone at this stage would allow BE renewed
access to financing markets without further restructuring being
accomplished. The fact that leverage is a function of weak
underlying cash flow, rather than over-indebtedness, which could
be resolved with one-off cash injections from disposals or other
sources, also implies a lengthier resolution of the problems.
Finally, Fitch has also noted its concern at the apparent
suddenness with which the board of BE was obliged to revise its
view of the ongoing solvency of the business.

BROOKFIELD: S&P Pegs Preferreds' Global Scale Rating at BB+
Standard & Poor's Ratings Services assigned its 'P-3(High)'
Canadian national scale and double-'B'-plus global scale ratings
to Brookfield Properties Corp.'s C$150 million-C$200 million
6.0% cumulative class AAA redeemable preferred shares, series F.

At the same time, the ratings outstanding on the company,
including the triple-'B' long-term issuer credit rating, were
affirmed. The outlook is stable.

The issuer credit rating reflects Brookfield's strong asset
quality, its long-term leases to good quality tenants, a debt
maturity schedule that matches the long-term nature of the lease
schedule, and adequate financial flexibility. These credit
strengths are mitigated by a high degree of concentration in the
New York, N.Y., market; a more highly levered balance sheet
compared with those of its peers; moderate coverage levels; and
an encumbered commercial property portfolio.

The proceeds from the preferred share issue will be used
primarily to retire higher cost C$150 million of 9.00% Class AAA
preferred shares, therefore the company's fixed charge coverage
ratios should not be negatively affected. (The AAA class of
preferred shares is subordinate to Brookfield's class A and
class AA preferred shares. Nevertheless, Standard & Poor's
generally does not distinguish between different series of
subordinated obligations unless there is a specific reason to
believe that deferral of payment is more likely. In the case of
Brookfield, the prior ranking preferred shares are not of a size
to affect the likely payment of the AAA class.)

The rating on any unsecured debt to be issued by Brookfield in
the future would be rated one notch lower than the issuer credit
rating, due to the very high level of existing secured debt. The
one-notch difference addresses the general ranking of each
respective debt type's recovery prospects. The overall default
risk remains reflected in the triple-'B' issuer credit rating on
the company. Brookfield has a portfolio of 50 commercial
properties of above-average asset quality in largely central
business district locations that contain more than 45 million
square feet of space. Brookfield also operates a real estate
service business and develops master-planned residential
communities. Although Brookfield is a Canadian domiciled
corporation, the company is headquartered in New York, and an
increasing proportion of funds from operations are generated
from properties located in the U.S. The key markets where the
company is active are New York; Toronto, Ont., Calgary, Alta.;
Boston, Mass.; Denver, Colo.; and Minneapolis, Minn.

Brookfield's portfolio is 96% leased at rents that are currently
about 19% below market, although this healthy cushion could be
eroded if the current recession is deeper or lengthier than
currently expected. There is also some concentration to the
portfolio since 24 properties represent the bulk of total book
value. Nevertheless, the overall lease maturity schedule is
manageable, with roughly 4% of office space expiring each year
until 2005 and 60% of the space expiring beyond 2009. The
company's average lease term is 10 years, with New York-based
tenants at 11 years.

The financial policy of Brookfield has been to use mainly
property level debt that is nonrecourse to the company and at
fixed rates. The company has no corporate debt with the
exception of the US$226 million unsecured line of credit, of
which C$51 million was drawn as of June 30, 2002. The rating on
any unsecured debt to be issued by Brookfield in the future
would be rated one notch lower than the issuer credit rating,
due to the very high level of existing secured debt. The one-
notch difference addresses the general ranking of each
respective debt type's recovery prospects.

Cash flow protection is moderate but manageable considering the
C-corp status and the high level of principal amortization. Debt
service coverage was 1.64 times for fiscal year 2001 and fixed
charge coverage was 1.57x with no material change expected with
the preferred stock offering. The capital structure is more
highly leveraged at 63.5% debt-to-book capitalization at fiscal
year-end compared with U.S. REITs, and reflects the company's
strategy of property-level borrowings and C-corp structure. The
debt maturity schedule is manageable, with only one major
property mortgage coming due before 2006. Financial flexibility
appears adequate, as Brookfield has been successful at
generating cash through refinancings, property sales, and cash
from operations, and also benefits from a low dividend payout.

                          Outlook: Stable

The North American office market has softened materially and
fairly quickly, and is not expected to rebound this year.
Nonetheless, Brookfield's portfolio is competitively well
positioned to withstand the currently more challenging operating
environment due to its favorable lease profile, and strong asset
quality and credit tenants.

BUDGET GROUP: Bringing-In King & Spalding as Antitrust Counsel
Over the last several years, Robert L. Aprati, Budget Group
Inc.'s Executive Vice President, General Counsel and Secretary,
relates that the attorneys at King & Spalding have represented
the Debtors and its affiliates in connection with various
corporate and antitrust work.  Through their representation of
the Debtors, the members of King have become uniquely and
thoroughly familiar with the Debtors and their business affairs.
The members, counsel and associates of King who will represent
the Debtors in connection with the matters upon which King is
retained have extensive knowledge and expertise in all aspects
of antitrust, corporate and securities work and the treatment of
these issues in the context of a Chapter 11 bankruptcy.  The
Debtors believe that King's continued representation in
connection with their corporate, antitrust and securities issues
is essential to a successful Chapter 11 process and will provide
a substantial benefit to their estates.

Thus, the Debtors seek the Court's authority to employ and
retain King & Spalding as its special antitrust, corporate and
securities counsel in connection with these Chapter 11 cases
pursuant to Section 327(e) of the Bankruptcy Code.

The Debtors anticipate that King will draw on its extensive
experience with antitrust matters and will provide legal,
litigation and transactional support required by the Debtors
concerning various issues, including:

A. Advising with respect to state, national and international
    antitrust matters;

B. Advising and representing the Debtors with respect to certain
    litigation and regulatory matters; and

C. Advising and representing the Debtors in general corporate,
    securities and corporate finance matters.

King will charge the Debtors for its legal services on an hourly
basis and seek reimbursement for all costs and expenses incurred
in connection with these cases.  King's hourly billing rates
currently range from:

        Attorneys                 $135 - $650
        Paraprofessionals          $74 - $160

These hourly rates are subject to an annual adjustment on
January 1 of each year.

Sarah Robinson Borders, Esq., a member of King & Spalding,
informs the Court that the Firm has not received any retainers
in connection with its representation of the Debtors in various
prepetition corporate and antitrust matters.  King received
$755,600 in fees and expenses in 2001 and $750,000 in fees and
expenses in 2002 to date.

Ms. Robinson assures the Court that King, its members, counsel
and associates do not represent or hold any adverse interest to
the Debtors or their estates with respect to the matters upon
which it is to be employed and do not have any connections with
the Debtors, their creditors, or any other party-in-interest or
their respective attorneys and accountants, or the United States
Trustee.  However, the Firm currently represents or has
represented these parties in unrelated matters:

A. Lenders:  Bank of America N.A., Bank of Montreal, Bank of New
    York, Bank of Tokyo Mitsubishi Ltd., Bankers Trust Co.,
    Dresdner Bank AG, Fuji Bank Ltd., Merill Lynch Pierce Fenner
    & Smith Inc., Credit Suisse First Boston, Bank of America
    N.A., Bank of Montreal, Bank of Nova Scotia, BNP Paribas,
    Commerzbank Aktiengesellschaft, Credit Agricole Indosuez,
    Credit Lyonnais, Fleet Bank N.A., Comerica Bank, General
    Electric Capital Corp., Sumitomo Mitsui Banking Corp., and
    SunTrust Bank;

B. Indenture Trustees:  Bankers Trust Co., Bank of New York,
    Wells Fargo Bank, JP Morgan Chase Bank, and Credit Suisse
    First Boston;

C. Unsecured Creditors:  Bank of New York, Morgan Stanley & Co.,
    State Street Bank & Trust Co., Salomon Smith Barney Inc.,
    Wells Fargo Bank Minnesota N.A., Bear Sterns & Co., JP Morgan
    Chase, Credit Suisse First Boston, Wachovia Bank, Deutsche
    Bank, Citibank N.A., Donaldson Lufkin & Jenrette Securities
    Corp., Goldman Sachs & Co., GE Capital Fleet Services, Banc
    of America Securities LLC, Computer Science Corp., Charles
    Schwab & Co., UBS PaineWebber & Co., Prudential Securities
    Inc., and Worldspan L.P.;

D. Major Vendors:  DaimlerChrysler Corp., General Motors, and
    Toyota Motor Corp.;

E. Insurance Carriers: American International Group Inc., CAN
    Insurance Co., Lloyd's of London, ZC Specialty Insurance Co.,
    and The Traveler's Insurance Co.;

F. Major Shareholders:  Sanford Miller, and Deutsche Bank; and

G. Professionals:  Ernst & Young LLP, Eversheds, Jefferies &
    Co., KPMG LLP, and Lazard Freres & Co.

King intends to conduct an ongoing review of its files to ensure
that no conflicts or other disqualifying circumstances exist or
arise.  If any new relevant facts or relationships are
discovered, King will supplement its Application in a disclosure
to the Court. (Budget Group Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

BURLINGTON: Exclusivity Extension Hearing Set for Sept. 24, 2002
Rebecca L. Booth, Esq., at Richards, Layton & Finger P.A., in
Wilmington, Delaware, relates that since the Petition Date,
Burlington Industries, Inc., and its debtor-affiliates made
substantial progress addressing four major issues facing their

   (a) continuing discussions with their constituents regarding
       the [non-public] Initial Business Plan,

   (b) working with their professionals to develop exit
       strategies for their emergence from Chapter 11,

   (c) obtaining approval of the Bar Dates for filing claims and
       distributing notice of the Bar Dates to over 52,000
       creditors and other parties, and

   (d) commencing an exhaustive review of executory contracts
       and unexpired leases and commencing the process to obtain
       the authority to assume, assume and assign or reject
       certain contracts and leases.

Through these Chapter 11 cases, the Debtors are undertaking a
difficult task of remaining one of the world's leading textile
companies, while reducing their overhead and operating costs and
extending their product sourcing skills to a global network.
Among other things, the Debtors currently plan to:

   (a) reduce additional capacity by closing their Halifax,
       Clarksville and Kinderton operations,

   (b) continue supporting the transitional services agreement
       with both Springs and Tietex relating to the sale of the
       Debtors' Consumer Products and Upholstery businesses,

   (c) continue to develop the Debtors' Burlington Worldwide
       operations, which includes structuring relationships with
       manufacturers in China and other parts of Asia,

   (d) streamline their corporate structure, including efforts
       to minimize their information technology expenditures,

   (e) pursue additional tax strategies to collect on the
       potential $60,000,000 in additional refunds, and

   (f) sell non-core assets, including excess real estate,
       equipment and other assets to generate additional cash.

Ms. Booth contends that it is simply unrealistic and impractical
to expect that any party would be in a position to formulate,
promulgate and build consensus regarding a Plan earlier than
January 31, 2003.

Thus, the Debtors ask the Court to extend the exclusive period
to file a Plan to January 31, 2003 and extend the exclusive
solicitation period to March 31, 2003.  Ms. Booth argues that:

   (1) The Requested Extension is justified by the size and
       complexity of the Debtors' Chapter 11 cases;

   (2) The Debtors' progress in the resolution of the issues
       facing their creditors and estates warrants and Extension
       of the Exclusive Periods; and

   (3) The Extension of the Exclusive Periods will not harm the
       interest of the Debtors' creditors or other parties.

In addition, Ms. Booth reminds the Court that the General Bar
Date on July 22, 2002 was passed recently and the Debtors are
just now beginning to evaluate the voluminous claims against

Ms. Booth assures the Court that the relief requested would not
result in a delay of the plan process but rather permit the
process to move forward in an orderly fashion.

Ms. Booth reports that the Debtors have focused on implementing
the Initial Business Plan and have made great strides on
numerous components of the Initial Business Plan, which

   -- unifying the Debtors' sales and marketing force in order
      that all apparel products are marketed and sold under one
      organization known as Burlington Worldwide;

   -- expanding the product offerings of the Debtors'
      manufacturing base with sourced products from Burlington
      Worldwide's international mill partners so that the Debtors
      can offer a broader range of fabrics and deliver these to
      points of assembly worldwide;

   -- exiting, by sale to third parties, the consumer products
      portions of their interior furnishings business;

   -- selling non-core businesses and excess assets, generating
      net cash proceeds in excess of $55,000,000;

   -- creating value for the estate by the ongoing development
      and improvement in the Debtors' investment in Nano-Tex,
      LLC; and

   -- reducing the Debtors' domestic manufacturing base through
      the closure or sale of the Debtors' locations which

        (a) Sheffield, North Carolina,
        (b) Mount Holly, North Carolina,
        (c) Stonewall, Mississippi,
        (d) Kinderton, Virginia,
        (e) Halifax, Virginia,
        (f) Clarksville, Virginia,
        (e) Aguascalientes, Mexico, and
        (g) Acambaro, Mexico.

"These activities resulted in a significantly lower investment
in working capital, improved cash flow for the Debtors and the
elimination of significant excess manufacturing capacity and
related losses," Ms. Booth says.

Ms. Booth informs the Court that at this stage, the Debtors are
evaluating their performance under the Initial Business Plan and
working with their professionals to update and refine the plan
based on operating results.  The Revised Business Plan will form
the basis of the Debtors' plan of reorganization.  The Debtors
are also working with their primary constituencies to assist
them in further understanding the Debtors' operations and the
Revised Business Plan when completed.

Furthermore, the Debtors are currently discussing the requested
four-month extension of the Exclusive Period with the Creditors'
Committee and their lenders, hoping to generate support for this
relief before the objection deadline on September 12, 2002.  In
connection with these discussions, the Debtors have agreed to
provide the Creditors' Committee with a copy of the Revised
Business Plan, on or before September 30, 2002 and a draft Plan
term sheet not later than November 30, 2002.

The parties are also discussing a potential amendment the
Debtors' postpetition credit agreement to allow the Debtors to
pursue additional asset sales and make additional adequate
protection to their prepetition secured lenders.

The Debtors believe that these productive discussions and their
provision to their constituents with copies of the Revised
Business plan and a draft Plan term sheet merit the relief

"It is clear under applicable law that, in large and complex
Chapter 11 cases such as these, exclusivity can and should be
extended where the Debtor has made, and is continuing to make,
significant progress towards a successful reorganization.
Accordingly, the Court should grant the requested extensions of
the Exclusive Periods," Ms. Booth asserts.

In addition, the Debtors are working with their professionals to

     -- the claims asserted against them;

     -- their current and projected cash flow and liquidity,
        including an analysis of future borrowing capacities and
        other sources of capital;

     -- potential capital structures and exit strategies to
        develop a Plan term sheet.

By application of Del.Bankr.LR 9006-2, the current deadline is
automatically extended through the conclusion of the September
24, 200 hearing. (Burlington Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

Burlington Industries' 7.25% bonds due 2005 (BRLG05USR1),
DebtTraders reports, are trading at 18 cents-on-the-dollar. See
for real-time bond pricing.

CGI HOLDING: Sells Safe Environment to SECO Management-Led Group
CGI Holding Corporation (OTCBB: CGIH.OB) announced the sale of
the stock of one of the Company's subsidiaries, Safe Environment
Corp. of Indiana, and of the Company's interest in Acadian
Builders, LLC., to a company controlled by the management of

SECO is an environmental remediation and demolition contractor;
Acadian is the owner of a housing development in Missouri. The
financial terms of the transaction were not disclosed.

Gerard M. Jacobs, the Company's CEO stated, "This divestiture
will eliminate a great deal of debt from the Company's
consolidated balance sheet, and will eliminate the Company's
exposure to a lower-margin, somewhat cyclical environmental
remediation industry. With this divestiture completed, we expect
to focus upon the growth of our remaining, profitable Websourced
subsidiary, and upon the potential for selected accretive
acquisitions of certain technology-advantaged companies."

CGIH, based in Hillside, Illinois, currently has one subsidiary,
Websourced, Inc., Morrisville, North Carolina, a leader in
search engine ranking services --

At June 30, 2002, CGI Holding's balance sheet shows a working
capital deficit of over $1 million, and a total shareholders'
equity deficit of $42,382.

CHARMING SHOPPES: Reports Improved Sales Performance for August
Charming Shoppes, Inc., (Nasdaq: CHRS), the retail apparel chain
specializing in women's plus-size apparel, reported that total
sales for the four weeks ended August 31, 2002 increased 14% to
$178,100,000 from $156,900,000 for the four weeks ended
September 1, 2001.  The current period's total sales include
sales from Lane Bryant, which was acquired August 16, 2001.
Comparable store sales for Charming Shoppes, Inc. decreased 1%
for the four weeks ended August 31, 2002.

Sales for the thirty weeks ended August 31, 2002 increased 52%
percent to $1,444,500,000 from $948,500,000 for the comparable
period ended September 1, 2001.  Comparable store sales for
Charming Shoppes, Inc., decreased 1% for the thirty weeks ended
August 31, 2002.

For more detailed information on monthly sales, please call
1-866-CHRS-NEWS (1-866-247-7639) to listen to Charming Shoppes,
Inc.'s prerecorded monthly sales commentary.  This recording
will be available until September 9, 2002.

Charming Shoppes, Inc., operates 2,311 stores in 48 states under
Monsoon and Accessorize are registered trademarks of Monsoon
Accessorize Ltd.  During the thirty weeks ended August 31, 2002,
the Company opened 39, relocated 20, converted 13 and closed 144
stores.  Please visit http://www.charmingshoppes.comfor
additional information about Charming Shoppes, Inc.

                           *    *    *

As reported in Troubled Company Reporter's May 24, 2002 edition,
Standard & Poor's assigned its BB- rating to Charming Shoppes'
$130 million Senior Unsecured Notes.

CHILDTIME LEARNING: Fails to Satisfy Nasdaq Listing Requirements
Childtime Learning Centers, Inc. (Nasdaq: CTIM), had received
notice of the determination by the Nasdaq Listing Qualifications
Department that, absent an appeal by the Company, the Company's
securities would be delisted from The Nasdaq National Market
System on September 13, 2002, because of the failure to maintain
market value of publicly held shares of $5,000,000, as required
for continued inclusion by Marketplace Rule 4450(a)(2).  The
Company intends to appeal the Staff determination.  During the
pendency of the appeal process, the Company's securities will
remain listed on The Nasdaq National Market System.  If the
Company determines that its appeal will not be successful, it
will apply to transfer the listing of its securities to The
Nasdaq SmallCap Market.  Although there are no assurances that a
transfer application to The Nasdaq SmallCap Market, if
necessary, would be approved, the Company believes that it meets
the applicable standards for inclusion in that market.

Childtime Learning Centers, Inc., of Farmington Hills, MI
acquired Tutor Time Learning Systems, Inc. on July 19, 2002 and
is now the nation's third largest publicly traded child care
provider with operations in 30 states, the District of Columbia
and internationally.  Childtime Learning Centers, Inc., has over
7,500 employees and provides education and care for over 50,000
children daily in over 450 corporate and franchise centers

COMM'L MORTGAGE: S&P Affirms Low-B Ratings on Class F to H Notes
Standard & Poor's Ratings Services affirmed its ratings on 12
classes of Commercial Mortgage Asset Trust's commercial mortgage
pass-through certificates series 1999-C1.

The affirmations reflect the stable operating performance of the
mortgage pool since issuance.

As of August 2002, the loan pool comprised 233 fixed-rate
mortgage loans with an outstanding aggregate principal balance
of $2,295 million. The servicer, Wachovia Securities Inc.
(Wachovia), has provided 2000 and 2001 year-end net operating
income for 91% and 81% of the current principal pool balance,
respectively. Based on this information, Standard & Poor's
calculated the weighted average debt service coverage ratio to
be 1.49 times for year 2000 data and 1.53x for year 2001 data.
These calculated DSCR levels compare to a DSCR of 1.49x at
issuance. To date, only one loan has paid off since issuance.
This former REO loan, known as the Green Oaks Park Hotel loan,
paid off on Aug. 11, 2002 at a $4.98 million principal loss (93%
of the unpaid principal balance) to the trust.

All of the loans in the pool comprise fixed-rate mortgages, 99%
of which are amortizing balloon loans. With a weighted average
maturity of 108 months, refinancing risk is not a concern. The
pool has some degree of geographic concentration, with the top
five states representing more than 50% of the total loan
balance, and California and Michigan representing 17% and 11%,
respectively. In terms of property type composition, retail
(41%) and office (26%) predominate.

The pool is skewed, with the top 10 loans comprising 38% of the
outstanding current pool balance, and the top three loans alone
representing 18% of the pool. Based on year-end 2001 data
reported by Wachovia, the DSCR for the top 10 loans was 1.54x,
or about the same as the 1.53x reported at issuance.

As of August 2002, the pool contained three specially serviced
loans. Two of these loans are delinquent, representing 0.77% of
the mortgage pool balance. One of these loans, secured by an
office building in Stratford, Conn., became REO on Aug. 7, 2002.
The sole tenant, The Dictaphone Corp., filed for bankruptcy, and
a reorganization plan has been approved. Based on conversations
with the special servicer, Lennar Partners Inc., a new lease at
a reduced rental rate has been signed, which will result in a
DSCR slightly below 1.0x. The other delinquent loan is 90-plus
days past due and is secured by Streator Industrial Facility, a
967,175 square foot industrial property located northeast of
Peoria, Ill. The primary tenant, which had occupied 89% of the
total space, vacated on July 24, 2002. Lennar is pursuing
judicial foreclosure. The third loan is secured by a Comfort Inn
in Chicopee, Mass. and is current. The property lost its Comfort
Inn flag, but a new franchise agreement with Park Inn has been

Currently, there are 36 loans on the servicer's watchlist that
total $252 million, or 11% of the mortgage pool. All of these
loans are current, but are on the watchlist because of one of
the following reasons: low DSCR, a tenant representing more than
25% of the total space has vacated, or the collateral property
comprises a bankrupt tenant. One of these loans is the third
largest loan in the pool at $124 million, and is secured by The
Source Mall in Westbury, N.Y. DSCR for this loan declined to
0.95x for the full year 2001 from 1.74x at issuance due to
several lease terminations. Operating performance has recently
improved as evidenced by a DSCR of 1.11x and occupancy of 91%
for the six months ending June 30, 2002.

Based on discussions with Wachovia and Lennar, Standard & Poor's
stressed several of the specially serviced loans, the watchlist
loans, and loans with DSCRs below 1.1x as part of its analysis.
The expected losses and resulting credit levels adequately
support the rating actions.

                          Ratings Affirmed

                    Commercial Mortgage Asset Trust
           Commercial mortgage pass-thru certs series 1999-C1

                Class   Rating    Credit Support (%)
                A-1     AAA       29.27%
                A-2     AAA       29.27%
                A-3     AAA       29.27%
                A-4     AAA       29.27%
                B       AA        24.62%
                C       A         18.92%
                D       BBB       12.98%
                E       BBB-      11.42%
                F       BB+       9.10%
                G       BB        6.51%
                H       BB-       5.47%
                X       AAA       N/A

CONSECO INC: Fitch Drops Corporate Ratings to Default Status
Fitch Ratings has lowered the corporate ratings of Conseco Inc.,
to 'Default' status. This action follows the expiration of the
30-day grace period on unpaid bond interest payments.

On August 9, 2002, Conseco missed interest payments on several
of its public securities and exercised the 30-day grace period
allowed by the bond indentures. Conseco has failed to cure the
delayed interest payments within the grace period. Given the
cross-default provisions within the company's securities
agreements, all Conseco public debt and preferred stock is now
in 'default'.

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

The long-term rating of 'CC' and the short-term rating of 'C' of
Conseco Finance Corp., a wholly owned subsidiary of Conseco,
remain on Rating Watch Negative. A 'CC' rating is indicative of
high default risk and that default of some kind appears
probable. Today's action reflects the announcement that Conseco
and CFC have obtained a temporary waiver of a cross default
provision from the one lender whose financing agreement contains
a cross default to events of default under Conseco's bond debt.

                          Conseco Inc.

           -- Long-term rating, lowered to 'D' from 'C';

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

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

                 Conseco Financing Trust I-VII

          -- Preferred securities, lowered to 'D' from 'C'.

               Insurer Financial Strength Ratings
                     Remain on Rating Watch

       -- Bankers Life & Casualty Co., 'B', Negative;

       -- Conseco Annuity Assurance Co., 'B', Negative;

       -- Conseco Direct Life Insurance Co., 'B', Negative;

       -- Conseco Health Insurance Co., 'B', Negative;

       -- Conseco Life Insurance Co., 'B', Negative;

       -- Conseco Life Insurance Co. of New York, 'B', Negative;

       -- Conseco Medical Insurance Co., 'B', Negative;

       -- Conseco Senior Health Insurance Co., 'B', Negative;

       -- Conseco Variable Insurance Co., 'B', Evolving;

       -- Pioneer Life Insurance Co., 'B', Negative.

