TCR_Public/020926.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 26, 2002, Vol. 6, No. 191    


AAMES FINANCIAL: Junk Bond Exchange Offer Extended to Oct. 4
ACOUSTISEAL: Appoints J.G. Ball as Chief Restructuring Officer
ADELPHIA COMMS: Brings-In O'Melveny as Special Conflicts Counsel
AGRIFOS FERTILIZER: Amends Plan to Include Mims Transaction
AKORN INC: Northern Trust Agrees to Forbear Until Jan. 3, 2003

AMERICAN GREETINGS: Appoints Robert Ryder as Chief Fin'l Officer
AMERICAN GREETINGS: Steve Willensky to Head Sales and Marketing
AMERICAN PLUMBING: S&P Hatchets Rating to B on Weaker Cash Flow
AMKOR TECHNOLOGY: Sets Q3 Earnings Conference Call for Oct. 29
APPLIED EXTRUSION: S&P Assigns B+ Rating to $50 Mill. Bank Loan

AUCXIS CORP: Exploring Financing Options to Continue Operations
BETHLEHEM STEEL: Wants to Assume 2 Intermodal Facilities Leases
BROADWING INC: Selects Kevin Mooney as New Chief Exec. Officer
BUDGET GROUP: Gets Green-Light to Hire Trumbull as Claims Agent
CANFIBRE GROUP: Resumes Trading on TSX as Inactive Issuer  

CEATECH USA: Cash Flow Insufficient to Satisfy Liquidity Needs
COMDISCO INC: Court Okays Payment of Severance Claims to Fazio
CONSOLIDATED FREIGHTWAYS: Sales Specialists Join CaseStack Inc.
CREST CLARENDON: S&P Rates Class D Notes & Preferreds at BB
CUTTER & BUCK: Moves to New Headquarters in Fremont in Seattle

DOBSON COMMS: Will Pay In-Kind Dividend on 13% Senior Preferreds
DVI: Weak Operating Results Spur Fitch to Cut Debt Rating To B+
DYNEGY INC: Elects Dan Dienstbier as Chairman of the Board
EL PASO CORP: S&P Puts Ratings on Watch in Wake of FERC Ruling
EMPRESA ELECTRICA: Wants to Hire Ordinary Course Professionals

ENRON: Court Clears Litigation Settlement with Simon Property
EXIDE TECHNOLOGIES: Fitch Rates $250 Mill. DIP Facility at BBB+
EXIDE TECHNOLOGIES: Applauds Fitch's BBB+ on $250M DIP Facility
FARMLAND INDUSTRIES: Fitch Withdraws Default-Level Ratings
FERRELLGAS PARTNERS: Completes $170MM Senior Debt Refinancing

FIRST UNION NAT'L: Fitch Affirms Low-B's on Five Notes Classes
FLAG TELECOM: Plan Solicitation Period Extended to November 27
FLEETWOOD ENTERPRISES: Appoints Charles Wilkinson as EVP and COO
FLEMING COMPANIES: Will Divest 110 Existing Price-Impact Stores
FMC CORPORATION: S&P Rates Proposed $300MM Senior Notes At BB+

FONIX CORP: Working Capital Deficit Reaches $8.4MM at June 30
GENEVA STEEL: Gets Continued Access to Lenders' Cash Collateral
INSCI CORP: Hooks Up with Midwest Power to Distribute Products
INTERLIANT INC: Sells Certain Non-Core Assets to Akibia, Inc.
IT GROUP: 24 Plan Participants Take Action to Recover Claims

J.P. MORGAN: Fitch Cuts Ratings on 3 P-T Certificate Classes
KMART CORP: Wins Court Approval of Settlement Pact with TBWA
KNOLOGY BROADBAND: Signs-Up Smith Gambrell as Bankruptcy Counsel
LJM2 CO-INVESTMENT: Case Summary & 8 Largest Unsec. Creditors
LODGIAN INC: Court Okays Evercore as Committee's Fin'l Advisors

LTV CORP: Wants to Abandon Interests in Six Foreign Affiliates
MARK NUTRITIONALS: Brings-In Pipkin Oliver as Bankruptcy Counsel
MEADOWCRAFT: Seeking Okay to Continue Finley Colmer's Engagement
MEDICALCV: Must Raise Up to $2MM to Fund Ops. & Meet Cash Needs
METROLOGIC INSTRUMENTS: Gets $1.7M Order from Major Retail Chain

NAVISITE INC: ClearBlue Entities Disclose 94.42% Equity Stake
NCI BUILDING: Completes New $250 Million Senior Secured Facility
NETWORK ACCESS: Delaware Court Sets Nov. 8, 2002 Claims Bar Date
OMEGA HEALTHCARE: Fitch Affirms B Corporate Credit Rating
ORGANOGENESIS: Commences Chapter 11 Proceeding in Massachusetts

OWENS CORNING: Committee Wants to Commence Avoidance Actions
PACIFIC GAS: Wind Nod to Defray $1.3MM Plan Implementation Costs
PEREGRINE SYSTEMS: IT Masters Backs BMC's Acquisition of Remedy
POLAROID CORP: Wants Lease Decision Period Extended to Jan. 31
PROJECT FUNDING: S&P Places Ratings on Notes on Watch Negative

PROVIDIAN FINANCIAL: Reports August Managed Net Credit Loss Rate
RAILWORKS CORP: Maryland Court Confirms Chapter 11 Reorg. Plan
R. H. DONNELLEY: S&P Puts Low-B Ratings on CreditWatch Negative
RITE AID: Balance Sheet Insolvency Burgeons to $91 Million
SEPRACOR INC: Repurchases $131MM of 7% Convertible Debentures

SERVICE MERCHANDISE: Wants to Keep Exclusivity Until October 30
SLI INC: Wants to Bring-In Bingham McCutchen as Special Counsel
SMITHWAY MOTOR: Fails to Satisfy Nasdaq Listing Requirements
STANDARD MEMS: Brings-In Cozen O'Connor as Bankruptcy Counsel
THAON COMMS: Settles Litigation with Former Officers & Directors

TIME WARNER: S&P Hatchets Corporate Credit Rating To B From B+
US AIRWAYS: Court Fixes November 4 Bar Date for Proofs of Claim
US STEEL CORPORATION: Forecasts Higher Third Quarter Earnings
VANTAGEMED CORP: Commences Trading on OTCBB Effective Sept. 24
WESTPOINT STEVENS: S&P Places Low-B & Junk Ratings on Watch Neg.

WILLIAMS COMMS: Court Clears Stipulation Agreement with SBC
WINSTAR COMMS: Trustee Gets Nod to Hire Kroll as Risk Consultant
WORLD KITCHEN: Court Fixes November 1, 2002 as Claims Bar Date
WORLDCOM INC: Selling Pentagon City to TST for $101 Million
W.R. GRACE: Sealed Air Fraudulent Transfer Trial Postponed

* DebtTraders' Real-Time Bond Pricing


AAMES FINANCIAL: Junk Bond Exchange Offer Extended to Oct. 4
Aames Financial Corporation (OTCBB:AMSF) announced that the
expiration date of its offer to exchange its newly issued 4.0%
Convertible Subordinated Debentures due 2012 for any and all of
its outstanding 5.5% Convertible Subordinated Debentures due
2006 has been extended to 5:00 p.m., New York City time, on
Friday, October 4, 2002. The Exchange Offer had been scheduled
to expire Friday, September 20, 2002, at 5:00 p.m., New York
City time. The Company reserves the right to further extend the
Exchange Offer or to terminate the Exchange Offer, in its
discretion, in accordance with the terms of the Exchange Offer.

To date, the Company has received tenders of Existing Debentures
from holders of approximately $42.9 million principal amount, or
approximately 37.7%, of the outstanding Existing Debentures.

As previously announced on April 30, 2002, the Company's
principal stockholder, Capital Z Financial Services Fund II,
L.P., through Specialty Finance Partners (a partnership it
controls), agreed to purchase $50.0 million aggregate principal
amount of the Existing Debentures in a private transaction. On
June 6, 2002, Capital Z filed an amendment to its Schedule 13D
indicating that the sellers delivered only an aggregate of
$41,616,000 principal amount of Existing Debentures to Capital
Z, and as a result, Capital Z purchased only $41,616,000
aggregate principal amount of Existing Debentures in the private
transaction, which it subsequently tendered for exchange in the
Exchange Offer. In lieu of delivering the remaining $8,384,000
aggregate principal amount of Existing Debentures pursuant to
their respective obligations in the private transaction, the
sellers and Capital Z have agreed that if the sellers sell to
the Company an aggregate of $10,000,000 principal amount of the
Company's 9.125% Senior Notes due 2003 for an aggregate purchase
price of $8,500,000, Capital Z will unconditionally release the
applicable seller from its respective obligation to deliver the
remaining Existing Debentures. A seller consummated a sale of
$2,200,000 principal amount of Senior Notes with the Company on
September 19, 2002.

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

                         *    *    *

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

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

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

ACOUSTISEAL: Appoints J.G. Ball as Chief Restructuring Officer
Acoustiseal, Inc., sought and obtained approval from the U.S.
Bankruptcy Court for the Western District of Missouri to appoint
J. G. Ball, as its Chief Restructuring Officer to generally
assist in the Company's reorganization.

The Debtor relates that it selected Mr. Ball as its Chief
Restructuring Officer as the result of having worked with his
primary employer, Crossroads LLC.  After receiving information
regarding Mr. Ball's qualifications from lenders associated both
with pre-petition and post-petition financing of the Debtor's
business as to his extensive experience in restructuring
companies, the Debtor has determined that Mr. Ball is uniquely
qualified to the job.

Serving as the Debtor's CRO, Mr. Ball will:

     a. Assume a leadership role in the Debtor's cash
        forecasting process, including reviewing cash flow
        projection models previously prepared by the Debtor;

     b. Analyze and manage the process for executory contract
        assumption/rejection, including cost/benefit analysis to
        determine which contracts should be rejected and which
        assumed; review with the Debtor analyses to maximize
        cost controls from contract improvements;

     c. Assume a leadership role to the Debtor related to vendor
        management and communications;

     d. Act as the liaison between the Debtor and outside
        professionals to:

          (i) coordinate the activities between the Debtor's
              professionals and representatives of the lender
              and other credit groups to achieve timely
              information production, accurate information flow,
              and avoid work duplication;

         (ii) provide regular dissemination of information among
              representatives of the various constituents
              involved in the Debtor's bankruptcy; and

        (iii) respond to information requests and distribution
              of requests to appropriate Debtor personnel,
              thereby avoiding unnecessary disruption of normal
              business operations.

Mr. Ball's compensation will be subject to the ultimate
allowance by the Bankruptcy Court.  For 2002, the Debtors agree
to pay Mr. Ball $550 per hour.

Acoustiseal, Inc., filed for chapter 11 protection on September
4, 2002 in the U.S. Bankruptcy Court for the Western District of
Missouri (Kansas City).  Cynthia Dillard Parres, Esq., and Mark
G. Stingley, Esq., at Bryan, Cave LLP represent the Debtor in
its restructuring efforts.  When the Company filed for
protection from its creditors, it listed an estimated assets of
$10-$50 million and estimated debts of over $50 million.

ADELPHIA COMMS: Brings-In O'Melveny as Special Conflicts Counsel
The Adelphia Communications Debtors seek the Court's authority
to employ and retain O'Melveny & Meyers LLP as their special
conflicts counsel in connection with the representation of their

According to Jonathan Rosenberg, Esq., a Member of O'Melveny &
Meyers, the firm has represented five of the Debtors' employees
since May 21, 2002, in connection with investigations commenced
by the SEC and the United States Attorney's Office for the
Southern District of New York.  These Cooperating Employees have
each been interviewed by the SEC and U.S. Attorney's office in
connection with their investigation of Debtors and might be
asked to appear as Grand Jury or trial witnesses in the ongoing
government investigations and prosecutions relating to the

The professional services that O'Melveny & Myers has rendered
and will likely render to the Cooperating Employees have
included and will likely include:

A. Advising and counseling the Cooperating Employees in
   connection with their interviews with the SEC and U.S.
   Attorney's office;

B. Advising and counseling the Cooperating Employees in
   connection with their assistance in the investigation by the
   Debtors' Special Committee of the Debtors' accounting
   practices and other matters;

C. Preparing the Cooperating Employees to testify as witnesses
   to one or more of the government's proceedings; and

D. Coordinating with other professionals retained by the

Mr. Rosenberg contends that O'Melveny & Myers has extensive
experience in the areas of corporate investigative and "white
collar" criminal and regulatory matters, and believes it is
highly qualified to represent the Cooperating Employees in all
aspects of the governments' investigation of the Debtors.  Mr.
Rosenberg will have principal responsibility for this
engagement.  Mr. Rosenberg has extensive experience in "white
collar" criminal and regulatory matters, having represented more
than 50 individuals and entities investigated, subpoenaed or
charged in numerous criminal and SEC enforcement matters.  
Moreover, Mr. Rosenberg served as the Assistant United States
Attorney in the U.S. Attorney's office for the Southern District
of New York from 1989 to 1995, and was Deputy Chief of the
Criminal Division. Therefore, Mr. Rosenberg is very familiar
with the types of government investigations being regarding the

Compensation will be payable to O'Melveny & Myers on an hourly
basis, plus reimbursement of actual and necessary expenses
incurred by O'Melveny & Myers.  The hourly rates that O'Melveny
& Myers currently charges in this matter for the attorneys and
legal assistants who are expected to render services to the
Cooperating Employees in connection with these Chapter 11 cases

       Jonathan Rosenberg        $550
       Jill Fieldstein           $350
       Martin Crisp              $185
       MaryAnn Bonner            $150

Since being retained by the Debtors in May 2002 to render
services on behalf of the Cooperating Employees, Mr. Rosenberg
informs the Court that the Firm has received a $75,000 retainer.
As of September 10, 2002, O'Melveny & Myers have rendered
$163,000 in fees and disbursements for legal services rendered.

Mr. Rosenberg assures the Court that none of the attorneys who
will be performing work on the O'Melveny & Myers representation
holds any interest adverse to that of the Debtors in any matter
pertinent to the O'Melveny & Myers Representation.  Because of
the large number of O'Melveny & Myers' past and present
engagements, and the number of attorneys working for O'Melveny &
Myers, it is not reasonably practicable to definitively confirm
that neither O'Melveny & Myers nor any of its partners or
employees holds any adverse interest.  However, if any conflict
issues arise among any O'Melveny & Myers' employees, appropriate
ethical screens will be installed.

Mr. Rosenberg informs the Court that O'Melveny & Myers currently
represents various clients that appear to be either adverse or
potentially adverse to the persons and entities included on the
Interested Parties List, or listed on the Interested Parties
List.  These are:

-- Parties with interests adverse O'Melveny's Clients in Current
   Matters:  Cablevision Systems Corp., Century Cable Century,
   Federal Savings & Loan Assoc., Charter Communications,
   Comcast Corp., Cox Communications, Deloitte & Touche,
   FrontierVision, Gardea State Cablevision LP, Insight
   Communications Co. LP, Lazard Freres, Morrison & Foerster
   LLP, Praxis Paradigm Synergies Inc., RCN Corporation,
   Telemedia Int'l. USA Inc., and Wellington Management Co.;

-- O'Melveny's Clients classified as Interested Parties:  ABN
   AMRO Bank N.V., Time Warner Inc., Bank of America, TMC
   Communications, The Chase Manhattan Bank, Credit Suisse First
   Boston, Deloitte & Touche Corporate Finance Ltd., Digital
   Telemedia Inc., Greg Badiskanian, Insight Investments Corp.,
   Insight Venture Partners, J.P. Morgan Chase & Co., Jeffrey
   Bacsik, Merrill Lynch & Co., Morgan Stanley, Price
   WaterhouseCoopers LLP, Salomon Smith Barney Inc., and Time
   Warner Inc.

Based on the information currently available from the conflict
system, Mr. Rosenberg asserts that there is no reason to believe
that any representations:

-- are related to the particular subject matter of the O'Melveny
   & Myers' representation of the Cooperating Employees where a
   conflict of interest would arise likely to result in the
   disqualification of O'Melveny & Myers from the
   representation, or

-- would render O'Melveny & Myers not disinterested within the
   meaning of Section 327(a) of the Bankruptcy Code. (Adelphia
   Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)

DebtTraders says that Adelphia Communications' 9.875% bonds due
2005 (ADEL05USR2) are trading at 36.5 cents-on-the-dollar. See
for real-time bond pricing.

AGRIFOS FERTILIZER: Amends Plan to Include Mims Transaction
Agrifos Mining LLC and Bedrock Holdings, LLC seek authority to
amend their Disclosure Statement and the Reorganization Plan.
Agrifos Mining and Bedrock remind the Court that the primary
transaction contemplated in their Plan is the sale and lease of
a large portion of Mining's assets to IMC Phosphates Company.

The Debtors relate that they have been in negotiations with the
Mims Group for the sale of the remaining assets of Mining.  Mims
filed an adversary against Mining, Wachovia Bank, National
Association and Congress Financial Corporation (New England)
alleging, among other things, that Mining was in breach of that
certain prepetition option contract granting Mims the right to
purchase the T/A Mineral Tract. Additionally, the Mims Adversary
alleged that Mining's obligation on reclamation project AGF-N-
BB(1) resulted in a secured claim of Mims. Among other things,
the Mims MOU provides that if the Mims Transactions close, Mims

     (i) dismiss the Mims Adversary with prejudice, and

    (ii) assume certain reclamation obligations including BB1,
         provided that if the Mims Transaction do not close
         through no fault of Mims, Mining will assume the BB1
         reclamation obligation as an administrative claim.

By this Motion, the Debtors request authority to:

  A) Supplement the Disclosure Statement by:

       (i) disclosing the Mims Transaction;

      (ii) providing the Debtors' analysis of the Mims
           Transaction and the Mims MOU;

     (iii) attaching the Mims MOU to the Disclosure Statement
           Supplement; and

      (iv) making any other amendments to the Disclosure
           Statement that are material in light of the Mims

  B) Amend the Plan to incorporate the terms and conditions in
     the Mims MOU.

  C) Send a new ballot and a notice advising that creditors may
     file a new ballot based on the Disclosure Statement
     Supplement and Plan Amendment, superceding any ballot
     previously received by the Debtors from the creditor.

  D) Change the Objection Deadline from September 23, 2002 to
     October 7, 2002.

  E) Change the Voting Deadline from September 23, 2002 to
     October 7, 2002.

  F) Change the Confirmation Hearing from October 7, 2002 to
     October 21, 2002.

The Debtors explain that they have only recently executed the
Mims MOU and thus, were not able to provide the necessary
disclosure in their earlier versions of the Disclosure Statement
or provide the terms of the Mims Transaction in the Plan.
Additionally, the Debtors assert that the Plan Amendment has any
affect on unsecured creditors of Mining or Bedrock.

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.

AKORN INC: Northern Trust Agrees to Forbear Until Jan. 3, 2003
Akorn, Inc., has entered into an Agreement with its senior
lender, The Northern Trust Company, under which the Bank has
agreed to forebear from taking action with respect to Akorn's
current default in the payment of principal and interest under
its existing Credit Agreement with the Bank and, subject to the
terms of the Agreement, will continue to forebear from
exercising its remedies under the Credit Agreement until January
3, 2003. The Bank had notified the Company on September 16, 2002
of the payment default, and of its decision to pursue its legal
remedies if an agreement on forbearance could not be reached
prior to September 23, 2002.

Under the terms of the Agreement, the Bank will provide a second
line of credit, up to a maximum of $1,750,000, to fund the
Company's day-to-day operations.  The Agreement provides for
certain restrictions on operations, including restrictions on
the payment of dividends, and the incurrence of capital
expenditures without the Bank's approval.  It also provides for
the application of cash from the Company's operations to repay
borrowings under the new revolving loan, and to reduce the
Company's other obligations to the Bank.  The Company has agreed
to provide the Bank with a plan for restructuring its financial
obligations to the Bank on or before December 1, 2002, and has
agreed to retain a consulting firm by September 27, 2002 to
assist in the development of this restructuring plan.

Akorn, Inc., manufactures and markets sterile specialty
pharmaceuticals, and markets and distributes an extensive line
of pharmaceuticals and ophthalmic surgical supplies and related

AMERICAN GREETINGS: Appoints Robert Ryder as Chief Fin'l Officer
American Greetings Corporation (NYSE: AM) has appointed Robert
Ryder as senior vice president and chief financial officer.
Ryder succeeds William Meyer, who announced his impending
retirement in March, and who has been operating as chief
financial officer since then.

Ryder brings 13 years of diverse experience at PepsiCo to
American Greetings. Most recently, he was vice president and
controller for PepsiCo's $9 billion Frito-Lay North America
division in Dallas, where he was a member of the executive
committee and managed a staff of 600. In that role, he was
responsible for financial reporting and analysis, financial
operations, internal control, financial systems implementation,
cash flow optimization and tax initiatives. Prior to that, he
was vice president and chief financial officer of Frito-Lay
International's $1 billion developing markets region, based in
London. Earlier, he was the director of strategic planning for
PepsiCo's $5 billion Frito-Lay International division in New

"We are fortunate to have an executive of Bob's caliber with
extensive experience at a global consumer products company,"
said Zev Weiss, executive vice president, AG ventures and
enterprise management. "He brings strong leadership, strategic
and financial skills that will benefit American Greetings as we
continue to stabilize our core business and begin to explore
new opportunities to grow emerging businesses."

Ryder began his career at the New York City office of the public
accounting firm Price Waterhouse. He is a certified public
accountant and holds a bachelor of science in accounting from
the University of Scranton.

American Greetings Corporation (NYSE: AM) is the world's largest
publicly held creator, manufacturer and distributor of greeting
cards and social expression products. Its staff of artists,
designers and writers comprises one of the largest creative
departments in the world and helps consumers "say it best" by
supplying more than 15,000 greeting card designs to retail
outlets in nearly every English-speaking country. Located in
Cleveland, Ohio, American Greetings generates annual net sales
of approximately $2 billion. For more information on the
Corporation, visit
on the World Wide Web.

As reported in the July 2, 2002 edition of Troubled Company
Reporter, Standard & Poor's affirmed American Greetings'
BB+ Subordinated Debt Rating.

AMERICAN GREETINGS: Steve Willensky to Head Sales and Marketing
American Greetings Corporation (NYSE: AM) has appointed Steve
Willensky to the new position of senior vice president,
executive sales and marketing officer. The Corporation also
announced that Randy Mason, formerly senior vice president and
general sales manager, will take on new responsibilities as a
senior vice president to lead a new business unit that will
focus specifically on serving Wal-Mart, the Corporation's
largest retail account.

"We are excited to have found someone with Steve Willensky's
breadth of experience to help position American Greetings in the
marketplace and to interact with our consumers and retailers,"
said Jeffrey Weiss, executive vice president, North American
Greeting Card Division. "We are also happy that Randy Mason,
with his 30-plus years of experience in managing retailer
relationships, will be leading our new business unit."

Weiss said Willensky will be responsible for linking the sales
and marketing processes more closely. "Steve will focus
specifically on strategic account management, or aligning
marketing strategies with opportunities to grow the social
expression category with our accounts to our mutual benefit,"
Weiss said.

"Randy will manage the day-to-day marketing and operations
dedicated to our largest retailer and will coordinate the
efforts of all our business units that serve that account,"
Weiss added. "We expect to apply a similar model to serve other
major retailers as part of our overall sales and marketing

Willensky brings 12 years of marketing leadership experience at
GE Lighting to American Greetings, including positions as vice
president of global marketing and product management, as well as
vice president of marketing and product management for Europe.
Willensky has also served as president and chief executive
officer of Westec Interactive, a retail management and security
services business, and as president of Medex, a global medical
supply company and subsidiary of The Furon Company.

Mason joined American Greetings in 1970 as a sales
representative and moved rapidly through a succession of
progressively responsible sales management positions.  He became
senior vice president, general sales manager in 1991, with
responsibility for all U.S. and Canadian sales efforts.

American Greetings Corporation (NYSE: AM) is the world's largest
publicly held creator, manufacturer and distributor of greeting
cards and social expression products. Its staff of artists,
designers and writers comprises one of the largest creative
departments in the world and helps consumers "say it best" by
supplying more than 15,000 greeting card designs to retail
outlets in nearly every English-speaking country. Located in
Cleveland, Ohio, American Greetings generates annual net sales
of approximately $2 billion. For more information on the
Corporation, visit
on the World Wide Web.

As reported in Troubled Company Reporter's July 2, 2002 edition,
Standard & Poor's affirmed American Greetings' BB+ Subordinated
Debt Rating.

AMERICAN PLUMBING: S&P Hatchets Rating to B on Weaker Cash Flow
Standard & Poor's Ratings Services lowered its corporate credit
rating on American Plumbing & Mechanical Inc., to single-'B'
from single-'B'-plus, and removed the rating from CreditWatch.

At June 30, 2002, AMPAM had about $167 million in debt
outstanding. The outlook is now negative. Round Rock, Texas-
based AMPAM is a leading provider of plumbing and mechanical
contracting services in the U.S.

"The downgrade reflects weaker-than-expected cash flow
generation due to softening market conditions, higher fixed and
insurance costs, and poor operating performance within some
business units, which has further strained financial
flexibility," said Standard & Poor's credit analyst Joel

The ratings reflect the company's limited liquidity, aggressive
financial profile, and its leading niche positions in large,
highly fragmented, and cyclical markets.

For the first six months of 2002, income from operations and
sales declined 81% and 4%, respectively, forcing AMPAM to seek a
waiver and amendment under its bank credit agreement. Although
the company was able to obtain changes to make the bank
financial covenants more reflective of the firm's lower
expectations, the amendment also reduced the size of the credit

A fair degree of operating leverage, meaningful pricing
pressures, and rising insurance costs, has lowered operating
margins. Although the company has undertaken a number of actions
to stabilize margins during this period of challenging market
conditions, it is unlikely that AMPAM will be able to restore
profitability to historical levels in the next several quarters.

Failure to stabilize operations and liquidity in the near term
could lead to further downgrades.

AMKOR TECHNOLOGY: Sets Q3 Earnings Conference Call for Oct. 29
Amkor Technology, Inc. (Nasdaq:AMKR), the world's largest
provider of outsourced semiconductor assembly and test services,
will hold a conference call to discuss third quarter results on
Tuesday, October 29, 2002, at 5:00 p.m. Eastern Time.

This call is being webcast by CCBN and can be accessed at
Amkor's Web site at The call can also be  
accessed by dialing 1-303-242-0001.

The webcast is also being distributed over CCBN's Investor
Distribution Network to both institutional and individual
investors. Individual investors can listen to the call through
CCBN's individual investor center at
http://www.companyboardroom.comor by visiting any of the  
investor sites in CCBN's Individual Investor Network.
Institutional investors can access the call via CCBN's password-
protected event management site, StreetEvents

Amkor Technology, Inc., is the world's largest provider of
contract semiconductor assembly and test services. The company
offers semiconductor companies and electronics OEMs a complete
set of microelectronic design and manufacturing services. More
information on Amkor is available from the company's SEC filings
and on Amkor's Web site at

                         *     *     *

As reported in Troubled Company Reporter's August 8, 2002
edition, Standard & Poor's lowered its corporate credit
and senior unsecured debt ratings on Amkor Technology Inc., to
single-'B' from single-'B'-plus. At the same time, the senior
secured bank loan rating was lowered to single-'B'-plus from

Standard & Poor's Ratings Services also lowered its ratings on
the West Chester, Pennsylvania-based company's convertible and
senior subordinated notes to triple-'C'-plus from single-'B'-
minus. The outlook is stable.

The ratings changes reflect volatile conditions in the
semiconductor market and a sustained deterioration in
profitability and debt-protection measures, offset by Amkor's
adequate near-term liquidity.

Amkor Technology Inc.'s 9.25% bonds due 2008, DebtTraders says,
are trading at 58 cents-on-the-dollar. See
for real-time bond pricing.

APPLIED EXTRUSION: S&P Assigns B+ Rating to $50 Mill. Bank Loan
Standard & Poor's Ratings Services said that it assigned its
single-'B'-plus rating to Applied Extrusion Technologies Inc.'s
newly established $50 million revolving credit facility maturing
in 2004, which replaces the company's $80 million revolving
credit facility due January 2003. The rating was placed on
CreditWatch with developing implications.

In addition, Standard & Poor's raised the rating on the $275
million senior unsecured notes due 2011 to single-'B' from
single-'B'-minus and placed it on CreditWatch with developing
implications due to the reduced amount of priority debt in the
capital structure following the establishment of the smaller-
size bank facility. The single-'B' corporate credit rating
remains on CreditWatch with developing implications (where it
were placed on July 8, 2002) following the announcement that the
firm has hired a financial advisor to evaluate options to
maximize shareholder value. Developing means the ratings could
be raised, lowered, or affirmed. Peabody, Mass.-based Applied
Extrusion is the leading oriented polypropylene films producer
in North America, with total debt outstanding of $278 million as
at June 30, 2002."Standard & Poor's will monitor developments on
the potential sale of the company and will evaluate the effect
on credit quality upon the announcement of any transaction,"
said Standard & Poor's credit analyst Liley Mehta.

Applied Extrusion's $50 million bank facility is rated one notch
above the corporate credit rating to reflect the strength
derived from its secured position and a substantial subordinate
cushion. The facility is secured by a security interest in and
lien on all assets, and pledge of stock of all subsidiaries.
Borrowings will be subject to a borrowing base of 85% of
eligible receivables, 50% of eligible inventory (subject to
certain limitations), plus a fixed asset sublimit deemed to be
equal to the sum of 25% of the orderly liquidation value of
machinery and equipment and 25% of the fair market value of real
property. Financial covenants tighten meaningfully on a
quarterly basis, providing limited headroom under the amended
credit agreement.

