TCR_Public/020919.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

          Thursday, September 19, 2002, Vol. 6, No. 186     

                          Headlines
      
724 SOLUTIONS: Nasdaq Okays Listing Transfer to SmallCap Market
ADELPHIA COMM: Equity Committee Taps Bragar as Conflicts Counsel
ADVANCED LIGHTING: Delays Payment of Interest on Senior Notes
ADVANCED TECHNOLOGY: Signs-Up Marcum & Kliegman as Accountants
AGRIFOS FERTILIZER: Renewing CFO Luttrell's Employment Pact

AMERICAN SOUTHWEST: Fitch Affirms Low-B's on Two Note Classes
AMERICREDIT: Fitch Places BB Sr. Debt Rating on Watch Negative
ANC RENTAL: Obtains Approval to Hire Brusniak as NTRG Counsel
BARTIZAN CAPITAL: Makes Assignment in Bankruptcy in Canada
BIONUTRICS: Seeking Additional Funding to Meet Liquidity Needs

BIOVEST: Exploring Financing Alternatives to Meet Cash Needs
BUDGET GROUP: Asks Court to Approve $15MM Cendant Break-Up Fee
CASTELLE: Fails to Meet Nasdaq SmallCap Listing Requirements
CHASE COMMERCIAL: S&P Assigns Low-B Ratings to 6 Certs. Classes
CIRCUIT RESEARCH: Accountants Issue Going Concern Opinion

COLD METAL: Court Approves Up to $48 Million in DIP Financing
CTC COMMUNICATIONS: Turns to CXO LLC for Restructuring Services
ENCOMPASS SERVICES: Special Shareholders Meeting Set for October
ENRON CORP: Asking Court to Stay Duke Partnership Arbitration
ETOYS INC: Court to Consider Liquidating Ch. 11 Plan on Sept. 27

FEDERAL-MOGUL: Court to Consider Sale of Wagner Business on Wed.
FIREBRAND FIN'L: Cash Resources Insufficient to Meet Obligations
GENESEE CORP: Board Declares Partial Liquidating Distribution
GENEVA STEEL: Michael J. Yonker Resigns from Board of Directors
GLENOIT CORPORATION: Plan Confirmation Hearing Set for Sept. 29

GLOBAL CROSSING: Files Chapter 11 Plan & Disclosure Statement
GMAC 2000-C1: Fitch Affirms Low-B Ratings on 5 Classes of Notes
GRANITE BROADCASTING: Fails to Meet Nasdaq SmallCap Requirements
HOLLEY PERFORMANCE: S&P Keeping Watch After Interest Nonpayment
HORIZON MEDICAL: Files Form S-1/A with Unqualified Audit Opinion

ICG COMMS: Wants to Sell Maroon Circle Property to MRA Meridian
INTERFERON SCIENCES: Wants to Sell Certain Assets to Raise Funds
JP MORGAN: Fitch Assigns BB/V4 Fund Rating to HYDI - BB Trusts
KMART CORP: UST Names 2 New Fin'l Institutions Committee Members
KNOLOGY BROADBAND: Files Prepack. Chapter 11 Petition in Georgia

KNOLOGY BROADBAND: Case Summary & 20 Largest Unsec. Creditors
MARINER POST-ACUTE: Secures Final Decree Closing Units' Cases
MARK NUTRITIONALS: Files for Chapter 11 Protection in Texas
MARK NUTRITIONALS: Case Summary & 19 Largest Unsecured Creditors
MARTIN INDUSTRIES: Exploring Options Including Bankruptcy Filing

MCCRORY CORPORATION: Wants Court to Fix Claims Bar Dates
MED DIVERSIFIED: Names Boudreau and Simms to Board of Directors
MEDCOMSOFT INC: Secures $680K Private Placement Equity Financing
METALS USA: Wants to Sell Indiana Property to Butler for $1.4MM
METALS USA: Secures Court Approval of Disclosure Statement

MTS/TOWER RECORDS: Extends Closing Date for Japanese Asset Sale
NETIA HOLDINGS: Appoints Wojciech Madalski as President and CEO
NORTEL NETWORKS: Unefon Sues Company for $900 Million
OMNI USA: Fails to Maintain Nasdaq Continued Listing Standards
OWENS CORNING: Gets OK to Execute New Minneapolis Facility Lease

PACIFIC GAS: Takes Steps to Block Reopening of Voting Period
PACKETPORT.COM INC: Ability to Continue Operations Uncertain
PLAINS ALL AMERICAN: S&P Rates $150MM Sr. Unsecured Notes at BB
PRECISION SPECIALTY: Plan Exclusivity Extended Until November 27
RESOURCE AMERICA: S&P Rates Proposed $125 Mil. Senior Notes at B

SAFETY-KLEEN: Restructuring Canadian Loan to SK Services Unit
SHENANDOAH RESOURCES: Canadian Court Grants Receivership Status
TI AUTOMOTIVE: S&P Assigns BB- Corporate Credit Rating
TRANSACTION SYSTEMS: Harlan F. Seymour Named New Board Chairman
TYCO: Files Form 8-K Report re Ex-Management's Improper Conduct

UNIROYAL TECHNOLOGY: Gets Interim Nod to Use $9 Million Revolver
US AIRWAYS: Seeks Okay to Employ Ordinary Course Professionals
US AIRWAYS: Passenger Agents Ratify New Contract Settlement
US AIRWAYS: Airline Mechanics Ratify Restructuring Agreement
V-ONE CORP: Fails to Comply with Nasdaq SmallCap Requirements

VALEO ELECTRICAL: Plan Confirmation Hearing Set for September 25
WARNACO GROUP: Wants to Expand BDO Seidman's Engagement Scope
WILLIAMS GAS: S&P Places On Watch Dev. After Sale Announcement
WORLDCOM INC: Examiner Wants to Retain Kilpatrick as Counsel
WORLDWIDE WIRELESS: Inks Pact to Sell Assets & Debts to NextWeb

W.R. GRACE: Court Appoints Three PD Committee Special Counsels
ZANY BRAINY: Asks Court to Delay Entry of a Final Decree

* J. Myers Joins Clear Thinking as Principal & Managing Director

* DebtTraders' Real-Time Bond Pricing

                          *********

724 SOLUTIONS: Nasdaq Okays Listing Transfer to SmallCap Market
---------------------------------------------------------------
724 Solutions (NASDAQ:SVNX; TSX:SVN) announced that The NASDAQ
Stock Market has approved the company's application to transfer
to The NASDAQ SmallCap Market. 724 Solutions common shares will
begin trading on The NASDAQ SmallCap Market on September 18,
2002 and the stock symbol will continue to be SVNX. The
company's common shares will also continue to trade on The
Toronto Stock Exchange.

As previously announced, 724 Solutions applied to transfer to
The NASDAQ SmallCap Market after notification that it no longer
met NASDAQ's minimum bid price requirement of $1 per share.

"We are pleased that our application for transfer to The NASDAQ
SmallCap Market has been approved in accordance with our stated
goals," said John Sims, chief executive officer, 724 Solutions.
"The continuity provided will allow 724 Solutions to execute its
strategy for penetrating the mobile operator marketplace through
the delivery of reliable, scalable technologies that enable
mobile operators to increase their average revenue per user."

724 Solutions Inc., (NASDAQ:SVNX; TSX:SVN) powers the world's
largest mobile operators and financial institutions to make the
most of m-Business. Our solutions transform business
applications into proactive solutions that deliver timely
information, invite immediate response and enable effortless
mobile transactions. Each implementation provides new
convenience to the end-user and strong return on investment to
the business owner. With headquarters in Toronto, Canada, the
company has development and sales offices around the world. For
more information, visit http://www.724.com


ADELPHIA COMM: Equity Committee Taps Bragar as Conflicts Counsel
----------------------------------------------------------------
The Official Committee of Equity Security Holders of Adelphia
Communications Corporation seeks the Court's authority to retain
Bragar Wexler Eagel & Morgenstern LLP as its special conflicts
counsel, nunc pro tunc to August 20, 2002.

As special conflicts counsel, Bragar will:

-- assist and advise the Equity Committee in connection with the
   investigation and analysis of the claims, liens and security
   interests asserted by the Debtors' prepetition secured
   lenders and potential affirmative claims against the Banks,
   and prosecuting these actions or objections when and if
   litigation is duly authorized;

-- represent the Equity Committee in connection with:

   1. any disputes respecting the validity, or avoidability of,
      the individual claims or interests against the Debtors
      asserted by Merrill Lynch, AT&T, General Electric,
      Citibank, Morgan Stanley, Credit Suisse First Boston, Bank
      One, Lehman, and Bank of America or their affiliates or
      subsidiaries, all of which have been identified as being
      "significant clients" of Sidley Austin,

   2. litigation against any of the Sidley Austin's Significant
      Clients individually,

   3. any issues relating to the assumption or rejection of any
      leases or executory contracts between any of the Sidley
      Austin Significant Clients and any of the Debtors, and

   4. similar matters in which the interests of the Equity
      Committee may be adverse to the particular individual
      interests of the Sidley Austin's Significant Clients;

-- represent the Equity Committee on any issues relating to
   CIT Communications Finance Corporation or its affiliates or
   subsidiaries in connection with these cases or the Chapter 11
   proceedings involving ABIZ;

-- represent the Equity Committee in connection with any issues
   involving ML Media Management, Inc., an affiliate of Merrill
   Lynch; and

-- perform all other necessary legal services in these cases
   as appropriate given the purpose and scope of Bragar's
   retention, and so as not to duplicate the services to be
   provided by Sidley Austin.

Equity Committee Chairperson Van Greenfield tells the Court that
they were impressed by Bragar's:

-- extensive experience and knowledge in the field of bankruptcy
   and creditors' rights,

-- regular representation of defrauded investors in major
   securities fraud and class action lawsuits, and

-- experience and expertise in other fields of law that are
   expected to be involved in these cases.

Bragar has appeared in numerous proceedings under Chapter 11 of
the Bankruptcy Code before this and other Courts.  Among other
significant bankruptcy representations, Bragar is currently
special conflicts counsel for the Official Committee of
Unsecured Creditors in the 360networks (USA) Inc. et al. Chapter
11 cases and is acting as bankruptcy counsel to the certified
investor class in the Livent Chapter 11 cases.  Bragar
previously acted as class counsel in connection with the Bennett
Funding Chapter 11 cases before the United States Bankruptcy
Court for the Northern District of New York.

Compensation will be payable to Bragar on an hourly basis, plus
reimbursement of actual, necessary expenses incurred, at least
during the initial phase of its work on behalf of the Equity
Committee, including the investigation relating to the Banks.  
At the time that the Equity Committee determines to commence
litigation against the Banks, the Equity Committee and Bragar
intend to negotiate an appropriate contingency fee or other
agreement relating to the payment of fees for any litigation by
the Debtors' estates at that time.  Bragar's hourly rates for
work of the nature to be provided to the Equity Committee in
this case currently range from:

       Partners and Counsel             $400 - 500
       Associates                        150 - 350
       Paralegals                        100 - 150

Peter D. Morgenstern, Esq., a partner of Bragar, assures the
Court that the Firm has not otherwise represented the Debtors,
their creditors, equity security holders, or any other parties-
in-interest, or their respective attorneys, in any matters
relating to the Debtors or their estates.  Mr. Morgenstern
asserts that Bragar:

-- does not hold or represent any interest adverse to the
   Debtors' estates or the Equity Committee or the equity
   holders the Equity Committee represents in the matters upon
   which it has been and is to be engaged, and

-- is "disinterested" within the meaning of Section 101(14) of
   the Bankruptcy Code.

Mr. Morgenstern relates that Bragar has in the past represented
General Electric Capital Corporation in connection with two
matters that are unrelated to these cases, but has either
completed these representations or withdrawn as counsel with the
consent of GECC, and may therefore represent the Equity
Committee in connection with issues or proceedings involving
GECC.  Bragar is currently representing Harris County, the City
of Houston, Houston Independent School District (ISD), North
Forest ISD, Hidalgo County, City of McAllen, Dallas County and
Bexar County in connection with the ABIZ Chapter 11 case.

Immediately upon retaining Bragar on August 20, 2002, the Equity
Committee directed the Firm to commence work on several matters
requiring immediate attention in connection with the Debtors'
cases, including reviewing various significant motions pending
before the Court.  Accordingly, the Equity Committee is seeking
the nunc pro tunc retention of Bragar. (Adelphia Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


ADVANCED LIGHTING: Delays Payment of Interest on Senior Notes
-------------------------------------------------------------
Advanced Lighting Technologies, Inc., (Nasdaq: ADLT) has entered
into an agreement with the banks under the Company's $38 million
credit facility, allowing the Company access to its existing
revolving credit facility until at least October 10, 2002,
despite the Company's default by failure to maintain with the
minimum debt service coverage ratio required by the credit
agreement.  The principal condition for the agreement was that
the Company not pay interest due on September 16, 2002 pursuant
to the Company's Senior Notes due 2008.  The agreement includes
additional requirements typical of such agreements, including
increased information requirements and covenants regarding its
operations during the forbearance period.  The Company believes
that it will be able to meet these requirements.

The Company is currently negotiating with its existing bank
group to reach an agreement to permit payment of the Senior Note
interest before the Company's 30-day grace period expires.  The
Company has been in the process of obtaining replacement credit
facilities with a structure better suited to the Company's
expanded foreign operations.  Based on preliminary discussions,
management expects that alternative financing sources will be
available.

Last week, the Company and its existing bank group entered into
an amendment to the credit facility to add collateral eligible
for guarantees by the Export Import Bank of the United States.  
The effect of this amendment was to increase the availability
under the revolving loan portion of the credit facility.  
Although the Company's current balance under the facility is
only $27 million and it had adequate collateral under the credit
agreement to make the Senior Note interest payment of $4
million, the banks declined to permit the payment.

Wayne Hellman, ADLT Chairman and Chief Executive Officer,
commented, "We believe sales of ongoing operations in our first
quarter will be approximately $34 million, up 10% over last
year.  In addition, preliminary results show that operational
cash flow exceeded $2 million in the months of July and August.  
Positive cash flow over the last five months has allowed us to
reduce our bank debt by $4 million.  All these factors, in
addition to our new lender discussions, give me great confidence
that we can conduct a refinancing satisfactory to our banks and
Senior Note Holders.

Hellman added, "We are obviously very disappointed that our
banks did not permit us to make the Senior Note interest payment
on time.  In the meantime, the Company expects to continue to
operate its business: serving its customers and meeting its
obligations to suppliers and employees.  Although we are only
beginning to see the results of our year-long efforts to improve
profitability, we believe the results of the quarter ending
September 30 will demonstrate our ability to increase operating
income in a sluggish economy."

Advanced Lighting Technologies, Inc., is an innovation-driven
designer, manufacturer, and marketer of metal halide lighting
products, including materials, system components and systems.
The Company also develops, manufactures and markets passive
optical telecommunications devices, components and equipment
based on the optical coating technology of its wholly-owned
subsidiary, Deposition Sciences, Inc.


ADVANCED TECHNOLOGY: Signs-Up Marcum & Kliegman as Accountants
--------------------------------------------------------------
Effective September 9, 2002, Advanced Technology Industries,
Inc., as a result of the recent merger of several of the
Partners of Grassi & Co., CPA's P.C., into Marcum & Kliegman,
LLP, engaged Marcum & Kliegman, LLP as its independent
accountant. The decision to change accountants was approved by
the Board of Directors of the Company.

The Grassi & Co., CPA's, P.C., report on the Company's financial
statements for the past two years ended December 31, 2001 and
2000 did modify its opinion due to going concern uncertainties.

Advanced Technology Industries, Inc., was incorporated under the
laws of the State of Delaware on October 25, 1995. On February
1, 2000, the Company changed its name from Kurchatov Research
Holdings, Ltd. to Advanced Technology Industries, Inc. The
Company was organized to identify, assess and commercialize
technologies introduced and developed by scientists throughout
the world with particular emphasis on technologies originating
in Israel, Germany and Russia.


AGRIFOS FERTILIZER: Renewing CFO Luttrell's Employment Pact
------------------------------------------------------------
Agrifos Fertilizer LP and its debtor-affiliates seeks authority
from the U.S. Bankruptcy Court for the Southern District of
Texas to continue employing Michael E. Luttrell as their Chief
Financial Officer.

The Debtors remind the Court that they secured authority to
employ Mr. Luttrell as their Chief Executive Officer for a
period of one year -- expiring September 20, 2002.

Under the terms of the current Employment Agreement, Fertilizer
pays Luttrell an annual $175,000 salary.  In addition, Mr.
Luttrell receives $10,000 per month for each month the Debtors
are in bankruptcy.  Mr. Luttrell also receives an $800 monthly
automobile allowance.

The Debtors wish to continue Mr. Luttrell's employment on a
month-to-month basis until the Company emerges from bankruptcy.
The Debtors proposes to continue the terms of the Employment
Agreement, as amended, on a month-to-month basis, including
paying the additional $10,000 per month for each month the
Debtors remain in bankruptcy.

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.


AMERICAN SOUTHWEST: Fitch Affirms Low-B's on Two Note Classes
-------------------------------------------------------------
Fitch Ratings upgrades American Southwest Financial Securities
Corp., commercial mortgage pass-through certificates, series
1995-C1's $9.3 million class B-1 to 'AAA' from 'AA+', interest
only class S-2 to 'AAA' from 'AA+' and $14.6 million class B-2
to 'AA' from 'A+'. Fitch also affirms the $14.6 million class B-
3 at 'BB+' and $11.7 million class B-4 at 'B'. Fitch does not
rate the class C certificates. The rating actions follow Fitch's
annual review of this transaction, which closed in July 1995.

The upgrades are primarily attributed to an increase in
subordination levels due to loan payoffs and amortization. As of
the September 2002 distribution date, the pool's aggregate
balance has been reduced by 81%, to $56.2 million from $293
million at issuance. Fifty-seven of the original 74 loans have
paid off since issuance leaving the pool heavily concentrated by
loan balance, geographic and property type concentration. While
Fitch views the increased concentration as a concern it was
taken into account in the upgrades.

There are currently two specially serviced loans (9.8%), which
include one real estate owned loan (3.8%) and one loan with a
bankrupt operator (6%). The largest of the specially serviced
loans is a loan secured by a hotel property in Pittsburgh, PA.
Lodgian, the owner and operator of this hotel, filed for
bankruptcy in January 2002, resulting in the loan being
transferred to the special servicer. Lodgian is expected to
submit a plan of reorganization in October 2002. The REO loan,
secured by a multifamily property, Pierson Apartments, was
assumed to incur a 100% loss. As of July 17, the loan was deemed
non-recoverable by the master servicer, Midland Loan Services.
The servicer advances were applied as interest shortfalls as the
servicer recovered a portion of their advances. Interest
shortfalls were incurred up to class B-2 in August 2002. Classes
B-2 and B-3 were repaid in September 2002 and class B-4
continues to incur interest shortfalls, which Fitch expects to
be repaid shortly. The property is currently under contract for
sale for $460,000 that will likely be applied to the remaining
servicer advances.

Midland collected year-end 2001 operating statements for 92% of
the outstanding pool balance. The YE 2001 weighted average debt
service coverage ratio for these loans is 1.37 times, compared
to 1.40x at YE 2000 for loans that reported both years operating
statements (81%). Two loans (11.7%) reported DSCRs below 1.0x.
The borrower of the property securing the largest of the loans
below 1.0x (9%) is actively working to improve occupancy at the
property. The property securing the second loan (2%) made
significant capital improvements over 2001, which contributed to
the low DSCR.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


AMERICREDIT: Fitch Places BB Sr. Debt Rating on Watch Negative
--------------------------------------------------------------
Fitch Ratings has placed the 'BB' senior debt rating of
AmeriCredit Corp., on Rating Watch Negative. The placement of
ACF on Rating Watch Negative reflects the announcement by the
company that it has received waivers by Financial Security
Assurance raising delinquency trigger levels in its
securitizations. Approximately $375 million of debt is affected
by this action.

Based on current asset quality trends, cumulative loss trigger
levels on some of ACF's securitization trusts could be
pressured, which would lead to the withholding of cash
securitization distributions. FSA has reached an agreement with
ACF to raise the delinquency trigger levels to a level in excess
of the company's current forecast of pool performance for the
six monthly reporting periods from September 2002 through
February 2003. Fitch sees the increased trigger levels as
temporary relief as the cumulative loss triggers may ultimately
become pressured. The credit enhancement requirements for ACF's
securitizations are generally established with an initial
deposit and further funded through excess cash flows from
securitized receivables. In the instance that a performance
trigger is breached, the credit enhancement levels are boosted
substantially and securitization distributions are held in the
trusts until the new enhancement levels are reached. In
addition, the enhancement levels for each securitization trust
insured by FSA are cross-collateralized to other FSA-insured
securitization trusts. As a result excess cash flow from a
performing securitization trust insured by FSA may be used to
support cash flow shortfalls from a non-performing
securitization trust insured by FSA, thereby further restricting
excess cash flow available to ACF. Securitization distributions
are a significant component of the company's total operating
cash flow. The withholding of the majority or all of the
securitization distributions would limit ACF's financial
flexibility, including posting credit enhancement deposits for
future securitizations.

In conjunction with the prior announcement, ACF has announced
the commencement of a public offering of common stock totaling
up to $500 million. Fitch believes it is essential to raise
additional common equity to improve the financial flexibility of
the company. Successful completion of the equity offering, in
this challenging environment, would be viewed favorably by
Fitch. Absent successful execution of an equity offering, the
ratings of ACF could be negatively impacted.

ACF has announced that it will transition its accounting
treatment away from 'true sale' structures which required an
upfront non-cash 'gain-on-sale'. ACF will now account for
securitization transactions as financings on balance sheet and
thus no gain-on-sale will be recorded. The transition away from
gain-on-sale accounting will result in recognition of revenue as
earned by ACF. Although ACF will show a decline in profitability
near-term as they transition away from gain-on-sale, the
fundamentals of the firm will remain the same.

Based in Fort Worth, Texas, ACF has become the largest
independent subprime automobile finance company in North
America. As of June 30, 2002, ACF maintained $14.8 billion in
managed automobile finance receivables.


ANC RENTAL: Obtains Approval to Hire Brusniak as NTRG Counsel
-------------------------------------------------------------
ANC Rental Corporation, and its debtor-affiliates obtained the
Court's authority to employ Brusniak Harrison & McCool P.C., as
special counsel on property tax protests, administrative
appeals, adversary proceedings and related proceedings involving
their taxable properties in various states.

With the Court's approval, Brusniak will be working with
National Tax Resource Group (NTRG) to address and resolve the
Debtors' existing and contemplated property tax disputes.  Since
Brusniak previously worked with NTRG on other matters similar in
nature, the Debtors believe that the firm is well qualified and
uniquely able to represent them as special counsel in an
efficient and timely manner.

Brusniak will render legal opinions to the Debtors and the NTRG,
prepare any necessary documents, and take any other action with
respect to the Property Tax Disputes, as well as perform other
necessary or desirable legal services for the Debtors.