      Conseco Finance Corp. Ratings Remain on Rating Watch

            -- Senior debt rating, 'CC', Negative;

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

Conseco Inc.'s 10.75% bonds due 2008 (CNC08USR1), DebtTraders
reports, are trading at 27 cents-on-the-dollar. See
real-time bond pricing.

CONSECO INC: Continued Declines Concern Fitch on Other Ratings
Fitch Ratings lowered the corporate credit ratings of Conseco
Inc. to 'D' (which indicates 'Default') from 'C'. The long-term
rating of 'CC' and the short-term rating of 'C' of Conseco
Finance Corp., a wholly-owned subsidiary of Conseco, remain on
Rating Watch Negative. A 'CC' is indicative of high default risk
and that default of some kind appears probable. Monday's action
reflects the earlier announcement that Conseco and CFC have
obtained a temporary waiver of a cross default provision from
the one lender whose financing agreement contains a cross
default to events of default under Conseco's bond debt.

As indicated in previous press releases, Fitch remains concerned
that the continued deterioration in the financial performance of
the parent company along with Conseco Finance, could further
impact the performance of the underlying asset backed
transactions. In a worst case scenario, a transfer of servicing
might become necessary potentially causing further deterioration
in performance of the underlying collateral.

In addition to the ongoing review of asset-backed transactions,
Fitch has reviewed ABS collateralized debt obligations,
structured investment vehicles, asset-backed commercial paper
programs, and monoline insurance companies for any ratings
associated with CFC.

The review represents a coordinated effort by the various teams
within Fitch's Structured Finance Group, International ABS
Group, CDO Group, Financial Institutions Group, ABCP Group, and
Insurance groups. As part of the review process, Fitch will
analyze the current and anticipated credit enhancement levels,
the performance trends for the various assets and the quality of
the current and expected servicing. Given the broad range of
consumer and commercial assets that CFC finances, and the
deterioration of the parent company, Fitch believes that a
coordinated review effort is the most appropriate approach.

As of June 30, 2002, CFC's total managed receivables portfolio
exceeded $39 billion of which MH-related exposure was $24
billion and HE exposure was $10 billion. In addition, Fitch
rates CFC serviced transactions backed by recreational vehicles,
dealer floorplan loans, and truck loans totaling approximately
$2.4 billion.

Fitch has outstanding ratings on the following Conseco Finance
serviced transactions:

                      Structured Finance:

                Manufactured Housing

$17.8 billion in securitizations in the following series:











              Home Equity/Home Improvement

$6.75 billion in securitizations in the following series:







Green Tree Recreational, Equipment and Consumer Trust

                 --Series 1996-B, C, D;

                 --Series 1997-A,B,C,D;

                 --Series 1998-A,B,C;

                 --Series 1999-A, 2000-A ($991 million).

Green Tree Floorplan Receivables Master Trust ($637 million)

Conseco Finance Vehicle Trust 2000-B (Truck) ($210 million)

Conseco Private Label Credit Card Master Note Trust ($602M)

In addition, exposure to CFC transactions in various CDOs, SIVs,
ABCP programs and Monoline Insurance portfolios is as follows:

Global ABS CDOs:

Of the 58 structured finance CDOs rated by Fitch, 35 of them
have outstanding CFC related ratings, with an average exposure
per deal of 5.88%, and a range of 0.26% to 10.48%. Of that, 25
CDOs have outstanding ratings of CFC bonds rated 'BBB' or below,
with an average exposure per deal of 2.98% and a range from
0.26% to 9.13%. 22 CDOs have outstanding CFC related rating on
bonds rated 'A', with an average exposure of 2.40% and a range
of 0.94% to 5.12%. 15 CDOs have outstanding CFC related ratings
on bonds rated 'AA', with an average exposure of 1.90% and a
range of 0.43% to 4.97%, and 7 CDOs have outstanding CFC related
ratings at the 'AAA' level, with an average exposure of 2.92%
and a range of 0.05% to 10.36%.

Fitch believes the CDOs with exposure at rating levels of 'BBB'
and below pose the greatest risk to the CDOs that hold them and
especially those that contain CFC MH Bonds. 21 of the 25 CDOs
have exposure to CFC MH bonds rated 'BBB' or below, with an
average exposure per deal of 2.09% and a range from 0.54% to

ABCP programs:

While none of the Fitch-rated ABCP programs have direct Conseco
related ratings, many of the programs, which are permitted to
buy highly rated securities, have indirect exposure to Conseco
entities through their ownership of certain senior tranches of
rated collateralized debt obligations. As of the date of this
press release, these CDO tranches remain eligible conduit
investments for each of the affected programs. However, in the
event Conseco suffers further deterioration and such CDO
tranches suffer downgrades, rendering them ineligible for the
respective conduits, the affected conduits would be required to
take certain remedial steps which may include the posting of
additional credit enhancement or an immediate take-out by
liquidity providers, thereby mitigating any potential loss to
ABCP noteholders.


Conseco's default is not expected to result in any fallout to
the Structured Investment Vehicle sector. SIVs were examined for
ratings on CFC manufactured housing securitisations, and only
one SIV has direct exposure. This was limited to 2 senior
tranches representing less than 2% of outstanding portfolio
balance. Two other SIVs have minimal indirect exposure via CDO
tranches, which in turn have exposure to mezzanine tranches of
certain CFC securitisations. In each instance, the SIV exposure
to the relevant CDO was less than 0.4% and the underlying CDO
exposures to Conseco ranged from 0.9%% to 5.6%"

Monoline financial guarantors:

MBIA Insurance Corp., Ambac Assurance Corp., Financial Security
Assurance Inc., Financial Guaranty Insurance Co., ACE Guaranty
Re Inc., AXA Re Finance S.A., Radian Asset Assurance Inc.,
Radian Reinsurance Co. Inc., XL Capital Assurance Inc., and XL
Financial Assurance Ltd. have a total of $2.3 billion of
principal in force on Conseco-serviced structured finance
transactions. MBIA also has $56 million of Conseco exposure
within 11 collateralized debt obligations. In these cases
however, the Conseco securities make up only a very small
portion of the CDO pools, and MBIA's exposures are on highly
rated tranches, with substantial first-loss protection.
Therefore, an interruption in the Conseco payments will not, in
and of themselves, result in insured claims.

CONSOLIDATED PROPERTIES: Closes on Asset Sale to St. James
R. Scott Hutcheson, President of Consolidated Properties Ltd.
announced that the company has entered into an agreement
to dispose of two Winnipeg based industrial assets for net
proceeds of $3,625,000, which will result in a pre-tax gain of
approximately $385,000. The purchaser is St. James Square
Limited Partnership. The general partner of St. James is a
subsidiary of Shelter Canadian Properties Limited, a corporation
which is effectively controlled by Arni C. Thorsteinson, the
Chairman of the Board of Directors of Consolidated Properties
Ltd.  Closing of the transaction is expected to occur at the end
of September.

The sale of the properties was approved unanimously by all of
the members of the Board of Directors of Consolidated other than
Mr. Thorsteinson who abstained from voting. In approving the
sale, the Board of Directors took into consideration an
independent estimate of market value which had been previously
obtained by management of the Corporation from Colliers Pratt
McGarry and estimated market value to be $3.6 million.

Mr. Hutcheson stated "This disposition further reduces the
geographic dispersion of Consolidated's real estate assets and
allows us to better concentrate on our portfolio of Calgary
based downtown office buildings."

Consolidated Properties Ltd., (TSE: COP) is a publicly traded,
real estate company whose common shares are listed on the
Toronto Stock Exchange.

COVANTA ENERGY: Intends to Enter into Insurance Financing Pact
Pursuant to Section 364(c)(3) of the Bankruptcy Code and Rule
4001(c) of the Federal Rules of Bankruptcy Procedure, Covanta
Energy Corporation and its debtor-affiliates seek the Court's
authority to enter into an insurance premium financing agreement
to finance the payment of premiums to be paid upon their
insurance policies.

According to Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen
& Hamilton, in New York, the Debtors must maintain various
insurance policies in the ordinary course of their business.
These policies provide primary and excess coverage for:

     (i) property, boiler and machinery damage and business
         interruption -- the Property Policies;

    (ii) Workers' Compensation, general and auto liability --
         Casualty Policies;

   (iii) director's and officer's liability -- D&O Policies; and

    (iv) environmental liability -- Environmental Polices.

In the ordinary course of business, the Debtors will renew the:

   (a) terms of the Property Policies for one year as of October
       20, 2002 no later than November 19, 2002.  The expected
       annual premium will be no more than $20,000,000;

   (b) terms of the D&O Policies for one year as of September
       27, 2002.  In addition, the Debtors intend to purchase
       extended discovery coverage under the current policies.
       The anticipated annual premiums will be at most
       $4,000,000.  The premiums are due before October 27,
       2002; and

   (c) terms of the Environmental Policy for three years as of
       October 20, 2002.  Expected term premium is not more than
       $1,000,000 to be paid before November 19, 2002.

Ms. Buell tells Judge Blackshear that the Policies are extremely
valuable to the Debtors and are essential to the operation of
the business and the preservation of the assets and properties
of the Debtors and their estates.  However, Ms Buell says, the
Premium Amounts payment in a lump sum would impose a severe
strain on the Debtors' cash resources.  Thus, the Debtors wish
to enter into arrangements to provide financing in order to pay
the Premium Amounts, consistent with their ordinary course
practice prepetition.

The Debtors were able to arrange for the insurance premium
financing with Cananwill, Inc. and A.I. Credit Corp. --
Financing Companies.  Under the Financing Agreements, the
premiums will be paid by the Financing Companies to the
insurance companies on behalf of the Debtors for the full term
of the Policies. Specifically, the Agreements provide that:

   -- Cananwill would pay the Property Premium for Covanta in
      consideration for which Covanta would pay Cananwill a
      downpayment and would repay the remainder, plus interest
      at a 6% annual rate, in monthly installments.  Cananwill
      will receive a security interest in the gross unearned
      premiums for the Property Policies in the form of a lien
      pursuant to Section 365(c)(3) of the Bankruptcy Code.  The
      lien will be junior in rank only to the security interests
      granted under the DIP Agreement or the lien will have
      priority over other liens to the extent consented by the
      Secured Parties.  In the event of cancellation of the
      Property Policies, the gross unearned premiums would be
      payable to Cananwill, subject to the security interests
      granted to the Secured Parties; and

   -- A.I. Credit Corp -- AICC -- would pay the Casualty Premium
      in consideration for which Covanta would pay AICC a
      downpayment and would repay the remainder, plus interest
      at an annual rate of 6%, in monthly installments.  AICC
      will receive a security interest in the gross unearned
      premiums for the Casualty Policies in the form of a lien
      pursuant to Section 364(c)(3) of the Bankruptcy Code.
      The lien will be junior to the security interests granted
      under the DIP Agreement and the DIP Order or it will have
      priority over other liens to the extent consented by the
      Secured Parties.  In the event of the cancellation of the
      Casualty Policies, the gross unearned premiums would be
      payable to AICC, subject only to the security interests
      granted under the DIP Agreement and the Final DIP Order
      to the Secured Parties or as the Secured Parties may

"Obtaining financing to pay large premiums secured solely by
unearned premiums is a common practice followed by many
businesses in order to spread the payments over the course of
the year and minimize the negative effect on cash flow of a lump
sum payment of the premiums," Ms. Buell states.

In the event Covanta defaults in the payment of any installment
due pursuant to any of the Financing Agreements, the Financing
Companies will mail a notice to Covanta demanding payment and
identifying the amount outstanding and the billing date, and for
Covanta to make payments within 13 business days.  Otherwise,
the Financing Companies may cancel the policies and they may
receive and apply the unearned or return premiums to the account
of the Debtors.  In the event that, after the application of
unearned premiums, any sums still remain due to the Financing
Companies, the deficiency will be recognized as an
administrative claim under Section 503(b)(1)(A) of the
Bankruptcy Code.  The Financing Companies will be entitled to
the payment of unearned premiums as an administrative claim in
the event that there exists a payment default under the
Financing Agreements or the Agreements are not assumed
obligations of the reorganized entity.

The financing for the premiums for the D&O Policies and the
Environmental Policy are still under negotiation.  Ms. Buell
assures the Court that the terms of the financing agreement will
be substantially similar to the Cananwill or the AICC Agreement.
(Covanta Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

DANA CREDIT: S&P Affirms BB/B Counterparty Credit Ratings
Standard & Poor's Ratings Services affirmed its double-
'B'/single-'B' counterparty credit ratings on Toledo, Ohio-based
Dana Credit Corp., following the company's announcement that it
has completed the sale of its real estate division. The ratings
are removed from CreditWatch, where they were placed on October
17, 2001, when Dana Corp., DCC's parent, announced that it had
engaged the firm of Lazard Freres and Co., to pursue the sale of
DCC. The outlook is stable.

The proceeds of the sale of DCC's real estate division represent
approximately 7% of DCC's asset base. At June 30, 2002, DCC's
assets were $2.14 billion. Additionally, in late June 2002, the
company sold several DCC subsidiaries, recording a net gain of
$30.8 million. It is widely anticipated that the company will be
sold in as many as five parts.

"DCC continues to perform well during the divestiture process,"
said credit analyst Steven Picarillo. "For the first six months
of 2002, income was $47.8 million." Removing the gain of the
subsidiary sale, income would be $17.1 million, approximately $5
million over the same period last year.

"The stable outlook is based on the expectation that DCC will
continue to perform well during the divestiture process," Mr.
Picarillo said.

DPL CAPITAL: S&P Cuts Ratings on Three Related Synthetic Deals
Standard & Poor's Ratings Services lowered its ratings on three
synthetic securities related to DPL Capital Trust II preferred
capital securities to double-'B'-plus from triple-'B'-minus.

The lowered ratings reflect the credit quality of the underlying
securities issued by DPL Capital Trust II, which are guaranteed
by DPL Inc.

These DPL Capital-backed issues are swap-independent synthetic
transactions that are weak-linked to the underlying collateral,
DPL Capital Trust II preferred capital securities.

                         Ratings Lowered

      SATURNS DPL Capital Security Backed Units-Series 2002-3
           $54.55 million callable units series 2002-3

           Class          To             From
           A units        BB+            BBB-
           B units        BB+            BBB-

                       SATURNS Trust No. 2002-4
      $42.5 million DPL Capital security-backed series 2002-4

           Class          To             From
           A units        BB+            BBB-
           B units        BB+            BBB-

      SATURNS DPL Capital Security Backed Units-Series 2002-7
       $25 million DPL Capital security-backed series 2002-7

           Class          To             From
           A units        BB+            BBB-
           B units        BB+            BBB-

ENGAGE INC: CMGI Divests Equity and Debt Ownership Interests
Engage, Inc. (OTCBB: ENGA), a pioneer in enterprise software and
services for advertisers, marketers and publishers, announced a
transaction with CMGI, Inc., (Nasdaq: CMGI) under which CMGI
canceled $60 million of debt owed to it by Engage and
transferred all of its holdings of Engage securities back to
Engage for retirement. Engage also announced the appointment of
a new leadership team including John Barone, as its new
President and Chief Operating Officer and member of its Board of
Directors, and Lisa McAlister, its recently appointed Chief
Financial Officer and Treasurer. Engage believes its improved
financial position, resulting from the elimination of
essentially all of its debt, and appointment of a new leadership
team strongly positions the company for growth.

Under the terms of the transaction, CMGI canceled approximately
$60 million in debt owed by Engage to CMGI and transferred to
Engage for retirement approximately 148.4 million shares of
common stock of Engage owned by CMGI, representing approximately
76% of the outstanding shares of Engage's common stock prior to
the close of the transaction. As consideration for CMGI's
cancellation of the debt and the transfer to Engage of CMGI's
shares, Engage paid to CMGI an aggregate of $2.5 million in cash
at the closing, issued CMGI a warrant to purchase 9.9% of the
shares of Engage common stock outstanding at the time of
exercise, and has agreed to pay CMGI future payments of $6
million. The $6 million future payments consist of a $2 million
non-interest bearing promissory note due in 2006 issued by
Engage to CMGI and future earn-out payments of up to $6 million
based on Engage's quarterly operating income starting with the
fiscal quarter ending October 31, 2003. Principal due on the
note will be canceled to the extent the earnout payments made by
Engage exceed $4 million as of the maturity date of the note in

Barone, who most recently held the position of Senior Vice
President of Sales and Marketing at Engage, will assume
leadership of Engage from Christopher Cuddy, who was brought in
to lead the company through a period of significant transition
and systematic restructuring over the past year and is now
stepping down from his position as interim President and CEO to
pursue other opportunities. As President and COO and member of
the Board of Directors, Barone will lead the company as it
begins its evolution from a majority-owned operating company of
CMGI into an independent, world-class developer of marketing
software and services.

"John has the wealth of experience needed to fuel Engage's
growth and development," said Ed Bennett of Engage's Board of
Directors. "We already support some of the world's most
respected retail brands, and John's 20 years of enterprise
software experience, coupled with his keen understanding of our
customers, will enable him to guide Engage on our course toward
clear market leadership."

McAlister joined Engage as its Chief Financial Officer and
Treasurer in June. She has brought to Engage more than 15 years
of financial and operating experience in public and venture-
backed private companies as well as an extensive background in
capital-raising and financial restructuring. Ms. McAlister has,
and will continue to play an integral part in developing the
strategy and execution of the plan for Engage's future growth.

"This transaction will significantly benefit Engage by
essentially eliminating all debt and allowing us to focus
financial resources on serving and broadening our client base
and continuing to improve our industry-leading enterprise
software solutions for advertising, marketing, and promotion
programs," said Barone.

Engage, Inc., (ENGA:OB) is a leading provider of advertising,
marketing and promotion software solutions. Engage's digital
asset management and workflow automation software enables the
creation, production and delivery of marketing and advertising
content more quickly and efficiently, increasing time-to-market
advantages, boosting productivity and ultimately driving higher
ROI from marketing programs and advertising campaigns. The
company's Internet ad management business platform powers the
effective and efficient design and delivery of online campaigns
for web publishers who are competing for advertising revenue in
a rapidly evolving medium. A publicly owned company, Engage is
headquartered in Andover, Massachusetts, with European
headquarters in London and offices worldwide. For more
information on Engage, please call 877-U ENGAGE or visit

                           *    *    *

As reported in Troubled Company Reporter's August 21, 2002
edition, Engage, Inc., received notification from the Nasdaq
Listing Qualifications Panel that it had denied Engage's request
for continued listing on the Nasdaq National Market and
consequently, its common stock was delisted at the opening of
business on August 15, 2002.  Engage's common stock was eligible
to trade on the Over-the-Counter Bulletin Board (OTCBB), and
began trading on the OTCBB on August 15, 2002 under the symbol

EMAGIN CORP: Ginola Secured Conv. Note Extended Until Sept. 30
On August 30, 2002, eMagin and Ginola Limited, an assignee of
Rainbow Gate Corporation, entered into an amendment agreement to
amend the default provision and extend the maturity date of the
Secured Convertible Promissory Note dated November 27, 2002,
issued under the Secured Note Purchase Agreement entered into
November 27, 2001, between eMagin and Rainbow Gate Corporation,
as amended by the Omnibus Amendment, Waiver and Consent
Agreement dated January 14, 2002.  The amendment agreement
extends the maturity date of the Ginola Secured Convertible Note
from August 30, 2002 to September 30, 2002 and adds certain
events of default.

                          *    *    *

In a letter to the shareholders of eMagin Corporation (AMEX:
EMA), Chairman, President, and CEO Gary Jones, remarked on the
current status of the company: "First, we are pleased to inform
you that we have a backlog of over $10 million in purchase
agreements, with another almost $10 million in Letters of Intent
for orders to be delivered over the remainder of 2002 and 2003.
We have delivered OLED-on-silicon microdisplays to military,
industrial, medical, and consumer OEM customers, and currently
are continuing to do so. Some customers have indicated that they
are planning new product lines, or even new start-up companies,
around our OLED microdisplays."

Mr. Jones continued, "However, as we have previously stated,
sufficient capital is required in order to execute our business
plan. As a semiconductor-model company such as eMagin ramps into
production it must still support the fixed costs for a high
technology cleanroom operation and add the increased cost of
building inventory, receivables and other expenses of
production. Certain transactions, which we expected to have
concluded by now, were either delayed or terminated for a
variety of factors, including selling pressure depressing the
stock price, certain capital and debt structural issues that had
been impeding us, and the overall unfavorable equity and debt
market conditions. Lack of operating capital, along with some
materials supply delays, took a toll on our ability to realize
the volume of shipments we had targeted for completion in the
second quarter of 2002, although the volume of orders increased
and our yields further improved. Both our customers and we were
ready, but the financial markets were not. This, along with cash
balance and working capital issues, must be resolved and we are
pursuing a number of possible approaches for resolving this
serious cash crunch."

"It is clear that our payables and debt must be reduced or
restructured in order to allow the company to move forward,"
explained Mr. Jones. "Therefore, we are presently making a
serious effort to restructure our payables. While we can assure
you that we are making every effort to succeed in this
restructuring, we cannot assure you that all of the key
creditors will cooperate fully in this effort or that the
company will be able to continue operations should we not

EMAGIN CORP: Extends Rivkin Secured Conv. Note to September 30
On August 30, 2002, eMagin and Mr. Jack Rivkin entered into an
amendment agreement to amend and extend the maturity date of the
Secured Convertible Promissory Note dated November 27, 2001,
issued under the Secured Note Purchase Agreement entered into
November 27, 2001 between eMagin and Rivkin.  The amendment
agreement extends the maturity date of the Rivkin Secured
Convertible Note from August 30, 2002 to September 30, 2002.

A leading developer of virtual imaging technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. These miniature, high-performance,
modules provide access to information-rich text, data, and video
which can facilitate the opening of new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging

ENRON CORP: Wins Approval to Consummate Asset Sale Deal with DAC
Garden State conducted an auction on July 19, 2002 and July 22,

At the start of the Auction, Garden State determined that
Deferiet Acquisition Corporation and Galaxy Carting would be
qualified to submit bids for Garden State's mill business

The initial bids communicated by DAC and Galaxy were made
subject to the terms of proposed asset purchase agreements which
varied from the form annexed to the Motion.  Several bids were
subsequently communicated by DAC and Galaxy during the Auction,
and from Garden State's perspective, the purchase price and
other terms of agreement were substantially improved.

As the bid amounts were increased, Garden State asked DAC and
Galaxy to provide sufficient evidence of their financial
wherewithal to consummate an acquisition of the Mill Business.
Garden State ultimately determined, and upon consultation with
the Creditors' Committee, that Galaxy had failed to do so.

DAC increased its bid and ultimately offered to purchase the
Mill Business for $6,100,000, subject to the terms and
conditions of a form of asset purchase agreement different than
the form annexed to the Motion.

Upon consultation with the Creditors' Committee, and in the
exercise of its business judgment, Garden State concluded that
DAC had submitted the highest and best offer for the Mill

Garden State and DAC executed an Asset Purchase Agreement, dated
July 29, 2002, pursuant to which, among other things, Garden
State agreed to sell certain assets and assign certain
liabilities of the Mill Business to DAC and DAC agreed to
purchase such assets and assume such liabilities.  The Original
Agreement also contemplated that the parties would continue to
negotiate and would reach agreement concerning certain of Garden
State's liabilities, and its rights to receive indemnification,
in respect of a claim asserted by Central Bergen Properties
seeking removal of an encroachment on property adjacent to
Garden State's real property.

After further negotiation, Garden State and DAC have executed
that certain First Amended and Restated Asset Purchase
Agreement, dated August 7, 2002.  Among other things, the
Agreement provides for a resolution of the issues arising from
the encroachment claim asserted by Central Bergen Properties.