Standard & Poor's has used an enterprise value approach, given
the likelihood that the business would retain more value as an
operating entity in the event of a bankruptcy. Based on this
analysis, Standard & Poor's believes that in a default scenario,
a distressed enterprise value would be sufficient to provide for
full recovery of the outstanding loan.

AUCXIS CORP: Exploring Financing Options to Continue Operations
Aucxis Corp., changed its name from e-Auction Global Trading
Inc. in June 2001.
The Company is currently developing e-business services for the
perishable commodity marketplace primarily in Europe. In
addition, through its subsidiary, Aucxis Trading Solutions N.V.
(formerly Schelfhout Computer Systemen N.V.), the Company is
engaged in the installation and maintenance of auction clock and
cooling systems for traditional auction halls and the
development of software for auctions, including Internet-based
auction systems. To date the Company has not earned significant
revenue from its Internet-based auction systems and the success
of these systems will depend upon market acceptance of a
commercially viable prototype and obtaining adequate resources
to complete and implement these systems. The Company is not yet
able to determine whether these efforts  will be successful.

In September 2001, the Company decided to discontinue its
financial support for its subsidiaries in The Netherlands,
including V-Wholesale N.V., Kwatrobox B.V., Palm Verlingsystemen
B.V., Scoop Software B.V., Automatiseringsbureau Palm N.V., and
Nieaf Systems B.V., as the businesses operated by these
companies no longer form part of the Company's refocused
business strategy. As a result, Kwatrobox and its operating
subsidiaries, Automatiseringsbureau Palm N.V., and Nieaf Systems
B.V., filed for bankruptcy and under the bankruptcy laws of the
Netherlands, a trustee took control of Kwatrobox and its
subsidiaries in October 2001.  

The Company has a serious working capital deficiency at June 30,
2002 and has suffered recurring operating losses and has an
accumulated deficit at June 30, 2002. These factors raise
substantial doubt about the ability of the Company to continue
as a going concern.  

The ability of the Company to continue as a going concern is
dependent upon effective implementation of revenue and cost
management alternatives and the success of potential future
external financing initiatives. Management is considering
various revenue and cost management alternatives and is
examining a variety of options to raise additional financing,
including the possibility of merging the Company's operations
with another company. It is not possible at this time to predict
with any assurance the success of these initiatives.

Revenue for the six months ended June 30, 2002 was $2,610,700
compared to $3,587,000 in the same period in 2001. Gross margin
was consistent for both periods at approximately 50%. Revenue
for the three months ended June 30, 2002 was $1,302,000 compared
to 1,621,000 for the three months ended June 30, 2001.  Although
overall revenue has decreased, revenue from ATS for the six
months ended June 30, 2002 has actually increased by $873,000
from the same six month period in 2001. The decrease in overall
revenue is a direct result of management's decision to
discontinue its financial support for the loss making Palm
Automatisering (Aucxis Business Solutions "ABS") and Nieaf
companies. ABS had continued to consume shareholder funds within
a business that no longer forms part of Aucxis' refocused
business strategy. Aucxis was unable to extract Nieaf from the
Kwatrobox failure in spite of the fact that it did fit with the
overall strategy. The assets of Nieaf were purchased from the
receiver in partnership with the two largest flower auctions in
the Netherlands. This is now operating as Auction Trading
Systems Holland B.V.-ATS Holland B.V. currently has arrangements
with the current employer of the previous Nieaf employees to
provide contractual services in support of installations. ATS
Holland is ramping up staff in line with revenues to ensure
continued ongoing maintenance of existing installations.

The loss for the six months ended June 30, 2002 was $547,200
compared to $5,323,000 for the same period in 2001. Similarily
the loss for the three months ended June 30, 2002 was $254,700
compared to $2,887,000for the three months ended June 30, 2002.
This significant improvement is attributed to the Company's
ongoing cost management initiatives. The results for the six
months ended June 30, 2002  include $115,800 in write-downs
including a one time write off of approximately $25,000 due to
the disposition of a Mercedes Benz utilized by the previous
managing director of ATS, Luc Schelfhout.

At June 30, 2002, the Company had a cash balance of $305,686, a
net change of less than $5,000 from the cash balance on December
31, 2001. In June of 2002, the Company was successful in raising
$375,000 in the form of a convertible loan for working capital
purposes. Cash from this loan and from ATS operations including
bank lines of credit were used primarily to fund inventory and
work in progress (an increase of approximately $1,600,000 from
December 31, 2001) and for general working capital purposes. The
projected cash flows for the Company are based upon assumptions
that include, amongst others, increased growth within ATS and
the success of future external financing initiatives. Management
continues to examine a variety of options to raise additional
financing. The restraint order applied by Mr. Luc Schelfhout and
Mrs. Hilde De Laet to a portion of the ATS shares held by Aucxis
NV continues to make it difficult for the Parent company to
raise capital as well as restricts Aucxis Corp., from realizing
the payment from ATS of any after tax dividends. This has
resulted in low cash levels at Aucxis Corp., and reasonable cash
levels at its subsidiary, ATS. At the ATS level  management has
been successful securing the necessary credit lines and bank
guarantees needed to fulfil the requirements under the various
contracts that have been secured. Aucxis is continuing its
revenue enhancement and cost management initiatives, including
decreasing operating costs and working with creditors regarding
outstanding payables. It is not possible at this time to predict
with any assurance the success of any other initiatives, however
management is working diligently towards the goal of self-

BETHLEHEM STEEL: Wants to Assume 2 Intermodal Facilities Leases
In conjunction with the sale of the Bethlehem Commerce Center,
Bethlehem Steel Corporation and its debtor-affiliates seek the
Court's authority to assume two unexpired nonresidential real
property leases.  The Debtors will assign one of the leases to

George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New
York, explains that the Bethlehem Center and the land adjacent
to it are encumbered by two leases between Bethlehem and
BethIntermodal LLC, a wholly owned subsidiary of Bethlehem:

  -- April 1, 1999 Intermodal Lease under which BethIntermodal
     operates railroad intermodal facilities on the Bethlehem
     Commerce Center; and

  -- September 1, 2001 Triple Crown Lease wherein BethIntermodal
     operates railroad intermodal facilities on the property
     adjacent to the Bethlehem Commerce Center.

In order for Majestic to develop the Center, Mr. Davis points
out that the intermodal facilities must be removed or relocated.
Therefore, the assumption of both Leases is necessary to
facilitate the relocation of the intermodal facilities.

Pursuant to the Purchase and Sale Agreement, Majestic has agreed
to give BethIntermodal notice of termination of the Intermodal
Lease.  The Leases are terminable on 24 months prior written
notice.  Majestic will also place $5,800,000 in escrow.  The
escrowed monies are intended to fund the cost of the removal or
relocation of the intermodal facilities from both the Bethlehem
Center and from the adjacent parcel of real property owed by the
Debtors.  Any amounts remaining in the escrow account after the
removal or relocation of the intermodal facilities will be paid
to the Debtors.

Mr. Davis explains that, if the facilities were not removed or
relocated, a bridge would be required to grade separate vehicles
from rail traffic.  The bridge would cost over $4,000,000 and
take up a substantial portion of the land to keep the grade of
the bridge to a marginally acceptable 6%, which is necessary to
allow the clearance for rail cars double stacked with trailers.

However, Majestic has stated it will not acquire a smaller
parcel -- reduced by the land occupied by the intermodal
facilities and the bridge -- because of the marketing issues
caused by the presence of the bridge and the hindrance to truck
traffic.  The Debtors believe that other developers would have
similar concerns.  Thus, it is estimated that keeping the
intermodal facilities at its present location will reduce net
land sale proceeds to the Debtors in the East Lehigh area by
more than $14,000,000.

Mr. Davis asserts that Majestic is fully capable of performing
all the Lessor's financial and other obligations under the
Intermodal Lease.  Majestic is a well-established real estate
development company with a large tenant base.  Majestic owns and
controls, directly and through joint ventures, a diversified
income producing commercial real estate portfolio, which exceeds
50,000,000 square feet.  The portfolio is geographically
diversified with a primary concentration of master planned
industrial parks and generates annual income in excess of
$259,000,000.  Mr. Davis further notes that Majestic has
substantial liquidity, excellent access to capital sources, and
raises over $650,000,000 annually for various commercial real
estate projects.

The Debtors are also contemplating the relocation of the
intermodal facilities to Bethlehem's coke oven area.  "That
relocation would permit the construction of Commerce Center
Boulevard to the Bethlehem Commerce Center free from
interference from the existing intermodal facility and would be
an ideal use of Bethlehem's coke oven area property," Mr. Davis

Mr. Davis represents that the coke oven area is the most
problematic from an environmental standpoint.  Hence, the use of
that property for the intermodal facilities would permit a large
footprint employing few structures and minor excavation
requirements, thereby minimizing site-specific remediation
costs. The Debtors estimate that the redevelopment of the coke
oven area -- of which the relocation of the intermodal
facilities thereto is a potential part -- will save them
$3,500,000 of potential environmental remediation costs.
(Bethlehem Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Bethlehem Steel Corporation's 10.375% bonds due 2003 (BS03USR1),
DebtTraders reports, are trading at 7 cents-on-the-dollar. See  
real-time bond pricing.

BROADWING INC: Selects Kevin Mooney as New Chief Exec. Officer
Broadwing Inc., (NYSE:BRW) announced that its board of directors
has elected Kevin W. Mooney to serve as chief executive officer,
effective immediately, succeeding Richard G. Ellenberger who, by
mutual agreement, is departing the Company and has resigned from
the board. Additionally, the board elected Cincinnati Bell
president, Jack F. Cassidy to the position of chief operating
officer. Mooney and Cassidy will both join the board as

Daniel J. Meyer, who has served as a director on Broadwing's
board since 1999, has been elected Chairman.

Mooney has served as Broadwing's chief operating officer for the
past year and previously as the Company's chief financial
officer. In addition to his new role, Cassidy will retain his
responsibilities as president of Cincinnati Bell.

"The board is very grateful to Rick for his leadership,
integrity, and vision that enabled our company to expand its
offerings in the Cincinnati market and complete an important
strategic acquisition that grew Broadwing from a single market
to a national presence," said Meyer.

"At the same time, we are delighted with the strong combination
of financial expertise, operational skills and customer focus
that Kevin and Jack bring to their respective positions. The
board is confident in their ability to continue to strengthen
Broadwing's financial position, improve operations, and build
value for our shareholders. Moreover, we are pleased to be able
to leverage Jack's leadership talents, that have made Cincinnati
Bell an industry leader, on a broader scale as Broadwing's chief
operating officer," Meyer continued.

"I am excited by the opportunity to build upon the excellent
foundation laid by Rick, lead the most talented and dedicated
employees in the industry, and increase our presence in
important markets," said Mooney. "This is a very challenging
telecom environment, and my top priorities are to evaluate
alternatives to strengthen our financial position; realize more
of the value that we have created in recent years; continue to
adjust operationally to thrive in this difficult market; and
continue to focus on providing an unparalleled level of service
to our customers," Mooney continued.

"I am privileged to have worked with so many outstanding
individuals at Cincinnati Bell and Broadwing," said Ellenberger.
"And I am extremely proud of the successes we achieved, the
challenges we have overcome, and the integrity we displayed in
growing Broadwing into an important industry player. I am
pleased to be leaving the company in the capable hands of Kevin
and Jack, with whom I have worked closely, and have the utmost
confidence in their ability to take Broadwing to its next stage
of development," said Ellenberger.

Mooney, (44) has served as chief operating officer of Broadwing
since November 2001. In that position he was responsible for all
operations of the Company and its two principle operating units
- Cincinnati Bell and Broadwing Communications. Prior to that,
he was chief financial officer of Broadwing, and previously
Cincinnati Bell. He has also served at the company's controller
and vice president of finance. Before joining Cincinnati Bell in
1990, Mooney held management positions at BellSouth and AT&T.

Cassidy (48) has served as president and COO of Cincinnati Bell
since 2000. Previously, he was responsible for the launch of
Cincinnati Bell's industry leading long distance and wireless
businesses. Prior to that, Cassidy held executive positions with
Cantel, Ericsson, and General Electric.

Meyer (65) is the retired Chairman and Chief Executive Officer
of Milacron, Inc., a manufacturer of metalworking and plastics
processing machinery and systems. He has served as a director of
Broadwing since 1999. He also serves as a director of The E.W.
Scripps Company, Milacron, Inc., AK Steel Holding Corporation
and Hubbell Incorporated.

Broadwing Inc., (NYSE: BRW) is an integrated communications
company comprised of Broadwing Communications and Cincinnati
Bell. Broadwing Communications leads the industry as the world's
first intelligent, all-optical, switched network provider and
offers businesses nationwide a competitive advantage by
providing data, voice and Internet solutions that are flexible,
reliable and innovative on its 18,500-mile optical network and
its award-winning IP backbone. Cincinnati Bell is one of the
nation's most respected and best performing local exchange and
wireless providers with a legacy of unparalleled customer
service excellence and financial strength. The company was
recently ranked number one in customer satisfaction, for the
second year in a row, by J.D. Power and Associates for local
residential telephone service and residential long distance
among mainstream users. Cincinnati Bell provides a wide range of
telecommunications products and services to residential and
business customers in Ohio, Kentucky and Indiana. Broadwing
Inc., is headquartered in Cincinnati, Ohio. For more
information, visit
As reported in Troubled Company Reporter's July 29, 2002
edition, Fitch downgraded Broadwing Communications, Inc.'s
12.5% Series B Junior Exchangeable Preferred Stock to 'C' from
'B'.  BCI is a wholly owned subsidiary of Broadwing, Inc.  The
Rating Outlook for all of Broadwing, Inc.'s ratings has been
changed to Negative from Stable.

Fitch's Negative Rating Outlook reflects the company's limited
financial flexibility in terms of available liquidity resources
and continued compliance with the financial covenants contained
within the company's senior secured credit facility. Fitch
estimates that the company has approximately $200 million of
additional availability under its senior secured credit
facility. However, the liquidity available under the revolver
amortizes to approximately $140 million by year-end 2002 and
will provide very limited availability during the first half of
2003. The company's liquidity position will be further pressured
in 2003 as the term loans under the company's bank facility
begin to amortize during the second quarter of 2003. Fitch
acknowledges the steps the company has taken to maximize and
preserve cash flow including reductions to capital spending,
operating cost controls and the suspension of the dividend on
the Exchangeable Preferred Stock. Broadwing borrowed only $27
million during the second quarter of which $12 million was for
restructuring. While the company has made significant progress
towards being free cash flow positive in the fourth quarter
2002, Fitch expects that the company will need to access capital
markets to solidify its liquidity position entering 2003.

BUDGET GROUP: Gets Green-Light to Hire Trumbull as Claims Agent
Budget Group Inc., and its debtor-affiliates sought and obtained
the Court's authority to employ Trumbull Services LLC as the
Claims and Noticing Agent in their Chapter 11 cases.

Trumbull, among other things, will:

-- serve as the Court's noticing agent to mail certain notices
   to the creditors and other parties in interest,

-- provide computerized claims, objection and balloting database
   services, and

-- provide expertise and consultation and assistance in claim
   and ballot processing and with the dissemination of other
   administrative information related to the Debtors' Chapter 11

Robert L. Aprati, the Debtors' Executive Vice President, General
Counsel and Secretary, tells the Court that although the Debtors
have not yet filed their Schedules of Assets and Liabilities, it
is anticipated that there will be thousands of creditors that
are required to be served with various notices, pleadings and
other documents filed in these cases.  The sheer size and
magnitude of the Debtors' creditor body makes it impracticable
for the Clerk of Court to serve notices efficiently and
effectively without creating an administrative burden.  Aside
from assisting in the claims processing, balloting and noticing,
Trumbull will also assist the Debtors in:

-- the solicitation of votes on any Chapter 11 Plan,

-- the forwarding of disclosure statements and related
   solicitation materials to many thousands of creditors, and

-- the accurate recordation and tabulation of the numerous
   ballots that are returned by the same creditors.

Trumbull has assisted and advised numerous Chapter 11 debtors,
like Kmart Corporation and Safety Kleen, in connection with
noticing, claims administration and reconciliation, and
administration of plan votes.

The terms of Trumbull's engagement is contained in a Consulting
Agreement, which outlines the specific services Trumbull will
render, at the request of the Debtors and Clerk's Office:

A. Preparing and serving required notices in these Chapter 11
   cases, including:

   * a notice of the commencement of these chapter 11 cases and
     the initial meeting of creditors under Section 341 (a) of
     the Bankruptcy Code,

   * a notice of the claims Bar Date,

   * notices of objections to claims,

   * notices of any hearings on a disclosure statement and
     confirmation of a plan or plans of reorganization, and

   * other miscellaneous notices as the Debtors or Court may
     deem necessary or appropriate for an orderly administration
     of these Chapter 11 cases;

B. Within five business days after the service of a particular
   notice, filing with the Clerk's Office a certificate or
   affidavit of service that includes:

   * a copy of the notice served,

   * an alphabetical list of persons on whom the notice was
     served, along with their address, and

   * the date and manner of service;

C. Maintaining copies of all proofs of claim and proofs of
   interest filed in these cases;

D. Maintaining official claims registers in this case by
   docketing all proofs of claim and proofs of interest in a
   claims database that includes this information for each claim
   or interest asserted:

   * the name and address of the claimant or interest holder and
     any agent thereof, if the proof of claim or proof of
     interest was filed by an agent,

   * the date the proof of claim or proof of interest was
     received by Trumbull or the Court,

   * the claim number assigned to the proof of claim or proof of
     interest, and

   * the asserted amount and classification of the claim;

E. Implementing necessary security measures to ensure the
   completeness and integrity of the claims registers;

F. Transmitting to the Clerk's Office a copy of the claims
   registers on a weekly basis, unless requested by the Clerk's
   Office on a more-or-less frequent basis;

G. Maintaining an up-to-date mailing list for all entities that
   have filed proofs of claim or proofs of interest and make the
   list available upon request to the Clerk's Office or any
   party in interest;

H. Providing access to the public for examination of copies of
   the proofs of claim or proofs of interest filed in these
   cases without charge during regular business hours;

I. Recording all transfers of claims pursuant to Rule 3001(e) of
   the Federal Rules of Bankruptcy Procedure and provide notice
   of these transfers as required by Bankruptcy Rule 3001(e), if
   directed to do so by the Court;

J. Complying with applicable federal, state, municipal and local
   statues, ordinances, rules, regulations, orders and other

K. Providing temporary employees to process claims, as

L. Promptly complying with any further conditions and
   requirements as the Clerk's Office or the Court may at any
   time prescribe; and

M. Providing any other claims processing, noticing, balloting,
   and relating administrative services as may be requested from
   time to time by the Debtors.

The Debtors will pay Trumbull's the fees and expenses as an
administrative expense and in the ordinary course of business.
The Debtors do not believe Trumbull is a "professional" whose
retention is subject to approval under Section 327 of the
Bankruptcy Code or whose compensation is subject to approval of
the Court.  Trumbull will be submitting to the Office of the
United States Trustee, on a monthly basis, copies of the
invoices it submits to the Debtors for services rendered.

Lorenzo Mendizabal, Vice President of Trumbull Services, assures
the Court that Trumbull, among other things:

-- is not employed by the Government and will not seek any
   compensation from the Government,

-- waives any rights to receive compensation from the

-- is not an agent of the United States and is not acting on
   behalf of the United States, and

-- will not misrepresent any fact to the public, and

-- will not employ any past or present employee of the Debtors
   for work involving the Debtors' Chapter 11 cases.

Mr. Mendizabal asserts that neither Trumbull, nor any of its
employees, has any connection with the Debtors, their creditors,
or any other party-in-interest.  Trumbull does not represent any
interest adverse to the Debtors' estates.

                            *   *   *

Trumbull Services LLC, has entered into an agreement to sell its
Trumbull Bankruptcy Services business unit to EPIQ Systems Inc.
for $31 million in cash.  The transaction is expected to close
in the next several weeks.  Trumbull Bankruptcy Services is a
national leader in providing technology-based case management
and administrative services for large Chapter 11 bankruptcy

"In just a few years, our bankruptcy services unit has
attained a national leadership position in the large Chapter 11
market, generating strong growth and profitability," said
Stephen Holcomb, president of Trumbull Services.  "However, the
unit represents a relatively small share of our overall business
and serves markets and distribution channels that are different
from our core businesses of business process outsourcing
services and technology solutions for the insurance industry."

"This divestiture enables Trumbull Services to dedicate our
capital and resources solely to serving the fast-growing
insurance services market," Holcomb added.  "It also places our
bankruptcy unit in an environment to continue its success and
growth.  We are pleased that EPIQ Systems will retain the
management team and employees.  We wish our former colleagues
continued success and thank them for their contributions to
Trumbull Services." (Budget Group Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    

Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1) are trading
at 18.25 cents-on-the-dollar, DebtTraders reports. See  
real-time bond pricing.

CANFIBRE GROUP: Resumes Trading on TSX as Inactive Issuer  
The CanFibre Group Ltd., (YCF: TSX Venture Exchange) has been
approved by the TSX Venture Exchange to resume trading effective
September 23, 2002, as an "Inactive Issuer" pursuant to Policy
2.6 of the TSX Venture Exchange.

The company is required to trade as Inactive because it does not
meet the Tier 2 Maintenance Requirement that substantially all
of its operating assets have not been impaired. With the recent
decision by the bondholders of CanFibre of Lackawanna LLC to
take over control of the Facility so that they can prepare it
for a sale, CanFibre does not meet this requirement.

During the period that CanFibre maintains the status of Inactive
Issuer, CanFibre has agreed to suspend current payments on all
Management and Investor Relations contracts and to work toward
"Reactivation" as soon as possible. To qualify for Reactivation,
CanFibre is preparing an offer to re-acquire the Facility and
expects to make such offer within 90 days. CanFibre expects the
offer to involve one or more partnerships with either industry-
based or financial-based companies. CanFibre has made
significant progress toward this objective since being notified
of the bondholder's intent to take over control.

CanFibre also notes that the Lackawanna facility has continued
to operate and fill sales orders on a timely basis.

                          *    *    *

As reported in Troubled Company Reporter's Sept. 13, 2002
edition, The CanFibre Group Ltd., announced that its discussions
with the senior secured lenders, supposedly to conclude a debt
restructuring agreement for CanFibre's Lackawanna MDF facility,
had concluded without concluding an agreement.  Notice was
received from the Bondholders that they had elected to foreclose
on CanFibre's ownership of the facility.  

In August 2002, CanFibre had negotiated the terms of a possible  
restructuring agreement with the Bondholders that resulted in a  
fully funded offer being made to the Bondholders to invest  
significant new equity into the facility in exchange for certain  
debt reductions. The offer met all of the terms and conditions  
being requested by the Bondholders at the time. Ultimately, the  
Bondholders decided to sell the facility instead.

CEATECH USA: Cash Flow Insufficient to Satisfy Liquidity Needs
During the quarter ended July 31, 2002, Ceatech USA Inc.,
experienced serious production problems in its hatchery which
prevented restocking of all of the Company's farm grow-out ponds
in a timely and orderly manner. The interruptions in the supply
of good quality seed to the farm had a material adverse impact
on Ceatech's financial and operating performance during the
period. The Company currently believes that the hatchery
production problems have been, or will soon be, mitigated to the
point of providing adequate seed to the farming operation.
However, it may take until the end of the fiscal year to produce
enough juvenile shrimp to stock all of the Company's existing 40
grow-out ponds and return to a normal harvest restocking

Management also intends to lease additional land and to
construct more growout ponds. The Company must finance such
expansion through the issuance of debt or equity. However, there
is no assurance that such debt or equity can be obtained on
terms acceptable to the Company. The inability to obtain
additional debt financing or equity capital will have an adverse
impact on the ability of the Company to continue operations.

Also, during the six months ended July 31, 2002, cash flow from
operations was insufficient to cover the Company's recurring
costs and expenses. Management continues to believe that further
expansion of the farm is required to achieve positive cash flow.
In addition, due primarily to the events of September 11, 2001,
there was a temporary but substantial decline in demand for
sales of fresh product in both local markets and high-end retail
markets on the west coast. As a result, the Company experienced
an increase in its inventory of frozen product at the end of the
fiscal year ended January 31, 2002, especially in the harder to
market smaller sizes of shrimp. Approximately half of this
inventory was sold to a mainland distributor during the quarter
ended April 30, 2002. Inventory of frozen product was reduced by
an additional 20,000 pounds during the quarter ended July 31,
2002. The Company is continuing to market the remaining
inventory of smaller sized frozen shrimp at a substantial
discount in order to obtain needed cash.  The Company reduced
the value of this inventory to the "lower of cost or market" by
approximately $318,000 as of April 30, 2002 and an additional
$122,000 as of July 31, 2002. These adjustments are reflected as
an increase in cost of sales in the consolidated statement of
operations for the six months ended July 31, 2002.

The Company has continued its efforts to obtain the rights to a
portion of several thousand acres of State-owned land adjacent
to and in the immediate vicinity of the farm formerly leased by
a major sugar cane grower. The Company has a short-term
revocable permit for the use of 115 acres of this land located
directly across the street from the present farm site which is
the best available land for efficient expansion of the farm
beyond the Kekaha Agriculture Park. If and when the Company is
able to commit to a long-term use of this property for its farm
operations, it is expected that the revocable permit will be
converted into a long-term lease. The Company remains in
discussions with other potential users of portions of the
vacated lands and with State of Hawaii representatives in regard
to the best means of structuring long-term leases for these
lands and the best means of maintaining and reconfiguring the
infrastructure and vital utility services necessary to support
future uses of these lands in the near and long term. Through
its active participation in the planning process, management is
reasonably confident that the Company eventually will be able to
secure enough land to accommodate all expansion in the
foreseeable future.

Since its inception in January 1995, the Company has sustained
cumulative net losses of approximately $9.1 million. Such losses
have been financed through a combination of funds provided by
stockholders and funds provided by loans from financial
institutions. Based on current shrimp production levels and
near-term projected sales revenue, the Company will be required
to obtain additional financing in order to continue to fund
losses until such time as expanded production facilities are

The Company has sustained net losses since inception and
presently has no committed outside source of capital to fund
such losses. Therefore, doubt must be expressed regarding the
Company's continuing viability. For the quarter and six months
ended July 31, 2002, the Company incurred a net loss of $744,438
and $1,649,545, respectively, and at July 31, 2002, the Company
had an accumulated deficit of $9,078,369, which, along with the
lack of committed outside capital to fund any future losses,
raises substantial doubt about its ability to continue as a
going concern. In addition, during the six months ended July 31,
2002, the Company used cash in operations of $162,748 and used
cash for investing activities of $165,643 and, therefore, had to
rely on sources of cash outside the Company to fund those
operations and activities.

COMDISCO INC: Court Okays Payment of Severance Claims to Fazio
Michael A. Fazio, a former employee of Comdisco, Inc., asks the
Court to compel the Debtors to pay his Severance and Wage
Related Claims amounting $1,300,000 plus an Emergence Bonus
pursuant to his Employment Agreement with the Debtors.  Mr.
Fazio also seeks medical, dental and other post-termination
benefits in accordance with the Court-approved Employment

                        *     *     *

With the agreement of both parties, Judge Barliant orders the
Debtors to pay $1,049,021, plus attorney's fees of $20,000 to
Mr. Fazio.  Moreover, in consideration of the modification of
the non-compete provision of the Employment Agreement, the
Debtors will continue to provide medical, dental and other post-
termination benefits to Mr. Fazio. (Comdisco Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900)    

CONSOLIDATED FREIGHTWAYS: Sales Specialists Join CaseStack Inc.
CaseStack, Inc., the leading provider of complete outsourced
logistics solutions to mid-sized companies, announced the
appointment of Gary Murphy as Vice President of Logistics
Solutions. Murphy joins CaseStack from Consolidated Freightways
where he was formerly Vice President, National Sales. In
addition, many of Consolidated Freightways' most progressive
sales managers will also join CaseStack, positioning the company
for significant future growth.

Consolidated Freightways Corporation (Nasdaq:CFWEQ) recently
announced it was discontinuing operations after 73 years as an
American transportation icon and the nation's third-largest
less-than-truckload carrier.

"It is always disruptive when an industry icon falls, but we are
excited to create the silver lining. CaseStack is welcoming CF's
most talented individuals to help us change the industry," said
Dan Sanker, President and CEO, CaseStack. "There are still far
too many companies force-feeding inappropriate transportation,
warehousing, and software services to clients. The future is
about providing client-based logistics solutions that include
those services."

Upon CF's liquidation announcement, analysts immediately
projected large rivals such as Roadway Corp. (Nasdaq:ROAD),
Yellow Corp. (Nasdaq:YELL), and Arkansas Best (Nasdaq:ABFS) to
benefit as Consolidated Freightways' customers scoured the
landscape for trucking capacity.

"Consolidated's bankruptcy should be a significant earnings
catalyst for the other LTL carriers," said Mark Levin, transport
analyst, Davenport & Co., Richmond, Virginia.

But some experts see a more profound change occurring as the
industry evolves further into the information age. Over the past
few decades, traditional carriers have faced the challenges of
deregulation while managing an old infrastructure heavy with
billions of dollars of assets and unionized labor.

"CaseStack is lucky to be in a position to attract the best that
the industry has to offer. We have grown five-fold since last
year, and with Gary and his team, CaseStack anticipates
continued growth at an even faster rate," said Sanker.

The new team of sales professionals joins CaseStack with
established relationships with more than 8,000 mid-sized
customers who spend over $30 billion on traditional logistics
services. CaseStack will provide these clients with the ability
to access Fortune-500 caliber technology, reduce overall costs,
and improve customer service levels.