Although the Debtors will separately retain Brusniak, the firm
will look solely to NTRG for payment of its fees in connection
with representation at hand. (ANC Rental Bankruptcy News, Issue
No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BARTIZAN CAPITAL: Makes Assignment in Bankruptcy in Canada
----------------------------------------------------------
Bartizan Capital Corporation announced that as a result of the
number of creditor claims that it faces, it has made an
assignment in bankruptcy. Collins Barrow Limited of Calgary,
Alberta has been appointed as trustee. The first meeting of
creditors has been scheduled for September 26, 2002 at which it
is anticipated that inspectors will be appointed to supervise
the trustee's administration of the estate. After payment of
debts, it is not anticipated that there will be any assets
available for distribution to Bartizan's shareholders.

Information concerning the bankruptcy, including a statement of
Bartizan's financial affairs will be available on Collins Barrow
Limited's Web site at http://www.corporaterecovery.com


BIONUTRICS: Seeking Additional Funding to Meet Liquidity Needs
--------------------------------------------------------------
Bionutrics Inc., is repositioning itself as a product
development company and as such is engaged in discussions with
several potential marketing partners involving future branded
products including dietary supplements and functional food
products. New products will be based on new technology extending
beyond a tocotrienol platform. The Company has announced that it
has two new cardiovascular products; Vitenol E is a rice bran
extract and is a more effective antioxidant than standard
vitamin E. and CARDIO-CIN is based on Bionutrics's patented
niacin and soluble fiber composition. These products are
targeted to the cholesterol dietary supplement market. However,
they are not currently being marketed because of the Company's
lack of resources.

Consolidated net revenues for the quarter ended July 31, 2002
were $8,000 versus $13,000 for the same quarter in 2001. Cost of
revenues for the three months ended July 31, 2002 was $2,000
versus $8,000 for the same quarter in 2001. This reduction is
due to lower sales volume of the Company's product, evolvE.

Net loss decreased to $431,000 for the three months ended July
31, 2002 from $672,000 for the quarter ended July 31, 2001, due
primarily to lower operating expenses.
        
Consolidated net revenues for the nine months ended July 31,
2002 were $24,000 versus $44,000 for the same period in 2001.
Cost of revenues for the nine months ended July 31, 2002 was
$12,000 versus $56,000 for the same period in 2001 due to
decreased sales volume. Additionally, cost of revenues for
the nine months ended 2001 was negatively impacted by the write-
off of expired inventory held under consignment.

Net loss was $2,019,000 for the nine months ended July 31, 2002
compared to $2,129,000 for the same period in 2001.

The Company requires additional financing of at least $4,000,000
to achieve its minimum corporate goals over the next 12 months.
The Company is currently in negotiations to secure this
necessary capital through equity private placements as well as
debt financing. The Company does not at this time have any
committed sources of financing, other than the Justicia equity
line of credit, the terms of which currently prohibit the
Company from drawing down any funds. There can be no assurance
that additional financing will be attainable on terms acceptable
to the Company, or at all, or at such time as the Company's
needs may require. Access to additional capital will depend
substantially upon prevailing market conditions, and the
Company's financial condition and prospects at the time. On July
18, 2001, the Company's common stock was delisted from the
Nasdaq SmallCap Market, and the shares are currently quoted on
the OTC Bulletin Board. As a result, activity in the Company's
common stock has declined substantially, which could adversely
affect the Company's ability to raise necessary capital. Such
additional financing may not be attainable, or attainable on
terms acceptable to the Company.  

The Company has made application for a loan in the amount of
$5,000,000 to a lender that specializes in loans secured by
intellectual properties. If the Company were successful in
obtaining this loan, it would receive up to $5,000,000 (less
closing costs and points estimated to total $350,000) and would
be required to place as much or more than $5,000,000 of debt on
its financial statement depending on the structure of the loan.
The terms of this agreement are presently being discussed. There
is no assurance the Company will succeed in obtaining this loan
or that, if successful in obtaining the loan that the terms and
conditions will be as described here.

The loan would be secured by a "pod" of patents owned by the
Company's subsidiary, LipoGenics, Inc.  If the Company defaults
on the loan's interest payments, loan repayment or other
material provisions of the loan agreements, the lender would be
entitled to foreclose on the collateral and, in such case, the
Company would lose such patents and all associated rights. The
loss of these patents could have a material adverse effect on
the Company.


BIOVEST: Exploring Financing Alternatives to Meet Cash Needs
------------------------------------------------------------
Biovest International Inc., is a biotechnology company focused
on production and contract manufacturing of biologic drugs and
products from small through commercial scale. It has
historically developed, manufactured and marketed patented cell
culture systems and equipment to pharmaceutical, diagnostic and
biotechnology companies, as well as leading research
institutions worldwide, and has provided contract cell
production services to those institutions. While continuing this
business, management has chosen to re-orient the Company's
focus, assets and operations to increase contract cell
production and biologic drug development and ownership. The
Company's first drug product, a personalized immunotherapeutic
for the most common and fastest-growing form of hematologic
cancer, known as B-cell Non-Hodgkin's lymphoma, is currently in
a Phase III FDA-approved pivotal licensing trial.

During the nine months ended June 30, 2002 the Company incurred
a net loss of $3,506,000. At June 30, 2002 the Company had a
deficit in working capital of $2,283,000. The Company has been
meeting its cash requirements through the use of cash on hand,
the sale of common stock and short-term borrowings, primarily
from affiliates.

In September 2001, the Company successfully entered into a
definitive cooperative Research and Development Agreement with
the National Cancer Institute for the development and ultimate
commercialization of a patient-specific immunotherapeutic for
the treatment of non-Hodgkin's low-grade follicular lymphoma.
The terms of the CRADA included, among other things, a
requirement for the Company to pay $530,000 quarterly to the NCI
for expenses incurred in connection with the ongoing Phase III
clinical trials. The Company made the first required payment in
the quarter ended September 30, 2001.

On May 8, 2002 the Company and the NCI executed an amendment to
the CRADA, which requires a single payment of $350,000, due on
September 30, 2002, in lieu of the quarterly payments of the
original agreement. Successful development of the
immunotherapeutic, if approved by the FDA, from Phase III
clinical trials through commercialization, will commit the
Company to several years of significant expenditures before
revenues are expected to be realized.

The Company's ability to continue its present operations and
meet its obligations under the CRADA is dependent upon its
ability to obtain significant additional funding. Such
additional financing could be sought from a number of sources,
including the sale of equity or debt securities, strategic
collaborations or recognized research funding programs.
Management is currently in the process of exploring various
financing alternatives to meet the Company's cash needs,
including additional short-term loans from shareholders and
others and the sale of equity securities. Management believes
they will be able to raise the necessary funds to continue
operations in the near term.

There is no assurance that the additional required funds can be
obtained on terms acceptable or favorable to the Company. The
net losses incurred and the need for additional funding raise
substantial doubt about the Company's ability to continue as a
going concern.


BUDGET GROUP: Asks Court to Approve $15MM Cendant Break-Up Fee
--------------------------------------------------------------
Recognizing that Cendant should be given an incentive for taking
the risk as a "stalking horse" bidder, Budget Group Inc., and
its debtor-affiliates ask the Court to approve the Termination
Fee agreed upon by the Debtors and Cendant.

Matthew B. Lunn, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, tells the Court that the parties have
agreed that if the Agreement is terminated, the Seller Parties,
jointly and severally, will pay in cash to Cendant, as a
termination fee and as liquidated damages, the applicable
percentages of an amount equal to $15,000,000.

Percentages of the amount will be paid to Cendant on these
circumstances:

A. If the Agreement is terminated because no Closing occurred
   and a binding Alternative Transaction has been entered into
   and approved by the Court, the Buyer will recover 23.34% of
   the Termination Amount (i.e., $3,500,000) within two Business
   Days of the termination and 76.66% of the Termination Amount
   (i.e., $11,500,000) on or before the earlier of the date of
   closing of Alternative Transaction and the sixth month
   anniversary of the termination of the Agreement,
   respectively;

B. If the Agreement is terminated because of breaches by the
   Seller Parties, the Buyer's recovery will be limited to
   23.34% of the Termination Amount (i.e., $3,500,000) if and
   only if:

   -- the breaches of representations and warranties by Seller
      Parties giving rise to the termination do not constitute
      or have a material adverse effect,

   -- the representations or warranties of Seller Parties whose
      breach gives rise to the termination were true and correct
      when first given or made,

   -- the representations and warranties of Seller Parties have
      become untrue or incorrect or occurrence(s) which was and
      is outside the control of, and which was not and is not
      caused by or remediable by, any of Seller Parties or their
      Affiliates, and

   -- the Seller Parties have not breached any of their
      covenants in any material respect;

C. If the Buyer terminates the Agreement because there has been
   an incurable breach -- or not cured within 15 days' written
   notice if the breach is curable -- the Buyer's recovery will
   be limited to 23.34% of the Termination Amount -- i.e.,
   $3,500,000.  But this is only if the breaches giving rise to
   the termination do not have a material adverse effect on the
   value of the Acquired Assets or the timely consummation of
   the transactions contemplated in the Agreement on a timely
   basis;

D. If the Agreement is terminated because the Committee
   withdraws its support for the sale transaction or the Court
   approves an Alternative Transaction or a Chapter 11 Plan
   without incorporating the transaction contemplated by the
   Agreement, the Buyer's recovery will be limited to 23.34% of
   the Termination Amount -- i.e., $3,500,000;

E. If the Seller Parties terminate the Agreement, the Buyer will
   be paid 23.34% of the Termination Amount -- i.e., $3,500,000
   -- within two Business Days of the termination; and

F. If the Buyer terminates the Agreement because the Order
   approving the Agreement has not been entered into on October
   28, 2002, the Buyer will not be entitled to any portion of
   the Termination Amount if:

   (a) by October 23, 2002 Seller Parties will have notified
       Buyer in writing of their desire to extend the October
       28, 2002 deadline to November 28, 2002; and

   (b) Buyer terminates this Agreement prior to November 28,
       2002.

   If an Alternative Transaction is approved by the Court
   within 275 days after the termination of the Agreement (and
   that Alternative Transaction was negotiated prior to the
   Termination Date, the Seller Parties will pay to the Buyer an
   additional amount in  cash equal to 76.66% of the Termination
   Amount -- i.e., $11,500,000 -- on the date of closing of the
   Alternative Transaction without need of any written demand by
   Buyer. (Budget Group Bankruptcy News, Issue No. 6; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)    

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1),
DebtTraders reports, are trading at 18.5 cents-on-the-dollar.
See http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1
for real-time bond pricing.


CASTELLE: Fails to Meet Nasdaq SmallCap Listing Requirements
------------------------------------------------------------
Castelle (Nasdaq:CSTL), a leading provider of fax solutions for
Fortune 1000 companies and small to medium-sized businesses, has
received a NASDAQ Staff Determination letter dated September 10,
2002 indicating that Castelle has failed to comply with the
minimum bid price requirement set forth in Marketplace Rule
4310(C)(4) and that its securities are, therefore, subject to
delisting from the NASDAQ SmallCap Market. Castelle has
requested a hearing before a NASDAQ Listing Qualifications Panel
to review the Staff determination. This hearing will defer the
delisting of Castelle's securities pending the Listing
Qualification Panel's decision. There can be no assurance that
the Panel will grant the Company's request for continued listing
on the NASDAQ SmallCap Market.

Castelle develops office automation systems that allow
organizations to easily implement faxing and printing over local
area networks and the Internet. It is a market leader in fax
solutions for small to medium-sized workgroups. Castelle's
FaxPress fax servers provide a simple way to integrate fax with
email, desktop and back-end applications. In addition, the
company manufactures the popular LANpress print servers, which
enable users to locate printers anywhere on the network.
Castelle products are easy to use and maintain, and provide an
economical way for companies to share resources over the
network.

Castelle was founded in 1987 and is headquartered in Morgan
Hill, California. Its products are utilized by Fortune 1000
companies and small to medium-sized businesses, and are
available through a worldwide network of distributors, value-
added resellers, systems integrators, e-commerce retailers, and
the Castelle Online Store. Visit Castelle online at
http://www.castelle.com


CHASE COMMERCIAL: S&P Assigns Low-B Ratings to 6 Certs. Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
classes G, H, I, J, K, and L of Chase Commercial Mortgage
Securities Corp.'s commercial mortgage pass-through certificates
series 2000-1. Concurrently, Standard & Poor's placed its
ratings on classes J, K, and L on CreditWatch with negative
implications. Prior to these rating actions, Standard & Poor's
only publicly rated classes A-1 through F of this transaction.

The assigned ratings reflect the subordination levels for each
respective class consistent with the loan pool characteristics.
The CreditWatch placements reflect the potential losses to the
trust resulting from the largest loan in the pool, as well as
risks associated with several of the watchlisted loans.

The subject property of the largest loan ($41.9 million, or 6.1%
of the loan pool) has been REO since February 2002. The loan is
secured by a 396,022 square foot retail center built in 1998 and
anchored by a Kmart Corp. store, Regal Cinemas, Winn-Dixie
Stores Inc., La Ideal Baby Store, The Rag Shop, and The Party
Supermarket, located in Pembroke Pines, Florida. The Kmart store
is not scheduled to close. In March 2002, the special servicer
(Lennar Partners Inc.) received an updated appraisal that valued
the property at $38 million. The most recent debt service
coverage ratio was 0.99 times with 91% occupancy. No other loans
are currently being specially serviced. As of August 2002, the
servicer (GEMSA Loan Services L.P.) placed 15 loans ($153.14
million, or 22.4%) on its watchlist for various reasons. The
second and sixth largest loans are secured by office properties
located in Santa Clara and Costa Mesa, Calif. Both loans are on
the watchlist due to several near-term lease expirations. The
top 10 loans represent 39.5% of the mortgage pool. Nine of the
10 loans reported a year-end 2001 DSCR of 1.54x.

Currently, Standard & Poor's is completing its due diligence on
this transaction to determine the potential impact on the credit
levels from the REO and watchlisted loans, and if rating changes
are warranted at this time.

       Ratings Assigned and Placed On Creditwatch Negative

          Chase Commercial Mortgage Securities Corp.
        Commercial mortgage pass-thru certs series 2000-1

         Class    Rating          Credit Support (%)
         G        BB+             6.62
         H        BB              5.86
         I        BB-             4.97
         J        B+/Watch Neg    3.31
         K        B/Watch Neg     2.80
         L        B-/Watch Neg    2.29


CIRCUIT RESEARCH: Accountants Issue Going Concern Opinion
---------------------------------------------------------
Circuit Research Labs Inc., develops, manufactures and markets
high-quality electronic audio processing, transmission encoding
and noise reduction equipment for the worldwide radio,
television, cable, Internet and professional audio markets. In
recent periods, it has acquired the assets of other companies
within its industry or in related industries into which it
desires to expand.  On May 31, 2000, it acquired the assets of
Orban, Inc., a producer of audio editing and processing
equipment.  On May 31, 2001, it acquired the assets of Avocet
Instruments, Inc., a supplier of quality audio receivers and
coders for the television and post-production industry.  On
January 18, 2002, it acquired the assets of Dialog4 System
Engineering GmbH, a producer of ISO/MPEG, audio, ISDN,
satellite transmission, networking and storage products.

Circuit Research Labs incurred losses of $2,046,640 and
$2,258,121 during the years ended December 31, 2001 and 2000,
respectively.  Its deteriorating financial results and reduced
liquidity caused it to renegotiate its $8.5 million debt owed to
Harman, which it incurred in connection with its acquisition of
the assets of Orban. Under the terms of the new agreement,
Harman can demand at any time that the Company immediately pay
in full the outstanding balance. Should this happen, Circuit
Research would immediately be forced to file for protection
under Chapter 11 of the United States Bankruptcy Code. Its
inability to pay the $8.5 million debt to Harman should payment
be demanded, its difficulties in meeting its financing needs and
its negative working capital position have resulted in its
independent public accountants adding a going concern emphasis
paragraph to their report by including a statement that such
factors raise substantial doubt about its ability to continue as
a going concern.  In addition to efforts to reduce costs and
increase sales, the Company is currently seeking sources of
long-term financing. However, the inclusion of a going concern
emphasis paragraph generally makes it more difficult to obtain
trade credit, insurance or additional capital through public or
private debt or equity financings.


COLD METAL: Court Approves Up to $48 Million in DIP Financing
-------------------------------------------------------------
Cold Metal Products Inc. (Amex: CLQ), a leading North American
intermediate strip steel processor, has secured final U.S.
Bankruptcy Court approval for up to $48 million in debtor-in-
possession financing.

The financing, from a consortium of lenders led by GMAC, will
enable Cold Metal to continue serving customers as the company
reorganizes under Chapter 11 of the U.S. Bankruptcy Code.

Cold Metal also secured court approval to continue its existing
wage and benefit programs for active employees.  Interim orders
approving the financing, wages and benefits were approved
earlier.

"Securing debtor-in-possession financing was a major step in
Cold Metal's reorganization process," said Raymond P. Torok,
Cold Metal president and chief executive officer.  "We are
pleased by the court ruling and by the initial support of our
customers, employees and suppliers following the news of our
Chapter 11 filing.  We look forward to serving our customers as
we prepare for Cold Metal's exit from Chapter 11 protection as a
stronger company."

A leading intermediate steel producer, Cold Metal Products,
Inc., provides a wide range of strip steel products to meet the
critical requirements of precision parts manufacturers.  Through
cold rolling, annealing, edge conditioning, oscillate-winding,
slitting, and cutting to length, the company provides value-
added products to manufacturers in the automotive, construction,
cutting tools, consumer goods and industrial goods markets. Cold
Metal operates plants in Ottawa, Ohio; Roseville, Mich.;
Hamilton, Ont. and Montreal, Quebec.


CTC COMMUNICATIONS: Turns to CXO LLC for Restructuring Services
---------------------------------------------------------------
CTC Communications Group, Inc., (OTCBB: CPTL) has engaged CXO,
L.L.C., to provide corporate and operational restructuring
services to CTC and its operating subsidiaries. Michael
Katzenstein, a CXO principal, was named interim Chief Executive
Officer of CTC and its operating subsidiaries. Robert J.
Fabbricatore, the Company's founder, has relinquished the
positions of Chairman of the Board of Directors and Chief
Executive Officer of CTC and its operating subsidiaries.

Richard J. Santagati, a longstanding CTC Board member and
Chairman of a Special Negotiating Committee consisting of
independent members of CTC's Board of Directors chartered to
oversee the restructuring of CTC, said, "CXO's team will join
with CTC's Board and management to take steps to improve CTC's
liquidity, profitability and attractiveness to investors. The
Board appreciates Bob Fabbricatore's distinguished contribution
to CTC over the past 21 years."

Mr. Katzenstein, in assuming the role as interim CEO, brings
directly related experience to the task of restructuring CTC
from his role as the President and CEO of OpTel, Inc., a CLEC
and integrated communications and cable television provider
based in Dallas, TX. Mr. Katzenstein completed the successful
restructuring of OpTel, Inc. during his tenure, and brings
experience from other CXO restructuring assignments in the
telecommunications and technology industries.

Mr. Santagati also noted that, as previously reported, CTC has
engaged Miller Buckfire Lewis & Co., LLC, to assist in
developing a plan to amend, restructure or refinance its
existing financing facilities and to raise additional capital.

CXO, L.L.C., is a group of experienced operating executives
(CEOs, COOs, CFOs, etc.) of public and private
telecommunications and technology-based companies. CXO
specializes in providing experienced and dynamic management,
operational and advisory services to help under-performing
telecommunications and technology companies mitigate risk,
maximize profitability and generate liquidity events for
stakeholders. CXO services include restructuring and crisis
management services to domestic and international telecom,
technology and media companies, and when requested, members of
the CXO team assume management and operating positions within
our client organizations.

With 27 experienced professionals and 23 current active client
engagements, Miller Buckfire Lewis ("MBL") is one of the world's
leading global independent investment banking firms providing
strategic and financial advisory services in large-scale
corporate restructuring transactions. Over the past five years,
MBL has been involved in over 100 restructuring transactions,
representing companies, creditors and acquirors. Services
provided by MBL include valuation and debt capacity analysis,
capital structure design, restructuring plan formulation and
negotiation and private equity and debt placement services.
Clients of MBL have access to the merger and acquisition and
capital raising capabilities of Dresdner Kleinwort Wasserstein,
one of world's leading investment banks, through a strategic
alliance between the two firms.

CTC is a "next generation" Integrated Communications Carrier
utilizing advanced technology and providing its customers with
converged voice, data, Internet and video services on a
broadband, packet-based network, called the PowerPath(R)
Network. The Company serves medium and larger business customers
from Virginia to Maine, which includes the most robust
telecommunications region in the world--the Washington D.C. to
Boston corridor. CTC's Cisco Powered IP+ATM packet network and
its sales and service teams, provide contiguous marketing and
technology coverage throughout the Northeast and Mid-Atlantic
States. The Company, through its dedicated commitment to
exceptional customer service, has achieved an industry-leading
market share in the Northeast. CTC can be found on the worldwide
web at http://www.ctcnet.com


ENCOMPASS SERVICES: Special Shareholders Meeting Set for October
----------------------------------------------------------------
J. Patrick Millinor, Jr., Chairman of the Board of Encompass
Services Corporation, is inviting shareholders to attend a
special meeting to be held on October   , 2002, (date yet to be
announced), at 10:00 a.m., Houston time, at the Houston City
Club, One City Club Drive, Greenway Plaza, Houston, Texas.

At the special meeting, shareholders will be asked to consider
and vote upon three proposals:

    -- To issue $35 million of Company voting securities to
Apollo Investment Fund IV, L.P., and Apollo Overseas Partners
IV, L.P., in conjunction with Encompass' pending rights offering
to all its shareholders at the same effective purchase price per
share;

    -- To amend the Amended and Restated Articles of
Incorporation to increase the number of shares of common stock
authorized for issue from 200,000,000 to 275,000,000; and

    -- To approve the grant of discretionary authority to the
Board of Directors to amend the Amended and Restated Articles of
Incorporation to effect a reverse stock split of Encompass
outstanding common stock at a ratio within the range from one-
for-five to one-for-fifteen at any time prior to August 1, 2003.
   
Encompass Services Corporation is one of the largest providers
of facilities services in the United States. The Company
provides electrical and mechanical contracting services and
cleaning and maintenance management services to commercial,
industrial and residential customers nationwide, including
construction, installation and maintenance. Encompass operates
in three reportable segments: Commercial/Industrial Services,
Residential Services and Cleaning Systems.