At the August 8, 2002 hearing, Garden State informed the Court
that the bid for the purchase of the Recycling Business has been

After due deliberation, Judge Gonzalez rules that:

   (i) all Contracts subject to the Transaction are in full
       force and effect and have not been terminable by
       operation of law, their own terms or otherwise;

  (ii) Garden State and DAC are authorized to perform
       all of their obligations in connection with the
       Transaction in accordance with the terms of the
       Agreement, and to execute other documents and agreements,
       if any, and take other actions as required to consummate
       the Transaction;

(iii) the Assets transferred to Purchaser pursuant to the
       Agreement will be free and clear of all liens, claims,
       encumbrances and any other interests of any kind or
       nature whatsoever, and including, without limitation, the
       DIP Liens; provided, however, that all Liens will be
       transferred and attached to the gross proceeds obtained
       for the Assets with the same validity, enforceability,
       priority, force and effect that they now have as against
       the Assets, subject to the rights, claims, defenses and
       objections of Garden State and all parties in interest
       with respect to the Liens;

  (iv) All proceeds received by Garden State in connection with
       the Transaction will be retained by Garden State and
       neither disbursed nor used until the earlier to occur of:

       -- agreement with the Creditors' Committee for the
          release of the proceeds; and

       -- further order of the Court;

   (v) pursuant to Section 105(a) and 1146(c) of the Bankruptcy
       Code, the making, delivery, filing or recording of any
       instruments of conveyance of the Assets will not be
       taxed under any law imposing a recording tax, stamp tax,
       transfer tax or similar tax, including any tax applicable
       to deeds and assignments of lease and all filing and
       recording officers are directed to accept for filing or
       recording, and to file or record immediately upon
       presentation thereof, the instruments of conveyance
       without payment of any taxes; and

  (vi) Garden State is authorized but not required to assume and
       assign to the Purchaser, effective as of the Closing, the
       Assumed Contracts free and clear of all Liens, and
       execute and deliver to the Purchaser the documents or
       other instruments as may be necessary to assign and
       transfer the Assumed Contracts to the Purchaser. (Enron
       Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
       Service, Inc., 609/392-0900)

Enron Corp.'s 9.125% bonds due 2003 (ENRN03USR1), DebtTraders
reports, are trading at 11.5 cents-on-the-dollar. See
for real-time bond pricing.

EXIDE TECHNOLOGIES: Judge Akard Approves Blackstone's Engagement
Upon reconsideration of the previous Blackstone employment
order, Judge Akard authorizes Exide Technologies and its debtor-
affiliates to employ Blackstone as their financial advisors from
the Petition Date until November 30, 2003.  Blackstone will also
be compensated in accordance with the Letter Agreement --
provided, however, that Blackstone will keep detailed time
records in half-hour increments and the $200,000 monthly fee
will be subject to the standards of Section 328(a) of the
Bankruptcy Code.  In addition, no restructuring fee, transaction
fee or other fee will be paid to Blackstone without specific
prior approval by the Court.  Judge Akard also approves the
Debtors' proposed revised indemnification provisions. (Exide
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

Exide Technologies' 10% bonds due 2005 (EXDT05FRR1) are trading
at 15 cents-on-the-dollar, DebtTraders reports. See
for real-time bond pricing.

FOSTER WHEELER: Swedish Unit Wins CFB Boiler Plant Order
Foster Wheeler Ltd.'s (NYSE:FWC) Finland-based subsidiary,
Foster Wheeler Energia Oy, has signed an agreement with the
forest products company, Stora Enso, to supply a 130 MWth
circulating fluidized bed boiler plant to the company's
Kvarnsveden paper mill in Borlange, Sweden.

The contract with Stora Enso Kvarnsveden AB, which has a
production capacity of 700,000 t/a of newsprint and magazine
paper, includes the CFB boiler, plant building, fuel silos,
electrical systems, instrumentation, automation, and stack.
Foster Wheeler's delivery forms the bulk of a new investment at
Kvarnsveden, which totals approximately $54.5 million in value
and is aimed at improving the mill's overall environmental

The new Foster Wheeler-supplied boiler will be fired on a
mixture of bark, mill sludge, and coal, and will replace an
existing grate-fired unit. The plant is scheduled to be
commissioned in late 2004.

Foster Wheeler's experience as a supplier to the forest products
industry, together with its global leadership in CFB technology,
were key factors contributing to winning this contract,
according to CEO Timo Kauranen of Foster Wheeler Energia Oy.

Foster Wheeler's CFBs and bubbling fluidized bed boilers have an
excellent track record of delivering high levels of efficiency
and availability, and are capable of firing a wide variety of
fuels-including many difficult-to-burn biofuels-with very low
levels of environmental emissions.

Foster Wheeler Ltd., is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and management,
research, plant operation and environmental services. The
corporation is based in Hamilton, Bermuda, and its operational
headquarters are in Clinton, N.J. For more information about
Foster Wheeler, visit our World-Wide Web site at

                            *    *    *

As reported in Troubled Company Reporter's September 2, 2002
edition, Standard & Poor's Ratings Services lowered its
corporate credit rating on Foster Wheeler Ltd., to single-'B'
from single-'B'-plus and removed the rating from CreditWatch
following the company's announcement that it has reached
agreement with its senior bank lenders, leasing, and account
receivable securitization lenders on amended or new financing

At the same time, Standard & Poor's withdrew its rating on the
company's $270 million revolving credit facility, which was
terminated. Additionally, Standard & Poor's assigned its double-
'B'-minus senior secured rating to Foster Wheeler's $71 million
term loan A, its single-'B'-plus senior secured rating to its
$149.9 million letter of credit facility, and its single-'B'
senior secured rating to its $68 million revolving credit
facility. The outlook is now negative.

At the same time, Standard & Poor's has heightened concerns that
the protracted lender negotiations (which had been in progress
since January 2002) may have eroded customer confidence, which
could affect backlog and new awards for the next several
quarters until clients are comfortable that the firm has
stabilized its operations and financial position. New awards may
be particularly challenging in the firm's energy equipment
group, given its exposure to the rapidly declining North
American power construction sector; the large cost overruns the
group experienced over the recent past; and its focus on fixed-
priced contracts, which typically include advanced payments from

Should the company fail to improve liquidity through assets
sales, or should new awards prove more challenging to obtain
than previously expected, the ratings could be lowered in the
near term.

Foster Wheeler Corporation's 6.75% bonds due 2005 (FWC05USR1),
DebtTraders says, are trading at 60 cents-on-the-dollar. See
real-time bond pricing.

FRUIT OF THE LOOM: Court Okays Keen Realty as Trust's Auctioneer
The Fruit of the Loom Liquidation Trust obtained permission from
the Court to retain and employ Keen Realty as its auctioneer to:

     -- conduct the Auctions and sale of the Non-Operating
        Real Property, and

     -- provide additional related services as the FOL Trust
        may request from time to time.

As previously reported, the FOL Trust owns parcels of real
property, including buildings, structures, and annexed fixtures.
Risa M. Rosenberg, Esq., at Milbank, Tweed, Hadley & McCloy,
tells the Court that the Trust has decided to sell its Non-
Operating Real Properties through public auctions or private
sales.  To that end, the FOL Trust wants to retain a
professional auctioneer with experience and expertise.  The FOL
Trust believes it would be the most cost-effective and organized
method for soliciting offers and consummating the sale of the
Non-Operating Real Properties.

As Auctioneer, Keen is expected to:

     (a) prepare the Non-Operating Real Properties to the extent
         necessary to induce buyers to submit bids;

     (b) furnish assistance that FOL Trust or its advisors may
         require to consummate the sale and transfer of the
         Non-Operating Real Properties for as high a price as

     (c) retain the services of local brokers in each market,
         who will look solely to Keen for compensation;

     (d) supervise on-site inspections with the assistance of
         local brokers prior to the sale of any Real or
         Personal Property;

     (e) respond to and manage all pre-sale inquiries from
         prospective buyers of the Non-Operating Real
         Properties; and

     (f) additional related services as FOL Trust may request
         of the Auctioneer.

Compensation shall be earned at these hourly rates:

       Professional       Position         Hourly Rate
       ------------       --------         -----------
       Moe Bordwin        Chairman          $400
       Harold Bordwin     President          400
       Chris Mahoney      Vice President     300
       Craig Fox          Vice President     300
       Mike Matlat        Vice President     300
       Matt Bordwin       Vice President     300
       Susan Walkey       Associate          110
       Robert Tramantano  Associate          110
       Eric Leighton      Associate          110
(Fruit of the Loom Bankruptcy News, Issue No. 59; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

GEERLINGS & WADE: Has Until February 26 to Meet Nasdaq Standards
Geerlings & Wade, Inc., (Nasdaq SmallCap: GEER) -- the nation's largest direct mail and
Internet retailer of premium wines and wine-related products to
consumers, today reported that it received a Nasdaq Staff
notification indicating that the Company's common stock has
closed below the minimum $1.00 per share requirement for
continued listing on NASDAQ SmallCap under Marketplace Rule 4310
(C)(8)(D).  The Staff indicated that under the Rule, the Company
will be provided 180 calendar days, or until February 26, 2003,
to regain compliance which requires the bid price of the
Company's common stock to close at $1.00 per share or more for a
minimum of 10 consecutive days.  If compliance cannot be
demonstrated by February 26, 2003, the Staff will determine
whether the Company meets the initial listing criteria for the
NASDAQ SmallCap Market under Marketplace Rule 4310(C)(2)(A). If
the Company meets the initial listing criteria, the Staff will
grant the Company an additional 180 calendar days to demonstrate
compliance. Otherwise, the Company's common stock will be
delisted with a right to appeal the determination to delist to a
Listing Qualifications Panel.

In the event the Company cannot comply with the listing
requirements during the first or second 180-day period, the
Company common stock will trade in the Over the Counter market.

Geerlings & Wade, founded in 1986, is America's leading direct
retailer of fine wine and wine accessories with retail locations
in 16 states, home and office delivery to 28 states, and a
devoted following of thousands of regular customers and wine
club members. The Canton, MA-based Company has developed a
unique, streamlined purchasing system that allows it to source
quality wines directly from the world's greatest wineries. G&W
has cultivated relationships with hundreds of renowned wineries
and negotiants in France, Italy, Australia, Chile and
California. Consumers and investors are encouraged to contact
Geerlings & Wade at 1-800-782-9463 or on the World Wide Web at

GLOBAL CROSSING: Judge Gerber Appoints Fee Review Committee
To monitor the fees incurred in these Chapter 11 cases, Judge
Gerber appoints a fee committee, nunc pro tunc to January 28,
2002, at the request of Global Crossing Ltd., its debtor-
affiliates, the Official Committee of Unsecured Creditors, the
Senior Secured Lenders, and the United States Trustee for Region

The Fee Committee is authorized to review and analyze fee
statements and fee applications submitted by professionals
appointed by this Court in these Chapter 11 cases and retained
by the Senior Secured Lenders whose fees and expenses are
charged against the Debtors.  The Fee Committee is also tasked
to verify whether these professionals complied with the
appropriate procedures approved by the Court.

                     Composition of Committee

The Fee Committee will consist of a businessperson appointed by
and representative of each of the Creditors' Committee, the
Senior Secured Lenders, the U.S. Trustee and the Debtors.  Each
member of the Fee Committee will have one vote on all Fee
Committee matters.  In the event of a 2-2 tie on any Fee
Committee matter, the U.S. Trustee will, after further
consultation with the members of the Fee Committee, determine
the issue.

Judge Gerber directs each constituent group to advise the
Debtors' attorneys of the identity of and contact information
for their appointee to the Fee Committee and the designated
contact person for each of such constituent group's
professionals.  Then, the Debtors' attorneys will provide each
appointee with a list of all appointees to the Fee Committee,
including their contact information, a list of all designated
contact persons for each of the Retained Professionals,
including their contact information, and a copy of each Retained
Professional's retention application and previous fee statements
and interim fee applications, as applicable.  The Bank Group
Professionals will provide copies of their fee statements for
the period from January 28, 2002 through June 30, 2002 directly
to each of the appointees to the Fee Committee.

The Fee Committee will elect one member to serve as Chairperson.
The Chairperson will be responsible for scheduling meetings,
collecting and distributing fee statements and applications and
reporting to the Court as may be required.  The attorneys who
are Retained Professionals for the Chairperson will be
responsible for:

-- submitting and prosecuting expense reimbursement applications
    for each member of the Fee Committee, and

-- representing the Chairperson on behalf of the Fee Committee
    with respect to a Fee Dispute.

In the event that the Fee Dispute involves Retained
Professionals for the Chairperson, Judge Gerber rules that an
alternate member selected by the Fee Committee will act in place
of the Chairperson with respect to that Fee Dispute.

In appointing their representative to the Fee Committee, each
constituent group is requested to appoint a senior
businessperson with final decision-making authority on fee
issues, but whose service on the Fee Committee will not
adversely affect or disrupt the businessperson's organization.

In the event a member of the Fee Committee resigns, the
constituent group represented by that resigning member may
designate a successor member.  The Chairperson will be
responsible for distributing contact information for the
successor member.  The Court may alter the membership of the Fee
Committee at any time.

                 The Joint Provisional Liquidators

Phillip Wallace, Jane Moriarty and Malcolm Butterfield, as the
Joint Provisional Liquidators appointed by order of the Supreme
Court of Bermuda, or their designee may attend and fully
participate at meetings of the Fee Committee, except that the
JPLs will have no vote on Fee Committee matters and will not be
members of the Fee Committee.

The JPLs will be given notice of Fee Committee meetings and will
be served with copies of all documents relevant to Fee Committee
matters in the same manner and at the same time as the Fee
Committee members.

The JPLs are requested to advise the Debtors' attorney of the
identity and contact information of their designee for purposes
of receiving notice of Fee Committee matters and documents
relevant to Fee Committee meetings.

The JPLs' participation at Fee Committee meetings will not
subject them to the jurisdiction of this Court.

                 Compensation of Committee Members

Judge Gerber emphasizes that Fee Committee members will receive
no compensation for their service or time expended on Fee
Committee matters.  However, all Fee Committee members are
entitled to reimbursement for reasonable, documented out-of-
pocket costs and expenses.  These Fee Committee expenses include
travel and lodging expenses for attendance at Fee Committee
meetings, but do not include professional fees incurred by
professionals advising Fee Committee members.


Judge Gerber directs each Retained Professional to prepare a
budget of the fees it expects to incur over the course of each
two-month period during the pendency of these Chapter 11 cases.
Each Budget will set forth in reasonable detail the services
anticipated to be provided over the next two-month period and
the fees to be incurred.  These services will be allocated by
task codes established by the Debtors and approved by the Fee

Each Budget will state whether the Retained Professional's
client has approved the Budget.  To the extent a Budget includes
a variance in respect of a given month contained in a previous
Budget, the Budget should include an explanation of the variance
to the extent the variation is material.

On or before September 15, 2002, the Fee Committee will serve on
each Retained Professional a:

-- timetable for the submission of all Budgets,

-- a description of how the Fee Committee will assess the
    reasonableness of each fee application, and

-- a description of any additional information or particular
    format that the Fee Committee may desire for Budgets.

The first of these Budgets will be due to the Fee Committee 15
calendar days after the Fee Committee has approved the task
codes and given notice of the task codes to the Retained
Professionals, for the months of August and September.  Each
subsequent Budget will be due by no later than the first
business day of every month thereafter.

To preserve confidentiality, all Budgets or other information
provided by any of the Retained Professionals will be submitted
on a confidential basis, subject only to:

-- the Fee Committee's right to use the Budget on prior notice
    in connection with any fee dispute, and

-- the Retained Professional's right to seek a protective order
    or similar protection of information it claims confidential.

The Budgets will be submitted and analyzed with the
understanding that they are based on assumptions and that it is
not possible to predict the volume or course of the multitude of
matters or issues that arise in Chapter 11 cases and related
litigation. Upon the filing by a Retained Professional of its
interim fee application, it will provide the Fee Committee with
a written explanation of the major reasons for differences
between its budgeted fees for a given month and its actual fees.
This explanation will be held in strict confidence by the Fee
Committee and will not be disclosed to any other party including
the member's constituency or its advisors.  On the submission of
a monthly fee statement, interim fee application or final fee
application, the Fee Committee will discuss with the Retained
Professional any variance between the fees actually incurred and
those projected to be incurred in the Budget.

                       Subsequent Retentions

Any professional retained by Court order will be bound by this
Order and the Fee Order and will immediately contact the Fee
Committee to establish the submission of Budgets and fee
statements or fee applications.  The Fee Committee is
authorized, upon appropriate application, to retain any
professionals required to effectively discharge its duties.

             Committee Exculpation and Indemnification

Judge Gerber rules that the Fee Committee and each of its
members are:

   -- appointed officers of the Court with respect to the
      performance of their duties on the Fee Committee, and

   -- provided the maximum immunity permitted by law from civil
      actions for all acts taken or omitted in the performance of
      their duties and powers on the Fee Committee.

No person or entity will commence an action against the Fee
Committee or any of its members in connection with Fee Committee
matters except in this Court.  No person or entity will commence
an action against the JPLs with respect to their attendance at
or participation in Fee Committee meetings or matters except in
the Supreme Court and the JPLs will be accorded immunity from
suit to the same extent as the Fee Committee.

The Fee Committee and each of its members are indemnified by the
Debtors' estates for losses or costs of defense incurred as a
result of acts taken or omitted, in each case in good faith, in
the performance of their duties as a member of the Fee

Any and all claims or causes of action not instituted against
the Fee Committee or any of its member prior to the 10th day
after entry of an order determining the last final fee
application in these cases will be forever barred and
discharged.  All persons and entities will be enjoined from
prosecuting these claims in any manner thereafter. (Global
Crossing Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

GLOBALSTAR LP: Parties Continuing Tasks on Modified Workout Plan
On February 19, 2002, Globalstar, L.P., filed a report that the
Company had reached an agreement with Loral Space &
Communications Ltd., and its Informal Committee of Bondholders
regarding the substantive terms of the financial and legal
restructuring of the Company's businesses. The terms of the
agreement were set forth in the Memorandum of Understanding,
dated February 15, 2002.

The Company subsequently filed with the U.S. Bankruptcy Court a
Joint Plan of Reorganization of Globalstar, L.P., and its Debtor
Subsidiaries and a related Disclosure Statement implementing the
PSA. However, the Company did not obtain the Court's approval of
the Disclosure Statement on or before August 12, 2002, as
required by the PSA, as amended. As permitted by the PSA, on
August 21, 2002, counsel for the Official Committee of Unsecured
Creditors, the successor in interest to the Informal Committee
of Bondholders, advised the Company that the Official Committee
was terminating the PSA as of the date of the letter.

The three parties to the PSA -- the Company, the Official
Committee and Loral Space & Communications Ltd. -- are
continuing their discussions with a view to formulating a
modified restructuring plan that would be submitted to the
bankruptcy court for approval.

HECLA MINING: Firms-Up Lease Agreement on Block B in Venezuela
Hecla Mining Company (NYSE:HL)(NYSE:HL-PrB) and CVG-Minerven,
the Venezuelan government-owned gold mining company, have
finalized the lease agreement on Block B in Venezuela's prolific
El Callao gold mining district.

Hecla currently operates the La Camorra gold mine in Venezuela,
a low-cost, high-grade mine that produced more than 86,000
ounces of gold in the first half of 2002 at an average total
cash cost of $134 per ounce. Hecla's Chairman and Chief
Executive Officer, Arthur Brown, said, "Block B is a very high
quality property with identified resources that contains several
promising exploration targets as well as numerous other
historically operated gold mines which have exciting further
potential. Our operations have performed very well in Venezuela
and we look forward to increased production from this country.
Block B is an excellent complement to the La Camorra gold mine
and the other exploration targets we have developed in
Venezuela. We see this as a very good opportunity to grow the
company and add to our resource base in the near future."

Block B is a 1,795 hectare land position (approximately seven
square miles) in the heart of the historic El Callao gold
district. Included in the land position are the Chile, Laguna
and Panama mines, which produced more than 1.5 million ounces of
gold between 1921 and 1946. These operations were narrow vein,
high-grade underground mines which were shut down due to events
surrounding the end of World War II and technical difficulties.
Brown said, "These deposits are a perfect fit with Hecla's
expertise in hardrock, narrow vein mining. The Venezuelan
government has entered into this agreement with us in order to
revive this historically rich mining area."

Hecla will initially focus on the Chile mine, which produced
more than 550,000 ounces of gold at an average ore grade of more
than one ounce of gold per ton. A recent drilling program
conducted by CVG-Minerven has already identified a resource
below the old mine workings of approximately 245,000 ounces of
gold at a grade of approximately 21.7 grams of gold per ton
(about 0.63 ounce per ton). Hecla has initiated the permitting
process and plans an extensive drilling program in the fourth
quarter to confirm and expand the identified resource.

Hecla has agreed to pay $500,000 upon signing the final
agreement. Six months after signing, Hecla would pay $1.25
million to CVG-Minerven, with an additional $1 million payment
in one year. These payments give Hecla the right to explore and
develop Block B. CVG-Minerven would also receive a sliding
royalty of 2% to 3% on any future production from the property.

Hecla Mining Company, headquartered in Coeur d'Alene, Idaho,
mines and processes silver and gold in the United States,
Venezuela and Mexico. A 111-year-old company, Hecla has long
been well known in the mining world and financial markets as a
quality silver and gold producer. Hecla's common and preferred
shares are traded on the New York Stock Exchange under the
symbols HL and HL-PrB.

                          *    *    *

As reported in Troubled Company Reporter's June 13, 2002,
Standard & Poor's revised its outlook on Hecla Mining Co., to
positive from negative based on the company's improved cost

Standard & Poor's said that its ratings on the company,
including its triple-'C'-plus corporate credit rating, are
affirmed. Standard & Poor's preferred stock rating on Hecla
remains at 'D', as the company is not current on its dividends.
Hecla, headquartered in Coeur d'Alene, Idaho, has about $19
million in total debt.

Standard & Poor's said that the ratings could be raised modestly
in the intermediate term if gold and silver prices remain near
their current levels and if Hecla can further increase its
profitability and enhance its reserve base and liquidity.

Standard & Poor's ratings on Hecla continue to reflect its well
below average business position due to its limited reserve base,
operating diversity, and tight liquidity.

HORSEHEAD INDUSTRIES: Asks Court to Appoint BSI as Claims Agents
Horsehead Industries, Inc., and its debtor-affiliates want to
Bankruptcy Services, LLC appointed as the official claims and
noticing agent.  The Debtors tell the U.S. Bankruptcy Court for
the Southern District of New York that the large number of
creditors and parties in interest involved in these cases may
impose heavy administrative and other burdens upon the Court and
the Office of the Clerk of the Court.  To relieve these burdens,
it is best to employ BSI as claims and noticing agent in these

At the request of the Debtors or the Clerk's Office, BSI will
provide these services as Claims and Noticing Agent:

      Claims Agent Services
      - Electronically transfer creditor database into the BSI
        Claims Management System.

      - Assist the Debtors in preparation of schedules of

      - Print and mail the first day orders, 341 notice, bar date
        notice, and proof of claim form to all potential
        claimants. Provide certificate of mailing.

      - Coordinate receipt of filed claims with the Court.
        Provide secure storage for all original proofs of claims.

      - Enter filed claims into the BSI database. Match scheduled
        liabilities and filed claims by creditor number.

      - Provide copies of the claims register as required.

      - If requested, provide exhibits and distribute materials
        in support of motions to allow, reduce, amend and expunge

      - Update claims register to reflect court orders affecting
        claims solutions and transfers of ownership.

      Claims Tracking Services
      - Establish database and provide periodic updates via
        electronic means.

      - Customize BSI's PC-based software to meet the specific
        business needs of the cases.

      - Provide on-site hardware and software support at the
        Debtors' and their counsel's offices.

      Balloting Services
      - Coordinate the design and printing of ballots with the
        Debtors and their counsel.

      - Identify the "universe" of the voting and non-voting
        creditors and shareholders subject to the Plan of
        Reorganization and voting procedures.

      - Prepare voting reports by plan class, creditor and
        shareholder and amount for review and approval by the
        Debtors and their counsel.

      - Print creditor and shareholder/class specific ballots and
        coordinate mailing of ballots, disclosure statement and
        the plan of reorganization to all voting and non-voting

      - Establish a toll-free "800" number to receive questions
        regarding voting on the Plan.

      - Solicit acceptances to the Plan of Reorganization, if

      - Receive ballots at a P.O. Box. Inspect ballots for
        conformity to voting procedures. Date, stamp and number
        ballots consecutively. Tabulate and certify the results.

      Disbursement Services
      - After confirmation of a plan of reorganization, BSI may
        be asked to calculate the disbursement amounts for cash
        and securities to holders of allowed claims.

      - BSI may be asked to develop customized disbursement
        reports that meet the Debtors' requirements.

      - Upon approval of the disbursement report, payments will
        be made to allowed claim holders by check or wire
        transfer on an account established and funded by the
        Debtors. Simultaneously, BSI will coordinate the issuance
        of new securities with a transfer Agent/Trustee selected
        by the Debtors.

BSI's professional service fees are:

           Kathy Gerber           $195 per hour
           Senior Consultants     $175 per hour
           Programmer             $125 - $150 per hour
           Associate              $125 per hour
           Data Entry/Clerical    $40 - $60 per hour

INTEGRATED HEALTH: Wants to Keep Exclusivity Until January 27
"[Integrated Health Services, Inc., and its debtor-affiliates]
are currently negotiating an agreement for the sale of their
businesses with the goal of filing a plan of reorganization
built around those transactions," Michael J. Crames, Esq., at
Kaye Scholer LLP, tells Judge Walrath.  The Creditors'
Committee, Mr. Crames advises, is intimately involved in those
negotiations and is analyzing the feasibility of a stand-alone
plan for Integrated's 300 geriatric care facilities and
specialty hospitals and for the Symphony division's 2,000
service contracts. The Debtors indicate that they're involved in
additional conversations with the Justice Department and "other
major constituents" about the proposed sale transactions.