"We all realize that CaseStack represents the future of this
industry. The CF team has developed customer relationships over
prior decades while providing only one component to address
their supply chain challenges," said Gary Murphy. "We are
excited to now be able to address our customers' end-to-end
logistics needs, including all modes of transportation,
warehousing and cost-effective supply chain management

CaseStack, Inc. -- a Business  
Process Outsourcing company, provides logistics services to mid-
sized companies that sell products to retailers, distributors
and other manufacturers. CaseStack combines an advanced
transportation and warehousing system with proprietary, web-
based software to provide end-to-end fulfillment services that
enable customers to reap the benefits and economies of a
sophisticated, global logistics system without all the
infrastructure costs.

CREST CLARENDON: S&P Rates Class D Notes & Preferreds at BB
Standard & Poor's Ratings Services has assigned its ratings to
Crest Clarendon Street 2002-1 Ltd./Crest Clarendon Street 2002-1
Corp.'s $300 million notes and preferred shares (see list).

Crest Clarendon 2002-1 is a CDO backed by REIT securities
(approximately 62% of the aggregate principal balance of the
collateral) and CMBS (approximately 38% of the aggregate
principal balance of the collateral), and is structured as a
cash flow transaction.

The transaction is static and was fully ramped up at closing.
There is no reinvestment period. MFS Investment Management is
acting as the collateral administrator.

The ratings are based on the following:

--  Adequate credit support provided by subordination and excess

--  Characteristics of the underlying collateral pool,
    consisting of REIT securities and CMBS;

--  Hedge agreements entered into with Wachovia Bank N.A. to
    mitigate the interest rate risk created by having all of the
    collateral paying a fixed rate of interest while
    approximately 80% of the liabilities pay a floating rate;

--  Scenario default rate of 26.80% for the class A notes,
    15.16% for the class B notes, 11.60% for the class C notes,
    5.40% for the class D notes, and 4.68% for the preferred
    shares; and a break-even loss rate of 35.79% for the class A
    notes, 19.15% for the class B notes, 13.19% for the class C
    notes, 7.42% for the class D notes, and 5.47% for the
    preferred shares;

--  Weighted average maturity of 7.180 years the portfolio;

--  Expected portfolio default rate of 3.046%;

--  Standard deviation of portfolio default rate of 4.291%;

--  Weighted average correlation of 4.754% for the portfolio;

--  Under Standard & Poor's stresses, interest on the class B-1,
    B-2, C, and D notes is deferred for some periods; thus the
    rating on the these notes addresses the ultimate payment of
    interest and principal. The rating on the preferred shares
    addresses solely the ultimate payment of the notional amount
    of $8 million.

                         Ratings Assigned

               Crest Clarendon Street 2002-1 Ltd./
               Crest Clarendon Street 2002-1 Corp.

          Class              Rating     Amount (mil. $)
          A                  AAA                    228
          B-1                A-                      29
          B-2                A-                      10
          C                  BBB                     15
          D                  BB                      10
          Preferred shares   BB-r                     8     

CUTTER & BUCK: Moves to New Headquarters in Fremont in Seattle
Cutter & Buck Inc., (Nasdaq: CBUKE) announced the successful
completion of its move to new headquarters in the Fremont area
of Seattle, WA.

"The move to new headquarters went smoothly and has given us the
opportunity to bring our headquarters staff back together under
the same roof," said John Leech, Vice President & Chief
Information Officer, who was responsible for all facets of the
move project. "We are confident that communications will be
enhanced and that we will gain more synergy and efficiency by
returning to a single facility. In addition, moving into an
incredibly attractive and functional building and invigorated
neighborhood has given all employees a tremendous lift," he
said. The building, a centerpiece in the Quadrant Lake Union
Center project, is owned by Bedford Property Investors and
sublet and managed by Adobe Systems, Inc.

The company also announced that it was a finalist in the annual
competition for "Warehouse of the Year" sponsored by Warehousing
Management Magazine.

"We are honored at the recognition of the excellence of our
Distribution Center," said Joni Barrott, Vice President of
Operations. "We have superb people and excellent systems, and we
intend to stay in the forefront of warehouse performance."

Cutter & Buck's new corporate Headquarters is located at 701
North 34th Street, Suite 400, Seattle, WA 98103 and houses
Administrative, Sales, Design, IT, Marketing, Production,
Accounting and Finance, Customer Service, and Embroidery
Development functions. The company continues to operate its
state-of-the-art Distribution Center in Renton, WA for
warehouse, shipping, and embroidery production.

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

                         *    *    *

As reported in Troubled Company Reporter's Sept. 17, 2002
edition, Cutter & Buck said it is continuing its internal
investigation into accounting irregularities during the fiscal
years ended April 30, 2000 and April 30, 2001 and intends to
restate its financial results for those periods in order to
correct inaccurate reporting of certain transactions and to
properly reflect the treatment of sales entries that should have
been recorded in later periods.

The circumstances leading up to the restatement are being
investigated by the Securities and Exchange Commission and by
Nasdaq and the Company is responding to their inquiries.

DOBSON COMMS: Will Pay In-Kind Dividend on 13% Senior Preferreds
Dobson Communications Corporation (Nasdaq:DCEL) declared an in-
kind dividend on its outstanding 13% Senior Exchangeable
Preferred Stock. The dividend will be payable on November 1,
2002 to holders of record at the close of business on October
15, 2002. The CUSIP number for the 13% Senior Exchangeable
Preferred Stock is 256072 50 5.

Holders of shares of 13% Senior Exchangeable Preferred Stock
will receive 0.03322 additional shares of 13% Senior
Exchangeable Preferred Stock for each share held on the record
date. The dividend covers the period August 1, 2002 through
October 31, 2002. The dividends have an annual rate of 13% on
the $1,000 per share liquidation preference value of the
preferred stock.

Dobson Communications is a leading provider of wireless phone
services to rural markets in the United States. Headquartered in
Oklahoma City, the Company owns or manages wireless operations
in 17 states. For additional information on the Company and its
operations, please visit its Web site at

                          *   *   *

As previously reported in the August 22, 2002 issue of the
Troubled Company Reporter, Dobson Communications Corporation
requested a review of the Nasdaq Staff Determination that it
recently received concerning the Company's continued listing
under Marketplace Rule 4450 as a Standard 2 member on the Nasdaq
National Market.

According to Nasdaq rules, a hearing request stays any action on
the Company's securities pending review by a Listing
Qualifications Panel. Consequently, until the appeal is finally
decided, Dobson's Class A shares will continue to trade on the
Nasdaq National Market.

Dobson/Sygnet Comm.'s 12.25% bonds due 2008 (DCEL08USR2) are
trading at 68.5 cents-on-the-dollar, DebtTraders reports. See
for real-time bond pricing.

DVI: Weak Operating Results Spur Fitch to Cut Debt Rating To B+
Fitch Ratings lowers DVI's senior unsecured debt rating to 'B+'
from 'BB-'. The Rating Outlook remains Negative. This action
covers $155 million of debt due in 2004.

The rating action reflects DVI's weak operating performance,
asset growth exceeding internal capital formation, rise in
encumbered assets as a percentage of total assets, and increased
financial leverage. The Rating Outlook remains Negative as DVI
faces significant challenges in reversing the trends in leverage
and capitalization. As such, if current trends continue, the
cushion available to unsecured debtholders may become further
compromised. Fitch also notes that gain-on-sale revenue as a
percentage of total revenue has rose sharply in fiscal year 2001
and first the first nine months of fiscal year 2002.

During the quarter ended March 31, 2002, DVI took two large one-
time charges in connection with the revaluation of certain
investments in its securities portfolio and its operations in
Argentina. The charges in the securities portfolio was to
recognized previously unrealized losses in current earnings for
Corvis Corp., and Claimsnet. This charge approximated $16.6
million. In Argentina, as a result of the peso devaluation, DVI
took a $13.7 million special loss provision. Although its
Argentinean operation is small, this amount did not cover all of
its outstanding credit.

While the charge for the investment securities had no impact on
book equity, as it was already recognized in comprehensive
income, it does provide additional insight into management's
risk appetite. The investment in Corvis came as a result of
warrants given to DVI in connection with a loan. DVI has taken
equity in other companies as a result of loan workouts. During
the March 31, 2002 quarter, DVI transferred $16.5 million of
loans receivable from two customers to an investment account to
reflect equity securities taken in consideration for credit
previously outstanding.

Overlaid against Fitch's concerns is management's success in
navigating the company through one of the most challenging
periods in commercial finance. Additionally, in part due to
industry consolidation, DVI has emerged as the leading
independent healthcare finance company in the world.

The special charges taken in the March 31, 2002 quarter resulted
in DVI reporting a loss for that three month period and net
income of $3 million for the nine-month period. Excluding these
charges, net income would have been $6.5 million and $18.9
million, respectively. While still profitable, DVI's internal
capital formation continues to lag asset growth. This
increasingly puts capital under pressure, especially when the
scope of DVI's international operations are considered. DVI
during the first half of calendar 2002 issued $25 million of
7.5% convertible subordinated debt. This security has a final
maturity of 2009 and is convertible into DVI common equity with
a strike price of $20/share.

Since fiscal year 1997, DVI's asset quality has weakened in part
due to the economy as well as a change in business mix, with the
addition of small ticket vendor finance. This trend has slowed
in fiscal 2002 as net chargeoffs as a percentage of managed
receivables have dipped slightly. However, because the company
uses the asset substitution provision allowable in its
securitizations, on-balance sheet assets could be adversely
selected against. While managed net chargeoffs appear moderate,
on a 12-month lag basis, there has been a noticeable increase on
an owned basis. It appears that credit costs will remain high
over the intermediate term as non-performing receivables as a
percentage of total managed receivables increased to 6.44% at
March 31, 2002 from 4.61% at June 30, 2001.

Additionally, losses arising from the recent problems in
Argentina have not been charged off. However reserves have been
increased and recoveries can be expected from assets previously
charged off.

DYNEGY INC: Elects Dan Dienstbier as Chairman of the Board
The Board of Directors of Dynegy Inc., (NYSE:DYN) announced the
election of Dan Dienstbier as the company's chairman of the
board. Dienstbier will continue in his present role as interim
chief executive officer until a successor is named.

Commenting on the board's election, J. Otis Winters, lead
director and chairman of the Governance and Nominating
Committee, said, "Certainty, consistency and confidence in
company leadership is one of our top priorities, and Dan has
excelled in every aspect of his duties as a member of the board
and interim chief executive officer.

"His commitment to responsibility, performance and
accountability made him the clear choice to serve in these
roles. We are confident that Dan can continue to build on
Dynegy's recent achievements and address its priorities,
including the execution of its capital and liquidity plan," he

Dynegy also announced that H. John Riley, Jr., chairman,
president and chief executive officer of Cooper Industries,
Ltd., a worldwide manufacturer of electrical products, tools and
hardware, has resigned from the board of directors. Riley, who
currently serves as director of The Allstate Corporation, Baker
Hughes Incorporated and Junior Achievement Inc., was elected to
Dynegy's board in May 2001.

"The demands on my time, resulting from my duties at Cooper
Industries and my responsibilities to the various organizations
I serve as a director and volunteer, reached a point where I
could no longer maintain the level of participation or
commitment that Dynegy deserves and requires as the company
executes its plan," Riley said. "I am proud to have served on a
board whose directors have worked diligently to develop and
execute a solid strategy for the company's future."

Riley's successor on the board has not been named.

Dynegy Inc., produces and delivers energy, including natural
gas, power, natural gas liquids and coal, through its owned and
contractually controlled network of physical assets. The company
serves customers by aggregating production and supply and
delivering value-added solutions to meet their energy needs.

                         *    *    *

As reported in Troubled Company Reporter's July 29, 2002,
edition, Standard & Poor's Rating Services lowered its corporate
credit rating of Houston, Texas-based energy provider Dynegy
Inc., and subsidiaries to single-'B'-plus from double-'B'.

At the same time, Standard & Poor's lowered the corporate credit
rating of Northern Natural Gas Co., to single-'B'-plus from
triple-'B' minus and the Creditwatch listing was changed to
negative from developing. All other affiliates' ratings remain
on CreditWatch with negative implications.

The rating action -- prior to completion of the Northern Natural
Gas pipeline -- reflected Standard & Poor's analysis that cash
flows were deteriorating.

DYN is continuing to execute a restructuring plan designed
to reduce consolidated debt and improve liquidity.

DebtTraders says that Dynegy Holdings Inc.'s 8.75% bonds due
2012 (DYN12USR1) are trading at 32 cents-on-the-dollar. See  
real-time bond pricing.

EL PASO CORP: S&P Puts Ratings on Watch in Wake of FERC Ruling
Standard & Poor's Ratings Services placed its ratings on El Paso
Corp., and its affiliates on CreditWatch with negative
implications as a result of the Federal Energy Regulatory
Commission Administrative Law Judge's recommendation that fines
be imposed for withholding capacity and exercising market power
in California.

Standard & Poor's will review the firm's response to regulatory
pressures, as well as 2003 projected cash flow and capital
spending at the pipeline, exploration and production (E&P)
units, and gathering and processing units. The potential for
lower credit ratings is possible after Standard & Poor's review,
which will be completed before the end of 2002.

"The CreditWatch listing for the El Paso family reflects the
market uncertainties regarding sustainable cash flow and the
current regulatory environment," said Standard & Poor's credit
analyst John Whitlock. However, El Paso's adequate liquidity
cushion is buoyed by a $4 billion credit facility backstopping
commercial paper, and cash and cash equivalents of $1.8 billion.

Providing additional means for the company to meet its
obligations are projected asset sale proceeds of nearly $4
billion through 2003. El Paso should have no difficulty in
meeting debt maturities of about $500 million in 2002 and $1.7
billion in 2003. With the elimination of rating and stock price
triggers on all but $300 million of the company's financings and
the declaration to limit working capital investment in its
merchant energy group to $1 billion, Standard & Poor's believes
that El Paso has an ample liquidity cushion.

El Paso's credit quality is bolstered by the steady cash flow
characteristics of its regulated pipeline units, ANR Pipeline
Co., Colorado Interstate Gas Co., El Paso Natural Gas Co.,
Southern Natural Gas Co., and Tennessee Gas Pipeline Co., which
currently account for over one-third of cash flow and assets.
This strength is countered by the growing importance of
investments in myriad higher-risk nonregulated businesses,
including E&P, merchant energy marketing and trading, LNG, and
gathering and processing.

EMPRESA ELECTRICA: Wants to Hire Ordinary Course Professionals
Empresa Electrica del Norte Grande S.A., wants to continue
employing professionals it turns to in the ordinary course of
its business without the necessity of submitting separate
employment applications and affidavits to the Bankruptcy Court
for each individual professional.

The Debtor tells the U.S. Bankruptcy Court for the Southern
District of New York that it desires to continue to employ the
Ordinary Course Professionals to render services to its estate
similar to those services rendered prior to the Petition Date.
These services, the Debtor explains, are not connected to the
Debtor's chapter 11 case, but include legal, accounting and
auditing services used in the ordinary course of the Debtor's
business and operations.  The Debtor further seeks to reserve
the right to retain additional Ordinary Course Professionals
from time to time during this case, as the need arises.

The Debtor submits that, in light of the additional cost
associated with the preparation of employment applications for
professionals who will receive relatively small fees, it is
impractical and inefficient for the Debtor to submit individual
applications for each professional. Accordingly, the Debtor
requests that this Court dispense with the requirement of
individual employment applications and retention orders with
respect to each Ordinary Course Professional, and that each
professional be retained from time to time as of the Petition

The Debtor proposes to pay each Ordinary Course Professional,
without a prior application to the Court provided that if any
amount owed for a professional's fees exceeds $20,000 per month,
then the payments to such professional shall be subject to the
prior approval of the Court. The Debtor believes at this time
that the fees payable to the Ordinary Course Professionals will
not exceed in the aggregate $40,000 per month.

Empresa Electrica del Norte Grande SA is a partially integrated
electric utility engaged in the generation, transmission and
sale of electric power in northern Chile. The Company filed for
chapter 11 protection on September 17, 2002. Lindsee Paige
Granfield, Esq., Thomas J. Moloney, Esq., at Cleary, Gottlieb,
Steen & Hamilton represent the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its
creditors, it listed $612,861,000 in total assets and
$385,483,000 in total debts.

ENRON: Court Clears Litigation Settlement with Simon Property
On August 29, 2002, Judge Gonzalez put his stamp of approval on
a Settlement Stipulation by and among Enron Energy Services
Operations Inc., Tenant Services, Inc., and Simon Property Group
LP to settle all claims.

As previously reported, Enron Energy Services Operations, Tenant
Services, and Simon Property Group LP and certain of its
affiliates entered into Agreements, under which Enron Energy
Services and Tenant Services will provide Simon Property and its
affiliates with energy management and utility billing services,
and design and construct energy projects for Simon Property's
owned and managed Facilities. The Project Costs incurred in
constructing the Projects approximate $6,490,000.

However, about a couple of days before the Petition Date, Enron
Energy Services Operations informed Simon Property that services
under the Outsource Agreement would cease.  But some Simon
Property Tenants continued to submit payments to the Account for
their December 2001 and January 2002 utility bills. These Post-
November Payments in the Account reached $6,760,000.

Simon Property made payments directly to the utility service
providers for December 2001 and January 2002 utility charges.  
SPG later demanded payment from Tenant Services and sought a
turnover of the Account.  However, the Debtors were reluctant to
turnover the Post-November Payments without a Court order and
without first determining whether the Debtors had claims against
Simon Property.

To recover the balance in the Account, Simon Property and
Telluride, thus, commenced an action against Tenant Services and
KeyBank.  The complaint was lodged in the United States District
Court for the District of Colorado.

In addition to seeking a turnover of the funds in the Account,
Simon Property asserted it was entitled to payment without
offset, under a constructive trust theory, of approximately
$4,000,000 paid to Tenant Services prior to December 1, 2001 and
not paid to utility service providers for pre-December 2001
utility services.  According to Simon Property, the Outsource
Agreement expressly provides that Tenant Services was acting as
its agent and, accordingly, Tenant Services had a fiduciary
obligation to remit the payments received to the utility service
providers.  Furthermore, Simon Property also asserted potential
claims of approximately $45,000,000 based on the termination of
the Agreements.

After an exchange of documents and extensive discussions and
negotiations in an effort to resolve the matter consensually,
the parties reached a settlement and compromise.  The terms of
their proposed Stipulation provides:

    (a) Effective Date of Stipulation and Termination of Civil

        The Stipulation becomes effective on the date it is
        "so ordered" by the Bankruptcy Court.  This is provided,
        however, if the Civil Action is still pending, the
        Effective Date does not occur, and this Stipulation will
        not become effective, until the Colorado District Court
        has entered an order, reasonably satisfactory to the
        Debtors, dismissing the Civil Action with prejudice. In
        the event the Civil Action is dismissed prior to the
        approval of this Stipulation by the Bankruptcy Court,
        the Debtors consent that they will not remove or
        transfer funds from the Account without:

        (1) the written consent of Simon Property, or
        (2) order of the Bankruptcy Court;

    (b) Telluride Claims Against Account:

        Simon Property will indemnify and hold harmless the
        Debtors for any claims asserted against any of the
        Debtors or any affiliate of Enron by Telluride arising
        under or in connection with the Account.  Simon Property
        must pay and reimburse the Debtors for any costs and
        expenses incurred by the Debtors in obtaining a
        dismissal of the Civil Action;

    (c) Payments to Simon Property:

        Within two business days after the Effective Date, the
        Debtors shall pay the Post-November Payments of
        $6,760,000 plus $3,500,000 to Simon Property;

    (d) Waiver of Simon Property Claims:

        The payments made pursuant to the Stipulation will be in
        full and complete settlement, release and discharge of
        any and all claims asserted by Simon Property against
        Enron Energy Services Operations, Tenant Services and
        the other Debtors;

    (e) Payments to Enron Energy Services Operations:

        In consideration for the purchase of the Projects, Simon
        Property will pay $6,490,000 to Enron Energy Services
        Operations, representing the Project Costs;

    (f) Transfer of Projects to Simon Property:

        Upon receipt by Enron Energy Services Operations of the
        Project Cost Payment, title to the Projects will be
        deemed transferred to Simon Property and Enron Energy
        Services Operations will have no further right, title or
        interest to the Projects.  Enron Energy Services
        Operations must provide Simon Property with a bill of
        sale evidencing the transfer "as is, where is";

    (g) Section 363(m) Protections Afforded Simon Property:

        The purchase of the Projects by Simon Property for the
        Project Cost Payment will constitute a "good faith"
        transaction and will be entitled to the protections set
        forth in Section 363(m) of the Bankruptcy Code;

    (h) Simon Property Remaining Tax Obligations:

        Notwithstanding the rejection and termination of the
        Agreements and the mutual releases, the Stipulation
        provides that to the extent Simon Property is obligated
        under the Agreements, Simon Property will remain
        obligated and responsible for the payment of, and
        reimbursement to Enron Energy Services Operations,
        Tenant Services, and the Debtors, respectively, for, all
        taxes and other charges imposed or levied by any taxing
        authority that are required to be paid by Simon Property
        and relate to any commodities, services, work,
        activities, materials, property and payments provided
        for, delivered, purchased, sold, consumed, fabricated,
        used or leased under or with respect to the Agreements;

    (i) Rejection and Termination of Agreements: On the
        Effective Date, each of the Agreements that constitute
        an executory contract or an unexpired lease for purposes
        of the Bankruptcy Code will be deemed rejected and
        terminated by the Debtors pursuant to Section 365 of the
        Bankruptcy Code without further liability.  Any
        Agreement not rejected, if any, that does not constitute
        an executory contract or unexpired lease for purposes of
        the Bankruptcy Code, will be deemed terminated by mutual
        consent on and as of the Effective Date, so that none of
        the Parties have any further obligations or liabilities
        to the other;

    (j) Mutual Release:

        Upon satisfaction of the Parties' obligations under the
        Stipulation, the Parties release from any and all claims
        which the Parties may have in connection with or
        relating to any of the Agreements.  Notwithstanding the
        foregoing, to the extent general liability insurance
        covers a claim asserted against Simon Property for
        bodily injury arising from Enron Energy Services
        Operations' maintenance services during the period when
        Enron Energy Services Operations was providing the
        services under the Agreements, Simon Property does have
        the right, at no cost and liability to the Debtors, to
        assert a claim against, and recover solely from, the
        general liability insurance policy.  Simon Property and
        the JV Parties agree that they will not file or
        otherwise seek to prosecute a claim in the Chapter 11
        cases of any of the Debtors. Any proofs of claim filed
        by or on behalf of Simon Property and the JV Parties in
        the Debtors' Chapter 11 cases will be deemed immediately
        expunged without any further order of the Court. (Enron
        Bankruptcy News, Issue No. 43; Bankruptcy Creditors'
        Service, Inc., 609/392-0900)

EXIDE TECHNOLOGIES: Fitch Rates $250 Mill. DIP Facility at BBB+
Fitch Ratings has assigned a 'BBB+' to Exide Technologies $250
million Debtor-In-Possession Facility consisting of $121 million
Revolving Credit facility and a $129 million Term Loan facility.
The DIP Facility expires the earlier of (i) February 15, 2004 or
(ii) the effective date of a plan of reorganization entered by
the Bankruptcy Court or (iii) the 30th day prior to the date
upon which the revolving credit loans under the Pre-Petition
Facilities become due (November 2003). The DIP Facility will
benefit from security under Bankruptcy Code Section 364(C)(2)
and Section 364(C)(3). The security afforded includes a
perfected first priority lien on all unencumbered property of
the Debtors and a perfected junior lien on all property of the
Debtors that is subject to valid and perfected liens in
existence at the time of the bankruptcy filing. Additionally,
the DIP Facility will hold super-priority administrative claim
status under the U.S. Bankruptcy Code, will benefit from
perfected first priority senior consensual priming liens on all
collateral that was securing the Company's obligations under the
pre-petition credit agreement, and will have dominion over the
cash via a lock box account.

A debtor-in-possession loan rating assigned by Fitch Ratings
addresses both the probability of a company's successful
reorganization and emergence from bankruptcy and the protection
afforded to the DIP loan providers through the structure and
collateral associated with the DIP Facility. This rating is
solely for the DIP Facility for Exide and is not an indication
of Exide's rating upon emergence from bankruptcy. Fitch Ratings
will review and provide a new credit rating for Exide at that

In providing a rating for the DIP Facility, Fitch Ratings
considered the Company's plan to rationalize battery
manufacturing facilities and plastic plants, reduce headcount
and streamline productivity through Lean Manufacturing, a
process that aims to eliminate waste and improve customer
relations, product design and factory management. The rating
also reflects stronger credit protection measures as a result of
the debt relief provided by the bankruptcy filing and throughout
the reorganization process. Fitch Ratings expects considerable
improvement in the credit protection measures by fiscal year end
2003 (March, 2003). Exide's EBITDA is expected to rebound due to
completed restructuring initiatives that involve reducing the
Company's cost structure. By year end 2003, EBITDAR/Cash
Interest is forecasted to improve to 2.4x, Total Debt/EBITDAR to
amount to 3.0x and DIP Debt/EBITDAR to be 0.6x. The rating is
constrained by the execution risk associated with the labor
intensive nature of the reorganization plan. The Company's
aftermarket distribution network faces a competitive environment
from larger and very well geographically diversified players.

In the event the Company does not emerge from bankruptcy and a
liquidation of the assets is required, the structure and asset-
based nature of the DIP Facility provides significant protection
for the lenders. Advances under the DIP Facility for the
Domestic Facilities are governed by a borrowing base consisting
of conservative advances of eligible domestic accounts
receivables, inventory, and fixed assets conservatively capped
by a percentage of the orderly liquidation value of eligible
equipment and certain real estate. The Euro Facility is subject
to availability with conservative advances against eligible and
accounts receivable and inventory. The borrowing base
comfortably covers average projected outstanding under the

Exide, headquartered in Princeton NJ, is one of the largest
producers of lead acid batteries in the world. The Company has
grown through acquisitions, currently conducting operations in
approximately 89 countries in North America, Europe, the Middle
East, Australia, and Asia. The Company operates three business
segments: Transportation, which produces automotive batteries,
Network Power, which provides network batteries used for back-up
power applications and telecommunications systems, and Motive
Power, which manufactures batteries for forklift trucks and
other electric vehicles. For fiscal year end March 31, 2002, the
Company reported $2,424.6 million in revenues and $154.0 million
in earnings before interest, taxes depreciation and
amortization, restructuring and non-recurring charges.

Several debt funded acquisitions between 1997 and 2000 and a
weak Network Power and telecommunication market in 2000 and
2001, led to a liquidity crunch and the Company filed for
protection under the Bankruptcy Code in April of 2002. During
2001 the Company undertook several restructuring initiatives
including closing the Burlington, Dallas and Dunmore plants,
reducing the manufacturing workforce in Cwmbran, Wales, and
Duisburg, Germany and reorganizing the European Transportation
segment's sales and logistics workforce resulting in the
elimination of 1100 employees. Additionally, Exide closed 27
distribution facilities principally in North America and shut
down its automotive manufacturing operation in Maple, Ontario.
The bankruptcy filing provides Exide with the time and
flexibility to address and resolve several operational issues
and to align their cost structure with the current demand in
their markets. The ongoing restructuring initiatives and cost
reduction should yield an additional $80.6 million to EBITDAR
over fiscal 2003.

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

EXIDE TECHNOLOGIES: Applauds Fitch's BBB+ on $250M DIP Facility
Exide Technologies, Inc., (OTCBB: EXDTQ) announced that the
Company's $250 million debtor-in-possession financing has been
assigned a "BBB+" rating by Fitch Ratings.

Exide Technologies and certain of its U.S. subsidiaries filed
petitions to reorganize under Chapter 11 of the U.S. Bankruptcy
Code on April 15, 2002. In conjunction with the filing the
Company received DIP financing arranged by Citicorp USA, a
subsidiary of Citibank N.A., and other financial institutions.

Fitch Ratings said that a DIP loan rating addresses, among other
things, the probability of a company's successful reorganization
and emergence from bankruptcy. In providing the rating for the
DIP facility, Fitch Ratings said that it considered Exide's
operational restructuring and Lean Manufacturing initiatives, as
well as stronger credit protection as a result of the debt
relief under Chapter 11 and expected improvements in EBITDA
(earnings before interest, taxes, depreciation and

Craig Muhlhauser, Chairman and Chief Executive Officer of Exide
Technologies, said, "We are pleased with this rating, which may
be viewed as an outside acknowledgement that our strategy to
reorganize our finances and operations is making progress. Our
reorganization is proceeding to plan, and our customers and
suppliers have shown outstanding support. They have seen that
our reorganization has had no adverse impact on our ability to
serve them. In fact, we have won several new contracts from new
and existing customers since April, and that is only possible
because all of us at Exide are focused on making our customers

Exide Technologies, with operations in 89 countries and fiscal
2002 net sales of approximately $2.4 billion, is one of the
world's largest producers and recyclers of lead-acid batteries.
The company's three global business groups -- motive power,
network power and transportation -- provide a comprehensive
range of stored electrical energy products and services for
industrial and transportation applications.

Industrial uses include network power applications such as
telecommunications systems, electric utilities, railroads,
photovoltaic (solar-power related) and uninterruptible power
supply; and motive-power applications for a broad range of
equipment uses, including lift trucks, mining vehicles and
commercial vehicles.

Transportation applications include automotive, heavy-duty
truck, agricultural and marine, as well as new technologies
being developed for hybrid vehicles and new 42-volt automotive
applications. The company supplies both aftermarket and
original-equipment transportation customers.