As reported in Troubled Company Reporter's Aug. 26, 2002
edition, the Company finances its operations and growth
primarily with internally generated funds and borrowings from
commercial banks and other lenders. During the second quarter of
2002, management anticipated that the Company might not be able
to remain in compliance with the financial covenants contained
in its primary bank credit facility as of June 30, 2002.
Accordingly, the Company entered into negotiations with its
senior bank lenders to amend the financial covenants to avoid a
possible default as of the end of the second quarter. Effective
June 26, 2002, the Company entered into an amended credit
facility, which provides financial covenant modifications
through February 2005. Management anticipates that the Company's
cash flow from operations and existing borrowing capacity under
the Amended Facility will be adequate to fund the Company's
normal working capital needs, debt service requirements and
planned capital expenditures for 2002.

The Company intends to sell certain under-performing or non-
strategic business units, provided that the Company is able to
secure prices, terms and conditions deemed acceptable by it.
Including the anticipated tax benefits associated with the sales
of some of these businesses, the Company believes that the
aggregate cash benefit to be realized from sales of businesses
will exceed $50 million. Pursuant to the Amended Facility, the
proceeds of any such sales will be used to permanently reduce
balances outstanding under the Term Loans and the Revolving
Credit Facility, on a pro-rata basis. There can be no assurance
that the Company will secure satisfactory offers for any
business unit or that some business units will not be sold at a
loss.


ENRON CORP: Asking Court to Stay Duke Partnership Arbitration
-------------------------------------------------------------
Enron Canada Corp., a non-debtor Enron affiliate, is a
corporation amalgamated pursuant to the laws of the Province of
Alberta and continued federally pursuant to a Certificate of
Continuance under the Canadian Business Corporations Act.  Enron
Canada is engaged primarily in the trading of natural gas,
electricity and other energy commodities.  Enron Canada is in
the process of winding down its operations, paying its
outstanding obligations and collecting on its outstanding
claims.

Enron Canada and Duke Energy Marketing Limited Partnership
currently hold cash collateral from each other on account of
their respective obligations under various confirmations and gas
purchase and sale agreements.  Specifically:

      * Enron North America holds, as agent for Enron Canada,
        $1,300,000 as collateral to secure Duke Partnership's
        obligations under the Gas Agreements; and

      * Duke Partnership, holds $20,787,125 as collateral to
        secure Enron Canada's obligations under and pursuant to
        the Gas Agreements.

As part of the wind down:

      * Enron Canada and Duke Partnership agreed to release each
        other from the Gas Agreements;

      * Enron Canada agreed to pay $39,749,613 to Duke
        Partnership as full and final payment of Enron Canada's
        obligations;

      * Duke Partnership agreed to deposit the $20,787,125 into
        Escrow for Enron Canada's benefit.

The Escrow Agreement provides that Macleod Dixon LLP will hold
the $20 million in trust until:

    (1) an arbitrator resolved whether Enron Canada consented to
        Duke Energy applying $4,500,000 of that collateral --
        Disputed Collateral -- against Enron Power Marketing
        Inc.'s obligations to Duke Energy Trading and Marketing
        LLC under and pursuant to confirmations or transactions
        entered into between Enron Power and Duke Energy; and

    (2) the remainder of the Enron Canada Collateral of
        $16,287,125 is paid pursuant to the direction of Enron
        Canada, Enron North America and either the Official
        Committee of Unsecured Creditors or the United States
        Bankruptcy Court.

As part of the arbitration procedure, Duke Energy submitted
affidavits on July 1, 2002 that went beyond the agreed scope
because they asserted the existence of an alleged oral or
written master netting agreement among an undefined group of
Duke Energy affiliated entities and an undefined group of Enron-
affiliated entities.  Duke Energy and Duke Partnership have
indicated that the alleged agreement is central to their
arbitration position.

Pursuant to Section 362(a) of the Bankruptcy Code, the Debtors
ask the Court to stay the arbitration involving assets of the
estate, or, in the alternative, enjoin arbitration against Duke
Energy Trading and Marketing LLC and Duke Energy Marketing
Limited Partnership.

Melanie Gray, Esq., at Weil, Gotshal & Manges, in New York,
fears that an expansive master netting agreement that includes
Enron Canada and the Debtors would both raise significant issues
under the Bankruptcy Code and directly impact the estate assets.

Because Duke Energy and Duke Partnership refuse to identify the
Enron entities they allege are parties to the Alleged Netting
Agreement, Debtors are left with no other choice but to assume
the "Enron Group" includes some or all of the Enron Debtors.
Enron Debtors whose interests may be affected by the existence
of an Alleged Netting Agreement with Duke Energy and its
affiliates, in addition to Enron Power Marketing Inc. and Enron
North America, include Enron Gas Liquids, Inc., Enron Liquid
Fuels, Inc., Enron Capital & Trade Resources International
Corp., Enron Global Markets, LLC, and Enron Energy Services,
Inc.

Moreover, the very obligation to which Duke Energy and Duke
Partnership seek to apply the Disputed Collateral is that of an
Enron Debtor -- Enron Power Marketing Inc.

On its face, Ms. Gray notes, an arbitration proceeding
adjudicating the existence of and parties to the Alleged Netting
Agreement will affect the rights and obligations of a debtor,
Enron Power.  Moreover, if the Alleged Netting Agreement exists,
it would impact other debtors who are parties to other
agreements with Duke entities.  Enron and Duke entities are
parties to 40 master agreements.

Of equal importance, the enforcement of a netting agreement
involving one or more debtors raises significant legal issues
under the Bankruptcy code.  Section 553 of the Bankruptcy Code
allows setoff rights only with respect to debts that are mutual.
Thus, Ms. Gray contends, Duke Energy could only offset a debt
Enron Power owed to it against its debt to Enron Power.  The
Alleged Netting Agreement then is not enforceable against the
Debtors or to Enron Canada.  "Duke Energy's apparent effort to
insert these issues into an arbitration is a clear violation of
the automatic stay," Ms. Gray asserts.

Ms. Gray suggests that if Duke Energy and Duke Partnership want
to collect on the alleged obligations of an Enron debtor entity
like Enron Power, they should avail themselves of the Bankruptcy
Code procedures along with all other creditors of Enron Power.

In addition to enforcing the automatic stay, Ms. Gray points out
that the Court has the authority to enjoin the proceeding since
the arbitration suit will interfere with the Debtors' efforts to
reorganize.

The Debtors believe that Duke Energy's attempt to litigate the
Alleged Netting Agreement is an "end run" around their
Bankruptcy Code Protection. (Enron Bankruptcy News, Issue No.
43; Bankruptcy Creditors' Service, Inc., 609/392-0900)

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


ETOYS INC: Court to Consider Liquidating Ch. 11 Plan on Sept. 27
----------------------------------------------------------------
On August 8, 2002, the U.S. Bankruptcy Court for the District of
Delaware entered an Order approving the Disclosure Statement
prepared by eToys Inc., and its debtor-affiliates.  The Court
found that the document contained adequate information pursuant
to 11 U.S.C. Sec. 1125 and allows creditors to make informed
decisions about whether to vote to accept or reject the
Company's liquidating chapter 11 plan.  The Honorable Mary F.
Walrath has scheduled a hearing to consider Confirmation of the
Debtors' Chapter 11 Liquidating Plan on September 27, 2002 at
2:00 p.m. (Eastern Time) or thereafter as Counsel can be heard.

Any confirmation objections must be served and received by the
Court before 4:00 p.m. on September 18, 2002, with copies served
on:

     (i) the Debtors
         EBC I, Inc.
         fka eToys, Inc.
         400 Continental Boulevard, 6th Floor
         El Segundo, CA 90245
        
    (ii) Counsel to the Debtors
         Morris, Nichols, Arsht & Tunnel
         1201 N. Market Street
         PO Box 1347
         Wilmington, Delaware 19899-1347
         Attn: Robert Dehney, Esq.
               Gregory W. Werkheiser, Esq.

   (iii) Co-Counsel to the Official Committee of Unsecured
          Creditors
         Traub, Bonacquist & Fox LLP
         655 Third Avenue, 21st Floor
         New York, NY 10017
         Attn: Susan Balaschak, Esq.
               
             and

         Jaspan Schlesinger Hoffman LLP
         1201 North Orange St., 10th Floor
         Wilmington, Delaware 19801
         Attn: Frederick Rosner, Esq.

    (iv) Office of the United States Trustee
         J. Caleb Boggs Federal Building
         844 King Street, Suite 2313
         Lockbox 35
         Wilmington, Delaware 19801
         Attn: Mark S. Kenney, Esq.
      
Creditors' Ballots must be received before 5:00 p.m. on
September 18, 2002 by the Balloting Agent:

      Bankruptcy Management Corporation,   
      Attn: eToys Ballot Processing Department
      1330 East Franklin Avenue,
      El Segundo, California 90245.

eToys, Inc., now known as EBC I Inc, operated a web-based toy
retailer based in Los Angeles, California.  The Company filed a
Chapter 11 Petition on March 7, 2001 in the U.S. Bankruptcy
Court for the District of Delaware.  When the company filed for
protection from its creditors, it listed $416,932,000 in assets
and $285,018,000 in debt.  eToys sold its assets and name to toy
retailer KB Toys.  In an SEC filing on February 28, 2002, the
Debtors listed $32,091,918 in total assets and $192,396,702 in
total liabilities.  Robert J. Dehney, Esq., at Morris, Nichols,
Arsht & Tunnell and Howard Steinberg, Esq., at Irell & Manella
represent the Debtors as they wind-up their financial affairs.


FAIRFIELD MANUFACTURING: Opts Not to Pay Dividend on Preferreds
---------------------------------------------------------------
Dividend payments for the 11-1/4% Cumulative Exchangeable
Preferred Stock of Fairfield Manufacturing Company, Inc., are
scheduled to occur on March 15 and September 15 of each year in
accordance with the terms of the Certificate of Designations
relating to the Preferred Stock.  The Board of Directors of the
Company had not determined to pay a dividend with respect to the
Preferred Stock on September 15, 2002, and accordingly Fairfield
Manufacturing did pay a dividend on that date.  Dividends will
continue to accrue in accordance with the terms of the
Certificate of Designations relating to the Preferred Stock.

As reported in Troubled Company Reporter's Monday Edition,
Fairfield Manufacturing Company, Inc.'s net sales and profits
have been adversely affected by the general slowdown in the
economy and the recent recession, as well as a result of pricing
pressure from foreign competitors, principally due to the strong
U.S. dollar.  In addition, the Company's profitability has
suffered due to an unfavorable product mix, which is a result of
the Company's decision to take on new business at lower margins
to get through the economic downturn coupled with a decrease in
volume on higher margin sales.  The Company's current level of
sales and profits has strained its liquidity and capital
resources, and the present market conditions are expected to
continue for the foreseeable future.


FEDERAL-MOGUL: Court to Consider Sale of Wagner Business on Wed.
----------------------------------------------------------------
After due deliberation, Judge Newsome finds that Decoma's Letter
of Intent offers Federal-Mogul Corp. the highest and best price
for its Wagner Lighting Business.  The Court will convene a
hearing on September 25, 2002 to consider entry of an order
approving the sale of the Wagner Business.

As previously reported, the Debtors in January received an
indication of interest in the Wagner Original Equipment Lighting
Products, a division of the Lighting Group, from Decoma
International Inc.  The Wagner lighting business has 800
employees and produces primarily forward lighting modules.  It
is owned by Debtor Federal-Mogul Ignition Company.  Decoma is a
subsidiary of Canadian auto parts supplier Magna International.

The salient terms under the Letter of Intent include:

Assets:  A. Wagner OE assets including personal property at the:

            1. manufacturing facilities in Hampton, Virginia and
               Matamoros, Mexico;

            2. distribution center in Brownsville, Texas; and

            3. assembly operation in Toledo, Ohio.

         B. all contract rights of Federal-Mogul Ignition
            related to the Wagner Assets;

         C. the Intellectual property rights, with the exception
            of trademark rights and trade names of Federal-Mogul
            related to the Wagner Assets; and

         D. applicable rights to machinery and equipment located
            at the facilities;

         The Debtors will retain all cash, accounts receivable,
         trademarks, intercompany accounts receivable, and
         certain other assets.

Buyer:   Decoma International Inc. or its affiliate

Price:   $5,000,000 to $8,000,000

         The amount is subject to a dollar-to-dollar adjustment
         based on the value of certain inventory at the date of
         the closing of the transaction.  The Buyer will also
         assume certain liabilities.  When including the
         estimated $10,000,000 in inventory and $13,000,000 in
         retained net assets, the Debtors value Decoma's offer
         at $28,000,000 to $31,000,000.

         The Debtors anticipate setting forth the sale of the
         Wagner OE assets to Decoma in a definitive sale
         agreement that will consummate the transaction
         contemplated by the Letter of Intent.

Payment: via a wire transfer at the Closing

Deposit: $200,000

         The Buyer agrees that, upon the execution of the
         Definitive Agreement, and provided the LOI is not
         terminated, it will deliver the refundable deposit to
         an interest bearing trust account. (Federal-Mogul
         Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
         Service, Inc., 609/392-0900)

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


FIREBRAND FIN'L: Cash Resources Insufficient to Meet Obligations
----------------------------------------------------------------
Firebrand Financial Group Inc., is primarily engaged in
investment banking and asset management services and to a lesser
extent retail brokerage. The investment banking business
structures and manages private offerings for early stage
companies. The asset management business provides asset
management services to investors though Dalewood Associates,
Inc. which manages a venture capital fund that invests primarily
in early stage companies. The retail brokerage business charges
commissions for individual and institutional clients for
executing buy and sell orders of securities on national and
regional exchanges and in the over the counter markets. In
February 2001, the Company initiated a line of business through
the StreetWide Asset Recovery Group, which provides debt
recovery services to broker/dealers in the financial community.
In December 2001, the Company added an institutional sales group
at EarlyBirdCapital, Inc.

The Company's main operating subsidiaries are EarlyBird,
Dalewood Associates, Inc., and StreetWide Asset Recovery Group.
Firebrand holds a 63.6% ownership interest in
EarlyBirdCapital.com Inc., which is the parent company of
EarlyBird and Dalewood. In addition, Firebrand directly holds an
80% ownership interest in StreetWide. As a result, a minority
interest exists which appears in the Company's Consolidated
Statement of Financial Condition.

During fiscal 2001, the Company transferred the retail accounts
of its wholly owned GKN Securities Corp., full service brokerage
subsidiary to other broker/dealers, effectively terminating that
activity. In fiscal 2001, EarlyBirdCapital.com wrote off its
investment in Angeltips.com Inc., and recognized a loss of
$1,363,000, which investment had been initiated earlier
in the current fiscal year. The write off represented
management's assessment of the impairment to value reflected by
marked change in the environment for angel Web sites. In
December 2000, the Company's Board approved a plan to dispose of
its 53.5% interest in Shochet Holding Corp, whose principal
operation, Shochet Securities, Inc. (subsequently renamed SSI
Securities Inc.) provided discount retail brokerage services in
South Florida). On August 1, 2001 Shochet announced that SSI had
signed a definitive agreement to transfer substantially all of
its brokers, accounts and operating assets to another
independent broker/dealer, BlueStone Capital Corp.  This
transaction closed on August 31, 2001, leaving Shochet as a
public shell. On November 7, 2001 BlueStone announced that it
had in turn sold substantially all of its operating assets to
another independent broker/dealer, Sands Brothers & Co.,
Ltd.  As of October 1, 2001, EarlyBirdCapital.com sold its
ownership interest in EBCapital (Europe) AG. On March 12, 2002,
the Company announced that it had signed a definitive agreement
to sell all of its interest, except for 52,785 shares of common
stock, in Shochet to Sutter Opportunity Fund 2, LLC. This
transaction closed on March 28, 2002.

In the first quarter of fiscal 2002 the Company established
StreetWide. StreetWide is engaged by broker/dealers and other
financial institutions to collect debt due to them from prior
broker employees or from customers. The broker debts are
generated through brokers reneging on employment contracts or
brokers generating losses due to their respective firms. The
customer debt is usually generated through unsecured margin
loans on which the customers have refused to repay the firms.

The Company's operations for fiscal 2003 have consumed
substantial amounts of cash and have generated significant net
losses, which have reduced stockholders' equity to $2,280,000 at
July 31, 2002. As noted above, many of the product lines
previously offered by the Company have been discontinued. These
matters raise substantial doubt about the Company's ability to
continue as a going concern. The Company's cash resources remain
constrained and are not sufficient to meet existing contractual
obligations and liabilities.


GENESEE CORP: Board Declares Partial Liquidating Distribution
-------------------------------------------------------------
Genesee Corporation (Nasdaq: GENBB) announced that its Board of
Directors has declared a partial liquidating distribution of
$3.00 per share, payable on October 11, 2002 to Class A and
Class B shareholders of record on October 4, 2002.  The partial
liquidating distribution announced today is the fifth paid by
the Corporation pursuant to the plan of liquidation and
dissolution approved by the Corporation's shareholders in
October 2000 and brings the total of liquidating distributions
paid to date to $56.1 million. Distributions totaling $30.50 per
share were paid to shareholders on March 1, 2001, November 1,
2001, May 17, 2002 and August 26, 2002.

Taking into account the $5.00 per share liquidating distribution
paid on August 26, 2002 and the $3.00 per share liquidating
distribution payable October 11, 2002, the Corporation updated
its estimate of net assets in liquidation to $16.5 million, or
$9.87 per share, compared to net assets in liquidation at July
27, 2002 of $29.9 million, or $17.87 per share.


GENEVA STEEL: Michael J. Yonker Resigns from Board of Directors
---------------------------------------------------------------
Effective August 29, 2002, Michael J. Yonker resigned, citing
personal reasons, as a member of the Board of Directors of
Geneva Steel Holdings Corp., and all committees thereof.

Geneva Steel Holdings Corporation is a public holding company
which does not have any significant business activities other
than its reporting and compliance obligations in accordance with
state and federal laws. It owns 100% of Geneva Steel LLC and
100% of each of the Debtors, except CPICOR Management Company,
which is wholly owned by Vineyard Management Company. * Geneva
owns and operates an integrated steel mill in Vineyard, Utah.
The Company manufactures steel plate, hot-rolled coil, pipe and
slabs for sale primarily in the Western and Central United
States.

Geneval Steel Holdings filed for Chapter 11 reorganization on
Sept. 13, 2002, in the U.S. Bankruptcy Court for the District of
Utah in Salt Lake City.


GLENOIT CORPORATION: Plan Confirmation Hearing Set for Sept. 29
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Glenoit Corporation and its debtor-affiliates' Disclosure
Statement as containing "adequate information" within the
meaning of section 1125 of the Bankruptcy Code.  Accordingly,  
the Court obtained Bankruptcy Court authority to transmit the
Disclosure Statement to creditors to solicit votes to accept
their chapter 11 Plan.

The Court will convene a confirmation hearing on September 26,
2002 at 2:00 p.m., at the United States Courthouse, Court Room
742, 219 South Dearborn Street, Chicago, Illinois 60604.

At the Confirmation Hearing, the Court will consider only
timely-filed written objections received not later than
September 23, 2002 and served on:

     i) Counsel for the Debtors:
        Alston & Bird LLP
        Mathew Levin, Esq.
        Mark I. Duedall
        1201 West Peachtree Street
        Atlanta, Georgia 30309-3432
        Tel: 404 881-7000
        Fax: 404 881-7777
     
        Young Conaway Stargatt & Taylor LLP
        Joel A. Waite, Esq.
        Edmon Morton, Esq.
        The Brandywine Building
        1000 West Street
        17th Floor
        Wilmington, Delaware 19899
        Tel: 302 571-6600
        Fax: 302 571-1253
    
    ii) Counsel for the Unofficial Noteholders' Committee:
        Strook & Stroock & Lavan LLP
        Chris Donho, Esq.
        180 Maiden Lane
        New York, New York 10038-4982
        Tel: 212 806-6209
        Fax: 212 806-6006

        Pachulski, Stang, Ziehl, young & Jones
        Bruce Grohsgal, Esq.
        919 North Market Street
        16th Floor
        Wilmington, Delaware 19899-8705
        Tel: 302 652-4100
        Fax: 302 652-4400

   iii) Counsel for the Agent for the secured Lenders:
        Kramer Levin Naftalis & Frankel LLp
        David Feldman, Esq.
        919 Third Avenue
        New York, New York 10022-3852
        Tel: 212 715-9100
        Fax: 212 715-8000

        Klett Rooney Lieber & Schorling
        Teresa K.D. Currier
        Wilmignton, Delaware
        The Brandywine Building
        1000 West Street, Suite 1410
        Wilmington, Delaware 19801
        Tel: 302 552-4200
        Fax: 302 552-4295

    iv) The U.S. Trustee
        Don Beskrone
        Office of the United States Trustee
        J. Caleb Boggs Federal Building
        844 King Street, Room 2313, Lockbox 35
        Wilmington, Delaware 19801
        Tel: 302 573-6492
        Fax: 302 573-6497

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


GLOBAL CROSSING: Files Chapter 11 Plan & Disclosure Statement
-------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates filed on
September 16, 2002, a reorganization plan and disclosure
statement to emerge from bankruptcy based on the sale of a 61.5%
stake to Hutchison Whampoa Ltd. and Singapore Technologies
Telemedia Pte for $250,000,000.  Under the Plan, creditors will
divide about $300,000,000 in cash, $200,000,000 in new notes and
a 38.5% stake in New Global Crossing equity.

Full-text copies of the Debtors' Plan and Disclosure Statement
are available for free at:

      http://bankrupt.com/misc/1755_ReorganizationPlan.pdf

           and

      http://bankrupt.com/misc/1754_DisclosureStatement.pdf

The proposed capital structure for New Global Crossing,
including the post-Effective Date financing arrangements, is:

Instrument               Description             Comments
-------------------  -----------------  ------------------------
New Senior Secured   $200,000,000       Plan Securities
Notes

New Preferred Stock  18 million shares  Securities purchased by
                                        STT and Hutchison

New Common Stock     22 million shares  Plan Securities issued
                                        to creditors and
                                        purchased
                                        by the Investors.

Option or other      3.5 million shares Plan Securities issued
stock-based awards   reserved for       under Management
                      issuance          Incentive Plan

In addition, New Global Crossing expects to arrange a
$150,000,000 working capital facility in order to fund ongoing
working capital needs.

As of the Effective Date, New Global Crossing will adopt a new
management incentive plan for its officers and other members of
senior management.  This plan will include a pool of options to
purchase and/or stock-based grants of 3,478,261 shares of New
Common Stock (8% on a fully diluted basis).  The options will be
awarded by the board of directors of New Global Crossing based
on recommendations by the chief executive officer.

The Plan also provides for the establishment of the Estate
Representative on the Effective Date.  The Estate Representative
will be a committee of five individuals, two of whom will be
appointed by the holders of the Lender Claims, two of whom will
be appointed by the Creditors Committee and one of whom will be
appointed by agreement between the holders of the Lender Claims'
appointees and the Creditors Committee's appointees.  The Estate
Representative will take over the functions of concluding the
Chapter 11 cases commencing on the Effective Date.  In order to
facilitate the fulfillment of its responsibilities, it is
anticipated that the Estate Representative will have the benefit
of a "cooperation agreement" with New Global Crossing.  The
functions of the Estate Representative are:

Making
Distributions: The Lender Agent is responsible for receiving the
               consideration from the Debtors under the Plan and
               distributing such consideration to the holders of
               the Lender Claims in accordance with the Credit
               Agreement.  The indenture trustees perform this
               function for the various holders of the Debtors'
               public debt.  The Estate Representative will
               perform this role for the class of General
               Unsecured Claims (and for the class of
               Convenience Claims).