The Debtors contemplate they will file a plan in the fourth
quarter of 2002.  To allow negotiations to continue in an
orderly fashion and without the worry that competing third-party
plans will appear at the courthouse, the Debtors ask Judge
Walrath -- for an eighth time, pursuant Section 1121 of the
Bankruptcy Code -- to:

       * extend their exclusive period in which to propose
         and file a chapter 11 plan through January 27, 2003;

       * extend their exclusive period in which to solicit
         acceptances of that plan from creditors through
         March 25, 2003.

The Debtors disclose that they have already received preliminary
bids from and held conversations with potential bidders.  The
Debtors did not provide any hint about those bidders'
identities. The Debtors make it clear that the Creditors'
Committee and the Senior Lenders are in the loop.  The Debtors
are getting ready to talk to the Premiere Creditors' Committee.

The Debtors confirm that they are paying all postpetition debts
as they come due in the ordinary course of business.  The
Debtors assures the Court that their liquidity is adequate.  The
Debtors also disclose that there are no borrowings outstanding
under the DIP Financing Facility at this time.

On the claims reconciliation front, the Debtors tell the Court
that they have reduced the mountain of proofs of claim asserted
against their estate by $1.5 billion to date, through the
omnibus claims objection process.  The Debtors believe that the
amount of potential claims will be well within the range of
reason by the time a plan is ready to go to confirmation and
that plan won't face any feasibility problems.  (Integrated
Health Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

INTEGRATED HEALTH: Omega Healthcare Says Terminate Exclusivity
Omega Healthcare Investors Inc., charges that without any
pressure to file a plan, Integrated Health Services, Inc., is
"treating the bankruptcy process as a safe haven to drive
creditors to the point of exhaustion."  Omega says that the
Debtors are attempting to languish in Chapter 11 for as long as
they can get away with it.  "It is in the best interest of these
estates that the Debtors quickly exit Chapter 11 and the best
avenue for that to happen is by the increased pressure resulting
from the possibility that a third party may submit its own plan
or plans of reorganization," Omega asserts.

Two and one-half years is sufficient time for Integrated to
negotiate a plan, file it and prepare an adequate disclosure
statement, Omega says.  Joseph J. Wielebinski, Esq., at Munsch
Hardt Kopf & Harr P.C., points out that the Debtors' major
competitors -- filing for bankruptcy protection at approximately
the same time as Integrated -- have each exited bankruptcy:

                                                     Date Plan
     Competitor                  Petition Date     Was Confirmed
     ----------                  -------------     -------------
     Vencor                         09/13/99         03/13/01
     Sun Healthcare Group           10/14/99         02/06/02
     Mariner Post-Acute Network     01/18/00         04/03/02
     Genesis Health Ventures        06/22/00         09/20/01

Each of these debtors were able, on a much shorter time frame,
to address many of the same complicated issues that the Debtors
are addressing and formulate and confirm a plan or plans of
reorganization.  Conversely, Omega complains, the Debtors are
not yet certain which mechanism is preferable for a plan of

To support further extensions of their Exclusive Periods, the
Debtors continue to:

         (i) rely on purported past efforts;

        (ii) point to the size of the cases;

       (iii) indicate there are complicated issues yet to be
             resolved; and

        (iv) give the Court and the creditors false expectations
             that a plan or plans or reorganization are

"These stale arguments are no longer persuasive," Mr.
Wielebinski says.  "If the Debtors are truly concerned about
what would happen if other parties file a plan of
reorganization, then the Debtors should stop procrastinating and
file their plan or plans of reorganization," Mr. Wielebinski
adds.  Terminating the Debtors' Exclusive Periods may give the
Debtors the sense of urgency they need in order to promptly file
a plan or plans or reorganization.

               Omega Chides Integrated's Management

According to Mr. Wielebinski, the operational performance of at
least some of the facilities managed by the Debtors has
decreased dramatically since the Petition Date.  If this
operational performance is indicative of the Debtors' portfolio
of all facilities they manage, Mr. Wielebinski says, the
creditors' chances for any meaningful recovery have diminished
because of the Debtors' failure to timely confirm a plan or
plans of reorganization.

Much of the Debtors' delay in filing a plan or plans of
reorganization must be attributable to Debtors' management,
Omega charges.  Nevertheless, Omega continues, at a time when
management should be focused on confirming a plan or plans of
reorganization, the Debtors have decided to reduce the time
commitment of Joseph A. Bondi, the Debtors' Chief Executive
Officer, effective April 1, 2002.  This reduction in Mr. Bondi's
time commitment to the Debtors was purportedly done because "the
tasks involved in order to formulate and file a plan or plans of
reorganization for the . . . Debtors do not necessitate [his]
full-time attention," according to the Debtors' Application for
an Order Authorizing a Second Amendment to Agreements with
Messrs. Bondi, Sansone and Johnsen.  The reduction of Mr.
Bondi's time commitment to the Debtors prompts Omega to question
whether that, in fact, is what's precipitated the need for the
Debtors to seek another extension of their Exclusive Periods.

               The Debtors' Sends a Word of Caution

Terminating exclusivity at this juncture, Michael J. Crames,
Esq., at Kaye Scholer LLP, warns, "would no doubt have a
monumental, adverse impact on the Debtors' business operations
and the progress of these cases and would inevitably foster a
chaotic and debilitating environment with no central focus and
explicitly conflicting interests."

"These concerns are not abstract or theoretical -- they are
real," Mr. Crames emphasizes.  If the exclusive periods were
terminated, these Chapter 11 cases would sink into a morass of
litigation over competing plans championing parochial interests.
The Debtors, in a neutral position, Mr. Crames suggests, can
harmonize those diverse and competing interests and resolve
struggles among the classes and conflict among the
constituencies in a reasoned and balanced manner.

Judge Walrath will convene a hearing at 10:30 a.m. today, to
consider the Debtors' request and Omega's opposition.
(Integrated Health Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

JEFFERSON SMURFIT: S&P Rates New $700 Million Senior Notes at B
Standard & Poor's Ratings Services assigned its single-'B'
senior unsecured debt rating to Jefferson Smurfit Corp. (U.S.)'s
$700 million senior notes due 2012. JSC is an indirect wholly
owned subsidiary of Chicago, Illinois-based Smurfit-Stone
Container Corp.

Standard & Poor's said that at the same time it has affirmed its
existing ratings, including its single-'B'-plus corporate credit
rating, on Smurfit-Stone and its subsidiaries. The outlook is

"Proceeds from the notes will be used to refinance JSC's $500
million of 9.75% senior notes due 2003 and partially fund the
previously announced acquisition of MeadWestvaco Corp.'s
Stevenson, Alabama corrugating medium mill and associated
operations", said Standard & Poor's credit analyst Cynthia

Smurfit-Stone is the world's largest producer of containerboard
and corrugated containers. The ratings reflect market leadership
and an improving cost position, offset by industry cyclicality,
a narrow product focus compared with many other large forest
products companies, and high debt levels.

"The ratings incorporate expectations of continued, gradual
strengthening of the financial profile over the intermediate
term", said Ms. Werneth. "However, improvement may be delayed by
continued lackluster containerboard demand and ensuing
production downtime, slightly higher debt levels following the
Stevenson acquisition, and likely increases in pension funding

KMART CORP: Wants Approval to Assume 2 Ernst & Young Agreements
Kmart Corporation and its debtor-affiliates want to assume two
consulting services agreements between Kmart and Ernst & Young:

A. Custom and Duties Agreement

    Beginning in 1999, Ernst & Young provided consulting services
    to the Debtors to advise them with respect to customs and
    duties.  The Customs and Duties Agreement concerns the
    implementation of procedures designed to capture first the
    sale savings for the Debtors.  The objectives of the
    Agreement is for Ernst & Young to develop and implement a
    comprehensive work program detailing the activities, tasks
    and personnel necessary for the overall project.

    The Agreement entitles Ernst & Young to a fee equal to the
    lesser of 10% of the actual duty recoveries -- including
    interest paid by U.S. Customs -- and reductions realized by
    Kmart over a 5-year period or 175% of Ernst & Young's
    standard hourly rates and documented expenses.  Ernst & Young
    will only receive a fee upon receipt of reimbursement or
    reduction in duties by U.S. Customs and subsequent invoicing
    by Ernst & Young.

B. FTB Audit Agreement

    Ernst & Young provides assistance to Kmart in responding to
    the audit by the California's Franchise Tax Board for the
    fiscal years ending January 1986 through January 1995.  The
    assistance includes representing Kmart on various issues
    before the California Boards of Equalization and Franchise
    Tax Board.  This representation includes:

       (1) analyzing facts;
       (2) preparing protests;
       (3) settlement and appeal documents; and
       (4) dealing with the respective California agencies on
           Kmart's behalf.

    Ernst & Young's fee for those services is based on a
    combination of time spent on the services and the value of
    the services.  The hourly portion of the arrangement will be
    billed monthly at standard hourly rates, plus out-of-pocket
    expenses, capped at $600,000.  The value portion of the fee
    arrangement is 10% of the benefits (tax and interest)
    achieved by Ernst & Young over $23,000,000.  This portion of
    the fee will be paid upon settlement by the various
    California agencies.

There are no outstanding prepetition obligations owed to Ernst &
Young for its services rendered in connection with the
Agreements.  So, there is no cure cost associated with the
assumption of both Agreements.

John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom in Chicago, Illinois, notes that the Agreements each
provide for Kmart to receive valuable assistance with projects
designed to generate substantial benefits for their estates.  In
addition, Kmart asked Ernst & Young to perform these services
because of the firm's knowledge and expertise in the retail

"It is critical that Kmart maintain this relationship so that
the projects covered by the Agreements continue uninterrupted
and allow Kmart to realize the benefits to the greatest extent
possible." Mr. Butler says.

Mr. Butler informs the Court that, as of the Petition Date,
Ernst & Young has invested a substantial amount of time and
resources in developing a comprehensive work program pursuant to
the Customs and Duties Agreement.  Any disruption in the
services would unnecessarily delay the process and potentially
diminish the benefits to Kmart.

With regards to the Audit Agreement, Mr. Butler says, there is a
chance for the Debtors to collect up to $25,000,000 in refund
from the California audit.

"As of today, the background work for responding to the audit is
complete and Ernst & Young is prepared to go before the
California Franchise Tax Board and try the matter.  Ernst &
Young has significant experience with California's agencies.
Hence, it would be detrimental to the Debtors' estates to lose
their assistance at this junction," Mr. Butler concludes. (Kmart
Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

KMART CORP: Equity Committee Taps Saybrook for Financial Advice
Saybrook Capital, LLC has been retained to serve as the
financial advisor to the Official Equity Committee appointed by
the U.S. Trustee in the Kmart bankruptcy proceeding, the largest
retail bankruptcy in U.S. history.

The firm will provide advisory and restructuring services to
maximize value for Kmart shareholders and will participate in
developing a strategy to help bring about a corporate

Traditionally, shareholders are entitled to compensation in
bankruptcy proceedings only after all creditors have been fully
repaid. In the Kmart case, Saybrook Capital had submitted a
valuation analysis to the U.S. Trustee comparing the fair
saleable value of the company's assets to its stated liabilities
in order to gauge the residual equity value.

"We believe Kmart is solvent and its shareholders deserve to
have their rights represented on par with those of other
stakeholders," commented Saybrook Capital Partner Jonathan
Rosenthal. "Unless a debtor is hopelessly insolvent,
shareholders deserve a seat at the table."

Saybrook will participate in all negotiations on behalf of the
shareholder committee and provide independent analysis of
Kmart's financial condition, business plans, capital spending
budgets, operating forecasts, management and prospects for
future performance. The firm will also work to identify
contracts and other agreements that may be disadvantageous to
the interests of the company.

The equity committee, which consists of seven Kmart
shareholders, was granted official status on the May 29
bankruptcy hearing in Chicago. The Securities and Exchange
Commission had formally endorsed the naming of a shareholders
committee in a memo filed with U.S. Bankruptcy Judge Susan
Pierson Sonderby.

Saybrook Capital, LLC is an investment bank specializing in fund
management, corporate restructuring, real estate and tax-exempt
finance. Founded in 1990, Saybrook is a NASD-registered
underwriter and broker/dealer, having brought to market and sold
over $20 billion in securities. The firm also manages more than
$300 million in capital, seeking to achieve above-market yields
in niche sectors of the real estate and municipal bond markets.
Saybrook Capital is headquartered in Santa Monica with offices
in New York, San Francisco and Seattle. For additional
information, please visit

Kmart Corp.'s 9.0% bonds due 2003 (KM03USR6), an issue in
default, are trading at 17 cents-on-the-dollar, DebtTraders
reports. For real-time bond pricing, see

KNOLOGY INC: Extends Exchange Offer for 11-7/8% Notes to Friday
Knology, Inc., is extending its exchange offer for the 11-7/8%
Senior Discount Notes due 2007 issued by Knology's subsidiary,
Knology Broadband, Inc.  The exchange offer, as extended, will
expire at 5:00 p.m., New York City time, on September 13, 2002.

As of September 6, 2002, the Company had received tenders of
$354.5 million principal amount at maturity of Old Notes,
representing 93% of the $379.9 million aggregate principal
amount at maturity of Old Notes subject to the exchange offer.
An additional $64.2 million principal amount at maturity of Old
Notes outstanding are held by Valley Telephone Co., Inc., a
subsidiary of Knology, and will be canceled at the completion of
the exchange offer.

Knology's President and CEO, Rodger Johnson said, "We are
gratified by the overwhelming support for our restructuring plan
that we have received from our major shareholders, our banks,
and the vast majority of our bondholders. Unfortunately we have
a small number of bondholders who have not yet tendered their
holdings.  Since the exchange offer is predicated, among other
things, on the exchange of 100% of the outstanding Old Notes,
the Company has decided it will abandon the exchange offer and
seek to restructure the Old Notes pursuant to a prepackaged plan
of reorganization of Broadband under the Bankruptcy Code, if the
needed Old Notes are not tendered by the expiration of this
offer on September 13, 2002."

Johnson also noted that Knology would continue its business as
usual.  The filing, should it become necessary, would not affect
any of Broadband's operating subsidiaries nor would it affect
Knology, Interstate Telephone Company or Valley Telephone

The Company previously conducted a solicitation of acceptances
with respect to the prepackaged plan of reorganization, and
received sufficient acceptances to obtain approval of the
prepackaged plan by the court.  If the conditions to the
exchange offer are not met and the Company abandons the exchange
offer after its expiration on September 13, 2002, the Old Notes
already tendered will be returned to their holders.

Offers to exchange Old Notes are made only by the Offering
Circular and Solicitation Statement, which can be obtained by
calling MacKenzie Partners, Inc., the Information Agent, at
(212) 929-5500 (call collect) for banks and brokers or (800)
322-2885 (toll-free) for all others.  In addition, holders of
the Old Notes may contact Credit Suisse First Boston
Corporation, the Dealer Manager, at (212) 538-0653 (call
collect), attention David Alterman, with questions regarding the
exchange offer.

Knology and Broadband, headquartered in West Point, Georgia, are
leading providers of interactive voice, video and data services
in the Southeast. Their interactive broadband networks are some
of the most technologically advanced in the country. Knology and
Broadband provide residential and business customers over 200
channels of digital cable TV, local and long distance digital
telephone service featuring the latest enhanced voice messaging
services, and high speed Internet service, which enables
consumers to download video, audio and graphic files at fast
speeds via a cable modem. Broadband was initially formed in 1995
by ITC Holding Company, Inc., a telecommunications holding
company in West Point, Georgia, and South Atlantic Venture
Funds, and Knology was formed in 1998.  For more information,
please visit its Internet site at

LAIDLAW INC: Court Approves Settlement Pact with Safety-Kleen
The U.S. Bankruptcy Court for the Western District of New York
approves a comprehensive Laidlaw Inc.'s Settlement Agreement,
resolving claims by and against Safety-Kleen Corp., under Rule
9019 of the Federal Rules of Bankruptcy Procedure.

The Global Settlement Pact provides for:

    (a) the settlement and dismissal of Proofs of Claims and
        Adversary Proceedings, specifically:

        -- Proofs of Claim in Laidlaw's Chapter 11 cases filed
           by Safety-Kleen and the Safety-Kleen Creditors'
           Committee, including Safety-Kleen Claim Nos. 556 and

        -- Proofs of Claim filed in Laidlaw's Chapter 11 cases
           by certain Safety-Kleen Directors, including Safety-
           Kleen Director Claims;

        -- Proofs of Claim filed in the Laidlaw's Chapter 11
           cases by Cole Taylor, as indenture trustee for the
           9.25% Safety-Kleen senior notes due 2009, including
           Safety-Kleen Noteholder Claims;

        -- the Safety-Kleen Adversary Proceeding;

        -- Proofs of Claim filed in the Safety-Kleen Chapter 11
           Cases by:

           (a) the Laidlaw Companies, including Proof of
               Claim Nos. 15600 and 17127;

           (b) James R. Bullock, including Proof of Claim No.

           (c) John R. Grainger, including Proofs of Claim
               Nos. 13036 through 13104 and 13113 through 13117;

           (d) Leslie W. Haworth, including Proof of Claim
               No. 14345; and

           (e) Peter Widdrington, including proof of Claim
               Nos. 11155 and 11156;

    (b) Safety-Kleen's $225,000,000 claim will be allowed as a
        general unsecured claim in Class 6 of the Plan against

    (c) Laidlaw will assign to Toronto Dominion, Inc. any and
        all rights it may have to the funds contained in
        account number 1065366 at Bank One, 1 Bank One Plaza in
        Chicago, Illinois, which has a value of $2,500,000.  In
        addition, Laidlaw Inc. agrees not to make any draws upon
        the Dai-Ichi Kangyo Bank Letter of Credit and to execute
        any documentation reasonably necessary to release any and
        all rights it may have under the letter of credit.
        Furthermore, Laidlaw agrees to waive any rights it may
        have against Safety-Kleen for payments of any amounts due
        under or to seek reimbursement for any amounts that have
        been paid or may in the future be paid by Laidlaw Inc.,
        under the Safety-Kleen Corp. Insurance & Claims Handling

    (d) each of Safety-Kleen, its Directors, Toronto Dominion,
        Inc., each member of the Steering Committee of the
        Safety-Kleen Lenders and Laidlaw will execute and
        exchange Releases.  Toronto Dominion, in its capacity as
        Administrative agent for the Safety-Kleen Lenders, has
        the authority to bid itself and all of the Safety-Kleen
        Lenders to the Settlement Agreement and the release to be
        executed by Toronto Dominion on behalf of the Safety-
        Kleen Lenders;

    (e) the $71,400,000 Westinghouse Note Claim will be allowed
        as a general unsecured claim pursuant to Class 6 of the

    (f) the resolution of additional claims involving Laidlaw
        and the Safety-Kleen Debtors, which will be filed under

    (g) participation of the Subcommittee of Laidlaw Bank
        Creditors and the Subcommittee of Laidlaw Bondholder
        Creditors in the mediation proceedings and the
        negotiation of the Settlement Agreement, as well as
        supporting the motion seeking Court approval of the
        Settlement Agreement; and

    (h) certain restrictions on the use of materials discovered
        during the Mediation. (Laidlaw Bankruptcy News, Issue No.
        23; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LIFEGUARD INC: A.M. Best Lowers Financial Strength Rating to C+
A.M. Best Co. has downgraded the financial strength rating to C+
(Marginal) from B+ (Very Good) of Lifeguard, Inc. (San Jose,
CA), and its subsidiary, Lifeguard Insurance Company, with a
negative outlook. Both companies have been removed from under

This rating action was driven by Lifeguard's large operating
losses in 2001, resulting in a much weakened capital position.
This poor performance reflected rising loss ratios and increased
utilization in the company's large case book of business
primarily written on one account, which accounted for
approximately 15% of the membership. Lifeguard no longer
underwrites this account.

Lifeguard's plan is currently $11.5 million below the required
level of capital for the State of California. Moreover, A.M.
Best notes Lifeguard lacks financial flexibility due to its not-
for-profit, public-benefit corporation status, which limits its
ability to raise funds in financial markets.

On August 19, 2002, Lifeguard terminated its proposed
affiliation with California Physicians Service (d/b/a BlueShield
of California).

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

LODGIAN INC: Court Okays Wallach as St. Louis Special Counsel
Lodgian, Inc., and its debtor-affiliates obtained permission
from the U.S. Bankruptcy Court for the Southern District of New
York to retain The Wallach Law Firm to serve as their St. Louis
Special Counsel in connection with their Chapter 11 cases
effective as of June 20, 2002.

Pursuant to Sections 327(e), 328(a), 329 and 504 of the
Bankruptcy Code, the Debtors sought the services of Wallach to
perform the necessary legal work to oppose the proposed
condemnation of the St. Louis Hotel property located at 4545
North Lindbergh Boulevard, St. Louis, Missouri.

In its capacity as St. Louis Special Counsel, Wallach will
represent the interests of the estates in opposition to the
proposed condemnation of a piece of the land owned by Lodgian.
The condemnation has the potential to significantly impair the
value of the Debtors' estates by restricting access to this

As proposed by Wallach, the Firm is retained on a contingent fee
basis, in accordance with Wallach's historical billing
practices.  As compensation, the Firm's legal fee shall be
33.33% of all amounts recovered by suit, settlement or
compromise, which are in excess of the final written offer
prior to the filing the condemnation proceedings. (Lodgian
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

LORAL SPACE: Combines Two Operations of CyberStar & Skynet Units
Loral Space & Communications (NYSE: LOR) announced that it is
integrating the operations of two subsidiaries, Loral CyberStar
and Loral Skynet.

The combined units will report to Loral Skynet president, Terry

The leading provider of global data, voice, video and Internet
backbone services, CyberStar delivers the most effective private
voice and data networks and Internet Service Provider services,
via its hybrid space/terrestrial network, to more than 300
enterprises and service providers worldwide. Based in Rockville,
MD, and with offices in North America, Europe and Asia,
CyberStar generated 2001 data services revenues of $98 million.

Skynet is one of the world's largest and fastest-growing
operators of telecommunications satellites, providing high-
volume communications and data transmission services to
broadcasting, cable TV, Internet and industrial companies around
the world. Its fleet of seven satellites covers the globe, and
three more are in late stages of construction. Skynet is based
in Bedminster, NJ, and had 2001 revenues of $389 million.

Bernard L. Schwartz, chairman and chief executive officer of
Loral, said, "Through both Skynet and CyberStar, Loral has
pursued a strategy to broaden our capabilities in order to
differentiate ourselves from the competition, add value for our
customers, increase margins and better deliver new applications.
Joining these two successful organizations is consistent with
that strategy -- it is the most effective way to make the
broadest range of networking services available to all Loral
customers. We expect Loral to benefit from multiple new revenue
opportunities created by the integration, from the provision of
new services and from the addition of customers."

Terry J. Hart, president of Loral Skynet, said, "Skynet recently
expanded its product offerings beyond its traditional
transponder leasing, by establishing two additional product
lines: Network Services, which provides satellite access
services and shared transmission platforms, and Professional
Services, which manages satellites for other operators and
develops customized transmission platforms for enterprise and
service provider clients. CyberStar's space and terrestrial
networking expertise is effective and well established in the
marketplace, making it an excellent fit. In our view, providing
a platform for broadband applications is a high-growth
opportunity. This integration allows Loral to combine Skynet's
advanced technologies, like spot beams, with CyberStar's
expertise and assets, to dramatically reduce the per-user cost
of the space segment required for new broadband applications.
It's a real win-win situation for Loral and for its customers."

Loral Space & Communications is a high technology company that
concentrates primarily on satellite manufacturing and satellite-
based services. For more information, visit Loral's Web site at

As previously reported, Loral's June 30, 2002 balance sheet
shows a $68.3 million working capital deficit and $1.1 billion
of shareholder equity evaporated in the first half of 2002.