Further information about Exide Technologies, its financial
results and other information can be found at

FARMLAND INDUSTRIES: Fitch Withdraws Default-Level Ratings
Fitch Ratings has withdrawn its ratings on Farmland Industries,
Inc.'s senior secured credit facility, subordinated debt, and
preferred stock. Farmland's senior secured credit facility was
rated 'DD'; the subordinated debt was rated 'D'; and the
preferred stock was rated 'D'. Farmland filed a petition for
reorganization and protection from its creditors under Chapter
11 of the U.S. Bankruptcy Code in May 2002 when the company
could not continue to meet aggressive redemption demands from
its subordinated debt holders. Fitch Ratings will no longer
provide coverage for this issuer.  

FERRELLGAS PARTNERS: Completes $170MM Senior Debt Refinancing
Ferrellgas Partners, L.P. (NYSE: FGP), the nation's second-
largest retail marketer of propane, has successfully completed
the sale of $170 million of 8-3/4% senior notes due 2012.

Ferrellgas' sale of these senior notes satisfied the funding
condition related to the previously announced tender offer of
all its 9-3/8% senior secured notes due 2006.  The tender offer
expired Tuesday at 9:00 a.m., Eastern Daylight Time.  The net
proceeds from the sale will be used to tender or redeem the $160
million of Ferrellgas' outstanding 9-3/8% senior secured notes,
including related call premiums, fees, accrued and unpaid
interest and consent payments.

"We are very pleased by the market's favorable reception to our
debt offering," said Kevin T. Kelly, Senior Vice President and
Chief Financial Officer of Ferrellgas.  "Our recent financial
performance and strong reputation in the capital markets allowed
us to capitalize on the favorable interest rate environment,
securing replacement financing well into the future at a lower
interest rate."

As of the expiration of the tender offer, $159,950,000 aggregate
principal amount of the tendered notes, which represents
approximately 99% of the 9-3/8% senior secured notes, were
tendered at a price of $1,032.50 per $1,000 principal amount,
which includes a consent payment of $1.25 per $1,000 principal
amount for those notes tendered within the consent period.  All
notes tendered have been accepted for payment.  Ferrellgas
intends to immediately redeem, pursuant to the terms of a
supplemental indenture, the remaining $50,000 of 9-3/8% senior
secured notes not tendered in the offer.

Credit Suisse First Boston acted as Dealer Manager in connection
with the tender offer and consent solicitation, and co-led the
underwriting group together with Banc of America Securities LLC
in connection with the sale of the 8-3/4% senior notes.

Ferrellgas Partners, L.P., through its operating partnership,
Ferrellgas, L.P., serves more than one million customers in 45
states.  Its employees indirectly own more than 17 million
common units of Ferrellgas through an employee stock ownership
plan.  Its common units trade on the New York Stock Exchange
under the ticker symbol FGP.
                         *    *    *

As reported in Troubled Company Reporter's Sept. 20, 2002
edition, Ferrellgas Partners, L.P.'s $170 million 8.75% senior
due June 15, 2012, issued jointly and severally with its special
purpose financing subsidiary Ferrellgas Partners Finance Corp.,
were rated 'BB+' by Fitch Ratings.

FGP's 'BB+' rating recognizes the subordination of its debt
obligations to approximately $547 million unsecured debt of
Ferrellgas, L.P., the operating limited partnership of FGP,
including the OLP's $534 million 'BBB' rated senior notes.
In addition, Fitch's assessment incorporates the underlying
strength of FGP's retail propane distribution network. Positive
qualitative credit factors include FGP's extensive geographic
reach, track record of customer retention, a proven ability to
maintain consistent gross profit margins even during past run-
ups in spot propane prices and strong internal operating,
pricing, and financial controls.

FIRST UNION NAT'L: Fitch Affirms Low-B's on Five Notes Classes
First Union National Bank-Chase Manhattan Bank's commercial
mortgage pass-through certificates, series 1999-C2, $144.9
million class A-1, $673.7 million class A-2 and interest-only
class IO are affirmed at 'AAA' by Fitch Ratings. In addition,
Fitch affirms the following classes: $47.3 million class B at
'AA', $62 million class C at 'A', $14.8 million class D at 'A-',
$41.4 million class E at 'BBB', $17.7 million class F at 'BBB-',
$41.4 million class G at 'BB+', $11.8 million class H at 'BB',
$11.8 million class J at 'BB-', $11.8 million class K at 'B+',
$11.8 million class L at 'B' and $11.8 million class M at 'B-'.
The $20.7 million class N is not rated by Fitch. The rating
affirmations follow Fitch's annual review of the transaction,
which closed in May 1999.

The rating affirmations reflect the consistent loan performance
and minimal reduction of the pool collateral balance since
closing. As of the September 2002 distribution date, the pool's
aggregate certificate balance has decreased by 5% since closing,
to $1.12 billion from $1.18 billion. The certificates are
collateralized by 215 well-diversified fixed-rate mortgage
loans, consisting primarily of multifamily (32% by balance),
retail (30%), and hotel (16%) properties, with concentrations in
California (13%), Georgia (10%), and Texas (7%).

Wachovia Securities, the master servicer, provided year-end 2001
borrower operating statements for 90% of the loans that are
required to report financials (6.4% of the pool is secured by
credit tenant lease loans, which are not required to report
financials). The weighted average debt service coverage ratio
for YE 2001 is 1.41 times, compared to 1.48x at YE 2000 and
1.36x at closing. Fourteen loans (4%) reported YE 2001 DSCRs
below 1.00x, but they are all current with debt service
payments. Of concern to Fitch is the decline in WADSCR for the
top five loans (14.4%) in the pool to 1.16x from 1.42x at YE
2000 and 1.36x at closing. Fitch accounted for this decline in
its modeling of the deal's cash flow by assigning a 100%
probability of default to the largest loan (4.2%).

Twenty loans (3.4%) are currently being specially serviced: a
90-day delinquent loan (0.3%) secured by a full-service hotel in
Ashville, NC; a loan in foreclosure (1.1%) secured by a full
service hotel in Charleston, SC; and eighteen real estate owned
loans (1.9%), which are secured by vacant Heilig Meyers
furniture stores. These concerns are mitigated by a guaranty
agreement, which provides for Wachovia Securities to reimburse
the Trust for the loss of principal associated with the
disposition of the HM assets. Since Fitch's previous review,
eight of the original twenty-six HM properties have been
liquidated with no losses to the trust. Fitch is concerned with
eleven (11.5%) of the thirteen (14%) non-CTL hotel loans in the
pool due to declines in DSCR since closing. However, all but the
two specially serviced hotel loans are current; Fitch's ratings
reflect the performance of these hotel loans.

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

FLAG TELECOM: Plan Solicitation Period Extended to November 27
FLAG Telecom Holdings Limited and its debtor-affiliates sought
and obtained a Court order extending the time within which they
may solicit acceptances of their Third Amended Plan of
Reorganization to November 27, 2002.

The Debtors are continue to solicit acceptances of their Plan
from their creditors and interest holders in anticipation of the
Court confirming the Company's Plan later today.
Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP,
speculates that the Debtors will obtain confirmation of their
Plan.  But in an exercise of caution, the Debtors seek an
extension of time as cushion for the event when, for some
unforeseen reason, the Plan is not confirmed on the Confirmation
Hearing Date or further negotiations or solicitations are

In large and complex Chapter 11 cases, such as the Debtors'
cases, courts often extend the Solicitation Period for
substantial periods of time in order to afford the debtor a
meaningful opportunity to formulate a plan of reorganization.

Courts have developed a list of several factors that should
guide the consideration of whether cause exists to extend the
Solicitation Period under Section 1121(d) of the Bankruptcy

    1. the size and complexity of the case;

    2. the necessity of sufficient time to permit the debtor to
       negotiate a plan and prepare adequate information;

    3. the existence of good faith progress toward

    4. the fact that the debtor is paying its bills as they
       become due;

    5. whether the debtor has demonstrated reasonable prospects
       for filing a viable plan;

    6. whether the debtor has made progress in negotiations with
       its creditors;

    7. the amount of time which has elapsed in the case;

    8. whether the debtor is seeking an extension of exclusivity
       to pressure creditors to submit to the debtor's
       reorganization demands; and

    9. whether an unresolved contingency exists.

Accordingly, the Court determines that cause exists to extend
the Debtors' solicitation period. (Flag Telecom Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)

FLEETWOOD ENTERPRISES: Appoints Charles Wilkinson as EVP and COO
Fleetwood Enterprises, Inc. (NYSE: FLE), the nation's largest
manufacturer of recreational vehicles and a leading producer and
retailer of manufactured housing, announced the promotion of
Charles A. Wilkinson to executive vice president and chief
operating officer.

Wilkinson, 61, has served as executive vice president-operations
since September 2001, leading the Housing, RV and Supply groups.  
With this promotion, he will take on additional involvement with
the Company's external communications activities.  Wilkinson's
earlier positions included senior vice president-Housing Group
and vice president - Western region, Housing Group. Altogether,
he has 33 years of experience in operations, including 17 years
with Fleetwood.

"Chuck has done an exceptional job during an extremely
challenging time in both of our primary industries," Ed Caudill,
president and CEO, said.  "Under his leadership, our Housing and
Supply groups are continuing to perform well and the RV Group
has made a dynamic return to a position of market leadership.
Chuck is a remarkable person and I consider myself fortunate to
have this opportunity to work with him."

Wilkinson holds a bachelor's degree in liberal arts and a
master's degree in American history, both from Western Illinois

                              *    *    *

As reported in Troubled Company Reporter's July 17, 2002
edition, Fleetwood executed an agreement with its lenders to
revise the covenants on its credit facility to reflect current
market conditions, and the Company expects that the combination
of its credit line and its cash and cash equivalents of $111.1
million at fiscal year-end will provide adequate liquidity for
at least the next twelve months.  While the Company expects to
report improved results in the first quarter of fiscal 2003,
management does not foresee achieving profitability in the

FLEMING COMPANIES: Will Divest 110 Existing Price-Impact Stores
Fleming Companies, Inc., (NYSE: FLM) announced that, having
concluded the strategic review of its retail operations, the
company has made the decision to divest Fleming's 110 existing
price-impact stores, which operate under the Food 4 Less and
Rainbow Foods banners.

The decision -- the result of a strategic review initiated
subsequent to the Core-Mark and Head Distributing acquisitions
-- was based on a number of factors including:  the advantages
of focusing resources and investments completely on Fleming's
growing supply chain distribution network; the greater return on
invested capital opportunities that exist in the core wholesale
distribution business as compared to the retail business; the
increasingly competitive conditions in the retail environment;
and the unique advantage that Fleming could gain from not
competing with its distribution customers in the retail markets.

Mark Hansen, Fleming's chairman of the board and chief executive
officer, said, "Following the completion of our Core-Mark and
Head Distributing transactions, which accelerated the
transformation of Fleming's multi-tiered supply chain network
and the diversification of our customer base, we initiated a
strategic review of our retail business to ensure that it was
still appropriately complementing our core distribution
business.  The conclusion of the review was that, based on the
greater growth opportunities and the higher relative returns on
invested capital generated by our distribution supply chain
business, the divestiture of our price-impact retail business
was in the best interest of our shareholders, distribution
customers and the company.

"We concluded that by exiting the retail business, and not
competing with the very customers with whom we are cultivating
strong relationships, we would be in a unique position among our
peers insofar as we would be the only independent, pure-play
wholesale distributing company with a national footprint that
covers all key retailing segments -- independent supermarkets,
convenience stores, chain stores, supercenters, discount stores,
and other retail outlets.  This perspective was underscored by
the fact that being in retail requires fuel centers today and we
simply don't want to compete with our new and valuable
convenience store customer base."

Not only will the divestiture of the retail business allow
Fleming to focus fully and completely on its growing and
profitable distribution business, but the proceeds from the sale
of the retail operations, anticipated to be in excess of $450
million net of taxes, will contribute to Fleming's ongoing
actions to reduce its debt.

Hansen continued, "We are pleased with the progress our company
has made to date in transforming our core distribution business
into a multi-tiered, diversified supply network.  The
divestiture of our retail business represents the next major
decision in the strategic repositioning of Fleming.  Other
aspects of that repositioning include strengthening our balance
sheet, continuing our cost-cutting and right-sizing initiatives,
implementing efficiency improvements in our centralized
procurement functions and integrating our F1 technology.  The
expected cash inflow that will be generated by the sale,
combined with other recent actions -- such as improving our
operating cash flow, reducing capital expenditures, cutting
administrative costs and eliminating any material debt
maturities until 2007 -- further demonstrate Fleming's
commitment to strengthen its balance sheet for long-term growth
and success."

Fleming has already initiated conversations with a number of
potential buyers for these retail operations.  Discussions and
due diligence are in process with both self-distributing chains
and regional and independent supermarket operators.  The actual
dispositions of the retail assets are anticipated to occur in a
series of sales to multiple buyers, beginning in the fourth
quarter of 2002 and completed in 2003.  It is likely that  
following the sale of the stores, Fleming will retain a
significant portion of the distribution volume for these stores.

              Updated Earnings and Cash Flow Guidance

Concurrent with its plans to divest the price-impact retail
operations and to enable investors to better evaluate the
company on a going forward basis, Fleming has updated its 2002
and 2003 earnings and cash flow guidance accordingly.  Based on
the intent to sell the retail operations, the retail segment
will be classified as a "discontinued operation," in accordance
with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets.

Additionally, the updated guidance reflects the recent economic
slowdown in consumer spending across the country and the
increasingly competitive environment in retail, which has
negatively impacted the entire industry. This industry-wide
slowdown has resulted in lower sales and higher operating
expenses as a percent of sales in Fleming's distribution

An integral slide presentation that provides significant detail
regarding the guidance calculations is available on the Fleming
Web site at

Fleming's earnings guidance for continuing operations in the
third quarter 2002 is between ($0.05) and $0.00 per share; for
the fourth quarter 2002, earnings guidance is between $0.35 and
$0.45 per share.  EBITDA for continuing operations in the third
quarter 2002 is anticipated to be in a range between $65 million
to $70 million; for the fourth quarter 2002 EBITDA is
anticipated to be in the range of $95 million to $105 million.  
Full year 2002 sales for continuing operations are anticipated
to be approximately $15.4 billion.

"Sales shortfalls in the third quarter reflect the pervasively
weak and increasingly competitive retail environment throughout
the country," said Hansen.  "Fleming has already taken decisive
action to lower costs, particularly administrative expenses, in
response to the generally soft sales environment."

The effect of these cost-reducing actions will be approximately
$40 million on an annualized basis.  The reductions in expenses
are being achieved in part by leveraging technology, making
process improvements and continually matching the organizational
structure to the company's business needs.  The benefits that
will follow from reductions in force will be realized beginning
in the fourth quarter of 2002.  Fleming remains committed to
achieving additional operating efficiencies through its low-
cost-pursuit initiatives.

The third quarter EPS projection for continuing operations
includes the impact of severance-related expenses, anticipated
to be approximately $0.10 per share.  It also includes an impact
of approximately $0.12 per share related to expenses incurred in
the start-up of the company's new distribution center in Tulsa
and the shutdown expenses of its Oklahoma City and Dallas
facilities.  The fourth quarter EPS projection reflects a modest
improvement in sales trends over the prior quarter to factor in
the generally higher fourth quarter seasonal sales and the
realization of a portion of the company's targeted cost-cutting

For 2003, Fleming expects continuing operations to generate EPS
of between $1.95 and $2.05 per share, and EBITDA of between $475
million and $490 million.  Continuing operations sales for 2003
are expected to be approximately $18 billion and are expected to
generate approximately $235 million in operating cash flow,
which will allow for additional debt repayments of an estimated
$100 million and capital expenditures to approximately $135
million in 2003.

                   Balance Sheet Improvement

Fleming has taken the following steps to strengthen its balance
sheet and continues to improve credit metrics in the second half
of 2002 and beyond:

    --  Eliminated all material long-term debt that matures
        before 2007.

    --  More efficient management of seasonal inventory builds,    
        resulting in improved operating cash flow.

    --  Cut administrative costs.

    --  Reduced capital expenditures.

The company's expectation is that it will generate approximately
$190 million in operating cash flow in the second half of 2002.  
The company will use approximately $100 million of this cash to
repay debt, including fully paying down the amounts outstanding
under its $550 million revolving credit facility by year-end,
regardless of the status of the retail disposition.  The company
will also use approximately $90 million of this cash to fund
capital expenditures.  Proceeds from the sale of price-impact
retail stores will also further pay down debt.  As a result of
this anticipated debt reduction, the company expects continual
improvement in all three primary credit ratios -- debt-to-
EBITDA, EBITDA-to-interest and debt-to-capitalization.

With its national, multi-tier supply chain network, Fleming is
the #1 supplier of consumer package goods to retailers of all
sizes and formats in the United States.  Fleming serves nearly
50,000 retail locations, including supermarkets, convenience
stores, supercenters, discount stores, concessions, limited
assortment, drug, specialty, casinos, gift shops, military
commissaries and exchanges and more.  To learn more about
Fleming, visit its Web site at

                        *    *    *

As reported in Troubled Company Reporter's June 24, 2002,
edition, Standard & Poor's affirmed its double-'B' corporate
credit rating on Fleming Cos. Inc., and raised its rating on
Core-Mark International Inc.'s subordinated debt to single-'B'-
plus (Fleming's level) from single-'B' following the completion
of Fleming's acquisition of Core-Mark.

The subordinated debt rating on Core-Mark was also removed from
CreditWatch and the double-'B'-minus corporate credit rating on
the company was withdrawn. The outlook on Fleming is negative.
Lewisville, Texas-based Fleming had $2.2 billion total debt
outstanding as of April 20, 2002.

FMC CORPORATION: S&P Rates Proposed $300MM Senior Notes At BB+
Standard & Poor's Ratings Services assigned its triple-'B'-minus
rating to FMC Corp.'s proposed $550 million senior secured
credit facilities and affirmed its triple-'B'-minus corporate
credit rating on the diversified chemical company. The outlook
is revised to negative from stable. At the same time, Standard &
Poor's assigned its double-'B'-plus rating to FMC's proposed
$300 million senior secured notes due 2009 and lowered the
ratings on its existing senior unsecured notes from triple-'B'-
minus to double-'B'-plus. The downgrade reflects the
noteholders' diminished recovery prospects in a default and
liquidation scenario, pro forma for completion of the
refinancing plan that will provide the holders of bank
obligations with a first-priority claim on assets. Proceeds of
the notes, which will be secured on a second-priority basis,
will be used primarily to repay existing debt and to establish a
debt reserve account to meet near-term debt maturities. Pro
forma for the refinancing, Philadelphia, Pa.-based FMC has
nearly $1.4 billion of debt outstanding.

"The proposed refinancing plan will solidify FMC's liquidity
position and provide ample capacity to meet scheduled
obligations, even if industry conditions remain depressed," said
Standard & Poor's credit analyst Kyle Loughlin. "In addition,
FMC's management team is committed to financial policies that
will support improvement to key credit protection measures. This
commitment was evidenced by the $101 million second-quarter
equity offering to raise funds for debt reduction," the analyst

The ratings for FMC reflect an average business profile derived
from leading positions in diverse industrial, agricultural, and
specialty chemicals businesses, and moderate financial policies
that support credit quality. With about $1.9 billion in annual
sales, FMC is a global and well-diversified chemical operator
with strong market positions in a range of products across three
broad product categories: industrial chemicals, agricultural
chemicals, and specialty chemicals. The business mix varies from
mature and slower-growth commodity product lines, such as
phosphates, soda ash, and hydrogen peroxide, to higher-value-
added agrochemicals and strong niche positions within
hydrocolloids, microcrystalline cellulose, and lithium products.
FMC's business positions within its industrial chemicals segment
tend to be bolstered by leading market shares and low-cost
production economics that result in better-than-average profit
margins. In the more specialized and niche areas, FMC generally
competes on the basis of higher-value-added products that
benefit from favorable industry characteristics, such as decent
growth, stronger customer relationships, and premium pricing
based on the performance of differentiated products. FMC
benefits from backward integration in soda ash and lithium,
which provides an important advantage in terms of production
economics. For about 20% of sales, raw materials are derived
from naturally renewable sources, including seaweed and
cellulose. Overall, FMC's exposure to oil and natural gas
feedstock price increases is limited versus many other commodity
chemical businesses.

The bank facilities are rated the same as the corporate credit
rating and are secured by a first-priority security interest in
all domestic current assets, including accounts receivables and
inventory, the stock of material domestic and foreign
subsidiaries, a pledge of an intercompany note due from a
material foreign subsidiary, and domestic principal production
facilities (subject to a provision contained in FMC's existing
indentures that effectively limits the amount of priority debt
secured by a first lien on domestic production facilities to 10%
of net tangible assets). Bank lenders will also share in the
second lien on the domestic production facilities, but any
residual value will be shared on an equal and ratable basis with
FMC's note holders representing more than $500 million in
aggregate claims (excluding pre-funded note maturities).

Material wholly owned domestic subsidiaries of FMC guarantee the
loans, although FMC subsidiaries that are not guarantors
reported approximately $186 million of liabilities, structurally
limiting lenders access to the assets at these subsidiaries.

The new revolving credit facility replaces FMC's existing bank
revolving credit facility and an accounts receivable
securitization program, which had previously represented an
alternative source of liquidity. The termination of the
securitization program addresses concerns related to rating
triggers that could have resulted in the termination of its
accounts receivable financing program ($85 million outstanding
at June 30, 2002), upon a downgrade. The new facility provides
added borrowing capacity and greater flexibility relative to
financial covenants. The new facilities are subject to a maximum
debt to EBITDA ratio, minimum interest coverage ratio, minimum
net worth calculation, and capital spending limitations.

The bank facilities' first-priority lien on the most liquid
assets of FMC provides a solid advantage relative to the claims
of the note holders. In evaluating the underlying collateral,
Standard & Poor's used a discrete asset approach as the
collateral package is somewhat limited in terms of the claims on
assets located outside the U.S. Based on this analysis, Standard
& Poor's believes that bank lenders are unlikely to realize full
recovery in the event of a bankruptcy, particularly given the
severity of an industry downturn that would be consistent with a
default. Prospects for a full recovery are limited due to the
substantial amount of priority claims, including foreign bank
debt that is guaranteed on a secured basis, the secured claims
of letter of credit facility providers, and FMC's obligations
under the Astaris support agreement. Still, the distressed value
of the collateral package would be expected to support a
meaningful recovery of principal, in the area of 50% of total
outstandings. In a simulated default scenario, Standard & Poor's
assumes that the revolving credit facility would be fully drawn.
The bank facility rating is based on preliminary terms and

The negative outlook highlights the possibility that ratings
could be lowered over the intermediate term in the absence of
improvement to the financial profile. In addition, failure to
preserve adequate liquidity, due to worse-than-anticipated
business conditions and outlays related to contingent
obligations, could also result in a downgrade.

FONIX CORP: Working Capital Deficit Reaches $8.4MM at June 30
Since inception, Fonix Corporation has devoted substantially all
of its resources to research, development and acquisition of
software technologies that enable intuitive human interaction
with computers, consumer electronics, and other intelligent
devices. Also since inception, and through June 30, 2002, the
Company has incurred significant cumulative losses, and losses
are expected to continue until the effects of recent marketing
and sales efforts begin to take effect, if ever.

The Company incurred negative cash flows from operating
activities of $8,307,493 during the six months ended June 30,
2002. Sales of products based on the Company's technologies have
not been sufficient to finance ongoing operations. As of June
30, 2002, the Company had negative working capital of $8,465,874
and an accumulated deficit of $179,296,449. The Company has
drawn all capital available under its equity lines of credit.
Accordingly, there is substantial doubt about the Company's
ability to continue as a going concern. The Company's continued
existence is dependent upon several factors, including the
Company's success in (1) increasing license, royalty, product,
and services revenues, (2) raising sufficient additional debt or
equity funding and (3) minimizing or decreasing operating costs.

While the Company anticipates that revenues will increase during
the next 12 months, it must raise additional funds to be able to
satisfy its cash requirements. Research and development,
corporate operations and marketing expenses will continue to
require additional capital. Because the Company presently has
only limited revenue from operations, the Company intends to
continue to rely primarily on financing through the sale of its
equity and debt securities to satisfy future capital  
requirements until such time as the Company is able to enter
into additional third- party licensing, collaboration or co-
marketing arrangements which generate revenues such that it will
be able to finance ongoing operations from license, royalty and
services revenues. There can be no assurance that the Company
will be able to generate substantial revenues from such
agreements. Furthermore, the issuance of equity or debt
securities which are or may become convertible into equity
securities of the Company in connection with such financing
could result in substantial additional dilution to the
stockholders of the Company and declining market value of the
Company's shares may limit the amount available in this manner.
The Company currently has drawn all available funds on existing
equity lines, but has recently entered into a third equity line
with the same investor under which the Company will issue up to
200,000,000 shares of Class A common stock when the registration
of such shares is declared effective.

The Company currently has no alternative plans for funding
operations other than issuance of debt and equity securities,
but it continues to explore other options for additional funding
for its operations. The Company's shareholders recently approved
an increase of 300,000,000 common shares in authorized capital
in order to facilitate the current funding process.

GENEVA STEEL: Gets Continued Access to Lenders' Cash Collateral
On September 23, 2002, Geneva Steel LLC, a wholly owned
subsidiary of Geneva Steel Holdings Corp (OTC: GNVH), reached
agreement with its secured lenders for continued access to cash
proceeds of sales of inventory and collections of accounts
receivable through at least November 15, 2002.

The agreement provides that the Company may have continued
access to cash collateral after November 15, 2002, if a
potential lender files an application for a loan guarantee under
the Emergency Steel Loan Guarantee Act on or before November 15,
2002. In the event that such an application is not filed, the
Company has agreed to work with its secured lenders to formulate
a plan of reorganization that is acceptable to the secured

Access to cash pursuant to the agreement is subject to
compliance with several conditions, including a budget for cash
disbursements, no event of default under the existing loan
agreements, and obligations to provide certain information to
the lenders. Any failure to satisfy these conditions may result
in the termination of the Company's access to cash, with the
exception of certain rights to pay accrued employee wages and
benefits. There can be no assurance that the Company will be
able to access cash under the agreement, that any available cash
proceeds will be sufficient to fund Geneva's activities, or that
the Company will be able to reach any further agreement for
access to cash collateral or other capital, if any is available,
after the current agreement ends.

The Company is seeking a new $250 million term loan to repay its
existing term loan of approximately $108.4 million and to
finance the Company's electric arc furnace strategy and working
capital requirements. The Company continues to work with
potential lenders, including with respect to a possible
application under the Emergency Steel Loan Guarantee Program.
There can be no assurance that the Company will be successful in
obtaining a new term loan, that an application will be filed
under the Emergency Steel Loan Guarantee Program or that any
loan, if obtained, will be sufficient for the Company's needs.

Geneva Steel's steel mill is located in Vineyard, Utah. The
Company's facilities can produce steel plate, hot-rolled coil,
pipe and slabs for sale primarily in the western, central and
southeastern United States.

INSCI CORP: Hooks Up with Midwest Power to Distribute Products
INSCI Corp. (OTC Bulletin Board: INSS), a leading supplier of
Electronic Statement Presentment, Integrated Document Archive
and Retrieval Systems and Enterprise Content Management
Solutions, has signed a strategic marketing alliance with Kansas
City-based Midwest Power Files, a storage systems solution firm
with an established and diverse customer base.

Under the terms of the alliance, INSCI and Midwest will co-
operate in the marketing and distribution of the INSCI ESP+
Solution Suite of products to Midwest's wide range of customers,
which include local, state and federal government agencies,
financial institutions, insurance companies, legal firms,
medical practices, branches of the U.S. military and an
expanding variety of manufacturing specialty corporations.

The agreement allows Midwest to expand its core technology
offerings and both firms to create a new opportunity for
generating revenue.

President and CEO Henry F. Nelson commented, "Our partnership
with Midwest is an excellent example of the success of our
recent efforts to grow our revenues through business alliances.  
Increasing and expanding our business alliances is a priority
going forward.  In support of this, we have promoted long-time
INSCI employee Bob Harte to Vice President of Business
Development where he will focus exclusively on identifying and
signing additional business partners for the purpose of
increasing overall market penetration.

"This new focus will emphasize teaming with organizations such
as Midwest, which already have a significant customer base in
the lines of business where we have shown success, but have the
potential to increase our market share," Nelson added.

Midwest Power Files, a Storage Systems Solution Firm, designs
and implements improved Information Access for its clients with
present and future growth in mind.  As specialists in filing and
storage solutions, Midwest shows companies how they can increase
the workflow efficiency within companies' most vital resources.  
Midwest's comprehensive line of products include: File supplies
and Cabinets, High Density Mobile Shelves, Bar Code Equipment
and Tracking Systems, Document Imaging and COLD, and LAN Storage
Systems.  For more information about Midwest, visit

INSCI Corp., is a leading-provider of highly scalable digital
repository and enterprise content management solutions that
provide high-volume digital asset presentment, preservation, and
delivery functions via networks or the Internet.  Its award-
winning products bridge value documents with front-office
mission critical and customer-centric applications by web-
enabling legacy-generated reports, bills, statements and other
forms of digital information.  The Company has strategic
partnerships and relationships with such companies as Xerox and
Unisys.  For more information about INSCI, visit  For additional investor relation's  
information, visit the Allen & Caron Inc Web site at

                        *    *    *

According to INSCI's Form 10KSB filing dated July 15, 2002,
INSCI had $412,000 of cash and working capital deficit of $6.2
million, at March 31, 2002, in comparison to $460,000 of cash
and working capital deficit of $6.9 million at March 31, 2001.
Accounts receivable were $1.3 million as of March 31, 2002
compared to receivables of $1.5 million as of March 31, 2001.