Serving as
Liquidating
Trustee:       The Plan establishes a Liquidating Trust, which
               will receive certain property on the Effective
               Date such as causes of action against third
               parties and (a portion of) certain funds located
               in a bank account in Bermuda.  The holders of
               certain claims, in turn, will own beneficial
               interests in the Liquidating Trust.  The
               interests in the Liquidating Trust will not be
               transferable. The Estate Representative will
               serve as the trustee for the Liquidating Trust or
               will designate a trustee for the Liquidating
               Trust.

Resolving
Disputed
Prepetition
Claims:        One of the key functions of the Estate
               Representative is to object to and resolve claims
               that remain disputed as of the Effective Date.  
               In this regard, the Estate Representative may
               object to claims, seek to estimate claims, and
               settle claims.

Bringing
Avoidance
Actions:       The Plan of Reorganization preserves certain
               avoidance actions that the Debtors may possess,
               such as the ability to recover funds from parties
               that received preferential transfers under
               Section 547 of the Bankruptcy Code or fraudulent
               transfers.  Although the Purchase Agreement
               limits the ability of the Estate Representative
               to bring these actions against certain current
               vendors of New Global Crossing, bringing
               avoidance actions is an important function of the
               Estate Representative.  The Estate Representative
               may also bring these avoidance actions in the
               context of a defense or counterclaim to claims
               asserted by creditors in the Chapter 11 cases.

Prosecution
of Causes of
Action:        Under the Plan, the Estate Representative will be
               responsible for prosecuting and settling the
               causes of action transferred to the Liquidating
               Trust.

Resolving
Disputed
Administrative
Claims:        Most Administrative Expense Claims will be paid
               by the Debtors in the ordinary course of
               business. Certain Administrative Expense Claims
               may remain unliquidated, contingent, disputed, or
               otherwise unpaid as of the Effective Date. The
               Debtors will set aside funds to cover these types
               of Administrative Expense Claims and the Estate
               Representative will object and or resolve the
               amounts owed, if any, to the holders of
               unliquidated, contingent, or disputed
               Administrative Expense Claims and otherwise pay
               them as they become due.

Mechanics:     The Estate Representative will have the authority
               to retain and compensate professionals to enable
               it to perform its functions.  Cash will be
               deposited with the Estate Representative to fund
               its expenses.  Any portion of those funds
               remaining after the Estate Representative has
               performed its functions must be transferred to
               New Global Crossing.

The Debtors not acquired by New Global Crossing will pay the
reasonable fees and expenses of each of the indenture trustees
for the publicly issued debt securities of GC Holdings and GCNA,
as mutually agreed or determined by the Bankruptcy Court,
including the reasonable fees and expenses of its professionals.

Although no liquidation analysis has yet been presented, the
Debtors believe that the value of any distributions to each
class of allowed claims in a Chapter 7 case, including all
secured claims, would be less than the value of distributions
under the Plan because distributions in a Chapter 7 case would
not occur for a substantial period of time.  In this regard,
there is a risk that distribution of the proceeds of the
liquidation could be delayed for one or more years after the
completion of the liquidation in order to resolve claims and
prepare for distributions.  In addition, recovery to creditors
may be decreased by any litigation engendered by the claims
allowance process.

The Court will convene a hearing on October 21, 2002 to consider
the adequacy of the Debtors' Disclosure Statement. (Global
Crossing Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GMAC 2000-C1: Fitch Affirms Low-B Ratings on 5 Classes of Notes
---------------------------------------------------------------
GMAC 2000-C1 commercial mortgage pass-through certificates,
series 2000-C1 have been affirmed by Fitch Ratings as follows:
$108.2 million class A-1, $537.2 million class A-2 and $863.1
million class X at 'AAA'; $37.4 million class B at 'AA'; $41.8
million class C at 'A'; $8.8 million class D at 'A-'; $30.8
million class E at 'BBB'; $15.4 million class F at 'BBB-'; $22.0
million class G at 'BB+'; $15.4 million class H at 'BB'; $6.6
million class J at 'BB-'; $8.8 million class K at 'B+'; $11.0
million class L at 'B'; $6.6 million class M at 'B-' and $6.6
million class N at 'CCC'. Fitch does not rate class O. The
rating affirmations follow Fitch Ratings' annual review of the
transaction, which closed in March 2000.

The rating affirmations reflect consistent loan performance and
minimal paydown of the pool certificate balance since issuance.
The comparable weighted average debt service coverage ratio
(DSCR) was 1.46 times as of year-end 2001, 1.44x as of YE 2000,
and 1.46x at issuance. The WADSCR was calculated using financial
statements collected by the master servicer, GMAC, for 91.9% of
the loans remaining in the pool. As of the August 2002
distribution date, the pool's aggregate certificate balance has
decreased by 1.9% since issuance to $863.2 million from $879.9
million. The pool is also well diversified by loan balance and
geographic location. In addition, approximately 92% of the pool
are collateralized by traditional property types.

Fitch is concerned with declining performance of the shadow
rated loan, Equity Inns Portfolio, representing 5.4% of the pool
balance. This portfolio was shadow rated investment grade by
Fitch at issuance. The portfolio experienced a decline in
revenue per available room (RevPar) as a result of the weakening
economy. The weighed average RevPar as of June 2002 ($56.55) is
down since the YE 2001 ($59.46) and issuance ($59.14), but it
has increased slightly since March 2002 ($54.22). The portfolio
is current with debt service and the Fitch stressed DSCR is
still considered strong at a 1.74x.

Seven loans (5.7%) reported YE 2001 DSCRs below 1.0x, they are
all current on debt service. In addition, twenty-five loans
(19.13%) are on the watchlist and four loans (2.36%) are in
special servicing. All watchlist loans are current. The special
servicer filed for foreclosure on two of the specially serviced
loans (0.55%); there are no known expected losses at this time.
The largest specially serviced loan (1.49%) is an industrial
property in Dearborn, MI. The borrower is current on debt
service, but is not making escrow payments.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


GRANITE BROADCASTING: Fails to Meet Nasdaq SmallCap Requirements
----------------------------------------------------------------
Granite Broadcasting Corporation (Nasdaq: GBTVK) has received a
letter from Nasdaq stating that its nonvoting common stock did
not comply with the $35 million market capitalization
requirement for continued listing on the Nasdaq SmallCap Market.
In order for Granite's common stock to continue to be listed on
the Nasdaq SmallCap Market, the market value of the common stock
must be $35 million or more for a minimum of ten consecutive
business days on or before October 9, 2002, and the Nasdaq Staff
must determine that Granite is in compliance with the rule. If
compliance cannot be demonstrated by October 9, 2002, the Nasdaq
Staff will provide written notification that the common stock
will be delisted and Granite will have the opportunity to
request a hearing before the Nasdaq Listing Qualification panel.

Granite Broadcasting Corporation is a group broadcasting company
founded in 1988 to acquire and manage network-affiliated
television stations and other media and communications-related
properties. The Company's goal is to identify and acquire
properties that management believes have the potential for
substantial long-term appreciation and to aggressively manage
such properties to improve their operating results. As of
December 31, 2001, the Company owned and operated nine network-
affiliated television stations: WTVH-TV, the CBS affiliate
serving Syracuse, New York; KSEE-TV, the NBC affiliate
serving Fresno-Visalia, California; WPTA-TV, the ABC
affiliate serving Fort Wayne, Indiana; WEEK-TV, the NBC
affiliate serving Peoria-Bloomington, Illinois; KBJR-TV, the NBC
affiliate serving Duluth, Minnesota and Superior, Wisconsin;
WKBW-TV, the ABC affiliate serving Buffalo, New York; WDWB-TV,
the WB Network affiliate serving Detroit, Michigan; KBWB-TV, the
WB Network affiliate serving San Francisco-Oakland-San Jose,
California; and KNTV, the NBC affiliate serving San Francisco-
Oakland-San Jose, California. The Company also owns a sixty
percent indirect interest in Channel 11 License, Inc., the
permittee of television station KRII, Channel 11, International
Falls, Minnesota. On April 30, 2002, the Company sold KNTV to
NBC.

As reported in Troubled Company Reporter's May 21, 2002 edition,
Ernst & Young LLP, New York City independent auditors for
Granite, stated, concerning their Auditors Report under date of
February 20, 2002:  "Since the date of completion of our audit
of the accompanying financial statements and initial issuance of
our report thereon dated February 20, 2002, which report
contained an explanatory paragraph regarding the Company's
ability to continue as a going concern, the Company, as
discussed in Note 17, has sold KNTV and the proceeds were used
to satisfy its obligations under its bank credit agreement, and
the Company entered into an amended and restated credit
agreement. Therefore, the conditions that raised substantial
doubt about whether the Company will continue as a going concern
no longer exist."


HOLLEY PERFORMANCE: S&P Keeping Watch After Interest Nonpayment
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its triple-'C'
corporate credit rating on Holley Performance Products Inc. on
CreditWatch with negative implications following the company's
failure to make its $9.2 million interest payment due September
16, 2002, on its 12.25% senior notes due 2007.

Bowling Green, Kentucky-based Holley, a specialty manufacturer
of replacement automotive parts, has total debt of about $180
million.

"Holley was unable to make the interest payment due to its weak
cash flow generation and very limited liquidity," said Standard
& Poor's analyst Martin King.

Holley had only $7 million available under its revolving credit
facility on July 30, 2002, and limited cash. The company's
equity sponsor, Kohlberg & Co., has committed to provide $15
million of capital to the company to enhance its liquidity. The
investment is conditioned upon bondholders consenting to
modifications of the bond indenture that would permit the
company to incur additional indebtedness. In addition, Holley is
seeking amendments to financial covenant requirements of its
credit facility.

The indenture governing the notes provides for a 30-day grace
period during which the company can make the interest payment
and avoid a default. If the consents are not received and the
additional investment is not made, Holley would have
insufficient liquidity to make the interest payment before the
expiration of the grace period, and the ratings would be lowered
to 'D'. If the investment is made, the ratings could be affirmed
or lowered based on Standard & Poor's assessment of Holley's
ability to meet its future debt service requirements when they
come due. Standard & Poor's will continue to monitor events as
they develop.

Holley Performance Products' 12.25% bonds due 2007 (HOLL07USR1),
DebtTraders reports, are trading at 60 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HOLL07USR1
for real-time bond pricing.


HORIZON MEDICAL: Files Form S-1/A with Unqualified Audit Opinion
----------------------------------------------------------------
Horizon Medical Products, Inc., (AMEX:HMP) announced the filing
of an amended Form S-1 Registration Statement with the
Securities and Exchange Commission on September 11, 2002,
registering for resale shares of common stock issued or issuable
in connection with the Company's March 2002 recapitalization.
This registration statement, as amended, contains an unqualified
audit opinion from the Company's independent auditors.

The recently announced sale of the Company's wholly owned
subsidiary Stepic Medical has resulted in sufficient funds to
allow the Company to extinguish the revolving portion of its
senior debt, resulting in the removal of a "going concern"
paragraph from the Company's year-end audit opinion contained in
its Form 10-K for the 2001 fiscal year.

Marshall B. Hunt, the Company's Chairman and CEO, stated, "The
recent divestiture of Stepic Medical, the pay down of our senior
debt and the receipt of an unqualified audit opinion have
dramatically improved our financial flexibility. This will allow
us to focus more keenly on our core proprietary vascular access
business, while improving our products and developing innovative
technology to drive future growth."

In a related event, Horizon Medical Products reported results
from its Annual Meeting of Shareholders, which was held Tuesday.
The Company announced that it received the required shareholder
approval of, among other things, proposals to (1) declassify its
Board of Directors, thereby reducing director terms from three
years to one year; (2) increase the total number of authorized
shares of the Company's common stock to 100 million shares from
50 million currently; and (3) issue up to 27 million shares of
common stock, which may be issued upon conversion of a portion
of the Company's convertible notes. Approval of these three
proposals by the Company's shareholders was required under the
note purchase agreement entered into in connection with the
recapitalization so as to avoid an event of default thereunder.

Mr. Hunt concluded, "With the overwhelming support of our
shareholders, our new financial flexibility and a superior
salesforce in place, we will continue to build out our Company
while focusing on shareholder value and long-term growth."

Horizon Medical Products, Inc., headquartered in Atlanta, is a
leader in the design, development, manufacture and/or sale of
technologically advanced, high value added percutaneous vascular
and spinal access systems. The Company's oncology product lines
include implantable ports, some of which feature VTX(TM)
technology; tunneled central venous catheters; and stem-cell
transplant catheters used primarily in cancer treatment
protocols. VTX(TM) Technology refers to the swirling blood flow
produced by a uniquely rounded reservoir design and tangential
outlet that substantially reduces thrombosis, or the buildup of
sludge from blood and drug byproducts, in the port reservoir and
reduces certain complications that require additional surgery.
The Company also markets a complete line of acute and chronic
dialysis catheters. More information can be found on the
Company's Web site at http://www.hmpvascular.com  

                         *    *    *

As reported in Troubled Company Reporter's August 28, 2002
edition, the auditor's opinion related to the consolidated
financial statements of Horizon Medical Products Inc., states
that there is substantial doubt as to the Company's ability to
continue as a going concern. Delivery of this opinion would have
triggered an Event of Default under the Company's Loan Agreement
and Note Purchase Agreement, as originally executed, because
both agreements require audited financial statements to be
delivered within 90 days of December 31, 2001 with an auditor's
opinion that does not contain such going concern language.
However, the default provisions relating to the audit opinion in
the Loan Agreement and the Note Purchase Agreement have been
waived.


ICG COMMS: Wants to Sell Maroon Circle Property to MRA Meridian
---------------------------------------------------------------
Brighton Shops LLC has backed out if its $1,700,000 deal.  Since
the time that the ICG Communications Debtors agreed to terms
with Brighton, the market value of the Maroon Circle Property
has been adversely affected by a continued decline in the Denver
office leasing market.  In addition, as a result of additional
diligence, potential purchasers have raised their estimates of
maintenance and tenancy costs associated with the Maroon Circle
Property, and have reduced their offers accordingly.

The Debtors' broker has confirmed that the market rent for
property similar to the Maroon Circle Property has dropped
significantly in the previous four months.  This decline has
reduced the broker's estimate of the market value of the Maroon
Circle Property.

With Brighton out of the picture, the Debtors now propose to
sell the Maroon Circle Property for $1,250,000 cash to the
highest remaining offeror, MRA Meridian Greens LLC.

The Maroon Circle Property is subject to a commercial note and
deed of trust dated September 2, 1994.  The Bank of Denver holds
the commercial note in the original principal amount of
$1,300,000, which is secured by the deed of trust.  The
outstanding principal balance of this note as of July 1, 2002 is
$928,666.16.  Pursuant to the Loan, the Bank of Denver holds a
properly perfected security interest in the Maroon Circle
Property.  Accordingly, upon sale of the Property, ICG Holdings
-- the Property's fee simple owner and the borrower under the
loan -- will utilize the sale proceeds to pay off the Bank of
Denver.

After payoff of the mortgage, the Debtors will net approximately
$321,333.84, less sales costs and related expenses, from the
sale of the Property.

The Debtors have evaluated the terms and benefits of the offer
to buy the Maroon Circle Property, as well as the benefits of
other alternatives, including retention of the property.  In
their business judgment, the Debtors have determined that this
offer and price represents the greatest overall benefit to their
estates.  The Debtors further note that:

(a) The property is a surplus asset, which requires weekly
    upkeep even though it is empty and provides no benefit
    to the Debtors;

(b) The Debtors' broker predicts that the commercial real
    estate market in Colorado will remain flat for some time
    and may deteriorate further given Colorado's current
    economic conditions; and

(c) Based on the offers received in 2002 and the estimates
    provided by the Debtors' broker, the offer is within the
    range that the market perceives for the Property.

The Debtors assert that neither the further marketing of the
Maroon Circle Property nor the submission of the Maroon Circle
Property to an auction process will produce any better offer.

The salient terms of the sale of this Property to MRA Meridian
are:

Purchase Price:  $1,250,000, paid in cash, with an
                 earnest money deposit of $85,000 paid
                 in escrow upon contract execution, and
                 an additional $35,000 paid upon
                 completion of an inspection period.

Assets Included: The proposed sale will include all of the
                 Debtors' right, title, and interest in the
                 Maroon Circle Property, as well as the UPS
                 system, emergency generator, Liebert cooling
                 units, certain furniture, fixtures and the
                 security system.

Closing:         The closing of the purchase and sale of the
                 Maroon Circle Property shall be held no later
                 than 15 days after the end of the inspection
                 period upon which the remaining $1,130,000 is
                 to be paid in cash.

Conditions
to Closing:      This purchase and sale is subject to
                 completion of customary due diligence. (ICG
                 Communications Bankruptcy News, Issue No. 30;
                 Bankruptcy Creditors' Service, Inc., 609/392-
                 0900)  

ICG Services Inc.'s 13.50% bonds due 2005 (ICGX05USR1) are
trading at 4.5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ICGX05USR1
for real-time bond pricing.


INTERFERON SCIENCES: Wants to Sell Certain Assets to Raise Funds
----------------------------------------------------------------
Interferon Sciences Inc., has experienced significant operating
losses since its inception in 1980. As of June 30, 2002, the
Company had an accumulated deficit of approximately $141.8
million. For the six months ended June 30, 2002 and the years
ended December 31, 2001, 2000 and 1999, the Company had losses
from operations of approximately $2.4 million, $7.8 million,
$4.5 million and $5.4 million, respectively.  Also, the Company
has limited liquid resources.  These factors raise substantial
doubt about the Company's ability to continue as a going
concern.  Although the Company received FDA approval in 1989 to
market ALFERON N Injection in the United States for the
treatment of certain  genital warts, it has had limited revenues
from the sale of ALFERON N Injection to date.  For the  Company
to operate profitably, the Company must sell significantly more
ALFERON N Injection.  Increased sales will depend primarily upon
the expansion of existing markets and/or successful  attainment
of FDA approval to market ALFERON N Injection for additional
indications, of which there can be no assurance. There can be no
assurance that sufficient quantities of ALFERON N Injection will
be sold to allow the Company to operate profitably.

At June 30, 2002, the Company had approximately $250,000 of cash
and cash equivalents, with which to support future operating
activities and to satisfy its financial obligations as they
become payable.

Based on the Company's estimates of revenues, expenses, the
timing of repayment of creditors, and levels of production,
management believed that the Company had sufficient resources to
enable the Company to continue operations until the end of
August 2002. However, actual results, especially with respect to
revenues, may differ materially from such estimate, and no
assurance can be given that additional funding will not be
required sooner than anticipated or that such additional
funding, whether from financial markets or collaborative or
other arrangements with corporate partners or from other
sources, will be available when needed or on terms acceptable to
the Company.

Management plans to pursue raising additional capital by either
(i) issuing securities in a private or public equity offering or
(ii) licensing the rights to its injectable, topical or oral
formulations  of natural alpha interferon. Management is seeking
to enter into mergers, joint  ventures or other collaborations
that could provide the additional resources necessary to advance
the Company's most valuable programs. There can be no
assurances, however, that the Company will be successful in
obtaining an adequate level of financing, on terms that are
acceptable to the Company, needed to continue operations.
Insufficient funds will require the Company to further delay,
scale back, or eliminate certain or all of its activities or to
license third parties to commercialize products or technologies
that the Company would otherwise seek to develop itself.

In addition, the Company is continuing its efforts to sell the
ALFERON N Injection business or license the rights to sell
ALFERON N Injection, and is in preliminary discussions with
several parties.  Due to the Company's precarious financial
position, if such a transaction cannot be completed in a
reasonably short period of time, the Company would reevaluate
its options which would include a  substantial curtailing or
complete cessation of the ALFERON N Injection business.


JP MORGAN: Fitch Assigns BB/V4 Fund Rating to HYDI - BB Trusts
--------------------------------------------------------------
Fitch Ratings assigns a 'BB/V4' bond fund credit and volatility
rating of to HYDI - BB TRUSTS HYDI - BB $94 million credit-
linked trust certificates due May 17, 2007 (HYDI - BB).

Bond funds rated in the 'BB' category meet speculative standards
with respect to the credit quality of the fund's underlying
assets. The weighted average default probability of the fund's
portfolio is consistent with the default probability of a 'BB'
rated fixed-income obligation.

Bond funds rated in the 'V4' category are considered to have
moderate market risk. Total returns perform consistently over
intermediate to long-term holding periods, but will exhibit some
variability over shorter periods due to greater exposure to
interest rates and changing market conditions. Bond fund
volatility ratings are assigned on a scale of 'V1' (least
volatile) through 'V10' (most volatile). Volatility ratings
reflect the relative sensitivity of the fund's total return and
market price to changes in interest rates and other market
conditions.

HYDI - BB is a credit-linked structure whereby the certificate
holders obtain $94 million of credit exposure to a portfolio of
U.S. high yield credits. The trust achieves credit exposure to
HYDI - BB via a $94 million basket of credit default swaps with
J.P. Morgan Chase Bank. The trust will use the certificate
proceeds to purchase a $94 million par value guaranteed
investment contract (GIC) issued by FGIC Capital Market
Services, Inc. and guaranteed by General Electric Capital
Corporation. The scheduled maturity date for HYDI - BB is May
17, 2007.

Any subsequent ratings assigned following the removal of a
reference entity from the trust's portfolio will only address
the ultimate receipt of interest and principal on the adjusted
outstanding certificate balance for the trust. The new rating
will be based on the average credit quality of the remaining un-
defaulted reference entities in the trust's then-current
portfolio and will not reflect the credit risk of any reference
entities removed from the trust's portfolio upon the occurrence
of a credit event.

As HYDI - BB approaches its maturity date, it is expected that
its market risk exposures will be reduced. Therefore, the
volatility rating assigned to HYDI - BB is expected to be lower
over time.

HYDI - BB will be held in trust by Wachovia Trust Company,
National Association, as trustee, while J.P. Morgan Chase Bank
will serve as grantor and swap counterparty.


KMART CORP: UST Names 2 New Fin'l Institutions Committee Members
----------------------------------------------------------------
Ira Bodenstein, United States Trustee for Region 11, adds two
new members to the Official Committee of Financial Institutions
appointed in Kmart's chapter 11 cases:

               (1) Third Avenue Value Fund
                   767 Third Avenue
                   New York, NY 10017
                   Attn: Brandon G. Stranzl

               (2) ESL Investments, Inc.
                   One Lafayette Place
                   Greenwich, CT 06830
                   Attn: Edward Lampert

Third Avenue and ESL Investments are bond and bank-debt traders,
which have accumulated more than $1,000,000,000 of Kmart's debts
in between them.  ESL Investments has invested on more than
$1,000,000,000 of Kmart debts while Third Avenue holds
$180,000,000 of Kmart bonds and trade claims.