LTV CORP: Steel Unit Selling Mahoning Land to Sherman for $2MM
The LTV Corporation, and its debtor-affiliates intend to sell:

1. Real property known as the Campbell Mill Property consisting
    of 113 acres located in the cities of Youngstown and
    Campbell, Mahoning County, Ohio, together with all buildings,
    facilities, and other improvements, and all licenses, leases,
    rights, privileges and all appurtenances;

2. Real Property Agreements consisting of:

         (i) OEPA Permit (expired);

        (ii) NPDES Permit (application only);

       (iii) Right-of-way easement between LTV Steel and
             Consumers Ohio Water Company as Grantee
             dated August 10, 1995;

        (iv) Road, rail and Utility Agreement between LTV
             Steel and American ladle and Furnace Co., Inc.,
             dated May 6, 1993;

         (v) Easement Agreement between LTV Steel as Grantor
             and Astro Shapes, Inc. dated May 21, 1993;

        (vi) Easement Agreement between LTV Steel as Grantor
             and Allied Industrial Development Corporation
             dated May 6, 1993;

       (vii) Road, Rail and Utility Agreement between LTV Steel
             and Youngstown Campbell Industrial Park dated
             September 12, 1991;

      (viii) Road, Rail and Utility Agreement between LTV Steel
             and Norbridge Enterprises, Inc., dated December 20,

        (ix) License between LTV Steel as Licensor and Casey
             Equipment Corporation as Licensee dated March 20,

         (x) Easement between LTV Steel as Grantor and
             Youngstown Campbell Industrial Park as Grantee
             dated December 20, 1991;

        (xi) Easement between Youngtown Campbell Industrial
             Park as Grantor and LTV Steel as Grantee dated
             December 20, 1991;

       (xii) Easement between LTV Steel as Grantor and Norbridge
             Enterprises, Inc. as Grantee dated December 20,

      (xiii) Easement between Norbridge Enterprises as Grantor
             and LTV Steel as Grantee dated December 20, 1991;

       (xiv) Road, Rail and Utility Agreement between LTV Steel
             and F.F.M. Associates dated May 27, 1993;

        (xv) License between The Pittsburgh & Lake Erie Railroad
             Company as Licensor and The Youngstown Sheet & Tube
             Company as Licensee dated June 17, 1916 (telephone
             wire crossing);

       (xvi) License between The Pittsburgh & lake Erie Railroad
             Company as Licensor and The Youngstown Sheet & Tube
             Company as Licensee dated June 15, 1916 (water pipe

      (xvii) License between P&LE as Licensor and YS&T as
             Licensee dated February 16, 1918 (stairway and

     (xviii) License between The Pittsburgh, Youngstown &
             Ashtabula Railway Company as Licensor and YS&T as
             Licensee dated April 10, 1962 (aerial and I ground

       (xix) License between YS&T as Licensor and P&LE as
             Licensee dated January 1, 1966, to maintain driveway
             across the Edgewood/Center Street property;

        (xx) Agreements dated January 11, 1913, March 18, 1913,
             and December 5, 1914, between HS&T, HI&S, P&LE and
             MVW Co. for conduits, culverts, drains and sewers;

       (xxi) Road Rail and Utility Serv ice Agreement dated April
             30, 1986, between LTV Steel and Casey Equipment

      (xxii) Blanket Easement Agreement dated March 30, 2001,
             among LTV Steel and Summit View, Inc.;

     (xxiii) Road and Bridge Easement and Maintenance Agreement
             dated March 30, 2001, among LTV Steel, Mahoning
             Valley Railway Company, and Summit View, Inc.; and

      (xxiv) Lease dated January 1, 1990, between LTV Steel and
             The Mahoning Valley Railway Company.

3. All machinery and equipment that is physically located on
    the real property; and

4. All tax benefit transfer agreements and all obligations and
    liabilities in that connection.

The Purchaser of these Assets is Sherman International
Corporation, which has no relationship with any of the Debtors.

The economic terms and conditions of the proposed sale are:

     (1) The total cash consideration to be paid on the date of
         closing by the Purchaser to LTV Steel for the Acquired
         Assets is $2,000,000 in cash;

     (2) Upon signing of the Purchase Agreement, the Purchaser
         will pay to LTV Steel by certified check or wire
         transfer in immediately available founds delivered to
         an escrow agent 10% of the Purchase Price as the
         Earnest Money Deposit;

     (3) At closing, the Purchaser is to assume all of the
         obligations of LTV Steel and its affiliates under the
         TBTs and will indemnify LTV Steel and its affiliates
         against any claim in that respect; and

     (4) At closing, the Purchaser will pay the Purchase Price,
         less the Earnest Money Deposit, to LTV Steel through
         an escrow agent.

The parties holding liens or other interests, or potential
interest, in the Acquired Assets, to the extent known by the
Debtors, are:

                    Mr. Thomas F. Maher
                    The Chase Manhattan Bank
                    380 Madison Avenue, 9th Floor
                    New York, New York

                    Mahoning County Treasurer
                    120 Market Street
                    Youngstown, Ohio

                    Mr. Andrew Briggs
                    Abbey national Treasury Services plc
                    Abbey House, 215-229 Baker Street
                    London, England

                    Actava SHL, Inc.
                    C/o Metromedia International Group Inc.
                    (successor to Fuqua Industries, Inc.)
                    505 Park Avenue, 21st Floor
                    New York, New York

                    American Electric Power
                    1616 Woodall Rogers Freeway
                    Dallas, Texas

                    BP Company North America, Inc.
                    (successor to Atlantic Richfield Co.)
                    200 East Randolph
                    Chicago, Illinois

Leah J. Sellers, Esq., at Jones Day in Cleveland, contends that
all of these liens and interests can be extinguished, will be
waived at the time of sale, or are capable of monetary

LTV Steel will use reasonable efforts to obtain any consent
necessary for the assignment of each Real Property Agreement
that could not otherwise be assigned under the Bankruptcy Code.
Ms. Sellers relates that the proposed sale does not require the
consent of the Debtors' postpetition lenders.

Objections to this sale, if any, must be made in writing and
filed and served on or before September 11, 2002. (LTV
Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service,
Inc., 609/392-00900)

LTV Corporation's 11.75% bonds due 2009 (LTVC09USR1),
DebtTraders says, are trading at half a penny to the dollar. See
for real-time bond pricing.

MAGELLAN HEALTH: G. Fred DiBona & A.D. Frazier Resign from Board
Magellan Health Services, Inc., (NYSE:MGL) announced that two of
its directors, G. Fred DiBona, Jr., and A.D. Frazier, Jr., have
resigned from the board of directors, citing the demands of
other commitments.

The company plans to fill the open seats and is in the process
of seeking new directors.

"Over their long-term tenures, Fred and A.D. have played key
roles in Magellan's development into the nation's leading
managed behavioral health care organization and we thank them
for their commitment and service to our company," said Henry T.
Harbin, chairman of the board of Magellan. "We look forward to
selecting new directors whose expertise and skills will
complement those of our other board members and the management
team as we work together to position the company for success in
the future."

"The time I spent on the Magellan board was enjoyable and, I
believe, productive," said DiBona, president and CEO of
Independence Blue Cross. "I wish the board future success in
directing the company's very important mission."

"I enjoyed my experience as a Magellan director, particularly
participating in its metamorphosis into managed care," said
Frazier, who recently became president and chief operating
officer of CaremarkRx, Inc. "I regret it, but the responsibility
of my new position precludes my being able to devote the time to
Magellan that this company deserves from its board members. I
continue to wish my former colleagues all the best."

Headquartered in Columbia, Md., Magellan Health Services, Inc.
(NYSE:MGL), is the country's leading behavioral health managed
care organization, with approximately 68 million covered lives.
Its customers include health plans, government agencies, unions,
and corporations.

                          *    *    *

As previously reported, Standard & Poor's Ratings Services
lowered its counterparty credit rating on Magellan Health
Services Inc., to single-'B'-minus from single -'B' based on the
company's recent quarterly earnings, constrained liquidity, and
financing concerns.

Magellan remains on CreditWatch with negative implications in
part because of an unmet need to rearrange the bank-sourced part
of its debt financing.

MEADOWCRAFT INC: Case Summary & 20 Largest Unsecured Creditors
Debtor: Meadowcraft Inc.
         4700 Pinson Valley Parkway
         Birmingham, Alabama 35215

Bankruptcy Case No.: 02-06910

Type of Business: The Debtor is a leading domestic producer of
                   casual outdoor furniture and is  the largest
                   manufacturer of outdoor wrought iron
                   furniture in the world.

Chapter 11 Petition Date: September 2, 2002

Court: Northern District of Alabama

Debtor's Counsel: Sherry T. Freeman, Esq.
                   Edward J. Peterson, III, Esq.
                   Lloyd C. Peeples, III, Esq.
                   Bradley Arant Rose & White LLP
                   One Federal Place
                   1819 Fifth Ave No
                   Birmingham, AL 35203-2104
                   Telephone: (205) 521-8000
                   Facsimile: (205) 521-8800

Estimated Assets: $50 to $100 Million

Estimated Debts: More than $100 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Blount Family Irrevocable  Subordinated Note        $6,799,449
  Turst, LLC
c/o Joseph W. Blackburn,
  as Manager
Sirole & Permutt PC
PO Box 55727
Birmingham, Alabama 35255-5727

Siemcor USA, Inc.          Trade Debt/Vendor Note   $2,822,988
Peter Blohm
350 5th Avenue
Empire State Bldg., Suite 7815
New York, NY 10118

Bank of America Leasing    Yuma Equipment Leases    $2,100,000
  and Capital Group
Pamela J. Grillet
2059 Northlake Parkway
4th Floor
Tucker, GA 30084

Ferrostaal, Inc.           Trade Debt/Vendor Note   $1,801,686
Matthias Lietsch
16510 Northchase Drive
Houston, TX 77060

Rusken Packaging, Inc.     Trade Debt/Vendor Note     $964,128
Greg Rusk
PO Box 2100
Callman, AL 35056-2100

Hanna Steel                Trade Debt/Vendor Note     $799,437
c/o Banc One of America
  Business Finance Corp.
600 Peachtree Street NE
GA 1-006-05-14
Atlanta, Georgia 30308-2265

PPG Industries, Inc.       Trade Debt/Vendor Note     $775,527
Bob Hamilton
One PPG Place
Pittsburgh, PA 15272

CWS Powder Coatings        Trade Debt/Vendor Note     $662,664
  Co., L.P.
Hans Helmuth Schmidt
6 Ramapo Trail
Harrison, NY 10528

Stone Container            Trade Debt/Vendor Note     $586,377
Gerald Curteman
Attn: Credit Dept.
PO Box 2276
Alton, IL 62002

Cone Mills Corporation     Trade Debt/Vendor Note     $481,152
William Tonkin
3101 North Elm Street
Greensboro, NC 27408

New Metals, Inc.           Trade Debt/Vendor Note     $449,601
Geraldo Ruiz
5823 Northgate, Suite 2032
Laredo, TX 78041-2697

San Mart International     Trade Debt/Vendor Note     $412,692
  Co., Ltd.
Nick Wu
19 Musick
Irvine, California 96218

Georgia Pacific Corp.      Trade Debt/Vendor Note     $389,805
Erich McInnis
133 Peachtree Street, 7th Fl.
Atlanta, GA 30303

Tietex International, Ltd. Trade Debt/Vendor Note     $362,526
Ken Coesens
PO Box 6218
Spartanburg, SC 29301

Wurzburg Brothers          Trade Debt/Vendor Note     $343,887
Wendy Lester
PO Box 710
Memphis, TN 38101

Maco, Inc.                 Trade Debt/Vendor Note     $307,780
Debby Neiterman
2900 Westchester Avenue
Purchase, NY 10577

Hynes Industries           Trade Debt/Vendor Note     $298,032
Tim Bresnaham
3760 Oakwood
Youngstown, OH 44515
330-794-3221 (Ext. 135)

Western Synthetic          Trade Debt/Vendor Note     $265,453
  Fiber Inc.
Jeff Martin
c/o Western Nonwovens, Inc.
966 East Sandhill Ave.
Carson, CA 90746

WHS Sales Corporation      Trade Debt/Vendor Note     $223,568

Jet Corr                   Trade Debt/Vendor Note     $222,397

MED DIVERSIFIED: Accredo Files Sues President & COO John Collura
Med Diversified, Inc., (PINK SHEETS: MDDV.PK) a leading provider
of home and alternate site services, announced that a personal
lawsuit was filed against its president and chief operating
officer, John J. Collura, by Accredo Health, Incorporated. The
suit alleges that by assuming his positions at Med Diversified,
Mr. Collura breached certain contractual obligations relating to
non-competition and disclosure of confidential information. The
suit seeks injunctive relief and damages and was filed on August
27, 2002, in the United States District Court, Western District
of Tennessee, Western Division.

The Company is not a party to the lawsuit. Mr. Collura will be
communicating with the Company regarding his response to the

Med Diversified operates companies in various segments within
the health care industry, including pharmacy, home infusion,
multimedia, management, clinical respiratory services, home
medical equipment, home health services and other functions. For
more information, see

As reported in Troubled Company Reporter's July 19, 2002
edition, Med Diversified is expecting that its total
shareholders' equity deficit will reach $190 million.

MORGAN STANLEY: Fitch Raises Ratings on Two Low B-Rated Notes
Morgan Stanley Capital's commercial mortgage pass-through
certificates, series 1997-C1, $51.3 million class B has been
upgraded to 'AAA' from 'AA' by Fitch Ratings. Fitch also
upgraded the $38.4 million class C to 'AA-' from 'A', the $35.2
million class D to 'BBB+' from 'BBB', the $19.2 million class F
to 'BB+' from 'BB' and the $11.2 million class G to 'BB' from
'BB-'. In addition to the upgrades, Fitch affirmed the following
classes: $96.1 million class A-1B, $139.5 million class A-1C and
the notional class IO-1 at 'AAA' and the $20.8 million class H
at 'B'. Fitch does not rate the $6.4 million class E and the
$25.6 million class J. The upgrades and affirmations follow
Fitch's annual review of the transaction, which closed in March
of 1997.

The ratings upgrades are due to the high weighted average debt
service coverage ratio of the pool and pay-down of the
transaction resulting in higher credit enhancement levels. As of
year-end 2001, the weighted average DSCR for the pool has
decreased slightly to 1.86 times, from 1.91x as year-end 2000.
While the performance has fallen from the previous year, the
year-end 2001 DSCR remains high and has increased from 1.33x at
issuance. The weighted average DSCR was calculated using
financial statements collected by the master servicer, GMAC
commercial mortgage for 91% of the loans remaining in the pool.

Since issuance the transaction's aggregate balance has been
reduced by 31.4% to $439.2 million from $640.7 million at
closing. Currently the pool is collateralized by 123 commercial
mortgage loans. Significant property type concentrations include
retail (27%), healthcare (19%), self-storage (14%) and
industrial (11%) loans. The properties are well diversified
throughout the country with significant concentrations in
California (18%) and Texas (8%).

Concerns in this transaction include four loans in special
servicing (4.1%). The first loan in special servicing is a $6.7
million office property located in Dallas, TX, which is
currently 30 days delinquent. The property is located in a
particularly soft market and has a current occupancy of 60%. The
borrower is attempting to lease up the property and it is
expected that a short-term forbearance agreement will be put in
place. The second property is a $4.6 million hotel located in
Atlanta, GA, which is more than 90 days delinquent. The property
is well located near a major Atlanta business district but has
been suffering from slowdown in business travel in the area. The
special servicer is currently working with the borrower to bring
the loan current. The remaining two properties in special
servicing are expected to payoff with no losses to the trust.

Fitch analyzed each loan in the pool and assumed greater than
expected probability of default and loss severity for loans of
concern. The required credit enhancement that resulted from this
remodeling of the pool, coupled with the lack of expected losses
resulted in the rating upgrades.

MT. MCKINLEY INSURANCE: S&P Withdraws Bpi Fin'l Strength Rating
Standard & Poor's Ratings Services withdrew its single-'Bpi'
counterparty credit and financial strength ratings on Mt.
McKinley Insurance Co., after determining that there is
insufficient market interest in maintaining the rating opinion.

Mt. McKinley, a wholly owned subsidiary of Everest Reinsurance
Holdings Inc., is currently in run-off. The ratings could be
reinstated in the future should this condition change.

N2H2 INC: Implementing Restructuring Plan to Reduce Costs by 11%
N2H2, Inc. (OTC Bulletin Board: NTWO.OB), a global Internet
content filtering company, announced a restructuring designed to
help the company achieve profitability, which is expected in
late fiscal 2003.  The restructuring includes the reduction of
18 positions across the company including the Chief Operating
Officer and the Vice President of Marketing.  N2H2's move from
delivering fully-managed filtering appliances to software-only
solutions has allowed the company to streamline its operations
and development groups. Marketing and operations activities will
be consolidated under the leadership of the N2H2 executive team.
N2H2 customer service is not impacted by the company
restructuring, and the company will continue to provide its high
level of support for its customers worldwide.

"We made a promise to our customers and our shareholders that we
would reach profitability in the near term," said Phil Welt,
president and CEO of N2H2.  "Our company restructuring plan will
help us accomplish this goal and at the same time allow us to
continue delivering the quality filtering solutions that our
enterprise and education customers have grown to expect."

In restructuring its workforce, N2H2 expects to reduce operating
expenses by 11 percent or $1.5 million annually.  At the same
time N2H2 is aggressively expanding its product distribution
channel through its more than 140 reseller partners.  N2H2 has
already grown its enterprise product platform to include
filtering for Cisco, Check Point, Microsoft and Novell firewall

N2H2 is a global Internet content filtering company. N2H2
software helps customers control, manage and understand their
Internet use by filtering Web content, monitoring Internet
access and delivering concise reports on user activity. These
safeguards are designed to enable organizations of any size to
limit potential legal liability, increase user productivity and
optimize network bandwidth.

N2H2's Bess and Sentian product lines are powered by N2H2's
premium- quality filtering database -- a list consistently
recognized by independent and respected third-parties as the
most effective in the industry. Based in Seattle, WA and serving
millions of users worldwide, N2H2's software products are Cisco
Verified, Microsoft Gold Certified and Check Point OPSEC
compliant and are available for major platforms and devices.
Additional information is available at http://www.n2h2.comor
206-336-1501 or 800-971-2622.

As previously reported, N2H2 Inc., was delisted from Nasdaq
National Market for failure to comply with the continued listing
requirements. It has been trading on OTC Bulletin Board
effective March 31, 2002.

NATIONAL STEEL: Court Okays Sale of DNN Interest for C$6.1 Mill.
After due deliberation, Judge Squires allows National Steel
Corporation and its debtor-affiliates to consummate the sale of
their stock interest in DNN Galvanizing Corporation and their
partnership interest in DNN Galvanizing Limited Partnership
pursuant to the terms of the Purchase and Sale Agreement with
NKK Corporation or one of its affiliates. The Debtors are also
permitted to carry out the Forbearance Agreement and the Line
Access Agreement.

All objections to the Sale are overruled.

                            *    *    *

As previously reported, over 53% of the Debtors' common stock is
owned by NKK U.S.A. Corporation, a wholly-owned affiliate of
NKK.  Shares owned by NKK U.S.A. control approximately 69% of
the voting rights of all of the Debtors' common stock.  Through
various agreements, the Debtors utilize a wide range of NKK's
steel making, processing and applications technology, as well as
certain engineers and other technical support personnel.

The Debtors and Dofasco Inc., one of Canada's largest steel
producers, entered into a series of agreements to build and
operate a 400,000-ton per year hot dip galvanizing facility in
Windsor, Canada known as the "DNN Facility".  The operation of
the DNN Facility and the legal relationships among the Dofasco
Entities, the NKK Entities and the Debtors' Entities are
primarily governed by these Agreements:

A. Shareholders' Agreement among DNN Galvanizing Corporation,
     904153 Ontario, Inc., an Ontario corporation and a wholly
     owned subsidiary of Dofasco, National Ontario Corporation, a
     Delaware Corporation and a wholly owned subsidiary of the
     Debtors and Galvatek America Corporation, a Delaware
     corporation and a wholly owned subsidiary of NKK;

B. Partnership Agreement among Dofasco, Inc., National Ontario
     II, Limited, a Delaware corporation and a wholly owned
     subsidiary of the Debtors, Galvalek Ontario Corporation, and
     DNN Corp., establishing a limited partnership named DNN
     Galvanizing Limited Partnership; and

C. An Amended and Restated Toll Processing Agreement, among
     NKK-USA Corporation, a Delaware Corporation and a wholly-
     owned subsidiary of NKK, the Debtors and DNN Corp.

Dofasco asserted that National Steel's bankruptcy filing
constituted a Financial Default of the Toll Processing Agreement
and the Partnership Agreement.  It matured when National Steel
failed to cure the default.

NKK served a default notice on May 3, 2002 to preserve its
rights under the agreements.

The Partnership Agreement provides that within 90 days of the
occurrence of a Matured Default, NKK shall buy the Debtors'
partnership interests in DNN LP at a price equal to the fair
market value, taking into consideration any damage caused to the
Partnership, all as determined by an independent valuator.  "If
NKK fails to purchase the Debtors' interest, Dofasco has the
option under the Partnership Agreement, at any time prior to
July 16, 2003, to purchase all of the Debtors' and NKK's
partnership interests in DNN LP," Mr. Berkoff adds.

The Shareholder Agreement requires NKK to acquire National
Ontario's shares in DNN Corp., if NKK acquires the Debtors'
partnership interest in DNN LP.  The Shareholder Agreement
similarly provides that Dofasco must acquire the shares of NKK
and the Debtors in DNN Corp., if Dofasco purchases the interests
of NKK and National in DNN LP. (National Steel Bankruptcy News,
Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)

NORTHWEST AIRLINES: 7.05 Billion Revenue Passenger Miles in Aug.
Northwest Airlines (Nasdaq: NWAC) announced a system-wide August
load factor of 80.7 percent, 0.1 points above August 2001.
System-wide Northwest flew 7.05 billion revenue passenger miles
and 8.73 billion available seat miles in August 2002, resulting
in a traffic decrease of 7.7 percent on a decline in capacity of
7.9 percent versus August 2001.

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

                          *    *    *

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

The 'B+' rating reflects the signs of stabilization in
Northwest's cash flow position.

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

Northwest Airlines Inc.'s 8.875% bonds due 2006 (NWAC06USR1),
DebtTraders says, are trading at 94 cents-on-the-dollar. See
for real-time bond pricing.

OWENS CORNING: Seeks Approval of Settlement Pact with Oregon DEQ
Owens Corning and its debtor-affiliates ask the Court to approve
its settlement agreement with the Oregon Department of
Environmental Quality.

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, tells the Court that the claims the Debtors wish to
settle arise in connection with the site generally located at
1645 Railroad Ave., St. Helens in Columbia County, Oregon and
identified in the DEQ's ECSI database as Site 91 or the St.
Helens' site.

Ms. Stickles relates that the Debtors owned the site between
1978 and 1986 and conducted manufacturing operations there
between 1978 and 1982.  The Debtors acquired the site from
Kaiser Gypsum Co., which performed manufacturing operations on
the site between 1956 and 1978.  The site has been home to
industrial operations since 1929.  The Debtors conveyed the site
to Armstrong Worldwide Industries Inc., pursuant to an Asset
Purchase Agreement dated December 31, 1986.  Armstrong has
conducted industrial operations on the site since that time.

According to Ms. Stickles, the DEQ has detected naphtha in soils
and in groundwater, metals in stormwater runoff, chrysene and
dibutylphthalate in surface impoundment soils, methylene
chloride in surface impoundment waters and free product
petroleum in the groundwater.  The DEQ also has reported that
surface and subsurface contaminants may represent a threat to
on-site workers or utility trench workers but the full extent of
contamination has not been defined.  The DEQ intends to
determine the extent of contamination at the site, which is a
high priority for further action.

Ms. Stickles recounts that the DEQ on October 9, 2001 issued an
administrative order to Armstrong compelling remedial
investigation, risk assessment, feasibility study, any necessary
remedial design, and remedial actions in connection with the
alleged contamination.  Armstrong, through its contractors, has
begun the required work at the Site.  DEQ also previously
notified the Debtors that it planned to exercise its regulatory
and police powers to add the Debtors as a party bound by the
administrative order issued to Armstrong, consistent with the
DEQ's policy of naming all current and former owners in the
orders and requiring them to take part in cleanup activities.

The Debtors previously agreed to extend the time for DEQ to file
a proof of claim to provide sufficient time to resolve the issue
and other claims by the DEQ.

Ms. Stickles relates that after extensive negotiations, the
Debtors and the DEQ have agreed to settle DEQ's claims against
the Debtors as they pertain to the site, under the terms of a
stipulation and consent decree.  Since DEQ's willingness to
enter into the stipulation is subject to Oregon's approval
process, which includes an opportunity for public comment, the
terms of the stipulation could be modified.  If the
modifications are material, the Debtors will submit a modified
stipulation with the Court for approval.