The Company has a deficiency in its financial statements in that
it has $8.0 million in liabilities and $2.2 million in assets.
This deficiency, unless remedied, can result in the Company not
being able to continue its business operations. The Company
believes that its current business plan, if successfully
implemented, may provide the opportunity for the Company to
continue as a going concern. However, in the event that
satisfactory arrangements cannot be made with creditors, the
Company may be required to seek protection under the Federal
Bankruptcy law.

INTERLIANT INC: Sells Certain Non-Core Assets to Akibia, Inc.
Interliant, Inc. (OTCBB:INIT), a leading provider of managed
infrastructure solutions, announced the sale of its networking
and security hardware and software business to Westborough,
Massachusetts-based Akibia, Inc., a provider of infrastructure
consulting services. The transaction was completed on August 22,
2002, and included the networking and security hardware and
software business managed by Interliant's office in Woburn,
Massachusetts. Business managed by the company's Vienna,
Virginia office was not included in the transaction.

Interliant continues to offer its managed security services,
including full security consultation, configuration, and on-
going maintenance and management of a client's specific security
requirements as they relate to a hosted environment. The managed
security service includes set up and installation, monitoring
and management, logging and reporting, policy management, and
firewall updates, as well as quarterly performance audits and
policy review.

"The sale of this business will help us focus on our core
business of providing managed infrastructure services, including
managed security offerings, to our customers," said Francis J.
Alfano, Interliant's president and CEO. "We're pleased to have
taken this important step in our restructuring plans. With the
divestiture of this business, we are now a leaner and stronger
company, better able to complete our reorganization."

Interliant, Inc., (OTCBB:INIT) is a leading provider of managed
infrastructure solutions, encompassing messaging, security, and
hosting plus an integrated set of professional services that
differentiate and add customer value to these core solutions.
The company makes it easier and more cost-effective for its
customers to acquire, maintain, and manage their IT
infrastructure via selective outsourcing. Headquartered in
Purchase, New York, Interliant has forged strategic alliances
and partnerships with the world's leading software, networking,
and hardware manufacturers, including Check Point Software
Technologies Inc., IBM and Lotus Development Corp., Microsoft,
Oracle Corporation, and Sun Microsystems Inc.

On August 5, 2002, Interliant and all of its U.S. subsidiaries
filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of New York. For more information
about Interliant, visit

IT GROUP: 24 Plan Participants Take Action to Recover Claims
On July 5, 1995, the Board of Directors of IT Corporation
approved and adopted a deferred compensation plan for their
officers and directors and employees.  Thomas A. Johnson, Esq.,
in Santa Barbara, California, explains that the purpose of the
Plan is to "provide specified benefits," to various non-employee
directors and a select group of management or highly compensated
employees who contribute materially to the continued growth,
development and future business success of IT Corporation.

According to Mr. Johnson, IT Corporation and its affiliates are
bound to pay the amounts deferred by the plan participants.
Under Article 13.1 of the Plan:

      "An Employer's obligation under the Plan shall be merely
       that of an unfunded and unsecured promise to pay money in
       the future."

Significantly, Mr. Johnson relates that a summary description of
the Plan provided to the participants from 1997 to 1998 assured
the participants that their benefits were protected.  According
to Mr. Johnson, the Summary stated that a 'Rabbi Trust' has been
established in order to provide benefit security.  The Trust is
specially designed so that assets will be deposited in the Trust
if certain events should take place -- that is, insolvency.  The
Summary also cited a "Withdrawal Election" as additional
security.  Here, plan participants are given the option to
withdraw their account balance at any time subject to a 15%
early withdrawal penalty.

The 1997 Summary Description, however, fails to describe certain
Funding/Exclusive Benefit Obligations.  Even before the Plan was
created, IT Corporation's President and CEO made promises that,
if IT Corporation were ever at risk of insolvency or bankruptcy,
IT Corporation would still contribute sufficient funds to pay
the plan participants' benefits to the Trust.  IT Corporation
further promised that those amounts would in fact be paid in
full to all plan participants.

IT Corporation later adopted a Master Trust Agreement in
conjunction with the Plan.  A copy of the Master Trust
Agreement, however, was never provided to any of the plan
participants until after the Petition Date; its terms,
consequently, were never disclosed.

Mr. Johnson tells the Court that the Master Trust Agreement
purportedly advises plan participants that, if IT Corporation
fails to make payments to the Plan from its general assets, the
Trust will pay the participants' benefits.  Yet, the Trust does
not provide security in the event IT Corporation or its
subsidiaries becomes insolvent or file for bankruptcy
protection. In that event, IT Corporation creditors, including
plan participants, will have claims to the bankruptcy estate.

After the Petition Date, the Debtors alleged that the Plan has
no assets and has never held any assets.

In view of that, 24 Plan Participants now ask the Court to allow
them to recover Plan benefits that the Debtors owe to them.  In
addition, the Plan Participants seek a ruling determining that
the Debtors breached their fiduciary promise to contribute funds
sufficient to pay the participant's account balances in full
prior to The IT Group's bankruptcy.

Mr. Johnson explains that the Debtors were supposed to put the
funds to a trust established for the sole and exclusive benefit
of the participants.  Instead, the Debtors placed the decision
when to fund the Plan in the hands of a plan committee composed
of the Debtors' top-ranked officers with serious conflicts of

The 24 Plan Participants also want the Court to determine that
the Carlyle Partners II LP, the investment fund in control of
the Debtors, breached its fiduciary obligations to the Plan.  
Mr. Johnson relates that when Carlyle acquired The IT Group,
Carlyle induced the Debtors not to perform their obligations and
use the money retained from the Participants to further
Carlyle's own financial interests and purposes.

The Participants want to hold IT Corporation and some of its
former and current executives liable for unpaid wages, fringe
benefits and wage supplements, which totals not less than
$2,129,211, including liquidated damages in an amount equal to
25% of the total amount of wages due, or $500, whichever is
greater.  They also seek an order determining that the Plan is
not a top-hat plan and is subject to, inter alia, ERISA's
fiduciary and minimum funding requirements.  The Participants
believed that the Debtors failed to meet the ERISA's minimum
funding obligations during the entire period of the Plan's
existence, 1996 to 2001, in violation of 29 U.S.C. Sections
1082, 1103, 1104, and 1109.

Mr. Johnson contends that the Funding/Exclusive Benefit
Obligation may have been omitted intentionally or mistakenly.
Inclusion of that obligation in the Plan would have put at risk
the purported "unfunded" status of the Plan and its purported
top-hat status.  Mr. Johnson also believes that the failure to
identify the Trustee in the 1997 Summary Description and the
failure to provide a copy of the Trust was intended to make sure
that Participants would never contact and pressure the trustee
to seek funding of the Plan. (IT Group Bankruptcy News, Issue
No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

J.P. MORGAN: Fitch Cuts Ratings on 3 P-T Certificate Classes
Fitch Ratings downgrades J.P. Morgan Commercial Mortgage Finance
Corp.'s mortgage pass-through certificates series 1999-C8 $20.1
million class H to 'BB-' from 'BB', $23.8 million class J to 'B-
' from 'B' and $7.3 million class K to 'CC' from 'B-'. In
addition, Fitch affirms the following classes: $133.3 million
class A-1, $357 million class A-2 and interest-only class X at
'AAA', $36.6 million class B at 'AA', $32.9 million class C at
'A', $14.6 million class D at 'A-', $25.6 million class E at
'BBB', $11 million class F at 'BBB-' and $16.5 million class G
at 'BB+'. Fitch does not rate the $12.6 million class NR
certificates. The rating downgrade and affirmation follow
Fitch's annual review of the transaction, which closed in August

The downgrades are the result of deterioration in the pool due
mainly to the specially serviced loans and their related
estimates of potential losses to the trust. Fitch is concerned
with the six specially serviced loans (5%) including four
retail, one health care, and one mixed use property.

Of the six specially serviced loans, three are cross
collateralized cross defaulted Horizon group properties located
in Sealy, TX; Gretna, NE; and Traverse, MI. The Sealy loan
currently has a balance of $10.7 million with approximately
$892,000 in advances. An appraisal dated June 2002 indicates a
current value of $2.2 million. The property in Gretna has a
balance of $7.2 million with approximately $660,000 in advances.
An appraisal dated May 2002 indicates a value of $4.9 million.
The property in Traverse had an appraisal dated June 2002
indicating a value above the loan amount. In all, the three
loans have exposure over $24 million with a value of
approximately $13 million.

As of the September distribution date, the pool's aggregate
principal balance has decreased by 5.5% to $691.3 million from
$731.5 million at closing. Of the original 128 loans, 126 remain

Midland Loan Services, the master servicer, collected year-end
2001 property financial statements for 85% of the pool. The
year-end 2001 weighted average debt service coverage ratio for
these loans is 1.56 times, compared to 1.40x at issuance. Other
then the specially serviced loans, four loans (3.1%) had YE 2001
DSCRs below 1.00x.

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

KMART CORP: Wins Court Approval of Settlement Pact with TBWA
Kmart Corporation and its debtor-affiliates obtained Court
approval of its Settlement Agreement entered into with TBWA
Worldwide Inc.

Pursuant to the Settlement Agreement:

(a) TBWA agrees to pay $2,718,239 to Kmart, which represents 50%
    of the Excess Payment;

(b) TBWA will be permitted to set off against --- and thereby
    reduce --- the Kmart Debt by $2,718,239, which represents
    the portion of the Excess Payment remaining after TBWA's

(c) TBWA will also be permitted to set off against the Kmart
    Debt up to $2,000,000 in Media Credits.  In the event the
    aggregate amount of Media Credits materially exceeds that
    sum, the parties will negotiate in good faith an allocation
    of the excess, and any amount determined by the parties to
    be allocated to and retained by TBWA will reduce the amount
    of TBWA's proof of claim;

(d) The parties agree that after giving effect to the
    transactions contemplated in the Settlement Agreement, TBWA
    will hold a $1,729,628 general unsecured prepetition claim
    against Kmart;

(e) Within 5 business days after the Court approves the
    Settlement Agreement, TBWA will amend its previously-filed
    proof of claim so that it equals the amount of the
    Liquidated Claim; provide that TBWA may further amend and
    increase the proof of claim to the extent the aggregate
    amount of Media Credits is less than $2,000,000;

(f) TBWA releases and discharges forever Kmart and all its
    officers, directors, agents, accountants and attorneys, from
    any and all claims, defenses and causes of action, of any
    nature or type, whether known or unknown, that TBWA has or
    may have against Kmart with respect to matters relating to
    Kmart advertising arising or accruing prepetition; provided,
    however, that TBWA does not release the Liquidated Claim;

(g) Kmart releases and discharges forever TBWA, and all its
    officers, directors, agents, accountants and attorneys, from
    any and all claims, defenses and causes of action, of any
    nature or type, whether known or unknown, that Kmart has or
    may have against TBWA with respect to matters relating to
    Kmart advertising arising or accruing prepetition.

As previously reported, TBWA claimed that Kmart owe $6,447,867
in respect of prepetition invoices issued by TBWA.  However,
Kmart asserted that the prepetition payments it has made to TBWA
in respect of certain Third Party Obligations exceeded the
amount of TBWA's assertion by $5,436,477.  In addition, certain
media vendors have issued and may in the future issue credits to
TBWA in connection with the prepetition advertising TBWA placed
on behalf of Kmart, which was cancelled or otherwise did not air
as planned. (Kmart Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

KNOLOGY BROADBAND: Signs-Up Smith Gambrell as Bankruptcy Counsel
Knology Broadband, Inc., wants to employ Smith, Gambrell &
Russell, LLP as counsel.  The Debtor tells the U.S. Bankruptcy
Court for the Northern District of Georgia that it needs Smith
Gambrell to:

     a. advise the Debtor generally regarding matters of
        bankruptcy law, including the rights, duties,
        obligations and remedies of the Debtor as debtor in
        possession, both with regard to its assets and with
        respect to the claims of its creditors;

     b. conduct examinations of witnesses, claimants or adverse
        parties, and to prepare and assist in the preparation of
        pleadings, exhibits, applications, reports, accountings,
        schedules and other documents necessary to the
        administration of these proceedings as required by the
        Code, the Federal Rules of Bankruptcy Procedure, the
        Local Rules of this Court and the requirements of the
        United States Trustee;

     c. perform those legal services necessary to the Debtor's
        bankruptcy case, including, but not limited to,
        institution and prosecution of legal proceedings, advice
        regarding debt restructuring and general legal advice
        and assistance related to this Chapter 11 case, all of
        which are necessary to the proper administration of the
        Debtor's Chapter 11 estate;

     d. advise the Debtor concerning Chapter 11 plans; and

     e. take any and all other actions necessary for the proper
        preservation and administration of the Debtor's Chapter
        11 estate, including general advice and counsel in
        connection with its ongoing business operations.

The Debtor relates that it contracted Smith Gambrell prepetiton
in connection with a wide range of corporate, securities, and
other legal matters, particularly with respect to advice
regarding the filing of a bankruptcy case and the requirements
for and preparation of a prepackaged plan of reorganization. The
Debtor submits that Smith Gambrell is intimately familiar with
the Debtor's business and any legal matters that may arise in
this case.

The Debtor wishes to employ Smith Gambrell on a general retainer
at its customary hourly rates:

          Michael S. Haber           $425
          Ronald E. Barab            $400
          Peter M. Pearl             $340
          Paul G. Durdaller          $325
          John T. Vian               $325
          Greta T. Griffith          $270
          Barbara Ellis-Monro        $260
          Brian P. Hall              $225
          Leigh H. Jones             $165
          John D. Northup, III       $150
          Lorna J. Virts (Paralegal) $130

Knology Broadband, Inc., provides services to certain of its
affiliates which are providers of cable TV, telephone and high
speed Internet access to business and residential customers. The
Debtor filed for chapter 11 protection on September 18, 2002.  
When the Company filed for protection from its creditors, it
listed $43,646,524 in total assets and $473,814,416 in total

LJM2 CO-INVESTMENT: Case Summary & 8 Largest Unsec. Creditors
Debtor: LJM2 Co-Investment, L.P.
        2100 McKinney Ave. #800
        Dallas, TX 75201

Bankruptcy Case No.: 02-38335

Type of Business: LJM2 Co-Investment, L.P. is an Enron Corp.
                  partnership used to keep debt off the energy
                  trader's books.

Chapter 11 Petition Date: September 25, 2002

Court: Northern District of Texas (Dallas)

Judge: Steven A. Felsenthal

Debtor's Counsel: Mark M. Maloney, Esq.
                  Sarah R. Borders, Esq.
                  King & Spalding
                  191 Peachtree Street
                  Atlanta, Georgia 30303-1763

                  H. Christopher Mott, Esq.
                  Krafsur, Gordon, Mott, Davis & Woody
                  4695 N. Mesa
                  El Paso, Texas 79912

                  Mitchell I. Sonkin, Esq.
                  Susan F. DiCicco, Esq.
                  King & Spalding
                  1185 Avenue of the Americas
                  New York, New York 10036

Total Assets: $65,017,364

Total Debts: $72,080,968

Debtor's 8 Largest Unsecured Creditors:

Entity                     Nature of Claim        Claim Amount
------                     ---------------        ------------
Dresdner Bank AG           Bank Loans              $17,500,000
New York and Grand Cayman
James Gallagher
75 Wall Street
New York, NY 10005-2889

Credit Suisse First        Bank Loans              $17,500,000
Global Impaired Asset
Jan Kofol, Director
11 Madison Avenue
New York, NY 10010-3629

National Westminister      Bank Loans              $17,500,000
Bank n/k/a The Royal Bank
Of Scotland
Charles Greer
65 East 55th Street
24th Floor
New York, NY 10022

First Union National Bank  Bank Loans               $5,833,333  
n/k/a Wachovia Bank,
National Association
Jill Akre
301 South Collage St.
Charlotte, NC 28288

Merill Lynch Capital       Bank Loans               $5,833,333
Carol J. Freely, Director
4 World Financial
7th Floor
New York, NY 10080

Royal Bank of Canada       Bank Loans               $5,833,333
Peter Gray-Donald
One Liberty Plaza
4th Floor
New York, NY 10006-1404

Merill, Lynch, Pierce,     Trade Claims             $1,827,000             
Fenner & Smith
David C. Sullivan
World Financial Center
North Tower
New York, NY 10281-1326

Kirkland & Ellis           Trade Claims               $253,969
Daniel F. Attridge
655 Fifteenth Street, NW
Washington, DC 20005

LODGIAN INC: Court Okays Evercore as Committee's Fin'l Advisors
Judge Lifland authorizes the Official Unsecured Creditors'
Committee to retain Evercore as its financial advisor, nunc pro
7tunc to January 11, 2002, in the chapter 11 cases involving
Lodgian, Inc., and its debtor-affiliates.

The Court rules that all requests by Evercore for payment of
indemnity pursuant to the Evercore Agreement will be made by
means of a motion and be subject to review by the Court to
ensure the payment of indemnity conforms to the terms of the
Amended Evercore Agreement and is reasonable based on the
circumstances of the litigation or settlement in respect of
which indemnity is sought; provided, however, that in no event
will Evercore be indemnified in the case of its own bad faith,
self-dealing, breach of fiduciary duty, gross negligence, or
willful misconduct.  In the event Evercore seeks reimbursement
for attorneys' fees from the Debtors pursuant to the Evercore
Agreement, the invoices and supporting time records from these
attorneys will be included in Evercore's own applications and
these invoices and time records will be subject to the U.S.
Trustee's guidelines for compensation and reimbursement of
expenses and the approval of the Court.

                          *    *    *

The Committee will look to Evercore to:

A. Become familiar with and analyze the business, operations,
   properties, financial condition and prospects of the Debtors,
   to the extent Evercore deems appropriate;

B. Assist and advise the Committee in developing a general
   strategy for accomplishing a Restructuring, as defined in the
   Evercore Agreement;

C. Assist and advise the Committee in evaluating and analyzing a
   Restructuring Plan, including the value of the securities, if
   any, that may be issued under the Restructuring plan;

D. Develop long-term financial projections of Lodgian's business
   and analyze the Debtors' long term business plan for the
   benefit of the Committee;

E. Subject to the provisions of clause (see P. below), assist in
   the development of financial data and presentations to the

F. Analyze the Debtors' financial liquidity and evaluate
   alternatives to improve such liquidity;

G. Provide strategic advice with regard to restructuring or
   refinancing the Debtors' obligations;

H. Evaluate the Debtors' debt capacity and alternative capital

I. Participate in negotiations among D&P, the Committee, Lodgian
   and its counsel, financial advisors, creditors, suppliers,
   lessors and other interested parties;

J. Advise the Committee and negotiate with Lodgian and its
   lenders with respect to potential waivers or amendments of
   various credit facilities;

K. Assist, from a financial point of view, in the analysis of
   Inter-company transactions and obligations, if any, between
   Lodgian and its various subsidiaries and affiliates; and

L. Determine a range of values for Lodgian, its subsidiaries and
   affiliates on a going concern basis and on a liquidation

M. Assist the Committee in preparing documentation required in
   connection with supporting or opposing any proposed
   restructuring plan;

N. Advise and assist the Committee in evaluating any potential
   financing by the Debtors, evaluation and contacting potential
   sources of capital and assisting the Committee in negotiating
   such a financing;

O. Assist the Committee in identifying and evaluating candidates
   for a potential acquisition, merger, consolidation or other
   business combination pursuant to which the business or assets
   of the Debtors are combined with a non-affiliated third
   party, advising the Committee in connection with and
   participating in negotiations, and aiding in the consummation
   of a Business Combination;

P. When and as requested by the Committee in writing, render
   financial reports to the Committee, as Evercore deems
   appropriate under the circumstances, provided that Evercore
   obtains the approval of the Committee's counsel prior to
   delivering any reports or other information to the Committee;

Q. Participate, to the extent reasonably requested by the
   Committee, including, without limitation, as a financial
   expert to the Committee, in hearings before a court of
   competent jurisdiction in which the Debtors may seek to
   implement a Restructuring, with respect to matters upon which
   Evercore has provided advice. This would include, as
   relevant, coordination with the Committee's counsel with
   respect to testimony.  However, if services under this
   contract entail greater participation than is customary in
   the ordinary course of the hearings that are uncontested or
   subject to limited contest, then the provision of services
   will be the subject of a separate agreement amount the among
   the parties and will not be governed by the terms and
   conditions of the Evercore Agreement; and

R. Provide other such advisory services as are customarily
   provided in connection with the analysis and negotiation of a
   Restructuring, as requested and mutually agreed upon by the
   Committee and Evercore.

The firm will be compensated for the services as described:

A. Evercore will be entitled to a monthly fee of $100,000
   per month for the first four months of the Engagement,
   starting November 2001, and $75,000 for each month
   thereafter. Fees are payable in cash for each month or any
   part thereof, with the first Monthly Fee payable upon
   execution of the Evercore Agreement by each party. Additional
   installments of the Monthly Fee are payable in advance on
   each monthly anniversary of the Effective Date, provided,
   however, that if the Evercore Agreement is terminated by
   Evercore, the Monthly Fee will be pro rated for any month;

B. Evercore will also be entitled to a transaction fee in an
   amount equal to $1,000,000, less 50% of the aggregate amount
   of monthly fees received by Evercore, but in no event less
   than $300,000. Except as otherwise provided in the Evercore
   Agreement, the Transaction Fee will be earned upon the
   completion of a Restructuring.  This is understood to mean
   the consummation of a Restructuring of the Debtors'
   obligations, effected through the execution, confirmation and
   consummation of a plan of reorganization pursuant to an order
   of the Bankruptcy Court.  The transaction fee will be paid,
   in cash, upon the consummation date of any such plan; and

C. Evercore will entitled to reimbursement of all necessary,
   reasonable out-of-pocket expenses incurred during this
   engagement, including, but not limited to: travel and
   lodging, direct identifiable data processing and
   communication charges, courier services, working meals,
   reasonable fees and expenses of Evercore's counsel in
   connection with this engagement and other necessary
   expenditures.  These are payable upon rendition of invoices
   setting forth in reasonable detail the nature and amount of
   the expenses, provided, that the reimbursable expenses do
   exceed $40,000 in the aggregate without the prior approval of
   the Debtors and a majority of the Committee. In connection
   therewith, the Debtors pay Evercore on the Effective Date and
   maintain thereafter a $20,000 expense advance for which
   Evercore will account upon termination of the Evercore
   Agreement. (Lodgian Bankruptcy News, Issue No. 16; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)  

LTV CORP: Wants to Abandon Interests in Six Foreign Affiliates
The LTV Corporation and its debtor-affiliates seek the Court's
authority to abandon their ownership interests in six non-
debtor, foreign affiliates:

1. Chateaugay Corporation;

   Debtor Reomar, Inc., owns 100% of the issued and outstanding
   shares of capital stock of Chateaugay Corporation, a Republic
   of Panama corporation.

2. Inmobiliaria Nueva Icacos, S.A. de C.V.;

   Debtor Investment Bankers, Inc., owns 100% of the issued and
   outstanding shares of capital stock of Inmobiliaria Nueva
   Icacos, S.A. de C.V., a Mexico corporation.

3. LTV International, N.V.

   LTV owns 100% of the ownership interests in LTV International
   N.V., a Netherlands Antilles limited liability company.
   Antillean Management Corporation acts as the "managing
   director" of LTV International.  AMACO bills LTV for
   management services provided by AMACO and for annual fixed

4. Repsteel Overseas Finance, N.V.

   LTV owns 100% of the ownership interests in Repsteel
   Overseas Finance N.V., a Netherlands Antilles limited
   liability company.  Curacao Corporation Company N.V. acts
   as the "managing director" of Repsteel.  Curacao has
   notified LTV that it will resign as managing director of
   Repsteel if LTV does not pay its invoices for management
   services by September 30, 2002, and that such resignation
   would cause Repsteel to forfeit its good standing under
   the laws and regulations of the Netherlands Antilles.

5. Varco-Pruden Exports, Ltd.,

   Debtor VP Buildings, Inc. owns 100% of the ownership
   interests in Varco-Pruden Exports, Ltd., a Bahamas company.

6. Varco-Pruden International de Chile

   Debtor Varco Pruden International, Inc., owns 100% of the
   ownership interests in Varco Pruden International de Chile
   Limitada, a Chilean limited liability company.

The Debtors have determined in their business judgment that
abandonment of the Ownership Interests is appropriate because
the Ownership Interests are both burdensome to the estates and
of inconsequential value and benefit.  None of the non-debtor
affiliates own assets of any apparent value.  Despite having
marketed the Ownership Interests -- in certain cases for several
years -- the Debtors have been unable to sell the Ownership
Interests to third parties.  Clearly, there is no value or
benefit that can be derived from the Ownership Interests.

By contrast, as long as the Debtors hold and maintain the
Ownership Interests, they incur liabilities and potential
liabilities relating to the ongoing existence of the non-debtor
affiliates.  For example, the Debtors continue to incur
obligations to pay fees to maintain the good standing of each of
the non-debtor affiliates in the applicable foreign
jurisdictions.  Similarly, with respect to certain of the non-
debtor affiliates, the Debtors incur obligations to pay fees to
persons or entities that manage the non-debtor affiliates.  But
if these interests will be abandoned, then the Debtors' estates
will no longer be liable for these liabilities and costs.  
Moreover, the Debtors believe that abandonment is a more cost-
efficient means of relieving the Debtors' estates of these
burdensome obligations than dissolving the non-debtor affiliates
under the laws of the applicable jurisdictions, which would
require the retention of local counsel and potentially other
entities in each foreign jurisdiction. (LTV Bankruptcy News,
Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-

LTV Corporation's 11.75% bonds due 2009 (LTVC09USR1),
DebtTraders reports, are trading at less than a penny on the
dollar. For real-time bond pricing, see

MARK NUTRITIONALS: Brings-In Pipkin Oliver as Bankruptcy Counsel
Mark Nutritionals, Inc., seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to employ Pipkin, Oliver
& Bradley LLP as its bankruptcy counsel because the firm has
extensive experience in reorganizations and is well-qualified to
represent the Debtor.

Pipkin Oliver will:

  a) assist and advise the Debtor relative to its operations as
     a debtor-in-possession, and relative to the overall
     administration of this chapter 11 case;

  b) represent the Debtor at hearings before this Court and
     communicate with its creditors regarding the matters heard
     and the issues raised, as well as the decisions and
     considerations of this Court;

  c) prepare, review and analyze pleadings, orders, operating
     reports, schedules, statements of affairs and other
     documents filed and to be filed with this Court by the
     Debtor or other interested parties in this Chapter 11 case;
     and consent or object to pleadings or orders on behalf of
     the Debtor;

  d) assist the Debtor in preparing such applications, motions,
     memoranda, adversary proceedings, proposed orders and other
     pleadings as may be required in support of positions taken
     by the Debtor, as well as preparing witnesses and reviewing
     relevant documents;

  e) coordinate the receipt and dissemination of information
     prepared by and received from the Debtor and the Debtor's
     accountants, and other retained professionals, as well as
     such information as may be received from accountants or
     other professionals engaged by any official committee;

  f) confer with the professional as may be selected and
     employed by any official committee;

  g) assist and counsel the Debtor in its negotiations with
     creditors, or Court-appointed representatives or interested
     third parties concerning the terms, conditions, and import
     of a plan of reorganization and disclosure statement to be
     proposed and filed by the Debtor;

  h) assist the Debtor with such services as may contribute or
     are related to the confirmation of a plan of reorganization
     in this chapter 11 case;

  i) assist and advise the Debtor in its discussions and
     negotiations with others regarding the terms, conditions,
     and security for credit, if any during this case;

  j) conduct such examination of witnesses as may be necessary
     in order to analyze and determine, among other things, the
     Debtor's assets and financial condition, whether the Debtor
     has made substantial transfers of its property, and whether
     causes of action exists on behalf of the Debtor's estate;

  k) assist the Debtor generally in performing such other
     services as necessary.

The bankruptcy attorneys and legal assistants primarily
responsible for this representation and their present billing
rates are:

          William H. Oliver      $250 per hour
          Marvin G. Pipkin       $300 per hour
          Matthew D. Bradley     $225 per hour

Mark Nutritionals, Inc., filed for chapter 11 protection on
September 17, 2002. When the Company filed for protection from
its creditors it listed estimated debts of over $10 million.

MEADOWCRAFT: Seeking Okay to Continue Finley Colmer's Engagement
Meadowcraft, Inc., wants the U.S. Bankruptcy Court for the
Northern District of Alabama to grant authority for the Company
to continue its prepetition employment arrangement with Finley,
Colmer & Company as financial consultants.

To fulfill its duty as a debtor-in-possession under the
Bankruptcy Code, the Debtor tells the Court that it will require
the assistance of a financial consulting firm.  The Debtor has
selected Finley Colmer because the Firm's consultants have
considerable experience and knowledge in these matters and are
qualified to represent the Debtor in its chapter 11 case.

The professional services that the Firm will render include:

  a) Assisting the Debtor in its record keeping and compliance
     duties, including, but not limited to, assisting in
     identifying, obtaining and safeguarding key accounting
     records, and assisting in the preparation of financial
     statements and income, payroll, and sales tax returns in
     compliance with various state, local and federal

  b) Continuing to review and discuss operations, accounting and
     financial controls/reporting with senior management and to
     recommend and help implement actions required by the \
     company to successfully reorganize;

  c) Advising and consulting with the Debtor for the preparation
     of all necessary schedules, disclosure statements and plans
     of reorganization; and

  d) Performing any and all financial services required by the
     Debtor in connection with its bankruptcy case.

The Debtor relates that Finley Colmer has performed these
services since the Firm was hired on March 14, 2001.