Press reports suggest these big-name distressed-debt investors
are expected to stir things up in Kmart's reorganization and
want to see a rapid emergence from chapter 11. (Kmart Bankruptcy
News, Issue No. 33; Bankruptcy Creditors' Service, Inc.,
609/392-0900)

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


KNOLOGY BROADBAND: Files Prepack. Chapter 11 Petition in Georgia
----------------------------------------------------------------
On September 18, 2002, Knology, Inc., and its subsidiary,
Knology Broadband, Inc., announced that they were seeking court
approval of a consensual, prepackaged plan of reorganization of
Broadband.  Under the terms of the reorganization, all of the
existing 11-7/8% Senior Discount Notes due 2007 issued by
Broadband, amounting to $444.1 million principal amount at
maturity, would be exchanged for an aggregate of $193.5 million
of newly issued 12% Senior Notes due 2009 of Knology and shares
of newly authorized preferred stock of Knology representing
approximately 19.3% of Knology's outstanding stock, on an as-
converted basis, after giving effect to the reorganization.

As previously announced, Knology and Broadband had negotiated
the prepackaged plan with Broadband's bank lenders and certain
holders of the existing Broadband notes and solicited
acceptances of the prepackaged plan. The prepackaged plan was
accepted by 100% of those voting.  As a result, Knology and
Broadband believe they have received the acceptances necessary
to obtain the court's approval of the prepackaged plan.  
Broadband has filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code to obtain court approval of the plan and
thereby bind all creditors to the plan, even if they did not
vote on the plan.

"We appreciate the overwhelming support we received from our
major shareholders, our banks, and the vast majority of our
bondholders throughout this process.  Their endorsement has
enabled us to implement the final pieces of our reorganization
plan.  Regrettably, we have to go the prepackaged route versus
the consensual exchange route because of a few holdouts.  We are
excited, however, to bring closure to this process and
concentrate on growing our business," said Rodger Johnson,
Knology's President and Chief Executive Officer.

Broadband is the only debtor in this proceeding. Knology and the
operating subsidiaries of Knology and Broadband, including
Interstate Telephone Company, Valley Telephone Co., Inc.,
Knology of Knoxville, Inc., and the Broadband subsidiaries
operating in Augusta and Columbus, Georgia; Huntsville and
Montgomery, Alabama; Panama City, Florida; and Charleston, South
Carolina, are not involved in the proceeding.  During the
restructuring, Knology's operations will continue uninterrupted,
customer service will be unaffected, suppliers and other trade
creditors will be paid in full, and Knology's current management
team and employees will remain in place.

The securities discussed in this news release to be issued
pursuant to the prepackaged plan will not be and have not been
registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements.

A copy of the Offering Circular and Solicitation Statement of
Knology and Broadband describing the prepackaged plan was filed
with the Securities and Exchange Commission by Knology pursuant
to Rule 14a-12 of the Securities Exchange Act of 1934 on July
25, 2002.

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 the Company's Internet site at
http://www.knology.com


KNOLOGY BROADBAND: Case Summary & 20 Largest Unsec. Creditors
-------------------------------------------------------------
Debtor: Knology Broadband, Inc.
        1241 O.G. Skinner Drive
        West Point, Georgia 31833
        aka Knology Holdings, Inc.

Bankruptcy Case No.: 02-11514

Type of Business: Debtor provides services to certain of its
                  affiliates which are providers of cable TV,
                  telephone and high speed Internet access to
                  business and residential customers.

Chapter 11 Petition Date: September 18, 2002

Court: Northern District of Georgia (Newnan)

Judge: W. Homer Drake

Debtor's Counsel: Barbara Ellis-Monro, Esq.
                  Michael S. Haber, Esq.
                  Ronald E. Barab, Esq.
                  Smith, Gambrell & Russell, LLP
                  Suite 3100, Promenade II
                  1230 Peachtree Street, N.E.
                  Atlanta, GA 30309-3592
                  (404) 815-3500

Total Assets: $43,646,524

Total Debts: $473,814,416

Debtor's 20 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Bank of New York           Bond debt              $437,429,573
Indenture Trustee
101 Barclay Street
New York, NY 10286
Attn: Corporate Trust Dept.

Knology, Inc.              Unsecured note          $10,000,000
1241 O.G. Skinner Dr.
West Point, GA 31833

CB&T Card Service          Trade debt                 $114,022

Interstate Telephone       Company Utilities           $95,155

Air Travel King            Trade debt                  $34,113

Morrison, Cohen, Singer    Professional services       $26,768
& Weins

Jes Search Firm, Inc.      Trade debt                  $10,000

United Business Forms &    Trade debt                   $8,659
Supplies

Communicorp, Inc.          Trade debt                   $7,909

Softchoice                 Trade debt                   $7,733

JMS Trading                Trade debt                   $6,647

ITC Holding Co.            Trade debt                   $6,631

Dello Janitorial           Cleaning services            $6,152

White and Williams, LLP    Professional services        $5,817

Symon Communications       Trade debt                   $4,586

Netiq                      Trade debt                   $4,459

Cybernetics                Trade debt                   $4,335

Golden Gate Software, Inc. Trade debt                   $4,237

Blackhawk Inc.             Trade debt                   $3,865

Eagle Technology           Trade debt                   $3,506
Consultants


MARINER POST-ACUTE: Secures Final Decree Closing Units' Cases
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware enter a
final decree closing each now-administered Mariner Post-Acute
Network, Inc.-subsidiary chapter 11 cases.

The Court orders the Debtors to pay the United States Trustee
$59,500 in post-confirmation fees.  The disputed amount of any
fees that the U.S. Trustee contends is due will be added to the
escrow account previously established, for $734,500.  Payments
are due not later than September 18, 2002. (Mariner Bankruptcy
News, Issue No. 33; Bankruptcy Creditors' Service, Inc.,
609/392-0900)  


MARK NUTRITIONALS: Files for Chapter 11 Protection in Texas
-----------------------------------------------------------
Mark Nutritionals, Inc., the maker of Body Solutions, has filed
a Chapter 11 reorganization case in the U.S. Bankruptcy Court
for the Western District of Texas, San Antonio Division. The
company has asked for the protection of the Bankruptcy Court
while it develops an operating plan that will allow it to repay
its creditors and continue to thrive as a national business.

Mark Nutritionals' Body Solutions products enjoy strong brand
loyalty and sales in the retail market have grown rapidly in
recent months.  The Chapter 11 filing will allow Mark
Nutritionals, Inc., some breathing room in which to develop and
implement its business plan going forward.  The company has
hired an experienced reorganization specialist to run the
company and work out issues with its creditors, which include
the many radio stations with which it has advertised in the
past.

Management is confident that negotiations with media creditors
will be successful and allow Mark Nutritionals, Inc., to
continue direct and retail marketing of its Body Solutions
product, creating a win-win situation for the media companies,
as well as Mark Nutritionals, Inc.  Mark Nutritionals, Inc.'s
management believes therefore the company will achieve a
successful reorganization.


MARK NUTRITIONALS: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Mark Nutritionals, Inc.
        13311 San Pedro Avenue
        San Antonio, Texas 78216
        dba Body Solutions

Bankruptcy Case No.: 02-54469

Chapter 11 Petition Date: September 17, 2002

Court: Western District of Texas (San Antonio)

Judge: Leif M. Clark

Debtor's Counsel: William H. Oliver, Esq.
                  Pipkin, Oliver & Bradley, LLP
                  1020 N.E. Loop 410 Suite 810
                  San Antonio, TX 78209
                  (210) 820-0082
                  Fax : (210) 820-0077

Estimated Assets: $1 to $10 Million

Estimated Debts: $10 to $50 Million

Debtor's 19 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Aloe Commodities Intl.,                               $638,187
Inc.
2161 Hutton Drive, Suite 126
Carrollton, TX 75006
(972) 241-2451

American Factors Corp.                                $613,611
2323 Bryan Street, Suite 2121
Dallas, TX 75201
(214) 969-9090

Clear Channel Outdoor      Advertising Services     $1,164,172
15260 Ventura Boulevard
5th Floor
Sherman Oaks, CA 91403
(818) 377-5300

D&A Advertising, L.P.      Advertising Services     $5,906,472
13311 San Pedro
San Antonio, TX 78216
(210) 357-2779

Dickinson Wright, PLLC                                $250,654  
215 South Washington Square,
#200
Lansing, MI 48933
(517) 371-1730

HealthTech Development,                             $1,225,000
Inc.
4900 Broadway, Suite 700
San Antonio, TX 78209
(210) 601-6922

KFI-AM Radio               Advertising Services       $247,630

KIIS-FM                    Advertising Services       $246,700

KMEL-FM                    Advertising Services       $191,730

KYLD-FM                    Advertising Services       $195,094

Kenyon & Kenyon                                     $1,034,350
One Broadway, 12th Floor
New York, NY 10004
(212) 425-7200

MJ1 Properties                                      $2,363,279
13311 San Pedro
San Antonio, TX 78216
(210) 357-2779

Metro Networks                                      $2,068,970
2800 Post Oak Boulvard,
#4000
Houston, TX 77056
(713) 407-6000

Premiere Radio Networks,   Advertising Services       $389,000
Inc.
15260 Ventura Boulevard,
5th Floor
Sherman Oaks, CA 91403
(818) 377-5300

The Harrell Group                                     $199,852

Viacom Outdoor                                        $750,200
275 Madison Avenue
P.O. Box 33056
New York, NY 10016
(212) 599-1100

WCCO-AM                    Advertising Services       $311,110
625 Second Avenue South,
2nd Floor
Minneapolis, MN 55402
(612) 370-0611

WFAN-AM                    Advertising Services       $226,890

Westwood One Companies                              $2,845,600
7557 Rambler Road,
Suite 1462
Dallas, TX 75231
(214) 373-0022


MARTIN INDUSTRIES: Exploring Options Including Bankruptcy Filing
----------------------------------------------------------------
Martin Industries, Inc. (OTCBB:MTIN), a manufacturer of premium
gas fireplaces and home heating appliances, has suspended
manufacturing operations due to its lack of working capital. As
previously reported, the Company has been operating under severe
cash constraints and has been aggressively searching for
alternative financing. However, it has not been successful to
date and the lack of adequate funding has forced the Company to
suspend operations while it continues discussions with its
primary lender as to the options available, which include
securing additional financing, selling some or all of the
Company's manufacturing operations or liquidating the Company
and may entail filing a voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code. However, there is
no assurance that the Company will be able to resume or continue
operations given its lack of operating capital.

Martin Industries designs, manufactures and sells high-end, pre-
engineered gas and wood-burning fireplaces, decorative gas logs,
fireplace inserts and gas heaters and appliances for commercial
and residential new construction and renovation markets in the
U.S. Additional information on Martin Industries and its
products can be found at its Web site:
http://www.martinindustries.com


MCCRORY CORPORATION: Wants Court to Fix Claims Bar Dates
--------------------------------------------------------
McCrory Corporation and its debtor-affiliates want the U.S.
Bankruptcy Court for the District of Delaware to fix the
deadline by which creditors must file their proofs of claim or
be forever barred from asserting that claim.  The Debtors
propose that the Court set December 6, 2002 as the Bar Date for
administrative claims and January 6, 2003 as the General Bar
Date for prepetition claims.

The Debtors report that they are conducting going out of
business sales and liquidating other assets, including certain
unexpired nonresidential real property leases.  Currently, there
are several assets the Debtors are attempting to liquidate.

The Debtors intend to propose a liquidating chapter 11 plan
which necessitates resolving the issues surrounding the nature,
amount and status of all claims to be asserted against each of
the respective estates, including prepetition and administrative
claims.

The Debtors identify four types of administrative claims, which
are excluded in the Administrative Bar Date:

     i) claims of Debtors' and Committee's professionals
        retained by the estates during the pendency of these
        cases;

    ii) U.S. Trustee's claims;

   iii) claims whom scheduled by the Court to a later bar date;
        and

    iv) claims previously allowed by the Court.

Any entity whose lease or executory contract has not yet been
rejected by the Debtors should also file their proofs of claim
on or before December 6, 2002.

Exemptions to the General Prepetition Claims Bar Date are
proposed for:

     i) claims already properly filed with The Altman Group or
        the Clerk of Court;

    ii) claims listed in the Schedules as not contingent,
        unliquidated or disputed;

   iii) claims previously allowed by this Court; and

    iv) claims of Debtors against other Debtors.

Additionally, holders of issued and outstanding equity interests
in the Debtors need not file proofs of claim or interest solely
on account of any such equity interest.

All proofs of claim must be filed with the Court-approved Claims
Agent, Altman Group, on or before 4 p.m. of the Bar Date at:

          The Altman Group, Inc.
          60 East 42nd Street
          New York, NY 10165
          Attn: McCrory Claims Processing

McCrory Corporation filed for chapter 11 protection on September
10, 2001. Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl,
Young & Jones P.C., represents the Debtors


MED DIVERSIFIED: Names Boudreau and Simms to Board of Directors
---------------------------------------------------------------
Med Diversified, Inc. (PINK SHEETS: MDDV), a leading provider of
home and alternate site health care services, announced Richard
J. Boudreau and Gregory J. Simms have accepted and been
appointed to the Company's now five-member board of directors.
Boudreau, an expert in finance and capital restructuring, and
Simms, a veteran sales and marketing executive, will bring a
wealth of operational expertise to the Company.

Boudreau currently is the founding and managing partner of
Massachusetts-based Boudreau & Associates, LLC, a law firm
specializing in debt restructuring, as well as the founder and
principal of Cypress Capital Partners, LLC, which raises and
manages funds to purchase debt instruments. He is also an
officer and director of Boudreau & Associates Consulting, Inc.,
which assists numerous health care providers in the collection
of their outstanding claims. Previous to his current positions,
Boudreau founded and served as managing partner of the
Massachusetts-based law firm Boudreau, Mitchell & Davis for 12
years. He has a J.D. from New England School of Law and B.S.
degrees from Boston University and Massachusetts Maritime
Academy. He has been a member of the Massachusetts Bar since
1987.

"After conducting extensive due diligence on Med Diversified,"
said Boudreau, "I'm convinced the Company is poised to execute
on its strategic goals and objectives. I am looking forward to
working with its CEO Frank Magliochetti and the entire Med
Diversified management team to help the company attain a
leadership position within the home health services market."

Gregory J. Simms will fortify the board with his more than 20
years of experience in sales and marketing in the technology and
medical industries. He currently serves as vice president of
sales and marketing for Vision2Reality, a software company that
provides business performance management and strategy execution
solutions. In this role, he helped create the company's
signature software, known as Vision2Change, and he developed the
business plan to market and sell this software. Simms has an
M.B.A. from Northern Illinois University and a B.S. from Western
Illinois University.

"Med Diversified has established a solid reputation in the home
health sector," said Simms. "It's my opinion that the company is
well positioned to capitalize on its assets, and I eagerly
anticipate helping Med Diversified's management team chart a
path towards consistent sales growth."

Med Diversified operates companies in various segments within
health care industry, including pharmacy, home infusion, multi-
media, management, clinical respiratory services, home medical
equipment, home health services and other functions. For more
information, see http://www.meddiversified.com  

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.


MEDCOMSOFT INC: Secures $680K Private Placement Equity Financing
----------------------------------------------------------------
MedcomSoft Inc. (TSE - MSF) has closed approximately $680,000
Private Placement Equity financing. The Private Placement
consisted of the issue of common shares in the capital of
MedcomSoft Inc.  Each common share was issued at $0.18 per
share. These common shares have a four-month hold period from
the closing date after which they are freely tradable.

"The funds obtained from the financing will be used to supply
adequate training and software support to new and existing
customers, and to provide sufficient support to the growing US
sales and marketing activities conducted through an expanded and
improved distribution channel." said Dr. Sami Aita, Chairman and
Chief Executive Officer "After a successful cost reduction
effort, MedcomSoft is now entering a consolidation and
stabilization phase that will allow the company to slowly settle
its remaining liabilities and build the solid foundation for
expected future growth".

MedcomSoft expects to release its 2002 fiscal year end financial
statements along with its fiscal 2003 first quarter results
prior to the end of October 2002.

MedcomSoft Inc., designs, develops and markets software
solutions for healthcare providers that are changing the way the
healthcare industry captures, manages and exchanges patient
information. As a result of MedcomSoft innovations, physicians
and managed care organizations can now easily and securely build
and exchange complete, structured, and codified electronic
patient medical records.

                         *   *   *

As reported in the March 7, 2002 issue of the Troubled Company
Reporter, MedcomSoft Inc., (TSE - MSF) initiates steps to
substantially reduce of its cash burn rate through temporary
layoffs of a large number of employees in both of its Canadian
and US operations and the implementation of severe cost
reduction measures in an effort to maintain an adequate
operation in all departments, align expenditures to current sale
levels and preserve cash.

Faced by a sluggish market after the tragic events of September
11th and longer than expected sale cycles, and after the
completion of the latest release of its flagship product
MedcomSoft(R) Record version 1.2, MedcomSoft decided to tailor
its operation to current market conditions and eventually re-
grow the Company as sales start to materialize at a faster pace.  
In addition, MedcomSoft has engaged several financial advisors
and interested institutions in the United States to help secure
additional financing for future growth.  


METALS USA: Wants to Sell Indiana Property to Butler for $1.4MM
---------------------------------------------------------------
As part of the efforts to relieve themselves of the burden of
maintaining unprofitable assets, Metals USA, Inc., and its
debtor-affiliates ask the Court to approve the sale of
miscellaneous real and personal property to Butler Properties
LLC, free and clear of liens, claims and encumbrances.

The assets to be sold are in the Debtors' Butler, Indiana
facility, used as a metal service center for the processing of
metals.  The Debtors are not reaping any profits from the
operation of this facility.  Hence, the Debtors decided to sell
the facility.  The Debtors undertook these marketing activities:

1. Efforts to sell the Butler Indiana Property began over a year
   ago;

2. The Debtors engaged Colliers Bennett & Kahnweiler Inc. as the
   broker;

3. Sale of the Butler Indiana Property has been advertised
   extensively; and

4. The Broker has shown the Butler Indiana Property to several
   potential buyers.

Zack A. Clement, Esq., at Fulbright & Jaworski LLP, in Houston,
Texas, tells the Court that the Debtors and Butler first entered
into an Asset Purchase Agreement on October 1, 2001.  But Butler
terminated the first Agreement on March 4, 2002.  The parties
drafted a second Agreement on August 7, 2002, with these terms:

A. Real Property to be purchased:  The real property situated at
   4211 County Road 61 in Dekalb County, Indiana, together with
   certain fixtures, equipment, and other personal property;

B. Proposed Buyer:  Butler Properties, LLC, an Indiana limited
   liability company;

C. Purchase Price:  $1,425,000.  The Purchase Price consists of
   two components, which include:

    -- $1,350,000 for the real property and other fixtures,
       equipment and personal property, and

    -- $75,000 for the Stamco Slitter, which is a large item of
       equipment used in metal work;

D. Broker Commissions:  2.5% of the purchase price.

By this motion, the Debtors ask the Court to approve the sale of
the Indiana Assets to Butler. (Metals USA Bankruptcy News, Issue
No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)


METALS USA: Secures Court Approval of Disclosure Statement
----------------------------------------------------------
PR Newswire  Sept 18

Metals USA, Inc., a Houston-based metals processor and
distributor, announced that the disclosure statement with
respect to its plan of reorganization was approved by the
Bankruptcy Court at a hearing held on September 18, 2002.

J. Michael Kirksey, Metals USA's chairman, president and chief
executive officer, stated, "We are pleased our company is moving
forward with the solicitation of its plan of reorganization.  
Attractive financing options are in place which we believe will
put us in a position to emerge from bankruptcy at the end of
October or early November.  Looking forward, we intend to use
our customer-focused capabilities, strong management teams and
excellent financial position to provide outstanding customer
solutions.  We owe a great deal of gratitude to our dedicated
employees, as well as our loyal customers, suppliers, and
lenders for their support and commitment to Metals USA, Inc.,
throughout this reorganization process."

Metals USA, Inc., indicated that the approval by the Bankruptcy
Court of the disclosure statement and related balloting
procedures was a significant milestone in its efforts to emerge
from Chapter 11 bankruptcy protection. According to the Company,
the approval of the disclosure statement will allow the Company
to begin solicitation of its plan of reorganization.  The plan
of reorganization, as previously announced, provides for the
conversion of in excess of $380 million of Pre-Petition
indebtedness into equity reducing leverage and interest expense.  
The plan of reorganization contemplates that the Company will
emerge from bankruptcy on or about October 31, 2002.

Metals USA, Inc., is a leading metals processor and distributor
in North America.  Metals USA provides a wide range of products
and services in the Carbon Plates and Shapes, Flat-Rolled
Products, and Building Products markets. For more information,
visit the Company's Web site at http://www.metalsusa.com


MTS/TOWER RECORDS: Extends Closing Date for Japanese Asset Sale
---------------------------------------------------------------
On September 13, 2002, MTS, Incorporated, dba Tower Records,
entered into an agreement to extend the closing date of the sale
of its Japanese operations. This letter agreement amends the
stock purchase agreement concerning the sale of Tower's Japanese
operations, providing an extension of the closing deadline from
September 13, 2002 to September 27, 2002 in order to complete
all documentation related to the sale of Tower's Japanese
operations and the refinancing of Tower's senior credit
facility.

                         *    *    *

As previously reported, MTS, Incorporated dismissed Arthur
Andersen LLP as independent auditors for the Company. The
decision to dismiss Andersen and to seek new accountants was
approved by the Company's Board of Directors.   Effective July
31, 2002, the Company has engaged KPMG LLP to serve as the
Company's independent auditors.

MTS' balance sheet, at April 30, 2002, shows liabilities
exceeding assets by $8 million.  The Company lost $29 million on
$745 million of revenue in the nine-month period ending
April 30, 2002.  

MTS entered into a THIRD AMENDMENT AND WAIVER dated as of April
30, 2002 (this "Amendment"), to its Credit Agreement with a
consortium of lenders led by JPMorgan Chase Bank to relax
various financial covenants.  

MTS anticipates that net proceeds -- 16 billion yen -- from the
sale of its Japanese operations will be used to pay down a
significant portion of the Credit Facility and the balance of
the facility will be refinanced. On June 5, 2002, the Company
received a $125 million commitment letter from CIT
Group/Business Credit, Inc.


NETIA HOLDINGS: Appoints Wojciech Madalski as President and CEO
---------------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIAQ/NTIDQ, WSE: NET), Poland's
largest alternative provider of fixed-line telecommunications
services, announced that the Company's supervisory board
unanimously approved the appointment of Mr. Wojciech Madalski as
the new President of the Company's management board.