The present form of the stipulation provides that:

A. Owens Corning agrees to the terms of the stipulation without
    admission of any liability or violation of the law;

B. Owens Corning will pay $900,000 to the State of Oregon,
    Hazardous Remedial Action Fund after Court approval and
    within 30 days after entry of the stipulation Oregon Circuit
    Court.  The payment will be in full satisfaction of any
    liability Owens Corning may have for payment of the DEQ's
    remedial action costs -- both incurred and to be incurred at
    any time in the future, and including any oversight or other
    costs that the DEQ might claim -- with respect to the
    contamination at the site, excluding the sediments of
    Scappoose Bay that lie continuously below the low waterline
    of the Columbia River.  The DEQ will expend these amounts, to
    the extent required, on activities or oversight related to
    the investigation and remediation of the site.  In no event
    will DEQ have the right to require the Debtors to perform any
    activity or to participate in any action regarding the site
    or to pay more than the settlement sum with respect to the

C. Upon timely payment of $900,000, the Debtors will not be
    liable for claims for contribution regarding matters
    addressed in the stipulation;

D. Nothing in the stipulation will prevent the Debtors from
    exercising any rights of contribution or indemnification the
    Debtors might have against any person not a party to the
    stipulation regarding the site;

E. The stipulation is without prejudice to any of the Debtors'
    claims, rights, and defenses against third parties; and

F. Upon payment by the Debtors, the DEQ has agreed not to sue
    or take any other action, including but not limited to
    judicial or administrative action, against the Debtors
    concerning any liability to the State of Oregon with regard
    to the release or threatened release of hazardous substances
    at the site addressed by the stipulation.

Ms. Stickles asserts that the Court should approve the
stipulation because:

-- it resolves in full the Debtors' potential liability to DEQ
    as an alleged potentially responsible person for any past and
    future remedial action costs at the site,

-- its resolves the Debtors' liability with respect to a
    potential administrative order by the DEQ in the exercise of
    its police or regulatory powers requiring investigation and
    cleanup of the site,

-- its terms are fair and reasonable,

-- if not resolved, the DEQ's claims would require complex
    litigation between the parties to resolve, and would cause
    the Debtors to incur substantial additional legal fees, costs
    and other expenses, without the benefit of certainty as to
    the outcome, and

-- the payment will protect public health, safety, and welfare
    and the environment by securing otherwise contested funds to
    facilitate and expedite ongoing remedial activities.

As a former owner of the site, the Debtors are liable for the
cost of cleaning up the site.  Ms. Stickles relates that the
Debtors' independent consultants have pegged the cost at
$4,600,000.  Where more than one owner or operator is
potentially liable for cleanup costs, liability for cleanup
costs may be allocated among them based on equitable principles.

To date, Armstrong has asserted claims relating to the site
against the Debtors.  The Debtors also maintain that Armstrong
is indebted to them for indemnification under the Asset Purchase
Agreement, as well as applicable federal and state laws.

Ms. Stickles clarifies that the proposed stipulation with DEQ
will not affect the Debtors' competing claims with Armstrong,
but will bar Armstrong's claims against the Debtors to the
extent they are for contribution relating to the site.

In the absence of the settlement, Ms. Stickles contends that the
Debtors would incur substantial additional costs:

-- in responding to an administrative order issued by the DEQ,

-- in attempting to secure the application of equitable
    principles of allocation, and

-- in investigating and cleaning up the site.

The Debtors have already incurred $225,000 in legal and
consultants' fees and expenses.  The Debtors' Oregon counsel has
estimated that future costs could range between $250,000 and
$500,000, based upon his experience at sites with similar
complexity, allocation issues and three or four parties sharing
cleanup costs. (Owens Corning Bankruptcy News, Issue No. 37;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

POLAROID CORP: Keeps Plan Filing Exclusivity Until October 15
The U.S. Bankruptcy Court for the District of Delaware granted
Polaroid Corporation and its debtor-affiliates the exclusive
right to propose and file a Chapter 11 Plan until October 15,
2002. Likewise, the Court granted the Debtors the exclusive
right to solicit acceptances of that plan from their creditors
through and including December 16, 2002.

Polaroid Corporation's 11.50% bonds due 2006 (PRDC06USR1) are
trading at 6 cents-on-the-dollar, DebtTraders reports. See
for real-time bond pricing.

POTLATCH CORP: Reaches Agreement to Sell Bradley Hardwood Mill
Potlatch Corporation (NYSE:PCH) has reached agreement with Dr.
David Chambers for the sale of its Bradley Hardwood mill in
Warren, Arkansas, for an undisclosed amount.

Potlatch has been seeking a buyer for the hardwood mill since
announcing the mill's closure and the company's exit from the
hardwood lumber business on June 3, 2002. The mill ceased
production in late July. In July, the company also announced a
second quarter 2002 pre-tax charge of approximately $9 million
to cover costs associated with the closure and write-down of the
Bradley mill's book value.

Sale of the Bradley mill is part of Potlatch's announced plans
to align its Arkansas operations with available raw material and
expand southern pine production. The company is currently hiring
additional workers for its Southern Unit pine mill in Warren
with the intent of adding a third shift to its current two-shift
operation. Both the Warren pine mill and the company's pine mill
in Prescott, Arkansas, are expected to increase the company's
annual southern pine production by as much as 30 percent,
according to Wood Products Vice President Rick Kelly.

Potlatch Corporation is a diversified manufacturer of wood and
paper products with 1.5 million acres of forestland in Idaho,
Arkansas and Minnesota.

                          *     *    *

As reported in Troubled Company Reporter's March 21, 2002,
edition, Fitch Ratings affirmed Potlatch Corp.'s ratings of
senior secured at 'BBB', senior unsecured at 'BBB-', senior
subordinated notes at 'BB+', and commercial paper at 'F3'. The
Rating Outlook for PCH is Stable.

The ratings reflect PCH's announcement that it is selling its
printing paper assets in Cloquet, MN.

PSINET INC: US Trustee Appoints Consulting Creditors' Committee
Pursuant to Sections 1102(a) and 1102(b) of the Bankruptcy Code,
the United States Trustee for the Southern District of New York
appoints these five creditors to the Official Committee of
Unsecured Creditors of PSINet Consulting Solutions Holdings

     1. The Bank of New York, as Indenture Trustee
        1155 Avenue of the Americas
        New York, NY 10036-2787
        Attn: Irene Siegel, Vice President
        Tel. No. (212) 819-7982

     2. Argemt Classic Convertible Arbitrage Fund (Bermuda) L.P.
        73 Front Street
        P.O. Box HM 3013
        Hamilton HMMX, Bermuda
        Attn: Henry Cox
        Tel. No. (441) 292-9718

     3. Argent Classic Convertible Arbitrage Fund, L.P.
        c/o Bobby Richardson
        3100 Tower Blvd., Suite 1104
        Durham, N.C. 27707
        Tel. No. (919) 403-2644

     4. Loeb Partners Corp.
        61 Broadway
        New York, NY 10010
        Attn: Gideon S. King

     5. Cypress Management
        100 Pine Street
        San Francisco, CA 94111
        Attn: Jack J. Mersch, Partner
        Tel. No. (415) 229-9079
(PSINet Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

QUANTUM CORP: Takes Restructuring Actions to Improve Performance
Quantum Corp. (NYSE: DSS), a leading provider of data protection
and network storage systems, announced a set of restructuring
actions designed to improve its business performance.  Following
an unprecedented multiple-year decline in server unit sales --
the most closely correlated market indicator for Quantum's
storage sales -- Quantum is improving its cost structure to
achieve its goal of becoming profitable by the end of the
current fiscal year.

The actions, which will take place in two phases over the next
two quarters, involve outsourcing manufacturing, consolidating
development teams and sites, and right-sizing the company's
infrastructure for a lower level of revenue.  As a result of the
restructuring, Quantum expects to reduce its pro forma operating
expenses, excluding amortization of good will and restructuring
expenses, by approximately 20 percent by the end of its fiscal
year in March 2003, from the $82 million level it reported at
the end of June. Quantum has also recently taken actions to
expand its product lines which the company also believes will
improve its revenue, gross margins and profitability.

Phase 1 of the restructuring affects both of Quantum's business
groups -- its DLTtape(TM) Group and Storage Solutions Group --
as well as its corporate functions.  The restructuring covers
actions that Quantum announced last week related to the
acquisition of Benchmark Storage Innovations and the outsourcing
agreement with Jabil Circuit.

In addition, Phase 1 restructuring includes outsourcing sub-
assembly manufacturing of Quantum's P-Series enterprise tape
libraries, consolidating the number of development sites for
disk-based backup and tape automation, and centralizing support
functions.  Overall, Phase 1 restructuring will eliminate
approximately 1100 positions, 80 percent of which are related to
the outsourcing agreement with Jabil.

The total of special charges for both phases of the
restructuring is expected to be approximately $100 million, with
slightly less than half being cash charges.  Phase 1 charges are
expected to be in a range of $60-75 million -- mostly from write
downs of goodwill and intangibles -- and will be reflected in
Quantum's fiscal second quarter results.  Phase 2 charges are
still being finalized, will be announced within the next 90
days, and are expected to be included in the company's fiscal
third quarter results.

The $40-50 million in total cash charges related to the
restructuring will be largely offset by two sources of cash
inflows:  $11 million from the recent sale of the Quantum
Technology Ventures portfolio and approximately $30 million from
Jabil's purchase of Quantum's production equipment and
inventory, that Jabil will use to manufacture tape drives and
tape automation products in Penang.  Quantum ended its last
fiscal quarter with $305 million on its balance sheet.

In addition to reducing operating expenses, the restructuring
actions -- combined with the Benchmark acquisition and
outsourcing to Jabil -- are expected to improve Quantum's
overall gross margins over the next several quarters.

"Quantum has recently completed the most aggressive series of
new product launches in the company's history, which has allowed
us to secure a number of major OEM wins, and strengthen our
channel business," said Rick Belluzzo, CEO of Quantum.  "With
this momentum, and our imminent acquisition of Benchmark,
Quantum is well positioned to solidify its role as a leader in
data protection, offering customers superior price/performance
and investment protection through one of the broadest portfolios
of products and solutions. However, the current market
environment and our current expense structure make it necessary
to take the restructuring actions that we are announcing today.
This will enable us to capitalize fully on our recent progress
and long-term opportunities with a more competitive business
model that provides sustainable growth and profitability."

Quantum Corp., founded in 1980, is a global leader in data
protection and network storage systems, meeting the needs of
business customers with enterprise-wide storage solutions and
services. Quantum is the world's largest supplier of tape
drives, and its DLTtape(TM) technology is the standard for
backup, archiving, and recovery of mission-critical data.
Quantum is a leader in the design, manufacture and service of
automated tape libraries used to manage, store and transfer
data. In addition to having the largest installed base of
Network Attached Storage appliances of any NAS supplier, Quantum
is the leader in the workgroup NAS market category. Quantum
sales for the fiscal year ending March 31, 2002, were
approximately $1.1 billion. Quantum Corp., 501 Sycamore Dr.,
Milpitas, CA 95035, (408) 944-4000,

                           *    *    *

As reported in Troubled Company Reporter's August 29, 2002
edition, Standard & Poor's Ratings Services placed its double-
'B' corporate credit rating and single-'B'-plus subordinated
debt ratings on tape-based enterprise storage company, Quantum
Corp., on CreditWatch with negative implications. The action
resulted from weakened operating performance. Quantum, based in
Milpitas, Calif., had $390 million of debt outstanding as of
June 30, 2002.

"Quantum's operating performance reflects the ongoing slump in
spending by enterprise customers on information technology.
Revenues of $211 million in the quarter ended June 30, 2002
declined 13% sequentially. Despite being at the beginning of a
positive product cycle, Quantum is suffering from weak volume
demand, pricing pressure in certain product areas, and increased
tape media inventories in the channel," said Standard & Poor's
credit analyst Joshua Davis.

SPORTS CLUB COMPANY: Raises $3MM from Sale of Texas Property
On August 30, 2002, The Sports Club Company, Inc. completed the
sale of its real estate in Houston, Texas to an unaffiliated
buyer. The property was acquired in 1998 with the intention of
building The Sports Club/LA - Houston on the site. The Company
received net proceeds of $3.0 million upon the close of the

                          *     *     *

As reported in Troubled Company Reporter's Tuesday edition, The
Sports Club Company, Inc., amended its Loan Agreement with
Comerica Bank - California. The amended agreement extends the
maturity date of the Company's credit facility until October 31,
2002.  All other terms of the agreement remain unchanged,
including the credit amount, financial covenants and interest

The Company remains out of compliance with two of the financial
covenants for the June 30, 2002 reporting quarter. The Bank has
waived the Company's compliance with such covenants for that

Between now and October 31, 2002, the Company intends on
renewing the bank agreement for another year and redefining the
financial covenants.

The Sports Club Company operates four sports and fitness clubs
(the Clubs) under The Sports Club/LA name in Los Angeles,
Washington D.C. and at Rockefeller Center and the Upper East
Side in New York City. The Company also operates the Sports
Club/Irvine, The Sports Club/Las Vegas and Reebok Sports
Club/NY. SCC's Clubs offer a wide range of fitness and
recreation options and amenities, and are marketed to affluent,
health-conscious individuals who desire a service-oriented club.
The Company's subsidiary, The SportsMed Company, operates
physical therapy facilities in some Clubs.

SUNBEAM CORP: Files Amended Plan of Reorganization in New York
Sunbeam Corporation has filed amended plans of reorganization
and disclosure statements with the U.S. Bankruptcy Court for the
Southern District of New York for Sunbeam and its domestic
operating subsidiaries.  Sunbeam's international subsidiaries
are not parties to the reorganization cases.

A hearing on the amended disclosure statements is scheduled for
October 4, 2002.  A confirmation hearing on the amended plans is
scheduled for November 4, 2002.

Jerry W. Levin said, "The amended plans of reorganization
represent the next step forward for Sunbeam's operating
businesses, our employees, vendors and retailers.  The plans
have the solid support of our secured lenders who will become
the principal stockholders of the reorganized Sunbeam.   As a
result, Sunbeam will emerge as a stronger, more competitive
company with a new capital structure and substantially less
debt. We have a compelling business strategy in place, and we
are pleased that these plans provide us the financial
flexibility to continue on that path.  I will continue as
Chairman and Chief Executive Officer of the reorganized Sunbeam
and I will make an equity investment in the reorganized

Mr. Levin continued, "The employees of Sunbeam's businesses have
achieved what some observers may have thought was an impossible
task when we started. We've created a first class operating
company with one of the greatest collections of leading consumer
brands, including Coleman(R), Sunbeam(R), Oster(R), Mr.
Coffee(R), Health o meter(R), Grillmaster(R), First Alert(R),
Campingaz(R) and Coleman Powermate(R).  We have reached this
point with the support of our friends -- our retailers and
suppliers -- despite the extraordinary difficulties of operating
in chapter 11."

The amended plan of reorganization filed for Sunbeam Corporation
provides for, among other things, converting substantially all
of Sunbeam's secured bank debt to equity in Sunbeam, as more
fully described in the disclosure statement filed with the U.S.
Bankruptcy Court.  The principal equity holders will be Morgan
Stanley, Wachovia and Bank of America.  The plan of
reorganization for Sunbeam's domestic operating subsidiaries
provides for payment in full to all unsecured creditors, as more
fully described in the disclosure statement filed with the U.S.
Bankruptcy Court.

Sunbeam Corporation is a leading consumer products company that
designs, manufactures and markets, nationally and
internationally, a diverse portfolio of consumer products under
such world-class brands as Coleman(R), Sunbeam(R), Oster(R), Mr.
Coffee(R), Health o meter(R), Grillmaster(R), First Alert(R),
Campingaz(R) and Coleman Powermate(R).

TUCKAHOE CREDIT: S&P Affirms B- Pass-Through Certificates Rating
Standard & Poor's Ratings Services affirmed its rating on
Tuckahoe Credit Lease Trust 2001-CTL1 credit lease-backed pass-
through certificates and removed it from CreditWatch negative,
where it was placed August 27, 2002. The Outlook on the rating
is Developing.

The rating action reflects the affirmation of Qwest
Communications International Inc.'s corporate credit rating at
single-'B'-minus, and its removal from CreditWatch negative. The
rating on the credit lease-backed certificates is dependent on
the rating of Qwest. Qwest's rating Outlook is Developing.

The credit lease-backed certificates are collateralized by a
first mortgage and assignment of lease encumbering a condominium
interest in a two-story industrial building in Yonkers, N.Y. The
entire property is leased to Qwest Communications Corp. (QCC), a
wholly owned subsidiary of Qwest, on a triple net basis, with
QCC responsible for all operating and maintenance costs.

         Rating Affirmed And Removed From Creditwatch

           Tuckahoe Credit Lease Trust 2001-CTL1
    Credit lease-backed pass-through certs series 2001-CTL1

        To                        From
        B-/Outlook Developing     B-/Watch Neg

UNIROYAL TECHNOLOGY: Asks Court to Approve $15MM DIP Facility
Uniroyal Technolgy Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for interim
and final authority to obtain postpetition financing.

Pending consummation of a plan of reorganization, the Debtors
intend to finance ongoing operations of their businesses through
the use of up to $15,000,000 of postpetition financing to be
provided by The CIT Group/Business Credit, Inc.

The Debtors tell the Court that they require a source of working
capital to maintain their going concern and continue ordinary
course day-to-day operations.  Without immediate access to
working capital provided by a postpetition financing facility,
the Debtors lack sufficient liquidity to maintain their
operations.  Without prompt access to such a facility, the
Debtors risk fundamental harm to their businesses and a possible
inability to consummate the Plan, the Debtors explain.

Moreover, the Debtors point out that their cash collateral will
not provide sufficient liquidity to allow them to operate their
businesses in the near term.  Without this financing facility,
the Debtors will be unable to meet their payroll and other
necessary, ordinary course business expenditures, which are
critical to the Debtors' ability to maintain the integrity of
their ongoing operations and preserve the going concern value of
their estates.

The Debtors will receive up to $8.5 million of incremental
borrowings following entry of the Interim Order and up to $15
million of additional incremental borrowings following entry of
the Final Order.

Under the DIP Facility:

      a) The Debtors will be able to borrow up to an aggregate
         maximum amount of $15,000,000 in the form of revolving
         credit loans with a letter of credit sublimit of

      b) The postpetition loan shall bear interest equal to the
         Chase Bank Rate plus 2% per annum and on the event of
         default, the interest rate shall be increased by 2%.

      c) The Debtors will pay the Lender a loan facility fee of
         $300,000 and an annual administrative fee of $40,000.

      d) The DIP Lender shall be granted superpriority liens,
         subject to a $550,000 carve-out for professional fees
         and the fees of the United States Trustee.

The Debtors have sought guidance from their financial advisor in
obtaining debtor in possession financing from a lender other
than CIT.  The financial advisors pointed out that the secured
obligations on the Debtors' balance sheet would not be able to
obtain financing by merely offering a lender an administrative
expense claim or a junior lien.   Ultimately, the proposal
provided by CIT offered the best terms.

The Debtors inform the Court that an important concession
provided by CIT is the willingness to lend against equipment and
real property, which do not form part of the borrowing base
under the Prepetition Credit Facility and represent a critical
source of incremental liquidity.  The Debtors are reasonably
comfortable that the proposed DIP Facility is the best financing
available and well within the exercise of sound business

Uniroyal Technology Corporation and its subsidiaries are engaged
in the development, manufacture and sale of a broad range of
materials employing compound semiconductor technologies, plastic
vinyl coated fabrics and specialty chemicals used in the
production of consumer, commercial and industrial products. The
Company filed for chapter 11 protection on August 25, 2002 Eric
Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at The Bayard
Firm represent the Debtors in their restructuring efforts.  When
the Debtors filed for protection from its creditors, it listed
$85,842,000 in assets and $68,676,000 in debts.

UNITED AIRLINES: Passenger Load Factor Climbs to 79% in August
United Airlines (NYSE: UAL) total scheduled revenue passenger
miles fell 12.9 percent in August vs. the comparable month in
2001, on a capacity decrease of 13.3 percent.  The carrier's
passenger load factor came in at 78.8 percent, up slightly from
78.4 percent a year ago.

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

                               *    *    *

As reported in Troubled Company Reporter's Sept. 5, 2002
edition, UAL Corp. (CCC/Watch Dev/--), parent of United Air
Lines Inc. (CCC/Watch Dev/--), announced a new CEO, Glenn F.
Tilton, formerly Vice Chairman of ChevronTexaco Corp., and
interim Chairman of Dynegy Inc.  Standard & Poor's Ratings
Services said its ratings for both entities remain on
CreditWatch with developing implications.

"Tilton's appointment as successor to interim CEO John W.
Creighton, Jr., after a long and difficult executive search,
should help reinvigorate negotiations between the company and
its unions regarding cost concessions to avoid a bankruptcy
filing," said Standard & Poor's credit analyst Philip Baggaley.

"The previous September 16 deadline for resolution of labor
talks may be extended now, but Tilton still has a very difficult
task in persuading employees to accept major pay cuts, and the
company faces mid-November debt payments that UAL has said it
cannot meet," the analyst continued. Tilton was elected with the
support of the pilots and machinists unions, which have Board
seats and can together block an executive choice (though the
previous two CEOs were also chosen with the initial support of
those two unions). The President of UAL and the Chief Operating
Officer of United resigned with the change in management, adding
to the executive turnover.

Standard & Poor's ratings could be lowered if progress toward a
financial restructuring does not materialize, or if such a plan
includes defaulting on debt instruments; alternatively, ratings
could be raised if such a plan is concluded successfully.

US AIRWAYS: Wants to Ink Bank of America Purchasing Agreement
US Airways Group Inc., and its debtor-affiliates seek the
Court's authority to enter into a Corporate Purchasing Card
Agreement with Bank of America. John Butler, Esq., at Skadden,
Arps, Slate, Meagher & Flom, explains that the Debtors will
receive a revolving line of credit from Bank of America under
the Card Agreement.  The Debtors' personnel will be able to
access the credit line by using charge cards to purchase, on
credit, goods and services incidental to business activities.

Material terms of the Card Agreement include:

   (a) Term: The Card Agreement will continue until terminated
       by either party upon prior written notice contemplated to
       be 30 to 60 days;

   (b) Late Payment Interest: The late payment interest charge
       will be the prime rate published in the Money Rates
       section of The Wall Street Journal -- adjusted on the
       first day of each calendar month -- plus a number of basis

   (c) Charge Limits: The Card Agreement imposes an aggregate
       charge limit of up to $5,000,000 subject to adjustment in
       an amount less than $5,000,000.  Each card will have
       preset per-card charge limits;

   (d) Fees: The Debtors may incur charges under the Card
       Agreement based upon usage.  These fees may include late
       payment fees, periodic finance charges, cash advance fees
       and returned payment fees;

   (e) Collateral: The obligations under the Card Agreement will
       be secured by cash collateral of up to 110% of the
       effective aggregate charge limit, pursuant to a Cash
       Collateral Account Agreement between US Airways, Inc. and
       Bank of America.  The Debtors agree to deposit the cash
       collateral in a special cash collateral account with Bank
       of America, which is under the sole control of Bank of
       America.  Bank of America will hold the Account as
       security for the Debtors' obligations and may draw funds
       from the Account should the Debtors fail to make timely
       payments under the Card Agreement; and

   (f) Representations and Warranties: The Card Agreement
       contains representations and warranties customarily found
       in purchasing card agreements for similar financings.

Mr. Butler emphasizes that immediate approval of the Card
Agreement and authorization to use the purchasing cards is
critical to the successful launch of these Chapter 11 cases. The
Debtors intend to rely on credit availability to make emergency
payments in the initial stages of these proceedings.  Absent a
ready and available source of funds, the Debtors may be unable
to make necessary payments in a timely and efficient manner.
Thus, the Debtors contend that the purchasing card program
serves to:

     -- avoid immediate and irreparable harm to the estates, and
     -- preserve the assets.

In addition, the use of purchasing cards will eliminate the need
for numerous petty cash allotments and, more importantly,
provide a control mechanism to ensure that purchases of
incidental goods and services are appropriate, authorized and
properly recorded.

Collateralizing the Card Agreement is a condition precedent to
its execution and Bank of America, as well as other institutions
that maintain similar purchasing card programs, would not
provide credit on an unsecured basis.  The Debtors believe that
collateralization of the Card Agreement is appropriate and does
not unduly burden the Debtors or their estates.

Mr. Butler reminds Judge Mitchell that the Court may authorize
the Debtors to enter into the Card Agreement under Section
364(c)(2) of the Bankruptcy Code.  This Section provides that a
court may authorize the obtaining of credit secured by a lien on
property of the estate that is not otherwise subject to a lien
if the Debtors are unable to obtain unsecured credit allowable
as an administrative expense under Section 503(b)(1) of the
Bankruptcy Code. (US Airways Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

US Airways Inc.'s 10.375% bonds due 2013 (U13USR2) are trading
at 10 cents-on-the-dollar, DebtTraders reports. See
real-time bond pricing.

US DATAWORKS: Independent Auditors Issue Going Concern Opinion
US Dataworks, Inc., a Nevada corporation, develops, markets, and
supports transaction processing software for Windows NT computer
systems. Its customer base includes many of the largest
financial institutions as well as credit card companies,
government institutions, and high-volume merchants in the United
States. It also has a strategic alliance with CheckFree
Corporation (NASDAQ: CKFR) to license the Company's software for
its banking customers and Thomson Financial Publishing, a unit
of Thomson Corporation (TSE: TOC), to incorporate its EPICWare
database into the Company's products. Prior to acquiring US
Dataworks, Inc., a Delaware corporation, the Company was a
financial services company specializing in the integration of
proprietary software applications with Applications Service
Provider ("ASP") services and an internet service provider
("ISP"). During July and December 2001, the Company started
shutting down its ISP and ASP operations, respectively, and at
March 31, 2002 all ISP and ASP activities had ceased. Effective
May 9, 2002, the Company merged with US Dataworks, Inc., a
Delaware corporation, and dissolved the Delaware corporation.