The Debtor desires to employ Finley Colmer at its regular hourly

          Peter Cohmer       $275 per hour
          Jim Jennings       $165 per hour
          Danette Higdon     $ 50 per hour

Meadowcraft, Inc., a leading domestic producer of casual outdoor
furniture and the largest manufacturer of outdoor wrought iron
furniture in the world, filed for chapter 11 protection on
September 2, 2002. Sherry T. Freeman, Esq., Edward J. Peterson,
III, Esq., and Lloyd C. Peeples, III, Esq., at Bradley Arant
Rose & White LLP represent the Debtor in its restructuring
efforts.  When the Company filed for protection from its
creditors, it estimated assets of over $50 million and debts of
over $100 million.

MEDICALCV: Must Raise Up to $2MM to Fund Ops. & Meet Cash Needs
MedicalCV manufactures and markets mechanical heart valves known
as the Omnicarbon Series 3000 and Series 4000. Its heart valves
are used to treat heart valve failure caused by the aging
process, heart diseases, prosthetic heart valve failure and
congenital defects. To date, the Company has distributed the
Omnicarbon 3000 and 4000 heart valves primarily in Europe, South
Asia, the Middle East and the Far East. In fiscal year 2002, it
derived 65.0 percent of its net sales from Europe. As an
innovator of heart valve technology, MedicalCV has more than 30
years of experience in developing, manufacturing and marketing
five generations of heart valves, and has sold more than 135,000
heart valves worldwide.

However, MediCalCV Inc., has sustained losses and negative cash
flows from operations in recent years and expects these
conditions to continue for the foreseeable future.  At July 31,
2002, the Company had an accumulated deficit of $13,571,252, and
has insufficient funds to meet the requirements of its revolving
line of credit, which matures November 2002, and finance its
working capital and capital expenditure needs.  These matters
raise substantial doubt about the Company's ability to continue
as a going concern.

The Company is currently pursuing the refinancing of its
revolving line of credit and seeking other financing to fund its
operations and working capital requirements.  If the Company is
unable to refinance its revolving line of credit and obtain
sources of additional funds by the end of calendar year 2002, it
will be required to significantly revise its business plans and
drastically reduce operating expenditures such that it may not
be able to develop or enhance its products, gain market share in
the United States or respond to competitive pressures or
unanticipated requirements, which could seriously harm its
business, financial position and results of operations.  To
continue operations past October 2002 without additional
capital, the Company will need to implement drastic cost cutting
measures and significantly reduce its working capital to
conserve cash.  In any event, the Company will need additional
capital by at least the end of calendar year 2002 to continue
its operations.

The Company is subject to risks and uncertainties common to
rapidly growing medical technology-based companies, including
rapid technological change, dependence on one principal product,
new product development and acceptance, actions of competitors,
dependence on key personnel and United States market

As mentioned above, as of July 31, 2002, MedicalCV had an
accumulated deficit of $13,571,252.  The Company has incurred
losses in each of the last six fiscal years. Since 1994, it has
invested in developing a bileaflet heart valve, a proprietary
pyrolytic carbon coating process and obtaining premarket
approval from the FDA to market its Omnicarbon 3000 heart valve
in the U.S. Its strategy has been to invest in technology to
better position the Company competitively once FDA premarket
approval was obtained.  The Company expects cumulative net
losses to continue at least through fiscal year 2003 because of
anticipated spending necessary to market the Omnicarbon 3000
heart valve in the U.S. and to establish and maintain a strong
marketing organization for domestic and foreign markets.

Cash and cash equivalents decreased to $1,128,745 at July 31,
2002, from $2,781,675 at April 30, 2002. The decrease in cash in
the current quarter was attributable primarily to funding
operating losses and working capital requirements.  Net cash
used in operating activities was $1,529,758 in the quarter ended
July 31, 2002, and $744,674 in the first quarter of the prior

Net cash used in operating activities increased $785,084 due
primarily to increases in working capital requirements combined
with funding higher operating losses.  Inventories increased
$324,370 in the current quarter as a result of carrying
additional purchased raw material component inventory to support
the launch of the Omnicarbon 3000 in the U.S.  The increase in
accounts receivable of $169,906 was attributable to the
increased level of sales combined with sales growth in markets
which require longer credit terms.

Net cash used in investing activities was $84,593 and $48,000
for the periods ended July 31, 2002 and 2001, respectively.
MedicalCV invested $84,593 in property, plant, and equipment in
the period ended July 31, 2002, compared to $22,000 in the same
period last fiscal year.

Net cash used in financing activities was $38,579 in the period
ended July 31, 2002 and consisted of principal payments on long-
term debt and capital leases. In the period ended July 31, 2001
net cash provided by financing activities was $705,513. In that
period, the Company borrowed an additional $740,000 on its bank
line of credit partially offset by $34,487 of principal payments
on its long-term debt and capital leases.

From March 1992 through July 2002, MedicalCV's primary source of
funding has been private sales of equity securities, which
totaled $9,775,704 in gross cash proceeds. It has also funded
operations through collateralized equipment financing term loans
and equipment leases. In addition, it financed its operations
since fiscal year 2000 through a bank line of credit
collateralized by its real estate, tangible and intangible
property and a guarantee by a principal shareholder.  This line
of credit will expire in November 2002.  Amounts borrowed under
this line of credit generally bear interest at the prime rate.  
As of April 30, 2002, the Company had borrowed the maximum
amount available of $2,500,000 under this line of credit.

As part of MedicalCV's credit agreement with Associated Bank
Minnesota, it was required to maintain a minimum tangible net
worth of not less than $3,000,000, measured as of the last day
of each fiscal quarter. At April 30, 2001, the Company failed to
comply with the minimum tangible net worth covenant. On August
24, 2001, Associated Bank Minnesota waived the covenant
defaults, and MedicalCV amended its credit agreement, which now
provides that the Company must maintain a minimum tangible net
worth of not less than $1,000,000, measured as of the last day
of each calendar month.  The Company was in compliance with its
debt covenants as of July 31, 2002. It is currently in
negotiations to refinance its bank line of credit.

MedicalCV expects to continue developing its business and to
build market share in the U.S. now that it has FDA market
approval of its Omnicarbon 3000 heart valve for sales in the
U.S. These activities will require significant expenditures to
develop, train and supply marketing materials to its independent
sales representatives and to build its sales and marketing
infrastructure. As a result, it anticipates that sales and
marketing and general and administrative expenses will continue
to constitute a material use of its cash resources.  Although
the Company has no commitment for these expenditures, it
currently anticipates spending between $4,700,000 and $5,600,000
in fiscal year 2003. In addition, MedicalCV projects capital
expenditures of approximately $250,000 to $350,000 for fiscal
year 2003 to increase manufacturing capacity in certain
functions and make necessary improvements to its corporate
facility.  The actual amounts and timing of its capital
expenditures will vary depending upon the speed at which it is
able to expand distribution capability in domestic and
international markets and the availability of financing.

MedicalCV expects that its operating losses and negative
operating cash flow will continue in fiscal years 2003 and 2004
as it expands its manufacturing capabilities, continues
increasing its corporate staff to support the U.S. roll-out of
its Omnicarbon 3000 heart valve, and adds marketing programs
domestically and internationally to build awareness of and
create demand for its Omnicarbon heart valves. The Company will
require additional financing in the current year. It anticipates
that it will need to raise between $1,500,000 and $2,000,000 of
additional equity or debt financing to fund operations and
working capital requirements in the next 2 to 6 months.  It also
anticipates the need to raise an additional $1,500,000 to
$2,000,000 within 12 to 18 months. The Company may also seek to
dispose of certain assets and enter into a sale leaseback
arrangement as a means to improve liquidity. MedicalCV expects
to face substantial difficulty in raising funds in the current
market environment and has no commitments at this time to
provide the required financing. It will also seek to
refinance its bank debt before November 2002 to give it
additional borrowing capacity and flexibility in funding the
growth of its business. Its capital requirements may vary
depending upon the timing and the success of the implementation
of its business plan, regulatory, technological and competitive
developments, or if:  operating losses exceed its projections,
its manufacturing and development costs or projections prove to
be inaccurate, it determines to license or develop additional
technologies, it experiences substantial delays in obtaining FDA
clearance of its proprietary carbon coating process for heart
valves sold in the U.S. market, or the Company makes

MedicalCV indicates that it cannot assure that it will be able
to raise sufficient capital on terms that are considered
acceptable, or at all. If unable to obtain adequate funds on
acceptable terms, the ability to fund the expansion of its
business or respond to competitive pressures would be
significantly impaired. It also would be required to revise its
business plans and reduce operating expenditures. In the event
that the Company is unable to refinance or extend its revolving
line of credit and obtain funds by the end of calendar year
2002, it will be required to significantly revise its business
plans, substantially reduce operating expenditures and consider
the sale of certain assets. To continue operations past October
2002 without additional capital, MedicalCV will need to
implement drastic cost cutting measures and significantly reduce
working capital to conserve cash. In any event, MedicalCV will
need additional capital by at least the end of calendar year
2002 to continue its operations.

METROLOGIC INSTRUMENTS: Gets $1.7M Order from Major Retail Chain
Metrologic Instruments, Inc. (NASDAQ-NMS: MTLG), a leading
manufacturer of sophisticated imaging systems using laser,
holographic, camera and vision-based technologies; high-speed
automated data capture solutions and bar code scanners,
announced that one of North America's largest department store
chains has ordered Metrologic's ScanPal(R) 2 Portable Data
Terminals (PDT) for inventory control data collection.

Greg DiNoia, Metrologic's Sales Manager Strategic Retail
Accounts stated, "This is a follow-on order that compliments an
earlier order received last spring. Our customer expects to
begin using these terminals during their upcoming physical
inventory. The Metrologic ScanPal 2 Data collectors were put to
the test by this retailer during their last physical inventory.
The speed, reliability, accuracy and ease of use of the ScanPal
2 provided significant time savings. As such, the decision to
replace more of their existing data collectors with the
Metrologic ScanPal 2 was an easy one. Due to the success of the
Metrologic ScanPal 2 in assisting with their physical inventory
process, this retailer has expanded the use of the ScanPal 2 to
other data collection applications within their stores. We have
been working with this particular retailer for several years and
Metrologic has been able to prove itself with product
reliability, durability, and value across several products and
applications. Although the ScanPal 2 is a relatively new
product, this important customer and many other retailers have
recognized its benefits and value and have incorporated it into
critical operations throughout their chains."

Metrologic designs, manufactures and markets bar code scanning
and high-speed automated data capture systems solutions using
laser, holographic and vision-based technologies. Metrologic
offers expertise in 1D and 2D bar code reading, portable data
collection, optical character recognition, image lift, and
parcel dimensioning and singulation detection for customers in
retail, commercial, manufacturing, transportation and logistics,
and postal and parcel delivery industries. In addition to its
extensive line of bar code scanning and vision system equipment,
the company also provides laser beam delivery and control
systems to semi-conductor and fiber optic manufacturers, as well
as a variety of highly sophisticated optical systems. Metrologic
products are sold in more than 100 countries worldwide through
Metrologic's sales, service and distribution offices located in
North and South America, Europe and Asia. For more information
please visit

                         *     *     *

As reported in Troubled Company Reporter's July 15, 2002
edition, Metrologic Instruments executed an Amended and Restated
Credit Agreement with its banks.

In connection with the Agreement, the banks have waived all
existing defaults and have withdrawn the notice of default.
Additionally, the term of the Agreement is through May 31, 2003.
As a result of the execution of the Agreement, Metrologic
expects to file an amended Annual Report on Form 10-K for the
year ended December 31, 2001 with the Securities and Exchange
Commission, which should include an unqualified opinion from its
independent auditors and a reclassification of a portion of bank
debt from short-term to long-term liabilities.

NAVISITE INC: ClearBlue Entities Disclose 94.42% Equity Stake
ClearBlue Technologies Equity, Inc., a Delaware corporation,
ClearBlue Finance, Inc., a Delaware corporation and ClearBlue
Technologies, Inc., a Delaware corporation have filed a joint
stock ownership schedule with the SEC. Both CBTE and CBF are
wholly-owned subsidiaries of ClearBlue and are holding

ClearBlue is a privately-held provider of outsourced information
technology managed services.

CBTE, CBF and ClearBlue beneficially own 329,798,670 shares of
the common stock of NaviSite, Inc., representing approximately
94.42% of the outstanding shares of common stock of the Company.
This percentage is based on the number of shares of common stock
issued and outstanding as of August 31, 2002, as reported by
NaviSite to ClearBlue. Of these shares of common stock,
74,236,444 shares of common stock and 5,203,252 warrants to
purchase shares of common stock were obtained by CBTE from CMGI,
Inc., and Hewlett-Packard Financial Services Company.
250,358,974 shares of common stock represent the number of
shares of common stock that CBF has a right to acquire through
conversion of the principal amount of the HPFS Note and the CMGI
Note plus all accrued interest thereon.

CBTE, CBF and ClearBlue share the power to vote and to dispose
of the shares of common stock.

CBTE, CBF and ClearBlue acquired beneficial ownership of the
shares of common stock on September 11, 2002 in two separate
transactions with CMGI, Inc., and Hewlett-Packard Financial
Services Company.

Pursuant to a Note and Stock Purchase Agreement dated September
11, 2002 between HPFS and ClearBlue, (a) HPFS transferred to
CBTE, 3,207,053 shares of common stock, (b) HPFS transferred to
CBF the 12% Convertible Note, dated November 8, 2001, of
NaviSite representing approximately $55 million aggregate
principal amount plus accrued interest thereon and assigned to
ClearBlue, which assumed, that certain Guarantee and Security
Agreement and related agreements, including all rights
thereunder and (c) ClearBlue transferred to HPFS 1,447,368
shares of ClearBlue common stock, representing approximately 22%
of issued and outstanding equity of ClearBlue after giving
effect to the transactions with HPFS and CMGI described here.

Pursuant to a separate Note and Stock Purchase Agreement dated
September 11, 2002 between CMGI and ClearBlue (a) CMGI
transferred 71,029,391 shares common stock and warrants to
purchase 5,203,252 shares of common stock to CBTE, (b) CMGI
transferred to CBF, the 12% Convertible Note dated November 8,
2001, of NaviSite representing $10 million aggregate principal
amount plus accrued interest thereon and (c) ClearBlue
transferred to CMGI 131,579 shares of ClearBlue common stock,
representing approximately 2% of issued and outstanding equity
of ClearBlue after giving effect to the transactions with HPFS
and CMGI described here.

NaviSite's obligations under the HPFS Note and the CMGI Note are
secured by a first priority lien on substantially all of the
Company's assets. The HPFS Note and the CMGI Note are
convertible at the election of the holder of each Note into
shares of common stock at any time prior to or at maturity, at a
rate of one share for each $0.26 of principal and interest
converted. Such conversion rate is subject to certain
anti-dilution protections. The Convertible Notes require payment
of interest only, at 12% per annum, for the three years from the
November 8, 2001 and then repayment of principal and interest,
on a straight-line basis, over the next three years until
maturity on November 8, 2007. At the Company's option, it may
make interest payments (i) 100% in shares of common stock in the
case of amounts owed under the CMGI Note, through December 2007
and (ii) approximately 16.67% in shares of common stock in the
case of amounts owed under the HPFS Note, through December 2003.

CBTE, CBF and ClearBlue acquired the shares of common stock to
provide them with a significant investment in NaviSite with the
intent of acquiring control of NaviSite because they believed
the shares of common stock to be an excellent investment
opportunity. In connection with the purchase of the shares of
common stock, Arthur Becker, Vice President of ClearBlue, and
Andrew Ruhan, Chief Executive Officer of ClearBlue, were
appointed to NaviSite's Board of Directors by ClearBlue, and
they currently are two of the four current members of NaviSite's
Board of Directors. It is expected that the other two members of
the Company's Board of Directors, David S. Wetherell and George
A. McMillan, will resign as directors in connection with
NaviSite's compliance with Rule 14f-1 of the Securities and
Exchange Act of 1934.

At the present time, CBTE, CBF and ClearBlue indicate the
intention of retaining ownership of the shares of common stock
and Convertible Notes subject to their continuing evaluation of
NaviSite and those factors noted below. CBTE, CBF and ClearBlue
indicate that they may conclude in the future that their best
interests are served by (a) proposing a merger or similar
transaction between NaviSite, ClearBlue or an affiliate of
ClearBlue, (b) acquiring additional shares of common stock
through open market purchases or privately negotiated
transactions, (c) otherwise seeking to influence management and
policy of NaviSite to enhance the value of all shares of common
stock , (d) proposing a reorganization or recapitalization of
NaviSite, (e) selling or otherwise disposing of some or all of
their shares of common stock and Convertible Notes in the open
market or in private transactions, or (f) voting their shares or
soliciting proxies from stockholders of NaviSite with the
objective of electing additional nominees to NaviSite's Board of

Any decision to increase the holdings of CBTE, CBF and ClearBlue
in NaviSite will depend on numerous factors, including, without
limitation, the price of the shares of common stock, the terms
and conditions relating to their purchase and sale, regulatory
conditions, the availability of any required financing and the
prospects of NaviSite. At any time, CBTE, CBF and ClearBlue may
also determine to dispose of some or all of NaviSite's common
stock and Convertible Notes depending on various similar

NaviSite, Inc., is a provider of outsourced Web hosting and
managed application services for companies conducting mission-
critical business on the Internet, including enterprises and
other businesses deploying Internet applications. The Company's
goal is to help customers focus on their core competencies by
outsourcing the management and hosting of their Web operations
and applications, allowing customers to fundamentally improve
the ROI of their web operations. NaviSite is a majority-owned
operating company of CMGI, Inc.

                         *    *    *

In its Form 10-Q for the quarter ended April 30, 2002, Navisite

currently anticipate that our available cash resources at April
30, 2002 will be sufficient to meet our anticipated needs,
barring unforeseen circumstances and subject to the impact of
the factors noted below, for working capital and capital
expenditures over the next twelve months. Our projected cash
usage could be significantly impacted by: (1) our ability to
maintain our current revenue levels through retaining existing
customer accounts and acquiring revenue growth at levels greater
than customer revenue churn; (2) our ability to achieve our
projected operating results; (3) our ability to collect amounts
receivables in a timely manner; (4) our ability to collect
amounts due from Engage related to the termination of our
contract with them; (5) our ability to achieve expected cash
expense reductions; and (6) our ability to sell our assets which
are held for sale at fair-market value. However, we may need to
raise additional funds in order to develop new, or enhance
existing, services or products, to respond to competitive  
pressures, to acquire complementary businesses, products or
technologies or to continue as a going concern, and we cannot
assure you that the additional financing will be available on
terms favorable to us, if at all. In addition, pursuant to our
financing arrangements with CFS as of October 29, 2001, we may
need to obtain approval from CFS for incremental funding, and we
may not obtain this approval from CFS."

NCI BUILDING: Completes New $250 Million Senior Secured Facility
NCI Building Systems, Inc., (NYSE: NCS) has refinanced its
existing bank debt with a new $250 million senior, secured
credit facility.  The new credit facility consists of a six-
year, $125 million term loan and a five-year, $125 million
revolver, both of which will be secured by receivables,
inventory, machinery and equipment.  The Company said that after
repayment of its previous borrowings, it had $79 million in
available borrowings under the new facility.

A.R. Ginn, Chairman of the Board, remarked, "The new credit
facility further enhances our flexibility to pursue our growth
strategy.  We have the advantage of a substantial, positive cash
flow that enabled us to reduce our debt by $74 million through
the first nine months of fiscal 2002.  NCI's sustained
profitability during this difficult period for the metal
construction industry highlights our fundamental advantages, and
reinforces our confidence about the prospects for a full
recovery in our margins given a more favorable environment for
capital spending."

NCI Building Systems, Inc., is one of North America's largest
integrated manufacturers of metal products for the non-
residential building industry. The Company operates
manufacturing and distribution facilities located in 16 states
and Mexico.

DebtTraders says that NCI Building Systems Inc.'s 9.25% bonds
due 2009 (NCS09USR1) are trading at 98 cents-on-the-dollar. See  
real-time bond pricing.

NETWORK ACCESS: Delaware Court Sets Nov. 8, 2002 Claims Bar Date
November 8, 2002 is the deadline set by the U.S. Bankruptcy
Court for the District of Delaware for creditors of Network
Access Solutions Corporation and Nasop, Inc., to file their
proofs of claims against the Debtors or be forever barred from
asserting their claims.

Proofs of claim must be addressed to:

     NAS Claims Processing
     PO Box 5011
     FDR Station
     New York, NY 10150-5011

A copy should also be sent to:

     Leon R. Baron, Esq.
     Adelman Levine Gold and Levin,
     A Professional Corporation
     1900 Two Penn Center Plaza
     Philadelphia, PA 19102

Claims need not be filed if they are on account of:

     (i) claims not listed in the Debtors' Schedules as
         contingent, unliquidated and/or disputed;

    (ii) claims on account of which a proof of claim has
         already been properly filed with the Bankruptcy Court;

   (iii) a debtor in these cases having a claim against another

    (iv) administrative expense claims; and

     (v) an entity that holds a claim arising out of or based
         solely upon an equity interest in the Debtors.

Network Access Solutions Corporation, provider of broadband
network solutions and internet service to business customers,
filed for chapter 11 protection on June 4, 2002. Bradford J.
Sandler, Esq., and Leon R. Barson, Esq., at Adelman Lavine Gold
and Levin, PC represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $58,221,000 in assets and $84,946,000 in

OMEGA HEALTHCARE: Fitch Affirms B Corporate Credit Rating
Standard & Poor's Ratings Services affirmed its single-'B'
corporate credit rating on Omega Healthcare Investors Inc.

At the same time, ratings on the company's $100 million 6.95%
senior unsecured notes due 2007 and $107.5 million preferred
stock are affirmed. The outlook is revised to positive from

The outlook revision reflects ongoing improvements to this
health care REIT's business, its increased debt coverage
measures, and improved financial flexibility following its
rights offering and private placement.

Maryland-based Omega invests in and provides financing to the
long-term care industry. The company owns or holds mortgages on
233 skilled nursing and, to less of an extent, assisted living
facilities with approximately 24,400 beds located in 28 states
and operated by 36 independent health care operating companies.
Similar to other health care REITs focused on skilled-nursing
facilities, the company's operator base faced significant
challenges during the past few years (in part, as a result of
the implementation of the Prospective Payment System) that led
to operator bankruptcies, and lease/mortgage restructurings.
Omega's management team has done a commendable job of
renegotiating and restructuring lease/mortgage agreements with
troubled operators. As a result, the vast majority of the
company's primary operators (representing about 75% of
investments) are currently meeting their obligations, albeit at
reduced rates, and achieving approximately 1.2 times EBITDAR
coverage after a 4% management fee.

The company has also made good strides recapitalizing its
balance sheet. It has used proceeds from asset sales and
suspended dividends to reduce debt, refinanced some existing
debt to lower overall debt costs, and completed a $50 million
rights offering in February 2002 that enabled it to meet its
maturing debt obligations and achieve extensions on its secured
bank line agreements. Further, book value leverage of about 40%
at June 30, 2002 is down materially from roughly 55% in 1999,
although the favorable debt reduction has been offset by the
higher proportion of variable-rate short-term, bank debt that
now dominates the capital structure. Nonetheless, coverage
measures have benefited, as debt service coverage reached 2.4x
for the six months ended June 30, 2002, which is up dramatically
from just 1.3x for fiscal year 2001. Notably, Omega's fixed-
charge coverage continues to mirror its debt service coverage
since the company has suspended preferred dividend payments ($35
million of cumulative to date) since February 2001. Common
dividends (which had been running at roughly $55 million
annually two years ago) will likely be reinstated sometime in
early 2003, but at a materially lower level. Financial
flexibility, while improved, does remain constrained as the
majority of assets are encumbered by mortgages, and bank line
availability is modest, with about $207 million outstanding at
the end of the second quarter under the combined $225 million
lines, both of which appear to be currently well-collateralized.

                         Outlook: Positive

The company has worked through several tenant bankruptcies and
lease/mortgage negotiations while successfully meeting its
maturing debt obligations. Further, Omega's operating cash flow
continues to improve and when combined with proceeds from asset
sales, should provide the company with sufficient cash to meet
the $40 million cumulative preferred dividends in early 2003,
subject to Omega's board approval. Once the cumulative preferred
dividends are paid and future preferred dividends are
reinstated, Standard & Poor's will raise the preferred rating
from its current 'D' default status to triple-'C'-plus and
consider raising the corporate rating and senior unsecured
rating a single-notch to single-'B'-plus and single-'B'-minus,

ORGANOGENESIS: Commences Chapter 11 Proceeding in Massachusetts
Organogenesis Inc., (AMEX: ORG) has filed a voluntary petition
for reorganization under Chapter 11 of the U.S. Bankruptcy Code
in the U.S. Bankruptcy Court for the District of Massachusetts.

In order to preserve the live cell lines used to produce the
company's living skin substitute product, and to maintain its
manufacturing facility in compliance with FDA regulations,
Organogenesis will continue scaled-down business operations
during the reorganization. Under the protection of Chapter 11,
Organogenesis will seek to implement transactions that will
rapidly return the product to the marketplace, while maximizing
value for its creditors.

Before the Chapter 11 filing, Organogenesis terminated its
agreements with Novartis Pharma AG, under which Novartis had
been the exclusive distributor of the product under the
trademark Apligraf(R). Organogenesis also reduced its workforce
before the filing from approximately 125 to 15 employees.

Organogenesis was the first company to develop and gain FDA
approval for a mass-produced product containing living human
cells. The Company's principal product, a living, bi-layered
skin substitute, has received FDA approval for the treatment of
diabetic foot ulcers and venous leg ulcers.

OWENS CORNING: Committee Wants to Commence Avoidance Actions
The Official Committee of Unsecured Creditors, in the chapter 11
cases involving Owens Corning and its debtor-affiliates, seeks
the Court's authority to commence these avoidance actions on
behalf of the Debtors' estates:

-- An action seeking the return of not less than $115,234,459
   of preferential transfers made to claimants and their law
   firms during the 90 days leading up to the bankruptcy

-- An action seeking the return of $290,000,000 of preferential
   transfers of certain "insiders" made to National Settlement
   Program Executive Committee members and those claimants
   represented by the members between March 2000 and the
   Petition Date;

-- An action seeking the return of certain payments made to the
   Debtors' officers and directors within one year prior to the
   Petition Date;

-- An action seeking the return of around $700,000,000 in cash
   as to certain asbestos obligations that were transferred into
   the accounts of certain NSP law firms; and

-- An action seeking to avoid obligations incurred, and the
   return of funds transferred, by Owens Corning pursuant to
   some or all NSP agreements entered into after January 1, 2000
   and agreements entered into earlier but converted or
   accelerated as a result of Owens Corning's financial crisis.

Eric D. Schwartz, Esq., at Morris Nichols Arsht & Tunnell, in
Wilmington, Delaware, tells the Court that the Debtors' estates
are entitled to recover the amounts because they were
transferred under suspicions of collusion.

Mr. Schwartz reminds the Court that in December 1998, after
years of pursuing a litigation strategy to resolve its asbestos-
related liability, Owens Corning and Fibreboard announced the
National Settlement Program.  Through the NSP, Owens Corning and
Fibreboard entered into omnibus agreements with the claimants'
law firms.  The NSP agreements did not resolve the claims
between Owens Corning and Fibreboard and the asbestos claimants
who are not parties to the NSP agreements.  The NSP agreements,
rather, are agreements between Owens Corning and Fibreboard and
law firms that recommended proposed settlements to their
clients.  As a general matter, Owens Corning and Fibreboard
approached law firms representing vast numbers of asbestos
claimants and negotiated fixed settlement amounts, by disease
type, to be offered to the firms' inventories of present and
future clients.

The NSP started with 50 law firms representing 176,000 asbestos
claimants, or 90% of Owens Corning's asbestos-related liability.
At the Petition Date, Owens Corning and Fibreboard entered into
96 NSP agreements and 70 so-called quasi-NSP agreements.  The
law firms comprised the NSP Council.

Although Owens Corning had asserted that under the NSP the
average cost of settlement per asbestos case would be reduced,
it turns out that the NSP actually doubled the cost of each
settlement.  Owens Corning, Mr. Schwartz adds, knew about it but
preferred to project otherwise to the public.

According to Mr. Schwartz, a review of Owens Corning's
settlement values indicate that Owens Corning incurred
substantially greater obligations under the NSP than it did
prior to the NSP.  For example, with respect to mesothelioma
claims, the average Owens Corning settlement value was $159,420
per claimant in 1998.  In 2000, the average value of obligations
incurred for the mesothelioma claimants soared to $316,400.  
Lung cancer claims cost on the average $31,026 in 1998 -- this
figure doubled to $78,035 in 2000.  Owens Corning had incurred
$860,000,000 in obligations to asbestos claimants during the
first full year of the program alone.  In May 8, 2000, 65 firms
were recruited to the NSP.  During the first four months of
2000, Owens Corning and the Fibreboard Trust incurred an
additional $1,200,000,000 of obligations to claimants, with
$1,700,000,000 more scheduled for payment through September

Recognizing the reality of its precarious financial situation,
Mr. Schwartz says, Owens Corning embarked on providing material,
nonpublic information to the NSP law firms while concealing this
information from the general public.  Owens Corning's
management, for example, informed the NSP law firms of Owens
Corning and Fibreboard's financial predicament.  The NSP Council
created an executive committee to negotiate a deferral program
with Owens Corning.  Of the law firms appointed to the NSP
Executive Committee, these law firms received these amounts
between March 2000 to the Petition Date:

      Law Offices of Peter G. Angeles                $5,876,000
      Baron & Budd                                   66,000,000
      Cooney & Conway                                   329,000
      Early Ludwick & Sweeny                          5,276,000
      Kazan McClain Edises Simon & Abrams PLC        10,976,000
      Ness Motley Loadholt Richardson & Poole         4,467,000
      Weitz & Luxemberg                             289,330,000
                                          Total:   $382,254,000

During a presentation on March 12, 2000, Owens Corning informed
the NSP Council that the incurrence of asbestos-related
obligations had an adverse effect on its balance sheet and
financial forecast.  Owens Corning then disclosed that it
suffered negative cash flow of $270,000,000 in 1999 and booked a
year-end debt of $2,000,000,000, or 40% of total sales for the
year.  Owens Corning then added that at the current rate of
incurring obligations, Fibreboard's trust was in danger of
running out of money in 2004, years earlier than expected.
Owens Corning also informed the NSP Council that its scheduled
asbestos obligations for March 2000 exceeded its ability to pay
by at least $500,000,000.  The NSP had, in effect, become

Mr. Schwartz emphasizes that Owens Corning's statements were in
stark contrast to its public statements.  In a January 25, 2000
press release, then Owens Corning's Chairman and CEO Glen Hiner,
was bullish on the Company's business prospects, reporting
record sales and earnings for 1999.  Mr. Hiner made the same
projections for 2000: " In the year 2000, we will continue that
momentum by improving our operations, while at the same time
satisfying the requirements of our National Settlement Program."