Mr. Kjell-Ove Blom, the acting president of the Company,
submitted his resignation notice from his post on the management
board.

As another important step in the restructuring process, the
supervisory board members selected Mr. Wojciech Madalski as
President and Chief Executive Officer of the Company.  Mr.
Madalski's track record and extensive international management
experience, especially concerning the restructuring of companies
and strengthening their market position, drove their selection.  
Mr. Madalski's task will be to continue the Company's
restructuring program.  Mr. Madalski thanks Mr. Kjell-Ove Blom,
who performed the function of acting president for the last 12
months, for his service to the Company during the past 5 years.

"I am very pleased that Wojciech Madalski has joined our
organization. I am convinced that under his management Netia
will continue to strengthen its position as the largest
alternative fixed-line telephony operator in Poland," commented
Morgan Ekberg, chairperson of the Company's supervisory board.

"Netia is a dynamically developing company with a huge potential
and strong market position. I look forward to completing the
difficult restructuring process and working towards continued
company growth for our shareholders," said Wojciech Madalski,
the new president of the Company's management board.

Netia Holdings SA's 13.125% bonds due 2009 (NETH09NLN1),
DebtTraders says, are trading at 18 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09NLN1
for real-time bond pricing.


NORTEL NETWORKS: Unefon Sues Company for $900 Million
-----------------------------------------------------
TV Azteca, S.A. de C.V. (NYSE: TZA)(BMV: TVAZTCA), one of the
two largest producers of Spanish language television programming
in the world, announced that Unefon, S.A. de C.V. (BMV: UNEFON),
a Mexican mobile telephony operator 46.5% owned by the company,
filed a lawsuit against Nortel Networks Limited, Unefon's major
equipment supplier and lender, for US$900 million.

As a consequence of the dispute, TV Azteca will postpone the
spin off of the company's investment in Unefon to allow Unefon
time to resolve its disagreements with Nortel.  TV Azteca
previously announced that its board of directors has approved
the spin off of the company's investment in Unefon, as a
distribution of Unefon shares to TV Azteca shareholders before
year-end.

Unefon has been seeking to restructure its debt and to negotiate
a procurement agreement with Nortel since the first quarter of
2002.  As part of this intention, last August, Unefon announced
that it did not make a US$6 million interest payment to Nortel.

Nortel responded with a notice of default to Unefon and warned
that a spin off would be interpreted as a change in the firm's
control, equivalent to an additional default.  Further, Nortel
decided to accelerate Unefon's indebtedness to Nortel, which
could result in a foreclosure of the guarantees of the loan,
comprised of Unefon's assets and concessions.

On September 9, Unefon filed a lawsuit for US$900 million
against Nortel alleging that Nortel has failed in its obligation
to syndicate portions of Unefon's indebtedness, which would have
triggered availability to Unefon of additional financing under
its agreement with Nortel.  The suit alleges that Nortel's
failure to "apply its best efforts" to syndicate the
indebtedness "in a diligent and timely manner" has resulted in
lost profits, a diminution in equity value, and has caused
Unefon to default as a consequence of Nortel's initial alleged
default.

"Had Unefon been able to make use of the entire US$618 million
credit facility as originally agreed with Nortel, Unefon would
certainly be in a different business position," said Pedro
Padilla, TV Azteca's Chief Executive Officer.  "We believe
Unefon's current financial situation is a direct consequence of
the lack of financing, and that its claims against Nortel have
merit."

"Therefore, we are pushing back our original schedule to give
Unefon the opportunity to resolve its negotiations or legal case
with Nortel.  We would prefer not to negatively impact Unefon by
granting a distribution of shares in a manner that could result
in a broader legal dispute with its main supplier and lender,"
added Mr. Padilla.

TV Azteca noted that it intends to submit the spin off for
approval by its shareholders in the future in the same manner
approved by its board of directors.

The company stated that, effective Tuesday, TV Azteca stops its
US$80 million financing support granted on behalf of Unefon in
July 2001.  As of August 30, Unefon had used US$48 million of
the guarantee.  TV Azteca will not allow Unefon to access the
remaining US$32 million of the facility until satisfactory
resolution of the dispute.

TV Azteca will continue to be subject to its commitment
regarding a US$35 million support to cover possible funding gaps
through December 2002, as agreed in year 2000 by TV Azteca and
Moises Saba. TV Azteca has not received any demand for payment
from Unefon under this commitment.

TV Azteca noted it does not have any direct obligations with
Nortel.

Even though TV Azteca believes the lawsuit of Unefon has merit,
it cannot give assurances that Unefon will win it, and in the
event of winning it, it cannot give assurances that the courts
will grant a judgment in the amount requested.

TV Azteca is one of the two largest producers of Spanish
language television programming in the world, operating two
national television networks in Mexico, Azteca 13 and Azteca 7,
through more than 300 owned and operated stations across the
country.  TV Azteca affiliates include Azteca America Network, a
new broadcast television network focused on the rapidly growing
US Hispanic; Unefon, a Mexican mobile telephony operator focused
on the mass market; and Todito.com, an Internet portal for North
American Spanish speakers.


OMNI USA: Fails to Maintain Nasdaq Continued Listing Standards
--------------------------------------------------------------
Omni USA, Inc., (Nasdaq: OUSA) has received notice from the
Nasdaq that the Company's securities have not met the minimum
market value of publicly held shares of $1,000,000 required
under Marketplace Rule 4310(C)(7).

On June 19, 2002, the Company was also notified by Nasdaq that
the Company's bid price for the Common Stock had closed below $1
per share, and therefore did not comply with Marketplace Rule
4310(C)(4).  Under Marketplace Rule 4310(C)(8)(B), on June 7,
2002, the Company was provided 90 days to regain compliance, or
until September 18, 2002.  The Company has submitted an Appeal
to the Nasdaq for a hearing by written submission which will
stay the delisting procedures pending the Appellate staff
determination.  The Company will submit its plan to comply with
the Marketplace Rules; however, the Company can not guaranty the
Nasdaq Panel determination.  The Company does not know when the
hearing will take place, nor does the Company know the
anticipated determination date.  The Company board of directors,
together with Company management, think the Company Common Stock
has been unduly affected by outside factors and that the present
Common Stock bid price reflects an excellent value and
appropriate use of Company resources.  

On September 10, 2002, the Company board of directors approved a
Stock Repurchase Plan for up to 500,000 shares of the Company's
Common Stock.  The Repurchase of Common Stock are to be market
purchases and will be made based on market price and available
resources.  The Repurchase Plan shall not otherwise impair the
Company's ability to fund operations or future operations.  The
Company will provide additional releases concerning the Nasdaq
determination as they become available.


OWENS CORNING: Gets OK to Execute New Minneapolis Facility Lease
----------------------------------------------------------------
Owens Corning and its debtor-affiliates obtained approval from
the Court to execute an Indenture of Lease with Lexington
Minneapolis LLC and a Development Agreement with Lexington and
Jones Development Company LLC.  The agreements are for the
construction and lease of a warehouse and distribution facility
that is to be constructed directly behind the Owens Corning's
shingles manufacturing plant in Minneapolis, Minnesota.

The Indenture of Lease gives Owens Corning the option to
purchase the property after five years:

      Lease Year         Exercise Date         Price
      ----------         -------------      ----------
         5                 11/1/07          $5,000,000
         6                 11/1/08           5,100,000
         7                 11/1/09           5,202,000
         8                 11/1/10           5,306,040
         9                 11/1/11           5,412,161
         10                11/1/12           5,520,404
         11                11/1/13           5,630,812
         12                11/1/14           5,743,428

Owens Corning is also obligated to make an offer, which may be
rejected, to purchase the Property if the plant is sold to an
unrelated third party, or if the plant is shutdown for more than
30 consecutive days without plans for restoring operations.  The
purchase price would then be:

      Lease Year         Exercise Date         Price
      ----------         -------------      ----------
         1                 11/1/03          $4,784,250
         2                 11/1/04           4,688,565
         3                 11/1/05           4,594,794
         4                 11/1/06           4,502,898
         5                 11/1/07           4,412,180
         6                 11/1/08           4,324,583
         7                 11/1/09           4,238,091
         8                 11/1/10           4,153,330
         9                 11/1/11           4,070,263
         10                11/1/12           3,988,858
         11                11/1/13           3,909,081
         12                11/1/14           3,830,899
(Owens Corning Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


PACIFIC GAS: Takes Steps to Block Reopening of Voting Period
------------------------------------------------------------
PG&E Corporation (NYSE: PCG) and Pacific Gas and Electric
Company today filed their opposition to a request by the
California Public Utilities Commission and the Official
Creditors' Committee to reopen the voting period and allow
creditors and equity holders to revote on competing plans of
reorganization in PG&E's bankruptcy proceeding.

Last week, the results of the voting by creditors were submitted
to the U.S. Bankruptcy Court, which showed PG&E's plan of
reorganization received overwhelming support from creditors, and
the CPUC's alternative plan did not. PG&E's plan received
approval in nine of the ten voting classes, while the CPUC's
alternative was approved by only one of the eight voting
classes, despite the Committee's recommendation that creditors
vote for both plans.

In its filing Tuesday, PG&E noted that the CPUC and Creditors'
Committee have provided no new financial projections or new
evidence from their financial advisors in support of the
modifications they propose to the CPUC's plan.  Nearly a month
after announcing their amended competing plan, the CPUC and
Committee still have not provided the financial details or
projections to support their modifications.  Simply stated,
there is "no there there" in the modifications.

PG&E, in its filing, also told the Bankruptcy Court that there
is no reason to have creditors and equity holders revote.  The
modifications made by the CPUC and the Creditors' Committee do
not meet the Bankruptcy Code requirements for a resolicitation.  
For example:

     -- The reorganization agreement entered into by the CPUC
and Creditors' Committee is not a material change because the
agreement is nearly identical to language in the CPUC's original
plan.

     -- Issuing preferred stock rather than common stock is not
a material change because the CPUC's original plan allowed
issuance of either common or preferred stock, and in any event,
Class 14 (Equity Interest Holders of PG&E) remains impaired by
the issuance of preferred under the amended plan.

     -- The Creditors' Committee already had recommended
creditors vote for both plans.  The Committee's indication of a
preference for the CPUC's plan is a change of opinion and not a
material change to the CPUC's plan under the Bankruptcy Code.

Even the CPUC and the Creditors' Committee have declared their
amended plan is, in the words of their counsel, "not a new plan.  
What this involves is really relatively modest changes to the
existing Commission plan."

The CPUC's failure to provide any detailed information on the
amended plan is particularly significant because it now
recognizes the need to raise an additional $2.7 billion to
resolve objections from mortgage bondholders, bringing the total
amount of debt the amended plan needs to raise to more than $6.5
billion.  The additional debt load further compounds the
financial feasibility problems with the CPUC's plan.

PG&E's filing also noted the CPUC and the Committee's amended
plan also backs away from their previous guarantee that the
securities will receive an investment-grade rating.  They have
changed their plan to say the securities will be "similar to"
investment-grade securities, but not necessarily investment
grade.

The Bankruptcy Court is scheduled to hear this issue on
September 20.


PACKETPORT.COM INC: Ability to Continue Operations Uncertain
------------------------------------------------------------
PacketPort.com, Inc., is engaged in the business of
manufacturing and marketing computer peripheral hardware and
software products for IP Telephony solutions and services that
are used for a wide range of telephony applications for the
Internet, telecommunications and other data networking
industries.

PacketPort.com incurred a net loss of $683,498 during the six
months ended July 31, 2002. In addition, cash available at July
31, 2002 is unable to support the Company's operations at
present levels through the completion of fiscal year 2003
without the Company raising more capital through public or
private financing or extending certain terms with certain
vendors. The Company does not know if additional financing will
be available or, if available, whether it will be available on
attractive terms. If the Company does raise more capital in the
future, it is probable that it will result in substantial
dilution to its stockholders. These factors create substantial
doubt as to the Company's ability to continue as a going
concern.

Management plans on obtaining sufficient working capital from
planned Private Placements in the near term, setting up
strategic partners to reduce future development costs and the
expansion of revenue earnings for customers utilizing its
existing products. The ability of the Company to continue as a
going concern is dependent upon the success of the capital
offering or alternative financing arrangements.

The Company recorded a net loss of $309,791, on revenues of
$23,226, for the three months ended July 31, 2002 as compared to
a net loss of $862,022 on revenues of $6,935 for the comparable
period ended July 31, 2001. Additionally, the Company recorded a
net loss of $683,498, on revenues of $60,110, for the six months
ended July 31, 2002 as compared to a net loss of $1,913,508 on
revenues of $13,250 for the comparable period ended July 31,
2001.

At July 31, 2002, the Company had a working capital deficit of
$761,568 as compared to a working capital deficit of $693,521 at
January 31, 2002. At July 31, 2002, the Company had cash and
cash equivalents of approximately $1,548. Cash used in operating
activities of $309,745 for the six months ended July 31, 2002
primarily consisted of the net loss, offset by non-cash charges
for depreciation, amortization and common stock issued for
services. The Company also invested $112,989 in software and
licenses. Cash used in operating and in investing activities was
financed by Microphase Corporation, which advanced the Company
an additional $424,244 during the six month period.

The Company's ability to continue as a going concern and its
future success is dependent upon its ability to raise capital in
the near term to: (1) satisfy its current obligations, (2)
continue its development of products, and (3) successfully
implement its plans to market the products through co-venturers
and commissioned sales representatives.

Management of the Company does expect that, in connection with
the anticipated growth of the Company's products, it will be
able to generate some increase in revenue and raise additional
funds through the public or private offering of its common stock
or otherwise obtain financing. However, there can be no
assurance that the Company's efforts to attain profitability
will be successful, that the Company will generate sufficient
revenue to provide positive cash flows from operations or that
sufficient capital will be available, when required, to permit
the Company to realize its plans.

Management expects operating losses and negative cash flow for
the foreseeable future as PacketPort.com must invest in
marketing and promotional activities, acquisitions, technology
and operating systems.

There is no certainty when, and if, PacketPort.com will achieve
sufficient revenues in relation to expenses to become
profitable.


PLAINS ALL AMERICAN: S&P Rates $150MM Sr. Unsecured Notes at BB
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its double-'B'
rating to Plains All American Pipeline L.P.'s $150 million
senior unsecured notes due 2012. In accordance with Standard &
Poor's criteria on notching for unsecured debt, the notes are
rated one notch lower than Plains All American's corporate
credit rating because of the substantial amount of secured bank
debt the partnership has outstanding.

Ratings on Plains All American remain on CreditWatch, where they
were placed with positive implications on June 27, 2002,
following the announcement by its 29% owner Plains Resources
Inc. of its plans to restructure.

Houston, Texas-based Plains All American has about $600 million
in outstanding debt.

Plains Resources intends to spin off substantially all of its
oil and natural gas exploration and production assets into a new
entity, Plains Exploration & Production Co. L.P.

"Historically, because Standard & Poor's viewed Plains Resources
as having effective control of Plains All American, ratings on
Plains All American were constrained to a level no higher than
one notch above the ratings on Plains Resources due to concern
that Plains Resources could voluntarily file Plains All American
into bankruptcy if needed," said Standard & Poor's credit
analyst John Thieroff.

Following the spin-off, the constraint on Plains All American's
ratings will be lifted because it will no longer be effectively
controlled by the surviving, lower-rated oil and gas E&P entity.
Once freed of this limitation, ratings on Plains All American
will likely be raised to investment-grade.

The CreditWatch listing will be resolved when the spin-off of
Plains Exploration & Production is complete.


PRECISION SPECIALTY: Plan Exclusivity Extended Until November 27
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Precision Specialty Metals, Inc., obtained an
extension of its exclusive periods.  The Court gives the
Debtors, until November 27, 2002, the exclusive right to file
its plan of reorganization and until January 25, 2003 to solicit
acceptances of that Plan.

Precision Specialty Metals is a specialty steel conversion mill
engaged in re-rolling, slitting, cutting and polishing stainless
steel and high-performance alloy hot band into standard or
customized finished thin-gauge strip and sheet product. The
Company filed for Chapter 11 protection on June 16, 2001 in the
U.S. Bankruptcy Court for the District of Delaware. Laura Davis
Jones, Esq., at Pachulski, Stang, Ziebl, Young & Jones P.C.,
represents the Debtor on its restructuring efforts.


RESOURCE AMERICA: S&P Rates Proposed $125 Mil. Senior Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its single-'B'
senior unsecured rating to Philadelphia, Pennsylvania-based,
Resource America Inc.'s proposed $125 million senior notes due
2010. At the same time, Standard & Poor's affirmed all ratings
on asset-management company Resource America. The outlook is
stable.

"Resource America will have approximately $160 million of debt
outstanding, proforma for the new notes and the completed tender
offer for its $65.6 million senior notes due 2004," noted
Standard & Poor's credit analyst Paul B. Harvey.

The ratings on Resource America reflect its small reserve base
(129 billion cubic feet equivalent (bcfe)) and a high debt level
relative to earnings (approximately 4 times EBITDA). This is
offset by the earnings support provided by recurring earnings
and a commitment to maintain a strong cash position. Resource
America is a proprietary asset management company with interests
in Appalachian natural gas and oil fields, real estate, and
leasing. Of these, the most important is the oil and gas
operations, which contributed roughly 77% of EBITDA for fiscal
year-end 2001.

Resource America's oil and gas operations are conducted through
investment partnerships, which typically reduce the company's
portion of drilling costs to an average 25% interest. Once
drilling is completed, Resource America receives the benefit of
an extra 7% interest in the partnership (33% in total), which
yields a 29% interest in the well's production. Resource
America's drilling program features low-risk wells (98% success
rate) and reliably producing properties with an average reserve
life of 17.5 years.

At 129 bcfe, Resource America's reserve pool is small; but good
success rates plus slow and steady production, averaging 6.6
bcfe per year, should help maintain reserve and production
levels. Finding and development costs net to Resource America
are a low, $0.48 per million cubic feet equivalent (mcfe),
reflecting the partnership structure of the company's drilling
program, fees received for drilling the well, and reimbursements
for general and administrative expenses. However, before these
adjustments, gross F&D costs would have averaged a very high
$1.49 per mcfe.

The stable outlook reflects the moderate debt leverage and the
support of recurring income, dividends, and service fees, to be
maintained by the company. These strengths are offset by high
debt relative to earnings that limits future improvements on the
rating.


SAFETY-KLEEN: Restructuring Canadian Loan to SK Services Unit
-------------------------------------------------------------
Safety-Kleen Corp., and its debtor-affiliates obtained the
Court's authority to restructure and reclassify the secured
obligations of Safety-Kleen Services Inc., under the Canadian
loan facilities established or contemplated under that certain
amended and restated credit agreement dated April 3, 1998, in
aid of consummation of the sale of substantially all of the
assets and certain equity interests of the Debtors' Chemical
Services Division to Clean Harbors, Inc.

The Court permits Safety-Kleen Services Inc., to assume all
liability of the Canadian Borrower to the Canadian Lenders under
the Prepetition Credit Agreement and to TD Canada under the
Canadian Operating Facility.  The Court awards each of the
Lenders its pro rata share of an administrative claim against
Services and the other Debtors in the amount of C$71,892,450.07,
plus interest of C$16,638,979.

                              *    *    *

                     The Proposed Restructuring

As a requirement to consummate the Sale, Services must satisfy
the Canadian Release Condition by restructuring the outstanding
obligations of SK Ltd. under the Canadian Facility so as to
relieve SK Ltd., of its obligations thereunder.

To satisfy the Canadian Release Condition, the Debtors propose
that:

     (1) Services would become the primary obligor to repay
         the obligations under the Canadian Facility in
         substitution for SK Ltd. -- obligations for which
         Services is already liable, and

     (2) these obligations would be allowed as an
         administrative expense claim, provided that the
         administrative expense claim would be satisfied
         solely through a distribution to the Lenders under
         the Canadian Facility of the same form of
         consideration that would be distributed to the
         Lenders under the U.S. Facility. (Safety-Kleen
         Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
         Service, Inc., 609/392-0900)    


SHENANDOAH RESOURCES: Canadian Court Grants Receivership Status
---------------------------------------------------------------
Shenandoah Resources Ltd., (CDNX: "SNN") has been placed into
receivership effective September 17, 2002 pursuant to a consent
order of the Court of Queen's Bench of Alberta. Effective
September 17, all directors and officers of Shenandoah have
resigned.


TI AUTOMOTIVE: S&P Assigns BB- Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services assigned its single-'B'
rating to TI Automotive Finance plc's proposed $215 million
senior unsecured notes due 2012.

In addition, Standard & Poor's assigned its double-'B'-minus
corporate credit rating to the company's parent, U.K.-based
automotive components supplier TI Automotive Limited, which will
guarantee the notes on a senior subordinated basis. TI
Automotive has total debt of about $1 billion. The outlook is
stable.

"The ratings reflect TI Automotive's fair business profile as a
leading provider of automotive fuel storage, carrying, and
delivery systems, and its fair degree of revenue diversity,"
said Standard & Poor's analyst Martin King.

The business profile is constrained by the highly competitive
and cyclical nature of the global automotive supply industry.
The ratings also incorporate TI Automotive's weak financial
profile, characterized by a heavy debt load and thin cash flow
protection. Proceeds from the new debt issue will be used to
repay existing debt.

TI Automotive is the largest provider of fuel and brake lines in
North American and Europe, and is a leading provider of plastic
fuel tanks, fuel pumps and modules, and powertrain components.
TI Automotive has developed technologically innovative products
to meet increasingly stringent design and regulatory
requirements. The company is the only global vertically
integrated supplier of fuel storage and delivery systems,
providing all components between the fuel cap and engine.

TI Automotive received amendments to its 2002 bank financial
covenants. Concurrent with the proposed debt offering, future
financial covenant requirements will be loosened to enhance
flexibility. TI Automotive is expected to make small niche
acquisitions to enhance its product or manufacturing
capabilities and to increase its market positions and geographic
scope, which may limit future debt reduction.  


TRANSACTION SYSTEMS: Harlan F. Seymour Named New Board Chairman
---------------------------------------------------------------
Transaction Systems Architects, Inc., (Nasdaq:TSAIE) a leading
global provider of enterprise e-payments and e-commerce
solutions, announced that Harlan F. Seymour has been appointed
chairman of its board of directors.  Mr. Seymour has been a TSA
board member since May 15, 2002.

Mr. Seymour has held a wide range of senior executive positions
in the health care and information services industries. He is
currently active investing in business through his Limited
Liability Corporation, HFS LLC. Prior to starting HFS, Mr.
Seymour served on the board of directors and as executive vice
president of ENVOY Corporation, a provider of EDI and
transaction processing services to participants in the health
care market. Prior to his work with ENVOY, Mr. Seymour held
various senior management positions with Trigon Blue Cross Blue
Shield of Virginia, First Financial Management Corporation and
DSI Corporation.  Mr. Seymour holds a B.A. in Mathematics from
the University of Missouri and a Masters of Business
Administration from the Keller Graduate School of Management.