The results of operations reflected in this discussion include
the operations of US Dataworks for the three months ended June
30, 2002 and 2001. The acquisition agreement between US
Dataworks and US Dataworks, Inc., a Delaware corporation, was
signed on March 31, 2001, with an effective date of
April 2, 2001. Balance sheet information, as well as revenue and
expenses, are affected by this consolidation and it is important
to understand this when viewing the overall results.

Revenue increased by $499,354, or 182%, to $773,131 for the
three months ended June 30, 2002 from $273,777 for the three
months ended June 30, 2001. The increase in revenue was
primarily attributable to an increase in the number of license
agreements the Company entered into in the first fiscal quarter
of 2003. The increase in license agreements led to increased
installations, generating more revenue from custom programming
and maintenance contracts related to these licenses.

Cost of Sales increased by $58,423, or 53%, to $168,269 for the
three months ended June 30, 2002 from $109,846 for the three
months ended June 30, 2001. The increase was primarily
attributable to an increase in labor related costs.

Total operating expenses decreased by $98,077, or 10%, to
$865,544 for the three months ended June 30, 2002 from $963,621
for the three months ended June 30, 2001. The decrease was
primarily attributable to reductions in marketing expenses,
salary expenses and administrative costs.

Other expenses, including interest expense and financing costs,
decreased during the three months ended June 30, 2002 primarily
due to reduced interest charges on Company convertible
promissory notes in the form of fixed conversion features and
amounts allocated to warrants as a debt discount. Interest
expense decreased by $1,716,991, or 87%, to $250,230 for the
three months ended June 30, 2002 from $1,967,221 for the three
months ended June 30, 2001.

For the three months ended June 30, 2002, US Dataworks did not
recognize a gain or a loss on discontinued operations of its
internet service provider, or ISP, and application services
provider, or ASP, divisions, as compared to a gain of $148,364
for the three months ended June 30, 2001. In April 2001, it
completed the acquisition of US Dataworks, Inc., a Delaware
corporation, a developer of electronic check processing
software. In August 2001, it ceased operations in its ISP
division due to the increased competition in the ISP market and
the resulting negative effect on cash flow. In February 2002,
the Company sold its ASP technology software and ceased
operations in its ASP division in order to focus on its core
business of software development.

Net loss decreased by $2,107,583, or 80%, to a net loss of
$526,102 for the three months ended June 30, 2002 from
$2,633,685 for the three months ended June 30, 2001.

                   Liquidity and Capital Resources

Cash and cash equivalents decreased by $153,467, or 67%, to
$95,631 for the three months ended June 30, 2002 from $249,098
for the three months ended June 30, 2001. This decrease was
primarily due to a decrease in interest charges on convertible
promissory notes and financing costs and a decrease in
investing activities, offset by an increase in proceeds from
financing activities. Cash used for operating activities was
$288,616 for the three months ended June 30, 2002, of which
$45,952 was used in discontinued operating activities, compared
to $936,080 for the three months ended June 30, 2001, of which
$79,596 was used in discontinued operating activities. Net loss
from operations reduced cash by $526,102.

US Dataworks has incurred losses for the last two fiscal years
and expects that its net losses and negative cash flow will
continue for the foreseeable future. Its auditors have included
an explanatory paragraph in their Independent Auditor's Report
included in the Company's audited financial statements for the
years ended March 31, 2002 and 2001 filed with the annual report
on Form 10-KSB for fiscal year ended March 31, 2002, to the
effect that the Company loss from operations for the year ended
March 31, 2002, and the accumulated deficit at March 31, 2002
raise substantial doubt about its ability to continue as a going
concern. US Dataworks has incurred significant losses in the
last two years and as of June 30, 2002, the accumulated deficit
was $28,038,106. Management believes that planned growth and
profitability will depend in large part on the Company's ability
to promote its brand name and gain and expand clients for whom
it would provide licensing agreements and system integration.
Accordingly, it intends to invest heavily in marketing and
promotion, development of its client base and development of its
marketing technology and operating infrastructure.

It is believed by Company management that the Company currently
has adequate cash to fund anticipated cash needs for at least
the next 6 months. It will need to raise additional capital and
is actively pursuing various financing options. However, it may
not be able to raise additional funds on favorable terms, or at
all. If unable to acquire additional capital, or required to
raise it on terms that are less satisfactory than desired, it
will have a material adverse effect on US Dataworks' financial
condition and ability to continue to operate its business. If it
raises capital through additional equity financings, these
financings may result in dilution to existing shareholders.

U.S. INDUSTRIES: Commences Exchange Offer for 7-1/8% Sr. Notes
U. S. Industries, Inc., (NYSE-USI) announced that, consistent
with its previously announced plan to extend the maturity of its
debt, it has commenced an Exchange Offer to exchange cash and
notes with a higher interest rate and longer maturity for all of
its outstanding 7-1/8% Senior Notes due 2003.

USI also announced that it received agreement from the lenders
holding a majority of the commitments under its senior bank
facilities to extend the maturity of its bank debt, which is
subject to customary conditions including the execution by 100%
of the lenders under USI's senior bank facilities of final
documentation providing for the extension. The amendment will
extend the maturity date of the bank debt from November 30, 2002
to October 1, 2003 with a further automatic extension to October
4, 2004 if the Exchange Offer is successful.

With the proceeds from its previously announced asset disposal
plan and working capital initiatives, USI will have reduced its
total net debt and letters of credit outstanding to
approximately $602 million, a reduction of approximately $751
million since June 30, 2001, after application of the
anticipated proceeds of the sale of SiTeco Holdings GmbH which
is expected to close by the end of September. The debt reduction
includes pay down of USI's senior debt and the credit facilities
of Rexair Holdings, Inc. and Rexair, Inc. (which were acquired
in August of 2001), the reduction of letter of credit facilities
and the amounts deposited into collateral accounts for the
benefit of the holders of our senior notes and other creditors.

USI currently has $250 million principal outstanding of the 03
Notes. If the Exchange Offer is consummated, holders who tender
their 03 Notes on or prior to the expiration date will receive
an amount of cash and principal amount of New Notes that is
together equal to the principal amount of the 03 Notes tendered.
The interest rate on the proposed New Notes will be 9-1/8%, 200
basis points greater than the interest rate on the 03 Notes. The
New Notes will become due and payable on December 31, 2005. The
other terms of the New Notes will be substantially similar to
the 03 Notes.

In connection with the Exchange Offer, USI is also soliciting
consents from a majority of the 03 Note holders to a proposed
amendment to the indenture under which the 03 Notes were issued
so that the cash deposited in a cash collateral account from the
sales of USI's non-core assets that is proportionally allocable
to tendering holders may be used to pay the cash consideration
in the Exchange Offer. A consent payment of $5 per $1,000
principal amount of 03 Notes will be paid out of the Company's
general working capital to all holders who deliver their
consents on or prior to the consent date.

USI anticipates that the aggregate cash available to distribute
in exchange for validly tendered 03 Notes will be approximately
$110 million, of which $89.3 million is currently on deposit in
a cash collateral account. As previously announced, USI expects
to complete the sale of SiTeco prior to the expiration date of
the Exchange Offer and expects to allocate approximately $21
million of the proceeds from that sale to collateralize the 03
Notes, and accordingly, pay this cash to the tendering holders
of 03 Notes. The cash allocable to the 03 Notes that are not
exchanged will remain in the cash collateral account. Upon
consummation of the sale of SiTeco, USI intends to promptly
publicly announce the amount of sale proceeds allocable to the
holders of 03 Notes. If for any reason the SiTeco sale is not
consummated by the expiration date, that amount will not be
available to be distributed in the Exchange Offer.

The Exchange Offer and the Consent Solicitation are subject to
customary conditions, including the participation of a minimum
of 90% of the current holders of 03 Notes, receipt of the
requisite consents to the amendment to the indenture and
satisfactory amendment of the bank debt. USI has reserved the
right to terminate or amend the Exchange Offer and Consent
Solicitation at any time prior to acceptance of the 03 Notes for

The expiration date for the Exchange Offer is 12:00 midnight,
New York City time, on October 4, 2002, unless extended. The
consent date is 12:00 midnight, New York City time, on the later
of September 20, 2002 and the date on which holders of a
majority in aggregate principal amount of 03 Notes deliver their
consents to the proposed amendment to the indenture.

The offering circular and consent solicitation statement and
related consent and letter of transmittal and other offering
materials relating to the Exchange Offer will be distributed to
eligible investors. Georgeson Shareholder Communications Inc. is
serving as the Company's Information Agent for the Exchange
Offer and Consent Solicitation and may be contacted at 17 State
Street, 10th Floor, New York, New York 10004. Banks and Brokers
may call collect using (212) 440-9800 and all others may call
toll free using (866) 807-2995. USI's public filings may also be
obtained through the Securities and Exchange Commission at its
Web site at of charge.

The Exchange Offer is being made in reliance on the exemption
afforded by Section 3(a)(9) from the registration requirements
of the Securities Act of 1933, as amended. The Exchange Offer is
being made solely pursuant to the offering circular and consent
solicitation statement dated September 9, 2002 and related
consent and letter of transmittal. Investors and note holders
are strongly advised to read both the offering circular and
consent solicitation statement and related consent and letter of
transmittal regarding the Exchange Offer because they contain
important information. USI will not pay or give, directly or
indirectly, any commission or remuneration to any broker,
dealer, salesman, agent or other person for soliciting tenders
in the Exchange Offer.

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

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

VIZACOM INC: Nasdaq SmallCap Elbows-Out Shares Effective Sept. 9
Vizacom Inc. (Nasdaq: VIZY), a provider of comprehensive
information technology product and service solutions, reported
that its shares were delisted from the Nasdaq SmallCap Market on
Friday, Sept. 6, 2002, because the Company had failed to meet
the requirements of the minimum $1.00 bid price and because its
stockholders' equity fell below $2,500,000 at June 30, 2002.

The Company's shares will now trade on the OTC Bulletin Board
under the symbol VIZY.OB. The Company is considering an appeal
of the Nasdaq delisting action.

Vizacom Inc., is a provider of comprehensive information
technology product and service solutions. Vizacom develops and
provides to leading global and domestic companies a range of
solutions, including: multimedia products; systems and network
development and integration; state-of-the-art managed and co-
location services; and data security solutions. Vizacom attracts
top, established companies as clients, including: Verizon
Communications, WPP Group, and Viacom. Visit

VOLT INFORMATION: May Violate Covenant Under Credit Facility
Volt Information Sciences, Inc., (NYSE: VOL) reported financial
results for the Company's third quarter and nine-months ended
August 4, 2002.

                Third Quarter of Fiscal 2002 Results

For the third quarter ended August 4, 2002, the Company reported
net income and income from continuing operations of $1.1 million
on net sales of $376.6 million, compared to a net loss of $1.2
million on net sales of $459.0 million in the fiscal 2001 third
quarter, which included a loss from discontinued operations of
$0.02 per share.

Non-recurring items in the 2001 third quarter results included a
gain of $1.1 million, net of taxes on the sale of an investment
in equity securities.  In addition, the 2001 third quarter
included amortization of goodwill, which is no longer permitted
to be amortized, of $0.5 million, net of taxes.  Excluding these
items, the loss from continuing operations for the third quarter
of fiscal 2001 was $1.6 million.

Mr. William Shaw, Chairman and President, stated, "I am pleased
to report the Company's return to profitability after two
difficult quarters.  Higher profitability in both our Staffing
Services and Telephone Directory segments, as well as continued
growth in the directory assistance products of our Computer
Systems segment, all contributed to the improved performance
compared to last year's third quarter and this year's second
quarter.  In addition, as a result of the Company's
restructuring to meet the reduced demand for certain of its
services due to continued economic uncertainty, quarterly
segment overhead was reduced by approximately $11.0 million from
the previous year's third quarter.  The Commercial and Light
Industrial division of our Staffing Services segment posted
revenue gains for the second successive quarter and its year-
over-year operating loss declined 61% on a 3% increase in
revenue. While the demand for telecommunications services
remains depressed and forecasts for resumed industry capital
spending get pushed further out into next year, our
reorganization and cost control programs should continue to have
a significant effect in reducing the segment's loss and lowering
its break-even run rate.  We believe that the actions and
strategy we have implemented across our business units should
provide us with the opportunity for increased profitability and
revenue growth as the economy improves."

The Company also reported that, on or before the September 18,
2002 due date applicable to the Company, its Chief Executive
Officer and Chief Financial Officer will furnish to the
Securities and Exchange Commission the certifications without
exceptions on the Company's last Annual Report on Form 10-K and
subsequent reports and proxy statement pursuant to the
Commission's June 27, 2002 Order directed to the 947 largest
domestic companies, including the Company, as well as, pursuant
to the Sarbanes-Oxley Act of 2002 with respect to the Company's
Quarterly Report on Form 10-Q to be filed with respect to the
financial statements summarized in this press release.

                  Nine Months of Fiscal 2002 Results

For the nine months of fiscal 2002, the Company reported a net
loss of $37.6 million, which included a non-cash charge of $31.9
million for goodwill impairment, on net sales of $1.1 billion.
This compares to a net loss of $0.2 million on net sales of $1.5
billion in the comparable fiscal 2001 period.

The results for the nine months of fiscal year 2002 include a
net gain from discontinued operations of $4.3 million an
extraordinary charge for the prepayment of the Company's
remaining $30.0 million outstanding Senior Notes in March 2002
of $1.3 million and the non-cash charge for goodwill impairment.
The results for the nine months of fiscal 2001 include a loss
from discontinued operations of $0.8 million.

The loss from continuing operations, for the fiscal 2002 nine-
month period, was $8.7 million.  This compares to income from
continuing operations of $0.6 million last year. Non-recurring
items in the nine months of fiscal 2001 results included, net of
taxes, a gain on the sale of the Company's interest in a real
estate partnership of $2.5 million and the gain of $1.1 million
on the sale of an investment in equity securities, partially
offset by a write-down of an investment in marketable securities
of $0.4 million.  Excluding these items and $1.5 million of
amortization of goodwill which is no longer permitted to be
amortized, the loss from continuing operations was $1.1 million,
net of taxes in the nine months of fiscal 2001.

                          Staffing Services

The Staffing Services segment reported an operating profit for
the third quarter of $6.1 million compared to $0.3 million for
the third quarter of fiscal 2001, and a 12% sequential increase
over the second quarter of fiscal 2002.  Segment sales for the
2002 third quarter were $316.9 million compared to $355.2
million in the third quarter of fiscal 2001 due to lower
Technical Staffing revenue.  Despite the lower sales volume, the
segment achieved comparable quarterly gross margin dollars to
the previous year's nine-month period due to continued strong
demand for higher margin project management work in the
segment's Technical Placement division and increased managed
service program fees from its ProcureStaff subsidiary as
transactions by two newer ProcureStaff clients ramped up.  The
$5.8 million year-over-year increase in segment operating
profit, primarily a result of lower overhead expense and
increased project management revenue, was split equally between
the Technical Placement and Commercial and Light Industrial

                     Telecommunications Services

The segment reported an operating loss of $3.3 million for the
third quarter of fiscal 2002 on sales of $24.3 million compared
to an operating profit of $2.5 million on sales of $66.8 million
for the corresponding quarter of the previous year.  The
operating loss was due to the reduction in sales caused by the
continued instability in the segment's telecommunication
industry customer base.  While sales declined an additional 12%
from the fiscal 2002 second quarter, the operating loss was
reduced by 35% due to continued cost control initiatives and
restructuring.  The Company had previously announced, on July
17th, the reorganization of Volt's two western divisions,
Voltelcon and Advanced Technology Services, into Volt
Telecommunications Group-West.

                           Computer Systems

The segment reported an operating profit of $2.6 million for the
third quarter compared to $2.4 million for the comparable
quarter last year and $1.9 million in the fiscal 2002 second
quarter.  Sales for the fiscal 2002 third quarter were $18.6
million compared to $17.7 million in the fiscal 2001 third
quarter and $18.2 million in the fiscal 2002 second quarter.
The increases in sales and operating profit were primarily the
result of the continued expansion of the segment's Application
Service Provider directory assistance and web-based services, as
well as increased sales and margins in the segment's IT service
division, Maintech.

                         Telephone Directory

This segment, which normally produces most of its profits in the
second half of the fiscal year, reported third quarter operating
profit of $3.4 million on $19.8 million in sales compared to a
$0.4 million operating loss on $25.2 million in sales for the
third quarter of fiscal 2001. Decreased paper prices and
production costs and increased productivity more than offset
lower sales volumes at the DataNational and Domestic Directory
divisions contributing to the segment's improved performance.
The segment has been notified that a high-margin production
contract with a telecommunications company, which accounted for
6% of the segment's annual revenue in fiscal 2001, will be
terminated in June 2003 as the customer's operations are being
sold.  The Company can not determine the amount of revenue the
segment will receive from the customer through the end of the
contract or whether current revenue and profits will be replaced
through existing or new customers in the future.

                     Liquidity and Sources of Capital

Cash and cash equivalents increased to $44.6 million at August
4, 2002 from $18.5 million at November 4, 2001.  In April 2002,
the Company entered into a three-year securitization program
which enables it to finance up to $100.0 million of accounts
receivable.  To date, the Company has sold a continuing
participation interest in accounts receivable of $60.0 million
under this program.  Accordingly, the Company has the ability to
finance up to an additional $40.0 million of accounts receivable
under this program.  In addition, the Company has a $40.0
million two-year secured revolving credit facility under which
borrowings are limited to a specific borrowing base ($29.0
million at August 4, 2002).  One covenant in the credit
facility, regarding interest expense coverage, may not be
achieved depending on the level of profitability in the fourth
quarter of fiscal 2002.  The Company has not borrowed under the
revolving credit facility since its inception in April 2002 and
no borrowings are anticipated in the fourth quarter of fiscal
year 2002.  As long as the facility is unused, there would be no
effect on any other financing, including the securitization
program. However, the Company is presently in discussion with
its banks to obtain a waiver.

Volt Information Sciences, Inc., is a leading national provider
of Staffing Services and Telecommunications and Information
Solutions for its Fortune 100 customer base.  Operating through
a network of over 300 Volt Services Group branch offices, the
Staffing Services segment fulfills IT and other technical,
commercial and industrial placement requirements of its
customers, on both a temporary and permanent basis.  The
Telecommunications and Information Solutions businesses provide
complete telephone directory production and directory
publishing; a full spectrum of telecommunications construction,
installation and engineering services; and advanced information
and operator services systems for telephone companies.  For
additional information, please visit the Volt Information
Sciences, Inc., Web site at

WHEELING-PITTSBURGH: Court Okays Services Pact with Columbia Gas
Wheeling-Pittsburgh Steel Corp., obtained Court approval of its
New Services Agreement and Stipulation with Columbia Gas of
Ohio, Columbia Gas Transmission Corporation, and Columbia Gulf
Transmission Corporation.

As previously reported, the Natural Gas Services Agreement
provided for the transmission of natural gas and for other
natural gas storage and transmission-related services.  In March
2000, the Services Agreement was amended.  As amended, the
Services Agreement required WPSC to:

      -- transport certain of its natural gas requirements
         through COH's transmission systems, and

      -- establish an "Enhanced Banking Services" for the
         storage of natural gas.

In return, COH agreed to release certain specified quantities of
natural gas transportation capacity on TCO facilities.  COH also
agreed to pay WPSC $1,000,000 annually for the right to manage
WPSC's Enhanced Banking Service, with payments due at the end of
each 12-month period.  WPSC also signed natural gas transmission
agreements with TCO and GULF.

The Services Agreement, as amended, ran through April 30, 2000,
and was subject to automatic annual renewals unless either party
elected to terminate the agreement.  Earlier this year, COH
notified WPSC that it does not intend to renew the Services
Agreement.  The parties have negotiated the terms of a revised
Services Agreement and have also reached an agreement relating
to the terms under which payments will be made to COH, TCO and

More specifically, WPSC has agreed to a new services agreement
under which WPSC will transport 100% of its natural gas
requirements at a transportation rate of $0.166 per MCF;
provided, however, that the rate will be $0.141 per MCF -- a
discount of 15% -- until WPSC emerges from Chapter 11.  The new
agreement is effective as of May 1, 2002, and will continue
through April 30, 2004, subject to automatic renewal unless
either part notifies the other of its intention to terminate the

In a Stipulation, WPSC also agreed to payment terms during the
pendency of these chapter 11 cases:

(1) WPSC will make monthly payments:

                 COH     $100,000
                 TCO      $83,000
                 GULF     $17,000

       Those payments will be applied against applicable
       invoices for services rendered during the immediately
       preceding month.  It is expected that the payments
       will be made before the invoices for the relevant
       preceding month have been completed and delivered.
       Upon the delivery of these invoices, WPSC either shall
       pay any remaining balance due, or, if the amount paid
       represents an overpayment, the amount of the overpayment
       will be applied as a credit and reduction against the
       next month's payment; and

(2) If WPSC fails to tender a payment in accordance with
       this schedule, COH may serve a notice of intent to
       suspend service.  This notice must be sent with no fewer
       than two business days' notice.  In the event that WPSC
       disputes the existence of a default, COH is prohibited
       from suspending service unless and until Judge Bodoh
       permits such a suspension. (Wheeling-Pittsburgh Bankruptcy
       News, Issue No. 26; Bankruptcy Creditors' Service, Inc.,

WIDECOM GROUP: Zafar Husain Doubts Ability to Continue Operation
Zafar Husain Siddiqui, Chartered Accountant and independent
auditor for The WideCom Group Inc. (incorporated in Ontario,
Canada), among other things, had the following to say concerning
the Company's condition at the time of the filing of financial
statements for the period ended June 30, 2002:  "Substantial
doubts existed, especially in view of a negative net equity as
at June 30, 2002, as well as on the date of this report, as to
the Company's ability to continue to meet its obligations and
commitments and also with regards to its ability to continue to
generate sufficient amounts of cash flows from its operations to
maintain its solvency for a reasonable period of time without
continued, substantial financial support from the personal
resources of two of its directors and one key employee who is
very closely related to those two directors.  Information from
management does not provide definitive confirmation of the
related willingness and ability of the above mentioned

"[T]he Company's ability to continue as a going concern may also
be jeopardized by a decision  by a secured creditor (a financial
institution) to enforce its demand for an immediate, full
repayment by the company of its indebtedness even though such an
action might be considered by management to be unlikely,
extreme, unscrupulous, or unwarranted."

"As mentioned in Note 8(a), the Company is committed to issuing
100,000 common shares to a claimant of alleged infringement of
software and trademark ownership rights as part of an out-of-
court settlement. As of the date of this report, those shares
are yet to be issued. The effects of those to-be-issued shares
on the financial statements have not been included.

"Except for the matters discussed above, based on my review, I
am not aware of any material modifications that should be made
to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.

His letter is dated August 19, 2002 at Mississauga, Ontario,

Management of the Company indicates that since inception,
WideCom has generated limited revenues from operations and has
not yet achieved significant profitability. Revenues are
primarily derived from product sales that are recognized when
products are shipped and the Company has experienced limited
revenue from operations, significant losses and has a
significant deficit.  Due to limited cash resources, WideCom has
often relied on cash infusions from management to meet ongoing
obligations.  There is no certainly that such access to funds
will be available to it in the future.  In order to reduce
losses, the Company has significantly reduced Selling, General
and Administrative costs and it is expected this will have a
reduction on sales.

While the Company received government grants in the past, it
does not meet the required pre-qualification for such grants
subsequent to conducting its public offering. In consideration
of this fact, WideCom shifted its research and development to an
affiliated joint venture based in Montreal, Canada.

In February 2000, it established a majority-owned subsidiary,
Posternetwork.COM Inc., to engage in the business line of
offering an online printing service. Posternetwork is currently
engaged in organizational and financing activities.

                        Results of Operations

Sales for the quarter ended June 30, 2002 were $ 139,560, an
increase of $53,808 as compared to $85,752 for the quarter ended
June 30,2001. Net Revenue for the quarter ended June 30, 2002
was $139,700, an increase of  $53,857 as compared to $85,843 for
the quarter ended June 30, 2001. The increase in revenue was
attributed to increase in selling activities.

Operating expenses for the quarter ended June 30, 2002 were
$252,847, an increase of $54,220 as compared to $198,627 for the
quarter ended June 30, 2001. This is mainly due to the increase
in Research and Development Expenses, Selling, General and
Administrative expenses.