Despite its admissions before the NSP Council of being in the
red, Owens Corning continued to incur new obligations under new
and accelerated NSP agreements and to pay out claims at inflated
rates.  Owens Corning's management entered into 29 new NSP
agreements after its disclosure, 14 of which were penned one
month prior to the Petition Date.  Owens Corning and Fibreboard
and the NSP law firms accelerated the processing of claims from
earlier NSP agreements to lock in settlements at values well
above averages for prior years.  In sum, just 90 days preceding
the Chapter 11 filings, Owens Corning and Fibreboard paid more
than $115,000,000 to law firms to settle claims under the NSP
agreements and quasi-NSP agreements.

Mr. Schwartz points out that the incidents, taken all together,
indicates collusion between Owens Corning and Fibreboard and the
NSP law firms to place the asbestos plaintiffs in a better
position than the Debtors' remaining creditors.

According to Mr. Schwartz, the expansion of the NSP in the face
of potential bankruptcy appears more suspicious in light of
Owens Corning's abandonment of the NSP formula from prior years.

In 2000, Owens Corning instituted a new process where it would
deposit large sums of money, totaling hundreds of millions of
dollars, with select law firms even before any individual
claimant had agreed to settle his or her claim.  With the
previous NSP agreements, clients first accepted the settlement
and then proved and released claims before Owens Coming
transferred money to the law firm for payment to the settling
client.  The pre-paid NSP agreements were entered into with the
law firms of Baron & Budd, Weitz & Luxemberg, Waters & Kraus and
Foster & Sear.

With the pre-paid NSP agreements, Owens Corning transferred
$66,000,000 to a Baron & Budd account on March 13, 2000.
Fibreboard transferred $44,000,000 to Baron & Budd on April 6,

According to Mr. Schwartz, the transfers to Baron & Budd, apart
from representing a departure from past practice, were made
before the NSP agreement even became effective.  The NSP
agreement was not to become effective until either an ethics
expert or the 68th Judicial District Court of Dallas County,
Texas determined that it complied with applicable ethical
requirements.  The opinion of an ethics expert was not obtained
until June 2000 and, as a result, the NSP agreement did not
become effective until that time.  Despite this, and the fact
that Baron & Budd was not obligated to perform under the NSP
Agreement, the Debtors transferred money into Baron & Budd's

Owens Corning and Fibreboard also prepaid their obligations to
Weitz & Luxemberg.  Owens Corning agreement gave the firm
$289,330,000 while Fibreboard gave $181,933,750.

The Committee believes that the funds transfer to Weitz &
Luxemberg was made within days of the Petition Date and that the
payment was made before any asbestos claimants represented by
the firm agreed to settle their claim.

Although the Weitz & Luxemberg NSP agreement contemplated that
payments were to be paid into an escrow account by an escrow
agent selected by an independent referee, Mr. Schwartz alleges
that the contemplated escrow account was never established.
Instead, the Debtors deposited nearly $300,000,000 dollars
directly into Weitz & Luxemberg's account.

Under a similar prepaid NSP agreement, Fibreboard transferred
$40,000,000 into the account of Waters & Kraus on August 25,
2000.  Owens Corning and Fibreboard also paid a total of
$80,000,000 into Poster & Sear's account in April 2000.

Mr. Schwartz insists that the payments under the prepaid
agreements should be recovered because they did not provide any
tangible benefits to the Debtors.

Moreover, Mr. Schwartz tells the Court that in the months prior
to the Petition Date, Owens Corning gradually modified its
Executives' Compensation Program which actually increased the
salaries of its top executives and cushioned the effects of
Owens Corning's  increased asbestos liability.

                          Debtors Object

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, reminds the Court that before a committee can be given
the right to bring an avoidance action on behalf of a debtor, it
must establish that:

    -- based on a cost-benefit analysis, a colorable claim
       exists that would benefit the estate; and

    -- the Debtors' inaction amounts to an abuse of their

The Committee, Ms. Stickles insists, has not met this burden on
all counts of its motion.

A. An Action Seeking The Return Of Not Less Than $115,243,459.15
   In Preferential Transfers.

Of the $115,000,000 that the Committee alleges to be
preferential transfers, $92,000,000 or 80% represent
distributions from the Baron & Budd and Weitz & Luxemberg escrow
accounts to their individual clients.  In the case of escrow
accounts, the 90-day preference period runs, not from the date
of distributions out of the account, but from the date of
deposit into the account.  The money was deposited into the
accounts on March 2000.  Given that, Ms. Stickles relates that
the payments from the escrow accounts fall outside the 90-day
preference period.

As for the remaining $23,000,000, Ms. Stickles informs the Court
that transfers were made by the Debtors to the law firms in the
ordinary course of business pursuant to settlement agreements
that were entered into before the 90-day period.  Specifically,
16 of the 19 firms that received payments within the 90-day
entered into settlement agreements with the Debtors prior to the
Petition Date.  The remaining three law firms entered into
settlement agreements in early 2000, still prior to the 90-day
period.  The law firms include:

   Counsel                    Agreement Date              Amount
--------------              ---------------            ---------
Angelos, Peter                 09/13/99                 $329,000
Baldwin & Baldwin              09/23/96               $1,962,027
Brayton, Purcell & Geagon      06/05/00               $5,542,065
Cascino Vaughn                 12/10/98                  $80,000
Contrada & Associates          10/12/99                 $250,000
Glasser & Glasser              10/16/98               $2,459,040
Hartley & O'Brien              05/07/99                 $400,000
Levin Middlebrooks et al       06/01/99                 $412,000
Lipman, David                  02/03/00               $5,530,000
Martins & Jones                12/14/99                 $385,417
Michie Hamlett et al           10/16/98                  $27,625
Norris Morris et al.           05/03/00               $1,266,000
Patten, Wornom & Watkins       10/16/98                 $447,709
Robles & Gonzalez              12/01/98                 $820,644
Scruggs Millette et al         12/09/96                 $978,250
Swartzfager, Jon               12/09/96                 $103,000
Sweeney, Robert                10/03/97               $1,184,500
Wellborn Houston et al         11/08/99                 $975,000
Wilentz Goldman & Spitzer      12/09/98                 $103,333
                                              Total: $23,255,610

Even if the payments could successfully be established as
preferential, Ms. Stickles points out that the costs to recover
them would just be equal to the amount for potential recovery.
Ms. Stickles explains that the action would require the filing
of more than a thousand separate actions against individual
defendants.  Given that many of the lawyers employed by the
Committee and the Debtors charge more per hour than the $470 per
claim transferred to 615 clients of Robles & Gonzales during the
90-day period, it is difficult to imagine how the actions could
result in a benefit to the Debtors' estate.

B. An Action Seeking The Return Of Not Less Than $290,000,000 In
   Preferential Transfers To Certain "Insiders" Made To NSP
   Executive Committee Members And The Claimants Represented By
   The Members Between March 2000 And The Petition Date.

Ms. Stickles contends that the proposed cause of action suffers
from a fatal defect -- it is entirely premised on the contention
that the NSP Executive Committee qualifies as "insiders".

According to Ms. Stickles, the Bankruptcy Code defines insiders
to only include directors, officers, persons in control of the
debtor, certain partners of the debtor or their relatives at the
time the challenged transfer was made.  Thus, it is indisputable
that members of NSP Executive Committee do not qualify as

Ms. Stickles adds that the Committee has failed to present
evidence that the Executive Committee member of the NSP received
more money, or benefited in any other way, by virtue of its
participation in the group.

C. An Action Seeking The Return Of Certain Payments Made To The
   Debtors' Officers And Directors Within One Year Prior To
   The Petition Date

Ms. Stickles tells the Court that the Debtors have reached a
partial agreement with the Committee, the Asbestos Claimants
Committee and the Futures Representative.  The agreement
provides that no actions will be pursued against directors or
officers who received less than $200,000, except for those who
received a $165,000 consulting payment.  The Debtors have
obtained or will obtain tolling agreements from the individuals
who received more than $200,000.

D. Action Under Seeking The Return Of $700,000,000 In Cash
   Transferred Into The Accounts Of Certain NSP Law Firms By
   Owens Corning And Fibreboard.

Ms. Stickles points out that the Committee made no mention of
the Debtors' active efforts to recover all escrow funds from
each of the four NSP firms, which they are legally entitled to
do.  The Committee was fully aware of these efforts, Ms.
Stickles says.

Ms. Stickles relates that recovering the amounts by pursuing an
action for fraudulent conveyance has no merit vis-a-vis the four
escrow agreements.  The Committee's claim that the Debtors
received less than the reasonably equivalent value for each of
the agreements is premised on the erroneous assumption that
Owens Corning transferred money into the escrow accounts based
only on plaintiffs' counsel's mere promise to recommend
settlement and did so without receiving any tangible benefits.  
According to Ms. Stickles, the NSP agreements, like most mass
tort settlements, are case processing agreements through which
the plaintiffs' attorneys recommend settlement terms to their
clients.  Tort agreements work, in large part, because claimants
almost always accept the recommendation of their attorneys.

E. An Action Seeking The Return Of Funds Transferred By Owens
   Corning Pursuant To Some Or All NSP Agreements Entered Into
   After January 1, 2000 And Agreements Entered Into Earlier But
   Converted Or Accelerated As A Result Of The Company's
   Financial Crisis.

Ms. Stickles observes that the Committee is not clear on what it
seeks to challenge.  The Committee has failed to identify any
so-called converted or accelerated agreements.  The Debtors are
unaware of any agreement they would place in that category.

Although two major NSP agreements were amended in 2000, Ms.
Stickles assures the Court that the agreement cannot be fairly
characterized as accelerated agreements because they already
have been discussed. (Owens Corning Bankruptcy News, Issue No.
38; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

Owens Corning's 7.70% bonds due 2008 (OWC08USR1), DebtTraders
reports, are trading at 30 cents-on-the-dollar. See  
real-time bond pricing.

PACIFIC GAS: Wind Nod to Defray $1.3MM Plan Implementation Costs
The City and County of San Francisco objected to each of Pacific
Gas and Electric Company's previous 10 Expense Motions in
connection plan implementation.  But the Court has granted the
10 previous motions over the objections raised by the Counties.  
San Francisco's objections to this motion are the same as those
to the 10 motions. To recall, San Francisco had argued that the
expenses will not be necessary until and unless the Court
confirms PG&E's Plan of Reorganization.

In light of the similarity and the Court's previous rulings, San
Francisco is willing to stipulate to an Order approving the
motion based on these conditions:

(1) the Order will be without prejudice to and without waiving
    any appellate rights that San Francisco may have; and

(2) to the extent that PG&E seeks any rate recovery in
    connection with expenses approved by the Order, this
    Stipulation and Order will not be construed to have any
    effect on applicable regulatory requirements for the

                          *     *     *

The Court approved both the Stipulation, and the Motion seeking
authority to incur additional miscellaneous expenses of
$5,602,810 for projects in connection with Plan Implementation.
(Pacific Gas Bankruptcy News, Issue No. 45; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    

PEREGRINE SYSTEMS: IT Masters Backs BMC's Acquisition of Remedy
IT Masters Inc., a leading provider of intelligent IT management
solutions, announced its support of the acquisition of Remedy
software by BMC Software, Inc.  A Remedy partner since 1996, IT
Masters offers a suite of products to enhance the Remedy
environment, including the award winning MasterARSuite(R) -- the
leading solution for enhancing the performance and ease the
development process for applications built on Remedy's Action
Request System(R) platform, and FirstResponse for ARSystem -- a
solution that fully integrates real-time operations and service
management environments.

"BMC's acquisition of Remedy is beneficial to Remedy and IT
Masters customers and partners.  It ensures that one of the most
popular and widely used business process management products
continues to provide value to companies around the world," said
Mark Stabler, IT Masters' vice president of sales and business
development.  "Remedy is the trouble ticketing backbone to real-
time service management, and is a must-have for companies that
want to proactively manage their IT systems."

"IT Masters will continue to offer products specifically
designed to support Remedy users, and through our flagship
product -- MasterCell(TM) -- we will continue to provide the
seamless integration tying Help Desk functionality to our
proven, holistic approach to the process of end-to-end service
management, including the continued development of our tight
integration with BMC distributed agents," added Stabler.

IT Masters' MasterARSuite is used by over 800 Remedy ARS
customers to help document, customize, analyze, troubleshoot and
support their ARS applications. MasterARSuite was named 'Best
Third-Party Utility' in 2002 by ARSList -- an independent
community comprised of more than 2200 Remedy developers and
consultants around the world.  The product suite, made up of
MasterNavigator, MasterDocumenter, MasterEditor, and
MasterAnalyzer products, has been proven to dramatically cut
development and support time, and improve ARS application
performance and response time by up to 90 percent.

Remedy AR System users are invited to review MasterARSuite
online at:  

IT Masters is an enterprise management solutions company with
over 1000 global customers, providing intelligent, software
solutions allowing companies to effectively manage their IT
infrastructure and quickly analyze the impact technology has on
their business.  The company's flagship product, MasterCell, is
an adaptive service management solution delivering cost
effective, reliable and flexible event management via a highly
scalable cellular architecture.  IT Masters has offices in the
United States and Europe.  For more information, visit  

                         *     *     *

As previously reported, BMC Software, Inc. (NYSE: BMC), a leader
in enterprise management, agreed to acquire the Remedyr assets
from Peregrine Systems, Inc., which recently filed for Chapter
11 Reorganization in Delaware, for $350 million in cash and the
assumption of liabilities of Remedy.  BMC Software has also
agreed to provide Peregrine Systems with debtor-in-possession
financing of up to $110 million, to be netted against the
purchase price.  These transactions are subject to a number of
conditions, including U.S. Bankruptcy Court and regulatory

Remedy is a leading provider of service management software
solutions. Under the terms of the agreement, BMC Software will
acquire substantially all of Remedy's assets including the
Remedy applications -- IT Service Management and Customer
Service and Support solutions -- and the Action Request
System(R), a comprehensive development platform.  Following the
acquisition close, Remedy will operate as a separate business
unit within BMC Software.

Founded in 1981 and headquartered in San Diego, Calif.,
Peregrine Systems is the leading global provider of
Infrastructure Management software. Market-leading application
suites delivered by Peregrine and Remedy(R) product lines
address diverse customer needs to better manage and extend the
life of infrastructure and manage business services.  
Peregrine's Service Management and Asset Management solutions
empower companies to support and manage assets with best
practice processes. Remedy's comprehensive suite of packaged
applications, including IT Service Management and Customer
Support solutions, enable customers to improve reliability and
quality of service for both internal and external service
management.  Remedy's Action Request System(R) provides a
comprehensive platform to deliver business process authoring
capabilities to meet the unique requirements of organizations
today and into the future.

Peregrine Systems, Remedy, and Action Request System are
registered trademarks of Peregrine Systems, Inc., or its wholly
owned subsidiaries. All other marks are the property of their
respective owners.

POLAROID CORP: Wants Lease Decision Period Extended to Jan. 31
Pursuant to Section 365(d)(4) of the Bankruptcy Code, Polaroid
Corporation and its debtor-affiliates ask the Court to further
extend the deadline to decide whether to assume or reject
unexpired leases of nonresidential real property to January 31,
2003 or the date of confirmation of their plan of
reorganization.  The deadline will be subject to the rights of
the landlord under the Unexpired Lease to request, upon
appropriate notice and motion, the Court to shorten the
Extension Period with respect to a specific lease and specify a
period of time in which the Debtors must determine whether to
assume or reject the Unexpired Lease.

Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, in Wilmington, Delaware, relates that the Debtors
expect to reject some, if not all, of the remaining Unexpired
Leases.  However, some of these Unexpired Leases may prove to be
"below market" leases that may yield value to the estate through
their assumption and assignment to third parties.  Until the
Debtors have had the opportunity to complete a thorough review
of all of the remaining Unexpired Leases, Mr. Desgrosseilliers
says, the Debtors cannot determine exactly which of the
remaining Unexpired Leases should be assumed, assigned or

Mr. Desgrosseilliers contends that the extension is warranted

    (a) of the large and complex nature of the Debtors' cases;

    (b) the Debtors have recently consummated the sale of
        substantially all of their assets and are drafting a
        disclosure statement and revised liquidating plan of
        reorganization to reflect the detail of the Sale; and

    (c) since Petition Date, the Debtors have remained, and will
        continue to remain, current on all of their postpetition
        rent obligations, thus, not prejudicing the landlords.

On the other hand, Mr. Desgrosseilliers points out, the Debtors
will be greatly prejudiced if they will be compelled to make a
decision now.  The Debtors may be compelled prematurely to
either assume substantial long-term liabilities under Unexpired
Leases or forfeit benefits associated with some of the Unexpired
Leases, to the detriment of the Debtors' creditors.

The Court will convene a hearing to consider the Debtors'
request on November 12, 2002.  By application of Del.Bankr.LR
9006-2, the deadline by which the Debtors must make decisions
about lease dispositions is automatically extended through the
conclusion of that hearing. (Polaroid Bankruptcy News, Issue No.
24; Bankruptcy Creditors' Service, Inc., 609/392-0900)

PROJECT FUNDING: S&P Places Ratings on Notes on Watch Negative
Standard & Poor's Ratings Services placed its ratings on the
class I, II, III, IV notes of Project Funding Corp. II on
CreditWatch with negative implications.

Project Funding Corp., II is a project funding CDO
collateralized by a geographically diversified pool of emerging
market and other project finance loans and bonds purchased from
Credit Suisse First Boston, BHF-Bank AG, and BHF (USA) Capital.
The transaction's structure is similar to that of a master trust
CDO with a static pool of amortizing loans and bonds.

The CreditWatch placements reflect factors that have negatively
affected the credit enhancement available since the transaction
was originated in March of 2000, including a material
deterioration in the credit quality of the bonds and loans
remaining within the portfolio, and the fact that several of the
loans have been deemed defaulted, which has led to a
subordination event for the transaction. The occurrence of the
subordination event means that future principal cash received
off of the assets in the portfolio will be allocated
sequentially to the rated notes; prior to the subordination
event, principal cash had been allocated pro rata across the
classes of notes.

Standard & Poor's will review the results of current cash flow
runs generated for Project Funding Corp. II to determine the
level of future defaults the tranches can withstand under
various default timing and interest rate stress scenarios, while
still paying all of the principal and interest due. The results
of these cash flow runs will be compared with the projected
default performance of the bonds and loans remaining in the
portfolio to determine whether the ratings currently assigned to
each class of notes remain consistent with the amount of credit
enhancement currently available.

               Ratings Placed On Creditwatch Negative

                      Project Funding Corp. II

                      Class        Rating

                              To                From

                       I       AAA/Watch Neg     AAA
                       II      A/Watch Neg       A
                       III     BBB/Watch Neg     BBB
                       IV      BB/Watch Neg      BB

PROVIDIAN FINANCIAL: Reports August Managed Net Credit Loss Rate
Providian Financial Corporation's managed net credit loss rate
for the month ended August 31, 2002 and its 30+ day managed
delinquency rate as of August 31, 2002 are presented in the
table below.  Managed results include results from both reported
and securitized loans, including loans securitized in the
Providian Gateway Master Trust.

Managed Net Credit Loss Rate    30+ Day Managed Delinquency Rate
----------------------------    --------------------------------
    (Annualized) (Unaudited)                (Unaudited)

    16.28%                                      10.86%

(1)  Calculations exclude SFAS No. 133 market value adjustments.
(2)  Gross principal charge-offs for the monthly period less the
     total amount of recoveries on previously charged-off loans,
     divided by the average daily total managed loans for the
     monthly period, multiplied by 12. Total managed loans
     exclude the estimated uncollectible portion of finance
     charges and fees.

(3)  Total managed loans as of the last day of the monthly
     period that are 30 or more days past due, divided by the
     total managed loans as of the last day of the monthly
     period.   Total managed loans exclude the estimated
     uncollectible portion of finance charges and fees.

Providian Gateway Master Trust's net credit loss rate for the
month ended August 31, 2002 and its 30+ day delinquency rate as
of August 31, 2002 are presented in the table below.

Trust Net Credit Loss Rate        30+ Day Trust Delinquency Rate
--------------------------         -----------------------------     
(Annualized) (Unaudited)                    (Unaudited)

     18.13%                                   12.92%

(1)  Gross principal charge-offs for the monthly period for
     loans in the Trust less the total amount of recoveries on
     previously charged-off loans, divided by the principal
     receivables outstanding in the Trust as of the
     last day of the prior monthly period, multiplied by 12.
     During months in which an addition of accounts to the Trust
     takes place, the weighted average principal receivables
     outstanding in the Trust is used as the denominator
     (calculated based on the principal receivables outstanding
     in the Trust as of the last day of the prior monthly period
     and the principal receivables outstanding in the Trust
     immediately following such addition).

(2)  Total loans in the Trust as of the last day of the monthly
     period that are 30 or more days past due, divided by the
     total loans in the Trust as of the last day of the monthly

The company that has been synonymous with subprime credit cards
has been kicked out of the business. One of the top US credit
card outfits, Providian Financial issues mainly secured credit
cards to more than 16 million customers, most with spotty credit
histories; it also issues credit cards to those with better
credit. Providian solicits new customers via direct mail, phone,
and online advertising. The company also offers money market
accounts, CDs, and home equity loans; its is an
online lender and deposit institution. High charge-offs have led
to a management shake-up, job cuts, and talk of putting the
company up for sale; meanwhile, regulators ordered the company
to stop issuing new subprime cards.

                          *   *   *

As reported in Troubled Company Reporter's May 27, 2002 edition,
Fitch Ratings lowered the senior debt rating of Providian
Financial Corp., to 'B' from 'B+' and senior debt rating of
Providian National Bank to 'B+' from 'BB-.' The ratings remain
on Rating Watch Negative where they were placed on December 20,

Fitch's downgrade of Providian's ratings primarily reflects
heightened concerns regarding performance of the Providian
Gateway Master Trust, where excess spread levels have fallen
over the past few months. The decline in excess spread has been
driven by a sharp rise in net chargeoffs of these assets. The
increase in loss rates reflects weakness in the economy that
began in 2001, limitations in growth, but it is also indicative
of the high-risk nature of Providian's customer base, a high
percentage of which would be considered subprime under bank
regulatory definitions.

RAILWORKS CORP: Maryland Court Confirms Chapter 11 Reorg. Plan
RailWorks Corporation, a leading provider of integrated rail and
transit system products and services in North America, won
approval on September 23, 2002 from the bankruptcy court in
Baltimore, Md., of its reorganization plan under Chapter 11 of
the U.S. Bankruptcy Code. This approval clears the way for the
company to emerge from bankruptcy. RailWorks will operate as a
privately held company under the direction of a new executive
leadership team, and with the support of new financial partners.

"The successful reorganization of RailWorks has resulted in a
stronger, more focused company in the rail services industry,"
said Ab Rees, chairman and chief executive officer of RailWorks
Corporation. "The Chapter 11 process provided RailWorks with the
opportunity to address its financial and capital structure
challenges in an orderly and comprehensive fashion. RailWorks
emerges with not only a strong financial position, but also
better integrated operations and a dedicated workforce committed
to excellence."

RailWorks filed for bankruptcy protection on September 20, 2001,
and filed a Plan of Reorganization with the U.S. Bankruptcy
Court on March 15, 2002.A A As part of the plan, RailWorks has
undergone a significant restructuring designed to ensure the
company's success in continuing to provide services to North
American's railroads, mass transit and light rail systems, and
commuter rail lines. The company integrated all of its nearly 50
specialized subsidiary companies into two divisions -- Transit
Systems and Track Products & Services -- operating under the
RailWorks Corporation name.

"The company has worked hard to prepare for this important day.
I am grateful to our employees, customers, and business partners
who have supported our determination to create a stronger, more
focused RailWorks," said Jim Kimsey, president and chief
operating officer for RailWorks Corporation.

RailWorks Corporation was formed in 1998 to capitalize on the
growing need for rail construction, maintenance, and materials
solutions. This increased demand for rail service support was
brought about by rail industry consolidation, federal funding of
rail infrastructure improvements, and demand by manufacturers
for modern rail infrastructure in their facilities.

RailWorks Corporation, founded in March 1998, is an integrated,
specialized supplier of construction, maintenance, materials,
products, and services for the rail and transit industry
throughout North America. With revenues of $550 million,
RailWorks is a leading provider of integrated rail systems
services and products in the United States and Canada.

R. H. DONNELLEY: S&P Puts Low-B Ratings on CreditWatch Negative
Standard & Poor's Ratings Services placed its double-'B' long-
term corporate credit and senior secured debt and single-'B'-
plus subordinated debt ratings for R.H. Donnelley Inc., on
CreditWatch with negative implications.

The CreditWatch listing reflects the agreement by R.H. Donnelley
Corp., the holding company of R.H. Donnelley Inc., to acquire
the directory publishing business of Sprint Corp., (BBB-
/Stable/A-3) for $2.23 billion in cash.

Headquartered in Purchase, N.Y., R.H. Donnelley is a leading
marketer of Yellow Pages advertising. The company had about $245
million of debt outstanding as of June 30, 2002.

As part of the transaction, Goldman Sachs Capital Partners 2000
L.P. and affiliated entities will purchase $200 million in
Donnelley convertible preferred stock. Donnelley also has firm
commitments to finance the transaction and refinance existing
debt. The transaction is expected to close in the 2003 first

"While the Sprint transaction will significantly expand
Donnelley's operations, it will substantially raise debt
levels," said Standard & Poor's credit analyst Donald Wong.
"Standard & Poor's will review its ratings after evaluating
Donnelley's future financial and operating strategies,"

The Sprint properties consist of more than 260 directories in 18
states, including 41 directories in four states where Donnelley
is the exclusive sales agent.

RITE AID: Balance Sheet Insolvency Burgeons to $91 Million
Rite Aid Corporation (NYSE, PCX:RAD) announced financial results
for its second quarter, ended August 31, 2002.

Revenues for the 13-week second quarter were $3.9 billion versus
revenues of $3.7 billion in the prior year second quarter.
Revenues increased 4.5 percent.

Same store sales increased 7.1 percent during the second quarter
as compared to the prior year second quarter, reflecting
prescription sales growth of 10.8 percent and a 1.3 percent
increase in front-end same store sales. Prescription sales
accounted for 63.1 percent of total sales, and third party
prescription sales represented 92.6 percent of pharmacy sales.

Second quarter earnings before interest, taxes, depreciation and
amortization, LIFO charges, gains from asset disposals and non-
operating charges (EBITDA) amounted to $125.4 million or 3.3
percent of sales. This compares to $99.0 million or 2.7 percent
of sales last year after adjusting the last year to make it

"We're very pleased with our second quarter results. We
increased EBITDA by 26.7 percent over last year, which shows
that our business plan is working," said Mary Sammons, Rite Aid
president and chief operating officer. "Our team did a great job
of cost control while at the same time increasing same store
sales by a solid 7.1 percent despite a soft economy."

Interest expense for the quarter was $85.0 million versus $102.4
million in the prior year's second quarter due to the
significant reduction in debt resulting from the company's June
2001 refinancing and lower interest rates. Interest expense was
comprised of $75.1 million cash interest on indebtedness and
capital lease obligations and non-cash interest of $9.9 million.

Non-cash items in this quarter include a charge of $58.7 million
related to store closing and impairment, $6.7 million of income
resulting from variable plan accounting for stock based
compensation and a $1.4 million gain from the early
extinguishment of debt. These items total non-cash charges of
$50.6 million.

Net loss was $105.3 million for the quarter compared to a loss
of $245.9 million last year. The prior year loss includes a
$66.6 million extraordinary charge on the early extinguishment
of debt.

At August 31, 2002, the Company's balance sheet shows a total
shareholders' equity deficit of about $91.6 million.

During the second quarter, the company remodeled 48 stores,
relocated three stores and closed 10 stores. Stores in operation
at the end of the quarter totaled 3,444.

Based on current trends, Rite Aid expects same store sales for
the third quarter of fiscal year 2003, which ends November 30,
2002 to increase 7 percent to 8 percent from the third quarter
of the prior year.

EBITDA for the third quarter is expected to be $120.0 million to
$130.0 million. This compares to $77.5 million in the prior year
third quarter.

The company raised EBITDA guidance for fiscal 2003 to a range of
$565.0 million to $600.0 million, compared to the previous range
of $545.0 million to $595.0 million.

"Our continued focus on improving operating results is really
paying off," said Bob Miller, Rite Aid chairman and chief
executive officer. "Our second quarter performance shows that
we're on target to achieve our goal of at least a 20 percent
growth in annual EBITDA."