"I am excited to take on this role with TSA," said Mr. Seymour.
"The company has a wonderful franchise in the e-payments
software space, an enviable customer base and tremendous
potential for the future. I look forward to working with the
board and management team to make sure we fulfill that potential
on behalf of all of our stakeholders."

TSA's software facilitates electronic payments by providing
consumers and companies access to their money. Its products are
used to process transactions involving credit cards, debit
cards, secure electronic commerce, mobile commerce, smart cards,
secure electronic document delivery and payment, checks, high-
value money transfers, bulk payment clearing and settlement, and
enterprise e-infrastructure. TSA's solutions are used on more
than 1,750 product systems in 71 countries on six continents.

                         *    *    *

As reported in Troubled Company Reporter's August 19, 2002
edition, Transaction Systems Architects received a letter from
The Nasdaq Stock Market, Inc., informing the Company that it is
in violation of NASDAQ Marketplace Rule 4310(C)(14), which
requires the Company to obtain a review of interim financial
information from the Company's independent auditors.

The Company announced on August 14, 2002 that the Company's
auditors have advised them they will not be able to complete
their review of the Company's financial statements for the three
and nine-month periods ended June 30, 2002 until its re-audit of
fiscal years 1999, 2000 and 2001 is complete. The re-audit
process has begun and the Company is working with KPMG LLP to
complete this process.

While the NASDAQ letter points out that a continuation of this
violation could subject the Company's securities to delisting,
the Company will request a hearing on this matter.


TYCO: Files Form 8-K Report re Ex-Management's Improper Conduct
---------------------------------------------------------------    
Tyco International Ltd., (NYSE: TYC, BSX: TYC, LSE: TYI) filed a
Form 8-K report with the Securities and Exchange Commission on
its investigation, review and analysis of transactions between
and among the Company and its subsidiaries and the Company's
officers and directors, including the improper conduct of its
former Chief Executive Officer, former Chief Financial Officer
and former Chief Corporate Counsel.

The Company said the improper conduct and the related misuse of
Company funds by its former management does not require material
adjustments to Tyco's prior financial statements because the
expenditure of these funds, while unauthorized, has already been
expensed in its financial statements.

The Company also said the improper conduct of its former
management has damaged Tyco.  The amount of money improperly
diverted by Tyco's former senior executives from the Company to
themselves is very small in comparison with Tyco's total
revenues and profits, but it is very large by any other relevant
comparison; and the extent of the former executives' misconduct
has harmed Tyco's reputation and credibility with investors,
lenders and others.  In the interest of restoring confidence in
the Company, the Company's disclosures in the 8-K filing go
beyond what the law requires, or what would ordinarily be
disclosed in such a filing.

The Company said that this pattern of improper and illegal
activity occurred for at least five years prior to June 3, 2002,
when former CEO L. Dennis Kozlowski resigned, and that this
activity was concealed from the Board and its relevant
committees.  The nature of such conduct, to the extent it is now
known by Tyco, is described in the filing.  The areas covered in
this filing include:
    
    -- Relocation Programs, under which certain executive
       officers, including Mr. Kozlowski, former CFO Mark Swartz
       and former Chief Corporate Counsel Mark Belnick used the
       Company's relocation program to take non-qualifying
       interest-free loans and unauthorized benefits that were
       not generally available to all salaried employees
       affected by relocations.

       Under the program, Mr. Kozlowski improperly borrowed
       approximately $61,690,628 in non-qualifying relocation
       loans to purchase real estate and other properties, Mr.
       Swartz borrowed approximately $33,097,925 and Mr. Belnick
       borrowed approximately $14,635,597.

    -- The "TyCom Bonus" Misappropriation, in which Mr.
       Kozlowski caused Tyco to pay a special, unapproved bonus
       to 51 employees who had relocation loans with the
       Company.  The bonus was calculated to forgive the     
       relocation loans of 51 executives and employees, totaling
       $56,415,037, and to pay compensation sufficient to
       discharge all of the tax liability due as a result of the
       forgiveness of those loans.  This action was purportedly
       related to the successful completion of the TyCom Initial
       Public Offering.  The total gross wages paid by the
       Company in this mortgage forgiveness program were
       $95,962,000, of which amount Mr. Kozlowski received
       $32,976,000 and Mr. Swartz received $16,611,000.  These
       benefits were not approved by, or disclosed to, the
       Compensation Committee or the Board of Directors.  
       However, the employees who received these bonuses were
       led by Mr. Kozlowski to believe that they were part of a
       Board-approved program.

    -- The "ADT Automotive Bonus" Misappropriations, in which
       Mr. Kozlowski authorized Tyco to pay cash, award
       restricted shares of Tyco common stock and purportedly
       forgive additional loans and make related tax  payments
       to approximately 17 Tyco officers and employees -- even
       though the relocation loans of each of these 17 persons
       had already been paid in full.  Mr. Kozlowski and Mr.     
       Swartz received cash bonuses, restricted shares and
       "relocation" benefits valued approximately $25,566,610
       and $12,844,632 respectively.  These benefits were not
       approved by or disclosed to the Compensation Committee or
       the Board of Directors.  As with the TyCom unauthorized
       bonus, other senior executives were misled by Mr.
       Kozlowski to believe that the ADT Automotive award of
       restricted shares was a Board-approved program.

    -- The Key Employee Loan (KEL) Program, in which certain
       executive officers borrowed money for purposes other than
       the payment of taxes due upon the vesting of restricted
       shares, or borrowed in excess of the maximum amount they
       were permitted under the program.  Mr. Kozlowski was, by
       a large margin, the greatest abuser of this program.  By
       the end of 2001, Mr. Kozlowski had taken over 200 KEL
       loans -- some for millions of dollars and some as small
       as $100 -- and his total borrowings over that time
       exceeded $250 million.  Approximately 90% of Mr.
       Kozlowski's KEL loans were non-program loans, which he
       used to fund his personal lifestyle, including
       speculating in real estate, acquisition of antiques and
       furnishings for his properties (including properties
       purchased with unauthorized "relocation loans") and the
       purchase and maintenance of his yacht.  Mr. Swartz also
       borrowed millions in non-program loans.  Like Mr.
       Kozlowski, Mr. Swartz used those unauthorized loans to
       purchase, develop and speculate in real estate; to fund
       investments in various business ventures and
       partnerships; and for miscellaneous personal uses having
       nothing to do with the ownership of Tyco stock.  Tyco is
       currently evaluating the KEL program in light of recent
       enactment of a prohibition upon loans by public companies
       to directors and executive officers.

    -- Attempted Unauthorized Credits to Key Employee Loan
       Accounts, in which Mr. Kozlowki and Mr. Swartz attempted
       to erase an outstanding $25 million KEL indebtedness to
       Mr. Kozlowski and $12.5 million in KEL indebtedness to
       Mr. Swartz without the knowledge or approval of the
       Compensation Committee.  Mr. Kozlowski, through his
       attorneys, has acknowledged to Tyco that he sought no
       approvals for these credits and that, if they were
       entered as a credit to his KEL account, it was done so
       improperly, and that he is therefore obligated to repay
       these amounts to Tyco.  Mr. Swartz has also agreed to
       repay his forgiven indebtedness with interest and has
       repaid most of the amounts.  Tyco has reversed these
       entries and a related unauthorized entry, thereby
       increasing the outstanding balances for the key employee
       loan accounts of each individual involved.

    -- Executive Compensation, including authorized and
       unauthorized compensation to Mr. Belnick, which totaled
       $34,331,679 for the years 1999-2001.  Belnick's
       compensation resulted from a secret agreement that tied
       Mr. Belnick's compensation to Mr. Kozlowski's
       compensation, thereby giving Mr. Belnick an undisclosed
       incentive to aid and facilitate Mr. Kozlowski's improper
       diversion of Company funds to Mr. Kozlowski's personal
       benefit.  The undisclosed terms of Messrs. Kozlowski's
       and Belnick's agreement were incorporated in a letter
       dated August 19, 1998 and signed by Mr. Kozlowski.  Mr.
       Kozlowski and Mr. Belnick agreed that the letter would
       not be disclosed to the Tyco Board, the Board's
       Compensation Committee or the Tyco Human Resources
       department.  Mr. Belnick did, however, keep a copy of the
       undisclosed agreement in his personal office.

    -- Perquisites in excess of $50,000 per year for Mr.
       Kozlowski and Mr. Swartz.  These perquisites were
       required to be reported in a proxy to the extent they
       exceeded $50,000.  However, these amounts were not
       reported in the proxy because Mr. Kozlowski and Mr.
       Swartz represented that they would reimburse the Company
       for amounts in excess of $50,000. However, in most cases
       Messrs. Kozlowski and Swartz failed to reimburse
       the Company for all perquisites in excess of $50,000.  
       Mr. Kozlowski also caused Tyco to make available to him
       various properties that the Company owned for his
       purported business use.  Tyco has now discovered that Mr.
       Kozlowski periodically made personal use of properties in
       North Hampton, NH, Boca Raton, FL, New York City and New
       Castle, NH.

    -- Self-Dealing Transactions and Other Misuses of Corporate
       Trust, including Tyco properties purchased by or from Mr.
       Kozlowski without disclosure to or authorization by the
       Compensation Committee.  For example, Mr. Kozlowski and
       others caused a Tyco subsidiary to purchase property in
       Rye, New Hampshire from Mr. Kozlowski on July 6, 2000 for
       $4,500,000.  After an appraisal in March 2002 valued the
       property at $1,500,000, Tyco wrote down the carrying
       value of the property to the appraised value and charged
       Mr. Kozlowski's $3,049,576 overpayment to expense.  Mr.
       Kozlowski also used millions of dollars of Company funds
       to pay for his other personal interests and activities,
       including a $700,000 investment in the film "Endurance";
       more than $1 million for an extravagant birthday party
       celebration for his wife in Sardinia; over $1 million in
       undocumented business expenses, including a private  
       venture; jewelry, clothing, flowers, club membership dues
       and wine; and an undocumented $110,000 charge for the
       purported corporate use of Mr. Kozlowski's personal
       yacht, "Endeavour."  Mr. Kozlowski also tampered with
       evidence under subpoena, purchased a New York City
       apartment at its depreciated rather than its market
       value, and took personal credit for at least $43 million
       in donations from Tyco to charitable organizations.

    -- Information Concerning Other Transactions Between Tyco
       and its Directors, which includes detail about
       transactions between the Company and certain directors.
   
                Actions Taken by the Company

The 8-K also includes previous announcements of actions taken
by Tyco to address the issues the Company has been facing.  
These include:

    -- A lawsuit against Mr. Kozlowski for breach of fiduciary
       duties, fraud and other wrongful conduct.  This suit
       seeks to recover actual and consequential damages,
       including misappropriated or otherwise unauthorized
       payments fraudulently made at Mr. Kozlowski's direction
       to himself, a former director and other senior executives
       and key managers; repayment of outstanding loans made to
       Mr. Kozlowski by a Company subsidiary; disgorgement of
       all compensation paid to Mr. Kozlowski from 1997 through
       2002; forfeiture of all benefits awarded to Mr. Kozlowski
       from 1997 through 2002; and compensatory, consequential,
       special and punitive damages suffered by Tyco as a result
       of Mr. Kozlowski's wrongful conduct, including his
       breaches of fiduciary duties and misappropriations of
       Tyco funds and assets.

    -- A lawsuit against Mr. Belnick for a broad pattern of
       misconduct, including using Company funds for personal
       gain.

    -- A lawsuit against former director Frank Walsh for
       breaching his fiduciary responsibilities by taking a $20
       million "finders fee" in connection with the CIT
       acquisition, without the knowledge or approval of the
       Board.

    -- The appointment of John A. Krol, former Chairman and CEO
       of E.I DuPont, to the Board of Directors.

    -- The appointment of Eric Pillmore as Senior Vice President
       for Corporate Governance, a newly-created position.

    -- The appointment of David FitzPatrick, the former Chief
       Financial Officer of United Technologies, as Tyco's new
       CFO.

    -- The appointment of William Lytton, the former General
       Counsel of International Paper, as Tyco's new General
       Counsel.

    -- The nomination of five leading figures in the business
       community to fill expected vacancies on the Board before
       the Company's next annual meeting.

    -- The Board's vote not to nominate or support for re-
       election at the Company's 2003 annual meeting any of the
       nine current members of the Board who were members of the
       Board prior to July 2002.
    
As disclosed in its 10-Q report filed on August 14, 2002, Tyco's
new Chief Executive Officer Ed Breen believes that one of his
immediate priorities is to restore the credibility of Tyco with
investors and regulators.  For that reason, Mr. Breen has
directed Boies, Schiller & Flexner LLP and the forensic
accounting firm of Urbach Kahn & Werlin Advisors, in conjunction
with the Company's auditor, PricewaterhouseCoopers LLP, to
perform an in-depth review of Tyco's accounting beginning with
fiscal year 1999 and extending into the fourth quarter of the
current fiscal year.  This review will include, but is not
limited to, reviewing Tyco's revenues, profits, cash flow and
internal auditing procedures as well as past and present
accounting for acquisitions and reserves.

Management notes that Tyco currently has no reason to believe
that there are any material adjustments necessary to the
Company's financial results. However, Mr. Breen believes that,
in view of recent events at the Company, this in-depth review of
accounting practices is important if the Company is to provide
further assurance to shareholders and regulators that accounting
decisions made at Tyco have been appropriate and consistent with
Generally Accepted Accounting Principles.  If this internal
review were to reveal any material adjustments necessary to the
Company's financial results, the Company of course would
promptly disclose such adjustments.
    
Tyco International Ltd., is a diversified manufacturing and
service Company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves.  Tyco also holds strong
leadership positions in medical device products, and plastics
and adhesives.  Tyco operates in more than 100 countries and had
fiscal 2001 revenues from continuing operations of approximately
$34 billion.
    
Tyco International Group's 6.875% bonds due 2002 (TYC02USR1),
DebtTraders reports, are trading at 96 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=TYC02USR1for  
real-time bond pricing.


UNIROYAL TECHNOLOGY: Gets Interim Nod to Use $9 Million Revolver
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
stamp of approval to Uniroyal Technology Corporation and its
debtor-affiliates to obtain secured postpetition financing from
The CIT Group/Business Credit, Inc., for up to $9,000,000, on an
interim basis pending final hearing.

The Debtors admit they owe CIT approximately $6.4 million plus
accrued interest and fees at the Petition Date.  The Debtors
submit that the Prepetition Obligations are secured by valid,
nonavoidable, enforceable liens and security interests.
Therefore, all of the Debtors' cash constitutes proceeds of the
Prepetition Collateral, which is cash collateral of CIT.  As of
the Petition Date, CIT asserts that the value of the Prepetition
Collateral exceeds the amount of the Prepetition Obligations.  

Without the DIP Financing, the Debtors tell the Court they
wouldn't have sufficient available sources of working capital
and financing to carry on the operation of their businesses
until an orderly reorganization can be effectuated.  The ability
of the Debtors to finance their operations, and the availability
of sufficient working capital and liquidity are essential to the
Debtors' continued viability and successful reorganization. In
the absence of such financing, serious and irreparable harm to
the Debtors and their estates would occur.

The Bankruptcy Court finds that the Debtors' critical need for
financing is immediate.  

The Debtors have sought, but have been unable to obtain,
unsecured credit allowable the Bankruptcy Code as an
administrative expense.  At this time, the Debtors are unable to
obtain secured credit on terms and conditions more favorable to
the interests of Debtors and their creditors than the terms and
conditions of the DIP Loan Agreement.

The Bankruptcy Court will convene a hearing to consider entry of
a final DIP Financing order on September 23, 2002.  Upon entry
of a Final Order, the Debtors will be authorized to borrow from
CIT an amount not to exceed $15,000,000 until the Termination
Date, pursuant to the Debtors' Consolidated Cash Flow
Projections:

                                         Week Ending
                                         -----------    
                           14-Sept   21-Sept   28-Sept   5-Oct     
                           -------   -------   -------   -----
Total Cash Receipts        $  885    $  885    $1,100    $  987
Total Cash Disbursements    1,027       600       826     1,404
Net Cash                     (142)      285       274      (632)
Beginning Revolver          7,349      7,491    7,206     6,932
Ending Revolver             7,491      7,206    6,932     7,564

                           12-Oct    19-Oct    26-Oct    2-Nov
                           ------    ------    ------    -----
Total Cash Receipts           987        987    1,092    1,061
Total Cash Disbursements      918      1,105      986    1,404
Net Cash                       69       (118)     106     (343)
Beginning Revolver          7,564      7,495    7,613    7,507
Ending Revolver             7,495      7,613    7,507    7,850

                           9-Nov     16-Nov     23-Nov
                           -----     ------     ------   
Total Cash Receipts         1,061     1,061      1,514
Total Cash Disbursements      915     1,103        988
Net Cash                      (69)      (42)       526
Beginning Revolver          7,850     7,919      7,961
Ending Revolver             7,919     7,961      7,435


US AIRWAYS: Seeks Okay to Employ Ordinary Course Professionals
--------------------------------------------------------------
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, relates that US Airways Group customarily retains the
services of attorneys, accountants, and other professionals in
the ordinary course of business.  During the course of these
bankruptcy cases, additional Ordinary Course Professionals have
been and may be retained.  Thus, the Debtors seek the Court's
authority to employ the Ordinary Course Professionals pursuant
to Sections 105(a) and 327 of the Bankruptcy Code, and
compensate them for services rendered, without additional Court
approval.

Mr. Butler informs the Court that prior to the Petition Date,
the Debtors employed Ordinary Course Professionals for services
on tax preparation and other tax advice, employee relations and
compensation, corporate legal advice, legal representation on
issues like personal injury and commercial matters, real estate
consulting, and other matters requiring the expertise and
assistance of professionals.

Mr. Butler explains that it is too costly and inefficient for
the Debtors to submit individual application and proposed
retention orders of the numerous Ordinary Course Professionals.  
In addition, Mr. Butler speculates that many Ordinary Course
Professionals might be unwilling to render services if they may
be paid only through a formal application process.

If the expertise and background knowledge of these Ordinary
Course Professionals are lost, Mr. Butler says, the Debtors'
estates will undoubtedly incur additional and unnecessary
expenses because the Debtors will be forced to retain other
professionals that are not so familiar with their business and
operations.  It would take additional time and effort to
properly orient other professionals.

The Debtors propose to pay, without formal application to the
Court, 100% of the postpetition interim fees and disbursements
to each Ordinary Course Professional when an invoice is
submitted providing reasonable detail of the services rendered.  
The interim fees and disbursements should not exceed $40,000 per
month per Ordinary Course Professional.  All payments to
Ordinary Course Professionals will become subject to approval
upon application to the Court for allowance of compensation and
reimbursement of expenses pursuant to Sections 330 and 331 of
the Bankruptcy Code if the payments exceed $40,000 per month.

Excluding Key Ordinary Course Professionals, the Debtors
anticipate that the total fees paid to Ordinary Course
Professionals will be between $450,000 and $550,000 per month.

At the present time, the Debtors employ two Key Ordinary Course
Professionals that may receive over $40,000 per month:

    (a) Fried, Frank, Harris, Shriver & Jacobson, and

    (b) Groom Law Group.

When the fees payable to a Key Ordinary Course Professional
exceed the $40,000 monthly limit, on the month following the
invoice, the firm will submit a monthly statement for additional
compensation to:

    * US Airways Group, Inc.
      2345 Crystal Drive
      Arlington, VA 22227
      Attn: Michelle V. Bryan

    * Skadden, Arps, Slate, Meagher & Flom (Illinois)
      333 West Wacker Drive, Suite 2100
      Chicago, Illinois 60606
      Attn: John Wm. Butler, Jr.

    * McGuireWoods LLP
      1750 Tysons Boulevard, Suite 1800
      McLean, Virginia 22102-4215
      Attn: Lawrence E. Rifken

    * The United States Trustee
      115 South Union Street, Plaza Level, Suite 210
      Alexandria, Virginia 22314

    * Counsel to the Debtors' postpetition lenders

    * Counsel to any official committee formed in these cases

These parties will have 20 days to review the Monthly Statement
and object to the fees requested by the Key Ordinary Course
Professionals.  If any of the Parties object, then the Key
Ordinary Course Professionals will be required to submit a
formal application to the Court.

Furthermore, the Debtors ask the Court to exempt Ordinary Course
Professionals from submitting separate applications for proposed
retention.  Instead, the Debtors propose that each attorney
Ordinary Course Professional will file with the Court and serve
upon the Parties an Affidavit.

The United States Trustee, any creditors' committee, and the
postpetition lenders will have 20 days after the receipt of each
Ordinary Course Professional's Affidavit to object to the
retention.  The objecting party will serve objections upon the
Parties and the Ordinary Course Professional on or before the
Objection Deadline.  If an objection cannot be resolved within
20 days, the matter will be scheduled for hearing before the
Court at the next regularly scheduled omnibus hearing date.  If
no objection is received within 20 days after the filing of an
Affidavit, the Debtors will be deemed authorized to retain
Professional.

The Debtors promise to file a statement with the Court every 120
days and serve the statement on the United States Trustee,
counsel for their postpetition lenders, and counsel for any
official committees, containing:

(a) the name of such Ordinary Course Professional;

(b) the aggregate amounts paid as compensation and reimbursement
    of expenses incurred during the 120 days; and

(c) a general description of the services rendered by each
    Ordinary Course Professional. (US Airways Bankruptcy News,
    Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
    0900)


US AIRWAYS: Passenger Agents Ratify New Contract Settlement
-----------------------------------------------------------
US Airways passenger service agents have ratified a new contract
settlement which will help the troubled airline through wage and
other concessions while giving employees access to new jobs and
setting up a process to strengthen retirement security.

The group, including 8,000 active employees, is represented by
the Communications Workers of America, and includes reservations
agents, ticket counter and gate agents and employees at US
Airways Club locations.

The settlement was approved by 75 percent of those who
participated in the ratification balloting, which was overseen
by the American Arbitration Association.

The new contract, which runs through Jan. 1, 2009, sets a top
salary rate of $20.05 per hour (an 8-percent cut) along with a
25-cent per hour customer contact premium. There are no salary
reductions for those earning less than $30,000 a year.

Salaries will begin increasing on Jan. 1, 2005, rising in
increments by 8.75 percent over the next four years.

The employees agreed to other concessions -- most of them
temporary -- in the areas of health care, overtime pay, vacation
pay and holidays -- but were also able to make gains in other
areas.   These include improvements in the 401(k) savings plan,
a 2-percent distribution of post-bankruptcy stock, new jobs at
US Airways Express and Internet services, and union recognition
at Mid Atlantic Airways, a new airline created by US Airways.

The settlement also calls for a joint task force to explore
development of a defined benefit pension plan as close to Jan.
1, 2003 as possible.  The agents lost their previous pension
plan 12 years ago before they had union representation.