                   Liquidity and Capital Resources

The Company's primary cash requirements have been to fund
inventories and to meeting operational expenses incurred in
connection with the commercialization of its products. The
Company meets its working capital requirements principally
through the issuance of debt and equity securities, government
sponsored research and development grants and reimbursement and
cash flow from operations.

Company cash requirements in connection with manufacturing and
marketing will continue to be significant. It does not have any
material commitments for capital expenditures. Based on current
plans and assumptions relating to operations, management
believes that projected cash flow from operations may not be
sufficient to satisfy contemplated cash requirements for the
foreseeable future. WideCom has relied on investments from
management to cover its short falls in the last fiscal year,
such investment may not be available to it in the future.  In
the event that plans or assumptions change, or prove to be
incorrect, or if the projected cash flows otherwise prove to be
insufficient to fund operations (due to unanticipated expenses,
delays, problems or otherwise), WideCom could be required to
seek additional financing sooner than currently anticipated.
There can be no assurance that this additional financing will be
available to it when needed, on commercially reasonable terms,
or at all.


The Company's common stock was delisted from the Nasdaq Small
Cap Market effective with the close of business April 10, 2001
for failure to meet certain minimum net tangible asset
requirements.  The stock continues to trade on the OTC Bulletin

WILLIAMS COMMS: Asks Court to Enjoin SBC from Terminating Pact
In aid of plan confirmation, Williams Communications Group,
Inc., and its debtor-affiliates want to permanently enjoin SBC
Communications from terminating the Master Alliance Agreement
based on any allegation by SBC of a "change in control" of
Williams LLC arising from the Spin-Off or the transactions
contemplated by the Plan, including:

-- the New Investment by Leucadia,

-- the transactions that will effectuate a tax "G
    Reorganization" of the Debtors pursuant to the provisions of
    Section 368(a)(1)(G) of the Internal Revenue Code, including
    the transfer of the Debtors' membership interests in Williams
    LLC to the reorganized Debtor, New WCG,

-- the exchange of debt in WCG for equity in New WCG, and

-- constitution of the board of directors of New WCG as
    contemplated by the Plan.

In addition, the Debtors ask the Court to grant them interim
relief by:

-- entering an order pursuant to Section 105(a) and 362 of the
    Bankruptcy Code in the form of a preliminary injunction
    maintaining the status quo with respect to the Alliance
    Agreement until the Confirmation Hearing, and

-- finding that the automatic stay of Section 362 of the
    Bankruptcy Code precludes SBC from terminating the Alliance
    Agreement; and

-- enjoining SBC from taking any of these actions if they are
    premised on an alleged "change in control" of Williams LLC
    arising from the Spin-Off.

                           The Alliance

In conjunction with the development of a broadband
communications network, Corinne M. Ball, Esq., at Jones Day
Reavis & Pogue, in New York, relates that the Debtors entered
into a strategic alliance with SBC for the provision and
exchange of telecommunications services.  The Alliance was
documented through a series of long-term agreements between the
Debtors and SBC, which are governed by an overarching Master
Alliance Agreement dated February 8, 1999 between SBC and
Williams Communications, Inc., predecessor-in-interest to
Williams Communications LLC, WCG's wholly-owned subsidiary.

As part of the Alliance, the Debtors financed, built, and
developed the Network's capabilities, products, and systems to
support SBC's long-distance voice and data requirements.  SBC,
in turn, promised that the Debtors would be its preferred
provider for SBC's domestic voice and data long-distance
services, as well as certain international wholesale services.
SBC and the Debtors agreed that, absent a basis for premature
termination, the Alliance would last 20 years, until the year
2019.  At present levels of revenues, the Agreement will
generate nearly $10,000,000,000 in future revenues for the
Debtors over the remaining life of the contract.  Furthermore,
revenues under the Agreement are expected to grow significantly
in the near future, when SBC receives regulatory approval to
expand its services to California and other states.  SBC is
currently the Debtors' single largest customer, and generates
over 40% of the Debtors' consolidated revenues.

According to Ms. Ball, the Agreement established certain
governance protocols to enable the Debtors and SBC to coordinate
the Alliance.  An "Alliance Council" was created with
representatives of both the Debtors and SBC, to manage various
committees coordinating Alliance activities between SBC and the
Debtors.  In addition, an "Officer Review Board" was created by
the parties, to set overall goals and objectives for the
Alliance.  That group meets at least every other month to review
the performance of SBC and the Debtors under the Alliance.
Finally, the parties formed an "Executive Committee" of senior
executives of the Debtors and SBC to address strategic
commercial and operational issues affecting the Alliance.  The
Executive Committee also meets at least every other month.

In addition, SBC also agreed to acquire an ownership interest in
WCG in an initial public offering of WCG stock that was being
planned.  That initial public offering was consummated in
October 1999 and SBC invested $440,000,000 to become the single
largest holder of WCG stock other than TWC.  In connection with
its investment in WCG, SBC obtained the right to designate one
member of WCG's board of directors upon reaching a certain
threshold of stock ownership.  Although SBC did not reach that
contractual threshold, it was nevertheless permitted to
designate one member of the WCG board.

                           The Spin-Off

On July 24, 2000, TWC publicly announced its plan to separate
from WCG in a transaction that ultimately took the form of a
tax-free spin-off of WCG to TWC's shareholders.  The next month,
WCG's top executives made a detailed presentation to SBC about
the Spin-Off, and indicated that it would likely take place in
the second quarter of 2001.  Given the close business
relationship between SBC and the Debtors, the Debtors kept SBC
fully apprised of all developments with respect to the Spin-Off
in subsequent meetings and in the meetings of the Alliance's
Officer Review Board and Executive Committee.

Ms. Ball relates that SBC representatives never expressed any
concern about the Spin-Off, despite the fact that it was
repeatedly discussed.  On the contrary, the comments made by SBC
representatives consistently indicated strong support for the
Spin-Off.  Furthermore, during the period when SBC knew the
Spin-Off was being planned, SBC relied on the Network to launch
long-distance service in its key Texas market, as well as in the
states of Oklahoma and Kansas.

The WCG board of directors were extensively involved in
consideration of the Spin-Off, including SBC Executive Vice
President Ross Ireland, who participated in a meeting of the
board's Audit Committee and voted to approve certain
transactions to enable the Spin-Off to occur.  Mr. Ireland and
the other directors independent of TWC adopted the Audit
Committee's recommendation and approved the transactions
associated with the Spin-Off.  On March 30, 2001, TWC and WCG
announced their approval of the Spin-Off, and TWC announced that
April 9, 2001 was to be the record date for the distribution of
WCG shares to TWC's shareholders.  On April 23, 2001, the Spin-
Off shares were distributed to holders of TWC stock as of April
9, 2001.  Until at least July 2002, TWC and SBC continued to be
WCG's largest shareholders, owning 4.3% and 4.1% respectively
following the Spin-Off.

Since the Spin-Off, Ms. Ball contends that the conduct of the
Alliance activities has not changed.  SBC has continued to rely
upon the Network to expand the geographic scope of the services
it provides to its customers.  In addition, the Spin-Off did not
result in the change of any officers of WCG or Williams LLC
serving on the Alliance governance committees, nor did it change
the composition of the Debtors' internal team that is
responsible for the Alliance.  The Alliance Council, Officer
Review Board, and Executive Committee have continued their work,
unaffected by the Spin-Off.  According to the data prepared by
the Debtors and reviewed by SBC during Officer Review Board
meetings, the Network performance has not been affected by the
Spin-Off and the high quality of service provided by the Debtors
continues unchanged. Nor has SBC ever suggested that the quality
of service was in any way affected by the Spin-Off.

                  Market Conditions Deteriorate

In the second and third quarters of 2001, as general market
conditions and the telecommunications industry severely
deteriorated, the Debtors experienced a decline in its credit
ratings and downward pressure on the price of its public debt
and equity securities.  Following the events of September 11,
market conditions deteriorated further.  In October 2001, SBC --
for the first time -- asserted that the Spin-Off might have been
a "change of control" under the Alliance Agreement, entitling
SBC to terminate the Alliance.  SBC insisted that the Debtors
sign a purported "Tolling Agreement", which provided that:

     "Until 5:00 PM on April 17, 2002, SBC will have the same
     right, if any, of termination under Section with
     respect to the Spin-Off issue that it had as of 5:00 PM on
     October 12, 2001."

Ms. Ball relates that the Debtors were surprised at this effort
by SBC to preserve rights that did not exist.  SBC clearly had
ratified and supported the Spin-Off by its actions and
statements.  Furthermore, the Alliance Agreement requires
written notice of termination "within a reasonable time but in
no event more than 180 days from actual notice of the event or
circumstances permitting termination."  However, rather than
start an immediate and protracted battle with its single largest
customer and strategic alliance partner, the Debtors signed the
proffered Tolling Agreement, believing that as of October 12,
2001 there was nothing for SBC to "toll" -- it had no right to
terminate the Alliance Agreement based on the Spin-Off.  The
dispute between the SBC and the Debtors was then dropped and the
Alliance activities continued unchanged.

In late 2001, as conditions in the general financial markets and
the telecommunications industry in particular worsened, the
Debtors began to explore options for a comprehensive
restructuring of its balance sheet.  This would require a
compromise of WCG's unsecured Senior Redeemable Notes, of which
$2,450,000,000 was publicly outstanding, down from
$3,000,000,000 immediately prior to the Spin-Off.  It would also
require the modification of certain of the covenants under the
Debtors' senior secured credit agreement dated as of September
8, 1999 under which Williams LLC was a borrower and WCG was a
guarantor. Immediately prior to the Spin-Off, and thereafter,
$975,000,000 was outstanding under the Williams LLC Credit

                       Search For More Funds

In early January 2002, Ms. Ball recounts that the Debtors and
its advisors initiated discussions with WCG's two largest
shareholders -- TWC and SBC -- to explore their interest in
providing additional capital to the Debtors.  TWC eventually
declined to provide the capital.  However, SBC expressed
interest in an investment, but proposed modifications to the
Alliance Agreement as a condition to any investment.  In part,
these modifications related to operational issues that had been
under discussion by the Alliance.  Significantly, SBC also
requested for the first time that the Debtors modify the
Alliance Agreement to grant SBC "optionality" to free SBC of its
obligations under the Alliance to direct its telecommunications
traffic to the Network.  This move would dramatically diminish
the value of the Alliance Agreement, so the Debtors determined
not to pursue this investment from SBC.

                    The Restructuring Agreement

In late February 2002, having determined that neither of its two
largest shareholders were viable sources of needed capital, the
Debtors announced that it was considering the commencement of a
Chapter 11 case as a means to implement a restructuring and de-
leveraging of its balance sheet.  Thereafter, the Debtors
commenced negotiations with an unofficial committee of certain
large holders of the Senior Redeemable Notes, and the
Administrative Agent for the lenders under the Williams LLC
Credit Agreement that led to an agreement dated as of April 19,
2002 whereby the Ad Hoc Committee and over 90% of the Lenders
agreed to support a Chapter 11 plan for the Debtors.
Significantly, the Restructuring Agreement enabled the Debtors
to effectuate its restructuring without having to place Williams
LLC into bankruptcy, thereby leaving it free to operate in the
ordinary course of business and continue to provide service to
SBC and the Debtors' other customers.

                        The New Investment

Following the execution of the Restructuring Agreement, Ms. Ball
relates that the Debtors and their advisors immediately began a
process to solicit and explore proposals for the New Investment
from potential investors.  Because the Alliance Agreement
represents the single most valuable asset of WCG's estate, it
was critical that an investor be located that was willing to
make the New Investment in a manner that would not constitute a
change of control under the Alliance Agreement.

The Debtors again approached SBC to solicit its interest in
making the New Investment.  SBC again expressed an interest in
making an investment, provided that the Debtors agree to changes
in the Alliance Agreement.  For the first time, however, SBC
indicated that it wished to eliminate the Alliance Agreement's
requirement that SBC not buy, use, or build an alternative
network to the Debtors' Network.  This became known as the
"continuity of service" issue, reflecting SBC's position that it
needed to prepare alternatives in the event that the Debtors
encountered financial difficulties in the future that might lead
to a shutdown of the Network.

In light of SBC's onerous terms, the Debtors declined to obtain
any of the New Investment from SBC, and ultimately accepted a
proposal from Leucadia National Corporation for the full
$150,000,000, as set forth in the Leucadia Investment Agreement.
Pursuant to that agreement, Leucadia would own up to 45% of New
WCG, but would be entitled to select only 2 of the nine
directors, and would be subject to certain other corporate
governance standstill provisions.

                          The Leucadia Pact

In the course of negotiating the Leucadia Investment Agreement,
Ms. Ball tells the Court, Leucadia made clear that its
investment would be predicated on its receipt of assurances from
SBC that SBC would not attempt to terminate the Alliance
Agreement on change of control grounds based on either the Spin-
Off or the transactions contemplated by the Plan.  In June 2002,
the Debtors and Leucadia met with SBC to discuss the Debtors'
intentions with respect to the Leucadia investment and Plan.
SBC assured Leucadia that SBC was satisfied with the quality of
service provided by the Debtors, and that SBC was committed to
the Alliance.  SBC stated that it had no problem with Leucadia
as a minority investor as proposed in the Plan, or with the
other transactions contemplated by the Plan.  However, SBC
informed Leucadia and the Debtors that it would continue to
reserve the right to argue that SBC was entitled to terminate
the Alliance Agreement based on the Spin-Off, unless SBC
received satisfactory relief under the Alliance Agreement on the
"continuity of service issue."  SBC stated that the Spin-Off
gave it leverage over any New Investment, indicating that "all
roads lead to San Antonio," where SBC is headquartered.  Despite
numerous subsequent meetings and conversations among the
Debtors, SBC, and Leucadia, SBC continues to reserve its rights
to terminate the Alliance Agreement based on the Spin-Off, as a
bargaining chip to obtain substantial modifications to the
Alliance Agreement.  Until this issue is resolved, Leucadia is
not obligated to make the New Investment.

                    Injunction Should Be Issued

Ms. Ball believes that the Court has authority to issue a
permanent injunction because the Alliance Agreement is the
single most valuable asset of WCG's estate.  Its continuation
after consummation of the Plan is a condition of the Leucadia
investment.  Leucadia's investment, in turn, is required by the
Restructuring Agreement.  If the conditions of the Restructuring
Agreement are not satisfied, and the Plan is not confirmed and
consummated by October 15, 2002, a default will occur under the
Williams LLC Credit Agreement, entitling the Lenders to exercise
remedies against Williams LLC, including foreclosure on its cash
and substantially all the other assets of the Debtors.  Thus,
the permanent injunction is necessary for the Debtors'
successful reorganization.

The permanent injunctive relief sought is fair to both SBC and
the Debtors because it merely preserves for the parties the
benefits of their bargain under the Alliance Agreement, by
prohibiting SBC from taking unfair opportunistic advantage of
the Debtors.  It is clear that SBC has no right to terminate the
Alliance Agreement based on the Spin-Off.  Nor do the
transactions contemplated by the Plan constitute a change of
control under the Alliance Agreement.  SBC will continue to deal
with the same individuals and institution that it has dealt with
since the inception of the Alliance and will continue to receive
the same service from the Debtors that it has touted and

Ms. Ball contends that SBC's position under the Alliance
Agreement will be materially enhanced because the reorganized
Debtors will be vastly stronger from a financial standpoint than
it was prior to the Spin-Off or the commencement of these cases.
Over $5,000,000,000 in WCG's unsecured debt will have been
eliminated, and the amounts owed under the Williams LLC Credit
Agreement will be reduced by $450,000,000.  In addition,
pursuant to the TWC Settlement Agreement, defaults on
obligations of $250,000,000 owed to TWC with respect to the
sale/leaseback of the Debtors' headquarters will be cured, and
the amounts owed to TWC will be reduced to $150,000,000.

Ms. Ball points out that the Debtors' reorganization is
threatened by SBC's efforts to use the Alliance Agreement as a
bargaining chip to gain unfair negotiating leverage.  Even
though the automatic stay of section 362 of the Bankruptcy Code
precludes SBC from terminating this "most valuable asset of
WCG's estate," intervention by the Court is necessary because
there is a substantial risk that SBC will take, or will continue
to take, steps in violation of the Alliance Agreement to buy,
use, or build an alternative network to the Debtors' Network.
"Those actions are detrimental to the Debtors, their estates,
and their prospects for reorganization," Ms. Balls says.
(Williams Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Williams Communications Group Inc.'s 10.70% bonds due 2007
(WCGR07USR1) are trading at about 13, DebtTraders reports. See
for real-time bond pricing.

WORLDCOM INC: BP Seeks Stay Relief to Setoff Mutual Obligations
According to James S. Carr, Esq., at Kelley Drye & Warren LLP,
BP International Limited and Worldcom Inc., entered into a
Global Services Agreement on November 30, 1999, pursuant to
which the Debtors formed BP Amoco Professional Services
Organization.  The organization was created to administer,
integrate and manage, on an exclusive basis, the global
telecommunications needs of BP International and all of its
worldwide affiliates.  The Debtors and BP entered into several
basic forms of agreements with various categories of third party
vendors, each of which had been providing telecommunications
services to BP prior to the execution of the Agreement, in order

-- facilitate the Professional Services Organization's ability
    to perform under the Agreement;

-- ensure that BP obtains the requisite level of
    telecommunications services in locations where the Debtors
    and its affiliates could not, themselves, supply the
    telecommunications services to BP; and

-- effectuate an orderly transition to the Professional Services
    Organization of the administration of all of BP's
    telecommunications services.

Mr. Carr relates that the first of these forms of agreement
involved assignments pursuant to which BP assigned to the
Debtors BP's existing contracts between BP and certain third
party vendors for the supply of telecommunications services.
The third party vendors had supplied these services to BP prior
to the execution of the Global Services Agreement.  In other
cases, pursuant to letters of agency and associated agreements,
BP appointed the Debtors as BP's agent with respect to certain
contracts between BP and other third party vendors for
telecommunications services supplied to BP prior to the
execution of the Global Services Agreement.  The net effect of
these transactions with the third party vendors was to permit
the Debtors to administer all of the pre-existing
telecommunications services provided to BP under all of the pre-
existing agreements with the third party vendors.

Under the terms of the agreements with the third party vendors,
Mr. Carr explains that BP remains obligated to pay the amounts
due to the third party vendors under all of the pre-existing
telecommunications services agreements between BP and the
respective third party vendors.  According to information
provided by the Professional Services Organization, as of the
Petition Date, the third party vendors were owed $6,612,742.01,
which includes $3,519,607 that BP had paid to the Debtors on
account of third party vendors Claim, but that the Debtors had
failed to remit to the applicable third party vendors.

Contemporaneously with the execution of the Agreement, Mr. Carr
informs the Court that BP and the Debtors entered into the US
Call-Off Contract, dated November 30, 1999, which governs all
matters relating to telecommunications services to be provided
by the Debtors in the United States.  Pursuant to the US
Agreement, BP is responsible to pay all amounts due to the
Debtors with respect to telecommunications services provided in
the United States.

In accordance with the US Agreement, Mr. Carr relates that BP
paid $3,519,607 to the Debtors on account of prepetition third
party vendors Claims.  The Debtors, however, failed to remit the
BP Payments to the third party vendors as required by the US
Agreement.  As a result, as of the Petition Date, the Debtors
were, and continue to be, in breach of the US Agreement and owe
BP, the BP Payments.  In addition, BP owes the Debtors an amount
well in excess of the BP Payments under the US Agreement on
account of prepetition telecommunications services provided by
the Debtors.

By this motion, BP asks the Court to modify the automatic stay
to permit it to offset the BP Payments against the BP
Obligations. To eliminate the risk of double payment, BP seeks
the Court's authority to:

-- set off any additional amounts that BP actually pays to the
    third party vendors and to the Debtors against any amounts
    that BP owes to the Debtors; and

-- withhold payments to the Debtors, while prohibiting the
    Debtors from invoicing or collecting from BP any amounts for
    prepetition services identified on third party vendors'
    invoices actually paid directly to the third party vendors by

BP will provide written notice to the Debtors of these payments.

Mr. Carr contends that cause exists to modify the automatic stay

-- BP's secured claim under Section 506(a) of the Bankruptcy
    Code, which arose by virtue of its valid right of setoff
    against the Debtors, lacks adequate protection; and

-- BP will suffer immediate and irreparable harm if it is not
    permitted to exercise its right of setoff. (Worldcom
    Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
    Inc., 609/392-0900)

Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USR4), DebtTraders
reports, are trading at 23 cents-on-the-dollar. See
for real-time bond pricing.

* Meetings, Conferences and Seminars
September 12-13, 2002
           18th Annual Meeting
                Holiday Inn Park Plaza, Lubbock, TX
                     Contact: 806-765-9199

September 12-13, 2002
           ACT2 Meeting
                Holiday Inn Park Plaza, Lubbock, TX
                     Contact: 806-765-9199

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

September 19 - 20, 2002
           Accounting and Financial Reporting
                Marriott East Side New York, New York
                     Contact: 1-888-224-2480 or 1-877-927-1563 or

September 19 - 20, 2002
           Securities Enforcement and Litigation
               The Russian Tea Room Conference Facility, New York
                     Contact: 1-888-224-2480 or 1-877-927-1563 or

September 24 - 25, 2002
           OTC Derivatives
                Marriott East Side New York, New York
                     Contact: 1-888-224-2480 or 1-877-927-1563 or

September 26-27, 2002
         Corporate Mergers and Acquisitions
             Marriott Marquis, New York
                Contact: 1-800-CLE-NEWS or

September 30 - October 1, 2002
           Outsourcing in the Consumer Lending Industry
                The Hotel Nikko, San Francisco
                     Contact: 1-888-224-2480 or 1-877-927-1563 or

October 1-2, 2002
           International Fall Meeting
                Hyatt Regency, Chicago, IL
                     Contact: 703-449-1316 or fax 703-802-0207

October 2-5, 2002
           Seventy Fifth Annual Meeting
                Hyatt Regency, Chicago, IL

October 3, 2002
           Member's Meeting (III)
                Chicago IL

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

October 9-11, 2002
       Annual Regional Conference
          Beijing, China

October 24-25, 2002
         Member's Meeting
             Sidley Austin Brown & Wood Offices, Washington D.C.

October 24-28, 2002
       Annual Conference
          The Broadmoor, Colorado Springs, Colorado
             Contact: 312-822-9700 or

November 21-24, 2002
       82nd Annual New York Conference
          Sheraton Hotel, New York City, New York
             Contact: 312-781-2000 or

December 2-3, 2002
           Distressed Investing 2002
                The Plaza Hotel, New York City, New York
                     Contact: 1-800-726-2524 or fax 903-592-5168

December 5-7, 2002
           Bankruptcy Law & Practice Seminar
                Sheraton Sand Key Resort

December 5-8, 2002
       Winter Leadership Conference
          The Westin, La Paloma, Tucson, Arizona
             Contact: 1-703-739-0800 or

February 22-25, 2003
       Litigation Institute I
          Marriott Hotel, Park City, Utah
             Contact: 1-770-535-7722 or

March 27-30, 2003
       Litigation Institute II
          Flamingo Hilton, Las Vegas, Nevada
             Contact: 1-770-535-7722

March 31 - April 01, 2003
      Healthcare Transactions: Successful Strategies for Mergers,
            Acquisitions, Divestitures and Restructurings
               The Fairmont Hotel Chicago
                    Contact: 1-800-726-2524 or fax 903-592-5168

April 10-13, 2003
       Annual Spring Meeting
          Grand Hyatt, Washington, D.C.
             Contact: 1-703-739-0800 or

May 1-3, 2003 (Tentative)
       Chapter 11 Business Organizations
          New Orleans
             Contact: 1-800-CLE-NEWS or

May 8-10, 2003 (Tentative)
       Fundamentals of Bankruptcy Law
             Contact: 1-800-CLE-NEWS or

June 19-20, 2003
           Corporate Reorganizations: Successful Strategies for
               Troubled Companies
                  The Fairmont Hotel Chicago
                     Contact: 1-800-726-2524 or fax 903-592-5168

June 26-29, 2003
       Western Mountains, Advanced Bankruptcy Law
          Jackson Lake Lodge, Jackson Hole, Wyoming
             Contact: 1-770-535-7722

July 10-12, 2003
       Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
          Securities, and Bankruptcy
             Eldorado Hotel, Santa Fe, New Mexico
                Contact: 1-800-CLE-NEWS or

December 3-7, 2003
       Winter Leadership Conference
          La Quinta, La Quinta, California
             Contact: 1-703-739-0800 or

April 15-18, 2004
       Annual Spring Meeting
          J.W. Marriott, Washington, D.C.
             Contact: 1-703-739-0800 or

December 2-4, 2004
       Winter Leadership Conference
          Marriott's Camelback Inn, Scottsdale, AZ
             Contact: 1-703-739-0800 or

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


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

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

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

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 Go 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 ***