Rite Aid Corporation is one of the nation's leading drugstore
chains with annual revenues of more than $15 billion and
approximately 3,400 stores in 28 states and the District of
Columbia. Information about Rite Aid, including corporate
background and press releases, is available through the
company's Web site at  

SEPRACOR INC: Repurchases $131MM of 7% Convertible Debentures
Sepracor Inc., (Nasdaq: SEPR) repurchased in privately
negotiated transactions, an aggregate of approximately $131.1
million face value of its 7% convertible subordinated debentures
due 2005, for an aggregate consideration of approximately $84.8
million in cash, excluding accrued interest.

As a result of these repurchases, interest savings will be
approximately $29.7 million over the remaining life of the 7%
Debentures. Sepracor will not be issuing approximately 2.1
million shares of common stock otherwise issuable upon
conversion of the repurchased debentures at a conversion rate of
$62.4375 per share.

In December 1998, Sepracor issued $300 million of 7% Debentures.  
As a result of these repurchases and debt conversions during
2002, approximately $111.9 million of the 7% Debentures remain

Currently, Sepracor has approximately $982 million of
convertible subordinated debt outstanding. As of June 30, 2002,
Sepracor had approximately $720 million in cash and marketable

Sepracor's 7% Debentures, 5% convertible subordinated debentures
due 2007 and 5.75% convertible notes due 2006 are currently
trading at discounts to their respective face amounts.  
Accordingly, in order to reduce future cash interest payments,
as well as future payments due at maturity, Sepracor may,
from time to time, depending on market conditions, repurchase
additional outstanding convertible debt for cash; exchange debt
for shares of Sepracor common stock, warrants, preferred stock,
debt or other consideration; or a combination of any of the
foregoing.  If Sepracor exchanges shares of its capital stock,
or securities convertible into or exercisable for its capital
stock, for outstanding convertible debt, the number of shares
that it might issue as a result of such exchanges would
significantly exceed the number of shares originally issuable
upon conversion of such debt and, accordingly, such exchanges
could result in material dilution to holders of Sepracor's
common stock.  There can be no assurance that Sepracor will
repurchase or exchange any additional outstanding convertible

Sepracor Inc., is a research-based pharmaceutical company
dedicated to treating and preventing human disease through the
discovery, development and commercialization of innovative
pharmaceutical products that are directed toward serving unmet
medical needs. Sepracor's drug development program has yielded
an extensive portfolio of pharmaceutical compound candidates,
including candidates for the treatment of respiratory, urology
and central nervous system disorders. Sepracor's corporate
headquarters are located in Marlborough, Massachusetts.

Sepracor's June 30, 2002 balance sheet shows a total
shareholders' equity deficit of about $322 million.

SERVICE MERCHANDISE: Wants to Keep Exclusivity Until October 30
Service Merchandise Company, Inc., and its debtor-affiliates ask
the Court to extend their exclusive period to file a chapter 11
plan through and including October 30, 2002 and give the Company
the continued exclusive right, through and including January 31,
2003, to solicit acceptances of that plan. This is the Debtors'
fourth request for more time to propose a plan.  The Debtors
don't keep it a secret that they'll be proposing a plan of

Paul G. Jennings, Esq., at Bass, Berry and Sims PLC, in
Nashville, Tennessee, tells the Court that the Debtors continue
to be focused on maximizing value for creditors and are working
consistently and cooperatively with the Unsecured Creditors
Committee and other parties-in-interest.  The Debtors are very
close to filing their liquidation plan.  However, there are
several aspects of the plan that are still being negotiated.
Once these are resolved, the result would permit for a more
streamlined confirmation process.

Mr. Jennings makes it clear that the request is not a
negotiating tactic or intended as an unnecessary delay.  Rather,
the Debtors intend to file a plan that has the support of their
major constituencies.

Even if the Debtors are able to file a plan of liquidation by
September 30, 2002, Mr. Jennings argues that the Debtors still
require an extension of their Exclusive Solicitation Period to
ensure that parties-in-interest have sufficient time to consider
the plan and the disclosure statement, and cast their vote.

Assuming that the Debtors file their plan by September 30, 2002,
the Debtors believe that the voting deadline will be during the
first week of December 2002.  Should the Debtors determine to
file their plan in October, however, a solicitation deadline of
January 31, 2003 is reasonable and appropriate under the
circumstances. (Service Merchandise Bankruptcy News, Issue No.
38; Bankruptcy Creditors' Service, Inc., 609/392-0900)

Service Merchandise's 9.0% bonds due 2004 (SVCD04USR1) are
trading at 7 cents-on-the-dollar, DebtTraders reports. See
for real-time bond pricing.

SLI INC: Wants to Bring-In Bingham McCutchen as Special Counsel
SLI, Inc., and its debtor-affiliates want the U.S. Bankruptcy
Court for the District of Delaware to give them authority to
retain Bingham McCutchen LLP as their special international and
corporate counsel.

In particular, the Debtors want to retain and employ Bingham
McCutchen as special counsel to continue to provide on-going
corporate advice and to provide strategic advice and assistance
with respect to international contingency planning matters.

Bingham McCutchen will advise the Debtors' senior management and
directors about:

  a) insolvency issues in Europe, Asia, Canada and South
     America, and will represent or assist in the representation
     of the Debtors in foreign insolvency proceedings to the
     extent such representation my be required, and

  b) domestic corporate, tax and litigation matters (unrelated
     to bankruptcy proceedings), which Bingham McCutchen has
     performed since 1996.

The Debtors seek to retain Bingham McCutchen as special
international counsel because of the firm's extensive domestic
and international experience and knowledge, particularly as it
relates to Bingham McCutchen's substantial experience in foreign
and cross-border insolvency proceedings.

Additionally, the Debtors want to engage Bingham McCutchen as
their domestic corporate counsel because of Bingham McCutchen's
intimate knowledge of the Debtors' business which experience is
derived from the years of prior representation of the Debtors by
Bingham McCutchen in connection with the Debtors' mergers,
acquisitions, corporate tax, general litigation, and
intellectual property matters.

As manufacturer and retailer of lighting primarily for the
international market, the Debtors have assets, operations and
employees throughout the Americas, Europe and the Asia Pacific
region.  The international bankruptcy and restructuring legal
services to be performed by Bingham McCutchen will at all times
be tailored to assisting the Debtors and their affiliates in
various foreign fora:

    i) advising the Debtors as to the international aspects of
       their rights, powers and duties as debtors and debtors in
       possession continuing to operate and manage their
       businesses and properties under chapter 11 of the
       Bankruptcy Code while simultaneously continuing to
       operate in various foreign countries;

   ii) assisting the Debtors in the formulating and approval of
       bankruptcy protocols, agreements or concordats, where
       appropriate, between the United States Bankruptcy Court
       and various foreign courts in which insolvency
       proceedings involving the Debtors may commence;

  iii) advising and assisting the Debtors with respect to their
       seeking recognition and relief in various foreign
       countries and foreign insolvency proceedings;

   iv) where needed, preparing on behalf of the Debtors all
       necessary and appropriate applications, motions, draft
       orders, other pleadings, notices, schedules and other
       documents, and reviewing all financial and other reports
       to be filed in these cases and in any related foreign
       countries or foreign proceedings;

    v) advising the Debtors concerning and preparing responses
       to, applications, motions other pleadings, notices and
       other papers that may be filed and served in these
       chapter 11 cases in connection with foreign proceedings
       initiated, including by the Debtors;

   vi) counseling the Debtors in connection with the
       formulation, negotiation and promulgation of a plan or
       plans of reorganization and any substantially similar
       schemes, compromises or plans which the Debtors may seek
       to propose in foreign insolvency proceedings; and

  vii) performing all other necessary or appropriate legal
       services in connection with these chapter 11 cases for or
       on behalf of the Debtors consistent with the limited role
       as special international counsel.

Bingham McCutchen's attorneys who will likely render services in
these cases are:

      Evan D. Flaschen (US)      Partner     $700 per hour
      Anthony J. Smits (US)      Partner     $450 per hour
      Michael H.M. Brown (US)    Associate   $300 per hour
      Leonhard Plank (UK)        Associate   $275 per hour
      Lisa Ciottone (US)         Associate   $250 per hour
      Marialta Sparagna (US)     Associate   $210 per hour     

SLI, Inc., and its affiliates operate in multi-business segments
as a vertically integrated manufacturer and supplier of lighting
systems, which includes lamps, fixtures and ballasts. The
Company filed for chapter 11 protection on September 9, 2002 in
the U.S. Bankruptcy Court for the District of Delaware. Gregg M.
Galardi, Esq., at Skadden, Arps, Slate, Meagher represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $830,684,000 in
total assets and $721,199,000 in total debts.

SMITHWAY MOTOR: Fails to Satisfy Nasdaq Listing Requirements
Smithway Motor Xpress Corp., (Nasdaq: SMXC) has received notice
that its shares of Class A Common Stock are subject to delisting
from the Nasdaq National Market.  The notice was received from
the Nasdaq Stock Market, Inc., because the stock has not met the
minimum market value of publicly held shares requirement for
continued listing set forth in Nasdaq Marketplace Rule
4450(a)(2).  Smithway intends to appeal the Nasdaq decision by
requesting a hearing before a Nasdaq Listing Qualifications
Panel. While the appeal is pending, no action will be taken with
respect to Smithway's National Market listing.  There can be no
assurance that the appeal will be successful and that the
Listing Qualifications Panel will grant Smithway's request for
continued listing.  If Smithway is unsuccessful in its appeal,
it intends to seek to list its securities on The Nasdaq Small
Cap Market, subject to approval by Nasdaq of a listing

Smithway is a truckload carrier that hauls diversified freight
nationwide, concentrating primarily on the flatbed segment of
the truckload market.

STANDARD MEMS: Brings-In Cozen O'Connor as Bankruptcy Counsel
Standard MEMS, Inc., tells the U.S. Bankruptcy Court for the
District of Delaware that it needs to hire Cozen O'Connor as
legal counsel in its on-going chapter 11 case.

The Debtor relates that Cozen has assisted it with the
preparation and filing of this Chapter 11 case. The Debtor wish
to continue to employ and retain Cozen as its counsel in
connection with the administration and prosecution of this
Chapter 11 case, effective as of the Petition Date.

The Debtor maintains that Cozen has the necessary background to
deal effectively with many of the potential legal issues and
problems that may arise in the context of this Bankruptcy Case.
The Debtor believes that Cozen is both well qualified and able
to represent it in this Bankruptcy Case in an efficient and
timely manner.

The Debtor needs Cozen to:

     a) advise the Debtor of its rights, powers, and duties as
        debtor and debtor-in-possession;

     b) take all necessary action to protect and preserve the
        state of the Debtor, including the prosecution of
        certain actions on the Debtor's behalf, the defense of
        any actions commenced against the Debtor, the
        negotiation of disputes in which the Debtor is involved,
        and the preparation of objections to claims filed
        against the Debtor's estate;

     c) prepare on behalf of the Debtor, as debtor-in-
        possession, all necessary motions, applications,
        answers, orders, reports, and papers in connection with
        the administration of the Debtor's estate;

     d) negotiate and prepare on behalf of the Debtor a plan of
        reorganization for the Debtor's emergence from Chapter
        11; and

     e) perform all other legal services reasonably necessary in
        connection with this Bankruptcy Case.

The attorneys who will be primarily responsible for this
engagement are:

          Mark E. Felger (senior member)      $320 per hour
          John Mullen (senior member)         $270 per hour
          Shelly Kinsella (associate)         $195 per hour

Standard MEMS, Inc., a fully integrated micro electro mechanical
systems (MEMS) company providing product design, MEMS
semiconductor fabrication, end product packaging and system
integration to the general marketplace, filed for chapter 11
protection on September 16, 2002 at the U.S. Bankruptcy Court
for the District of Delaware.  Mark E. Felger, Esq., at Cozen
O'Connor represent the Debtor in its restructuring efforts. When
the Company filed for protection from its creditors, it listed
estimated debts and assets of over $10 million.

THAON COMMS: Settles Litigation with Former Officers & Directors
Thaon Communications, Inc., (OTCBB: THAO) has reached a
settlement agreement with former officers and directors.

Under the terms of the settlement the lawsuit will be dismissed
by the plaintiffs, and the company will pay to the plaintiffs
$75,000 in cash or free trading stock, payment to be made at the
request of the plaintiffs, but in no case will payment be due
prior to January 1, 2003.

Adam Anthony, president of Thaon stated, "As part of our efforts
to restructure the company it is important the we resolve any
litigation. We viewed this particular action against the company
as one of the key hurdles in moving forward with our
restructuring plan. Now that this action has been settled we
intend to continue with our restructuring efforts."

                         *     *     *

As reported in Troubled Company Reporter's Sept. 4, 2002
edition, Thaon Communications engaged the services of Magnum
Financial Group , LLC -- to  
assist Thaon in further refining its strategy, restructuring its
business units and capital structure, identify potential merger
candidates and other related advisory services.

TIME WARNER: S&P Hatchets Corporate Credit Rating To B From B+
Standard & Poor's Ratings Services lowered its corporate credit
rating on competitive local exchange carrier Time Warner Telecom
Inc., to single-'B' from single-'B'-plus to reflect the higher
degree of business risk for TWT in light of its dependence on
many distressed and/or bankrupt long distance carriers as
customers and the weak fundamentals of the CLEC business.

Standard & Poor's also lowered its senior unsecured debt rating
on the Littleton, Co.-based company to triple-'C'-plus from
single-'B'-minus, and its secured bank loan rating on subsidiary
Time Warner Telecom Holdings Inc., to single-'B' from double-
'B'-minus. In addition, the ratings were placed on CreditWatch
with negative implications. At June 30, 2002, the company had
$1.1 billion of consolidated debt outstanding.

"As of mid-year, about 17% of TWT's recurring revenues were
attributable to bankrupt companies, including WorldCom Inc.,
which represents the company's largest single customer. In
addition, the company has faced continued disconnects by
carriers grooming and paring down their network requirements
and, to a lesser extent, by enterprise customers cutting back
telecommunications services spending," Standard & Poor's credit
analyst Catherine Cosentino said.

Standard & Poor's also said that the negative CreditWatch
listing reflects concerns that the company's financial metrics,
including EBITDA interest coverage and total debt to EBITDA, may
not meet compliance levels required under its bank facility
maintenance covenants in 2003, given uncertainty about
performance potential and accompanying EBITDA levels for 2003.
Standard & Poor's will evaluate the company's ability to address
this issue in the near term to resolve the CreditWatch listing.

Time Warner Telecom Inc.'s 10.125% bonds due 2011 (TWTC11USN1)
are trading at 45 cents-on-the-dollar, DebtTraders reports. See
for real-time bond pricing.

US AIRWAYS: Court Fixes November 4 Bar Date for Proofs of Claim
Judge Mitchell establishes:

   (a) November 4, 2002 as the deadline, or General Bar Date,
       for all entities holding or wishing to assert a claim
       against US Airways Group and its debtor-affiliates to
       file a Proof of Claim;

   (b) an Amended Bar Date -- the later of the General Bar Date
       or 30 days after a claimant is served with notice that
       the Debtors have amended their schedules of assets and
       liabilities reducing, deleting, or changing the status of
       a scheduled claim -- as the deadline for filing a proof
       of claim necessitated by the Debtors amending their

   (c) except as set forth in an order authorizing rejection of
       an executory contract or unexpired lease, the later of
       the General Bar Date or 30 days after the effective date
       of any order authorizing the rejection of an executory
       contract or unexpired lease, or the Rejection Bar Date,
       as the bar date by which a proof of claim regarding
       Debtors' rejection of the contract or lease must be
       filed; and

   (d) February 7, 2003 as the deadline for all governmental
       units, as defined in section 101(27) of the Bankruptcy
       Code, to file a proof of claim in these cases.

The Bar Dates would apply to all entities holding Claims against
the Debtors -- whether secured, priority or unsecured -- that
arose prior to the Petition Date, including:

    a. Any Person or Entity whose Claim is listed as
       "disputed," "contingent," or "unliquidated" and that
       desires to participate in any of these Chapter 11 cases
       or share in any distribution in these Chapter 11 cases;

    b. Any Person or Entity whose Claim is improperly classified
       in the Schedules or is listed in an incorrect amount and
       that desires to have its Claim allowed in a
       classification or amount other than set forth in the
       Schedules; and

    c. Any Person or Entity whose Claim against a Debtor is not
       listed in the applicable Debtors' Schedules.

Parties that need not file proofs of claim are:

    1. Any Person or Entity that agrees with the nature,
       classification, and amount of the Claim set forth in the
       Schedules and whose Claim against a Debtor is not listed
       as "disputed," "contingent," or "unliquidated" in the

    2. Any Person or Entity that has already properly filed a
       proof of claim against the correct Debtor;

    3. Any Person or Entity asserting a Claim allowable under
       Sections 503(b) and 507(a)(1) of the Bankruptcy Code as
       an administrative expense of the Debtors' Chapter 11

    4. Any of the Debtors or any direct or indirect subsidiary
       of any of the Debtors that hold Claims against one or
       more of the other Debtors;

    5. Any Person or Entity whose Claim against a Debtor
       previously has been allowed by, or paid pursuant to, an
       order of the Bankruptcy Court; and

    6. Any holder of equity securities of the Debtors with
       respect to the holder's ownership interest in or
       possession of equity securities, provided, that any
       holders who wish to assert a Claim against any of the
       Debtors based on transactions in the Debtors' securities,
       including, but not limited to, Claims for damages based
       on the purchase or sale of such securities, must file a
       proof of claim on or prior to the General Bar Date.

Any person that fails to timely file a proof of claim will be
forever barred, estopped, and enjoined from:

   (a) asserting any Claim against the Debtors, and

   (b) voting upon, or receiving distributions under, any plan
       or plans of reorganization in respect of an Unscheduled

The Debtors will serve the initial notices of the Bar Date on or
before October 5, 2002.  Potential claimants will have 30 days
to file their Claims after receiving the Bar Date Notice and
Proof of Claim Form. (US Airways Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

US STEEL CORPORATION: Forecasts Higher Third Quarter Earnings
United States Steel Corporation (NYSE: X) expects third quarter
net income to be near the top of the analysts' range of $0.43 to
$0.75 per share and considerably higher than the First Call
consensus of $0.53 per share.

Continued strong shipments, operating efficiencies and improved
prices for both the domestic and Slovakian operations are
leading to solid financial results.  Flat-rolled segment
shipments are expected to be about even with second quarter
shipment levels, and previously announced sheet price increases
have resulted in increased realized prices.  The Tubular segment
continues to control costs at low operating levels and shipments
are expected to be in line with second quarter shipment levels.  
U. S. Steel Kosice is expected to show improved third quarter
results versus the second quarter with shipments in line with
second quarter levels and increased realized prices.

                         *     *     *

As reported in Troubled Company Reporter's Sept. 12, 2002
edition, Standard & Poor's assigned preliminary ratings
to United States Steel Corp.'s $600 million universal shelf.
Standard & Poor's assigned a preliminary double-'B' rating to
the shelf's senior unsecured debt and preliminary single-'B'-
plus rating to the senior subordinated debt. All ratings on the
company, including the double-'B' corporate credit rating, are
affirmed. The outlook is stable.

The Pittsburgh, Pennsylvania-based integrated steel producer
currently has about $1.4 billion of total debt.

VANTAGEMED CORP: Commences Trading on OTCBB Effective Sept. 24
VantageMed Corporation (Nasdaq: VMDC) announced that the Nasdaq
Listing Qualifications Panel has rejected the Company's request
for an additional grace period under Marketplace Rule
4310(C)(8)(D) to meet the minimum bid price requirement of
$1.00.  Accordingly, Nasdaq determined to delist the Company's
securities from the Nasdaq Stock Market effective with the open
of business Tuesday, September 24, 2002.  Effective immediately,
the Company's securities began trading on the OTC Bulletin

Richard Brooks, Chairman and Chief Executive Officer, said, "We
are obviously disappointed with Nasdaq's decision, but market
conditions are very difficult right now.  Considering the
improvement in the Company's financial condition as a result of
our restructuring efforts and the recently announced release of
Version 4.4 of ChartKeeper, we believe we are gaining positive
momentum.  We are currently assessing our listing options
including the possibility of an appeal to the Nasdaq Listing and
Hearing Review Council. Our primary focus continues to be on the
execution of our restructuring plan, improvement in operating
results and cash flow, and long-term shareholder value."

VantageMed is a provider of healthcare information systems and
services distributed to over 11,000 customer sites through a
national network of regional offices. Our suite of software
products and services automates administrative, financial,
clinical and management functions for physicians, dentists, and
other healthcare providers and provider organizations.

WESTPOINT STEVENS: S&P Places Low-B & Junk Ratings on Watch Neg.
Standard & Poor's placed its ratings on Atlanta, Ga.-based
WestPoint Stevens Inc., including the single-'B' long-term
corporate credit and triple-'C'-plus subordinated debt ratings,
on CreditWatch with negative implications.

Total debt outstanding at June 30, 2002, was about $1.7 billion.

The CreditWatch placement follows the company's recent
announcement of additional restructuring initiatives and its
downward adjustment of revenues for 2002 due to weaker than
expected K-Mart Corp. sales. These actions have resulted in
amendments to the company's bank agreement. Furthermore,
expected lower asset utilization in the third and fourth
quarters will result in additional pressure on margins.

"Standard & Poor's will monitor the situation and meet with
management to review the company's operating and financial
outlook," said Standard & Poor's credit analyst Susan Ding.

WestPoint Stevens is a home fashions consumer products company
with a line of company-owned and licensed brands for the bedroom
and bathroom. The company is a vertically integrated
manufacturer of bed linens, towels, and other accessories sold
in retail outlets. WestPoint Stevens products are marketed under
the well-known brand names of Martex, Grand Patrician, Vellux,
Stevens, and Lady Pepperell, and under licensed brands including
Ralph Lauren Home Collection.

Westpoint Stevens Inc.'s 7.875% bonds due 2005 (WXS05USR1) are
trading at 28 cents-on-the-dollar, DebtTraders reports. See  
real-time bond pricing.

WILLIAMS COMMS: Court Clears Stipulation Agreement with SBC
Williams Communications Group, Inc., (OTC Bulletin Board: WCGRQ)
announced that the United States Bankruptcy Court for the
Southern District of New York has approved its Stipulation
Agreement with SBC.  The Court's approval resolves legal issues
between Williams Communications and SBC and helps clear the way
for confirmation of the Company's Plan of Reorganization.

Specifically, the approved Agreement satisfactorily resolves
change of control issues related to the company's 2001 spinoff
from its parent, The Williams Companies, and its current
restructuring.  It also provides for the necessary SBC approval
of Williams Communications' Plan of Reorganization.  At the same
time, SBC and the operating subsidiary of Williams
Communications executed amendments to the alliance agreements
that make a number of changes that will ensure SBC's excellent
service to its customers.

"Williams Communications and SBC continue to be committed to a
mutually beneficial business relationship," said Howard Janzen,
chief executive officer of Williams Communications Group.  "Now,
Williams Communications and SBC will move forward and build on
their strategic alliance."

Based in Tulsa, Okla., Williams Communications Group, Inc., is a
bankrupt "debtor in possession" and the parent company of
Williams Communications, LLC, a leading broadband network
services provider.  For more information, visit

WINSTAR COMMS: Trustee Gets Nod to Hire Kroll as Risk Consultant
Winstar Communications, Inc.'s Chapter 7 Trustee Christine
Shubert obtained Court's authority to employ and retain Kroll
Inc. as special risk and litigation consultant, nunc pro tunc to
July 8, 2002.

Kroll will perform investigative services regarding confidential
matters for the purpose of assessing the viability of certain
causes of action held by the Trustee.  Apart from reimbursement
of reasonable out-of-pocket expenses, Kroll will be compensated
based on these hourly rates:

              Managing Directors       $350
              Professionals             220
              Agents                    220

The Trustee and Kroll have agreed that the total estimated cost
for Kroll's services would be between $20,000 to $25,000.
(Winstar Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

WORLD KITCHEN: Court Fixes November 1, 2002 as Claims Bar Date
By Order of the U.S. Bankruptcy Court for the Northern District
of Illinois, Eastern Division, November 1, 2002 is the deadline
for creditors of World Kitchen, Inc., and its debtor-affiliates,
to file their proofs of claim or be forever barred from
asserting that claim.

All proofs of claim must be received by the Debtors' Claims and
Noticing Agent before 4:00 p.m. on the Nov. 1 Claims Bar Date.
Claims must be addressed to:

     Logan & Company, Inc.
     546 Valley Road,
     Upper Montclair, New Jersey 07043
     Attn: World Kitchen Claims Processing Department

However, claims of any governmental units against the Debtors
must be received by Logan & Company on or before December 2,

World Kitchen, a subsidiary of WKI Holding Company, Inc., makes
some of the most popular kitchenware and tableware in the US.
Its brands include Corelle, CorningWare, Pyrex, Revere, and
Visions. When the Debtors filed for Chapter 11 protection on May
31, 2002, they listed consolidated assets of $728 million and
debts of about $1 billion. Richard M. Cieri, Esq., Carl E.
Black, Esq., Jeffrey B. Ellman, Esq., and Ilana N. Glazier,
Esq., at Jones, Day, Reavis & Pogue represent the Debtors in its
restructuring efforts.

WORLDCOM INC: Selling Pentagon City to TST for $101 Million
Worldcom Inc., and its debtor-affiliates seek the Court's
authority to sell an office complex known as "Pentagon City" and
related personal property to TST/Pentagon City LLC, an affiliate
of Tishman Speyer Properties for $101,425,000.

According to Marcia L. Goldstein, Esq., at Weil Gotshal & Manges
LLP, in New York, Pentagon City is a two-building office complex
located at 701 South 12th Street and 601 South 12th Street in
Arlington, Virginia.  In the months prior to the Petition Date,
the Debtors reduced its workforce in the Washington, D.C. area
and began to consolidate its office space occupancy.  By early
May 2002, the Debtors determined that the continued ownership of
Pentagon City was no longer necessary or desirable. Accordingly,
the Debtors marketed Pentagon City for sale to potential

Ms. Goldstein states that the Debtors prepared an extensive
information package for interested parties and provided numerous
tours of Pentagon City.  Twenty-seven parties expressed interest
in the property and the Debtors received bids from 16 parties.
As the marketing period approached its conclusion in mid-June
2002, the Debtors identified the four most attractive offers
from potential purchasers.  As the Debtors evaluated these
proposals, the Debtors received an offer from TST/Pentagon City
LLC.  After analysis, the Debtors determined that the
Purchaser's offer represented the highest and best offer for
Pentagon City.  After several weeks of negotiations, the Debtors
and TST/Pentagon City LLC entered into a contract for the sale
of Pentagon City on July 11, 2002.

By selling the Assets, the Debtors will generate cash to devote
to their reorganization and the operation of their core
telecommunications business.  The Purchase Price provided under
the Agreement represents the best offer received by the Debtors
during the period in which the Debtors marketed Pentagon City
for sale.  The Debtors believe the Purchase Price represents
fair market value for the Assets and that the Agreement is the
culmination of good faith, arm's-length negotiations between the
Debtors and TST/Pentagon City LLC, and is not in violation of
Section 363(n) of the Bankruptcy Code.  Therefore, the sale of
the Pentagon City Assets is well within the sound business
judgment of the Debtors and should be approved.

The Debtors also ask the Court to approve the sale of the
Pentagon City Assets "free and clear of all liens, claims and
encumbrances," with any Liens to be transferred and attached to
the net proceeds obtained for the Pentagon City Assets with the
same validity, priority, force and effect these Liens had upon
the Pentagon City Assets immediately prior to their sale,
subject to further order of the Court.  The Debtors'
postpetition secured lenders have consented to the proposed
sale. (Worldcom Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

W.R. GRACE: Sealed Air Fraudulent Transfer Trial Postponed
Sealed Air Corporation (NYSE:SEE) announced that the upcoming
fraudulent transfer trial, scheduled for September 30, 2002, has
been adjourned in light of a recent opinion by the U.S. Court of
Appeals for the Third Circuit in an unrelated case.

A new trial date has not yet been set.

The Third Circuit ruling, issued on September 20, 2002 in the
Cybergenics bankruptcy case, held that a creditor or creditors
committee may not assert a fraudulent transfer claim in a
bankruptcy proceeding and that only a debtor-in-possession or an
appointed trustee may bring such actions. Since creditors
committees brought the fraudulent transfer case against Sealed
Air, the court is reviewing how this case should proceed in view
of the Cybergenics ruling.

The 1998 transaction that combined Sealed Air with the Cryovac
packaging business of W. R. Grace was designed to create a
world-leading packaging company. Sealed Air believes that Grace
was solvent at the time of the transaction and remains confident
in the integrity of the deal.

Sealed Air Corporation is a leading global manufacturer of a
wide range of food, protective and specialty packaging materials
and systems, including such widely recognized brands as Bubble
Wrap(R) air cellular cushioning, Jiffy(R) protective mailers and
Cryovac(R) food packaging products. For more information about
Sealed Air Corporation, please visit the Company's Web site at

* DebtTraders' Real-Time Bond Pricing

Issuer               Coupon   Maturity  Bid - Ask  Weekly change
------               ------   --------  ---------  -------------
Federal-Mogul         7.5%    due 2004    22 - 24        -2
Finova Group          7.5%    due 2009    31 - 33        0
Freeport-McMoran      7.5%    due 2006    89 - 91        -1
Global Crossing Hldgs 9.5%    due 2009   1.5 - 2.5       0
Globalstar            11.375% due 2004   2.5 - 4.5       0
Lucent Technologies   6.45%   due 2029    33 - 35        -4
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    30 - 32        -6
Xerox Corporation     8.0%    due 2027    40 - 42        -1

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


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

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

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

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

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

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

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

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

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