More details on the settlement can be found at:  
http://www.cwa.net  

CWA represents a total of 700,000 workers overall in
telecommunications, journalism, broadcast and cable TV,
electronics manufacturing, and the public sector, as well as the
airline industry.


US AIRWAYS: Airline Mechanics Ratify Restructuring Agreement
------------------------------------------------------------
US Airways' mechanics and related workers, represented by the
International Association of Machinists District 141-M, ratified
the agreement on the Company's restructuring with 57 percent
voting to support the proposal.

"The ratification of this last remaining employee agreement
provides us with tremendous momentum to secure our financing,
complete our restructuring plan, and emerge from bankruptcy
early in 2003.  We have the elements in place to become a
competitive and successful airline, and ultimately our mechanics
and related employees recognized that some painful tough
decisions now can lead to success and opportunities," said Jerry
A. Glass, US Airways senior vice president of employee
relations.  "All of our employees deserve credit for their
willingness to work with us to restructure the company, preserve
pensions and benefits, and give US Airways a new lease on life."

US Airways has restructuring plan agreements in place with all
of its employees, including its pilots, represented by the Air
Line Pilots Association; flight attendants, represented by the
Association of Flight Attendants; simulator engineers,
dispatchers, and the flight crew training instructors, each
represented by the Transport Workers Union; fleet service
workers, represented by International Association of Machinists
District 141; maintenance training specialists, also represented
by the IAM, and reservations and airport ticketing and gate
workers represented by the Communications Workers of America.


V-ONE CORP: Fails to Comply with Nasdaq SmallCap Requirements
-------------------------------------------------------------
V-ONE Corporation (Nasdaq:VONE) has received a Nasdaq Staff
Determination indicating that the Company fails to comply with
the minimum $2,000,000 net tangible assets or the minimum
$2,500,000 stockholder's equity requirements for continued
listing set forth in Marketplace Rule 4310(C)(2)(B).

Accordingly, the Company's common stock is subject to delisting
from the Nasdaq SmallCap Market.

V-ONE Corporation will be requesting an oral hearing before the
Nasdaq Listing Qualifications Panel to appeal the Staff
Determination. While there can be no assurance that the Panel
will grant the Company's request for continued listing, the
Company is exploring all possible avenues to preserve the Nasdaq
listing.

Pending a final ruling, delisting will be stayed and V-ONE's
common stock (Nasdaq:VONE) will continue to be listed on the
Nasdaq SmallCap Market.

Providing enterprise-level network security protection since
1993, V-ONE Corporation's flagship product is SmartGate(TM) VPN,
a client/server Virtual Private Network technology. Fortune 1000
corporations, health care organizations and sensitive government
agencies worldwide use SmartGate for their integrated
authentication, encryption and access control.

With its patented client deployment and management capabilities,
SmartGate is a compelling solution for remote access intranets
and secure extranets for electronic business between trading
partners, for both conventional and wireless networks. V-ONE is
headquartered in Germantown, MD.

Product and network security information, white papers and the
Company's latest news releases may be accessed via V-ONE's World
Wide Web site at http://www.v-one.com


VALEO ELECTRICAL: Plan Confirmation Hearing Set for September 25
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on September 25, 2002 at 10:00 a.m., to
consider confirmation of the Joint Plan of Reorganization of
Valeo Electrical Systems, Inc., and its affiliate, Valeo
Electrical Systems Sales and Marketing, LLC.

The Honorable Stuart M. Bernstein directs that, to be counted,
creditors' ballots to accept or reject the plan must be received
by the Debtors' Balloting Agent, Bankruptcy Services LLC, no
later than 5:00 p.m., on September 19, 2002.  Ballots may be
sent by mail or by hand.  

All confirmation objections must be filed and served by 12:00
noon on September 19.  Objections must be filed with the Office
of the United States Trustee with foregoing copies also sent to
the (i) Debtors' Counsel, and to the (ii) Counsel to the
Official Committee of Unsecured Creditors.

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


WARNACO GROUP: Wants to Expand BDO Seidman's Engagement Scope
-------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates seek the
Court's authority to further expand the scope of BDO Seidman's
employment to include certain analysis and examination of the
assumptions underlying the financial projections utilized in
formulating a plan of reorganization, nunc pro tunc to August 2,
2002.

Stanley P. Silverstein, Vice President, General Counsel and
Secretary of Warnaco, tells Judge Bohanon that the expanded
scope of employment include:

    (1) Receiving briefings from the corporate officers, group
        presidents and divisional CFO's or other representatives
        concerning historical and projected operating and
        financial performance;

    (2) Obtaining the most recent historical financial data for
        each division;

    (3) Obtaining the most recent prospective financial
        statements for each division with all underlying
        assumptions to the forecasts or projections;

    (4) Working with divisional and corporate management to
        understand the planning process and the documentation
        used to form the bases for the plan numbers.  This will
        involve evaluating the assumptions used to consolidate
        the divisional numbers into the corporate plan as well
        as the assumptions used at the corporate level for items
        like capital structure, interest rates, cash flow
        requirements; and

    (5) Comparing each divisional set of assumptions to the
        historical data for the same division and for comparable
        companies and industries in the marketplace.  BDO will
        utilize readily available data from recognized sources
        and cite same.  BDO's focus will be on the quality and
        level of support for the operational factors
        contributing to the plan EBITDAR an net income numbers,
        specifically gross and net revenues, cost of goods sold,
        gross and net profit margins, SM&A, depreciation and
        amortization, interest, taxes and other items.

Bruce B. Bingham, a Partner at BDO, reports that BDO will charge
the Debtors for its Plan Assumption Analysis Services on an
hourly basis, in accordance with its ordinary and customary
rates for matters of this type in effect on the date the
services are rendered.  BDO will also seek reimbursement of all
costs and expenses incurred in connection with these Chapter 11
cases.  The current BDO rates are:

         Partners               $450 - 525
         Senior Managers         295 - 385
         Managers                215 - 300
         Associates and staff    165 - 210

Mr. Bingham estimates that the fees for the additional services
will be $365,000 plus expenses. (Warnaco Bankruptcy News, Issue
No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


WILLIAMS GAS: S&P Places On Watch Dev. After Sale Announcement
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its single-'B'-plus
rating on Williams Gas Pipelines Central Inc., on CreditWatch
with developing implications.

Tulsa, Oklahoma-based Central has about $175 million in
outstanding debt.

The action is based on parent The Williams Cos. Inc.'s
announcement that it has signed a definitive agreement to sell
Central to Southern Star Central Corp., a subsidiary of AIG
Highstar Capital L.P., for $380 million in cash and assumption
of $175 million in debt. The sale is expected to close within 60
days, subject to completion of Hart-Scott-Rodino review.

"The developing CreditWatch listing reflects the uncertainty
surrounding the disposition of the $175 million of senior notes
at Central," according to Standard & Poor's credit analyst
Jeffrey Wolinsky. "Assuming that the transaction closes, the
rating could be raised, lowered, or withdrawn, depending on how
the new owner structures the acquisition," he added.


WORLDCOM INC: Examiner Wants to Retain Kilpatrick as Counsel
------------------------------------------------------------
Dick Thornburgh, the Examiner appointed in these cases, seeks
the Court's authority to retain Kirkpatrick & Lockhart LLP as
legal counsel in Worldcom Inc.'s Chapter 11 cases, nunc pro tunc
to August 6, 2002.

Mr. Thornburgh tells the Court that Kilpatrick will assist him
in his duties as Examiner.  Mr. Thornburgh relates that
Kilpatrick attorneys have the experience and expertise
sufficient to perform the tasks necessary to his examinations.

As counsel, Kilpatrick is expected to:

-- take all necessary actions to assist the Examiner in his
   examination;

-- prepare on behalf of the Examiner all reports, pleadings,
   applications and other necessary documents in the discharge
   of the Examiner's duties;

-- assist the Examiner in the other tasks that may be directed
   to be undertaken by the Court; and

-- perform all other necessary legal services in connection with
   the Case.

The Examiner understands that Kilpatrick will charge its
standard hourly rates for the engagement, which are subject to
periodic adjustments to reflect economic and other conditions.  
The current hourly rates for Kilpatrick attorneys and
paraprofessionals range from:

          Partners                  $230 - 600
          Counsel                    150 - 600
          Associates                 130 - 325
          Paraprofessionals           40 - 210

Mr. Thornburgh informs Judge Gonzalez that the Kilpatrick
attorneys are admitted to practice before the Courts of the
Commonwealths of Pennsylvania and Massachusetts, the states of
New York, New Jersey, Florida, Texas and California, as well as
the District of Columbia and various bankruptcy, district, and
appellate courts across the country.  The Kilpatrick attorneys
have experience in bankruptcy practice and other areas of
practice that may be necessary to the examination and are well
qualified to represent the Examiner.

Kilpatrick Partner Stephen G. Topetzes, Esq., assures the Court
that the Firm does not hold any disqualifying interest adverse
to the Debtors' estates in matters upon which the law firm is to
be engaged by the Examiner.  However, the Firm and certain of
its partners, counsel and associates may represent or may have
in the past represented creditors or equity security holders of
the Debtors in connection with matters unrelated to the matters
on which the Examiner seeks to employ Kilpatrick.  These
include:

A. Significant Creditors:  Qwest Corporation, Verizon Credit
   Corp., Wilmington Trust, Sun Trust, Deutsche Bank AG, ABN
   Amro Bank N.V., Metropolitan Life Insurance Co., and New York
   Life;

B. Unsecured Creditors:  Citibank N.A., BNP Paribas, Fleet
   National Bank, Mitsubishi, Credit Lyonnais, Bank One N.A.,
   Mellon Bank N.A., Wells Fargo Bank, AMR, and Hewlett Packard;

C. Bondholders:  JP Morgan Chase, Bear Sterns, Bank of New York,
   State Street Bank, Morgan Stanley, Citibank, Boston Safe
   Deposit Trust Co., Northern Trust, UBS Warburg, Wells Fargo,
   Salomon Smith Barney, Chase Securities, Lehman Bros., Banc of
   America, BT Alex Brown, FUNB-Philmain, Merill Lynch, Bank of
   New York Clearing Services, Morgan Stanley Dean Witter,
   American Express, UBS PaineWebber, PNC Bank, Charles Schwab,
   Prudential, First Union, Neuberger Berman, LaSalle Bank,
   Barclays Capital, Lehman Bros. International, and JP Morgan
   Chase Investors. (Worldcom Bankruptcy News, Issue No. 7;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)   

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


WORLDWIDE WIRELESS: Inks Pact to Sell Assets & Debts to NextWeb
---------------------------------------------------------------
Worldwide Wireless Networks Inc., (OTCBB: WWWN) has signed a
Definitive Agreement with NextWeb, Inc., to acquire the
operating assets and certain liabilities of the Company through
the Chapter 11 restructuring process.

The Company states that this action to sign a Definitive
Agreement with NextWeb was chosen after very careful
consideration of all potential prospects and alternatives. WWWN
believes that this option represents the best solution all
stakeholders in the Company.

WWWN stresses that during the interim, all operations will
continue as normal. The Company will continue to provide full
services to all of its current customers, as well as any new
subscribers. The Company also plans to continue servicing all
current liabilities, including lease obligations and payments to
current vendors and employees, in the normal course of business.

          Definitive Agreement Signed as Best Option

For the past year, the Company has been seeking ways to
restructure its debt load. Due to the recent downturn in the
telecommunications industry, Chapter 11 restructuring has been a
necessary process that has helped many firms to get back on
their feet.  NextWeb, Inc., has provided the best financial,
operational and strategic proposal to combine the businesses and
produce a very strong, viable wireless Internet service
provider. NextWeb brings significant stability to an industry
fraught with uncertainty, due to the collapse of capital
markets, on-going technology challenges and intense competitive
pressures.

NextWeb is a solid, US-based, wireless Internet service
provider, backed by established household names such as Kaiser
Permanente, Tenet Healthcare and other institutional investors.
NextWeb plans to invest heavily in Worldwide Wireless Network
Inc, to increase the reliability and performance of the
Company's network.

"The core of any business is its customer base. In order to be
competitive and achieve growth goals, a company must provide
excellent value and ensure complete customer satisfaction.
WWWN's existing customer base is the key asset of the Company.
The business combination with NextWeb will leverage this asset
to obtain maximum value," stated Mr. Jerry Collazo, President
and acting CEO of Worldwide Wireless Networks. "NextWeb can not
only provide financial investment, but operational and strategic
support as well. NextWeb has achieved success in the same
business, and has built a large carrier-class network throughout
the San Francisco Bay Area and Silicon Valley with no debt. They
have achieved high margins, as we have, through proper
operational management. To my knowledge, combined we will be the
largest fixed wireless broadband provider in the US."

"I am excited for the customers," added Mr. Collazo. "Not only
will we enhance our network reliability, but we will be able to
invest in new technology to provide large bandwidth customers
with the performance they need. Also, we will be able to resume
our expansion to other Southern California areas with the proper
support from investors."

Mr. Collazo concluded that, "The future prospects for our
operations and customers now look better than ever. As we
proceed down this path we will continue to announce significant
milestones in our progress as we endeavor to maximize value for
our stakeholders."

Chapter 11 of the US Bankruptcy code allows companies to
continue operating and managing their assets in the ordinary
course of business. Congress enacted Chapter 11 to encourage and
enable a debtor business to continue operations as a going
concern, to preserve jobs and to maximize the recovery of all
stakeholders. For the Chapter 11 proceedings, the Company is
being represented by Mr. R. Gibson Pagter Jr. of Pagter and
Miller.

NextWeb, Inc., is a broadband network service provider
delivering local access and advanced IP applications to
corporate users over its next-generation fixed-wireless network.
NextWeb's network covers over 300 square miles with access to
over 15,000 business locations throughout the San Francisco Bay
Area and Silicon Valley. NextWeb is a privately held company
located in Freemont, California. Investors include Monet
Capital, Kaiser Permanente, and Tenet Healthcare, and Healthcare
Property Investments, Inc. For more information, visit them on
the Web at http://www.nextweb.net  

Worldwide Wireless Networks is a data-centric wireless
communications company headquartered in Orange, California. The
Company specializes in high-speed, broadband Internet access
using an owned wireless network. Other products and services
include frame relay, collocation services and network
consulting. The Company serves all sizes of private and public
sector accounts. For more information, visit them on the Web at
http://www.wwwn.com


W.R. GRACE: Court Appoints Three PD Committee Special Counsels
--------------------------------------------------------------
The ZAI Claimants, in the chapter 11 cases involving W. R. Grace
& Co. and its debtor-affiliates, present Judge Fitzgerald with a
revised, proposed designation of Special Counsel and Additional
Special Counsel.  The ZAI Claimants want Edward J. Westbrook,
Esq., at Richardson, Patrick, Westbrook & Brickman, in
Charleston, South Carolina, as the Lead Special Counsel and
Darrell W. Scott, Esq., at Lukins & Annis, P.S., in Spokane,
Washington, as Additional Special Counsel.

The ZAI Claimants also seek the Court's authority to retain
local bankruptcy counsels for purposes of performing local
bankruptcy functions.  The present local bankruptcy counsel, for
these purposes, is William D. Sullivan, Esq., at Elzufon,
Austin, Reardon, Tarlov & Mondell, in Wilmington, Delaware.  The
ZAI Claimants want to add to the list:

    -- Thomas Sobol, Esq., at Hagens Berman LLP, in Boston,
       Massachusetts, to perform work pertaining to discovery
       centered in the State of Massachusetts; and

    -- the law firm of Lieff, Cabraser, Heimann & Bernstein, in
       San Francisco, California, to perform work pertaining to
       discovery centered in the State of California.

They are also expected to work on specific trial plan issues
when their retention will promote cost-efficient preparation for
the ZAI Science Trial.

Fees and costs of Special Counsel (including other counsel as
authorized by this Court to perform services for Special
Counsel) will be capped at $1,500,000 for fees and $500,000 for
costs. This fee and cost cap is subject to modification, if
events prove it advisable, upon further petition to and approval
of this Court.

Special Counsel will submit, on a quarterly basis, verified
applications for payment of fees and costs to be paid by W.R.
Grace.  Detailed time records of Special Counsel may be
submitted, in camera.

Special Counsel will submit a projected litigation budget to
provide Judge Fitzgerald with general guidance as to the nature
and amount of anticipated litigation costs.  While it is
anticipated that litigation costs will fall within the general
categories and budget ranges contained in this budget
projection, it is recognized that actual and ongoing litigation
developments will shape the categories of costs and their
amounts.  Subject always to the cost cap Judge Fitzgerald
imposes and Judge Fitzgerald's ultimate approval of any item of
cost, Special Counsel may incur costs of the type and in the
amounts that prove appropriate to prosecution of ZAI Claimants'
interests.

Budget Projection For ZAI Science Trial:

Fees                                               $1,500,000

Discovery phase activities (including case
analyses and preparation, expert witness
development, discovery re fact witnesses,
expert witnesses, document production and
review, and depositions).                            $900,000

Pre-trial motion practice, including Daubert/
In Limine/Summary Judgment motions.                  $200,000

Trial preparation and Trial                          $400,000

Costs                                                $500,000

Expert Costs (including testing, surveys,
inspections, consulting, preparation of and
analysis of expert witness reports, and fees
for depositions and trial testimony for
approximately 5 testifying experts)                  $250,000

Other Litigation Expenses (including travel,
lodging, copying and document imaging,
deposition costs, transcription costs, phone,
faxing, postage, fed ex expenses, trial
exhibit costs).                                      $250,000

                        Debtors Respond

Grace contends that any litigation must necessarily be based on
assumptions concerning the yet-to-be developed litigation.  The
Debtors propose to pay the ZAI Claimants' reasonable, out-of-
pocket expenses -- so long as they do not exceed $250,000.  The
Debtors propose to pay professional fees to lawyers and
paralegals representing the ZAI claimants at the rate of 75% of
their standard hourly rates, but not to exceed $100 per hour.
The professionals representing the ZAI Claimants will be
entitled to the remaining 25% of their standard hourly rate, or
the excess of the fees over $100 per hour, plus an additional
10% of their standard hourly rates, for total compensation of
110% of their standard hourly rates) in the event that the ZAI
Claimants are successful in prevailing in the science trial.

                           *     *     *

After due deliberation, Judge Fitzgerald appoints these firms as
special counsel to the PD Claimants:

(1) Eluzufon Auston Reardon Tarlov & Mondell, in Wilmington
    William D. Sullivan, Esq., and Charlie Brown, III, Esq.;

(2) Richardson, Patrick, Westbrook & Brickman, in Charleston,
    South Carolina -- Edward J. Westbrook, Esq. and Robert M.
    Turkewitz, Esq.; and

(3) Lukins & Annis PS, of Spokane, in Washington -- Darrell W.
    Scott, Esq. and Burke D. Jackowich, Esq.

In addition, the Court approves the Litigation Budget proposed
by the ZAI Claimants for the science trial. (W.R. Grace
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ZANY BRAINY: Asks Court to Delay Entry of a Final Decree
--------------------------------------------------------
Zany Brainy, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to delay entry of
a final decree in chapter 11 case number 01-1749 until
March 3, 2003.

The Debtors tell the Court that a delay is necessary to afford
Zany sufficient time to complete the evaluation of all
outstanding claims and interests filed against the estates and
to resolve certain other outstanding matters pending before this
Court.

Furthermore, other matters remain outstanding with respect to
Zany's chapter 11 case. Specifically:

   - a hearing to consider the Debtors' motion approving the
     assumption of the nonresidential real property lease for
     the space located at Fremont Hub Shopping Center in
     Rosville, California, is scheduled for October 29, 2002.

   - Zany expects that the Court will be required to adjudicate
     certain matters relating to the various disputes between
     the Debtors, FAO, Inc. and Ingram Book Company.

Zany Brainy was a leading specialty retailer of high quality
toys, games, books and multimedia products for children.  The
company filed for chapter 11 protection on May 15, 2001.  Mark
D. Collins, Esq., and Daniel J. DeFranceschi, Esq., at Richards
Layton & Finger, P.A., represent the Debtors.  When the Company
filed for protection from its creditors, it listed $200,862,000
in assets and $131,283,000 in debts.


* J. Myers Joins Clear Thinking as Principal & Managing Director
----------------------------------------------------------------
Clear Thinking Group, Inc., the retail, consumer products, and
manufacturing turnaround consultancy, announced that Joseph E.
Myers, a business credit and enterprise management executive,
has joined Clear Thinking Group as Principal and Managing
Director.

Mr. Myers most recently led the Turnaround Insolvency department
at Global Credit Services, Inc.

"We are very excited that Joe has joined Clear Thinking Group.
His consulting experience, credit management and financial
background, and senior management experience will be invaluable
to Clear Thinking Group and in turn, our clients," said Stuart
Kessler, CEO of Clear Thinking Group. "Our primary asset to our
clients is the caliber of our principals and Joe is no
exception -- he is a seasoned executive who is widely respected,
published, and considered an expert in his field," Mr. Kessler
added.

Mr. Myers is an experienced credit professional with a 35-year
career in business credit and enterprise management. Myers'
varied experienced includes Regional Credit Manager for Jim
Walter Corp. (Building Trades); Director of Credit at Triangle
PWC (Wire and Cable); and various executive credit positions
with Royal Doulton, Polo Ralph Lauren and Escada. Joe was
Assistant Treasurer of Warnaco Inc. and was responsible for
Accounts Receivable and Accounts Payable. He served as Managing
Director, COO and CFO of Beach Patrol Inc. and CFO of AGX Corp.
Joe is a CCE and a Certified Expert Witness. Joe is published in
The Credit Research Foundation, including his most recent
article on "Imaging for The Credit Department." Joe, a graduate
of St. Peter's College, has also served on the Board of
Directors of a major NACM affiliate and has lectured widely.

Clear Thinking Group is a national consulting organization that
provides trustworthy advice and actionable solutions to its
clients. Their wide range of services help clients achieve their
objectives with innovative operating and financial strategies.
This side-by-side approach not only drives companies toward
growth, it helps accelerate the turnaround process for Clear
Thinking Group clients. Clear Thinking Group is based in
Hillsborough, NJ with offices in Atlanta, and Florida. Clear
Thinking Group is a wholly owned subsidiary of Liquidation
World, Inc. (TSX: LQW) (NASDAQ: LIQWF).


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

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    24 - 26        0
Finova Group          7.5%    due 2009    31 - 33        0
Freeport-McMoran      7.5%    due 2006    90 - 92        0
Global Crossing Hldgs 9.5%    due 2009   1.5 - 2.5       +1
Globalstar            11.375% due 2004   2.5 - 4.5       0
Lucent Technologies   6.45%   due 2029    37 - 39        -20
Polaroid Corporation  6.75%   due 2002   5.5 - 7.5       0
Terra Industries      10.5%   due 2005    78 - 80        0
Westpoint Stevens     7.875%  due 2005    36 - 38        -2
Xerox Corporation     8.0%    due 2027    41 - 43        +2

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

                          *********

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

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

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

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

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

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

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

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

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

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

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